Net income for fiscal 2013 was $9.2 million, or $1.08 per diluted share, compared with a net loss in fiscal 2012 of $2.4 million, or $0.29 loss per diluted share.
The net loss in fiscal 2012 was primarily due to the previously disclosed 2012 second quarter inventory markdown in the Company’s basics segment, which was necessitated by unprecedented, record-high cotton costs.
Strong net sales gains in the Company’s basics segment along with similar growth in the Company’s Junkfood, The Game and Art Gun businesses drove the record revenue for the year. These gains were somewhat offset by softness in the Soffe business that continued through the fiscal year. In addition to the Company’s record high consolidated revenue, improved margins across most business units drove the net income gains for fiscal 2013.
For the fiscal 2013 fourth quarter, net sales were $133.6 million compared to $135.4 million for the comparable 2012 quarter. Net income for the 2013 fourth quarter was $4.0 million, or $0.48 per diluted share, compared to $4.8 million, or $0.55 per diluted share, in the 2012 fourth quarter. While operating profit for fourth quarter 2013 was higher than that of the comparable 2012 period, net income was negatively impacted by a less favorable tax treatment in the 2013 period.
All of the Company’s business units other than Soffe experienced revenue growth for both the full year and fourth quarter. Excluding Soffe, higher unit sales in both the branded and basics segments were somewhat offset by lower average selling prices.
Branded Segment Review
All of the Company’s branded segment businesses other than Soffe experienced strong sales growth during fiscal 2013; however, the 12% increase in combined sales for Junkfood, The Game and Art Gun was offset by a 24% sales decline in the Soffe business.
As such, fiscal 2013 branded segment sales declined to $219.6 million from $235.2 million in fiscal 2012. Art Gun continued its rapid growth with a 94% increase in sales. The Game posted an 11% revenue increase, driven primarily by rapid growth in the Salt Life product line, which experienced nearly 50% sales growth in fiscal 2013.
The popular Junkfood brand grew sales 8% as it expanded its professional sports product line. All three of these businesses also expanded gross margins in fiscal 2013.
For the fourth quarter, branded segment sales totaled $55.5 million versus $57.9 million in the 2012 fourth quarter. The double digit sales increases posted by The Game, Junkfood and Art Gun in the fourth quarter were more than offset by the previously mentioned softness that continued in the Soffe business.
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