Cygne Designs, Inc. Announces First Quarter 2008 Results

NEW YORK--(Business Wire)--
Cygne Designs, Inc. (NASDAQ: CYDS) today announced results of
operations for the first quarter ended April 30, 2008.

Net sales for the first quarter of 2008 were $15,282,000, a
decrease of $5,581,000 from $20,863,000 net sales for the first
quarter of 2007. This decrease in sales is comprised of a $1,616,000
decrease in sales from branded garments, and a decrease of $10,430,000
from the loss of business of two major customers, partially offset by
an increase in sales of our private label business of $5,559,000 and
an increase in our non-denim products of $906,000.

Gross profit for the first quarter of 2008 was $547,000, a
decrease of $3,626,000, or 86.9%, from the gross profit of $4,173,000
for the first quarter of 2007. Gross margins decreased to 3.6%
compared to 20% in the prior year period as a result of the product
categories sold and the fact that the Company no longer has a
guaranteed margin agreement in place with its former supplier.
Additionally, the Company's initial gross margins with its new
suppliers were lower overall compared to the prior year period and,
due to late deliveries during the period, the Company incurred
significant chargebacks and late delivery fees, which negatively
impacted gross margins during the period.

The Company recorded a net loss of $3,800,000, or $0.10 loss per
share on a basic and diluted share basis, for the quarter ended April
30, 2008 as compared to a net loss of $1,372,000, or $0.05 per share
on a basic and diluted share basis, for the prior year period. The net
loss of $3,800,000 for the three months ended April 30, 2008 included
expenses of $1,008,000 for a severance expense attributable to the
Company's former CEO and $273,000 for non-cash stock compensation
issued to the Company's current CEO.

Cygne and its bank use EBITDA as a supplemental financial measure
to assess the financial performance of its assets without regard to
financing methods and capital structure. EBITDA should not be
considered an alternative to net income, operating income and cash
flow from operating activities or any other measure of financial
performance or liquidity presented in accordance with GAAP. EBITDA
excludes some items that affect net income and operating income. Since
these items may vary among other companies, EBITDA as presented below
may not be comparable to similarly titled measures of other companies.
A reconciliation of the net (loss) to EBITDA is shown in the table
below.

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Reconciliation of EBITDA
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Quarter Ended
------------------------------
(In thousands)
April 30, April 30,
2008 2007
--------------- -------------
Net (loss) $ (3,800) $ (1,372)
Depreciation and amortization of
intangible assets 35 508
Interest expense including
amortization of the debt discount 217 957
Provision for income taxes 12 480
--------------- -------------

EBITDA $ (3,536) $ 573
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Cygne Designs, Inc. is a designer, merchandiser, manufacturer and
distributor of branded and private label women's denim, casual and
career apparel with sales to retailers located in the United States.

Statements contained in this press release, which are not
historical facts, are forward-looking statements as that term is
defined in the Private Securities Litigation Reform Act of 1995. All
forward-looking statements are subject to risks and uncertainties,
which could cause actual results to differ from those projected. Such
risks and uncertainties are discussed more fully in the Company's
Annual Report on Form 10-K for the year ended January 31, 2008 and the
Company's other filings with the Securities and Exchange Commission.

(Financial table to follow)

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CYGNE DESIGNS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share data)

Quarters Ended
------------------------
April 30 April 30
2008 2007
------------ ----------
Net sales $ 15,282 $ 20,863
Cost of goods sold 14,735 16,690
------------ ----------

Gross profit 547 4,173
Selling, general and administrative expenses 4,143 3,600
Depreciation and amortization 35 508
------------ ----------

(Loss) Income from operations before
interest and income taxes (3,631) 65
Interest expense 217 957
Other (income) (60)
(Loss) from operations before income taxes (3,788) (892)
Provision for income taxes 12 480
------------ ----------

Net loss $ (3,800) $ (1,372)
============ ==========

Net loss per share-basic and diluted $ (0.10) $ (0.05)
============ ==========

Weighted average common shares outstanding:
Basic 37,976 26,462
============ ==========

Diluted 37,976 26,462
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Cygne Designs, Inc.
Nomaan Yousef, CFO
212-997-7767, x242

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