EX-99.1 2 l25688aexv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
(BLAIR CORPORATION LOGO)
FOR IMMEDIATE RELEASE:
     
CONTACTS:
   
 
   
Blair Corporation
Larry Pitorak, CFO & CAO
814-723-3600
  Carl Hymans
G.S. Schwartz & Co
212-725-4500
carlh@schwartz.com
BLAIR CORPORATION REPORTS FIRST QUARTER RESULTS
WARREN, Pa., (April 17, 2007) — Blair Corporation (Amex: BL), (www.blair.com), a national multi-channel direct marketer of women’s and men’s apparel and home products, today announced results for the first quarter ended March 31, 2007.
     Net sales for the first quarter ended March 31, 2007 were $76.1 million, a decrease of 25.9%, compared to the $102.7 million reported for the first quarter ended March 31, 2006.
     The Company had expected net sales for the first quarter of 2007 to be below first quarter 2006 net sales as a result of planned reductions in catalog circulation. The first quarter 2007 results were 14.8% below the Company’s expectations for the period. The decline in first quarter 2007 net sales was a result of lower customer demand and slow response to spring apparel. Additionally, fulfillment difficulties resulting from the start-up of a new warehouse management software system adversely impacted net sales. Unit sales volume for the first quarter of 2007 declined 27.6% from first quarter 2006 levels. This volume decline was partially offset by a 1.7% increase in average selling prices. The reduction in catalog circulation levels and slow response rates also impacted E-commerce sales. E-commerce net sales for the first quarter of 2007 were $17.8 million, a 28.2% decline from the $24.8 million recorded in the first quarter of 2006.
     The Company reported a net loss of $5.1 million, or $1.35 per basic and diluted share for the first quarter of 2007, compared to a net loss of $4.8 million or $1.23 per basic and diluted share reported for the first quarter of 2006.
     Cost of goods sold as a percentage of net sales for the first quarter of 2007 declined to 45.8%, compared to 46.7% for the first quarter of 2006. This improvement in cost of goods sold as a percent of net sales was the result of continued efforts to reduce the cost of merchandise through increased direct sourcing by the Company. Advertising expenses for the first quarter of 2007 were $10.3 million lower than for the first quarter of 2006, a 33% decline in costs. This decline in advertising costs was the result of planned reductions in catalog circulation implemented to garner greater selling expense efficiencies. General and administrative expenses for the first quarter of 2007 were $3.9 million lower than the comparable quarter of 2006, primarily due to restructurings which occurred in 2006. The Company continues to restructure its workforce to meet the changing requirements of its business. In


 

the first quarter of 2007, the Company recorded $249,000 of severance expense compared to $1.5 million of severance expense recorded in the first quarter of 2006.
     The first quarter of 2007 severance expense is associated with the previously disclosed closing of Blair’s leased Returns Center in Erie, Pa. and movement of all returns operations to the Blair Distribution Complex in Irvine, Pa. The closing was announced in the fourth quarter of 2006 and the move completed in March 2007.
     In June 2006, the Company began a credit program where it absorbed any bad debt on credit issued to specified Blair customers that would otherwise not be eligible under the Blair Credit program. First quarter 2007 results include a provision for doubtful accounts of approximately $1.5 million associated with these Blair credit sales. During the first quarter of 2007, the Company recorded $524,000 of rent related expenses associated with the closing of the above mentioned leased Returns Center in Erie, Pa. First quarter 2007 results were also impacted by approximately $975,000 of expenses incurred relative to its announced pending merger transaction with Appleseed’s Topco, Inc.
     In connection with the proposed merger and related transactions, Blair Corporation has filed a definitive proxy statement with the Securities and Exchange Commission. Blair stockholders are urged to read the definitive proxy statement carefully, because it contains important information. Stockholders are able to obtain a copy of the proxy statement and other documents containing information about Blair Corporation, free of charge, at the SEC’s Web site at www.sec.gov. In addition, copies of the proxy statement are available free of charge on the investor relations portion of the Blair Corporation Web site at www.blair.com, and may also be obtained by writing Blair Corporation’s investor relations department, at 220 Hickory Street, Warren, PA 16366, or by calling Georgeson Inc. at (866) 229-8451. Blair Corporation and its respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from Blair Corporation’s stockholders in respect of the proposed transaction. Information regarding Blair Corporation’s directors and executive officers and their ownership of Blair securities is set forth in the definitive proxy statement. Further information regarding persons who may be deemed participants, including any direct or indirect interests they may have, is also set forth in the definitive proxy statement filed on March 21, 2007.
ABOUT BLAIR
     Headquartered in Warren, Pennsylvania, Blair Corporation sells a broad range of women’s and men’s apparel and home products through direct mail marketing and its Web site www.blair.com. Blair Corporation employs approximately 1,900 associates (worldwide) and operates facilities and retail outlets in Northwestern Pennsylvania as well as a catalog outlet in Wilmington, Delaware. The Company, which has annual sales of approximately $425 million, is publicly traded on the American Stock Exchange (Amex: BL).
     This release contains certain statements, including without limitation, statements containing the words “believe,” “plan,” “expect,” “anticipate,” “strive,” and words of similar import relating to future results of the Company (including certain projections and business trends) that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to, changes in political and economic conditions, demand for and market acceptance of new and existing products, as well as other risks and uncertainties detailed in the most recent periodic filings of the Company with the Securities and Exchange Commission.


