People's Liberation, Inc. (OTCBB:PPLB), designer of high-end casual
apparel under the brand names People's Liberation™
and William Rast™, today announced financial
results for the fourth quarter and year ended December 31, 2007.
FISCAL YEAR 2007 FINANCIAL RESULTS
Net sales for the 2007 full year rose 27% to a record $20.3 million
compared with $16.0 million for 2006. Gross margin improved to 48.6%
compared with 44.8% in 2006. Total operating expenses for 2007 increased
to $10.5 million from $8.1 million in 2006. This increase was due
primarily to increased selling and general and administrative expenses
incurred to promote the People's Liberation and William Rast brands.
Net loss for the year ended December 31, 2007 amounted to $768,000
compared with a net loss of $865,000 in 2006. The decrease in net loss
is due primarily to increased net sales, gross profit and other income,
offset by increased operating expenses and minority interest. In the
second half of 2007, the Company recorded net income totaling
approximately $651,000 for the six-month period, as compared with a net
loss of $162,000 for the corresponding period of 2006.
2007 FOURTH QUARTER FINANCIAL RESULTS
Net sales for the fourth quarter of 2007 were $5.6 million compared with
$4.4 million in the corresponding prior-year quarter. Gross margin
increased to 50.5% for the fourth quarter of 2007 compared with 49.5% in
the fourth quarter of 2006. Operating expenses for the fourth quarter of
2007 amounted to $2.7 million, compared with $2.5 million in the fourth
quarter of 2006.
Net income for the fourth quarter of 2007 was $53,000 compared with a
net loss of $295,000 in the fourth quarter of 2006.
RECENT DEVELOPMENTS
In the first quarter of 2008, the Company added three new exclusive
distributors for the William Rast brand in Italy, Russia and
Scandinavia and replaced its Canadian distributor.
In February 2008, the Company successfully launched its William Rast
Collection, designed by Johan and Marcella Lindeberg of Paris68.
In the fourth quarter of 2007, the Company raised approximately
$496,000 in net proceeds in a private placement transaction with
various strategic investors, including its German distributor, its
Chief Operating Officer, and its investment banking firm.
“We are pleased to have reached our
previously announced goals, which included achieving a profitable second
half of the 2007 fiscal year and fourth-quarter 2007 margins in excess
of 50%,” commented Chairman and Chief
Executive Officer Colin Dyne. “In addition,
our February launch of the Fall 2008 William Rast Collection has
generated strong customer interest and orders, and gives us a very
optimistic outlook for the balance of 2008.”
Mr. Dyne continued, “Our collection now sets
us apart from being just a denim brand and moves us into a contemporary
lifestyle brand for both men's and women's apparel. The changes we made
in the second half of 2007 to our infrastructure, operations, sales,
marketing and design position us for significant growth in 2008.”
CONFERENCE CALL
Investors are invited to participate in a conference call featuring
management’s commentary on financial results
and a question and answer session, on Monday, March 24, 2008 at 1:30
p.m. (Pacific Time) by dialing 866-696-7913 from within the U.S. or
706-758-4510 from outside the U.S. A telephone replay will be available
beginning Monday, March 24, 2008 at 4:30 p.m. Pacific Time, through
Sunday, March 30, 2008 at 9:00 p.m. PT. To access the replay, dial
800-642-1687 (U.S.) or 706-645-9291 (International) and use pass code:
38668172. The call also will be webcast at www.earnings.com.
For those who cannot listen to the live webcast, the call will be
archived at the investor relations section of the Company’s
website at www.peoplesliberation.com.
ABOUT PEOPLE'S LIBERATION, INC.
People's Liberation, Inc., based in Los Angeles, designs, markets and
sells premium contemporary apparel under the brand names People's
Liberation™ and William Rast™.
