NEW YORK — Solid sales growth combined with operating discipline to return Movie Star Inc. to profitability in the fourth quarter.
In the three months ended June 30, net income reached $1 million, or 7 cents a diluted share, versus a loss of $329,000, or 2 cents a share, in the comparable 2002 period. The year-ago figure includes a $43,000 aftertax gain from the disposal of discontinued retail stores.
Sales skyrocketed 44.8 percent to $15.5 million from $10.7 million in the earlier quarter.
“These robust results reflect sharply higher sales volume combined with much better margins resulting from improved sourcing,” said Mel Knigin, chief executive officer, in a statement. “Moreover, our disciplined cost-control initiatives, which included streamlining our distribution and making additional efficiency improvements throughout our organization, culminated in the most profitable year in the company’s history.”
Investors welcomed the news, sending the firm’s shares to a new 52-week high of $2.14 on Thursday before ending the session at $1.96, up 24 cents, or 14 percent, in American Stock Exchange trading.
With the cost of sales rising 33 percent, well below the sales gain, gross margin advanced 610 basis points to 32.3 percent of sales.
The New York-based supplier of intimate apparel and sleepwear reported a 45 percent drop in debt, to $2.3 million, year-over-year, and Knigin noted that open orders for the first half of the new fiscal year were comparable to those of a year ago.
For the year, Movie Star’s net income increased more than sixfold, reaching $3.4 million, or 22 cents a diluted share, from $547,000, or 4 cents in the prior year. The prior year’s income included an $86,000 aftertax gain from discontinued retail operations.
Sales for the year were up 19.4 percent to $64.9 million from $54.4 million.
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