OshKosh B'Gosh, Inc. Reports First Quarter Financial Results

Apr 25, 2001, 01:00 ET from Oshkosh B'Gosh, Inc.

    OSHKOSH, Wis., April 25 /PRNewswire/ --
     OshKosh B'Gosh, Inc. (Nasdaq:   GOSHA) today reported first quarter 2001 net
 sales of $99.4 million, a $4.3 million increase (4.5%) over 2000 first quarter
 net sales of $95.1 million.  Net income decreased by 4.3% to $4.5 million, as
 compared to $4.7 million for the first quarter of 2000.  Earnings per share
 for the first quarter decreased by 2.7% to $.36 as compared to $.37 for the
 first quarter of 2000.
 
 The Company's net sales for the first quarter of 2001 and 2000 are summarized
 as follows:
 
 
 
                                                  Net Sales
                                                (in millions)
                                     Domestic
                               Wholesale     Retail         Other        Total
 
     Three month
      period ended:
       March 31, 2001           $54.7         $42.9         $1.8         $99.4
       April 1, 2000             48.3          44.3          2.5          95.1
       Increase (decrease)       $6.4         $(1.4)        $(.7)         $4.3
 
     Percent increase
     (decrease)                  13.3%         (3.2%)      (28.0%)         4.5%
 
 
     The Company's first quarter 2001 domestic wholesale net sales were
 favorably impacted by a combination of higher customer demand, an increase in
 the number of "closed-out" units sold along with the timing of shipment of
 certain Spring fashion items.  (During 2000, shipment of certain Spring
 fashion items was delayed into April.  During 2001, no such delay occurred.)
 The Company's 2001 first quarter domestic wholesale unit shipments were
 approximately 22.1% higher than in 2000.  Slightly lower average unit selling
 prices, higher customer sales allowances and the higher level of "closed-out"
 unit sales partially offset this unit sales increase.
     The Company's first quarter 2001 retail sales decrease resulted from a
 9.2% comparable store sales decrease offset in part by sales volume from
 stores opened subsequent to April 1, 2000 (the Company operated seven more
 stores during the first quarter of 2001 as compared to 2000).
     Douglas W. Hyde, OshKosh B'Gosh, Inc. President and CEO commented, "The
 first three months of 2001 proved to be a difficult and challenging retail
 environment.  While the first several weeks of the quarter were generally
 solid at retail, our own retail stores, along with many of our department and
 specialty store wholesale customers experienced a significant slowdown in
 consumer traffic from mid-February through the end of March."
     Mr. Hyde continued, "We believe that a combination of a generally negative
 economic environment, along with adverse weather conditions impacted customer
 store traffic.  Despite this challenging economic environment, our gross
 profit margins remained relatively strong."
     Current Company plans for 2001 call for the addition of approximately six
 new OshKosh B'Gosh outlet stores and one outlet store closing (during the
 first quarter of 2001, the Company closed one outlet store).  The Company
 currently anticipates low single digit comparable store sale gains for the
 remaining nine months of 2001.
     Mr. Hyde concluded, "We are optimistic that our earnings for the all
 important second half of 2001 will compare favorably with 2000.  We remain on
 track for a 5-7% unit increase in our wholesale fashion business.  Recent
 April trends in our retail stores have also been encouraging."
     During the first quarter of 2001, the Company repurchased 25,000 of its
 Class A Common stock for approximately $.5 million.  Approximately
 1.64 million shares remain available to be repurchased under the Company's
 current share repurchase program.
     OshKosh B'Gosh is best known as a premier marketer of children's apparel
 and related products, available in over 50 countries around the world.  The
 Company is headquartered in Oshkosh, Wis.
     Certain statements included herein are "forward-looking statements" within
 the meaning of the federal securities laws, including statements regarding
 future sales and net income, planned store expansions and store closings,
 future comparable store net sales, future product sourcing plans and future
 business conditions.  Such forward-looking statements are based on current
 assumptions and expectations that involve risks and uncertainties.  Actual
 results may differ materially.
     The Company's future results of operations and financial position can be
 influenced by such factors as the level of consumer spending for apparel,
 particularly in the children's wear segment, overall consumer acceptance of
 the Company's product styling, the financial strength of the retail industry,
 including, but not limited to, business conditions and the general economy,
 natural disasters, competitive factors, risk of non-payment of accounts
 receivable, the unanticipated loss of a major customer, failure of Company
 suppliers to timely deliver needed raw materials, as well as risk associated
 with foreign operations.  In addition, the inability to ship Company products
 within agreed timeframes due to unanticipated manufacturing and-or
 distribution system delays or the failure of Company contractors to deliver
 products within scheduled timeframes are risk factors in ongoing business.  As
 a part of the Company's product sourcing strategy, it routinely contracts for
 apparel products produced by contractors in Asia, Mexico and Central America.
 If financial, political or other related difficulties were to adversely impact
 the Company's contractors in these regions, it could disrupt the supply of
 products contracted for by the Company.
     The forward-looking statements included herein are only made as of the
 date of this press release.  The Company undertakes no obligation to publicly
 update such forward-looking statements to reflect subsequent events or
 circumstances.
 
