SOURCE: Nitches, Inc.

April 19, 2006 09:00 ET

Nitches, Inc. Announces Second Quarter Fiscal 2006 Results

SAN DIEGO, CA -- (MARKET WIRE) -- April 19, 2006 --

--  Earnings per share of $.01 versus year ago $.15 loss
--  Net sales increase 89% from prior year to $12.3 million
--  Order backlog for fiscal 2006 remains strong at $26.0 million
Nitches, Inc. (NASDAQ: NICH) announced today its results for the three and six month periods ended February 28, 2006. The Company earned consolidated net income of $45,000 for the second quarter of fiscal 2006, reversing a $524,000 loss in the year earlier period. Second quarter earnings per split-adjusted share were $.01 versus a loss of $.15 for the second quarter of fiscal 2005. Earnings per share for the current quarter reflect the effect of a 200% stock dividend issued on January 20, 2006 which had the effect of a 3 for 1 stock split.

Earnings during the period were negatively impacted due to one time, non-cash adjustments related to the acquisition of Designer Intimates on October 24, 2005. For the second quarter, consolidated pretax income before the effect of these one time charges would have been $327,000 and net income would have been $196,000 or $.05 per split-adjusted share.

For the six months ended February 28, 2006 the Company earned $.15 per weighted average share as compared to a $.15 loss in the year earlier period. Consolidated pretax income before the effect of one time acquisition charges was $1.9 million and net income was $1.1 million or $.29 per weighted average share. Per share amounts for the current six month period reflect the effect of 180,000 shares issued in conjunction with the acquisition of Designer Intimates.

Consolidated net sales for the second quarter of fiscal 2006 increased 89% to $12.3 million versus $6.5 million for the second quarter of 2005 due to net sales contributed by the Company's newly acquired Designer Intimates business. Consolidated net sales for the first half of fiscal 2006 increased 110% to $27.0 million from $12.9 million for the first half of fiscal 2005. Designer Intimates contributed $12.3 million of the $14.1 million increase.

                          Three Months Ended           Six Months Ended
                            February 28,                 February 28,
                         2006          2005          2006          2005
                     -----------   -----------   -----------   -----------
Net sales            $12,314,000   $6,521,000    $27,029,000   $12,858,000
Net income (loss)         45,000     (524,000)       565,000      (536,000)
Earnings per share   $      0.01   $    (0.15)   $      0.15   $     (0.15)
Weighted average
 shares outstanding    4,053,507    3,513,507      3,895,385     3,513,507
For the second half of the fiscal year ending August 31, 2006 the Company has shipped and on-hand orders totaling $26.0 million. At this time last year the Company had comparable orders of $12.7 million. Additionally, to date the Company has received orders for shipment in the first quarter of fiscal 2007 of $15.0 million. At this time last year the Company had comparable orders on hand for the first quarter of fiscal 2006 of $1.5 million. The increase is due to additional orders reported as a result of the acquisition of Designer Intimates, as well as both an increase in orders and earlier order placement for the company's menswear, sleepwear, and private label product lines. The amount of unfilled orders at any given time is affected by a number of factors, including the timing of the receipt and processing of customer orders and the scheduling of the manufacture and shipping of the product, which may be dependent on customer requirements.

Backlog amounts include both confirmed orders and unconfirmed orders that the Company believes, based on industry practice and past experience, will be confirmed. While cancellations, rejections and returns have generally not been material in the past, there can be no assurance that such action by customers will not reduce the amount of sales realized from the backlog of orders at a given point in time.

On October 24, 2005, Nitches acquired the remaining seventy-two percent (72%) of Designer Intimates, Inc. which it did not own, resulting in the Company owning one hundred percent (100%) of Designer Intimates. The primary reason for the acquisition was to acquire the trademarks and brand licenses held by Designer Intimates to complement the Company's broad production base and provide a platform for future revenue growth. Nitches currently distributes men's casual lifestyle clothing by Newport Blue®, Dockers® men's swimwear and t-shirts, golf apparel by The Skins Game, women's sleepwear and loungewear by Body Drama® and women's western wear by Adobe Rose®, Saguaro® and Southwest Canyon®. With the recent acquisition of Designer Intimates, the Company markets sleepwear, robes, loungewear, and daywear under the following brands: Argentovivo®, Derek Rose®, Princesse tam tam®, Crabtree & Evelyn®, The Anne Lewin® Collection, The Bill Blass® Lifestyle Collection, The Dockers® Collection, The Claire Murray® Collection and The Vassarette® Collection. Products are sold to better department stores, specialty boutiques, moderate department stores, and national and regional discount department stores and chains. The Company also develops and manufactures private label products for many leading retailers and catalogs.

Nitches, Inc. has been designing and marketing quality apparel for niche markets since 1971. The Company is headquartered in San Diego, California with offices in Los Angeles, New York City, Hong Kong and Istanbul. The Company's shares are traded on the NASDAQ Capital Market under the symbol NICH. Visit our web site at

Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to differ materially from forecasted results. Those risks include a softening of retailer or consumer acceptance of the Company's products, pricing pressures and other competitive factors, or the unanticipated loss of a major customer. The Company's results may also differ materially from period to period due to the seasonal nature of the Company's product lines. Such seasonal differences may be further impacted by the Company's acquisition of Designer Intimates. These and other risks are more fully described in the Company's filings with the Securities and Exchange Commission.

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