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The Jones Group Inc. Reports 2013 Second Quarter Financial Results



      The Jones Group Inc. Reports 2013 Second Quarter Financial Results

PR Newswire

NEW YORK, July 31, 2013

NEW YORK, July 31, 2013 /PRNewswire/ -- The Jones Group Inc. (NYSE: JNY; the
"Company") today reported results for the second quarter ended July 6, 2013. 
Revenues for the second quarter of 2013 were $846 million, as compared with
$855 million for the second quarter of 2012.

The Company reported adjusted earnings per share ("EPS") of $0.02 for the
second quarter of 2013, as compared with adjusted EPS of $0.22 for the same
period last year.  The adjusted results exclude charges related to the
impairments of certain intangible assets, the impact of severance and other
costs related to restructuring activities, certain acquisition-related costs
and other costs not considered relevant for period-over-period comparisons
(see reconciliation of adjusted earnings to reported earnings in the
accompanying schedule).

As reported under generally accepted accounting principles ("GAAP"), the
Company reported a ($0.05) loss per share in the second quarter in 2013 and
earnings per share of $0.10 in 2012.  The 2013 and the 2012 second quarter
results include, among other things, costs and charges of $7 million ($5
million after tax) and $15 million ($9 million after tax), respectively,
relating to the planned closure of certain Company-operated retail stores,
restructuring and other cost saving initiatives.   

Wesley R. Card, The Jones Group Chief Executive Officer, stated: "Second
quarter revenues were in line with our expectations, with the Jeanswear
segment registering the largest improvement in operating results, as those
product lines continue to perform well.  The International Wholesale segment
also showed improved operating results, led by the Nine West and Stuart
Weitzman international businesses.  For other areas of the business, the
weather impacted seasonal product sales, which generated higher promotional
levels.  As a result, second quarter gross margins were approximately 260
basis points below last year. We anticipate we will achieve improved
performance in fall 2013 with our new and refocused sportswear product
offerings."

The Company ended the quarter with $81 million in cash and generated cash from
operating activities during the six months of $2 million, compared with $124
million in the prior year period.  The current year results reflect a higher
level of required investment in working capital, higher tax and interest
payments and lower earnings.  At July 6, 2013, the Company had no amounts
drawn under its $650 million of committed revolving credit facilities.

John T. McClain, The Jones Group Chief Financial Officer, commented: "Our
financial position remains strong.  We ended the quarter with $81 million in
cash and our revolver undrawn.  Our approach to inventory commitments
continues to be conservative, and we continue to emphasize tight expense
control.  Our plans to create operational efficiencies, reduce costs within
the wholesale channel and improve the performance of our domestic retail
business are on track.  We believe these actions will enable us to maintain a
strong balance sheet." 

Mr. Card concluded: "We believe that we are better positioned for the second
half of the year, as we continue to focus on enhancing profitability. We are
approaching the Jones brand with strong conviction and have received very
positive reactions from our customers to our refocused sportswear that will
begin shipping in August.  We are confident that this will translate into
improved retail performance and ultimately increased profitability for the
brand."

The Company's Board of Directors has declared a regular quarterly cash
dividend of $0.05 per share to all common stockholders of record as of August
16, 2013, for payment on August 30, 2013.

The Company will host a conference call with management to discuss these
results at 8:30 a.m. eastern time today, which is accessible by dialing
412-858-4600 or through a web cast at www.jonesgroupinc.com (under Investor
Relations/Conference Schedule). The call will be recorded and made available
through August 8, 2013 and may be accessed by dialing 877-344-7529
(International 412-317-0088).  Enter account number 10031250.  A slide
presentation will accompany the prepared remarks and has been posted with the
webcast on the Company's website. 

Presentation of Information in the Press Release

Financial information discussed in this press release includes both GAAP and
non-GAAP measures, which include or exclude certain items.  These non-GAAP
measures differ from reported results and are intended to illustrate what
management believes are relevant period-over-period comparisons.  A
reconciliation of the GAAP measures presented to the comparable non-GAAP
information appears in the financial tables section of this press release. 