 
                     OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
                     Condensed Consolidated Balance Sheets
                                 (In thousands)
 
                                                     March 31,    December 30,
                                                       2001          2000*
                                                    (unaudited)
     Assets
     Current assets
       Cash and cash equivalents                       $7,614        $19,839
       Investments                                         --            511
       Accounts receivable                             29,865         30,166
       Inventories                                     54,645         53,185
       Prepaid expenses and other current assets        1,964          1,882
       Deferred income taxes                           11,900         13,800
     Total current assets                             105,988        119,383
 
     Property, plant and equipment                     69,271         68,295
       Less accumulated depreciation
        and amortization                               37,750         36,010
     Net property, plant and equipment                 31,521         32,285
 
     Non-current deferred income taxes                  4,900          4,950
     Other assets                                       2,378          1,638
 
     Total assets                                    $144,787       $158,256
 
 
     Liabilities and shareholders' equity
     Current liabilities
       Current portion of long-term debt                $ 333        $10,000
       Accounts payable                                 8,105         14,840
       Accrued liabilities                             36,133         39,942
     Total current liabilities                         44,571         64,782
 
     Long-term debt                                    36,667         34,000
     Employee benefit plan liabilities                 14,665         15,001
 
     Shareholders' equity
       Preferred stock                                     --             --
       Common stock:
        Class A                                           100             99
        Class B                                            22             22
       Additional paid-in capital                         461             --
       Retained earnings                               48,936         45,054
       Unearned compensation under
        restricted stock plan                            (635)          (702)
     Total shareholders' equity                        48,884         44,473
 
     Total liabilities and shareholders' equity      $144,787       $158,256
 
     *Condensed from audited financial statements.
 
 
                     OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
                  Condensed Consolidated Statements of Income
                    (In thousands, except per share amounts)
                                  (Unaudited)
 
 
                                                   Three Month Period Ended
                                                     March 31,       April 1,
                                                       2001            2000
 
     Net sales                                        $99,445        $95,051
 
     Cost of products sold                             58,452         54,464
 
     Gross profit                                      40,993         40,587
 
     Selling, general and
      administrative expenses                          35,710         33,997
     Royalty income, net                               (2,464)        (2,077)
 
     Operating income                                   7,747          8,667
 
     Other income (expense):
       Interest expense                                  (731)        (1,187)
       Interest income                                    216            161
       Miscellaneous                                       31             49
 
     Other income (expense) -- net                       (484)          (977)
 
     Income before income taxes                         7,263          7,690
 
     Income taxes                                       2,789          2,999
 
     Net income                                        $4,474         $4,691
 
     Net income per common share
       Basic                                            $0.37         $ 0.37
       Diluted                                          $0.36         $ 0.37
 
