You were right on SNKI; $.62 vs $.63; feels GREAT, doesn't it??
B: Swank, Inc. Reports Increased Net Sales and Net Income for the Twelve Months
Ended December 31, 2011 ( Marketwire )
NEW YORK, NY, Feb 27, 2012 (MARKETWIRE via COMTEX) --
John Tulin, Chairman of the Board and Chief Executive Officer of
SWANK, INC. (PINKSHEETS: SNKI) ("Swank"), today reported financial
results for the Company's fourth quarter and twelve months ended
December 31, 2011.
Net income for the fourth quarter ended December 31, 2011 was
$3,439,000 or $.62 per diluted share compared to net income of
$3,563,000 or $.63 per diluted share for the corresponding quarter in
2010. For the year ended December 31, 2011, net income was $5,938,000
or $1.06 per diluted share compared to $4,174,000 or $.74 per diluted
share for fiscal 2010. Net sales for the quarter increased 4.3% to
$46,959,000 and, for the year, increased 4.5% to $138,620,000, in
both cases as compared to the same periods in 2010.
Income before taxes for the quarter was $5,600,000 compared to
$5,785,000 for 2010's fourth quarter and for the year, was $9,799,000
compared to $6,086,000 last year. Income before taxes for 2010
includes a pretax charge recorded during that year's first quarter of
$1,492,000 associated with inventory disposal and other costs
incurred by us in connection with the termination of our relationship
with Style 365, LLC ("Style 365"), a marketer of women's belts and
accessories.
Commenting on the results for the quarter and year, Mr. Tulin said,
"We are very pleased with our 2011 results for both the quarter and
12-month periods, particularly that we were able to increase net
income for the year by 42% while increasing net sales by 4.5% in a
still uncertain economic environment. Net sales of our personal
leather goods and department store belt collections increased during
2011 due to strong demand for our products at many retailers. Our
attractive merchandise collections and strong portfolio of designer
brands continued to drive sales growth of our core products during
2011 through a variety of retail channels."
Mr. Tulin continued, "Our strong balance sheet continues to provide
us with the flexibility to quickly take advantage of sales
opportunities as they develop. We look forward to capitalizing on a
number of new opportunities for this Spring as we work closely with
our retail partners to bring additional new merchandise concepts to
market."
Results for the Fourth Quarter ended December 31, 2011
Net income for the fourth quarter ended December 31, 2011 was
$3,439,000 or $.62 per diluted share compared to $3,563,000 or $.63
per diluted share for the corresponding quarter in 2010. Income
before taxes for the quarter was $5,600,000 compared to $5,785,000
for the same period in 2010.
Net sales during the quarter increased 4.3% to $46,959,000 compared
to $45,032,000 for the corresponding period in 2010. The increase
during the quarter was principally due to higher shipments of our
personal leather goods merchandise and a reduction in dilutive
allowances including reserves for customer returns and in-store
markdowns, offset in part by a decrease in shipments for belts and
gift accessories. Shipments increased for personal leather goods due
to additional orders received for our luxury collections as well as
higher volume at certain of our department store customers. The
decrease in belt shipments was due to substantial orders received
during last year's fourth quarter from certain wholesale club
accounts which did not recur in 2011. The decrease in dilutive
allowances was mainly associated with a change in sales mix and a
reduction in estimated customer returns and in-store markdown
expenditures during the quarter as compared to the same time last
year.
Gross profit for the quarter increased $1,360,000 or 8.8% and, as a
percentage of net sales, increased to 35.7% compared to 34.2%, in
both cases as compared to last year. The increase in gross profit
during the quarter was due to higher net sales as well as reductions
in certain inventory-related expenses, including merchandise
markdowns associated with out of line inventory, offset partially by
a reduction in our gross margin, mainly for our jewelry and personal
leather goods merchandise, and increased product royalty expense.
Selling and administrative expenses for the quarter ended December
31, 2011 increased $1,549,000 or 16.3% to $11,042,000 compared to
$9,493,000 for last year's fourth quarter. As a percentage of net
sales, selling and administrative expenses were 23.5% and 21.1% for
the quarters ended December 31, 2011 and 2010 respectively. The
increase in selling and administrative expenses was mainly due to
increases in professional fees associated with the
previously-announced transaction with Randa as well as higher
variable selling costs and compensation and benefits expenses.
