NEW YORK — The discontinuation of a business segment combined with a calendar shift to push Cygne Designs Inc.’s third-quarter results into the red.
This story first appeared in the December 24, 2002 issue of WWD. Subscribe Today.
For the three months ended Nov. 2, the New York-based private label apparel manufacturer recorded a net loss of $206,000, or 2 cents a diluted share. That compares with last year when the company earned profits of $13,000, or zero cents. In a statement, Cygne said the loss stemmed mostly from a change in the timing of shipments in the year-over-year quarters.
Sales for the period tumbled 54.6 percent to $5.4 million from $11.8 million a year ago. The sales decline was due primarily to the company’s sale in June of its Mideast Knit business, which generated $5.5 million in sales in last year’s third quarter.
Overall, for the first nine months of the year, a special item allowed Cygne’s earnings to skyrocket more than twelvefold, or 1,169.7 percent, to $1.8 million, or 15 cents a diluted share. Last year, the company recorded net earnings of $145,000, or one cent.
Included in the nine-month profits was the reversal of a tax accrual during the first quarter of $4.8 million established in connection with a potential tax deficiency proposed by the Internal Revenue Service. Cygne and the IRS have since executed a settlement agreement with no tax payment due.
Sales for the three quarters fell 38 percent to $19.4 million from $31.3 million a year ago. Of that, revenue from the Mideast declined 45.1 percent to $4.6 million from $8.4 million last year.