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SOURCE: Joe's Jeans Inc.
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October 15, 2008 16:00 ET
Joe's Jeans Reports 2008 Third Quarter Results
LOS ANGELES, CA--(Marketwire - October 15, 2008) - Joe's Jeans Inc. (the "Company") (NASDAQ: JOEZ) today announced financial results for the third quarter ended August
31, 2008. Highlights were:
-- Net sales improved 16 percent to $18.2 million compared to $15.7
million in the third quarter a year ago.
-- A year-over-year gross margin improvement of 49 percent during the
third quarter, a seven percentage point increase over 42 percent in the
third quarter of 2007.
-- A record quarter of profitability with net income of $2.2 million, or
$0.04 per share, compared to $913,000, or $0.02 per share in the third
quarter a year ago.
-- Opening of the first full-price Joe's® retail store in the Bucktown
neighborhood of Chicago.
Marc Crossman, President and Chief Executive Officer, commented, "We are
very pleased to be reporting $18.2 million in sales and record net income
of $2.2 million during the quarter. These results reflect continued sales
growth and gross margin improvement as a result of increases across all of
our business segments, including women's, men's, international and kid's,
and from the shift in our sourcing from outside of the U.S. Additionally,
last week we opened our first full-price retail store in the Bucktown
neighborhood in Chicago and expect to open three additional stores by the
end of our fiscal year. We are pleased with the progress we made this
quarter and we look forward to capitalizing on our position in the
marketplace for 2009."
For the third quarter ended August 31, 2008, net sales improved to $18.2
million from $15.7 million in the third quarter ended August 25, 2007, a 16
percent increase. Gross margins during the third quarter of 2008 were 49
percent. SG&A during the third quarter ended August 31, 2008 was $6.1
million compared to $5.3 million in the third quarter of 2007, a 15 percent
increase primarily due to: higher headcount to support sales growth and
additional personnel for the retail strategy; an increase in stock-based
compensation expense as a result of the issuance of restricted common stock
and restricted stock units during the fourth quarter of 2007 and the first
quarter of 2008; an increase in distribution and shipment costs as a result
of higher sales volume over the prior year period; and an increase in
professional fees. The Company generated net income of $2.2 million, or
$0.04 per share, during the third quarter of 2008 compared to net income of
$913,000, or $0.02 per share, during the third quarter of 2007.
The Company will host a conference call to discuss its 2008 third quarter
results today, October 15, 2008, beginning at 4:30 pm ET. To access the
live call, please dial (800) 638-5439 (U.S.) or (617) 614-3945
(International). The conference ID number and participant passcode is
93324598 and is entitled the "Q3 2008 Joe's Jeans Inc. Earnings Conference
Call." The information provided on the teleconference is only accurate at
the time of the conference call, and the Company will take no
responsibility for providing updated information. A telephone replay of
the conference call will be available beginning at 6:30 PM Eastern Time on
October 15, 2008 until 11:59 PM Eastern Time on October 29, 2008 by dialing
(888) 286-8010 (U.S) or (617) 801-6888 (international) and using the
conference passcode 30358589. In addition, the conference call will be
archived for two weeks on the Company's website at www.joesjeans.com.
About Joe's Jeans Inc.
Joe's Jeans Inc. designs, produces and sells apparel and apparel-related
products to the retail and premium markets under the Joe's® brand and
related trademarks. More information is available at the company website
at www.joesjeans.com.
Statements in this news release which are not purely historical facts are
forward-looking statements, including statements containing the words
"intend," "believe," "estimate, "project," "expect" or similar expressions.
Forward-looking statements in this press release include, without
limitation, our ability to capture market share in the premium denim
category, both domestically and internationally, our ability to achieve
long-term profitability, our expectations for our Joe's Jeans® brand in the
marketplace, including our ability to transition to a lifestyle brand, our
belief in our growth strategy, and our ability to implement our retail
strategy. These statements are made pursuant to the safe harbor provisions
of Section 21E of the Securities Exchange Act of 1934, as amended. All
forward-looking statements are based upon information available to Joe's
Jeans Inc. on the date of this release. Any forward-looking statement
inherently involves risks and uncertainties that could cause actual results
to differ materially from the forward-looking statements. Factors that
would cause or contribute to such differences include, but are not limited
to: uncertainty regarding the effect or outcome of the Company's
expectations in the domestic and international marketplaces; continued
acceptance of the Company's products in the marketplace, particularly
acceptance and near-term sales of the Joe's® brand; successful
implementation of the Company's retail strategy; the ability of the Company
to continue to improve its gross margins; the ability to obtain new
financing from other financing sources; the ability to generate positive
cash flow from operations; competitive factors, including the possibility
of major customers sourcing product overseas in competition with our
products; dependence upon third-party vendors; a possible oversupply of
denim in the marketplace; and other risks detailed in the Company's
periodic report filings with the Securities and Exchange Commission. By
making these forward-looking statements, the Company undertakes no
obligation to update these statements for revisions or changes after the
date of this release. Readers are cautioned not to place undue reliance on
forward-looking statements.
JOE'S JEANS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three months ended
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August 31, August 25,
2008 2007
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(unaudited)
Net sales $ 18,248 $ 15,708
Cost of goods sold 9,303 9,123
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Gross profit 8,945 6,585
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Operating expenses
Selling, general and administrative 6,134 5,335
Depreciation 70 91
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6,204 5,426
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Operating income 2,741 1,159
Interest expense (133) (203)
Other expense - -
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Income before provision for taxes 2,608 956
Income taxes 368 43
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Net income $ 2,240 $ 913
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Earnings per common share - basic $ 0.04 $ 0.02
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Earnings per common share - diluted $ 0.04 $ 0.02
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Weighted average shares outstanding
Basic 59,477 43,662
Diluted 60,063 45,541