Cherokee Global Brands, a global marketer of style-focused lifestyle brands, reported financial results for the first quarter ended May 3, 2014.
-First quarter revenues increased 23.7% to $10.0 million
-First quarter net income increased 121.4% to $3.6 million
-First quarter EPS increased 121.4% to $0.43 per diluted share
-Announce Corporate Rebranding Initiative to ‘Cherokee Global Brands’
Revenues for the first quarter increased 23.7% to $10.0 million, compared with $8.1 million in the prior-year period. The increase in revenues relates to continuing organic growth of the Cherokee brand and the recent Tony Hawk brands acquisition. SG&A expenses totaled $4.8 million, an 11% decrease from $5.4 million in the prior-year period.
The decrease in SG&A was due to approximately $1.0 million of professional and consulting fees that did not recur in the first quarter fiscal 2015. On a Non-GAAP basis SG&A expenses totaled $4.8 million, or 48% of sales compared to $4.4 million, or 55% percent of sales versus the prior year period. The improvement on a percentage basis was due to the Company’s continued focus to leverage its operating structure and improve operating margins.
Net income totaled $3.6 million, or $0.43 per diluted share, compared with $1.6 million, or $0.19 per diluted share, in the first quarter of 2014. On a Non-GAAP basis net income totaled $3.6 million, or $0.43 per diluted share, compared with $2.2 million, or $0.27 per diluted share in the prior year period. A reconciliation of GAAP to non-GAAP financials can be found in a table at the end of this release.
The company also announced its corporate rebranding initiative as ‘Cherokee Global Brands.’ The rebranding offers a refreshed image, logo and marketing materials to better communicate its strong leadership position within the licensing industry and efforts to provide exemplary service on a global basis to its retailers, licensees and potential future partners.
“This is an exciting time for Cherokee Global Brands. The first quarter marked our strongest top and bottom line results since I joined the Company three years ago, and an extremely solid start to the fiscal year,” said Chief Executive Officer Henry Stupp. “Consistent with our initiatives, our focus lies on taking our group of brands, and making them even better, while expanding our global footprint.
"We continue to unlock the value and potential of Cherokee Global Brands through our turn-key 360° degree licensing model. Through this transformation we are now able to deliver higher quality product and services than ever before. We will continue to make investments in our brands and partnerships to enhance Cherokee Global Brands and helping our partners achieve success.”
At May 3, 2014, the Company had cash and cash equivalents of $1.6 million, compared to $3.6 million at February 1, 2014.