SOURCE: Sport-Haley, Inc.

May 15, 2008 14:53 ET

Sport-Haley, Inc. Reports Third Quarter Unaudited Results

DENVER, CO--(Marketwire - May 15, 2008) - Sport-Haley, Inc. (NASDAQ: SPOR) ("Sport-Haley" or the "Company") today reported unaudited earnings for its third fiscal quarter and nine months ended March 31, 2008.

Net sales of fashion apparel for the three months ended March 31, 2008, were $4,740,000, a decrease of $533,000, or 10%, from net fashion apparel sales of $5,273,000 for the comparable three-month period in the prior fiscal year. Net sales of fashion apparel for the nine months ended March 31, 2008, were $12,532,000, a decrease of $419,000, or 3%, from net fashion apparel sales of $12,951,000 for the comparable nine-month period in the prior fiscal year. Net sales of Top-Flite® branded apparel of $11,000 and $158,000 for the three months and nine months ended March 31, 2008, respectively, were comprised of shipments to a retailer for a test in 50 of its stores and the disposition of inventories related to the cancellation by that retailer of a portion of its original purchase order. Net sales of Top-Flite® branded apparel of $1,185,000 for the nine months ended March 31, 2007, were comprised of sales to Wal-Mart of $1,000,000 and sales of $185,000 to other markets with regard to the disposition of inventories related to cancellations of purchase orders by Wal-Mart.

As a percentage of net sales, gross profit of our fashion apparel was 38% and 38%, versus 35% and 36%, for the three months and nine months ended March 31, 2008 and 2007, respectively. As a percentage of net sales, gross profit of our branded apparel was (55%) and 0%, versus 0% and 25%, for the three months and nine months ended March 31, 2008 and 2007, respectively.

Net loss for the three months ended March 31, 2008, was ($80,000), an improvement of $138,000, or 63%, as compared with the net loss of ($218,000) for the comparable three-month period in the prior fiscal year. Net loss for the nine months ended March 31, 2008, was ($683,000), an improvement of $153,000, or 18%, as compared with the net loss of ($836,000) for the comparable nine-month period in the prior fiscal year. Basic and diluted earnings (loss) per common share were ($0.04) and ($0.09) for the three month periods ended March 31, 2008 and 2007, respectively. Basic and diluted earnings (loss) per common share were ($0.30) and ($0.31) for the nine month periods ended March 31, 2008 and 2007, respectively. All securities options were anti-dilutive and therefore excluded from the per share calculations with respect to periods in which net losses were incurred.

For further information regarding the third quarter of our 2008 fiscal year, refer to our Form 10-Q for the quarterly period ended March 31, 2008, which submitted to the Securities and Exchange Commission today.

Sport-Haley, Inc. designs, purchases, contracts for the manufacture of and markets women's and men's fashion golf apparel and outerwear under the SPORT HALEY® and Ben Hogan® labels. The fashion golf apparel collections, known for their innovative designs, quality fabrics, generous fits and classic styles, are primarily marketed in the premium and mid-priced markets, through a network of independent sales representatives and distributors, to golf professional shops, country clubs, resorts and exclusive department stores within the United States and by certain distributors within international markets. Reserve Apparel Group LLC, a wholly owned subsidiary of Sport-Haley, Inc., designs, purchases, contracts for the manufacture of, markets and distributes branded golf apparel and outerwear under the Top-Flite® label to mass retailers and other big-box type high sales volume retail stores. Ben Hogan® fashion apparel and Top-Flite® branded apparel are distributed pursuant to a licensing agreement with Callaway Golf Company, which we consider to be a key component of our business strategies.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: When used in this release, the words "may," "will," "expect," "anticipate," "continue," "estimate," "project," "intend," "believe," and similar expressions, variations or the negative of these words, and any statement regarding possible or assumed future results of operations of our business, the markets for our products, anticipated expenditures, regulatory developments or competition, or other statements regarding matters that are not historical facts, are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. The reader should be aware that our actual results could differ materially from those contained in forward-looking statements. Our financial condition and the results of our operations will depend on a number of factors, including, but not limited to, the following: successfully anticipating fashion trends, designing favorably accepted fashion golf apparel, effectively advertising and communicating within the marketplace, and penetrating our chosen distribution channels; competition within golf apparel markets; business conditions and growth in the fashion golf apparel market and the general economy; our ability to successfully forecast sales and optimize inventory levels; our ability to successfully manage risks associated with the trend of a high relative percentage of sales with respect to licensed apparel, such as the Ben Hogan® apparel collections; loss of certain third party suppliers, and/or delays in receiving garments from third party suppliers caused by various factors, including lost or reduced manufacturing capacity or significant suppliers, labor shortages, timely performance of third parties, transportation difficulties, and others; significant delays in deliveries from third party suppliers; unsatisfactory recourse with regard to nonconforming goods received from foreign suppliers; political and international trade relations; changes in international trade quota systems for apparel; significant reliance upon several individual foreign suppliers; reliance upon a certain foreign person responsible for maintaining relationships with and monitoring the performance of certain of our significant foreign suppliers; consumer spending on golf apparel; general global economic and political conditions resulting from threats or acts of war or terrorism and responses thereto; access to capital; maintaining satisfactory relationships with commercial banking institutions; establishing controls with regard to and maintaining the integrity of technology and information systems; and, reliance upon executive officers and key employees. Additional information on these and other factors that could affect our financial results is included in our Form 10-K for the year ended June 30, 2007. There may be other factors not mentioned above or included in our Securities and Exchange Commission filings that may cause actual results to differ materially from any forward-looking statement. The reader should not place undue reliance on any forward-looking statement. Neither the Company nor any of its corporate officers or key employees assumes any obligation to update any forward-looking statement as a result of new information, future event or development, except as required by securities laws.

                            SPORT-HALEY, INC.
               Consolidated Unaudited Financial Information
                   (In thousands, except per share data)



                               Three Months Ended      Nine Months Ended
                                   March 31,               March 31,
                             ---------------------   ---------------------
                               2008        2007        2008        2007
                             ---------   ---------   ---------   ---------
Statements of Income Data:

Net sales                    $   4,751   $   5,273   $  12,690   $  14,136

Gross profit                     1,806       1,865       4,769       4,922

Total other operating costs      2,080       2,143       5,719       5,917

Loss from operations              (274)       (278)       (950)       (995)

Other income (expense), net        196          71         276         233

Net income (loss)                  (80)       (218)       (683)       (836)

Diluted earnings (loss)
 per common share               ($0.04)     ($0.09)     ($0.30)     ($0.31)

Diluted average weighted
 shares outstanding          2,284,000   2,490,000   2,284,000   2,678,000


                                                           March 31,
                                                     ---------------------
                                                       2008        2007
                                                     ---------   ---------
Balance Sheets Data:

Current assets                                       $  12,391   $  12,938

Total assets                                            12,643      13,661

Current liabilities                                      1,906       1,814

Commitments and Contingencies                               38           -

Long-Term Liabilities                                        -           -

Shareholders' equity                                    10,699      11,847

Contact Information

  • CONTACT:
    Donald W. Jewell
    Interim Chief Executive Officer
    (303) 320-8800

    Patrick W. Hurley
    Chief Financial Officer
    (303) 320-8800