Tropical Sportswear cuts staff, earnings forecast

By MARK ALBRIGHT

© St. Petersburg Times,
published June 14, 2001

TAMPA -- Tropical Sportswear Int'l Corp. is cutting 160 people from the payroll at its Tampa and El Paso, Texas, plants because of sagging sales and depressed profits.

The maker of casual cotton pants under such brand names as Farah, Flyers and Savane said sales are down because of the sluggish economy and frugal consumers.

The Tampa company will take a $600,000 one-time charge against third quarter earnings for severance pay. By terminating 160 employees, Tropical hopes to save $4-million in annual expenses. It did not indicate how it will divide the job cuts between its plants.

Wall Street focused on the company's disclosure that it expects revenues to shrink to $440-million in the fiscal year that ends Sept. 30 from $473-million in 2000. Tropical shares closed Wednesday at $17.65, down $2.85 a share, or 13 percent. Tropical lowered its short-term earnings forecast, too.

"With the platform we have in place, we'll be in good shape once the economy turns around," said Michael Kagan, Tropical's chief financial officer. "But right now it doesn't look good out there in the stores."

Nationally, retail sales were "listless" in May, the National Retail Federation said Wednesday.

Tropical forecasts its net income before expenses will be about $1.7-million in the current third quarter and $14-million for the fiscal year. Last year, Tropical reported net income of $5.7-million for the quarter and $18-million for the year.

Tropical did not estimate its earnings per share. But based on the most recent report of outstanding shares, net income would be about 21 cents a share for the quarter and $1.79 a share for the year. The lone analyst covering the company forecast net income of 67 cents a share for the quarter and $2.40 for the year.

- Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

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