FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT: A. Richard Hurwitz Vice President, Corporate Communications (305) 858-2200 BISCAYNE APPAREL ANNOUNCES 1997 OPERATING RESULTS CLIFTON, NJ - (March 6, 1998) Biscayne Apparel, Inc. (ASE:BHA) today announced its operating results for the year ended December 31, 1997. Net sales in 1997 were $93.2 million versus $105.4 million in the same period in 1996. Net loss in 1997 was $3.9 million, or $0.36 per share, compared to net loss in 1996 of $8.7 million, or $0.81 per share. Biscayne's 1997 and 1996 results included restructuring charges and income tax reserves of $1.5 million and $9.1 million, net of taxes, or $0.14 and $0.85 per share, respectively. The Company's gross margin in the 1997 fiscal year was 24.8%, compared to 25.9% in the same period in 1996. The decline in gross margin was largely attributable to warm-weather related markdowns of women's outerwear and increased production costs in children's underwear. Selling, general and administrative expense ("S,G&A") declined in 1997, from $24.4 million, or 23.1% in 1996 to $22.2 million, or 23.8% of net sales in 1997. Biscayne's net sales in the fourth quarter ended December 31, 1997 were $23.7 million, compared to $30.0 million in the same period in 1996. The net loss in the fourth quarter of 1997 was $3.8 million, or $0.35 per share, compared to net loss in the fourth quarter of 1996 of $8.0 million, or $0.74 per share. Peter Vandenberg, Jr., President and Chief Financial Officer, commented, "We are disappointed with Biscayne's 1997 operating results, which reflected the impact of several factors, including: unseasonably warm fall/winter weather, which impeded sell-through of outerwear at wholesale and retail levels, decreased realizable sales prices, and increased inventories, and increased production costs and lower efficiencies at our children's underwear division. "We have moved aggressively to improve the Company's long-term sales, profitability, and liquidity. We undertook several cost saving activities and operating initiatives, while making investments in product development and marketing. Examples of these initiatives include the following: * implemented a set of initiatives in our Varon unit (led by our new management team) to improve production efficiency, lower variable and overhead expense, and reduce inventories, * consolidated the operations and management of Andy Johns Fashions into the Mackintosh of New England product group. (This action has lowered the Company's S,G&A through reductions in personnel, S,G&A expense, and facilities consolidation.), and * implemented co-operative sourcing among the outerwear product groups, utilizing a network of existing overseas satellite offices and staff. "In addition, we expanded our family of licensing partnerships in 1997 with long-term agreements with several well-known children's and junior/women's brand names, including: * Starter Corporation (NYSE:STA) to manufacture girl's activewear, swimwear, and outerwear in sizes 4-6x and 7-16. * Healthtex, a division of VF Corporation (NYSE:VFC), to manufacture a new collection of children's outerwear under the Healthtex brand name in sizes newborn through 16 for girls and newborn through 7x for boys. The outerwear products include jackets, pramsuits, windsuits, one- and two- piece snowsuits, and padded vests. * XOXO, a division of privately-held Lola, Inc., to manufacture a line of junior/ women's outerwear. The XOXO outerwear line will focus on the upscale contemporary junior customer for distribution through major department and better specialty stores. Initial shipments for our new licenses are slated for delivery in Fall 1998. Vandenberg concluded, "While we expect to generate further cost savings in 1998, we believe that the impact of the initiatives, outlined above, will result in significant improvement in operating comparisons to 1997." This news release contains certain forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward looking statements involve risks and uncertainties that could cause actual results to differ materially from these forward-looking statements. These risks include, but are not limited to, raw material costs and the ability to pass price increases to customers in a timely fashion, product acceptance and availability, changes in the level of consumer demand and/or spending, fashion trends, weather patterns, further governmental regulations, etc. All forward- looking statements should be considered in light of these risks and uncertainties. Biscayne Apparel, Inc. is a designer, manufacturer, and importer of diversified apparel and has the following operations: M&L International - infant's, toddler's, and children's outerwear, sportswear and swimwear; Mackintosh of New England - women's woolen coats and active outerwear; and Varon - girl's and boy's underwear and girl's daywear. Additional information on Biscayne Apparel, Inc. is available on the Internet World Wide Web at this address: http://www.cfonews.com/bha; or interested parties may dial direct by modem to (718) 279-3590; or may send E-mail to cfo@panix.com, with the subject bha. ### BISCAYNE APPAREL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) THREE MONTHS ENDED TWELVE MONTHS ENDED DECEMBER 31, DECEMBER 31, 1997 1996 1997 1996 Net sales......................$ 23,714 $ 29,995 $ 93,206 $ 105,425 Operating costs and expenses: Cost of goods sold .......... 19,068 21,722 70,045 78,112 Selling, general and administrative ............ 5,783 6,567 22,183 24,394 Restructuring expense ....... 465 2,039 465 2,039 Impairment of long-lived assets .................... - 7,062 - 7,062 Operating (loss) income........ (1,602) (7,395) 513 (6,182) Other income and (expenses): Interest and other expenses... (933) (966) (3,270) (3,643) Interest and other income..... 18 37 43 246 Gain on sale and equity in net income of investee... - - - 123 Loss before benefit for income taxes ............... (2,517) (8,324) (2,714) (9,456) Provision (benefit) for income taxes ............... 1,290 (364) 1,157 (732) Net loss.......................$ (3,807) $ (7,960) $ (3,871) $ (8,724) ========= ========= ========== ========== Net loss per common share......$ (0.35) $ (0.74) $ (0.36) $ (0.81) ========= ========= ========== ========== Shares used in computing net loss per common share ... $10,771,308 $10,741,748 $10,764,632 $10,741,748 ========== ========== ========== ========== BISCAYNE APPAREL, INC. CONSOLIDATED BALANCE SHEET (Dollars in thousands) DECEMBER 31, DECEMBER 31, 1997 1996 ASSETS Current assets: Cash and cash equivalents.......................$ 268 $ 327 Trade accounts receivable, less allowances of $2,278 in 1997 and $2,018 in 1996........... 13,509 14,374 Inventories..................................... 17,258 14,554 Federal income tax receivable................... - 1,455 Prepaid expenses and other...................... 962 2,261 Total current assets......................... 31,997 32,971 Property, plant and equipment, less accumulated depreciation of $2,517 in 1997 and $1,912 in 1996.............................. 2,739 2,864 Other assets, net................................. 81 275 $ 34,817 $ 36,110 ========= ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable................................$ 4,320 $ 4,024 Accrued liabilities............................. 4,878 6,184 Notes payable to banks.......................... 6,855 1,473 Current portion of long-term debt............... 2,000 1,750 Total current liabilities.................... 18,053 13,431 Subordinated notes................................ 6,444 6,444 Long-term debt.................................... 2,500 4,500 Other liabilities................................. 162 557 Commitments and contingencies..................... - - Stockholders' Equity: Common stock.................................... 108 107 Additional paid-in capital...................... 26,610 26,311 Accumulated deficit............................. (19,060) (15,240) Total stockholders' equity................... 7,658 11,178 $ 34,817 $ 36,110 ========= ========== End