RG Barry Brands Reports Solid FY 2013 Performance

RG Barry Brands Reports Solid FY 2013 Performance

R.G. Barry Corporation (NASDAQ-GM: DFZ) today reported a solid performance for its fiscal year ended June 29, 2013.

Annual Results
For the full 2013 fiscal year, the Company reported on a consolidated basis:

  • Net earnings of $13.3 million, or $1.15 per diluted share, compared to $14.5 million, or $1.27 per diluted share, reported one-year ago;
  • Year-over-year net sales of $147.0 million versus $156.0 million in fiscal 2012;
  • Gross profit as a percent of net sales of 43.5%, up 40 basis points from 43.1% in the comparable period one-year ago, primarily reflecting the net benefit of the discontinuation of lower-margin and licensed footwear products on mix; and
  • SG&A expenses of $43.0 million, or 29% of net sales, compared to $43.8 million, or 28% of net sales, reported for fiscal 2012.

The Company said that its results reflect a $15 million decline in net sales in its Footwear segment. Most of the decline was anticipated and resulted predominantly from the elimination of lower-margin and licensed business. The decline was partially offset by an increase of more than $6.0 million year-over-year in higher-margin net sales in the Company’s Accessories segment.

Fourth Quarter Results
For the fourth quarter, the Company reported on a consolidated basis:

  • Net earnings of $281,000, or $0.02 cents per diluted share, versus $474,000, or $0.04 cents per diluted share, in the fourth quarter of fiscal 2012;
  • Net sales of $25.5 million, up from $25.0 million in the comparable period one-year ago;
  • Gross profit as a percent of net sales contracted 120 basis points to 41.7% from 42.9% in the comparable period last year, reflecting a shift in sales mix for the quarter; and
  • Selling, general and administrative expenses of $10.5 million, or about 41% of quarterly net sales, compared to $10.6 million, or 42.6% of quarterly net sales, one-year ago.

Financial Strength
The Company remained in a healthy financial position at year-end.

  • Cash and short-term investments were $39.5 million;
  • Consolidated inventory was at $24.2 million, up from $21.1 million at the end of fiscal 2012; and
  • Net shareholders’ equity rose 17% to $87.1 million from $74.4 million one year ago.

Management Comments
“We are once again among the best-of-class in our category and we remain solidly positioned to continue transforming RG Barry Brands into a multi-dimensional provider of accessories products,” said Greg Tunney, President and Chief Executive Officer.  “We plan to meet future marketplace challenges with superior products, excellent performance and continuing investment in strengthening and expanding our portfolio of great accessories brands.”

“Our actions last year in eliminating less-productive businesses reflected our realignment of the Footwear segment for future growth and enhanced profitability,” added Jose Ibarra, Senior Vice President Finance and Chief Financial Officer. “Despite facing the formidable combination of retail and economic headwinds and our strategic decision to eliminate lower-margin and licensed footwear products in fiscal 2013, we generated an operating profit in excess of 14% as a percentage of net sales, making us one of the best performers in our sector.”

Mr. Tunney continued, “Looking to fiscal 2014, we expect to resume our pattern of increasing year-over-year revenue. In the non-promotional, full-price Accessories businesses we will target a growth rate in the mid-teens. The objective of our Footwear segment will be to hit a year-over-year growth target in low single digits, although at a higher level of profitability than in fiscal 2013. We also plan to increase investment spending in support of our current businesses to a level that is more in line with our long-term growth strategies and profitability profile.

“Our commitment to significant growth through acquisitions remains strong. We have continued to fine-tune our approach and have broadened the scope of our search to include prospects in select international markets and additional business categories that we believe will fit well with our model and filter. We also have created a full-time internal position to support our M&A efforts. We remain very confident that our next growth milestone of becoming a $200-to-$250 million company in 3-to-5 years can and will be achieved,” he concluded.

Conference Call/Webcast Today
RG Barry senior management will conduct a conference call for all interested parties at 9:00 a.m. Eastern Daylight 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=95711.

The call will also be available at 800.860.2442 (U.S.) 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 Daylight Time, Sept. 20, 2013 at 877.344.7529 (U.S.) and +1.412.317.0088 (Canada/international); ask for conference 10033161. 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.