Net interest expense for the quarter was $130,000 compared to
$134,000 last year. Average borrowings during the quarter decreased
slightly relative to the fourth quarter of 2010.
Results for the Year Ended December 31, 2011
Net income for the year ended December 31, 2011 was $5,938,000 or
$1.06 per diluted share compared to net income of $4,174,000 or $.74
per diluted share last year. Income before taxes was $9,799,000
compared to $6,086,000 in 2010. As previously discussed, net income
and income before taxes for 2010 reflect a pretax charge of
$1,492,000 associated with Style 365.
Net sales for the year increased 4.5% to $138,620,000 compared to
$132,702,000 last year. The increase was due to higher shipments of
our men's personal leather goods merchandise and reductions in
dilutive allowances including reserves for customer returns and
in-store markdowns, offset in part by lower shipments of our men's
belts and gift accessories. Personal leather goods shipments
increased due to higher orders during 2011 from a number of our
department and chain store customers as well as a large order for
certain of our luxury merchandise shipped during the fourth quarter.
Shipments of our belt merchandise increased to department store
customers but declined overall relative to last year due to several
orders shipped to certain wholesale club accounts during 2010. The
decrease in dilutive allowances was due to reductions in estimated
customer returns and in-store markdown expenditures during 2011 as
compared to last year.
Net sales for both 2011 and 2010 include annual adjustments recorded
during the second quarter to reflect the variance between customer
returns of prior year shipments actually received in the current year
and the allowance for customer returns which was established at the
end of the preceding fiscal year. This adjustment increased net sales
by $2,223,000 and $782,000 for the years ended December 31, 2011 and
2010, respectively. The favorable adjustments in both years resulted
from actual returns experience during the spring selling seasons
being better than anticipated compared to the respective reserves
established at the end of the previous fiscal years. The reserve
established at December 31, 2010 was substantially larger than in
previous years due to significant shipments during our fall 2010
season to certain wholesale club accounts and an unusually large
holiday gift program to a major customer, each of which are
customarily subject to season-end stock adjustments. Returns
experience overall during the spring 2011 season was much better than
expected, contributing to a larger returns adjustment relative to the
prior year.
Gross profit for the twelve months ended December 31, 2011 increased
$5,413,000 or 13.2% as compared to 2010. Gross profit expressed as a
percentage of net sales improved to 33.5% during the year compared to
30.9% in 2010. The increase in gross profit was due to higher net
sales and decreases in certain inventory control costs as well as an
improvement in gross margin percentage, all offset in part by an
increase in product royalty expense. Gross profit in 2010 reflects a
charge of $1,492,000 related to Style 365 recording during 2010's
first quarter. Exclusive of that charge, gross profit as a percentage
of net sales in 2010 would have been 1.4 percentage points higher.
As described above, we record an adjustment each year during our
second quarter to reconcile actual customer returns received during
the spring season with the reserve established at the end of the
preceding year. Those adjustments resulted in an increase in gross
profit of $1,203,000 and $547,000 for fiscal 2011 and 2010,
respectively.
Selling and administrative expenses for the twelve-month period ended
December 31, 2011 increased $1,782,000 or 5.2% compared to last year.
Selling and administrative expenses expressed as a percentage of net
sales were 26.2% and 26.0%, for 2011 and 2010, respectively. The
increase was primarily attributable to higher merchandising and
variable selling costs along with increases in professional fees
recorded mainly during the fourth quarter associated with the
previously-announced transaction with Randa. Compensation and benefit
expenses also increased during the year.
Net interest expense for the twelve-month period ended December 31,
2011 was $340,000 reflecting a decline of $82,000 or 19.4% compared
to the prior year. The decrease was due to a 28.6% decline in average
borrowings resulting from an increase in cash provided by operations
primarily during the first and fourth quarters of 2011 relative to
the corresponding periods in 2010.
Forward-Looking Statements
Certain of the preceding paragraphs contain forward-looking
statements, which are based upon current expectations and involve
certain risks and uncertainties. Under the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995, readers should
note that these statements may be impacted by, and the Company's
actual performance and results may vary as a result of, a number of
factors including general economic and business conditions,
continuing sales patterns, pricing, competition, consumer
preferences, and other factors.
