SAN DIEGO, CA -- (MARKET WIRE) -- 04/25/08 -- Nitches, Inc. (NASDAQ: NICH) announced today its results for the three and six months ended February 29, 2008. Highlights include:
-- An increase in net sales for the three month comparative periods of $1.9 million, or 13% -- Operating expenses for the three month comparative periods increased only 12% by comparison and decreased 3% for the six month comparative periods -- A 20% increase in order backlog of $33.7 million versus $28.1 million at the same time last year
The Company also announced that its Backwoods® subsidiary would be hosting a grand opening celebration this weekend, April 26-27th, in Austin, Texas, to mark the opening of the eighth Backwoods® store.
Nitches reported that consolidated net sales for the second quarter of fiscal 2008 increased 13.1% to $16.1 million versus $14.3 million for the second quarter of 2007. The sales increase was attributable primarily to an increase in shipments of men's sportswear and women's sleepwear product. Consolidated net sales for the six months ended February 29, 2008 decreased 1% to $49.3 million versus $49.7 million for the six months ended February 28, 2007. The sales decrease was attributable primarily to a decrease in shipments of men's sportswear in the first quarter of fiscal 2008.
The Company reported a consolidated net loss of $1.9 million for the second quarter of fiscal 2008 versus a net loss of $530,000 in the prior year. Second quarter loss per basic and diluted share were $.32 versus a loss of $.10 per basic and diluted share for the second quarter of fiscal 2008. Consolidated net loss of $1.4 million for the six months ended February 29, 2008 compares with net income of $689,000 for the six months ended February 28, 2007. For the current year period, the loss was $.25 per basic and diluted share versus earnings of $.14 per basic share and $.13 per diluted share for the first half of fiscal 2007.
Net sales and consequently earnings were negatively impacted during the current three and six month periods by lower realized gross margins due to pricing pressures and higher sales allowances granted to significant customers amid a weakening retail environment. Furthermore, an increase in interest expense related to the convertible debentures issued in June 2007, as well as increased borrowings under the Company's factoring agreement, also contributed to the net loss.
At February 29, 2008, the Company had unfilled customer orders of $33.7 million compared to $28.1 million at the same time last year, with such orders generally scheduled for delivery by August 2008 and August 2007, respectively. The increase in backlog is due to growth in orders across product lines, most significantly for men's sportswear and for Paula Deen® dinnerware and related items sold under the recently signed license.
"We are disappointed with the sales and margin performance of our wholesale businesses, but satisfied with our efforts to contain costs," expressed Steve Wyandt, Chairman and CEO of Nitches. "The general economic climate continues to present challenges that are placing downward pressure on selling prices and upward pressure on our costs of manufacturing. In order to combat these challenges we remain focused on shifting our revenue mix from lower margin private label products to higher margin branded lines of business such as our Paula Deen® products and direct ownership of specialty retail stores like Backwoods®."
The Company announced that its eighth Backwoods® store location will be opening in Austin this weekend, April 26-27th, with day-long activities including live music, a climbing wall and vendor-hosted product demonstrations. During the quarter the Company acquired Backwoods®, a specialty outdoor retailer with a 30 year history of providing customers an impressive assortment of top quality technical gear, clothing and footwear for active lifestyles and adventure travel. Backwoods® operates in Kansas, Nebraska, Oklahoma and Texas. Learn more about Backwoods® at www.backwoods.com.
Nitches, Inc. has been designing and marketing quality products for niche markets since 1971. The Company's owned and licensed apparel brands include Adobe Rose®, Anne Lewin®, Claire Murray®, Crabtree & Evelyn®, Derek Rose®, Dockers®, Eminence®, Gossard®, Nat Nast®, Princesse tam tam®, Saguaro®, Shock Absorber®, The Skins Game®, So-Cal Speed Shop®, Southwest Canyon®, and ZOIC®. The Company also distributes home décor products under the Bill Blass® brand and tabletop items such as dinnerware under the Paula Deen® brand. The Company's products are sold to better department stores, specialty boutiques, moderate department stores, and national and regional discount department stores and chains. The Company develops and manufactures private label products for many leading retailers and multi-channel marketers. Visit our web site at www.nitches.com to learn more about our brands and our company.
Nitches is headquartered in San Diego, California with offices in New York City, Los Angeles, Dallas, Austin and Hong Kong. The Company's shares are traded on the NASDAQ Capital Market under the symbol NICH.
Backlog amounts include both confirmed orders and unconfirmed orders that the Company believes, based on industry practice and past experience, will be confirmed. While cancellations, rejections and returns have generally not been material in the past, there can be no assurance that such action by customers will not reduce the amount of sales realized from the backlog of orders at a given point in time. The amount of unfilled orders at any given time is affected by a number of factors, including the timing of the receipt and processing of customer orders and the scheduling of the manufacture and shipping of the product, which may be dependent on customer requirements.
Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to differ materially from forecasted results. Those risks include, among other things, a softening of retailer or consumer acceptance of the Company's products, pricing pressures and other competitive factors, or the unanticipated loss of a major customer. The Company's results may also differ materially from period to period due to the seasonal nature of the Company's product lines. These and other risks are more fully described in the Company's filings with the Securities and Exchange Commission.
Three Months Ended Six Months Ended -------------------------- -------------------------- February 29, February 28, February 29, February 28, 2008 2007 2008 2007 ------------ ------------ ------------ ------------- Net sales $ 16,148,000 $ 14,274,000 $ 49,255,000 $ 49,695,000 Net income (loss) $ (1,859,000) $ (530,000) $ (1,401,000) $ 689,000 Basic earnings (loss) per share $ (0.32) $ (0.10) $ (0.25) $ 0.14 Diluted earnings (loss) per share $ (0.32) $ (0.10) $ (0.25) $ 0.13 Weighted average number of common shares: Basic 5,774,369 5,253,507 5,717,007 5,077,816 Diluted 5,774,369 5,253,507 5,717,007 5,200,724
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