About The Jones Group Inc.

The Jones Group Inc. (www.jonesgroupinc.com) is a leading global designer,
marketer and wholesaler of over 35 brands with product expertise in apparel,
footwear, jeanswear, jewelry and handbags.  The Jones Group has a reputation
for innovation, excellence in product quality and value, operational execution
and talent.  The Company also markets directly to consumers through branded
specialty retail and outlet stores, through concessions at upscale department
stores and through its e-commerce sites.

The Company's internationally recognized brands and licensing agreements (L)
include: Nine West, Jones New York, Anne Klein, Kurt Geiger, Rachel Roy (L),
Robert Rodriguez, Robbi & Nikki, Stuart Weitzman, Brian Atwood (L), Boutique
9, Easy Spirit, Carvela, Gloria Vanderbilt, l.e.i., Bandolino, Enzo Angiolini,
Nine & Co., GLO, Joan & David, Miss KG, Kasper, Energie, Evan-Picone, Le Suit,
Mootsies Tootsies, Grane, Erika, Napier, Jessica Simpson (L), Givenchy (L),
Judith Jack, Albert Nipon, Pappagallo and Rafe (L). 

Forward Looking Statements

Certain statements contained herein are "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.  All
statements regarding the Company's expected financial position, business and
financing plans are forward-looking statements.  The words "believes,"
"expects," "plans," "intends," "anticipates" and similar expressions identify
forward-looking statements.  Forward-looking statements also include
representations of the Company's expectations or beliefs concerning future
events that involve risks and uncertainties, including:

  o those associated with the effect of national, regional and international
    economic conditions;
  o lowered levels of consumer spending resulting from a general economic
    downturn or lower levels of consumer confidence;
  o the tightening of the credit markets and the Company's ability to obtain
    capital on satisfactory terms;
  o given the uncertain economic environment, the possible unwillingness of
    committed lenders to meet their obligations to lend to borrowers, in
    general;
  o the performance of the Company's products within the prevailing retail
    environment;
  o customer acceptance of both new designs and newly-introduced product
    lines;
  o the Company's reliance on a few department store groups for large portions
    of the Company's business;
  o the Company's ability to identify acquisition candidates and, in a
    competitive environment for such acquisitions, acquire such businesses on
    reasonable financial and other terms;
  o the integration of the organizations and operations of any acquired
    businesses into the Company's existing organization and operations;
  o consolidation of the Company's retail customers;
  o financial difficulties encountered by the Company's customers;
  o the effects of vigorous competition in the markets in which the Company
    operates;
  o the Company's ability to attract and retain qualified executives and other
    key personnel;
  o the Company's reliance on independent foreign manufacturers, including
    political instability in countries where contractors and suppliers are
    located;
  o changes in the costs of raw materials, labor, advertising and
    transportation, including the impact such changes may have on the pricing
    of the Company's products and the resulting impact on consumer acceptance
    of the Company's products at higher price points;
  o the Company's ability to successfully implement new operational and
    financial information systems; 
  o the Company's ability to secure and protect trademarks and other
    intellectual property rights;
  o the effects of extreme or unseasonable weather conditions; and
  o the Company's ability to implement its strategic initiatives to enhance
    profitability.

A further description of these risks and uncertainties and other important
factors that could cause actual results to differ materially from the
Company's expectations can be found in the Company's Annual Report on Form
10-K for the year ended December 31, 2012, including, but not limited to, the
Statement Regarding Forward-Looking Disclosure and Item 1A-Risk Factors
therein, and in the Company's other filings with the Securities and Exchange
Commission.  Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, such expectations may prove to
be incorrect.  The Company does not undertake to publicly update or revise its
forward-looking statements as a result of new information, future events or
otherwise.

