ITCHACA’S EBITDA NET INCREASES 111%
NEW YORK — Ithaca Industries Inc., which emerged from Chapter 11 proceedings in November 1996, said earnings before interest, taxes, depreciation and amortization expense (EBITDA) surged 111 percent in its year ended Feb. 2, to $21.3 million from $10.1 million.
Sales for the underwear, hosiery and T-shirt manufacturer fell 14.7 percent to $398.8 million from $340.3 million, reflecting the elimination of unprofitable product lines.
Gross margins rose to 13.7 percent of sales from 11.3 percent as a result of lower costs from offshore sourcing of underwear, coupled with improved efficiencies in women’s hosiery.
Selling, general and administrative expenses were trimmed to 10.2 percent of sales from 10.9 percent due to lower payroll and benefits realized from consolidating distribution centers.
Ithaca said bottom-line numbers were not comparable because of asset write-downs, recoveries aad restructuring charges related to the bankruptcy. Ithaca showed a net profit of $62.6 million in the current year against a loss of $49.6 million a year ago.
“Fiscal 1997 was a very difficult, yet positive year,” said Jim D. Waller, chairman, president and chief executive officer.
Waller noted that its business continues to suffer from overcapacity, especially in sheer hosiery. He said sales for the first two months of 1997 are “soft” and the company does not expect to achieve budgeted sales for the first quarter.
He said the company will continue to look for ways to reduce costs, introduce new programs and diversify its sales base.
J.C. Penney accounts for about half of sales, and Wal-Mart, 10 percent.
As part of the reorganization, the company exchanged $125 million in debt for all the stock in the company. Ithaca is applying for a listing on the NASDAQ over-the-counter market.