Biscayne: 3rd Qtr '97 Earnings News Release FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT: A. Richard Hurwitz Vice President, Corporate Communications (305) 858-2200, or Peter Vandenberg, Jr. Executive Vice President, CFO (201) 473-3240, x221 BISCAYNE APPAREL ANNOUNCES THIRD QUARTER OPERATING RESULTS CLIFTON, NJ - (November 11, 1997) Biscayne Apparel, Inc. (ASE: BHA) today announced its operating results for the third quarter ended September 30, 1997. Net sales in the 1997 third quarter were $41.8 million versus $46.1 million in the same period of 1996. Net income in the 1997 third quarter was $2.5 million, or $0.23 per share, versus net income of $2.8 million, or $0.26 per share, posted in the third quarter of 1996. Net sales for the first nine months of 1997 were $69.5 million, compared to $75.2 million in the same period of 1996, reflecting a decline in sales of women's outerwear and children's underwear. Operating income improved from $1.0 million in the first nine months of 1996 to $2.1 million in the same period of 1997. Net loss for the first nine months of 1997 decreased to $0.1 million, or $0.01 per share, compared to a net loss of $0.8 million, or $0.07 per share in the comparable period in 1996, reflecting an increase in profitability in women's and children's outerwear, offset by a decline in profitability in children's underwear. Biscayne's consolidated sales backlog as of October 31, 1997 was $21.6 million versus $24.4 million as of October 31, 1996. The Company's gross margin was 28% in the third quarter of 1997, compared to 27% in the same period in 1996. The increase in gross margin was attributable to the success of various cost reduction and sourcing programs that the Company has implemented in the past 18 months. Selling, general and administrative expense ("S,G&A") declined from $6.9 million, or 15% of net sales in 1996 third quarter to $6.7 million, or 16% of net sales in 1997. Biscayne's total debt at September 30, 1997 was $35.0 million, a decline of 13% compared to $40.0 million at September 30, 1996. Earl W. Powell, Chairman, President, and Chief Executive Officer, commented, "We are pleased with our Company's improved year-to-date operating performance, but understand that we face several challenges in meeting our long-term objectives of growing sales and improving profitability. To this end, we have identified cost reduction and improved systems opportunities in the following areas: * new product development processes and software, * consolidation and reduction of office space, and * co-operative sourcing among the outerwear product groups, utilizing a network of existing overseas satellite offices and staff. In addition, we have recently expanded our family of licensing partnerships 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 the new licenses are slated for delivery in Fall 1998." 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: Andy Johns Fashions International - women's, junior's, and children's outerwear; M&L International - infant's, toddler's, and children's outerwear, sportswear and swimwear; Mackintosh of New England - women's woolen coats and 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) (Unaudited) THREE MONTHS ENDED NINE MONTHS ENDED September 30, September 30, 1997 1996 1997 1996 Net sales $ 41,798 $46,054 $69,492 $75,183 Operating costs and expenses: Cost of goods sold 30,116 33,753 50,977 56,359 Selling, general and administrative 6,662 6,869 16,400 17,511 Restructuring charges - 45 - 347 Operating income 5,020 5,387 2,115 966 Other income and (expenses): Interest and other expenses (1,075) (1,046) (2,337) (2,677) Interest and other income 93 293 114 456 Gain on sale and equity in net income of investee - - - 123 Income (loss) before provision (benefit) for income taxes 4,038 4,634 (108) (1,132) Provision (benefit) for income taxes 1,534 1,804 (44) (368) Net income (loss) $ 2,504 $ 2,830 $ (64) $ (764) Net income (loss) per common share $ 0.23 $ 0.26 $(0.01) $(0.07) Shares used in computing net income (loss) per common share 10,793,639 10,743,535 10,761,288 10,741,540 BISCAYNE APPAREL, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands) SEPTEMBER 30, DECEMBER 31, 1997 1996 (Unaudited) Assets Current assets: Cash and cash equivalents $ 442 $ 327 Trade accounts receivable, less allowances of $2,619 in 1997 and $2,018 in 1996 31,013 14,374 Inventories 22,098 14,554 Federal income tax receivable - 1,455 Prepaid expenses and other 2,454 2,261 Total current assets 56,007 32,971 Property, plant and equipment, less accumulated depreciation of $2,333 in 1997 and $1,912 in 1996 2,648 2,864 Other assets, net 266 275 $ 58,921 $ 36,110 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 6,371 $ 4,024 Accrued liabilities 5,986 6,184 Notes payable to banks 24,054 1,473 Current portion of long-term debt 2,000 1,750 Total current liabilities 38,411 13,431 Subordinated notes 6,444 6,444 Long-term debt 2,500 4,500 Other liabilities 124 557 Commitments and contingencies - - Stockholders' Equity: Common stock, $0.01 par value; 25,000,000 shares authorized; 10,770,213 issued and outstanding in 1997 and 10,741,748 in 1996 107 107 Additional paid-in capital 26,602 26,311 Unearned stock award (17) (68) Accumulated deficit (15,250) (15,172) Total stockholders' equity 11,442 11,178 $58,921 $ 36,110 Ends.