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Michael Kors Holdings Limited Announces First Quarter Fiscal 2013 Results

Stocks in this article: KORS

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,” “seek,” “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 Annual Report on Form 20-F for the fiscal year ended March 31, 2012 (File No. 001-35368), filed on June 12, 2012 with the U.S. Securities and Exchange Commission.

       
SCHEDULE 1
 
MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except share and per share data)
(Unaudited)
 
Three Months Ended
June 30, July 2,
2012 2011
 
Net sales $ 397,370 $ 232,282
Licensing revenue   17,495     10,844
Total revenue 414,865 243,126
Cost of goods sold   163,865     106,157
Gross profit 251,000 136,969
Total operating expenses   139,057     91,993
Income from operations 111,943 44,976
Interest expense, net 435 671
Foreign currency (gain) loss   (375 )   1,507
Income before provision for income taxes 111,883 42,798
Provision for income taxes   43,238     18,683
Net income 68,645 24,115
Net income applicable to preference shareholders   -     5,198
Net income available for ordinary shareholders $ 68,645   $ 18,917
 
Weighted average ordinary shares outstanding:
Basic 192,790,454 140,554,377
Diluted 199,391,127 179,177,268
 
Net income per ordinary share (1):
Basic $ 0.36 $ 0.13
Diluted $ 0.34 $ 0.13
 
Statements of Comprehensive Income:
Net income $ 68,645 $ 24,115
Foreign currency translation adjustments   (3,278 )   1,979
Comprehensive income $ 65,367   $ 26,094
 

(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.

 
       
SCHEDULE 2
 
MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
 
June 30, March 31, July 2,
Assets 2012 2012 2011
Current assets
Cash and cash equivalents $ 162,075 $ 106,354 $ 58,198
Receivables, net 104,700 127,226 47,986
Inventories 246,601 187,413 122,015
Deferred tax assets 15,518 11,145 7,925
Prepaid expenses and other current assets   40,298     31,925     20,129
Total current assets 569,192 464,063 256,253
Property and equipment, net 180,317 170,755 120,731
Intangible assets, net 13,684 14,146 15,449
Goodwill 14,005 14,005 14,005
Deferred tax assets 3,942 3,952 1,357
Other assets   6,780     7,504     3,827
Total assets $ 787,920   $ 674,425   $ 411,622
 
Liabilities and Shareholders' Equity
Current liabilities
Revolving line of credit $ 27,667 $ 22,674 $ 13,238
Accounts payable 82,464 67,326 50,989
Accrued payroll and payroll related expenses 17,270 33,710 9,615
Accrued income taxes 40,342 8,199 16,646
Accrued expenses and other current liabilities   28,505     33,097     20,653
Total current liabilities 196,248 165,006 111,141
Note payable to parent - - 101,650
Deferred rent 46,137 43,292 31,999
Deferred tax liabilities 6,816 6,300 5,495
Other long-term liabilities   3,069     3,590     3,218
Total liabilities 252,270 218,188 253,503
Commitments and contingencies
Contingently redeemable ordinary shares - - 6,706
Shareholders' equity *
Ordinary shares, no par value; 650,000,000 shares authorized, and 193,226,091 shares issued and
outstanding at June 30, 2012, and 192,731,390 shares issued and outstanding at March 31, 2012. - - -
Additional paid-in capital 242,367 228,321 39,999
Accumulated other comprehensive loss (4,013 ) (735 ) 6,012
Retained earnings   297,296     228,651     105,402
Total shareholders' equity   535,650     456,237     151,413
Total liabilities and shareholders' equity $ 787,920   $ 674,425   $ 411,622

 

* Share amounts applicable to July 2, 2011 were omitted as they reflect our equity structure prior to our restructuring and initial public offering.

       
SCHEDULE 3
 
MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED SEGMENT DATA
(In thousands)
(Unaudited)
 
Three Months Ended
June 30, July 2,
2012 2011
Revenue by Region:
North America (U.S. and Canada) $ 377,149 $ 225,768
Europe 33,387 15,864
Other Regions   4,329   1,494
Total Revenue: $ 414,865 $ 243,126
 
Revenue by Segment:
Net sales: Retail $ 215,004 $ 122,344
Wholesale 182,366 109,938
Licensing   17,495   10,844
Total Revenue: $ 414,865 $ 243,126
 
Income from Operations:
Retail $ 59,879 $ 27,922
Wholesale 40,718 10,868
Licensing   11,346   6,186
Total Income from Operations $ 111,943 $ 44,976




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