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RG Barry Brands Reports 2nd Quarter Performance



               RG Barry Brands Reports 2nd Quarter Performance

PR Newswire

PICKERINGTON, Ohio, Feb. 5, 2013

PICKERINGTON, Ohio, Feb. 5, 2013 /PRNewswire/ -- R.G. Barry Corporation
(Nasdaq: DFZ) today said that its second-quarter/first-half consolidated
performance was in line with its previously-reported expectations for its
fiscal 2013 year.

For the half ended December 29, 2012, the Company reported, on a consolidated
basis:

  o Net earnings of $11.4 million, or $0.99 per diluted share, down 13.6% from
    $13.2 million, or $1.17 per diluted share, in the first half of fiscal
    2012;
  o Net sales of $95.7 million versus net sales of $105.8 million one year
    ago;
  o Gross profit as a percent of sales at 43.3% up from 42.8% in the first
    half of fiscal 2012; and
  o Selling, general and administrative expenses of $22.9 million versus $23.3
    million in the comparable period one year ago.

Consolidated quarterly results included:

  o Net earnings of $5.3 million, or $0.46 per diluted share, versus $6.4
    million, or $0.56 per diluted share, in the second quarter of fiscal 2012;
  o Net sales of $48.5 million compared to net sales of $55.6 million in the
    equivalent period last year;
  o Gross profit as a percent of net sales 42.4% up from 41.4% one year ago;
    and
  o Selling, general and administrative expenses down 3.9% at $11.9 million
    versus $12.4 million in the second quarter last year.

Footwear Segment
The company said the 13.7% year-over-year decrease in first half net footwear
sales to $77.8 million reflected reductions in certain seasonal programs and
generally soft July-to-December 2012 retail business in some channels.
Footwear net sales for the quarter were $39.5 million versus $47.9 million in
the equivalent period last year.

Footwear segment gross profit as a percentage of first half net sales at 40.5%
rose 40 basis points from the comparable period of fiscal 2012; and quarterly
gross profit as a percentage of net sales expanded to 39.7% from 38.5% in the
second quarter one year ago. The increases were due primarily to changes in
product and customer mix.

The segment generated a first half operating profit of $20.7 million, down
$4.1 million from last year; and a second quarter operating profit of $9.8
million down from $12.3 million in the second quarter of fiscal 2012.

Accessories Segment
Six-month net sales in Accessories segment rose 14.1% in both new and existing
channels to $18.0 million versus $15.7 in the equivalent period of fiscal
2012. For the quarter, accessories net sales were up 17.1% at $9.0 million.

Accessories gross profit dollars for the half rose by 8.9% to $10.0 million,
although gross profit as a percentage of net sales contracted by 270 basis
points to 55.4% compared to one year ago. For the quarter, gross profit was
$4.9 million, up 7.6% from the prior year.  The changes in gross profit
reflected both a shift in product mix and increased shipments to retailers
versus the comparable periods of fiscal 2012.

Segment operating profits of $1.6 million for the quarter and $3.4 million for
the half were basically flat versus last year as a result of increased
shipping costs related to higher sales and to increased expenses from the
Company's continuing investment in its brands and long-term growth strategy.

Management Comments
"We continue aligning our business for tomorrow while consistently producing
operating efficiencies today that place us among the best in our industry,"
said Greg Tunney, President and Chief Executive Officer. "During the first
half of this year we introduced baggallini into new channels. We extended the
distribution of our Foot Petals brand. And, we launched an international
growth initiative."

Jose Ibarra, Senior Vice President Finance and Chief Financial Officer added,
"Our 6-month consolidated gross profit as a percentage of net sales expanded
by 50 basis points despite the 9.5% drop in six-month net sales. Consolidated
expenses for the half were down nearly 2% year-over-year, even as we continued
investing in our brands. We ended the important holiday selling season with
our inventory levels and mix properly positioned for the remainder of this
year; and our cash and short-term investments at the half were up 14% from one
year ago at $41.4 million.

