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MOVIE STAR, INC. REPORTS SECOND QUARTER RESULTS.

NEW YORK--(BUSINESS WIRE)--February 10, 1995--MOVIE STAR INC. (ASE:MSI) today reported results for the second quarter and six months ended December 31, 1994.

Net sales for the quarter totaled $35,997,000, up 3% from $35,020,000 in the second quarter of last year, reflecting increased sales to existing customers. Net sales for the six months ended December 31, 1994 rose 5% to $68,437,000 from $64,942,000 for last year's first half.

Gains in the gross profit percentage for the three and six-month periods stemmed from last fiscal year's restructuring of the Sanmark division, which produces and sells popular-priced intimate apparel. Since that time, management has concentrated that division's efforts on growing its higher margin private label business, on improving merchandising and sourcing and on the elimination of low margin trade business.

The sales gain, an improvement in gross margin percentage and a reduction in selling, general and administrative expenses resulted in a 392% increase in income from operations which was $1,574,000 in the current second quarter as compared to $320,000 for the same period last year. Net income for the current second quarter rose to $944,000, or $.07 per share, while last year's second quarter net income, which included a $984,000 pre-tax gain from the sale of plant facilities, was $782,000, or $.06 per share.

For the six-month period ended December 31, 1994, income from operations increased 197% to $2,585,000 from $869,000 in the first half of fiscal 1994. Net income was $1,551,000, or $.11 per share, in the first half of fiscal 1995. This compares to $1,972,000, or $.14 per share, in the same period last year, which included the aforementioned pre-tax gain of $984,000 and the cumulative effect of a change in accounting of $861,000, or $.06 per share.

Movie Star Chairman and Chief Executive Officer, Mark M. David, commented, "Although we fell somewhat short in sales and operating income from the forecast we made four months ago, Movie Star's second quarter and year-to-date financial performance represents a significant improvement over the comparable periods last year. Had sales met our target of $70 million, operating income would have been in line with our projections."

Mr. David continued, "While we are pleased by the significant turnaround achieved thus far this year, as well as the $10 million reduction in inventory levels compared to last year, there is more still to be done. We are taking additional measures to further enhance profitability including identifying suitable new business opportunities, containing expenditures and enhancing production and operating efficiencies." -0-

 MOVIE STAR, INC.
 CONDENSED CONSOLIDATED STATEMENTS
 OF INCOME
 (Unaudited)
 (in thousands, except per share amounts)


 For the Three Months For the Six Months
 Ended Dec. 31, Ended Dec. 31,
 1994 1993 1994 1993


Net sales $35,997 $35,020 $68,437 $64,942
Income from operations 1,574 320 2,585 869
Gain on sale of
 plant facilities - 984 - 98


Income before provision
 for income taxes and
 cumulative effect of
 accounting change 1,574 1,304 2,585 1,853


Provision for income taxes 630 522 1,034 742


Income before
 cumulative effect
 of accounting change 944 782 1,551 1,111


Cumulative effect of
 change in accounting
 for income taxes - - - 861


Net Income $ 944 $ 782 $ 1,551 $ 1,972


Income per share before
 cumulative effect of
 accounting change $.07 $.06 $.11 $.08


Cumulative effect of accounting
 change per share $.06


Net income per share $.07 $.06 $.11 $.14


Weighted average number of
 shares outstanding 13,959 14,175 13,959 14,205


CONTACT: Movie Star, Inc.

Saul Pomerantz, CFO

212/684-3400

or

The Equity Group Inc.

Linda Latman

212/836-9609
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Publication:Business Wire
Date:Feb 10, 1995
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