SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 3, 1998
ITHACA INDUSTRIES, INC.
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(Exact name of registrant as specified in charter)
Delaware 000-22385 56-1385842
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
Highway 268 West, P.O. Box 620, Wilkesboro, North Carolina 28697
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (336) 667-5231
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ITEM 5. OTHER EVENTS
On September 3, 1998, Ithaca Industries, Inc. ("Ithaca" or the
"Company") issued a press release reporting its results for the fiscal 1999
second quarter ended August 1, 1998.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
Exhibit Number Description
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99 Press Release of Ithaca Industries,
Inc. dated September 3, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ITHACA INDUSTRIES, INC.
Date: September 4, 1998 By: /s/ Richard P. Thrush
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Richard P. Thrush
Senior Vice President - Finance
and Administration, Chief
Accounting and Principal Financial
Officer
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EXHIBIT INDEX
Exhibit Number Description
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99 Press Release of Ithaca Industries,
Inc. dated September 3, 1998.
EXHIBIT 99
ITHACA INDUSTRIES, INC.
HIGHWAY 268 WEST
P.O. BOX 620
WILKESBORO, NC 28697
(336) 667-5231
Contact for additional information:
Richard P. Thrush
Senior Vice President/CFO
(336) 667-5231 X314
FOR IMMEDIATE RELEASE
ITHACA INDUSTRIES REPORTS PROFITABLE SECOND QUARTER
RESULTS FOR FIRST HALF ALSO PROFITABLE ON HIGHER VOLUME
WILKESBORO, N.C., SEPTEMBER 3, 1998--ITHACA INDUSTRIES, INC., one of the
nation's largest manufacturers of private-brand men's and women's apparel and
women's hosiery products, today announced profitable results for the second
quarter of fiscal 1999 ended August 1, 1998.
For the second quarter of fiscal 1999, net sales totaled $67.2 million. This
represents an increase of 10.4 percent over last year's second quarter results.
Included in this year's second quarter was $8.7 million from Glendale Hosiery
Company ("Glendale") which was acquired effective March 24, 1998.
The net income for the second quarter of fiscal 1999 was $783,000 or $0.08 per
share versus $1.0 million or $0.10 per share in last year's second quarter.
Gross profit for the second quarter was 16.1 percent versus 16.0 percent for
last year's second quarter. This improvement, which was achieved despite the
hosiery consolidation costs, resulted primarily from improved sourcing costs in
the company's underwear division. SG&A costs this year increased to $7.6 million
from $6.4 million primarily due to the incremental volume associated with the
Glendale acquisition. As a percent of sales, this year's SG&A was 11.3 percent
versus 10.5 percent last year.
Earnings before interest, taxes, depreciation and amortization (EBITDA) was $4.7
million this year versus $4.8 million for last year's second quarter.
Interest expense increased to $2.2 million in this year's second quarter versus
$1.8 million in last year's comparable period due to the borrowings associated
with the Glendale acquisition.
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FIRST HALF OPERATIONS PROFITABLE
Revenues for the first half of fiscal 1999 were $127.6 million. This represents
an increase of 6.6% over the same period last year. Included in this year's
first half revenue was $12.5 million attributable to Glendale.
The net income for the period was $174,000 or $0.02 per share versus $854,000 or
$0.09 per share in the prior year's first half.
Gross profit for the first half of fiscal 1999 was 14.5 percent versus 15.0
percent in last year's period. This year's first half results include an
additional $300,000 provision for LIFO along with the start-up investment to
merge the company's two hosiery divisions. Total selling, general and
administrative expenses (SG&A) increased to $14.6 million from $13.2 million
last year due primarily to the incremental volume associated with the Glendale
acquisition. As a percent of sales, total SG&A was 11.5 percent this year versus
11.0 percent in the comparable year ago period.
Earnings before interest, taxes, depreciation and amortization (EBITDA) was $6.9
million versus $7.9 million for last year's first half. The decrease is
attributable to the previously mentioned increase in SG&A costs partially offset
by increased gross profit dollars.
Interest expense increased to $3.9 million in this year's first half versus $3.5
million last year due to the borrowings associated with the Glendale
acquisition.
CONTINUED IMPROVEMENT ANTICIPATED FOR THIRD QUARTER
Jim D. Waller, Ithaca's Chairman, President and Chief Executive Officer stated,
"We are gratified by our first half results since they were achieved during a
period that saw mixed results in the retail sector along with substantial
internal efforts to both finalize the Glendale Hosiery integration and put a new
financing package in place."
Waller also stated, "The on-going progress in completing the Ithaca and Glendale
hosiery operations consolidation and operating our underwear facilities at full
capacity will generate bottom line improvement in the third quarter."
Ithaca Industries, Inc. is one of the largest manufacturers of private-brand
men's and women's apparel and women's hosiery products in the United States.
Products are sold through a wide range of retail distribution channels and are
offered to the public through more than 10,000 customer outlets, including
discount stores, department stores, specialty stores, drug stores and
supermarkets. Ithaca stock (ITHI) is currently traded via the NASDAQ bulletin
board.
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THIS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS
INVOLVE RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM FUTURE RESULTS IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THESE
RISKS INCLUDE BUSINESS RISKS SUCH AS CHANGES IN THE PRICE OF RAW MATERIALS,
CONCENTRATION OF ITHACA'S PRINCIPAL CUSTOMERS, AVAILABILITY OF LABOR AND
COMPETITIVE FACTORS; INDUSTRY RISKS SUCH AS CHANGES IN THE RETAILING INDUSTRY
AND SHIFTS IN CONSUMER PREFERENCES; FINANCIAL RISKS SUCH AS LIQUIDITY AND ACCESS
TO CAPITAL; INTEGRATION OF THE GLENDALE HOSIERY COMPANY ACQUISITION; AND OTHER
RISKS AS SET FORTH FROM TIME TO TIME IN THE COMPANY'S FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Tables to Follow...
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8
ITHACA INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
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August 1, 1998 August 2, 1997 August 1, 1998 August 2, 1997
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<S> <C> <C> <C> <C>
Net Sales $ 67,249 $ 60,934 $ 127,637 $ 119,676
Cost of Sales 56,438 51,187 109,082 101,714
Gross Profit 10,811 9,747 18,555 17,962
Selling, General and Administrative Expenses 7,594 6,375 14,627 13,164
Operating Income 3,217 3,372 3,928 4,798
Interest Expense (2,200) (1,765) (3,886) (3,509)
Other Income 90 127 123 319
Income Before Income Taxes 1,107 1,734 165 1,608
Income Tax (Expense) Benefit (324) (729) 9 (754)
Net Income 783 1,005 174 854
Basic and Dilutive Net Income Per Common Share $ 0.08 $ 0.10 $ 0.02 $ 0.09
Weighted Average Common Shares Outstanding 10,400 10,000 10,289 10,000
Supplemental Disclosure - EBITDA $ 4,675 $ 4,826 $ 6,940 $ 7,880
</TABLE>
