MOSS Mossimo

Mossimo, Inc. (NASDAQ: MOSS) today announced financial results for the third quarter ended September 30, 2005. Mossimo, Inc. reported third quarter 2005 total net revenues increased to $6.8 million compared to $4.9 million for the same period last year. The Company reported third quarter net earnings of $637,000 compared to net a net loss of $125,000 for the same period last year, and diluted earnings per share of $0.04 compared to diluted loss per share of $0.01 for the same period last year. Net revenues for the nine months ended September 30, 2005 were $24.5 million compared to $17.4 million in the same period last year. The company reported net earnings for the first nine months of 2005 of $4.7 million compared to net earnings of $2.1 million in the corresponding period a year ago, and diluted earnings per share of $0.30 compared to diluted earnings per share of $0.13 for the same period last year. Edwin Lewis, President and Co-Chief Executive Officer stated, "Our third quarter performance was primarily driven by continued improvements in our Target business, coupled with better regular price sales at Modern Amusement. While there is still much work to be done in both businesses, we are encouraged by the progress we are making." The Company also announced that its agreement with Hudson's Bay Company has expired, and there are no plans to renew it. The Company also announced that it would be holding its 2005 Annual Meeting on December 15, 2005. Proxy materials are expected to be mailed on or about November 17, 2005 to holders of record of the Company's shares as of October 19, 2005. To listen to the Mossimo prerecorded third quarter fiscal 2005 earnings call, please dial (719) 457-0820 or (888) 203-1112, followed by the conference identification number #8467676. This call will be available beginning today, November 14, 2005 at 4:00 pm ET and run through November 21, 2005 at 11:59 pm ET. Founded in 1987, Mossimo, Inc. is a designer, licensor and distributor of men's, women's, boy's and girl's apparel, footwear, and other fashion accessories such as jewelry, watches, handbags, and belts. The matters discussed in this news release with respect to operations and future results, and the benefits thereof, are forward looking statements that involve risks and uncertainties, including the demand for the Company's products in Target stores which have not traditionally sold the Company's products, changes in consumer demands and preferences, shifting trends in the overall retail and apparel market, competition from other lines, changes in consumer spending patterns and general economic conditions, and uncertainties generally associated with product introductions and apparel retailing. Forward looking statements are not guarantees and involve known and unknown risks and uncertainties, any of which could cause actual results to vary materially from anticipated results. Operating results stated herein are not necessarily indicative of results that may be expected in future periods. More information on risk factors, which could affect the Company's financial results, is included in the Company's Forms 10-K and 10Q, periodically filed with the S.E.C. (Tables to Follow) -0- *T MOSSIMO, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) (Unaudited) Sept. 30, Dec. 31, 2005 2004 -------- -------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 17,884 $ 4,903 Restricted cash 722 413 Investments - 4,800 Accounts receivable 4,551 2,908 Merchandise inventory 1,009 539 Deferred income taxes 2,952 1,739 Prepaid expenses and other current assets 302 436 -------- -------- Total current assets 27,420 15,738 PROPERTY AND EQUIPMENT, at cost, net of accumulated depreciation and amortization 923 1,117 DEFERRED INCOME TAXES 3,022 5,646 GOODWILL 212 212 TRADENAME, net 92 112 OTHER ASSETS 37 96 -------- -------- $ 31,706 $ 22,921 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 1,556 $ 352 Accrued liabilities 645 257 Accrued commissions 382 258 Accrued bonuses 2,568 206 -------- -------- Total current liabilities 5,151 1,073 DEFERRED RENT 132 135 -------- -------- Total liabilities 5,283 1,208 COMMITMENTS, CONTINGENCIES, AND SUBSEQUENT EVENTS STOCKHOLDERS' EQUITY: Preferred stock, par value $.001; authorized shares 3,000,000; no shares issued or outstanding - - Common stock, par value $.001; authorized shares 30,000,000; issued and outstanding 15,748,442 at September 30, 2005 and 15,738,442 at December 31, 2004 15 15 Additional paid-in capital 39,788 39,763 Accumulated deficit (13,380) (18,065) -------- -------- Net stockholders' equity 26,423 21,713 -------- -------- $ 31,706 $ 22,921 ======== ======== *T -0- *T MOSSIMO, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (IN THOUSANDS, EXCEPT PER SHARE DATA) (Unaudited) For the Three For the Nine Months Months September 30, September 30, ---------------- ---------------- 2005 2004 2005 2004 ------- ------- ------- ------- Revenue from license royalties and design service fees $ 4,238 $ 4,187 $19,705 $16,181 Product sales 2,533 747 4,775 1,197 ------- ------- ------- ------- Total revenues 6,771 4,934 24,480 17,378 Operating expenses: Cost of product sales 1,204 665 2,937 889 Selling, general and administrative 4,935 4,470 14,864 13,014 ------- ------- ------- ------- Total operating expenses 6,139 5,135 17,801 13,903 ------- ------- ------- ------- Earnings (loss) from operations 632 (201) 6,679 3,475 Interest income 123 26 232 73 ------- ------- ------- ------- Earnings (loss) before income taxes 755 (175) 6,911 3,548 Income taxes 118 (50) 2,226 1,476 ------- ------- ------- ------- Net earnings (loss) $ 637 $ (125) $ 4,685 $ 2,072 ======= ======= ======= ======= Earnings (loss) per common share: Basic $ 0.04 $ (0.01) $ 0.30 $ 0.13 ======= ======= ======= ======= Diluted $ 0.04 $ (0.01) $ 0.30 $ 0.13 ======= ======= ======= ======= Weighted average common shares outstanding: Basic 15,748 15,738 15,742 15,738 ======= ======= ======= ======= Diluted 15,785 15,738 15,770 15,777 ======= ======= ======= ======= *T