NEW YORK — Movie Star Inc. had a star-studded second quarter as increased efficiency produced an Oscar-caliber bottom-line performance.
This story first appeared in the February 12, 2003 issue of WWD. Subscribe Today.
For the three months ended Dec. 31, the New York-based sleep- and leisurewear manufacturer reported net income almost doubled, skyrocketing 90.1 percent to $751,000, or 5 cents a diluted share.
That compares with last year’s earnings of $395,000, or 3 cents.
Sales for the period grew 9.7 percent to $16.7 million from $15.2 million a year ago.
Movie Star attributed the sales increase to broad-based improvement in demand for its product across all distribution channels.
Movie Star shares bolted ahead 13 cents, or 17.6 percent, to close at 87 cents in American Stock Exchange trading. The stock hit a 52-week high of 89 cents in intraday trading.
“As a direct result of our shift to total offshore production, we simultaneously realized improved gross margins as we sharpened our competitive edge,” said chief executive officer Mel Knigin in a statement. “Our recently implemented operating initiatives — better sourcing, reducing debt and interest expense, improving inventory turns, optimizing our physical facilities and increasing our penetration of key accounts — have resulted in persistent fundamental improvements to our business model.”
Gross margin for the quarter expanded 200 basis points to 30.6 percent of sales from 28.6 percent last year. Moreover, interest expense plunged 47.8 percent to $119,000 from $228,000 a year ago. Taken together, these factors allowed pretax income to shoot up 90 percent to $1.3 million from $659,000 in the prior-year period.
Overall, for the first half of the year, Movie Star reported net income more than doubled, expanding 104.2 percent to $1.4 million, or 9 cents a share. That compares with last year’s profits of $696,000, or 5 cents. Last year’s results also included $43,000 in earnings from discontinued operations.
Sales for the period pushed up 7.8 percent to $32.5 million from $30.1 million a year ago.
Knigin called Movie Star’s outlook “very optimistic as we expect meaningful increases in both sales and earnings, versus last year’s second half.”
Thomas Rende, chief financial officer, said, “We’re firing on all cylinders right now. We feel that when the economy finally does turn around, the top line could really take off for us.”