 

 

THE JONES GROUP INC.
CONSOLIDATED OPERATING RESULTS
(UNAUDITED)
All amounts in
millions, except
per share data
                    SECOND QUARTER                 FISCAL SIX MONTHS
                    2013            2012           2013             2012
Net sales           $       98.8  % $     98.8  %  $        98.8  % $        98.7  %
                    835.2           844.3           1,832.8          1,767.7
Licensing income    10.2    1.2     10.2  1.2      20.9     1.1     22.5     1.3
Other revenues      0.2     0.0     0.3   0.0      0.6      0.0     0.5      0.0
Total revenues      845.6   100.0   854.8 100.0    1,854.3  100.0   1,790.7  100.0
Cost of goods sold  544.9   64.4    528.6 61.8     1,205.3  65.0    1,121.1  62.6
Gross profit        300.7   35.6    326.2 38.2     649.0    35.0    669.6    37.4
SG&A expenses       289.9   34.3    304.5 35.6     621.3    33.5    607.7    33.9
Operating income    10.8    1.3     21.7  2.5      27.7     1.5     61.9     3.5
Net interest
expense and         (15.4)  (1.8)   (8.8) (1.0)    (31.5)   (1.7)   (51.5)   (2.9)
financing costs
(1)
Equity in (loss)
income of           (0.5)   (0.1)   0.4   0.0      0.1      0.0     1.3      0.1
unconsolidated
affiliate
(Loss) income
before (benefit)    (5.1)   (0.6)   13.3  1.6      (3.7)    (0.2)   11.7     0.7
provision for
income taxes
(Benefit)
provision for       (1.9)   (0.2)   4.9   0.6      (1.4)    (0.1)   4.3      0.2
income taxes
Net (loss) income   (3.2)   (0.4)   8.4   1.0      (2.3)    (0.1)   7.4      0.4
Less: income
attributable to     0.2     0.0     0.3   0.0      0.6      0.0     0.5      0.0
noncontrolling
interest
(Loss) income       $               $              $                $      
attributable to      (3.4)  (0.4) %       0.9   %   (2.9)   (0.2) %    6.9   0.4   %
Jones                                8.1
(Loss) earnings
per share (2)
    Net (loss)      $               $              $                $      
    income           (3.2)                          (2.3)              7.4
                                     8.4
    Less: income
    attributable
    to              0.2             0.3            0.6              0.5
    noncontrolling
    interest
    (Loss) income
    attributable    (3.4)           8.1            (2.9)            6.9
    to Jones
    Less: (loss)
    income
    allocated to    (0.1)           0.2            (0.2)            -
    participating
    securities
    (Loss) income
    available to    $               $              $                $      
    common           (3.3)                          (2.7)              6.9
    stockholders                     7.9
    of Jones
Shares outstanding  73.1            76.0           73.2             77.5
- diluted
(Loss) earnings     $               $              $                $      
per share  -         (0.05)                         (0.04)          0.09
diluted                             0.10
Percentages may not add due to rounding.
    Refer to item "g" on the Reconciliation of Non-GAAP Measures to GAAP for amounts
(1) impacting interest expense relating to adjustment of remaining consideration
    payable related to acquisition of Stuart Weitzman.
    Earnings per share is calculated under the "two-class method," where income is
    allocated between common shares and participating securities (unvested
(2) restricted shares held by employees that have a nonforfeitable right to
    dividends).  Both our common shares and participating securities share equally
    in dividend payments and earnings.

 

 

 

