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L.A. GEAR REPORTS FINANCIAL RESULTS FOR FOURTH QUARTER AND FISCAL YEAR

L.A. GEAR REPORTS FINANCIAL RESULTS FOR FOURTH QUARTER AND FISCAL YEAR
 LOS ANGELES, Feb. 25 /PRNewswire/ -- L.A. Gear, Inc. (NYSE: LA) today announced its financial results for the year and fourth quarter ended November 30, 1991. For the year, net sales and the loss from continuing operations were $618.1 million and $45.0 million ($2.40 per share), respectively. In 1990, the Company earned $25.6 million ($1.28 per share) from continuing operations on net sales of $818.8 million. A $67.8 million 1991 net loss applicable to common stock ($3.49 per share) compares to net income for 1990 of $31.3 million ($1.56 per share). A 24.5 percent decline in net sales was primarily the result of a drop in the number of pairs sold domestically and internationally, coupled with a decrease in the average selling price per pair. The decrease in the average unit selling price was attributable primarily to the Company's efforts to reduce inventory levels through price reductions and increased sales to wholesale distributors.
 During the Company's fourth quarter of 1991, a series of actions were initiated which are intended to strengthen the Company's core business, improve operating results and enhance long-term shareholder value. As a result, charges aggregating $27.8 million before income taxes were recorded by the Company in November 1991 for nonrecurring and restructuring costs associated with the reorganization and consolidation of its corporate offices, reduction in the employee workforce, writeoff of unsalvageable property and equipment, settlement of customer chargebacks, including claims for defective products, and other nonrecurring items.
 The Company's continuing operations results were adversely affected by (1) the decline in sales, (2) a decrease in gross profit margins from 34.9 percent in 1990 to 27.4 percent in 1991, primarily attributable to price reductions and (3) the recognition of the restructuring and other nonrecurring charges discussed above. These factors all contributed to the Company reporting its first annual loss since its initial public offering of stock in 1986.
 Also during November 1991, the Company announced its intention to discontinue its apparel design and marketing operations. Compared to net income of $5.7 million ($.28 per share) in 1990, these operations, which are reported as discontinued operations, had a net loss after tax of $21.2 million ($1.09 per share in 1991). This net loss includes an after tax charge of $11.9 million for the estimated loss associated primarily with the sale of remaining apparel inventories and rental expenses for the apparel warehouse facility.
 For the quarter ended November 30, 1991, net sales from continuing operations were $127.1 million, the net loss from continuing operations was $22.3 million ($1.22 per share) and the net loss applicable to common stock was $39.9 million ($2.04 per share). The $27.8 million pre-tax charges for restructuring and nonrecurring costs discussed above adversely affected 1991 continuing operations results reported for the quarter. During the year-earlier period, net sales from continuing operations were $171.5 million, the net loss from continuing operations was $6.4 million ($.33 per share), and the net loss applicable to common stock was $7.1 million ($.37 per share).
 Separately, the Company also announced that it had recently amended its existing bank credit agreement. The amendment provides for, among other things, (1) a reduction in the credit facility from $200 million to $150 million, (2) reductions in the "borrowing base" calculation,(3) an increase in borrowing rates based on LIBOR, and (4) amendments of certain covenants (including temporarily reducing the required minimum net worth and quick ratio).
 L.A. Gear is a leading designer, developer and marketer of a broad range of quality athletic and casual-lifestyle footwear.
 L.A. GEAR, INC.
 Statement of Operations
 (In thousands, except per share amounts)
 Three months ended Year ended
 Nov. 30, Nov. 30,
 1991 1990 1991 1990
 Net sales $127,064 $171,515 $618,092 $818,809
 Cost of sales 88,206 122,850 448,682 533,420
 Gross profit 38,858 48,665 169,410 285,389
 Selling, general
 and administrative
 expenses 69,749 55,016 224,197 224,870
 Interest expense,
 net 637 3,882 12,936 18,515
 Income (loss) from
 continuing
 operations before
 income taxes (31,528) (10,233) (67,723) 42,004
 Income taxes (9,208) (3,794) (22,727) 16,376
 Income (loss) from
 continuing
 operations (22,320) (6,439) (44,996) 25,628
 Discontinued
 operations:
 Income (loss)
 from discontinued
 operations (net
 of income tax
 provision
 (benefit) (4,083) (660) (9,350) 5,710
 Provision for
 estimated loss on
 disposal, net of
 income tax benefit (11,854) --- (11,854) ---
 (15,937) (660) (21,204) 5,710
 Net income (loss) (38,257) (7,099) (66,200) 31,338
 Dividends on
 mandatorily
 redeemable
 preferred
 stock (1,625) --- (1,625) ---
 Income (loss)
 applicable to
 common stock $(39,882) $(7,099) $(67,825) $31,338
 Earnings (loss) per
 common share:
 Continuing
 operations $(1.22) $(.33) $(2.40) $1.28
 Discontinued
 operations (.82) (.04) (1.09) .28
 Total $(2.04) $(.37) $(3.49) $1.56
 Weighted average
 shares outstanding 19,539 19,395 19,453 20,041
 L.A. GEAR INC.
 Selected Balance Sheet Data
 (In thousands)
 Nov. 30,
 1991 1990
 Accounts receivable, net $111,470 $155,901
 Inventories 141,115 160,668
 Borrowings under line of credit 20,000 94,000
 Working capital 203,215 180,281
 Mandatorily redeemable
 preferred stock 100,000 ---
 Retained earnings 39,384 114,698
 Total shareholders' equity 131,715 205,877
 -0- 2/25/92
 /CONTACT: Michael Sitrick or Steve Stern of Sitrick & Company, 310-788-2850, for L.A. Gear/
 (LA) CO: L.A. Gear ST: California IN: SU: ERN


TS-AL -- LA014 -- 2205 02/25/92 09:06 EST
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Date:Feb 25, 1992
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