Michael Kors Holdings Limited Announces Fourth Quarter And Annual Fiscal 2012 Results

For fiscal 2013, the Company expects total revenue to be in the range of $1.7 billion to $1.8 billion. This assumes a comparable store sales increase of approximately 20%. Diluted earnings per share are expected to be in the range of $1.08 to $1.12 for the year. This assumes 201.2 million diluted weighted average shares outstanding and a 38% tax rate.

Conference Call Information

A conference call to discuss fourth quarter and annual results is scheduled for today, June 12, 2012 at 8:00 a.m. EDT. A replay of the call will be available today at 11:00 a.m. EDT; to access the replay, dial 1-877-870-5176 for domestic callers or dial 1-858-384-5517 for international callers and enter access code 1622346. The conference call will also be webcast live in the investor relations section of www.michaelkors.com. The webcast will be accessible on the website for approximately 90 days after the call.

About Michael Kors

Michael Kors is a world-renowned, award-winning designer of luxury accessories and ready to wear. His namesake company, established in 1981, currently produces a range of products through his Michael Kors, KORS Michael Kors and MICHAEL Michael Kors labels, including accessories, footwear, watches, jewelry, men’s and women’s ready to wear, and a full line of fragrance products. Michael Kors stores are operated, either directly or through licensing partners, in some of the most prestigious cities in the world, including New York, Beverly Hills, Chicago, London, Milan, Paris, Munich, Istanbul, Dubai, Seoul, Tokyo and Hong Kong.

Forward Looking Statements

This press release contains forward-looking statements. You should not place undue reliance on such statements because they are subject to numerous uncertainties and factors relating to the Company’s operations and business environment, all of which are difficult to predict and many of which are beyond the Company’s control. Forward-looking statements include information concerning the Company’s possible or assumed future results of operations, including descriptions of its business strategy. These statements often include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. The forward-looking statements contained in this press release are based on assumptions that the Company has made in light of management’s experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors that it believes are appropriate under the circumstances. You should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect its actual financial results or results of operations and could cause actual results to differ materially from those in these forward-looking statements. These factors are more fully discussed in the “Risk Factors” section and elsewhere in the Company’s Registration Statement on Form F-1, as amended (File No. 333-180022).

MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
Schedule 1
				Three Months Ended								Twelve Months Ended
				March 31,				April 2,				March 31,					April 2,
				2012				2011				2012					2011
Net sales				$	362,905			$	226,536			$	1,237,100				$	757,800
Royalty revenue					17,085				13,467				65,154					45,539
Total revenue					379,990				240,003				1,302,254					803,339
Cost of goods sold					160,868				105,882				549,158					357,274
Gross profit					219,122				134,121				753,096					446,065
Total operating expenses					140,281				91,487				505,414					309,199
Income from operations					78,841				42,634				247,682					136,866
Interest expense, net					383				163				1,495					1,861
Foreign currency (gain) loss					1,291				4,594				(2,629	)				1,786
Income before provision for income taxes					77,167				37,877				248,816					133,219
Provision for income taxes					33,555				20,504				101,452					60,713
Net income					43,612				17,373				147,364					72,506
Net income applicable to preference shareholders					-				3,745				21,227					15,629
Net income available for ordinary shareholders				$	43,612			$	13,628			$	126,137				$	56,877
Weighted average ordinary shares outstanding:
Basic					191,184,171				140,554,377				158,258,126					140,554,377
Diluted					196,855,404				179,177,268				189,299,197					179,177,268
Net income per ordinary share (1):
Basic				$	0.23			$	0.10			$	0.80				$	0.40
Diluted				$	0.22			$	0.10			$	0.78				$	0.40
Statements of Comprehensive Income:
Net income				$	43,612			$	17,373			$	147,364				$	72,506
Foreign currency translation adjustments					2,231				4,698				(4,768	)				3,803
Comprehensive income				$	45,843			$	22,071			$	142,596				$	76,309

(1) The calculation for basic earnings per ordinary share is based on net income available for ordinary shareholders divided by basic ordinary shares. The calculation for diluted earnings per share is based on net income divided by diluted shares.

MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
Schedule 2
								March 31,					April 2,
Assets								2012					2011
Current assets
Cash and cash equivalents								$	106,354				$	21,065
Receivables, net									127,226					80,081
Inventories									187,413					117,173
Deferred tax assets									11,145					7,322
Prepaid expenses and other current assets									31,925					19,757
Total current assets									464,063					245,398
Property and equipment, net									170,755					119,323
Intangible assets, net									14,146					15,796
Goodwill									14,005					14,005
Deferred tax assets									3,952					1,951
Other assets									7,504					3,022
Total assets								$	674,425				$	399,495
Liabilities and Shareholders' Equity
Current liabilities
Revolving line of credit								$	22,674				$	12,765
Accounts payable									67,326					52,873
Accrued payroll and payroll related expenses									33,710					26,100
Accrued income taxes									8,199					18,701
Accrued expenses and other current liabilities									33,097					17,286
Total current liabilities									165,006					127,725
Note payable to parent									-					101,650
Deferred rent									43,292					29,381
Deferred tax liabilities									6,300					5,495
Other long-term liabilities									3,590					3,218
Total liabilities									218,188					267,469
Contingently redeemable ordinary shares									-					6,706
Shareholders' equity
Convertible preference shares, no par value; 10,163,920 shares issued and outstanding at April 2, 2011.									-					-
Ordinary shares, no par value; 650,000,000 shares authorized, and 192,731,390 shares issued and
outstanding at March 31, 2012, and 140,554,377 shares issued and outstanding at April 2, 2011.									-					-
Additional paid-in capital									228,321					40,000
Accumulated other comprehensive (loss) income									(735	)				4,033
Retained earnings									228,651					81,287
Total shareholders' equity									456,237					125,320
Total liabilities and shareholders' equity								$	674,425				$	399,495

MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION FOR NON-GAAP MEASURES– CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share data)
(Unaudited)
Schedule 3
Reconciliation of income from operations, as reported, to income from operations, as adjusted
					Three Months Ended									Twelve Months Ended
					March 31,					April 2,				March 31,					April 2,
					2012					2011				2012					2011
Income from operations, as reported					$	78,841				$	42,634			$	247,682				$	136,866
Add back adjustments for one time charges:
Stock option expense						-					-				10,600					-
IPO fees						(2,000	)				-				3,170					-
Employee share option redemption - private placement						-					-				10,690					-
Income from operations, as adjusted					$	76,841				$	42,634			$	272,142				$	136,866
Reconciliation of net income, as reported, to net income, as adjusted
					Three Months Ended									Twelve Months Ended
					March 31,					April 2,				March 31,					April 2,
					2012					2011				2012					2011
Net income, as reported					$	43,612				$	17,373			$	147,364				$	72,506
Add back adjustments for one time charges:
Stock option expense						-					-				10,600					-
IPO fees						(2,000	)				-				3,170					-
Employee share option redemption - private placement						-					-				10,690					-
Less tax benefit on above						-					-				(8,686	)				-
Net income, as adjusted					$	41,612				$	17,373			$	163,138				$	72,506
Weighted average ordinary shares outstanding:
Diluted						196,855,404					179,177,268				189,299,197					179,177,268
Net income per ordinary share, as adjusted:
Diluted					$	0.21				$	0.10			$	0.86				$	0.40

Use of Non-GAAP Financial Measures

In addition to reporting financial results in accordance with generally accepted accounting principles (GAAP), the Company provides non-GAAP operating results that exclude certain charges or credits such as transaction expenses related to the Company's IPO, Stock option expense and other offering fees. These amounts are not in accordance with, or an alternative to, GAAP. The Company's management believes that these measures provide investors with transparency by helping illustrate the underlying financial and business trends relating to the Company's results of operations and financial condition and comparability between current and prior periods. Management uses the measures to establish and monitor budgets and operational goals and to evaluate the performance of the Company.

MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED SEGMENT DATA
(In thousands)
(Unaudited)
Schedule 4
						Three Months Ended								Twelve Months Ended
						March 31,				April 2,				March 31,				April 2,
						2012				2011				2012				2011
Revenue by Region:
North America (U.S. and Canada)						$	339,332			$	222,927			$	1,183,234			$	763,819
Europe							36,627				16,451				108,790				38,502
Other Regions							4,031				625				10,230				1,018
Total Revenue:						$	379,990			$	240,003			$	1,302,254			$	803,339
Revenue by Segment:
Net sales: Retail						$	172,187			$	95,489			$	626,940			$	344,195
Wholesale							190,718				131,047				610,160				413,605
Licensing							17,085				13,467				65,154				45,539
Total Revenue:						$	379,990			$	240,003			$	1,302,254			$	803,339
Income from Operations:
Retail						$	33,959			$	14,707			$	121,851			$	61,194
Wholesale							34,477				16,386				85,000				48,241
Licensing							10,405				11,541				40,831				27,431
Total Income from Operations						$	78,841			$	42,634			$	247,682			$	136,866
Income from Operations, as adjusted*:
Retail						$	33,105			$	14,707			$	129,230			$	61,194
Wholesale							33,448				16,386				100,759				48,241
Licensing							10,288				11,541				42,153				27,431
Total Income from Operations, as adjusted						$	76,841			$	42,634			$	272,142			$	136,866
*Adjusted results reflect one-time items shown in Schedule 3.

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