     Weighted average common shares outstanding
       Basic                                           12,183         12,612
       Diluted (including share equivalents)           12,396         12,784
 
     Cash dividends per common share
       Class A                                        $0.0500        $0.0500
       Class B                                        $0.0425        $0.0425
 
 
                     OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
                Condensed Consolidated Statements of Cash Flows
                                 (In thousands)
                                  (Unaudited)
 
                                                    Three Month Period Ended
                                                      March 31,     April 1,
                                                         2001          2000
 
     Cash flows from operating activities
       Net income                                      $4,474         $4,691
       Depreciation and amortization                    1,959          1,969
       Deferred income taxes                            1,950            200
       Income tax benefit from stock
        option exercises                                  257             --
       Items in net income not
        affecting cash and cash equivalents              (277)           326
       Changes in current assets                       (1,241)        (4,155)
       Changes in current liabilities                 (10,544)        (1,626)
 
     Net cash provided by (used in)
      operating activities                             (3,422)         1,405
 
     Cash flows from investing activities
       Additions to property, plant and equipment      (1,084)        (1,095)
       Proceeds from disposal of assets                    26              4
       Sale of short-term investments                     511             --
       Changes in other assets                           (869)            12
 
     Net cash used in investing activities             (1,416)        (1,079)
 
     Cash flows from financing activities
       Payment on long-term debt                       (7,000)             --
       Dividends paid                                    (591)          (613)
       Net proceeds from issuance of
        common shares                                     718             65
       Repurchase of common shares                       (514)        (4,395)
 
     Net cash used in financing activities             (7,387)        (4,943)
 
     Net decrease in cash and cash equivalents        (12,225)        (4,617)
 
     Cash and cash equivalents at
      beginning of period                              19,839          9,093
 
     Cash and cash equivalents at end of period        $7,614         $4,476
 
 
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SOURCE Oshkosh B'Gosh, Inc.
    OSHKOSH, Wis., April 25 /PRNewswire/ --
     OshKosh B'Gosh, Inc. (Nasdaq:   GOSHA) today reported first quarter 2001 net
 sales of $99.4 million, a $4.3 million increase (4.5%) over 2000 first quarter
 net sales of $95.1 million.  Net income decreased by 4.3% to $4.5 million, as
 compared to $4.7 million for the first quarter of 2000.  Earnings per share
 for the first quarter decreased by 2.7% to $.36 as compared to $.37 for the
 first quarter of 2000.
 
 The Company's net sales for the first quarter of 2001 and 2000 are summarized
 as follows:
 
 
 
                                                  Net Sales
                                                (in millions)
                                     Domestic
                               Wholesale     Retail         Other        Total
 
     Three month
      period ended:
       March 31, 2001           $54.7         $42.9         $1.8         $99.4
       April 1, 2000             48.3          44.3          2.5          95.1
       Increase (decrease)       $6.4         $(1.4)        $(.7)         $4.3
 
     Percent increase
     (decrease)                  13.3%         (3.2%)      (28.0%)         4.5%
 
