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RG Barry Reports 1st Quarter Results



                     RG Barry Reports 1st Quarter Results

PR Newswire

PICKERINGTON, Ohio, Nov. 5, 2013

PICKERINGTON, Ohio, Nov. 5, 2013 /PRNewswire/ -- R.G. Barry Corporation
(Nasdaq: DFZ), today said that shifts in the timing of its holiday shipments
to retailers and the sluggish retail environment were among factors that
combined to negatively affect its first-quarter fiscal 2014 results.

For the quarter ended September 28, 2013, the Company reported, on a
consolidated basis:

  o Net earnings of $4.8 million, or $0.41 per diluted share, down 22.4% from
    $6.1 million, or $0.54 per diluted share, in the first quarter of fiscal
    2013;
  o Net sales of $41.9 million down 11.3% versus net sales of $47.2 million
    one year ago;  
  o Gross profit as a percent of sales at 46.5%, up 220 basis points versus
    44.3% in the first quarter last year; and
  o Selling, general and administrative expenses of $11.9 million, up 8.0%
    versus $11.0 million in the comparable quarter a year ago, primarily
    reflecting increased investment spending that is aligned with long-term
    growth initiatives not in place one year ago.

"We are obviously disappointed in our first quarter results," said Greg
Tunney, President and Chief Executive Officer, "but ours has never been a
quarter-to-quarter business. Holiday shipments to retailers can occur in
either the first or second quarter, based upon retailer needs; and retail
sell-through during the Christmas season has significant impact on our rate of
profitability. We are working with our customers to maximize our in-store
performance between now and December 31," he said.

Changes in the timing of some seasonal footwear shipments to retailers, the
decision to exit a negative-margin private label department store footwear
program and sluggish retail sales all contributed to the decline in
consolidated quarterly net sales compared to last year. Improved gross profit
as a percentage of net sales, in spite of lower top-line and gross profit
dollars, resulted from our continuing shift to a more profitable mix of
products and channels.

The decline in quarterly consolidated net sales was attributed primarily to
the Footwear segment, which was down $5.4 million or 14.2% to $32.8 million
from the comparable period last year.  A 160 basis point increase in Footwear
gross profit as a percentage of net sales to 43.0% reflected the Company's
continuing move toward a mix of higher-margin branded footwear sales and away
from private label and licensed products.

Accessories segment net sales increased 1.4%, or $128,000 compared to the
first quarter last year, to $9.0 million and produced a 59.1% gross profit as
a percentage of net sales. The nearly 250 basis point increase in gross profit
as a percentage of net sales versus the comparable first quarter of fiscal
2013 was driven by the Company's strategic shift out of discount and lower
margin businesses, resulting in a change in product and channel mix across the
segment.

Looking Ahead
"We recognize that based upon our business outlook and economic headwinds,
this is not going to be an easy year for many suppliers to retail," said Jose
G. Ibarra, Senior Vice President Finance and Chief Financial Officer.  "Given
the current environment, we expect consolidated revenue for the year to be
down slightly compared with fiscal 2013. We will have a much better view of
the full year when we report on the second quarter and the first half in
February."   

"We remain fully committed to our growth plan and strategy of investment in
both existing and new businesses," added Mr. Tunney.  "While we continue to
refine our model with a goal of balanced performance, we are not there yet.
The real long-term solution for us lies in generating sustainable, profitable
growth from channels such as e-commerce and international and expansion into
new accessories product categories through acquisitions. Our strong operating
cash flow and healthy balance sheet give us the flexibility to fund growth
initiatives even in a challenging retail environment."

Conference Call/Webcast Today
RG Barry 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
teleconference participants.
To listen via the Internet, log on to
http://www.videonewswire.com/event.asp?id=96753.

The conference call will be available at 800.860.2442 (U.S.), 866.605.3852
(Canada) and +1.412.858.4600 (international) until five minutes before
starting time.

Replays will be available beginning approximately one hour after the call
conclusion and running and through 9 a.m. Eastern Time, Nov. 20, 2013  at
877.344.7529 (U.S.) and +1.412.317.0088 (Canada/international); ask for
conference 10036385. Replays and a written transcript of the call will be
posted for up to one year in the Investor Room section of rgbarry.com.

About RG Barry
RG Barry develops accessories brands that provide fashionable,
solution-oriented products for a great life. 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 secure and protect
trademarks and other intellectual property; 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 news release and
in our filings with the Securities and Exchange Commission (the "SEC"), in
particular "Item 1A. Risk Factors" of Part I of our Annual Report on Form 10-K
for the fiscal year ended June 29, 2013 (the "2013 Form 10-K"), 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 2013 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 Weeks      Thirteen Weeks
                       Ended               Ended
                        (unaudited)         (unaudited)        % Increase
                       September 28, 2013  September 29, 2012  Decrease
Net sales              $                   $                   -11.3%
                                41,911              47,233
Cost of sales          22,439              26,316              -14.7%
   Gross profit        19,472              20,917              -6.9%
     Gross profit (as  46.5%               44.3%
percent of net sales)
Selling, general and
administrative         11,882              10,990              8.1%
expenses
    Operating profit   7,590               9,927               -23.5%
Other income           363                 223
Interest  (expense),   (139)               (177)               -21.5%
net
     Earnings, before  7,814               9,973               -21.6%
income taxes
Income tax expense     3,051               3,839               -20.5%
Net earnings           $                   $                   -22.4%
                                  4,763                6,134
Earnings per common
share
       Basic           $                   $                   -22.2%
                                    0.42                 0.54
       Diluted         $                   $                   -24.1%
                                    0.41                 0.54
Weighted average
number of common
shares outstanding
       Basic           11,395              11,282
       Diluted         11,516              11,454
Common shares
outstanding at the end 11,388              11,265
of period
Cash dividends         $                   $                
declared per share                  0.09                 0.08
 CONSOLIDATED BALANCE SHEETS 
 (in thousands of dollars) 
                        (unaudited)         (unaudited)         (audited) 
                       September 28, 2013  September 29, 2012  June 29, 2013
ASSETS
Cash & short-term      $                   $                   $              
investments                     19,285              14,578         39,500
Accounts receivable,   29,766              34,301              16,755
net
Inventory              33,989              30,610              24,239
Prepaid expenses and   4,156               2,989               3,670
other current assets
   Total current       87,196              82,478              84,164
assets
Net property, plant    4,126               4,150               4,178
and equipment
Other assets           41,514              44,685              41,911
   Total assets        $                   $                   $              
                             132,836              131,313        130,253
LIABILITIES &
SHAREHOLDERS' EQUITY
Short-term notes
payable & current      4,286               6,036               4,286
installments of
long-term debt
Accounts payable       10,145              8,078               10,655
Other current          5,803               7,467               4,899
liabilities
    Total current      20,234              21,581              19,840
liabilities
Long-term debt         15,000              19,286              16,071
Accrued retirement     6,600               10,763              7,165
costs and other
Shareholders' equity,  91,002              79,683              87,177
net
   Total liabilities & $                   $                   $              
shareholders' equity         132,836              131,313        130,253

 

SOURCE R.G. Barry Corporation

Website: http://www.rgbarry.com
Contact: Roy Youst, RG Barry Investor Relations, 614.729.7200,
ryoust@rgbarry.com; Jose G. Ibarra, Senior VP Finance/CFO 614.864.6400,
jibarra@rgbarry.com
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