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R.G. Barry generates healthy sales despite difficult conditions
04
May '09
R.G. Barry Corporation, the Dearfoams company reported a 4.4% increase in net sales and per share earnings of $0.01 for its third quarter ended March 28, 2009.

For the quarter, the Company reported:
• Net earnings of $123,000, or $0.01 per basic and diluted share, compared to net earnings of $1.2 million, or $0.11 per basic share and diluted share, in the third quarter of fiscal 2008;
• Net sales of $21.1 million, compared to $20.2 million reported for the corresponding period of fiscal 2008; and
• Gross profit as a percent of net sales of 33.5 percent versus 39.5 percent in the comparable quarter one year ago.

For the nine months:
• Net earnings were $7.3 million, or $0.69 per basic share and $0.68 per diluted share, versus net earnings of $9.1 million, or $0.87 per basic share and $0.85 per diluted share, in the comparable period one year ago;
• Net sales rose to $95.6 million versus $91.0 million one year ago; and
• Gross profit as a percent of net sales was 38.2 percent versus 41.6 percent in the comparable period of fiscal 2008.

The Company's balance sheet continues to present a strong picture of financial health:
• Cash and short-term investments totaled $35.1 million, up from $28.0 million one year ago;
• Although collections from customers remain on target, accounts receivable increased $4.5 million from the same period a year ago, reflecting higher shipments and the timing of processing customer deductions;
• Inventory declined by approximately 18 percent to $11.5 million versus $14.1 million at the end of the third quarter of fiscal 2008; and
• Total shareholders' equity was $54.0 million, up from $46.0 million in the comparable period one year ago.

Management Comments
“We are pleased with the gains reported today, and we remain confident about the overall direction of our business,” said Greg Tunney, President and Chief Executive Officer. “This is our seventh consecutive quarter of positive earnings and healthy sales despite the most difficult economic conditions in recent memory and retail's continuing loss of doors to bankruptcies, closings and consolidations.

“Our vision is well-defined. We are operating from a position of strength. The advantages of category leadership, distribution across multiple retail channels, a growing brand portfolio, a pristine balance sheet and a strong cash safety net offer us tremendous flexibility and opportunity during a time when others are struggling.

As a result, we continue taking market share from competitors and gaining toeholds with new customers. We are investing in our proprietary brands, aggressively seeking category-appropriate acquisitions that will broaden our reach in the accessories arena and continuing to refine and focus the private label and licensed portions of our business.

“The contraction in gross profit percentage evident in today's report was not unexpected. The erosion is the residual impact of inflationary pressures experienced last year when we locked in pricing with our suppliers, increased promotional support for retailers during the difficult 2008 holiday season and a shift in third quarter product mix to lower margin channels. We expect the gross profit percentage to improve in fiscal 2010.

“Looking ahead, we are quite confident that our existing businesses and long-range growth strategies will allow us to continue to be consistently among the top performers in our category,” Mr. Tunney concluded.

R.G. Barry Corporation


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