 
     The Company's first quarter 2001 domestic wholesale net sales were
 favorably impacted by a combination of higher customer demand, an increase in
 the number of "closed-out" units sold along with the timing of shipment of
 certain Spring fashion items.  (During 2000, shipment of certain Spring
 fashion items was delayed into April.  During 2001, no such delay occurred.)
 The Company's 2001 first quarter domestic wholesale unit shipments were
 approximately 22.1% higher than in 2000.  Slightly lower average unit selling
 prices, higher customer sales allowances and the higher level of "closed-out"
 unit sales partially offset this unit sales increase.
     The Company's first quarter 2001 retail sales decrease resulted from a
 9.2% comparable store sales decrease offset in part by sales volume from
 stores opened subsequent to April 1, 2000 (the Company operated seven more
 stores during the first quarter of 2001 as compared to 2000).
     Douglas W. Hyde, OshKosh B'Gosh, Inc. President and CEO commented, "The
 first three months of 2001 proved to be a difficult and challenging retail
 environment.  While the first several weeks of the quarter were generally
 solid at retail, our own retail stores, along with many of our department and
 specialty store wholesale customers experienced a significant slowdown in
 consumer traffic from mid-February through the end of March."
     Mr. Hyde continued, "We believe that a combination of a generally negative
 economic environment, along with adverse weather conditions impacted customer
 store traffic.  Despite this challenging economic environment, our gross
 profit margins remained relatively strong."
     Current Company plans for 2001 call for the addition of approximately six
 new OshKosh B'Gosh outlet stores and one outlet store closing (during the
 first quarter of 2001, the Company closed one outlet store).  The Company
 currently anticipates low single digit comparable store sale gains for the
 remaining nine months of 2001.
     Mr. Hyde concluded, "We are optimistic that our earnings for the all
 important second half of 2001 will compare favorably with 2000.  We remain on
 track for a 5-7% unit increase in our wholesale fashion business.  Recent
 April trends in our retail stores have also been encouraging."
     During the first quarter of 2001, the Company repurchased 25,000 of its
 Class A Common stock for approximately $.5 million.  Approximately
 1.64 million shares remain available to be repurchased under the Company's
 current share repurchase program.
     OshKosh B'Gosh is best known as a premier marketer of children's apparel
 and related products, available in over 50 countries around the world.  The
 Company is headquartered in Oshkosh, Wis.
     Certain statements included herein are "forward-looking statements" within
 the meaning of the federal securities laws, including statements regarding
 future sales and net income, planned store expansions and store closings,
 future comparable store net sales, future product sourcing plans and future
 business conditions.  Such forward-looking statements are based on current
 assumptions and expectations that involve risks and uncertainties.  Actual
 results may differ materially.
     The Company's future results of operations and financial position can be
 influenced by such factors as the level of consumer spending for apparel,
 particularly in the children's wear segment, overall consumer acceptance of
 the Company's product styling, the financial strength of the retail industry,
 including, but not limited to, business conditions and the general economy,
 natural disasters, competitive factors, risk of non-payment of accounts
 receivable, the unanticipated loss of a major customer, failure of Company
 suppliers to timely deliver needed raw materials, as well as risk associated
 with foreign operations.  In addition, the inability to ship Company products
 within agreed timeframes due to unanticipated manufacturing and-or
 distribution system delays or the failure of Company contractors to deliver
 products within scheduled timeframes are risk factors in ongoing business.  As
 a part of the Company's product sourcing strategy, it routinely contracts for
 apparel products produced by contractors in Asia, Mexico and Central America.
 If financial, political or other related difficulties were to adversely impact
 the Company's contractors in these regions, it could disrupt the supply of
 products contracted for by the Company.
     The forward-looking statements included herein are only made as of the
 date of this press release.  The Company undertakes no obligation to publicly
 update such forward-looking statements to reflect subsequent events or
 circumstances.
 
 
                     OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
                     Condensed Consolidated Balance Sheets
                                 (In thousands)
 
                                                     March 31,    December 30,
                                                       2001          2000*
                                                    (unaudited)
     Assets
     Current assets
       Cash and cash equivalents                       $7,614        $19,839
       Investments                                         --            511
       Accounts receivable                             29,865         30,166
       Inventories                                     54,645         53,185
       Prepaid expenses and other current assets        1,964          1,882
       Deferred income taxes                           11,900         13,800
     Total current assets                             105,988        119,383
 
     Property, plant and equipment                     69,271         68,295
       Less accumulated depreciation
        and amortization                               37,750         36,010
     Net property, plant and equipment                 31,521         32,285
 
     Non-current deferred income taxes                  4,900          4,950
     Other assets                                       2,378          1,638
 
