SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
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) March 14, 1997
INNOVO GROUP INC.
_______________________________________________________________________
(Exact name of registrant as specified in charter)
Delaware 0-18926 11-2928178
______________________________________________________________________
(State or other jurisdiction Commission (IRS Employer
of Incorporation File Number) Identification No.)
27 North Main Street, Springfield, Tennessee 37172
______________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (615) 384-0100
Not Applicable
______________________________________________________________________
(Former name or former address, if changed since last report)
<PAGE>
Contents
Item 5: Other Events 3
Signatures 4
<PAGE>
ITEM 5. Other Events
On March 14, 1997, Innovo Group Inc. ("the Company") issued the
press release attached as Exhibit 10.1.
<PAGE>
SIGNATURES
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 thereunto duly authorized.
INNOVO GROUP INC.
(Registrant)
Date: March 14, 1997 By:/s/ Patricia Anderson-Lasko
____________________________
Patricia Anderson-Lasko
Chairman/President/CEO
EXHIBIT 10.1
FOR IMMEDIATE DISTRIBUTION
CONTACT: KIRK MILLER, 615-384-0100, EXT. 464
INNOVO GROUP REPORTS SALES INCREASE IN CALL WITH ANALYSTS
Sales increase of 68% reported and outlook for 1997 discussed in
conference call
SPRINGFIELD, TENNESSEE, March 14, 1997 - INNOVO GROUP INC. (NASDAQ
Symbol: INNO), the manufacturer and marketer of a broad line of fashion,
utility and sport bags and licensed t-shirts, today announced that its sales
for the first quarter of fiscal 1997 were $2,221,000, which represented a 68%
increase over sales of $1,319,000 for the three months ended February 28, 1996.
The announcement was made in a conference call with brokers and analysts in
which company officials discussed their outlook for 1997 and the upcoming
April 4, 1997 annual stockholders' meeting. Innovo indicated that an
announcement having additional details about the first quarter sales would be
made next week.
Patricia Anderson-Lasko, Innovo's president and chief executive
officer, told the group that the company anticipates real growth in sales
in fiscal 1997 as the result of the new Walt Disney and Warner Bros.
license product lines, as well as the continued growth in domestic craft
sales. Ms. Anderson-Lasko explained that it takes six months from the
time a new license is acquired until the products are at market. The
Warner and Disney licenses were secured in late 1996, and the first
quarter benefitted a little from some initial Warner product shipments.
Innovo's president indicated that the company was currently on schedule
to continue initial Warner shipments in the second quarter, and to start
Disney product shipments in the third quarter. She concluded by saying
that the effect of these new licenses should be visible in the third and
fourth quarters, but added that a period of two years is needed before
the full potential of a new license is known or reached, and that
therefore these licenses could produce additional growth in 1998. The
company indicated that it was not presently willing to quote a projection
for sales due to the newness of the Disney and Warner products and
markets, but added that contingency plans were in place in the event that
the sales growth was lower than internally projected.
In response to questions about the company's projected net income for
fiscal 1997, Ms. Anderson-Lasko and Scott Parliament, Innovo's chief
operating officer, indicated that the projected increase in sales, as
well as new focus and controls over product costs and overhead allow the
company to forecast real improvement in operating results. They
indicated that the first quarter had been projected to be a loss, and
would be, and that a loss in the second quarter was also projected
consistent with the seasonality of the company's sales, and because the
first and second quarters will continue to reflect the expense of
developing the new Warner and Disney products. The company indicated
that it projected that 70% of its 1997 sales would come in the second
half of the year, compared to 54% in fiscal 1996. As a result, the
second half of the year would be the key to the overall 1997 results.
Innovo also reminded the group that projections are subject to risks and
uncertainties and that consumer spending and product acceptance, and the
availability of working capital and labor, could affect results.
With respect to the upcoming April 4 annual meeting, the company
indicated that it was aware that the proposal to increase the number of
authorized common shares was drawing a lot of attention. Ms. Anderson-
Lasko stated that she felt that it was important to understand that while
the company was asking for the authorization of an additional 40 million
shares, it currently had no plans or commitments to issue the majority of
them, and did not anticipate near-term use of the majority of the new
shares. Ten million shares would be reserved for outstanding warrants,
conversion rights and options, but 775,000 would underlie warrants that
were out of the money, and 4 million would underlie a stock option that
would not enter the float near-term. Additionally, any warrant exercise
would produce working capital for the company. Innovo's president also
indicated that the company's current 1997 projections showed a possible
need for between $250,000 and $400,000 of working capital in the second
quarter to support sales, but that the company hoped to obtain that, if
needed, from one or a combination of warrant exercise, debt financing or
debt refinancing. If a common stock issuance was needed, it would still
leave the majority of the new shares unused.
Innovo Group manufactures and markets a wide range of both fashion
oriented and utility and sports designed tote, laundry and duffle bags,
lunch bags, fanny packs, aprons and other canvas craft products, as well
as sports-licensed bags and backpacks and licensed t-shirts. The
company's fashion lines are based on its own designs, while the sports
lines feature both company designs and the logos of NFL, MLB, NHL, NBA
and college teams. Innovo also holds licenses from Walt Disney, Warner
Bros. and Anheuser-Busch Cos. Innovo's Thimble Square subsidiary
manufactures and distributes a ladies' ready-to-wear at home, sleep and
lounge wear from plants in Georgia.
LISTED: NASDAQ SmallCap Market
TRADING SYMBOL: INNO
