For the nine months ended June 30, 2005, Haggar reported net income of $4.9 million, or $0.69 per diluted share, on net sales of $340.8 million. This compares to the nine months ended June 30, 2004, in which the Company reported net income of $5.5 million, or $0.79 per diluted share, on net sales of $356.1 million.
The decrease in earnings per share during the first nine months of fiscal 2005 is partly due to the selling results of the Company's ForeverNew products, which resulted in higher customer allowances as the product did not meet the customers' expectations, and an incremental $2.5 million pre-tax in marketing expense ($1.5 million after tax or $0.21 on a diluted per share basis) related to the Company's ForeverNew product introduction.
Also included in the first nine months of fiscal 2005 results is a $1.6 million pre-tax charge ($1.0 million after-tax or $0.14 on a diluted per share basis) to reorganization costs related to the closure of two Company-operated sewing facilities.
Offsetting these costs in the first nine months of fiscal 2005 is the $0.5 million pre-tax gain ($0.3 million after tax or $0.04 on a diluted per share basis) related to the sale of a Company owned apartment.
Also offsetting these costs during the first nine months ended June 30, 2005 is the net financial impact of three wrongful termination lawsuits; a $2.6 million pre-tax reversal of a prior legal reserve in reorganization costs related to a favorable Texas Supreme Court ruling as mentioned above, a $0.3 million reversal of a prior legal reserve in reorganization costs due to a second favorable outcome in an unrelated case also before the Texas Supreme Court, and a $2.0 million pre-tax charge to selling, general and administrative expenses for an unfavorable decision in a trial court that is pending appeal. Combined, these three lawsuits net to a $0.9 million pre-tax ($0.5 million after tax) increase to earnings for the nine months ended June 30, 2005, or $0.08 on a diluted per share basis.
marketing@alchempro.com
