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G-III Apparel Group, Ltd. Announces Second Quarter Fiscal 2013 Results

Statements concerning G-III’s business outlook or future economic performance, anticipated revenues, expenses or other financial items; product introductions and plans and objectives related thereto; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters are “forward-looking statements” as that term is defined under the Federal Securities laws. Forward-looking statements are subject to risks, uncertainties and factors which include, but are not limited to, reliance on licensed product, reliance on foreign manufacturers, risks of doing business abroad, the current economic and credit environment, the nature of the apparel industry, including changing customer demand and tastes, customer concentration, seasonality, risks of operating a retail business, customer acceptance of new products, the impact of competitive products and pricing, dependence on existing management, possible disruption from acquisitions and general economic conditions, as well as other risks detailed in G-III’s filings with the Securities and Exchange Commission. G-III assumes no obligation to update the information in this release.

             

G-III APPAREL GROUP, LTD. AND SUBSIDIARIES

 

(NASDAQGSM:GIII)

CONSOLIDATED STATEMENTS OF OPERATIONS AND

SELECTED BALANCE SHEET DATA

 

(In thousands, except per share amounts)

(Unaudited)

 

Three Months Ended

July 31,

   

Six Months Ended

July 31,

2012

2011

2012

2011

 
Net sales $ 251,479 $ 229,975 $ 480,928 $ 426,846
Cost of sales   176,636         164,404       337,395         301,820
Gross profit 74,843 65,571 143,533 125,026
Selling, general and administrative expenses

69,454

59,826

136,068

117,751

Depreciation and amortization   2,100         1,852       4,153         3,376
Operating profit 3,289 3,893 3,312 3,899
Equity loss in joint venture 146 376 433 475
Interest and financing charges, net   1,034         952       2,138         1,711
Income before taxes 2,109 2,565 741 1,713
Income tax expense   802         1,000       282         668
Net income 1,307 1,565 459 1,045
Add: Loss attributable to noncontrolling interest   (55 )       -       (55 )       -
Income attributable to G-III $ 1,362       $ 1,565     $ 514       $ 1,045
 
Net income per common share:
Basic $ 0.07       $ 0.08     $ 0.03       $ 0.05
Diluted $ 0.07       $ 0.08     $ 0.03       $ 0.05
Weighted average shares outstanding:
Basic 19,995 19,848 19,928 19,784
Diluted 20,331 20,253 20,334 20,221
 
   
Selected Balance Sheet Data (in thousands): At July 31,

2012

   

2011

Cash $ 22,653 $ 8,566
Working Capital 297,144 240,431
Inventory 336,389 322,387
Total Assets 662,343 618,395
Short-term Revolving Debt 87,007 141,974
Total Stockholders' Equity 364,172 309,679
 

       

G-III APPAREL GROUP, LTD. AND SUBSIDIARIES

RECONCILIATION OF ACTUAL AND FORECASTED GAAP NET INCOME PER SHARE TO

ACTUAL AND FORECASTED NON-GAAP NET INCOME PER SHARE

(Unaudited)

 

 

Three Months Ended

July 31,

    Six Months Ended

July 31,

 

2012

   

2011

2012

   

2011

GAAP diluted net income per common share

$ 0.07 $ 0.08 $ 0.03 $ 0.05

Excluded from Non-GAAP:

Expenses associated with Vilebrequin acquisition, net of taxes

 

0.06

     

-

     

0.06

     

-

Non-GAAP diluted net income per common share

$

0.13

   

$

0.08

   

$

0.09

   

$

0.05

 

         
Forecasted Twelve Months Actual Twelve Months
Ending January 31, 2013       Ended January 31, 2012
 

GAAP diluted net income per common share

$2.68 - $2.78 $ 2.46

Excluded from Non-GAAP:

Expenses associated with Vilebrequin acquisition, net of taxes

0.06

     

-

Non-GAAP diluted net income per common share

$2.74 - $2.84

     

$ 2.46

 

Non-GAAP diluted net income per share is a “non-GAAP financial measure” that excludes the expenses associated with the acquisition of Vilebrequin. The non-GAAP information in the tables above reflects an adjustment for expenses associated with the Vilebrequin acquisition that were incurred through July 31, 2012, but does not reflect expenses and integration costs that may be incurred in the second half of the fiscal year. Management believes that this non-GAAP financial measure provides meaningful supplemental information regarding our performance by excluding discrete expenses and integration costs associated with the acquisition of Vilebrequin that are not indicative of our core business operating results. Management uses this non-GAAP financial measure to assess our performance on a comparative basis and believes that it is also useful to investors to enable them to assess our performance on a comparative basis across historical periods and facilitate comparisons of our operating results to those of our competitors. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

       

G-III APPAREL GROUP, LTD. AND SUBSIDIARIES

RECONCILIATION OF FORECASTED AND ACTUAL NET INCOME TO FORECASTED

AND ACTUAL ADJUSTED EBITDA

(In thousands)

(Unaudited)

 
Forecasted Actual
Twelve Months Ending Twelve Months Ended

January 31, 2013

January 31, 2012

Net income $55,200 - $57,200 $ 49,620
Expenses associated with Vilebrequin acquisition 1,800 -
Depreciation and amortization 9,700 7,473
Interest and financing charges, net 7,700 5,713
Income tax expense 33,800 - 35,100     29,620
Adjusted EBITDA, as defined $108,200 - $111,500     $ 92,426
 

Adjusted EBITDA is a “non-GAAP financial measure” which represents earnings before depreciation and amortization, interest and financing charges, net, and income tax expense and excludes expenses related to the acquisition of Vilebrequin. The non-GAAP information in the table above reflects an adjustment for expenses associated with the Vilebrequin acquisition that were incurred through July 31, 2012, but does not reflect expenses and integration costs that may be incurred in the second half of the fiscal year. Adjusted EBITDA is being presented as a supplemental disclosure because management believes that it is a common measure of operating performance in the apparel industry. Adjusted EBITDA should not be construed as an alternative to net income as an indicator of the Company’s operating performance, or as an alternative to cash flows from operating activities as a measure of the Company’s liquidity, as determined in accordance with generally accepted accounting principles.

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