CRYSTAL BRANDS CHOPS LOSSES IN SECOND QUARTER AND HALF
SOUTHPORT, Conn. — Aided by improved gross margin and lower expenses, Crystal Brands Inc. cut second-quarter losses to $5.1 million from $104.5 million a year ago, which included an $82 million special charge.
In the second quarter ended July 2, operating losses dropped to $3.3 million from $11.7 million. Selling, general and administrative expenses were reduced to $29.7 million from $34.8 million.
Gross margin improved to 31.3 percent of sales from 23.8 percent.
The $82 million provision in the year-ago quarter was for the writeoff of goodwill and trademarks related to the sale of the Evan-Picone trademarks.
The company, which has been operating in Chapter 11 proceedings since January, said current discussions with creditors do not provide for any distribution to shareholders. Crystal Brands stock continues to trade on the New York Stock Exchange and closed Thursday at 13/32, down 1/16. The company expects to emerge from Chapter 11 by yearend. A spokesman said details with respect to the creditors have not been worked out yet.
Net sales in the quarter fell 13 percent to $84.7 million from $97.1 million. The company attributed the decline to the absence of sales from its discontinued operations in Lacoste merchandise and Izod youthwear products, and lower sales of women’s sportswear.
Charles J. Campbell, chairman and chief executive officer, said the second quarter is seasonally the weakest, but the company achieved higher gross margins in dollars and as a percentage of sales. He concluded, “The results strengthen our confidence that we are on the road to achieving our profit objectives for the turnaround of Crystal Brands.”
In the half, losses narrowed to $12.2 million from $128.7 million. Sales dropped 16.4 percent to $176.2 million from $210.8 million. The operating loss was $5.3 million against $15.4 million.
Although Crystal Brands has stated in the past that its costume jewelry operations are up for sale, they continue to be included in the company’s results. Crystal Brands makes jewelry under the Monet, Trifari and Marvella labels. The firm also makes men’s and boys’ sportswear under the Gant, Salty Dog and Izod brand; active sportswear for men and women under the Izod Club and U.S. open labels, and Izod sportswear and casual apparel for women.
— Fairchild News Service