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<br /> corporate
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<br /> Garment Graphics Inc.
<br /> ith certain licensing rights to the Properties Inc.The company also has certain
<br /> very popular Looney Tunes char- rights to the Looney Tunes.Peanuts and
<br /> acters and the ever-popular Garfield cartoon characters.
<br /> Peanuts characters,Garment As a part of the licensing agreements,certain
<br /> Graphics Inc.should be as hot as Snoopy's Joe cartoon characters can be used in conjunction
<br /> Cool persona.The Mounds View-based screen with the college or-sports team wear.Royalty
<br /> printer,however,has watched its earnings come payments of 6 percent to 14 percent of the gross
<br /> and go as quickly as the latest fashion trend. selling price are made to the licenser.A 20-per-
<br /> For the fourth quarter ending March 31,the son internal graphic arts department creates the
<br /> . company lost$213,572,or a loss of 7 cents per actual designs using the various licensed charac-
<br /> share,on revenues of$5.3 million.The loss fig- ters.About 71 percent of the company's total
<br /> ure compares with earnings a year earlier of sales are of the licensed products.The company
<br /> $51,856,or 2 cents per share,on revenues of also has its own line of wildlife,outdoor and
<br /> $4.5 million. novelty designs.The end products are then mar-
<br /> Although the fourth quarter is traditionally the keted according to design under the label names
<br /> weakest for the company,other factors led to dis- of Garment Graphics,Ultimate Sportswear,or
<br /> appointing fourth-quarter and year-end results. Signet Sportswear.The Garment Graphics label
<br /> An outdated computer system caused inventory is reserved for the more upscale designs.
<br /> glitches which required a physical inventory The company does most of its printing on
<br /> adjustment of$300,000 during the second quar- blanks—sportswear that initially has no print-
<br /> ter.To remedy the inventory problems,the com- ing.The blank sportswear is made to Garment
<br /> pany began installing a new computer system in Graphic specifications regarding style,weight,
<br /> January,and the second phase of the installation style and color.Much of the blank sportswear is
<br /> will be finished by Sept. 1,1995.Also,higher made in the southeastern U.S.,but the company
<br /> interest rates and strong competition in a weak also buys from China.Pacific Rim nations,the
<br /> retail market contributed to the loss. Middle East and Latin America.During the sec-
<br /> Retail sales make up the majority of the and quarter in 1995,the company had quality
<br /> company's profits.Major customers include problems with several suppliers.The products
<br /> Dallas-based JC Penney Co.Inc..Minneapolis- were returned to the manufacturers,and in order
<br /> based Target,Bentonville,Ark.-based Sam's to meet production deadlines,the company was
<br /> Club,and Maurices Inc.,Duluth.For fiscal forced to purchase the goods on the open mar-
<br /> 1995,major customers represented about 51 ket.said Neil Hamlin,chairman and CEO for
<br /> percent of the total gross sales.This percentage Garment Graphics.This problem affected ship-
<br /> has dropped from 57 percent in 1994 and 61 ment of the goods during the second and third
<br /> percent in 1993.The percentage is expected to quarters.
<br /> keep dropping,but the company expects to The company has evolved since it opened in
<br /> make up the sales with other customers. 1976.Garment Graphics began as an imprinter,
<br /> Garment Graphics decorates sportswear, screen printing graphics on goods that were sup-
<br /> such as T-shirts,sweatshirts and shorts,with plied by the customer.By 1988,the company
<br /> custom screen print designs,embroidery and phased out its contvact imprinting and sold only
<br /> appliques.The company has more than 230 indi- its own products. -
<br /> vidual licensing agreements with such groups as Garment Graphics is traded on the NAS
<br /> colleges,the National Football League - DAQ SmallCap Market under the symbol
<br /> Properties Inc.,and Major League Baseball GRMN.
<br /> Total common shares outstanding_.._..._._..._.._...__.._M_._ 3,071,654
<br /> Price per share of common stock on Aug.I _...__ _.._..._._. _............. _....__..._. __ ._ _..__...$1.62
<br /> Market value on Aug.1 __ _.._$4,976,079.48
<br /> PERFORMANCE RECsORD
<br /> (In thousands of dollars except per-share data)
<br /> • 1995 1994 1993 1992
<br /> Net revenue' $33,588 $30,807 $18,543 $21,847
<br /> Earnings before income taxes(loss) $(229,924) $1,295,554 $(341,143) $1,119,326
<br /> Net earnings(loss) $(159) $806 $(231) $670
<br /> Net earnings per share(loss) $.05 $.27 $(.09) $.26
<br /> Shareholders'equity(deficit) $3,819 $3,761 $2,149 $2,055
<br /> Total assets $13,873 $9,004 $6,682 " $5,656
<br /> Total liabilities $10,054 $5,243 $4,533 $3,601
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