R.G. Barry reports strong fiscal 2008 performance

10 Sep '08

5 min read

Accessories footwear and slipper marketer R.G. Barry Corporation reported increased sales and strong earnings growth for its fourth quarter and full fiscal year ended June 28, 2008.

Fiscal Year 2008 Results
For the year, the Company reported:
• A net sales increase of approximately 4.0 percent to $109.5 million.
• Gross profit as a percent of sales expanded to 41.1 percent from 39.7 percent one year ago.
• Income from continuing operations before taxes of approximately $14.9 million, an increase of more than 22.0 percent versus fiscal year 2007.
• After-tax net earnings of $9.8 million, or $0.93 per basic share and $0.92 per diluted share, compared to after-tax net earnings of $25.1 million, or $2.49 per basic share and $2.40 per diluted share one year ago. Fiscal year 2008 net earnings reflected a fourth quarter, $1.4 million gain on an insurance recovery and an income tax expense of approximately $5.1 million while fiscal year 2007 net earnings reflected a gain of $878,000 on the sale of land and the income tax benefit of $13.7 million primarily due to the reversal of the Company's deferred tax asset valuation allowance.

Fourth Quarter Results:
In the fourth quarter, net sales were $18.6 million compared to $14.1 million in the fourth quarter last year. Net earnings were approximately $729,000, or $0.07 per basic and diluted share, versus a net loss of approximately $1.7 million, or $0.16 net loss per basic and diluted share, in the comparable quarter of fiscal year 2007. Much of the fourth quarter sales increase resulted from the Company's selection last year as the lead supplier of replenishment slippers to a large retailer.

Performance Dynamics
The Company ended its fiscal year with a strong balance sheet, which included:
• Cash and short-term investments of approximately $26.1 million, up from approximately $18.2 million one year ago;
• An inventory level of $10.8 million down from $14.6 million at the end of fiscal year 2007; and
• Net shareholders' equity of $46.0 million, or a book value of $4.31 per diluted share, which increased $9.8 million versus the prior year.
Other significant factors influencing performance during the 2008 fiscal year included:
• Increased retail sales of the Company's products in mass, warehouse club, catalog, internet and specialty outlets; and
• An increase of approximately 5.0 percent in selling, general and administrative expenses in support of the Company's brands and its long-term growth strategy.

Management Comments:
“Despite challenges at retail during fiscal 2008, our Company performed well and achieved or exceeded our expectations for revenue and earnings for the third straight year,” said Greg Tunney, President and Chief Executive Officer. “Our balance sheet reflects the company's strong health and positive direction.

Year-over-year improvements in cash and short-term investments, inventory management, and control of operational and administrative costs all continue to be among the best in our peer group. Net shareholders equity increased by nearly $10 million last year.

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