RGB Barry R G Corp

R.G. Barry Corporation Reports Third Quarter Improvement PICKERINGTON, Ohio, Oct. 30 /PRNewswire-FirstCall/ -- R.G. Barry Corporation today reported significantly improved operating results for the third quarter and nine months ended September 27, 2003. Quarterly net sales from continuing operations rose to $40.0 million up from $38.6 million in the third quarter of 2002. The Company reported a net after-tax profit from continuing operations of $1.5 million, or $0.15 cents per diluted share, up from net after-tax earnings of $983,000, or $0.10 cents per diluted share, in the comparable period one year ago. Quarterly gross profit as a percent of sales increased to 40.6 percent from 40.2 percent in the third quarter of 2002. Nine-month net sales from continuing operations increased to $79.4 million from $73.9 million in the equivalent period of 2002. The Company's nine-month net operating loss from continuing operations declined approximately 37 percent to $3.9 million, or $0.40 cents per share, from $6.2 million, or $0.64 cents per share, in the first nine months last year. Gross profit as a percent of sales for the nine months rose to 37.5 percent from 35.6 percent in the comparable period of 2002. The nine-month net after-tax loss, including discontinued operations, was $5.2 million, or $0.53 cents per share, down from a net after-tax loss of $7.9 million, or $0.82 cents per share, in the comparable period one year ago. "We are pleased by the performance of our continuing operations and believe that it reflects some of the initial benefit of our three-year strategic program to return R.G. Barry to profitability and growth. Our net sales, net earnings and gross profit as a percent of sales have again improved against the comparable prior periods," said Gordon Zacks, Chairman of the Board and Chief Executive Officer. "The early receipt of a significant amount of outsourced products into our distribution system increased third quarter shipping expense, inventory levels and short-term bank debt against last year's comparable periods. This inventory is part of planned fourth quarter sales and should ship by year-end. We expect to end 2003 with a more appropriate inventory level and with no short-term bank debt. "Our comfort footwear business remains highly seasonal and centered around the Christmas holiday. Healthy retail sales over the next 8-to-10 weeks are critical to us for a successful year. The Dearfoams(R) family of brands will have power presentations in some of America's best retail traffic locations for the upcoming holidays, and our army of in-store merchandisers will make sure those presentations are well stocked during this important selling period. New products like our licensed NASCAR(R) slippers and slipper socks and the patent applied for Terrasoles(TM) indoor-outdoor leisure footwear brand are performing above our expectations at retail. General retail sales in August, September and October were better than plan for most of our key customers. If these trends continue into November and December, we foresee a healthy Christmas selling season and believe we are properly positioned to return to modest profitability in our continuing operations this year," he said. R.G. Barry Corporation senior management will conduct a conference call for all interested parties at 10:00 a.m. EST Friday, October 31. Management will discuss the Company's performance, its plans for the future and will accept questions from invited participants. The conference call is available at (888) 349-9379 or (706) 634-2347 until five minutes before starting time or via the Internet. To listen via the Internet, go to < http://www.rgbarry.com/ > at least 15 minutes prior to the scheduled start time to register, download, and install any necessary audio software. Replays of the call will be available shortly after its completion. The audio replay can be accessed through November 7, 2003, by calling (800) 642-1687 or (706) 645-9291 and using access code 3623134; or for 30 days by visiting the Company's Web site at < http://www.rgbarry.com/ >. A written transcript of the call will be available for 12 months at the Company's Web site under the "Investors/News Release" section. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: The statements in this release, other than statements of historical fact, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon our current plans and strategies, and reflect our current assessment of the risks and uncertainties related to our business. In addition to the risks and uncertainties noted in this news release, there are factors that could cause results to differ materially from those anticipated by some of our forward-looking statements. These factors include product demand and market acceptance; the economic and business environment and the impact of governmental regulations, both in the United States and abroad; the effects of direct sourcing by customers of competitive products from alternative suppliers; the loss of significant customers in connection with mergers, acquisitions, bankruptcies or other circumstances; economic, regulatory and cultural difficulties or delays in our business outside the United States; our ability to improve processes and business practices to keep pace with the economic, competitive and technological environments; the availability and costs of financing; capacity, efficiency and supply constraints; weather; the effects of terrorist acts; acts of war; and other risks detailed in the our press releases, shareholder communications and Securities and Exchange Commission filings. --tables to follow- R. G. BARRY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands of dollars, except for per share data) 13 weeks ended 39 weeks ended Sept. 27, Sept. 28, %Incr. Sept. 27, Sept. 28, %Incr. 2003 2002 (Decr.) 2003 2002 (Decr.) Net sales $40,001 $38,619 3.6% $79,395 $73,866 7.5% Cost of sales 23,767 23,097 2.9% 49,623 47,564 4.3% Gross profit 16,234 15,522 4.6% 29,772 26,302 13.2% Gross profit percent 40.6% 40.2% 37.5% 35.6% Selling, general & admin. exp. 13,410 13,145 2.0% 34,985 35,190 (0.6%) Restructuring charges - 545 200 1,272 Operating profit (loss) 2,824 1,832 54.1% (5,413) (10,160) 46.7% Other income - 200 53 600 Interest expense, net (450) (451) (921) (900) 2.3% Income (loss) - continuing ops., before income tax benefit 2,374 1,581 50.2% (6,281) (10,460) 40.0% Income (tax) benefit (914) (592) 54.4% 2,427 4,359 44.3% Minority interest, net of tax (4) (6) (39) (49) Income (loss) - continuing ops. 1,456 983 48.1% (3,893) (6,150) 36.7% Income (loss) from discontinuing operations, net of tax 3 (781) (1,305) (1,723) Net earnings (loss) $1,459 $202 622.3% ($5,198) ($7,873) 34.0% Earnings (loss) per common share - Basic and diluted $0.15 $0.03 400.0% ($0.53) ($0.82) 35.4% Average shares outstanding 9,828 9,635 9,818 9,553 CONSOLIDATED BALANCE SHEETS (in thousands of dollars) Sept. 27, Sept. 28, Dec. 28, 2003 2002 2002 ASSETS Cash and equivalents $3,106 $3,992 $6,881 Accounts receivable, net 31,768 34,864 11,125 Inventories 50,504 44,864 32,894 Deferred and recoverable income taxes 6,143 6,986 8,569 Prepaid and other current assets 2,215 2,939 1,599 Total current assets 93,736 93,645 61,068 Net property, plant and equipment 9,784 11,746 10,910 Goodwill, net 2,692 2,223 2,374 Deferred income taxes and other assets 12,292 9,760 13,286 Total assets $118,504 $117,374 $87,638 LIABILITIES & SHAREHOLDERS' EQUITY Short-term notes payable 36,000 32,000 - Accounts payable 14,827 9,157 10,474 Other current liabilities 7,389 6,713 9,667 Long-term debt 2,877 6,351 5,760 Accrued retirement costs and other 14,409 8,927 14,188 Minority Interest 400 385 361 Shareholders' equity, net 42,602 53,841 47,188 Total liabilities & shareholders' equity $118,504 $117,374 $87,368 DATASOURCE: R.G. Barry Corporation CONTACT: Daniel D. Viren, Senior Vice President-Finance, or Roy Youst, Director Corporate Communications, both of R.G. Barry Corporation, +1-614-864-6400 Web site: http://www.rgbarry.com/

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