"We continue refining the elements of our business that are within our
control; and we are confident in the viability of our operating model. The
Company is financially healthy and well-positioned to continue its focus on
strengthening existing brands through investment and acquiring new brands for
our expanding portfolio," he said.

Looking Ahead
Mr. Tunney concluded, "We expect to finish our year among the best-performing
companies in our category, but fiscal 2013 will be the first time in seven
years that we have not posted top-line growth. Our decision to exit certain
seasonal footwear programs, the elimination of a key men's slipper program and
general retail softness in our replenishment footwear business all will
negatively impact our overall annual performance to a greater extent than we
originally envisioned. We expect our Accessories segment to meet or exceed its
growth and profitability objectives for fiscal 2013, but those gains will only
partially offset anticipated declines in footwear.

"While we are disappointed by these short-term issues, our approach to
operating this business remains laser-focused on the future. We are committed
to our strategies and confident that they will, over time, generate continuing
innovation, efficiency, growth and profitability for our consumers, customers
and shareholders."

Conference Call/Webcast Today
R.G. Barry Corporation senior management will conduct a conference call for
all interested parties at 9:00 a.m. Eastern Standard Time today. Management
will discuss the Company's performance, its plans for the future and will
accept questions from participants. The conference call is available at (800)
860-2442 in the U.S., (866) 605-3852 in Canada and +1 (412) 858-4600
internationally until five minutes before starting time. To listen via the
Internet, log on at: http://www.videonewswire.com/event.asp?id=91816.

Replays of the call will be available several hours after its completion. The
audio replay can be accessed through Feb. 20, 2013, by calling (877) 344-7529
in the U.S. or (412) 317-0088 internationally and using passcode 10024140. A
written transcript and audio replay of the call will be posted for at least 12
months at the Investor Room section of rgbarry.com.

About RG Barry
RG Barry develops great accessories brands that provide fashionable,
solution-oriented products that touch consumers. Our primary brands include:
Dearfoams slippers dearfoams.com; baggallini handbags, totes and travel
accessories baggallini.com; and Foot Petals premium insoles and comfort
products footpetals.com.  To learn more, visit us at rgbarry.com.

Forward-Looking Statements
Some of the disclosures in this news release contain forward-looking
statements that involve substantial risks and uncertainties.  You can identify
these statements by forward-looking words such as "may," "expect," "could,"
"should," "anticipate," "believe," "estimate," or words with similar
meanings.  Any statements that refer to projections of our future performance,
anticipated trends in our business and other characterizations of future
events or circumstances are forward-looking statements.  These statements,
which are forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995, are based upon our current plans and
strategies and reflect our current assessment of the risks and uncertainties
related to our business.  These risks include, but are not limited to: our
continuing ability to source products from third parties located within and
outside North America; competitive cost pressures; the loss of retailer
customers to competitors, consolidations, bankruptcies or liquidations; shifts
in consumer preferences; the impact of the global financial crisis and general
economic conditions on consumer spending; the impact of the highly seasonal
nature of our footwear business upon our operations; inaccurate forecasting of
consumer demand; difficulties liquidating excess inventory; disruption of our
supply chain or distribution networks; our ability to implement new enterprise
resource information systems; a failure in or a breach of our operational or
security systems or infrastructure, or those of our third-party suppliers and
other service providers, including as a result of cyber-attacks; the
unexpected loss of any of the skills and experience provided by our senior
officers; our ability to successfully integrate any new business acquisitions;
and our investment of excess cash in certificates of deposit and other
variable rate demand note securities.  You should read this news release
carefully because the forward-looking statements contained in it (1) discuss
our future expectations; (2) contain projections of our future results of
operations or of our future financial condition; or (3) state
other "forward-looking" information.  The risk factors described in "Item 1A.
Risk Factors" of Part I of our Annual Report on Form 10-K for the fiscal year
ended June 30, 2012 (the "2012 Form 10-K") and our other filings with the
Securities and Exchange Commission (the "SEC"), give examples of the types of
uncertainties that may cause actual performance to differ materially from the
expectations we describe in our forward-looking statements.  If the events
described in "Item 1A. Risk Factors" of Part I of our 2012 Form 10-K occur,
they could have a material adverse effect on our business, operating results
and financial condition.  You should also know that it is impossible to
predict or identify all risks and uncertainties related to our business. 
Consequently, no one should consider any such list to be a complete set of all
potential risks and uncertainties.  Forward-looking statements speak only as
of the date on which they are made, and we undertake no obligation to update
any forward-looking statement to reflect circumstances or events that occur
after the date on which the statement is made to reflect unanticipated events,
except as required by applicable law.  Any further disclosures in our filings
with the SEC should also be considered.