The clothing consists of premium denim, knits, wovens, and outerwear for
men and women. In the United States, the Company distributes its
merchandise to better department stores and boutiques, including
Nordstrom, Bloomingdales, Saks Fifth Avenue, Neiman Marcus and Fred
Segal. Outside the U.S., in select countries, the Company sells its
products directly and through distributors to better department stores
and boutiques, including TNT in Canada, Jades in Germany and Harvey
Nichols in the United Kingdom. The Company also sells merchandise on its
websites: www.peoplesliberation.com
and www.williamrast.com.
FORWARD-LOOKING STATEMENTS
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 are inherently unreliable and actual results
may differ materially. An example of forward looking statements in this
news release include statements regarding the belief that our Fall 2008
William Rast Collection has generated strong customer interest and
orders, and gives us a very optimistic outlook for the balance of 2008
and our belief that the changes we made in the second half of 2007 to
our infrastructure, operations, sales, marketing and design position us
for significant growth in 2008. Factors which could cause actual results
to differ materially from these forward-looking statements include the
company's ability to maintain customer and strategic business
relationships, the impact of competitive products and pricing, growth in
targeted markets, the adequacy of the company's liquidity and financial
strength to support its growth, and other information that may be
detailed from time to time in the Company's filings with the United
States Securities and Exchange Commission. The Company undertakes no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
PEOPLE'S LIBERATION, INC.
Consolidated Balance Sheets
December 31,
2007
December 31,
2006
Assets
Current Assets:
Cash and cash equivalents
$
362,505
$
62,389
Due from factor
1,517,029
2,772,773
Accounts receivable, net of allowance for doubtful accounts
1,029,510
1,017,884
Inventories
3,833,170
2,846,181
Refundable income taxes
11,500
16,500
Prepaid expenses and other current assets
196,730
140,486
Deferred income taxes
38,000
52,000
Total current assets
6,988,444
6,908,213
Property and equipment, net of accumulated depreciation and
amortization
612,264
577,331
Trademarks, net of accumulated amortization
363,359
227,748
Intangible asset
428,572
428,572
Other assets
265,020
64,970
Total assets
$
8,657,659
$
8,206,834
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable and accrued expenses
$
2,628,906
$
2,297,895
Income taxes payable
13,390
3,200
Total current liabilities
2,642,296
2,301,095
Deferred tax liabilities
93,000
61,000
Total liabilities
2,735,296
2,362,095
Stockholders’ equity:
Common stock, $0.001 par value, 150,000,000 shares authorized;
36,002,563 and 34,942,563 shares issued and outstanding at
December 31, 2007 and December 31, 2006, respectively
36,002
34,942
Additional paid-in capital
7,775,255
6,930,194
Accumulated Deficit
(1,888,894
)
(1,120,397
)
Total stockholders’ equity
5,922,363
5,844,739
Total liabilities and stockholders’ equity
$
8,657,659
$
8,206,834
PEOPLE'S LIBERATION, INC.
Consolidated Statements of Operations
Year Ended
December 31, 2007
Year Ended
December 31, 2006
Net sales
$
20,267,377
$
15,959,766
Cost of goods sold
10,409,159
8,801,924
Gross profit
9,858,218
7,157,842
Selling expenses
3,362,571
2,242,024
Design and production
2,428,501
2,278,495
General and administrative
4,681,425
3,585,618
Total operating expenses
10,472,497
8,106,137
Loss from operations
(614,279
)
(948,295
)
Interest (expense) income, net
(80,706
)
59,750
Other income
120,444
--
Total other income
39,738
59,750
Loss before income taxes and minority interest
(574,541
)
(888,545
)
(Provision) benefit for income taxes
(80,939
)
23,494
Net loss before minority interest
(655,480
)
(865,051
)
Minority interest
113,017
--
Net loss
$
(768,497
)
$
(865,051
)
Basic and diluted weighted average loss per common share
$
(0.02
)
$
(0.03
)
Basic and diluted weighted average common shares outstanding
35,200,207
34,063,658
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