THE JONES GROUP INC.
Reconciliation of Non-GAAP Measures to GAAP
for the quarters and six months ended July 6, 2013 and June 30, 2012
(UNAUDITED)
All amounts in millions, except    SECOND QUARTER          FISCAL SIX MONTHS
per share data
                                   2013         2012       2013        2012
Operating income                   $     10.8   $          $     27.7  $      
                                                 21.7                   61.9
Adjustments:
Items affecting segment income:
    Expenses related to retail     (0.6)        1.1        7.8         1.6
    store closure plan (a)
    Charges related to acquired    3.4          1.2        5.2         0.3
    businesses (b)
    Other business development     0.1          0.5        0.1         0.7
    costs (c)
    Present value adjustments to
    lease liabilities for          1.8          9.3        2.0         9.3
    properties not in use (d)
    Severance and other charges
    related to executive           1.0          2.2        1.0         5.9
    management changes (e)
    Other restructuring expenses
    and certain other charges      1.5          4.4        8.5         13.3
    (f)
Total adjustments to operating     7.2          18.7       24.6        31.1
income
Adjusted operating income          $     18.0   $          $     52.3  $      
                                                 40.4                   93.0
(Loss) income attributable to      $            $          $           $      
Jones (as reported)                 (3.4)          8.1      (2.9)         6.9
(Benefit) provision for income     (1.9)        4.9        (1.4)       4.3
taxes
Adjustments to operating income,   7.2          18.7       24.6        31.1
from above
Adjustment of remaining
consideration payable related to
acquisition
    of Stuart Weitzman (g)         -            (4.2)      (0.4)       23.5
Adjusted income before provision   1.9          27.5       19.9        65.8
for income taxes
Adjusted provision for income      (0.8)        (10.2)     (7.6)       (24.5)
taxes
Adjusted income attributable to    1.1          17.3       12.3        41.3
Jones
Less: adjusted income allocated    -            (0.5)      (0.3)       (0.9)
to participating securities
Adjusted income available to       $            $          $     12.0  $      
common stockholders of Jones       1.1           16.8                   40.4
(Loss) earnings per share -        $            $          $           $      
diluted (as reported)               (0.05)       0.10       (0.04)      0.09
(Benefit) provision for income     (0.03)       0.06       (0.02)      0.05
taxes
Items affecting segment income:
    Expenses related to retail     (0.01)       0.01       0.10        0.02
    store closure plan (a)
    Charges related to acquired    0.05         0.01       0.07        -
    businesses (b)
    Other business development     -            0.01       -           0.01
    costs (c)
    Present value adjustments to
    lease liabilities for          0.03         0.12       0.03        0.12
    properties not in use (d)
    Severance and other charges
    related to executive           0.01         0.03       0.01        0.08
    management changes (e)
    Other restructuring expenses
    and certain other charges      0.02         0.06       0.11        0.17
    (f)
Adjustment of remaining
consideration payable related to
acquisition
    of Stuart Weitzman (g)         -            (0.05)     -           0.30
Adjusted income before provision   0.02         0.35       0.26        0.84
for income taxes
Adjusted provision for income      (0.01)       (0.13)     (0.10)      (0.31)
taxes
Adjustment for using diluted       0.01         -          -           -
share count (h)
Adjusted earnings per share -      $     0.02   $          $     0.16  $      
diluted                                          0.22                   0.53
Non-GAAP adjustments affecting
income by segment (i):
    Domestic wholesale             $            $          $           $      
    sportswear (b,e,f)             1.4             0.3     4.9            4.2
    Domestic wholesale jeanswear   0.1          0.9        0.7         2.0
    (d,e,f,g)
    Domestic wholesale footwear    2.5          10.7       3.2         12.8
    and accessories (e,f)
    Domestic retail (a,e,f,g)      (0.6)        3.3        8.1         4.6
    International wholesale        0.6          -          2.2         0.2
    (e,f)
    International retail (b,f)     1.5          1.5        3.1         3.1
    Licensing, other &             1.7          2.0        2.4         4.2
    eliminations (b,c,e,f)
    Total                          $            $          $     24.6  $      
                                   7.2           18.7                   31.1
(a) 2013 and 2012 include severance, fixed asset impairment and other charges
    and credits related to the closure of underperforming retail locations.
    2013 and 2012 include the fair value adjustments of the contingent
(b) consideration payable for the Robert Rodriguez acquisition and the
    amortization of certain acquired intangible assets related to the
    acquisition of Kurt Geiger. 
    2013 and 2012 include investment consulting fees, legal fees, accounting
(c) fees and other items related to acquisitions and other business
    development activities.
(d) 2013 and 2012 include present value accruals and adjustments for
    liabilities related to leases on properties currently not in use.
(e) 2013 and 2012 include severance and restricted stock charges related to
    executive management changes.
    2013 and 2012 include severance, occupancy, and other costs related to the
(f) restructuring of corporate and business support functions and other
    charges not considered by management to be part of ongoing operations. 
(g) 2013 and 2012 represent the fair value adjustment of the remaining
    consideration payable related to the acquisition of Stuart Weitzman.
    In accordance with ASC 260 "Earnings Per Share," the calculation of
    diluted shares for the purpose of generating GAAP EPS does not include any
    antidilutive items (such as restricted stock) that would result in a lower
(h) loss per share.  Since the non-GAAP adjustments would result in adjusted
    net income, these items become dilutive to EPS.  This adjustment
    represents the impact of including these dilutive items in the calculation
    of diluted shares used to determine adjusted EPS.
(i) See "Segment Information" page for the presentation of GAAP and Adjusted
    amounts.
                                   SECOND QUARTER          FISCAL SIX MONTHS
                                   2013         2012       2013        2012
    GAAP gross profit              $   300.7    $          $   649.0   $    
                                                 326.2                  669.6
    Other restructuring expenses
    and certain other charges      0.1          -          0.6         0.3
    (f)
    Adjusted gross profit          $   300.8    $          $   649.6   $    
                                                 326.2                  669.9

