Consolidated fourth quarter net sales increased 50% to $50.5 million. Wholesale net sales increased 60%; and Retail store net sales increased 11%.

Excluding transaction and amortization expenses associated with the purchase of Hudson Clothing Holdings, Inc. (“Hudson”), adjusted operating income was up 105% to $6.5 million dollars for the fourth quarter of fiscal 2013;

For the fourth quarter ended November 30, 2013, overall net sales were $50.5 million compared to $33.7 million in the prior year comparative period, or a 50% increase. It completed its acquisition of Hudson on September 30, 2013 and its results for the fourth quarter of fiscal 2013 reflect the operation for two months of Hudson as one of our subsidiaries.

Its overall gross profit for the quarter increased to $21.7 million from $15.7 million in the prior year comparative period, or a 38% increase. Overall gross margin in the fourth quarter of fiscal 2013 was 43% compared to 47% in the fourth quarter of fiscal 2012.

Impacting gross profit and gross margins for the quarter was a non-cash charge of approximately $2.0 million related to the fair value step up of inventory acquired in connection with the acquisition of Hudson that was subsequently sold in October and November 2013.

Excluding this charge, gross margin for the fourth quarter of fiscal 2013 would have been comparable at 47%. Operating expense in the fourth quarter of fiscal 2013 was $20.2 million compared to $12.5 million a year ago. Operating expense includes approximately $3.0 million in transaction expenses associated with the acquisition of Hudson.

Excluding the transaction expenses, operating expense would have been $17.2 million for the fourth quarter of fiscal 2013. Operating income was $1.5 million compared to $3.2 million in the prior year comparative period and had a net loss of $1.8 million compared to net income of $2.0 million in the prior year period. As a result, fully diluted loss per share was $0.03 for the fourth quarter of fiscal 2013 compared to earnings per share of $0.03 in same period a year ago.

Excluding transaction expenses and the charge related to the acquired inventory, operating income would have been $6.5 million, net income would have been $2.4 million and fully diluted earnings per share would have been $0.03 for the quarter.

Marc Crossman, President and Chief Executive Officer, commented, “With just two months of our Hudson subsidiary included in our fourth quarter results, we are pleased to report record consolidated revenues and gross profits. Excluding the transaction expenses and inventory charge, our operating income would have doubled from the prior year period.”

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