WASHINGTON — Beach Patrol Inc., a Carson, Calif., maker of women’s swimwear, intends to expand its manufacturing capacity, add a girls’ swimwear line and men’s lines and pay off its factor debts with expected proceeds of $9.9 million from a planned initial public offering of 1 million shares.
Two stockholders plan to sell an additional 1 million shares, according to a Securities and Exchange Commission registration statement. Brian J. Zientek, president, chief executive officer and director, expects to cash in 60,000 shares. Ronald N. Stern, Beach Patrol’s chairman, intends to sell 940,000 shares through Westland Apparel Group Ltd., a company of which he is chairman and president.
Beach Patrol merchandise is sold to 1,600 retailers, including department stores Macy’s and Dillard’s, specialty store Nordstrom and the Victoria’s Secret catalog, according to the SEC filing. Its junior division swimsuits generally retail between $40 and $80 under the labels Daffy Waterwear, Rebel Beach and Tango Rose, while its contemporary division, aimed at women above age 25, sell for $50 to $100 under the labels Baja Blue, Swim Systems and Amber Bay.
Young girls’ swimwear under the Daffy Waterwear brand and men’s swimwear and related sportswear with the Baja Blue label are being planned for shipping next year.
The company’s net sales rose 34.6 percent in the nine months ended March 31, 1994, compared with the same period the year prior, reaching $33.7 million against $25 million. Junior division goods accounted for about one-quarter of the increase and 50.7 percent of sales, while the contemporary division represented three-quarters of the increase and 49.3 percent of sales.
Net income grew 62.7 percent in the nine-month period, to $2.3 million, compared with $1.4 million a year earlier.
The company’s sales strategy in women’s swimwear includes the introduction of new brands and products to target particular demographic groups, the filing says.
Beach Patrol also plans to increase its foreign trade, which accounted for 4.4 percent of net sales in fiscal 1993. Most of that business was in Mexico and Canada, although the company last year entered a licensing agreement with a Japanese manufacturer for Daffy Waterwear production.
Patrol plans to fully pay off its factoring debt to CIT Group/Commercial Services, using proceeds from the offering. As of May 31, the debt totaled $11.2 million, but it is “expected to be less than the net proceeds of the offering by the date this offering is consummated.”
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Paying off the factors will free up a significant amount of the company’s funds, the filing said, including about $500,000 to equip a recently acquired central California sewing plant expected to begin operations this fall.
The plant will produce 10 percent of Beach Patrol’s merchandise by 1995, the filing said. Beach Patrol also owns a cutting and packaging plant in Carson.