 

 

 

THE JONES GROUP INC.
SEGMENT INFORMATION
(UNAUDITED)
Dollars in millions                      Domestic
                    Domestic   Domestic  Wholesale                                        Licensing,
                    Wholesale  Wholesale Footwear &  Domestic International International Other &
                    Sportswear Jeanswear Accessories Retail   Wholesale     Retail        Eliminations Consolidated
For the fiscal
quarter ended July
6, 2013
     Revenues       $          $         $           $        $             $             $            $        
                     133.3      182.6     181.6         148.1  88.7          101.1         10.2         845.6
     Segment (loss) $          $         $           $        $             $             $          
     income             (9.4)     14.2      0.5                10.9          0.2            (0.7)      10.8
                                                     (4.9)
     Segment margin (7.1%)     7.8%      0.3%        (3.3%)   12.3%         0.2%                       1.3%
     Net interest                                                                                      (15.4)
     expense
     Equity in loss
     of                                                                                                (0.5)
     unconsolidated
     affiliate
     Loss before                                                                                       $          
     benefit for                                                                                         (5.1)
     income taxes
     Segment (loss) $          $         $           $        $             $             $            $          
     income             (9.4)     14.2      0.5                10.9          0.2            (0.7)       10.8
                                                     (4.9)
     Adjustments
     affecting      1.4        0.1       2.5         (0.6)    0.6           1.5           1.7          7.2
     segment income
     (b)
     Adjusted       $          $         $           $        $             $             $            $          
     segment (loss)     (8.0)     14.3      3.0                11.5          1.7             1.0        18.0
     income                                          (5.5)
     Adjusted       (6.0%)     7.8%      1.7%        (3.7%)   13.0%         1.7%                       2.1%
     segment margin
For the fiscal
quarter ended June
30, 2012
     Revenues       $          $         $           $        $             $             $            $        
                     174.8      151.0     195.5         150.6  75.4          97.3          10.2         854.8
     Segment income $          $         $           $        $             $             $          
     (loss)              8.9        7.0    (1.6)               9.7           3.7            (3.0)      21.7
                                                     (3.0)
     Segment margin 5.1%       4.6%      (0.8%)      (2.0%)   12.9%         3.8%                       2.5%
     Net interest                                                                                      (8.8)
     expense (a)
     Equity in
     income of                                                                                         0.4
     unconsolidated
     affiliate
     Income before                                                                                     $          
     provision for                                                                                      13.3
     income taxes
     Segment income $          $         $           $        $             $             $            $          
     (loss)              8.9        7.0    (1.6)               9.7           3.7            (3.0)       21.7
                                                     (3.0)
     Adjustments
     affecting      0.3        0.9       10.7        3.3      -             1.5           2.0          18.7
     segment income
     (b)
     Adjusted       $          $         $           $        $             $             $            $          
     segment income      9.2        7.9     9.1                9.7           5.2            (1.0)       40.4
                                                      0.3
     Adjusted       5.3%       5.2%      4.7%        0.2%     12.9%         5.3%                       4.7%
     segment margin
(a)  Refer to item "g" on the Reconciliation of Non-GAAP Measures to GAAP for amounts impacting interest expense
     relating to adjustment of remaining consideration payable related to acquisition of Stuart Weitzman.
(b)  See "Reconciliation of Non-GAAP Measures to GAAP" page.

