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"Other product categories performed satisfactorily. Tailored clothing at the higher price points is selling well at retail. The Misook business, acquired in July, 2004, continues to generate excellent earnings; the Simply Blue business, acquired at the end of October, 2005, contributed $11.2 million to year-to-date revenues and approximately $.035 to diluted earnings per share, and is on target to be accretive for the full year within our previously stated range of $.05 to $.07 per share. And, we are actively pursuing acquisitions that can be accretive to earnings, consistent with our strategic criteria.
"We are lowering our 2006 full year guidance to reflect the first half shortfall and current outlook. We continue to expect revenues for the full year to increase in the low- to mid-single digits. We now anticipate full year diluted earnings per share in the range of $.50 to $.55, which includes any one-time costs associated with the changes we are making; this compares to the previous guidance of a 12 percent - 20 percent earnings improvement over last year's $.63 per diluted share.
"Despite the lower year-to-date earnings and expectations for the full year, we are ahead of plan on reducing our investment in working capital and related debt. Whereas at November 30, 2005, inventories were $23.1 million higher than the year earlier date, at May 31, 2006, they were $156.9 million, $7.7 million higher than the year earlier period.
Total debt was $109.4 million at May 31, 2006 compared to $105.9 million in the year earlier period; total debt declined approximately $19 million from the year earlier period after excluding the amounts paid for Simply Blue and Hartmarx stock repurchases. We anticipate that we will meet or exceed our goal of reducing debt (excluding the impact of acquisitions, stock repurchases or dividends) by 20 percent at year- end.
marketing@alchempro.com
