Joe's Jeans Inc. (the "Company") (NASDAQ: JOEZ) today announced
financial results for the fourth quarter and year ended November
30, 2009. Highlights were:
-- Fourth quarter net sales increased 42% to a record $25.2 million
-- Gross margins increased one percentage point to 49%
-- Operating income increased 142% to $3.0 million
-- Year-end cash and cash equivalents on hand of $13.2 million
For the fourth quarter ended November 30, 2009, overall net
sales were $25.2 million compared to $17.8 million, a 42% increase.
Marc Crossman, President and Chief Executive Officer, commented,
"We are pleased to report that all of our distribution channels,
namely, domestic women's, domestic men's, international and retail
experienced sales increases." Crossman continued, "The sales gains
we made across all channels of distribution were the direct result
of a renewed focus on fashion denim, a revamping of our core basic
program, and the successful introduction of two new product
classifications."
Gross margin during the quarter increased one percentage point
to 49% compared to 48% in the year ago quarter. The increase in
gross margin was a result of a higher percentage of our net sales
coming from retail and licensing during the quarter compared to the
fourth quarter a year ago. Fourth quarter SG&A was $9.3 million
compared to $7.1 million a year ago. The increase over last year is
mostly attributable to additional headcount and rent costs
associated with retail stores we opened in the fourth quarter of
2008 and the two stores we opened in 2009. We also recorded
additional advertising costs as we invested more in advertising to
coincide with the launch of our leggings line, and increased costs
associated with facilities and distribution due to our increase in
sales volume.
In the fourth quarter, we reversed our valuation allowance for
our deferred tax assets. This resulted in an income tax benefit of
$16.4 million for fiscal 2009. As a result of this non-cash tax
benefit, our fourth quarter net income was $20.5 million compared
to $1.1 million during the prior year period. In summary, for the
fourth quarter of 2009, we earned $0.33 per share in the fourth
quarter of 2009 compared to $0.02 per share for 2008.
Marc Crossman, President and Chief Executive Officer, commented,
"The fourth quarter was the perfect end to a successful year during
which we were able to grow the top line, improve gross margins,
build significant cash balances, add two new licensees, open four
retail stores, and most importantly, gain a solid foothold in two
new product classifications."
For the year ended November 30, 2009, overall net sales were
$80.1 million compared to $69.2 million from the prior year
comparative period. Gross margins were 50 percent compared to 47
percent for the year ended November 30, 2008, a three percentage
point increase. Selling, general and administrative expense was
$30.7 million compared to $26.2 million, or a 17% increase. The
increase is primarily attributable to expenses required to support
our retail stores and increases in our facilities and distribution
costs to support our sales volume increases. In addition, our
advertising and tradeshow expenses increased mostly due to entering
into more short term leases for billboards and other ad space in NY
and LA and our media blitz associated with the launch of our new
legging product line.
As noted above, in the fourth quarter, we reversed our valuation
allowance which resulted in recording a significant income tax
benefit. As a result of the non-cash tax benefit, net income for
2009 was $24.5 million, or $0.40 per share, compared to $4.9
million in 2008, or $0.08 per share.
The Company will host a conference call on Wednesday, February
3, 2010 at 4:30 p.m. Eastern Time to discuss financial results for
the fourth quarter and fiscal year ended November 30, 2009. To
access the live call, please dial (866) 578-5784 (U.S.) or (617)
213-8056 (International). The conference ID number and participant
passcode is 23753359 and is entitled the "Q4 2009 Joe's Jeans Inc.
Earnings Conference Call." The information provided on the
teleconference is only accurate at the time of the conference call,
and the Company will take no responsibility for providing updated
information. A telephone replay of the conference call will be
available beginning at 7:30 p.m. Eastern Time on February 3, 2010
until 11:59 p.m. Eastern Time on February 10, 2010 by dialing (888)
286-8010 (U.S.) or (617) 801-6888 (international) and using the
conference passcode 18937040. In addition, the conference call will
be archived for two weeks on the Company's website at
www.joesjeans.com.
