3 years later and the spoiled failed law school brat still hasn't figured out where the gas pedal is on the toy daddy gave him|
Whatever happened to Kirk and Del? The fun days of INNO have passed
Weren't they headed to do 20 million in sales in 97?
Friday March 3, 9:21 am Eastern Time
Company Press Release
SOURCE: Innovo Group Inc.
Innovo Group Reports Year-End Fiscal 1999 Results
KNOXVILLE, Tenn., March 3 /PRNewswire/ -- Innovo Group Inc. (Nasdaq: INNO - news), a designer, manufacturer, marketer and distributor of various cut and sewn canvas and nylon consumer products for sale in the retail and premium markets, today announced results for the fiscal year ended November 30, 1999.
For the fiscal year 1999, net loss decreased to $(1.3) million, or $(.22) per share, from net loss of $(4.0) million or $(.49) per share for 1998. Net sales for the fiscal year 1999 were $10.8 million compared to $6.8 million for 1998.
Commenting on these results, Jay Furrow, Chief Operating Officer said, ``Our year-end results demonstrated our commitment to continuing the strong growth of the company. We saw revenue growth in all of our core products - a clear signal of increasing demand and brand awareness for our product lines. Our Clear Gear branded line contributed to our increased sales being featured on Good Morning America and in the Wall Street Journal. We are also especially pleased that our efforts in growing our premium sales division of custom printed bags materialized.
``Our line of products are being well received in all of our markets,' Mr. Furrow continued, ``We have implemented a sound business plan supported by a highly experienced and focused management team that are committed to enhancing shareholder value by increasing sales and profits.'
In January of this year Innovo announced the termination of the letter of intent to acquire Z. Metro. Upon due diligence consistent with the terms of the letter of intent, both companies agreed to not proceed with the announced acquisition and parted on amicable terms. The distribution and consulting agreement is still in effect and will continue through to the pre-determined termination date.
Innovo also announced in January the appointments of Phillip Myers as National Premium Sales Manager and William Moore as Vice President of Retail Sales. Mr. Myers will further establish Innovo as a leading marketer in the premium and specialty marketplace. Mr. Moore is responsible for initiating strategic marketing plans in merchandising; sales and promotions; and developing brand awareness of Innovo products.
Year-End Fiscal 1999 Results
Net sales increased 59.6% to $10.8 million compared to $6.8 million for the year-end fiscal 1998. This was attributable to a $2.5 million promotional order from a national car rental company and the increased demand of the company's clear backpacks and sports coolers and bags.
Gross profit margins increased 8.5 basis points from 33.8% to 42.3% in 1999 due to improved material pricing and a reduction in production costs. The company anticipates a further improvement in gross margin in 2000 due to further reductions in material costs from favorable pricing in imported items.
Selling, General and Administrative costs increased $1.3 million or 36.4% from 1998 to 1999 due primarily to increased royalties and commissions from the increased sales and temporary labor hired during the company's back to school shipping season.
The improvement for profits for 1999 was offset by $588,000 of significant charges for the following items. During 1999, the company wrote down a long- lived asset to its fair market value. This write-down was $145,000. The company also recorded a $293,000 charge for the termination of a capital lease. Finally, the company recorded $50,000 for an insurance loss and $100,000 for a settlement in a lawsuit. Each of these items was recorded in operating costs. These one-time charges collectively had a significant unfavorable effect on the operational performance of the company for the fiscal year 1999.
The improvement in the 1999 earnings is evidenced by a decrease in net loss per share to $(.22) from $(.49) for the year-end fiscal 1998.
About Innovo Group Inc.
Innovo Group Inc. designs, markets, manufactures and distributes fashion and sports licensed nylon and canvas products for the premium and advertising specialty market and retail sector in the United States and Europe. Under licensing agreements, the company's sports lines feature the designs of the NBA, NFL, NHL, Major League Baseball and numerous collegiate teams as well as Garfield, Walt Disney and Warner Brothers. Innovo also has certain exclusive and non-exclusive manufacturing and distribution rights for NASCAR licensed products. For more information, visit the company web site at innovogroup.com.
``Safe Harbor' statement under the Private Securities Litigation Reform Act of 1995: Except for historical information, the matters discussed in this news release that may be considered forward-looking statements could be subject to certain risks and uncertainties that could cause the actual results to differ materially from those projected. These include uncertainties in the market, competition, legal and other risks detailed from time to time in the company's SEC reports. The company assumes no obligation to update information in this release.
INNOVO GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(000's except per share data)
Year Ended November 30,
1999 1998 1997
NET SALES $10,837 $6,790 $7,901
COST OF GOODS SOLD 6,252 4,493 5,303
Gross profit 4,585 2,297 2,598
42.3% 33.8% 32.9%
Selling, general and
administrative 4,963 3,638 3,740
Write down of long-term assets 145 300 --
Termination of a Capital lease 293 -- --
Depreciation and amortization 287 265 267
5,688 4,203 4,007
LOSS FROM OPERATIONS (1,103) (1,906) (1,009)
INTEREST EXPENSE (517) (503) (657)
OTHER INCOME (EXPENSE), net 280 142 337
LOSS BEFORE INCOME TAXES (1,340) (2,267) (1,729)
INCOME TAXES (BENEFIT) -- -- --
LOSS FROM CONTINUING
OPERATIONS (1,340) (2,267) (1,729)
Results from Thimble
Square operations (1) (346) (110)
Loss on disposal of
Thimble Square -- (1,401) --
(1) (1,747) (110)
LOSS BEFORE EXTRAORDINARY ITEM (1,341) (4,014) (1,839)
EXTRAORDINARY ITEM -- -- 524
NET LOSS $(1,341) $(4,014) $(1,315)
LOSS PER SHARE:
Continuing operations $(0.22) $(0.49) $(0.50)
Discontinued operations $(0.00) $(0.38) $(0.03)
Net loss $(0.22) $(0.87) $(0.38)
WEIGHTED AVERAGE SHARES
OUTSTANDING 5,984 4,618 3,438
INNOVO GROUP INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(000's except for share data)
Cash and cash equivalents $ -- $ 1,078
Accounts receivable net
of allowance 1,161 708
($153,000 for 1999 and $67,000
Inventories 1,968 1,101
Prepaid expenses 3 267
TOTAL CURRENT ASSETS 3,132 3,154
PROPERTY, PLANT and EQUIPMENT,
net 3,042 4,037
OTHER ASSETS 48 41
TOTAL ASSETS $ 6,222 $ 7,232
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 959 $ 914
Current maturities of
long-term debt 75 270
Accounts payable 623 1,139
Accrued expenses 856 906
TOTAL CURRENT LIABILITIES 2,513 3,229
LONG-TERM DEBT, less current
maturities 1,979 2,234
OTHER -- 47
TOTAL LIABILITIES 4,492 5,510
Common stock, $0.10 par - shares 629 538
authorized 15,000,000 in 1999
and 7,000,000 in 1998;
issued 6,299,032 in 1999
and 5,387,113 in 1998
Additional paid-in capital 31,540 30,282
Promissory note - officer (703) (703)
Deficit (27,310) (25,969)
Treasury stock (2,426) (2,426)
TOTAL STOCKHOLDERS' EQUITY 1,730 1,722
TOTAL LIABILITIES and
STOCKHOLDERS' EQUITY $ 6,222 $ 7,232
SOURCE: Innovo Group Inc.