INGLEWOOD, Calif., June 15, 2001 (PRIMEZONE) -- Signature Eyewear (OTCBB:SEYE) today reported results for its second fiscal quarter and six-month period ended April 30, 2001, reflecting profitability for the second consecutive quarter and significant improvements in operations, based on an aggressive cost-reducing turnaround program.
For the three-month period, the company reported net income of $229,000, or $0.05 per share, on net sales of $11.5 million, compared with a net loss of $2.5 million, or $0.49 per share, on net sales of $12.4 million for the corresponding period in fiscal 2000. Excluding discontinued products, net sales for the second quarter of fiscal 2001 were $11.3 million versus $11.4 million for the same period in 2000.
For the first six months of fiscal 2001, Signature Eyewear reported net income of $333,000, or $0.07 per share, on net sales of $22.4 million, versus a net loss of $2.7 million, or $0.54 per share, on net sales of $24.4 million. Excluding discontinued products, net sales for the six months declined 3% from the same period in 2000.
Total operating expense for the second quarter declined to $6.5 million from $10.8 million, a 40% improvement.
Selling expense decreased 45% year-to-year to $3.3 million, or 29% of net sales, compared with $6.1 million, or 49% of net sales. The decline in selling expense was primarily due to reductions in advertising and promotional expenses in conjunction with lower variable selling costs.
General and administrative (G&A) expense declined 36% year-to-year to $2.9 million, or 25% of net sales compared with $4.4 million or 36% of net sales. G&A expense declined primarily due to reduced staffing. For the six-month period, selling expenses declined $3.0 million and general administrative expenses declined $2.0 million. The $5.0 million reduction in selling, general and administrative expenses is primarily the result of the implementation of the company's turnaround plan.
For the quarter, gross margin increased to 61.4% of net sales versus 59.2% for the same period in 2000. For the six-month period, gross profit improved to 63.4% from 59.6%. Margin improvements for the three and six-month periods were attributed to higher average frame prices and lower frame costs.
Bernard Weiss, chairman and chief executive officer, said, "We continue to realize the benefits of our active turnaround program to improve sales and reduce selling and overhead expense. With our improving operating performance, we anticipate in the months ahead fine-tuning our infrastructure while implementing our turnaround plan."
Recently, Signature Eyewear announced that it received an extension of its bank forbearance agreement to August 31, 2001. The company believes the extension gives it sufficient time to refinance the existing credit facility.
The company also announced that it had received a written proposal from a new lender to refinance the credit facility with a two-year revolving line of credit for up to $13.5 million. The line of credit would be secured by the assets of the company with availability tied to eligible accounts receivable and inventory. Closing of the line of credit is subject to satisfactory completion of due diligence and other conditions.
Michael Prince, chief financial officer, reconfirmed the company's dedication to its 2001 turnaround strategy, which includes refinancing its existing credit facility; increasing profit margins on most of its brand name products, and increasing inventory turnover rates to improve its cash position and reducing inventory levels.
Prince noted that Signature Eyewear's inventory levels have decreased 21% to $14.8 million as of April 30, 2001, compared with $18.7 million at fiscal year end October 31, 2000. Accounts payable also have decreased 27% to $10.7 million as of April 30, 2001, versus $14.7 million at October 31, 2000.
Prince said, "The company's balance sheet has grown stronger as a result our turnaround program that has been designed to improve a number of negative factors on our balance sheet. The results thus far indicate that we have been successful, and we are working to extend this positive trend in the months ahead. Additionally, the company has continued its program of negotiating vendor discounts of outstanding payables, which, over the six-month period, totaled $600,000."
Signature Eyewear is a leading designer and marketer of prescription eyeglass frames under internationally recognized brand names such as Eddie Bauer Eyewear, Laura Ashley Eyewear, bebe eyes, Nicole Miller, and Hart Schaffner & Marx Eyewear, as well as its proprietary brands, including Dakota Smith, Camelot and the Signature line. In addition to producing distinctive frame designs, the company distinguishes itself through innovative sales and merchandising programs that are unique to the optical industry. Signature Eyewear's products are distributed in the U.S. and internationally to opticians, optometrists and ophthalmologists and sold directly to major worldwide retail chains.
This press release contains certain forward-looking statements that involve risks and uncertainties. Such statements include, but are not limited to, the company's ability to implement its turnaround strategy, including increasing liquidity, generating working capital, refinancing its credit facility, maintaining current sales levels, and reducing inventory levels. Actual results may differ materially from those indicated by such statements as a result of various factors, including those discussed in the company's 2000 annual report on form 10-K and other periodic reports filed with the Securities and Exchange Commission.
SIGNATURE EYEWEAR, INC.
Summary Financial Data
Statement of Income Data:
(in thousands, except per share data)
Three Months Ended Six Months Ended
April 30, April 30,
2001 2000 2001 2000
---------- ---------- ---------- ----------
(unaudited) (unaudited)
Net sales $ 11,470 $ 12,390 $ 22,359 $ 24.393
Cost of sales 4,428 5,058 8,189 9,866
---------- ---------- ---------- ----------
Gross profit 7,042 7,331 14,170 14,527
Operating Expenses:
Selling 3,343 6,066 6,634 9,653
General &
administrative 2,851 4,429 5,931 7,941
Depreciation &
amortization 295 279 595 612
---------- ---------- ---------- ----------
Total Operating
Expenses 6,489 10,774 13,160 18,206
---------- ---------- ---------- ----------
Income (Loss)
from Operations 553 (3,443) 1,010 (3,679)
---------- ---------- ---------- ----------
Other income
(expense):
Interest, net (356) (294) (729) (490)
Sundry 31 29 53 40
---------- ---------- ---------- ----------
Total Other Income
(Expense) (324) (265) (676) (450)
---------- ---------- ---------- ----------
Income (Loss) before
Income Taxes 229 (3,708) 334 (4,128)
Provision (Benefit)
for Income Taxes (1,239) 1 (1,407)
---------- ---------- ---------- ----------
Net Income (Loss) $ 229 $ (2,469) $ 333 $ (2,721)
========== ========== ========== ==========
Earnings (Loss) Per
Share, Basic &
Diluted; Earnings
(Loss) per Common
Share $ 0.05 $ (0.49) $ 0.07 $ (0.54)
========== ========== ========== ==========
Weighted average
shares outstanding 5,056,889 5,056,889 5,056,889 5,060,952
========== ========== ========== ==========
Balance Sheet Data:
April 30, October 31,
2001 2000
--------- -----------
Current Assets $ 27,945 $ 33,006
Total assets $ 35,171 $ 41,435
Current liabilities $ 22,598 $ 28,187
Total liabilities $ 26,397 $ 32,993
Stockholders' equity $ 8,774 $ 8,441