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Saturday, Feb 4, 2023

Nitches Stitches Together Acquisition

San Diego-based Nitches Inc. is looking for a new niche in retailing.

Long known as a designer and marketer of women’s and men’s sportswear, in recent years the business has expanded into dinnerware, candles and home accessories.

Nitches changed gears again this month and acquired outdoor equipment and clothing retailer Backwoods Equipment Co., now based in Texas.

Jennifer Mull, Backwoods’ chief executive, said while working with Nitches for a designer line of outdoor clothing, the two realized they made a good fit and decided to join forces.

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Mull declined to reveal the price her company fetched, but said it was in shares of Nitches, traded on Nasdaq under the ticker NICH.

Calls to Nitches were not returned by last week’s deadline.

Founded in 1973 by Mull’s father, Lewis, Backwoods has eight stores in four Midwestern states, and 50 full-time employees, but during busy periods temporary employees can boost the employment to about 100, she said.

In addition to camping and outdoors equipment, the stores sell clothing and footwear. It recently moved its headquarters to Austin, Texas, from Wichita, Kan.

Mull said Backwoods plans to open a store in Austin in April, and later, expand two existing stores in Fort Worth, Texas, and Overland Park, Kan.

The company also operates a travel division, Backwoods Adventures, which arranges trips to such exotic locales as Mount Kilimanjaro in Africa, Nepal and New Zealand.

“This new division has enabled Backwoods to forge an even stronger bond with customers by providing them with the opportunity to explore the world utilizing the products and equipment available in Backwoods retail stores,” Mull said.

Mull said during the past five years, the company’s revenue has doubled, but declined to provide any figures. Last year, she told the Austin Business Journal that the company did $10 million in sales.

Up until the most recent quarter, Nitches’ sales have been rising fast. For the most recent fiscal year ended Aug. 31, sales were up 55 percent to $85 million. For the first quarter ended Nov. 30, sales declined 6.5 percent to $33.1 million.

For the full fiscal year, the company reported a net loss of $936,000 compared with a net profit of $468,000 for the prior fiscal year.

The company said expenses associated with a non-cash amortization and stock compensation charges totaling $660,000, plus an inventory write-down of $317,000, contributed to the losses.

As far as Nitches’ stock, investors haven’t fared too well. A year ago, it was about $6, but has been falling for most of the past year. It hit $1.84 as of Feb. 8. The company is using the stock for acquisitions such as Backwoods, and issuing new shares, so its value has been diluted.

Another fact to be aware of: Forty percent of shares are held by insiders, and there are loads of short sellers betting it will fall even lower, according to the Yahoo Finance Web site.

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Cubic Racks Up Better Earnings:

Cubic Corp. got off to a good start in its first quarter ended Dec. 31, reporting net income of $10.7 million, up from $8.3 million in the previous year.

Revenue for the local company with defense and transportation divisions was $202.7 million, down a bit from the prior year’s first-quarter revenue of $202.9 million.

Although both divisions had increased sales, Cubic sold a small paper business in the fourth quarter, accounting for the reduction.

Cubic reported record sales for the fiscal year ended Sept. 30 of just under $900 million.

The driver is its defense unit, which supplies the federal government and many allied nations with combat training systems, mission support services and defense electronics.

As of Sept. 30, Cubic said it had a total backlog of orders of more than $2 billion, up from $1.5 billion as of the end of its 2006 fiscal year.

The nice financials helped boost Cubic shares, traded on the American Stock Exchange as CUB, past $50 in October, but it’s been battered since then and fell to $28.22 as of Feb. 8. The 52-week range is $19.92 to $50.68.

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Digirad Has Better Sales, Lower Loss:

Digirad Corp., a Poway-based maker of diagnostic imaging systems, reported 2007 annual revenue of $73.9 million, up from $72 million in 2006.

The net loss for the year was $1.4 million, compared with a net loss of $6.3 million in 2006.

The company forecast 2008 revenue in the range of $80 million to $84 million. As for the net results, expect it to come in between a net loss of $1 million to a net profit of $500,000, including an estimated stock-based compensation expense of $1 million.

Traded on Nasdaq under DRAD, shares closed Feb. 8 at $2.94, and have ranged from $2.55 to $4.88.

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ResMed Sales Rise 14 Percent:

ResMed Inc., a maker of devices that help people who have sleep disorders, reported revenue of $202.7 million for its second quarter ended Dec. 31, up 14 percent from the prior year’s fourth quarter. However, net income for the quarter was $26.8 million, down 7 percent from $28.9 million in net profit in the like period of 2006.

The company cited higher expenses for research and development and increased administrative costs as reasons for reduced earnings.

For the six months, ResMed reported net income of $50.9 million on revenue of $388.4 million, compared with net income of $53.9 million on revenue of $342 million for the prior year’s first half.

ResMed stock, traded under RMD on the New York Stock Exchange, declined by about a point Feb. 8 to $43.36. Its 52-week range is $38.34 to $54.58.

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Ticker Takes:

RF Industries Ltd. reported reduced annual revenue for the fiscal year ended Oct. 31 of $14.8 million, but said increased demand by telecom companies for its cables should produce record sales in its first quarter. SYS Technologies reported second-quarter sales of $18 million , within previous guidance , and forecast third-quarter revenue between $19 million and $20 million, and to be profitable. PriceSmart Inc. said total sales for its warehouse club stores in January increased 27 percent to $83 million, compared with the same month in 2007. SAIC named Frances Cordova, president of Purdue University, to its board. BakBone Software Inc. said bookings for its third quarter ended Dec. 31 were $15.7 million, down 9 percent from the year-ago period.

Send any news of local public companies to Mike Allen via e-mail at


. He can be reached at (858) 277-6359.


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