 

—Financial table follows—


 

Blair Corporation and Subsidiaries
Consolidated Statements of Income
                 
    (Unaudited)  
    Three Months Ended  
    March 31  
    2007     2006  
 
               
Net sales
  $ 76,089,802     $ 102,682,991  
Other revenue
    1,777,871       1,511,280  
     
 
    77,867,673       104,194,271  
 
               
Cost and expenses:
               
Cost of goods sold
    34,818,965       47,920,130  
Advertising
    21,203,312       31,543,715  
General and administrative
    28,543,291       32,421,844  
Provision for doubtful accounts
    1,529,375       50,877  
Interest (income) expense, net
    (340,253 )     (316,161 )
Other (income) expense, net
    (60,745 )     47,596  
     
 
    85,693,945       111,668,001  
     
Loss before income taxes
    (7,826,272 )     (7,473,730 )
 
               
Income taxes benefit
    (2,684,000 )     (2,679,000 )
     
 
               
Net loss
  $ (5,142,272 )   $ (4,794,730 )
     
 
               
Basic (loss) earnings per share based on weighted average shares outstanding
  $ (1.35 )   $ (1.23 )
     
Diluted (loss) earnings per share based on weighted average shares outstanding and assumed conversions
  $ (1.35 )   $ (1.23 )
     


 

Blair Corporation and Subsidiaries
Consolidated Balance Sheets
                 
    (Unaudited)        
    March 31     December 31  
    2007     2006  
 
               
Assets
               
Current assets:
               
Cash and cash equivalents
  $ 31,265,476     $ 36,927,303  
Receivables, less allowances for doubtful accounts of $2,048,333 in 2007 and $592,645 in 2006
    3,734,982       2,995,973  
Inventories:
               
Merchandise
    60,179,599       61,317,388  
Advertising and shipping supplies
    9,025,954       6,947,037  
       
 
    69,205,553       68,264,425  
Deferred income taxes
    1,049,000       1,643,000  
Prepaid and refundable federal and state taxes
    2,187,171       -0-  
Prepaid expenses
    2,645,586       2,575,795  
Assets held for sale
    700,000       700,000  
       
Total current assets
    110,787,768       113,106,496  
Property, plant, and equipment:
               
Land
    548,817       548,817  
Buildings and leasehold improvements
    64,254,784       64,090,428  
Equipment
    82,818,427       75,408,270  
Construction in progress
    67,970       7,163,389  
       
 
    147,689,998       147,210,904  
Less allowances for depreciation
    102,513,894       100,409,796  
       
 
    45,176,104       46,801,108  
Trademarks
    253,374       271,434  
Other long-term assets
    1,285,849       1,066,354  
       
Total assets
  $ 157,503,095     $ 161,245,392  
       


 

Blair Corporation and Subsidiaries
Consolidated Balance Sheets — Continued
                 
    (Unaudited)        
    March 31     December 31  
    2007     2006  
 
               
Liabilities and Stockholders’ Equity
               
Current liabilities:
               
Trade accounts payable
  $ 19,571,685     $ 17,826,858  
Advance payments from customers
    2,289,744       1,113,744  
Reserve for sales returns and allowances
    5,589,000       5,974,000  
Accrued expenses
    13,128,818       11,083,565  
Accrued federal and state taxes
    -0-       3,674,168  
Current portion of capital lease obligations
    9,756       10,453  
     
Total current liabilities
    40,589,003       39,682,788  
 
               
Capital lease obligations, less current portion
    1,717       4,242  
 
               
Deferred income taxes
    1,449,000       1,676,000  
 
               
Stockholders’ equity:
               
Common stock without par value:
               
Authorized 12,000,000 shares issued 10,075,440 shares (including shares held in treasury) — stated value
    419,810       419,810  
Additional paid-in capital
    14,607,348       14,354,608  
Retained earnings
    324,697,466       329,745,101  
Accumulated other comprehensive (loss) income
    (150,464 )     (121,711 )
     
 
    339,574,160       344,397,808  
 
               
Less 6,206,003 shares in 2007 and 6,228,623 shares in 2006 of common stock in treasury — at cost
    223,687,199       224,061,659  
Less receivable and deferred compensation from stock plans
    423,586       453,787  
     
 
    115,463,375       119,882,362  
     
Total liabilities and stockholders’ equity
  $ 157,503,095     $ 161,245,392