Perry Ellis International Reports Fourth Quarter & Full Fiscal 2013 Results *Fiscal 2013 fourth quarter revenues total $258 million, an increase of 13% from $229 million last year *Fiscal 2013 fourth quarter GAAP diluted EPS was $0.28 compared to $0.12 last year *Fiscal 2013 fourth quarter adjusted diluted EPS of $0.50 compared to $0.38 last year *Fiscal 2013 revenue totaled $970 million compared to $980 million last year *Fiscal 2013 GAAP diluted EPS of $0.97 compared to $1.60 last year *Fiscal 2013 adjusted diluted EPS of $1.45 compared to $1.94 last year MIAMI, March 21, 2013 (GLOBE NEWSWIRE) -- Perry Ellis International, Inc. (Nasdaq:PERY) today reported results for the fourth quarter ("fourth quarter of fiscal 2013") and the fiscal year ended February 2, 2013 ("fiscal 2013"). Oscar Feldenkreis, president and chief operating officer of Perry Ellis International commented, "We ended fiscal 2013 positively, reporting strong fourth quarter results and achieving progress on our objectives. Most rewarding is the improvement generated within our Perry Ellis and Rafaella sportswear collections. We were also pleased to see continued positive momentum for our Golf lifestyle apparel across all brands and our Direct to Consumer business, which delivered positive comparable store sales in the quarter." Fourth Quarter 2013 Results Total revenue for the fourth quarter of fiscal 2013 was $258 million, a 13% increase compared to $229 million reported in the fourth quarter of fiscal 2012. Revenue growth was driven by many of the Company's businesses, including Golf lifestyle apparel, the Perry Ellis brand, Laundry by Shelli Segal, International distribution and Direct to Consumer sales. Gross margins expanded to 32.6% as compared to 31.4% in the same period of the prior year, reflecting a lower level of promotions in the collections businesses as well as higher contributions from the businesses discussed above. As reported under GAAP, fourth quarter earnings per diluted share were $0.28 compared to earnings per diluted share of $0.12 in the fourth quarter of fiscal 2012. On an adjusted basis, fourth quarter earnings per diluted share were $0.50 as compared to adjusted earnings per diluted share of $0.38 in the fourth quarter of fiscal 2012. Adjusted earnings per diluted share exclude certain items as outlined in Table 1 Reconciliation of GAAP diluted earnings per share to adjusted diluted earnings per share. Fiscal 2013 Results Fiscal 2013 revenues were $970 million, as compared to $980 million reported in the prior year ended January 28, 2012 ("fiscal 2012). The prior year results include approximately $20 million of revenues associated with businesses exited during fiscal 2013.Revenues rose in many of the Company's businesses, including Golf lifestyle apparel, Laundry by Shelli Segal, International distribution and Direct to Consumer.These increases were partially offset by planned reductions in the Perry Ellis and Rafaella sportswear collections. On a GAAP basis, net income for fiscal 2013 was $14.8 million, or $0.97 per fully diluted share compared to GAAP net income of $25.5 million or $1.60 per fully diluted GAAP share in fiscal 2012. Adjusted earnings per diluted share for fiscal 2013 were $1.45 compared to adjusted earnings per diluted share of $1.94 in fiscal 2012 and exclude the costs mentioned above for both fiscal periods. (See reconciliation "Table 1") Gross margin for fiscal 2013 was 32.7% and was negatively impacted by 30 basis points due to business exit costs. This compares to gross margin of 33.0% in fiscal 2012. Gross margin performance in fiscal 2013 also reflects a higher level of promotional activity in the first half of the year as the Company repositioned its collections businesses. Selling, general and administrative ("SG&A") expenses were well controlled throughout fiscal 2013 and totaled $280 million compared to $268 million in fiscal 2012. The year over year increase reflects approximately $10 million in costs associated with strategic initiatives and non-cash asset impairment costs.In addition, store openings added incremental store expenses, which were partially offset by expense savings initiatives undertaken by the Company. Earnings before interest, taxes, depreciation, amortization and impairments ("adjusted EBITDA") for fiscal 2013 totaled $61.4 million, or 6.3% of total revenue. This compares to adjusted EBITDA of $75.1 million for