True Religion Apparel posts 40% sales rise in Q2

04 Aug '06

3 min read

Apparel retailer True Religion Apparel Inc announced financial results for the second quarter ended June 30, 2006.

Highlights:

-- Operating income grows 44.0% to $9.8 million; Company records 31.9% operating margin

-- Net income of $4.9 million, after giving effect to a one-time arbitration settlement expense totaling $1.9 million

-- Earnings per diluted share of $0.21, after giving effect to a one-time settlement expense of $0.05 per diluted share

-- Company engages Goldman Sachs & Co. to explore strategic alternatives

The company also said that its Board of Directors has retained Goldman Sachs & Co as its financial advisor to assist in evaluating various strategic alternatives to increase shareholder value.

Net sales for the 2006 second quarter increased 39.7% to $30.7 million compared with $22.0 million in the 2005 second quarter.

Excluding the previously announced one-time expense related to an interim arbitration settlement, which includes the arbitration award, legal costs and interest, and which totals $1.9 million before income taxes, or $0.05 per diluted share, adjusted net income increased 43% to $6.1 million, or $0.26 per diluted share. This compares with $4.3 million, or $0.18 per diluted share in the second quarter of 2005. Giving effect to this one-time charge, net income for the 2006 second quarter was $4.9 million, or $0.21 per diluted share.

Net income from operations was $9.8 million, or 31.9% of sales, in the 2006 second quarter versus $6.7 million, or 30.3% of sales, in the same period in 2005.

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