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Hartmarx posts third quarter results
02 Oct '08
6 min read
The fourth quarter net loss excluding non-recurring items is estimated in the range of $.05 - $.10 per diluted share compared to the prior year's fourth quarter loss per diluted share of $.19.
This would aggregate to a full year loss per diluted share in the range of $.25 - $.35 in 2008 compared to the prior year loss per diluted share of $.12.
While we remain committed to our stated long-term growth strategies, we are operating our business in a very cautious and conservative manner," Mr. Patel concluded.
At August 31, inventories of $148.0 million declined $18.6 million or 11% from the year earlier levels of $166.5 million.
The trailing year total debt increase of $21.6 million to $155.9 million at August 31 this year reflected approximately $36 million of outflows attributable to acquisitions, capital expenditures and share repurchases.
To date, approximately 1.1 million shares have been repurchased pursuant to the Company's 3 million share authorization; there were no share repurchases during the third quarter.
The third quarter revenue decline was principally attributable to the tailored product categories included in the Men's Apparel Group segment.
This segment also included the Monarchy product lines, acquired in August, 2007, which contributed $6.0 million to the current year third quarter revenues ($.9 million of revenues in 2007) and $13.6 million for the nine months.
The Women's Apparel Group segment represented approximately 25% of consolidated revenues this year compared to 26% in last year's third quarter.
The third quarter operating loss was $2.1 million in 2008 compared to operating earnings of $3.0 million in 2007. The decline was principally attributable to the Men's Apparel Group segment, although the Women's Apparel Group segment earnings were also lower.
The decrease reflected both the $11.2 million decline in sales and a lower gross margin rate of 32.8% for the quarter compared to 34.5% in 2007, resulting principally from fewer full-price sales and the disposition of surplus inventories.
Selling, general and administrative expenses for the three months were $43.5 million compared to $44.4 million in 2007 on the lower sales, representing 35.1% of sales compared to 32.8% in 2007.
The current period included, among other things, $2.1 million of incremental expenses related to Monarchy, which were more than offset by other expense reductions across the Company.
Interest expense declined to $1.8 million compared to $2.0 million in 2007, reflecting lower rates as average borrowing levels were higher.
The current period net loss was $2.4 million compared to net earnings of $.5 million in last year's third quarter.
For the nine months, revenues this year were $374.5 million with an operating loss of $7.4 million, compared to sales of $411.2 million and operating earnings of $10.9 million in 2007, reflecting this year's lower sales, gross margins and operating margins in both the Men's Apparel Group and Women's Apparel Group segments.
The women's segment represented approximately 23% of consolidated revenues this year compared to 24% in the prior nine-month period. The year-to-date gross margin rate was 33.0% this year compared to 34.7% last year, reflecting fewer full-price sales, the liquidation of surplus inventories and, to a lesser extent, the lower percentage of women's segment sales.
Selling, general and administrative expenses for the nine months of 2008 were $132.7 million compared to last year's $133.5 million on the lower sales, representing 35.4% of sales compared to 32.5% in 2007.
The current year included $5.8 million of incremental expenses associated with the Monarchy acquisition, which were more than offset by other expense reductions across the Company.
Year-to-date interest expense declined to $5.8 million this year compared to $6.8 million in the prior year with the decrease attributable to lower rates as average borrowing levels were higher.
The year-to-date net loss was $7.4 million this year compared to net earnings of $2.5 million last year. The year-to-date effective tax benefit rate of 43.7% compared to the prior year's effective tax rate of 38.6% reflected an income tax settlement during the second quarter which had an approximate $1 million favorable impact on the year-to-date recorded tax benefit.
This would aggregate to a full year loss per diluted share in the range of $.25 - $.35 in 2008 compared to the prior year loss per diluted share of $.12.
While we remain committed to our stated long-term growth strategies, we are operating our business in a very cautious and conservative manner," Mr. Patel concluded.
At August 31, inventories of $148.0 million declined $18.6 million or 11% from the year earlier levels of $166.5 million.
The trailing year total debt increase of $21.6 million to $155.9 million at August 31 this year reflected approximately $36 million of outflows attributable to acquisitions, capital expenditures and share repurchases.
To date, approximately 1.1 million shares have been repurchased pursuant to the Company's 3 million share authorization; there were no share repurchases during the third quarter.
The third quarter revenue decline was principally attributable to the tailored product categories included in the Men's Apparel Group segment.
This segment also included the Monarchy product lines, acquired in August, 2007, which contributed $6.0 million to the current year third quarter revenues ($.9 million of revenues in 2007) and $13.6 million for the nine months.
The Women's Apparel Group segment represented approximately 25% of consolidated revenues this year compared to 26% in last year's third quarter.
The third quarter operating loss was $2.1 million in 2008 compared to operating earnings of $3.0 million in 2007. The decline was principally attributable to the Men's Apparel Group segment, although the Women's Apparel Group segment earnings were also lower.
The decrease reflected both the $11.2 million decline in sales and a lower gross margin rate of 32.8% for the quarter compared to 34.5% in 2007, resulting principally from fewer full-price sales and the disposition of surplus inventories.
Selling, general and administrative expenses for the three months were $43.5 million compared to $44.4 million in 2007 on the lower sales, representing 35.1% of sales compared to 32.8% in 2007.
The current period included, among other things, $2.1 million of incremental expenses related to Monarchy, which were more than offset by other expense reductions across the Company.
Interest expense declined to $1.8 million compared to $2.0 million in 2007, reflecting lower rates as average borrowing levels were higher.
The current period net loss was $2.4 million compared to net earnings of $.5 million in last year's third quarter.
For the nine months, revenues this year were $374.5 million with an operating loss of $7.4 million, compared to sales of $411.2 million and operating earnings of $10.9 million in 2007, reflecting this year's lower sales, gross margins and operating margins in both the Men's Apparel Group and Women's Apparel Group segments.
The women's segment represented approximately 23% of consolidated revenues this year compared to 24% in the prior nine-month period. The year-to-date gross margin rate was 33.0% this year compared to 34.7% last year, reflecting fewer full-price sales, the liquidation of surplus inventories and, to a lesser extent, the lower percentage of women's segment sales.
Selling, general and administrative expenses for the nine months of 2008 were $132.7 million compared to last year's $133.5 million on the lower sales, representing 35.4% of sales compared to 32.5% in 2007.
The current year included $5.8 million of incremental expenses associated with the Monarchy acquisition, which were more than offset by other expense reductions across the Company.
Year-to-date interest expense declined to $5.8 million this year compared to $6.8 million in the prior year with the decrease attributable to lower rates as average borrowing levels were higher.
The year-to-date net loss was $7.4 million this year compared to net earnings of $2.5 million last year. The year-to-date effective tax benefit rate of 43.7% compared to the prior year's effective tax rate of 38.6% reflected an income tax settlement during the second quarter which had an approximate $1 million favorable impact on the year-to-date recorded tax benefit.
Hartmarx Corporation
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