fiscal 2012. (See attached reconciliation "Table 2"). Balance Sheet Update George Feldenkreis, chairman and chief executive officer of Perry Ellis International stated, "Our liquidity and leverage profile remains extremely strong with net debt to capitalization of 24.4% and full availability under our credit facility.During the year we made a strategic purchase of the Ben Hogan tradename to enhance our Golf lifestyle portfolio.We also divested tradenames and businesses that were small revenue and low profit contributors. "As we look to 2014, our strategic focus is driving the elevation of our Perry Ellis and Rafaella collection sportswear businesses as well as on optimizing our Golf lifestyle business.We will continue to invest in these businesses internally to enhance and grow profitability and market share." Cash and cash equivalents at year end totaled $55 million. Inventories declined by 8% to $183 million as compared to $198 million in the comparable prior year period ended January 28, 2012. The Company also increased inventory turnover to 3.9 times from 3.3 times in the prior year. Fiscal 2014 Guidance Oscar Feldenkreis concluded, "As we look ahead, we believe it is prudent to remain conservative regarding our business outlook for fiscal 2014.Our focus is direct and unyielding and our priority is on our namesake brand, Perry Ellis.We have augmented our management, creative and merchandising teams for both Perry Ellis and Rafaella and believe we are well positioned for continued progress in fiscal 2014.We also remain optimistic about our core business opportunities and expect to further our growth potential through the expansion of our distribution channels." The Company is maintaining the guidance it provided on February 19, 2013 for the twelve months ending February 1, 2014 ("fiscal 2014").The Company continues to expect revenue to increase in a range of 3% to 5% and fully diluted earnings per share on an adjusted basis to be in a range of $1.50 - $1.60. On a GAAP basis, the Company expects fully diluted earnings per share to be in a range of $1.60 - $1.70 which includes the sale of the John Henry trademark in Asia which closed in February 2013. About Perry Ellis International Perry Ellis International, Inc. is a leading designer, distributor and licensor of a broad line of high quality men's and women's apparel, accessories and fragrances, as well as select children's apparel. The Company's collection of dress and casual shirts, golf sportswear, sweaters, dress pants, casual pants and shorts, jeans wear, active wear, dresses and men's and women's swimwear is available through all major levels of retail distribution. The Company, through its wholly owned subsidiaries, owns a portfolio of nationally and internationally recognized brands, including: Perry Ellis®, Jantzen®, Laundry by Shelli Segal®, C&C California®, Rafaella®, Cubavera®, Ben Hogan®, Centro®, Solero®, Munsingwear®, Savane®, Original Penguin® by Munsingwear®, Grand Slam®, Natural Issue®, Pro Player®, the Havanera Co.®, Axis®, Gotcha®, Girl Star®, MCD®, John Henry®, Mondo di Marco®, Redsand®, Manhattan®, Axist®, Farah®, Anchor Blue®, Miller's Outpost®, Tahoe River Outfitters®, Original Khaki Company® and Techworks®. The Company enhances its roster of brands by licensing trademarks from third parties, including: Nike® and Jag® for swimwear, and Callaway®, PGA TOUR® and Champions Tour® for golf apparel. Additional information on the Company is available at http://www.pery.com. Safe Harbor Statement We caution readers that the forward-looking statements (statements which are not historical facts) in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations rather than historical facts and they are indicated by words or phrases such as "anticipate," "believe," "budget," "contemplate," "continue," "could," "estimate," "expect," "guidance," "indicate," "intend," "may," "might," "plan," "possibly," "potential," "predict," "probably," "proforma," "project," "seek," "should," "target," or "will" and similar words or phrases or comparable terminology. We have based such forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, many of which are beyond our control. These factors include: general economic conditions, a significant decrease in business from or loss of any of our major customers or programs, anticipated and unanticipated trends and conditions in our industry, including the impact