Royalty expense for the first quarter of 2007 was $358,000 compared to $1.5 million in the same quarter of 2006. The decrease was primarily due to royalties on sales under the licensed Jessica Simpson and Alain Weiz brands in the first quarter of 2006. There were no such sales in the first quarter of 2007.
Income from operations was $63,000 in the first quarter of 2007 compared to $1.6 million in the first quarter of 2006. Income from operations in the first quarter of 2007 was impacted by $2 million in due diligence and other fees incurred in connection with the acquisition of The Buffalo Group. On April 19, 2007, the parties mutually terminated the potential acquisition.
The net loss for the 2007 first quarter was $1.0 million, or $0.03 per share, compared to net income for the 2006 first quarter of $836,000, or $0.03 per diluted share. The first quarter 2007 net income was also impacted by the $2 million charge mentioned above.
“Our first quarter results reflected continued strength in our Private Label business, and the initiatives we have pursued to improve operating results," said Gerard Guez, Chairman and Interim CEO of Tarrant Apparel Group.
"Despite the absence of sales from three brands, the Company was able to improve operating results, excluding expenses related to the acquisition of The Buffalo Group. While we are disappointed that we were unable to conclude the acquisition of The Buffalo Group, we believe the growingsales of American Rag CIE along with our Private Label business will result in another year of solid growth and improved profitability."
The Company expects 2007 full-year revenue of $230 million to $240 million.
The Company will host a conference call and audio webcast at 4:30 p.m. Eastern Time to discuss the results and outlook for 2007.
marketing@alchempro.com
