Movie Star reports Q3 fiscal 2007 & nine months financial results
14 May '07
4 min read
In addition, the Company recorded a $496,000 gain on the sale of its distribution center in Pennsylvania in the second quarter of fiscal 2007. The Company recorded net income of $509,000, or $0.03 per diluted share, for the fiscal 2007 nine month period, compared to $515,000, or $0.03 per diluted share, in the comparable period of fiscal 2006, which included the gain from the insurance recovery related to Hurricane Katrina.
Mel Knigin, the Company's President and Chief Executive Officer, stated, “Our gross margin improved nicely during the quarter and year-to-date, primarily as a result of a more profitable product mix and lower customer allowances and markdowns. We expect sales for the fourth quarter of fiscal 2007 to be higher than the fourth quarter of fiscal 2006."
"At March 31, 2007, our backlog of orders was approximately $17,700,000 as compared to $27,400,000 at March 31, 2006. This decrease in our backlog was due to a shift in the timing of orders booked from the third to the fourth 2007 fiscal quarter. Orders booked in April 2007 were $13,600,000 compared to $3,000,000 in April 2006.”
The Company is working hard to close the proposed merger, which is not expected to be completed until the fourth calendar quarter of 2007. The later than anticipated timing relates to a delay in the preparation of Frederick's audited financial statements for the fiscal years ended July 29, 2006 and July 30, 2005.
Because Frederick's willbe considered the acquirer for accounting purposes in the proposed merger, its historical financial statements for fiscal 2005 and 2006 must comply with accounting rules applicable to publicly-traded companies even though Frederick's is a private company.
The application of these rules to the historical financial statements of Frederick's, specifically the application of “push down” or “purchase” accounting rules due to a change of control of Frederick's effective March 3, 2005, has taken significantly longer than originally expected.
Since Frederick's has not delivered its audited financial statements by the date provided for in the Merger Agreement, we have the right to terminate the Merger Agreement, however, we presently do not intend to exercise this right.
marketing@alchempro.com