—financial charts follow—

 

R.G. BARRY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands of dollars, except for per share data)
               Thirteen       Thirteen                 Twenty-Six     Twenty-Six
               Weeks Ended    Weeks Ended              Weeks Ended    Weeks Ended
                (unaudited)    (unaudited)   %          (unaudited)    (unaudited)   %
                                             Increase                                Increase
               December 29,   December 31,   Decrease  December 29,   December 31,   Decrease
               2012           2011                     2012           2011
Net sales      $              $              -12.8%    $              $              -9.5%
                      48,505         55,599                   95,737       105,829
Cost of Sales  27,951         32,602         -14.3%    54,266         60,579         -10.4%
   Gross       20,554         22,997         -10.6%    41,471         45,250         -8.4%
profit
     Gross
profit (as     42.4%          41.4%                    43.3%          42.8%
percent of net
sales)
Selling,
general and    11,930         12,415         -3.9%     22,921         23,295         -1.6%
administrative
expenses
    Operating  8,624          10,582         -18.5%    18,550         21,955         -15.5%
profit
Other income   242            88                       465            175
Interest       (175)          (189)          -7.4%     (351)          (444)          -20.9%
income, net
     Earnings,
before income  8,691          10,481         -17.1%    18,664         21,686         -13.9%
taxes
Income tax     3,390          4,130          -17.9%    7,229          8,445          -14.4%
expense
               $              $                        $              $            
Net earnings                                 -16.5%           11,435         13,241  -13.6%
                5,301          6,351
Earnings per
common share
               $              $                        $              $            
       Basic                                 -17.5%                                  -15.1%
               0.47           0.57                      1.01          1.19
               $              $                        $              $            
       Diluted                               -17.9%                                  -15.4%
               0.46           0.56                      0.99          1.17
Weighted
average number
of common
shares
outstanding  
       Basic   11,372         11,179                   11,327         11,157
       Diluted 11,564         11,364                   11,526         11,335

 

 CONSOLIDATED BALANCE SHEETS 
 (in thousands of dollars) 
                        (unaudited)        (unaudited)          (audited) 
                       December 29, 2012  December 31, 2011    June 30, 2012
ASSETS
Cash & Short term      $                  $                    $              
investments               41,415             36,210                 41,711
Accounts Receivable,   19,481             20,280               13,176
net
Inventory              19,829             18,889               21,149
Prepaid expenses and   2,932              3,184                2,864
other current assets  
   Total current       83,657             78,563               78,900
assets
Net property, plant    4,136              4,264                4,186
and equipment
Other assets           44,150             46,088               45,180
   Total Assets        $                  $                    $              
                        131,943            128,915                128,266
LIABILITIES &
SHAREHOLDERS' EQUITY
Short-term notes       -                  1,750                1,750
payable
Accounts payable       8,654              5,763                10,962
Other current          10,634             12,809               9,987
liabilities
    Total current      19,288             20,322               22,699
liabilities
Long-term debt         18,214             22,500               20,357
Accrued retirement     10,811             10,801               10,803
costs and other
Shareholders' equity,  83,630             75,292               74,407
net
   Total liabilities & $                  $                    $              
shareholders' equity    131,943            128,915                128,266

 

SOURCE R.G. Barry Corporation

Website: http://www.rgbarry.com
Contact: Roy Youst, RG Barry Investor Relations, +1-614-729-7200,
ryoust@rgbarry.com; Jose G. Ibarra, Senior VP Finance/CFO, +1-614-864-6400,
jibarra@rgbarry.com
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