Robert W. Humphreys, President and CEO, commented, “We are pleased to have met our revenue and earnings estimates for the third quarter and continue our focus on building a platform that will enhance our operating efficiencies and maximize segment growth. Looking at the performance in our two segments, sales in our retail ready segment were relatively flat compared to the prior year period.”
Mr. Humphreys continued, “Our activewear segment did not achieve the results we were expecting in the third quarter due to lower pricing for basic t-shirts in the marketplace. We chose not to match the lower pricing which decreased our total unit volume but slightly improved our average selling price. We expect competitive pricing of basic t-shirts will continue into the fourth quarter."
"While our manufacturing efficiency with the integration of FunTees was below our expectations in the third quarter and is expected to negatively impact our fourth quarter earnings results, we are well underway to gaining greater operating leverage and achieving improved manufacturing efficiency in our activewear segment in the coming fiscal year.”
This segment, which includes the Soffe and Junkfood businesses, reported a slight sales decline of $0.1 million, or 0.4%, to $32.7 million for the third quarter of fiscal year 2007. The sales decline was driven by lower sales in the licensed t-shirt business, offset partially by increased sales in the Soffe business.
The Soffe business continued to increase its sales, achieving a 3.6% increase in sales from its prior year third quarter, although the cold weather throughout the third fiscal quarter slowed the sales of spring merchandise. Operating income in the Retail-Ready segment for the third fiscal quarter of 2007 increased $0.2 million from the prior year quarter to $4.1 million due primarily to manufacturing improvements achieved in the Soffe business.
The Board of Directors declared a dividend of five cents per common share of stock payable on Tuesday, May 29, 2007 to shareholders of record as of the close of business on Wednesday, May 16, 2007. This dividend was declared pursuant to the Company's previously announced quarterly dividend program, which the Company may amend or terminate at any time.
The Company will hold a conference call with senior management to discuss the financial results at 9:00 a.m. ET.
marketing@alchempro.com
