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RG Barry reports 4% growth in net sales

08
Sep '09
Accessory footwear and slipper marketer R.G. Barry Corporation reported increased sales and $7.0 million in net after-tax earnings for its 2009 fiscal year ended June 27, 2009.

Fiscal Year 2009 Results
For the year, the Company reported:
- A net sales increase of approximately 4 percent to $113.8 million, reflecting improved sales in some sectors of its diverse retailer base. The sales increases more than offset annual sales lost due to retailer bankruptcies and a general softness at retail;
- Net earnings of $7.0 million, or $0.66 per basic share and $0.65 per diluted share, compared to net earnings of $9.8 million, or $0.93 per basic share and $0.92 per diluted share one year ago. Fiscal year 2008 net earnings benefited from a fourth-quarter $1.4 million pre-tax gain on an insurance recovery related to tornado damage at the Company's Texas distribution center.
- Gross profit as a percent of sales declined to 38.2 percent from 41.1 percent one year earlier, principally as a result of inflationary pressures realized during the product buying cycle for fiscal year 2009; and
- Relatively flat selling, general and administrative expenses of $32.9 million, or 28.9 percent of sales, compared to $32.1 million, or 29.3 percent of sales, one year ago. SG&A reflected increased spending in support of the Company's long-term commitment to strengthening its brand portfolio through strategic brand marketing, offset by cost savings in other areas.

Quarterly Results
In the fourth quarter, traditionally the company's weakest operating period, net sales were $18.2 million compared to $18.6 million in the equivalent period last year. Net loss for the quarter was approximately $286,000, or a loss of $0.03 per basic and diluted share, versus net earnings of approximately $729,000, or $0.07 per basic and diluted share, in the comparable quarter one year ago. Fiscal year 2008 net earnings reflected the benefit of the tornado-related insurance settlement.

Balance Sheet Highlights
The Company ended its fiscal year with a strong balance sheet, which included:
- Cash and short-term investments of $39.2 million, up approximately 50 percent from $26.1 million one year ago;
- A historically low inventory level of $8.5 million, down about 21 percent from $10.8 million at the end of fiscal year 2008; and
- Net shareholders' equity of $45.9 million, which was relatively flat against the previous year due to the negative impact of a $5.7 million charge to equity primarily related to a decline in the value of pension plan assets and the $2.7 million impact of a special one-time cash dividend paid to shareholders in June 2009.

Management Comments
“For the fourth consecutive year, we are reporting top-quartile annual performance,” said Greg Tunney, President and Chief Executive Officer. “Despite the incredibly difficult economic environment and the loss of some good customers, including Mervyn's and Linens 'n Things, to bankruptcies, we generated a solid 4 percent net sales increase for our fiscal year. We actually set sell-through records with some retailers during the holiday period despite one of the worst retail environments since the Great Depression.


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