 

 

 

THE JONES GROUP INC.
SEGMENT INFORMATION
(UNAUDITED)
Dollars in millions                      Domestic
                    Domestic   Domestic  Wholesale                                        Licensing,
                    Wholesale  Wholesale Footwear &  Domestic International International Other &
                    Sportswear Jeanswear Accessories Retail   Wholesale     Retail        Eliminations Consolidated
For the fiscal six
months ended July
6, 2013
     Revenues       $          $         $           $        $             $             $            $      
                     349.9      439.1     422.9         274.2  162.0         185.3         20.9        1,854.3
     Segment income $          $         $           $        $             $             $          
     (loss)              0.8      48.5    22.4                 16.5         (8.0)         (12.5)       27.7
                                                     (40.0)
     Segment margin 0.2%       11.0%     5.3%        (14.6%)  10.2%         (4.3%)                     1.5%
     Net interest                                                                                      (31.5)
     expense (a)
     Equity in
     income of                                                                                         0.1
     unconsolidated
     affiliate
     Loss before                                                                                       $          
     benefit for                                                                                         (3.7)
     income taxes
     Segment income $          $         $           $        $             $             $            $          
     (loss)              0.8      48.5    22.4                 16.5         (8.0)         (12.5)        27.7
                                                     (40.0)
     Adjustments
     affecting      4.9        0.7       3.2         8.1      2.2           3.1           2.4          24.6
     segment income
     (b)
     Adjusted       $          $         $           $        $             $             $            $          
     segment income      5.7      49.2    25.6                 18.7         (4.9)         (10.1)        52.3
     (loss)                                          (31.9)
     Adjusted       1.6%       11.2%     6.1%        (11.6%)  11.5%         (2.6%)                     2.8%
     segment margin
For the fiscal six
months ended June
30, 2012
     Revenues       $          $         $           $        $             $             $            $      
                     408.4      335.8     421.3         278.7  148.8         175.2         22.5        1,790.7
     Segment income $          $         $           $        $             $             $          
     (loss)            32.2       23.6    16.7                 19.6         (1.3)           (3.5)      61.9
                                                     (25.4)
     Segment margin 7.9%       7.0%      4.0%        (9.1%)   13.2%         (0.7%)                     3.5%
     Net interest                                                                                      (51.5)
     expense (a)
     Equity in
     income of                                                                                         1.3
     unconsolidated
     affiliate
     Income before                                                                                     $          
     provision for                                                                                      11.7
     income taxes
     Segment income $          $         $           $        $             $             $            $          
     (loss)            32.2       23.6    16.7                 19.6         (1.3)           (3.5)       61.9
                                                     (25.4)
     Adjustments
     affecting      4.2        2.0       12.8        4.6      0.2           3.1           4.2          31.1
     segment income
     (b)
     Adjusted       $          $         $           $        $             $             $            $          
     segment income    36.4       25.6    29.5                 19.8          1.8             0.7        93.0
     (loss)                                          (20.8)
     Adjusted       8.9%       7.6%      7.0%        (7.5%)   13.3%         1.0%                       5.2%
     segment margin
(a)  Refer to item "g" on the Reconciliation of Non-GAAP Measures to GAAP for amounts impacting interest expense
     relating to adjustment of remaining consideration payable related to acquisition of Stuart Weitzman.
(b)  See "Reconciliation of Non-GAAP Measures to GAAP" page.