JOE'S JEANS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three months ended
----------------------------
November 30, November 30,
2009 2008
------------- -------------
(unaudited)
Net sales $ 25,217 $ 17,761
Cost of goods sold 12,755 9,301
------------- -------------
Gross profit 12,462 8,460
------------- -------------
Operating expenses
Selling, general and administrative 9,343 7,119
Depreciation and amortization 135 106
------------- -------------
9,478 7,225
------------- -------------
Operating income 2,984 1,235
Interest expense 98 141
------------- -------------
Income before provision for taxes 2,886 1,094
Income tax (benefit) expense (17,575) (46)
------------- -------------
Net income $ 20,461 $ 1,140
============= =============
Earnings per common share - basic $ 0.34 $ 0.02
============= =============
Earnings per common share - diluted $ 0.33 $ 0.02
============= =============
Weighted average shares outstanding
Basic 60,410 59,559
Diluted 61,528 60,430
About Joe's Jeans Inc.
Joe's Jeans Inc. designs, produces and sells apparel and
apparel-related products to the retail and premium markets under
the Joe's® brand and related trademarks. More information is
available at the company website at www.joesjeans.com.
This release contains forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, as amended. The matters discussed in
this document involved estimates, projections, goals, forecasts,
assumptions, risks and uncertainties that could cause actual
results or outcomes to differ materially from those expressed in
the forward-looking statements. All statements in this news release
that are not purely historical facts are forward-looking
statements, including statements containing the words "intend,"
"believe," "estimate, "project," "expect" or similar expressions.
Any forward-looking statement inherently involves risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements. Factors that would cause or
contribute to such differences include, but are not limited to: the
risk that the Company will be unsuccessful in gauging fashion
trends and changing customer preferences; the risk that changes in
general economic conditions, consumer confidence, or consumer
spending patterns will have a negative impact on the Company's
financial performance or strategies; the highly competitive nature
of the Company's business in the United States and internationally
and its dependence on consumer spending patterns, which are
influenced by numerous other factors; the Company's ability to
respond to the business environment and fashion trends; continued
acceptance of the Joe's® brand in the marketplace; successful
implementation of any growth or strategic plans, including changes
and new product offerings; effective inventory management; the
Company's ability to continue to have access on favorable terms to
sufficient sources of liquidity necessary to fund ongoing cash
requirements of its operations, which access may be adversely
impacted by a number of factors, including the reduced availability
of credit generally and the substantial tightening of the credit
markets, including lending by financial institutions, who are
sources of credit for the Company, the recent increase in the cost
of capital, the level of the Company's cash flows, which will be
impacted by the level of consumer spending and retailer and
consumer acceptance of its products; the ability to generate
positive cash flow from operations; competitive factors, including
the possibility of major customers sourcing product overseas in
competition with our products; the risk that acts or omissions by
the company's third party vendors could have a negative impact on
the company's reputation; a possible oversupply of denim in the
marketplace; and other risks. The Company discusses certain of
these factors more fully in its additional filings with the SEC,
including its last annual report on Form 10-K filed with the SEC,
and this release should be read in conjunction with that annual
report on Form 10-K, together with all of the Company's other
filings, including current reports on Form 8-K, made with the SEC
through the date of this release. The Company urges you to consider
all of these risks, uncertainties and other factors carefully in
evaluating the forward-looking statements contained in this
release.
Any forward-looking statement is based on information current as
of the date of this document and speaks only as of the date on
which such statement is made, and the Company undertakes no
obligation to update these statements to reflect events or
circumstances after the date on which such statement is made.
Readers are cautioned not to place undue reliance on
forward-looking statements.
Contact: Joe's Jeans Inc. Hamish Sandhu 323-837-3700 x 304
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