OroAmerica Inc. Reports Results for Second-Quarter Fiscal 2000

Business Wire,  Sept 9, 1999  

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BURBANK, Calif.--(BUSINESS WIRE)--Sept. 9, 1999--

OroAmerica Inc. (Nasdaq/NM:OROA) Thursday reported results for its second quarter ended July 30, 1999.

For the quarter, sales were $30.1 million compared with $29.4 million in the second quarter of fiscal 1999, an increase of 2.2% that the Company attributed primarily to an increase in the amount of gold jewelry sold, despite a 10% lower average market price of gold.

Gross profit was $8.0 million, or 26.6% of sales, compared with $6.9 million, or 23.5% of sales, in the second quarter of fiscal 1999. The increase in gross margin was the net result of a variety of factors, notably a favorable change in sales product mix.

Net loss for the quarter -- which includes a $585,000 write-off ($351,000 net of tax benefits) of net assets related to the closure (in late June, 1999) of the Company's Beverly Hills, Calif. cigar store -- was $647,000, or $0.11 per diluted share, compared with net income of $1,000, or $0.00 per diluted share, for the comparable period of the prior fiscal year.

The cigar operations incurred an operating loss (excluding the $585,000 write-off) of $216,000, compared with an operating loss from the cigar operations of $442,000 in the second quarter of the prior fiscal year. Cigar-related sales were $556,000 in the second quarter of fiscal 2000, compared with $113,000 in the same period a year ago.

Guy Benhamou, Chairman and Chief Executive Officer of OroAmerica, said the Company is pleased with the improvement in gross margin. "Our strategy of offering a better product mix appears to be working," said Benhamou, "and we are seeking to reduce selling, general and administrative, and other expense as a percentage of sales."

OroAmerica, with facilities in the United States and overseas, designs, manufactures and distributes gold and silver jewelry products.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements contained in this news release that are not historical facts, may be deemed forward-looking statements and involve a number of risks and uncertainties. OroAmerica's actual results may differ materially from the expectations expressed in such forward-looking statements. Among the factors that could cause actual results to differ materially are business, economic and industry conditions in OroAmerica's markets, fluctuations in the price of gold, competitive conditions, and other risks detailed from time to time in OroAmerica's filings with the Securities and Exchange Commission, including but not limited to, OroAmerica's Annual Report on Form 10-K for the year ended Jan. 29, 1999, and OroAmerica's Quarterly Report on Form 10-Q for the period ended July 30, 1999. -0-

                            OROAMERICA INC.
                   CONSOLIDATED STATEMENTS OF INCOME
             Periods Ended July 30, 1999 and July 31, 1998
                              (Unaudited)
           (Dollars in thousands, except per share amounts)

                             For the                  For the
                         13 Weeks Ended           26 Weeks Ended
                       July 30,     July 31,    July 30,    July 31,
                        1999          1998        1999       1998


Net sales             $ 30,091      $ 29,433   $ 69,368    $ 71,910

Cost of goods sold,
 exclusive of
 depreciation           22,087        22,505     52,584      55,534

  Gross profit           8,004         6,928     16,784      16,376

Selling, general
 and administrative
 expenses, and
 other expenses          8,787         6,621     16,530      13,761

Operating (loss)
 income                   (783)          307        254       2,615

Interest expense           295           306        590         727

(Loss) income
  before income
  taxes                 (1,078)            1       (336)      1,888

(Benefit) provision
 for income taxes         (431)           --       (134)        736

Net (loss) income     $   (647)     $      1   $   (202)   $  1,152

Basic net (loss)
 income per share     $  (0.11)     $   0.00   $  (0.04)   $   0.18
Diluted net (loss)
 income per share     $  (0.11)     $   0.00   $  (0.04)   $   0.18

Weighted average
 shares outstanding  6,068,878     6,290,711  6,170,545   6,272,711
Dilutive effect of
 stock options            --       1  00,657       --       100,657
Weighted average
 shares outstanding
 assuming dilution   6,068,878     6,391,368  6,170,545   6,373,368

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