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 TAMPA, Fla., Aug. 23 /PRNewswire/-- Nutmeg Industries, Inc. (NYSE: NTM) today reported record sales and earnings for the 13th consecutive quarter.
 Net earnings were a record $2,952,000 for the second quarter ended July 31, 1993, a 24-percent increase over the $2,386,000 earned in the comparable quarter a year ago. Net sales for the quarter were a record $45.4 million, up 37 percent over the $33.2 million reported in last year's second quarter.
 Earnings per share for this year's second quarter rose to $.16 compared to $.13 a year ago.
 The current backlog is $69 million compared to $58 million a year ago.
 For the six months ended July 31, 1993, sales increased 32 percent to $78.1 million compared to $59.1 million for the first six months of last year. Net income for the first six months this year was $4,596,000 or $.24 per share compared to $3,698,000 or $.20 per share a year ago.
 Richard E. Jacobson, Nutmeg's chairman and chief executive officer, said, "We are very pleased with our 13th consecutive quarter of record sales and profits, especially given the continuation of a very difficult retail and overall economic environment."
 He said the strong results were driven by "impressive sales growth" and by anticipated improvements in gross profit margins which had now risen to 33.5 percent, up 2.4 percent of sales since the third quarter of the last fiscal year. He added that the quarter would have been even better except for higher-than-expected selling, general and administrative expenses. These included a $700,000 charge in connection with the bankruptcy of a long-standing customer of McBriar Sportswear, a Nutmeg subsidiary. The one-time write-off and a tax rate higher than a year ago "did not slow our earnings momentum as we enter the second and most important half of our fiscal year."
 Jacobson also said, "We are continuing to focus on our core business, licensed sports. We intend to increase our domestic and international market share through an even greater commitment to creativity, quality and service.
 "We are continuing to make progress in our cap and jacket business. Recent licenses with the World Cup, Big Ten, various European soccer clubs and NASCAR and some of its most important drivers, as well as our new advertising campaign intended to expand our brand-name awareness, demonstrate our innovative marketing efforts," he said.
 Jacobson added that, "Retail sales of our products are very encouraging. Our challenge is to get generally cautious retailers who want shorter manufacturing lead times to promptly commit available dollars to reorders and new back-to-school and holiday bookings. Unlike most of our competitors, Nutmeg's sales force sells only Nutmeg products. In a particularly sluggish retail environment, this provides us a better opportunity to accomplish our ambitious sales objectives. Our very large and diverse domestic manufacturing capabilities are a key to meeting these increasing demands of retailers. We will make good use of and expand upon these capabilities as competition intensifies and the industry continues to consolidate."
 Jacobson said, "Nutmeg's balance sheet remains one of the strongest in the industry with a debt-to-total-capital ratio of only .2 to 1. To further improve our liquidity, our banks recently increased our credit line from $50 million to $75 million."
 Nutmeg designs, manufactures and markets high-quality sportswear under licenses granted by Major League Baseball, the National Basketball Association, the National Football League, the National Hockey League and their respective player associations, most major colleges and universities, World Cup and various European soccer clubs and NASCAR. The licenses authorize Nutmeg to use team names, logos and other names and graphics on a wide variety of apparel.
 (In thousands except per-share data)
 Quarter Ended Six Months Ended
 July 31, July 25, July 31, July 25,
 1993 1992 1993 1992
 Net sales $45,427 $33,154 $78,124 $59,140
 Cost and expenses:
 Cost of merchandise sold 30,231 22,337 52,267 39,702
 Selling, general and
 administrative 10,204 7,167 18,198 13,771
 Interest (income) expense 170 89 175 (36)
 Other expense 15 --- 29 2
 Total costs and expenses 40,620 29,593 70,669 53,439
 Income before income taxes 4,807 3,561 7,455 5,701
 Income tax provision 1,855 1,175 2,859 2,003
 Net income $ 2,952 $ 2,386 $ 4,596 $ 3,698
 Net income per share $ .16 $ .13 $ .24 $ .20
 Weighted average number
 of common shares used
 in the calculation 18,892 18,712 18,884 18,682
 -0- 8/23/93
 /CONTACT: George N. Derhofer, senior vice president and chief financial officer of Nutmeg Industries, Inc., 813-963-6153, ext. 122/

CO: Nutmeg Industries ST: Florida IN: TEX SU: ERN

JB -- FL011 -- 5154 08/23/93 16:04 EDT
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Publication:PR Newswire
Date:Aug 23, 1993

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