Movie Star, Inc., Reports Fiscal 2007 First-Quarter Financial Results.

NEW YORK -- Movie Star, Inc. (AMEX:MSI), today announced improved financial results for the 2007 fiscal first quarter ended September 30, 2006.

For the fiscal 2007 first quarter, net sales increased 37.1% to $18,690,000 from $13,637,000 in the same period last year. Gross margin, as a percentage of sales, was 31.2% for the fiscal 2007 first quarter compared with 27.2% in the fiscal 2006 first quarter. Selling, general and administrative expenses were $5,026,000 compared to $4,215,000 in the fiscal 2006 first quarter, an increase of $811,000. Net income for the fiscal 2007 first quarter was $366,000, or $0.02 per diluted share, compared to a net loss of $371,000, or a loss of $0.02 per share, for the first quarter of fiscal 2006.

Mel Knigin, President and Chief Executive Officer, stated: "We began fiscal 2007 more optimistic about the Company's business outlook than we have been for some time and that optimism continues today. The hurdles we faced last year are behind us, allowing us to fully concentrate on improving our operations. Our gross margins increased significantly as a result of a better product mix and lower overall allowances and chargebacks. The increase in selling, general and administrative expenses was primarily the result of a $540,000 increase in professional fees. The increase was due to our continuing exploration of our strategic alternatives to maximize shareholder value, including discussions with a private apparel company with respect to a possible combination of the companies. TTG Apparel, LLC, which beneficially owns 22.4% of our outstanding common stock, is a majority stockholder of the private company. Consequently, we established a special committee of independent directors to consider this transaction and our strategic alternatives. The special committee has retained a financial advisor, Chanin Capital Partners, and legal counsel. We caution that no assurances can be made that the exploration of strategic alternatives, including the discussions with the private apparel company, will result in a transaction. We also do not intend to disclose developments with respect to these matters unless and until we enter into a specific transaction or the process is otherwise completed."

Mr. Knigin continued, "We are continuing to receive good responses from our customers to our new and existing product lines. Our backlog of open orders to be shipped was $33,159,000 at September 30, 2006 compared to $24,155,000 at the same time last year. We book our orders upon receipt and believe that the backlog is firm and will be shipped in the current fiscal year."

MOVIE STAR, INC. produces and sells ladies apparel, including sleepwear, robes, leisurewear and daywear. Current collections include the Cinema Etoile premium line of intimate apparel and the Movie Star line of apparel sold as private label programs.

Certain of the matters set forth in this press release are forward-looking and involve a number of risks and uncertainties. Among the factors that could cause actual results to differ materially are the following: business conditions and growth in the industry; general economic conditions; addition or loss of significant customers; the loss of key personnel; product development; competition; risks of doing business abroad; foreign government regulations; fluctuations in foreign rates; rising costs for raw materials and the unavailability of sources of supply; the timing of orders booked; and the risk factors listed from time to time in the Company's SEC reports.

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(a) Derived from audited financial statements.