of recent or future retail and wholesale consolidation, recent and future economic conditions, including turmoil in the financial and credit markets, the effectiveness of our planned advertising, marketing and promotional campaigns, our ability to contain costs, disruptions in the supply chain, our future capital needs and our ability to obtain financing, our ability to protect our trademarks, our ability to integrate acquired businesses, trademarks, trade names and licenses, our ability to predict consumer preferences and changes in fashion trends and consumer acceptance of both new designs and newly introduced products, the termination or non-renewal of any material license agreements to which we are a party, changes in the costs of raw materials, labor and advertising, our ability to carry out growth strategies including expansion in international and direct to consumer retail markets, the level of consumer spending for apparel and other merchandise, our ability to compete, exposure to foreign currency risk and interest rate risk, possible disruption in commercial activities due to terrorist activity and armed conflict, and other factors set forth in Perry Ellis International's filings with the Securities and Exchange Commission. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those risks and uncertainties detailed in Perry Ellis' filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which are valid only as of the date they were made. We undertake no obligation to update or revise any forward-looking statements to reflect new information or the occurrence of unanticipated events or otherwise. PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (UNAUDITED) (amounts in 000's, except per share information) INCOME STATEMENT DATA: Three Months Ended Years Ended February 2, January 28, February 2, January 28, 2013 2012 2013 2012 Revenues Net sales $251,015 $222,062 $942,451 $955,549 Royalty income 7,330 7,386 27,102 25,043 Total revenues 258,345 229,448 969,553 980,592 Cost of sales 174,004 157,394 652,352 656,850 Gross profit 84,341 72,054 317,201 323,742 Operating expenses Selling, general and 67,010 55,517 263,444 248,618 administrative expenses Depreciation and amortization 3,582 3,691 13,896 13,673 Impairment on long-lived 3,516 6,066 3,516 6,066 assets Total operating expenses 74,108 65,274 280,856 268,357 Operating income 10,233 6,780 36,345 55,385 Costs on early extinguishment -- -- -- 1,306 of debt Interest expense 3,825 3,800 14,836 16,103 Net income before income taxes 6,408 2,980 21,509 37,976 Income tax provision 2,021 1,197 6,708 12,459 Net income 4,387 1,783 14,801 25,517 Net income, per share Basic $0.30 $0.12 $1.01 $1.71 Diluted $0.28 $0.12 $0.97 $1.60 Weighted average number of shares outstanding Basic 14,842 14,680 14,715 14,927 Diluted 15,426 15,408 15,315 15,950 PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (UNAUDITED) (amounts in 000's) BALANCE SHEET DATA: As of February 2, 2013 January 28, 2012 Assets Current assets: Cash and cash equivalents $54,957 $24,116 Accounts receivable, net 174,484 145,563 Inventories 183,127 198,264 Other current assets 30,536 33,733 Total current assets 443,104 401,676 Property and equipment, net 50,749 56,496 Intangible assets, net 246,681 242,634 Goodwill 13,794 13,794 Other assets 8,801 9,595 Total assets $763,129 $724,195 Liabilities and stockholders' equity Current liabilities: Accounts payable $132,028 $80,253 Accrued expenses and other liabilities 28,595 23,142 Accrued interest payable 4,061 4,186 Unearned revenues 4,647 4,179 Total current liabilities 169,331 111,760 Long term liabilities: Senior subordinated notes payable, net 150,000 150,000 Senior credit facility -- 21,679 Real estate mortgages 24,202 25,114 Deferred pension obligation 14,686 17,326 Unearned revenues and other long-term 33,670 31,821 liabilities Total long-term liabilities 222,558 245,940 Total liabilities 391,889 357,700 Equity Total equity 371,240 366,495 Total liabilities and equity $763,129 $724,195 PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES Table 1 Reconciliation of the three and twelve months ended February 2, 2013 and January 28, 2012 net income and earnings per share to adjusted net income and adjusted earnings per share. (UNAUDITED) (amounts in 000's, except per share information) Three Months Ended Years Ended February 2, January 28, February 2, January 28, 2013 2012 2013 2012 Net income $4,387 $1,783 $14,801 $25,517 Plus: Impairment on long-lived 3,516 6,066 3,516 6,066 assets Costs on exited brands 431 -- 2,676 -- Costs of streamlining and consolidation of 944 -- 3,341 -- operations, and other strategic initiatives Costs of voluntary -- -- 2,420 -- retirement Costs on early -- -- -- 1,306 extinguishment of debt Duplicate interest from -- -- -- 745 March 8 to April 6, 2011 Less: Gain on asset sales -- -- (410) -- Tax benefit (1,574) (1,965) (4,118) (2,748) Net income, as adjusted $7,704 $5,884 $22,226 $30,886 Three Months Ended Years Ended February 2, January 28, February 2, January 28, 2013 2012 2013 2012 Net income per share, $0.28 $0.12 $0.97 $1.60 diluted Net per share impairment on 0.16 0.26 0.16 0.26 long-lived assets Net per share costs on 0.02 -- 0.11 -- exited brands Net per share costs of streamlining and consolidation of 0.04 -- 0.13 -- operations, and other strategic initiatives Net per share costs of -- -- 0.10 -- voluntaryretirement Net per share costs on early extinguishment of -- -- -- 0.05 debt Net per share duplicate interest from March 8 to -- -- -- 0.03 April 6, 2011 Net per share gain on asset -- -- (0.02) -- sales Adjusted net income per $0.50 $0.38 $1.45 $1.94 share, diluted "Adjusted net income per share, diluted" consists of "net income per share, diluted" adjusted for the impact of impairment on long-lived assets, the costs on exited brands,costs of streamlining and consolidation of operations, and other strategic initiatives, costs ofvoluntaryretirement, early extinguishment of debt, duplicate interest from March 8, 2011 to April 6, 2011, the time during which the retired debt and the new debt were simultaneously outstanding, and gain on asset sales. These costs and gain are notindicative of our core operations and thus to get a more comparable result with the operating performance of the apparel industry, they have been removed, net of taxes, from the calculation. PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES Table 2 RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA(1) (UNAUDITED) (amounts in 000's) Three Months Ended Years Ended February 2, January 28, February 2, January 28, 2013 2012 2013 2012 Net income $4,387 $1,783 $14,801 $25,517 Plus: Depreciation and 3,582 3,691 13,896 13,673 amortization Interest expense 3,825 3,800 14,836 16,103 Costs on early -- -- -- 1,306 extinguishment of debt Income tax provision 2,021 1,197 6,708 12,459 EBITDA 13,815 10,471 50,241 69,058 Impairment on 3,516 6,066 3,516 6,066 long-lived assets Costs on exited brands 431 -- 2,676 -- Costs of streamlining and consolidation of 778 -- 2,954 -- operations, and other strategic initiatives Costs of voluntary -- -- 2,420 -- retirement Gain on asset sales -- -- (410) -- EBITDA, as adjusted $18,540 $16,537 $61,397 $75,124 Gross profit $84,341 $72,054 $317,201 $323,742 Less: Selling, general and administrative (67,010) (55,517) (263,444) (248,618) expenses Plus: Costs on exited brands 431 -- 2,676 -- Costs of streamlining and consolidation of 778 -- 2,954 -- operations, and other strategic initiatives Costs of voluntary -- -- 2,420 -- retirement Gain on asset sales -- -- (410) -- EBITDA, as adjusted 18,540 16,537 61,397 75,124 Total revenues $258,345 $229,448 $969,553 $980,592 EBITDA margin 7.2% 7.2% 6.3% 7.7% percentage of revenues (1) Adjusted EBITDA consists of earnings before interest, taxes, depreciation, amortization, impairment on long-lived assets, costs on early extinguishment of debt, costs on exited brands, costs of streamlining and consolidation of operations, and other strategic initiatives, as well as, costs associated withvoluntary retirements and the gain on sale of assets. Adjusted EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States of America, and does not represent cash flow from operations. Adjusted EBITDA is presented solely as a supplemental disclosure because management believes that it is a common measure of operating performance in the apparel industry. In addition, we present Adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across periods on a consistent basis by excluding items that we do not believe are indicators of our core operating performance. CONTACT: Perry Ellis International, Inc. Anita Britt, CFO 305-592-2830 Perry Ellis International, Inc. logo
Perry Ellis International Reports Fourth Quarter & Full Fiscal 2013 Results
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