     Total assets                                    $144,787       $158,256
 
 
     Liabilities and shareholders' equity
     Current liabilities
       Current portion of long-term debt                $ 333        $10,000
       Accounts payable                                 8,105         14,840
       Accrued liabilities                             36,133         39,942
     Total current liabilities                         44,571         64,782
 
     Long-term debt                                    36,667         34,000
     Employee benefit plan liabilities                 14,665         15,001
 
     Shareholders' equity
       Preferred stock                                     --             --
       Common stock:
        Class A                                           100             99
        Class B                                            22             22
       Additional paid-in capital                         461             --
       Retained earnings                               48,936         45,054
       Unearned compensation under
        restricted stock plan                            (635)          (702)
     Total shareholders' equity                        48,884         44,473
 
     Total liabilities and shareholders' equity      $144,787       $158,256
 
     *Condensed from audited financial statements.
 
 
                     OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
                  Condensed Consolidated Statements of Income
                    (In thousands, except per share amounts)
                                  (Unaudited)
 
 
                                                   Three Month Period Ended
                                                     March 31,       April 1,
                                                       2001            2000
 
     Net sales                                        $99,445        $95,051
 
     Cost of products sold                             58,452         54,464
 
     Gross profit                                      40,993         40,587
 
     Selling, general and
      administrative expenses                          35,710         33,997
     Royalty income, net                               (2,464)        (2,077)
 
     Operating income                                   7,747          8,667
 
     Other income (expense):
       Interest expense                                  (731)        (1,187)
       Interest income                                    216            161
       Miscellaneous                                       31             49
 
     Other income (expense) -- net                       (484)          (977)
 
     Income before income taxes                         7,263          7,690
 
     Income taxes                                       2,789          2,999
 
     Net income                                        $4,474         $4,691
 
     Net income per common share
       Basic                                            $0.37         $ 0.37
       Diluted                                          $0.36         $ 0.37
 
     Weighted average common shares outstanding
       Basic                                           12,183         12,612
       Diluted (including share equivalents)           12,396         12,784
 
     Cash dividends per common share
       Class A                                        $0.0500        $0.0500
       Class B                                        $0.0425        $0.0425
 
 
                     OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
                Condensed Consolidated Statements of Cash Flows
                                 (In thousands)
                                  (Unaudited)
 
                                                    Three Month Period Ended
                                                      March 31,     April 1,
                                                         2001          2000
 
     Cash flows from operating activities
       Net income                                      $4,474         $4,691
       Depreciation and amortization                    1,959          1,969
       Deferred income taxes                            1,950            200
       Income tax benefit from stock
        option exercises                                  257             --
       Items in net income not
        affecting cash and cash equivalents              (277)           326
       Changes in current assets                       (1,241)        (4,155)
       Changes in current liabilities                 (10,544)        (1,626)
 
     Net cash provided by (used in)
      operating activities                             (3,422)         1,405
 
     Cash flows from investing activities
       Additions to property, plant and equipment      (1,084)        (1,095)
       Proceeds from disposal of assets                    26              4
       Sale of short-term investments                     511             --
       Changes in other assets                           (869)            12
 
     Net cash used in investing activities             (1,416)        (1,079)
 
     Cash flows from financing activities
       Payment on long-term debt                       (7,000)             --
       Dividends paid                                    (591)          (613)
       Net proceeds from issuance of
        common shares                                     718             65
       Repurchase of common shares                       (514)        (4,395)
 
     Net cash used in financing activities             (7,387)        (4,943)
 
     Net decrease in cash and cash equivalents        (12,225)        (4,617)
 
     Cash and cash equivalents at
      beginning of period                              19,839          9,093
 
     Cash and cash equivalents at end of period        $7,614         $4,476
 
 
                    MAKE YOUR OPINION COUNT -     Click Here
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 SOURCE    Oshkosh B'Gosh, Inc.