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Fredericks of Hollywood Group Announces Third Quarter Results (AMEX: FOH)

|Includes: Frederick's of Hollywood Group Inc (FOH)
Frederick's of Hollywood Group, Inc. is a New York corporation incorporated on April 10, 1935. The company conducts its business through 2 operating divisions: the multi-channel retail division and the whole sale division. Through the multi-channel retail division, they sell women’s intimate apparel and relate products under the proprietary Frederick’s of Hollywood brand exclusively though mall-based specialty retail stores in the United States, and through their catalof and website atwww.fredericks.com. As of April 24, 2010, they operated 128 Frederick’s of Hollywood stores nationwide. Today, Frederick’s of Hollywood Group Inc. reported its profitable fiscal 2010 3rd quarter financial results.

Financial Highlights include:
  1. Net income applicable to common shareholders was $218,000, or $.01 per diluted share, compared to a net loss of $2.1 million or ($.08) per diluted share.
  2. Adjusted EBITDA was $2,165,000 compared to $22,000. Net sales decreased 7.2% to $43.4 million from $46.8 million.
  3. Gross margin, as a percentage of net sales, increased to 40.2% from 38.2%.
  4. Selling, general, and administrative expenses decreased by 14.6% to $16.6 million, or 38.3% of sales, from $19.5 million or 41.6% of sales.
This improving financial data results directly from efforts remaining focused on implementing changes in their business strategy. These key initiatives include:

 
  1. Entering into an exclusive, multi-year international licensing agreement with Blue By Yoo to manufacture, distribute, and market a new line of women’s swimwear under the FOH brand.
  2. Retaining WhittmanHart Interactive, a brand building digital agency, to help increase FOH’s website exposure to customers through a complete social media and online marketing campaign.
  3. Entering into an integrated marketing and media partnership agreement with Hard Rock Hotel & Casino Las Vegas in May 2010. Frederick’s will have on-site presence throughout HRH, including event participation at the hotel’s clubs and pools, retail presence throughout HRH and featured Frederick’s of Hollywood branded merchandise will be promoted through various HRH sales channels.
Frederick’s of Hollywood has continued to improve operations through the elimination of expenses and implementing the strategies above. The company has reduced expenses during the first nine months of fiscal year 2010 by $6,337,000. These cuts include reducing personnel through the elimination and consolidation of executive and support positions, transitioning certain manufacturing support functions previously performed by domestic personnel to our facilities in Asia or to third party manufacturers, decreasing the use of outside consultants, and consolidating employee benefits and insurance.

 

We are encouraged by our solid performance this quarter and have a number of reasons to be optimistic about our future. Sales in our wholesale business are starting to gain traction with open orders up approximately 20%. In addition, our fourth quarter financials will reflect our recently closed Debt Exchange and Preferred Stock Conversion transaction, which increased shareholders' equity by more than $23.0 million," concluded Mr. Lynch.

To view this article at World Market Media click on the link below: http://www.worldmarketmedia.com/779/section.aspx/1760/post/fredericks-of-hollywood-group-announces-third-quarter-results-amex-foh



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