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Cygne Designs Inc declares Q2 & H1 2006 results

16 Sep '06

3 min read

Cygne Designs Inc announced results of operations for the second quarter and six months ended July 31, 2006.

Net sales for the second quarter of 2006 were $45.1 million, an increase of $41.0 million from $4.1 million in the second quarter of 2005. $42.7 million of the increase in sales resulted from Cygne's acquisition of the branded and private label denim business of Diversified Apparel Resources LLC ("DAR") on July 31, 2005 and its acquisition of the private label denim business of Innovo Group Inc on May 12, 2006.

The increase in sales was offset primarily by decreased non-denim sales. Gross profit for the second quarter of 2006 increased to $10.0 million compared to $0.3 million for the prior year period.

Gross margins increased to 22.1% compared to 7.2% in the prior year period as a result of higher gross margins on sales stemming from the acquisition of product primarily sourced through a supply agreement with DAR for the second quarter.

Net profit for the second quarter ended July 31, 2006 was $2,412,000 or $0.09 on a basic and diluted per share basis, compared to a net loss of $426,000 or $0.03 on a basic and diluted per share basis in the comparable prior period in 2005.

Net sales for the six months ended July 31, 2006 were $66.0 million, an increase of $56.4 million from $9.6 million in the six months ended July 30, 2005.

$61.9 million of the increase in sales resulted from Cygne's acquisition of the branded and private label denim business of Diversified Apparel Resources LLC ("DAR") on July 31, 2005 and its acquisition of the private label denim business of Innovo Group, Inc. on May 12, 2006.

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