Biscayne: Earnings News Release FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT: Peter Vandenberg, Jr. Vice President, Chief Financial Officer (201) 473-3240, x221 or A. Richard Hurwitz Vice President, Corporate Communications (305) 858-2200 BISCAYNE APPAREL ANNOUNCES 1997 FIRST QUARTER RESULTS CLIFTON, NJ - (May 12, 1997) Biscayne Apparel, Inc. (ASE:BHA) today announced its operating results for the first quarter ended March 31, 1997. Net sales in the 1997 first quarter were $14.8 million, compared to $16.2 million in the same period of 1996. The net loss in the 1997 first quarter was $1.1 million, or $0.10 per share, an improvement of $303,000 from the net loss of $1.4 million, or $0.13 per share posted in the first quarter of 1996. Biscayne's consolidated sales backlog as of May 2, 1997 was $72.3million versus $63.1 million as of May 3, 1996. This 15% increase resulted primarily from higher sales of children's outerwear products. The Company's gross margin was 26% in the first quarter of 1997, compared to 24% in the same period in 1996, an increase resulting from various cost reduction programs that the Company instituted in the past 12 months and increased outsourcing of apparel production to offshore manufacturers. Selling, general and administrative expense ("SG&A") declined 14% from $5.7 million in 1996 to $4.9 million in 1997 due to management's continued cost reduction efforts. Interest expense declined from $0.8 million in the first quarter of 1996 to $0.6 million in the same period of 1997 due to lower borrowings. Earl W. Powell, Chairman, President, and Chief Executive Officer, commented, "Typically, the first quarter provides approximately 15% of total year sales. Due to improvements brought about by the implementation of our new strategic operating plan, we were able to reduce our net loss by 21% from the same period in 1996. These improvements included a combination of cost reductions and consolidations which have made Biscayne leaner and more competitive, and have laid the foundation for significant improvement in operating results in the forthcoming year." Biscayne Apparel, Inc. is a designer, manufacturer, and importer of diversified apparel and has the following operations: Andy Johns Fashions International - women's and children's outerwear; M&L International - infants', toddlers', and children's outerwear, sportswear and swimwear; Mackintosh of New England - women's woolen coats and outerwear; and Varon - girls' and boys' underwear and girls' 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 BALANCE SHEET (Dollars in thousands) March 31, December 31, 1997 1996 ------------- ------------- ASSETS (Unaudited) Current assets: Cash and cash equivalents....... $ 613 $ 327 Trade accounts receivable, less allowances of $1,639 in 1997 and $2,018 in 9,318 14,374 Inventories..................... 15,474 14,554 Federal income tax receivable... 2,095 1,455 Prepaid expenses and other...... 2,121 2,261 ------------- ------------- Total current assets......... 29,621 32,971 Property, plant and equipment, less accumulated depreciation of $2,048 in 1997and $1,912 in 1996....... 2,844 2,864 Other assets, net................. 642 275 ------------- ------------- $ 33,107 $ 36,110 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable................ $ 4,558 $ 4,024 Accrued liabilities............. 4,514 6,184 Notes payable to banks.......... 2,357 1,473 Current portion of long-term deb 2,000 1,750 ------------- ------------- Total current liabilities.... 13,429 13,431 Subordinated notes................. 6,444 6,444 Long-term debt.................... 2,500 4,500 Other liabilities................. 477 557 Commitments and contingencies..... - - Stockholders' Equity: Common stock, $0.01 par value; 25,000,000 shares authorized; 10,741,819 issued and outstanding in 1997 and 10,741,748 in 1996. 107 107 Additional paid-in capital........ 26,483 26,311 Unearned stock award.............. (51) (68) Accumulated deficit............... (16,282) (15,172) ------------- ------------- Total stockholders' equity... 10,257 11,178 ------------- ------------- $ 33,107 $ 36,110 ============= ============= BISCAYNE APPAREL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands of dollars, except per share data) (Unaudited) THREE MONTHS ENDED MARCH 31, ------------------------- 1997 1996 ----------- ----------- Net sales............................... $ 14,849 $ 16,236 Operating costs and expenses: Cost of goods sold.................... 11,037 12,270 Selling, general and administrative... 4,947 5,718 Restructuring charges................. - 89 ----------- ----------- Operating loss.......................... (1,135) (1,841) Other income and (expenses): Interest and other expenses............ (555) (837) Interest and other income.............. 13 151 Gain on sale and equity in net income of investee - 123 ----------- ----------- Loss before income tax benefit.......... (1,677) (2,404) Income tax benefit...................... (567) (991) ----------- ----------- Net loss................................ $ (1,110) $ (1,413) =========== =========== Net loss per common share............... $ (0.10) $ (0.13) =========== =========== Shares used in computing net loss per co 10,741,819 10,741,407 =========== =========== BISCAYNE APPAREL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Three Months Ended March 31, March 31, 1997 1996 Operating activities: Net loss.................................... $ (1,110) $ (1,413) Adjustments to reconcile net loss to net cash provided by operating activities: Gain on sale of assets.................... - (11) Gain on sale of equity investee........... - (123) Amortization of unearned stock award compensation............................. 17 17 Amortization of warrants costs............ 33 - Depreciation expense...................... 144 158 Amortization expense...................... 78 69 Provision for losses and sales allowances on receivables........................... 635 1,268 (Increase) decrease in operating assets: Trade accounts receivable.................. 4,421 5,867 Inventories................................ (920) 1,064 Prepaid expenses and other................. 140 (101) Federal income tax receivable.............. (640) (967) Other assets............................... (306) (133) Increase (decrease) in operating liabilities: Accounts payable........................... 534 (51) Accrued liabilities........................ (1,670) (1,226) Other liabilities.......................... (58) - Net cash provided by operating activities 1,298 4,418 Investing activities: Proceeds from net sale of assets............ - 11 Capital expenditures........................ (124) (145) Proceeds on sale of Hartwell Sports, Inc.... - 1,750 Net cash (used in) provided by investing activities............................... (124) 1,616 Financing activities: Payments under notes payable to banks....... (5,306) (13,100) Borrowings under notes payable to banks..... 6,190 8,200 Principal payments under term loan.......... (1,750) (1,250) Principal payments of long-term debt and capital leases............................. (22) (20) Net cash used in financing activities..... (888) (6,170) Net increase (decrease) in cash and cash equivalents................................. 286 (136) Cash and cash equivalents at beginning of year 327 312 Cash and cash equivalents at end of period... $ 613 $ 17 =========== =========== Supplemental disclosure information: Interest expense paid....................... $ 366 $ 763 Income taxes paid........................... - $ 59 Ends.