Swank designs and markets men's jewelry and men's and women's belts
and personal leather accessories. The Company distributes its
products to retail outlets throughout the United States and in
numerous foreign countries. These products, which are known
throughout the world, are distributed under the names "Kenneth Cole,"
"Tommy Hilfiger," "Nautica," "Geoffrey Beene," "Guess?," "Tumi,"
"Buffalo David Bitton," "Chaps," "Donald Trump," "Pierre Cardin," "US
Polo Association," and "Swank." Swank also distributes men's jewelry
and leather items to retailers under private labels.
SWANK, INC.
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
FOR THE QUARTERS ENDED DECEMBER 31, 2011 AND 2010
(Dollars in thousands except share and per share data)
2011 2010
----------- -----------
Net sales $ 46,959 $ 45,032
Cost of goods sold 30,187 29,620
----------- -----------
Gross profit 16,772 15,412
Selling and administrative expenses 11,042 9,493
----------- -----------
Income from operations 5,730 5,919
Interest expense 130 134
----------- -----------
Income before income taxes 5,600 5,785
Income tax provision 2,161 2,222
----------- -----------
Net income $ 3,439 $ 3,563
----------- -----------
Share and per share information:
Basic net income per weighted average common share
outstanding $ .62 $ .63
Basic weighted average common shares outstanding 5,562,988 5,637,936
Diluted net income per weighted average common share
outstanding $ .62 $ .63
Diluted weighted average common shares outstanding 5,562,988 5,637,936
SWANK, INC.
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011 AND 2010
(Dollars in thousands except share and per share data)
---------------------------------
2011 2010
----------- -----------
Net sales $ 138,620 $ 132,702
Cost of goods sold 92,158 90,161
Costs associated with termination of Style 365
agreement - 1,492
----------- -----------
Cost of goods sold 92,158 91,653
Gross profit 46,462 41,049
Selling and administrative expenses 36,323 34,541
----------- -----------
Income from operations 10,139 6,508
Interest expense 340 422
----------- -----------
Income before income taxes 9,799 6,086
Income tax provision 3,861 1,912
----------- -----------
Net income $ 5,938 $ 4,174
----------- -----------
Share and per share information:
Basic net income per weighted average common share
outstanding $ 1.06 $ .74
Basic weighted average common shares outstanding 5,602,362 5,664,236
Diluted net income per weighted average common share
outstanding $ 1.06 $ .74
Diluted weighted average common shares outstanding 5,602,362 5,664,236
SWANK, INC.
CONDENSED BALANCE SHEETS
(Dollars in thousands except share data)
(Unaudited)
December 31, 2011 December 31, 2010
------------------ ------------------
ASSETS
Current:
Cash and cash equivalents $ 287 $ 3,235
Accounts receivable, less
allowances of $6,637 and $7,798
respectively 23,275 20,214
Inventories, net:
Work in process 930 773
Finished goods 24,084 21,848
-------- --------
25,014 22,621
Deferred taxes, current 2,101 2,713
Prepaid and other current assets 1,185 1,150
--------- ---------
Total current assets 51,862 49,933
Property, plant and equipment, net
of accumulated depreciation 975 1,132
Deferred taxes, noncurrent 2,258 2,118
Other assets 2,547 2,905
--------- ---------
Total assets $ 57,642 $ 56,088
========= =========
LIABILITIES
Current:
Note payable to bank $ 669 $ 5,287
Current portion of long-term
obligations 1,967 711
Accounts payable 4,253 4,151
Accrued employee compensation 2,564 1,748
Other current liabilities 3,483 3,916
--------- ---------
Total current liabilities 12,936 15,813
Long-term obligations 5,330 6,584
--------- ---------
Total liabilities 18,266 22,397
--------- ---------
STOCKHOLDERS' EQUITY
Preferred stock, par value $1.00:
Authorized - 300,000 shares and
1,000,000 shares, respectively - -
Common stock, par value $.10:
Authorized - 43,000,000 shares:
Issued - 6,429,095 shares 642 642
Capital in excess of par value 2,859 2,605
Retained earnings 39,368 33,430
Accumulated other comprehensive
(loss), net of tax (908) (696)
Treasury stock, at cost, 874,843 and
800,350 shares, respectively (2,585) (2,290)
--------- ---------
Total stockholders' equity 39,376 33,691
--------- ---------
Total liabilities and stockholders'
equity $ 57,642 $ 56,088
========= =========
Contact:
Jerold R. Kassner
Swank, Inc.
(508) 822-2527
SOURCE: Swank, Inc.
Copyright 2012 Marketwire, Inc., All rights reserved.
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