 

 

 

THE JONES GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
All amounts in millions
                                    July 6, 2013         June 30, 2012
ASSETS
Current assets:
  Cash and cash equivalents         $                    $                
                                         81.0                277.1
  Accounts receivable               312.3                327.2
  Inventories                       540.6                467.5
  Deferred taxes                    31.5                 27.7
  Other current assets              63.6                 60.5
  Total current assets              1,029.0              1,160.0
Property, plant and equipment, at
cost, less
    accumulated depreciation and    260.0                271.4
amortization
Goodwill                            211.6                256.3
Other intangibles, less             847.7                891.8
accumulated amortization
Other assets                        135.9                129.4
Total assets                        $                    $                
                                     2,484.2              2,708.9
LIABILITIES AND EQUITY
Current liabilities:
  Current portion of long-term      $                    $                
debt and capital lease obligations         2.2                    2.1
  Current portion of acquisition    2.3                  216.7
consideration payable
  Accounts payable                  249.6                232.7
  Accrued expenses and other        128.9                139.7
current liabilities
  Total current liabilities         383.0                591.2
Long-term debt and obligations      950.1                856.5
under capital leases
Deferred taxes                      59.7                 69.6
Acquisition consideration payable   4.4                  4.8
Other                               110.9                112.9
Total liabilities                   1,508.1              1,635.0
Redeemable noncontrolling interest  0.6                  -
Equity                              975.5                1,073.9
Total liabilities and equity        $                    $                
                                     2,484.2              2,708.9

 

 

 

THE JONES GROUP INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
All amounts in millions                         Six Months Ended
                                                July 6, 2013     June 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net (loss) income                              $                $            
                                                       (2.3)               7.4
 Adjustments to reconcile net (loss) income to
 net cash
   provided by operating activities, net of
 acquisitions:
      Amortization of employee stock options    14.6             13.3
 and restricted stock 
      Depreciation and other amortization       43.1             44.5
      Impairment losses                         6.8              0.4
      Adjustments to acquisition consideration  0.3              19.4
 payable
      Equity in income of unconsolidated        (0.1)            (1.3)
 affiliate
      Deferred taxes                            2.9              (7.4)
      Other items, net                          10.2             3.8
      Changes in operating assets and
 liabilities:
      Accounts receivable                       65.3             22.2
      Inventories                               (60.0)           24.1
         Accounts payable                       (5.6)            (3.8)
         Income taxes payable/prepaid taxes     (11.0)           6.7
         Acquisition consideration payable      (20.5)           (0.8)
         Other assets and liabilities, net      (41.9)           (4.5)
         Total adjustments                      4.1              116.6
 Net cash provided by operating activities      1.8              124.0
CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital expenditures                           (29.3)           (38.2)
 Notes receivable issued                        (6.5)            -
 Payments related to acquisition of Brian       (0.5)            -
 Atwood
 Contingent consideration paid related to       -                (3.5)
 investment in GRI Group Limited
 Other                                          0.4              (0.1)
 Net cash used in investing activities          (35.9)           (41.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
 Costs related to secured revolving credit      (0.3)            (0.3)
 agreement
 Dividends paid                                 (7.8)            (7.9)
 Payments of acquisition consideration payable  (9.4)            (7.5)
 Repurchase of common shares                    (14.5)           (29.0)
 Other                                          (1.5)            1.0
 Net cash used in financing activities          (33.5)           (43.7)
EFFECT OF EXCHANGE RATES ON CASH                (1.0)            (0.2)
NET (DECREASE) INCREASE IN CASH AND CASH        (68.6)           38.3
EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING            149.6            238.8
CASH AND CASH EQUIVALENTS, ENDING               $                $            
                                                      81.0             277.1

 

SOURCE The Jones Group Inc.

Website: http://www.jonesgroupinc.com
Contact: Investor Contact: John T. McClain, Chief Financial Officer, The Jones
Group, (212) 703-9189; Media Contacts: Joele Frank and Sharon Stern, Joele
Frank, Wilkinson Brimmer Katcher, (212) 355-4449
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