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PVH Corp. Reports 2012 Third Quarter Results

(1) Please see Note A in the Notes to Consolidated GAAP Income Statements for reconciliations of diluted net income per common share.

PVH CORP. Non-GAAP Measures (In thousands, except per share data)

The Company believes presenting its results excluding (i) the costs incurred in 2012 and 2011 in connection with its integration of Tommy Hilfiger and the related restructuring; (ii) the costs incurred in 2012 in connection with its pending acquisition of Warnaco, which is expected to close in early 2013; (iii) the expense incurred in 2011 associated with settling the unfavorable preexisting license agreement in connection with its buyout of the perpetual license for Tommy Hilfiger in India; (iv) the costs incurred in 2011 in connection with the modification of its credit facility; (v) the costs incurred in 2011 in connection with the negotiated early termination of its license to market sportswear under the Timberland brand; (vi) the tax effects associated with these costs; and (vii) the tax benefit in 2012 resulting from previously unrecognized tax credits, which are on a non-GAAP basis for each year, provides useful additional information to investors. The Company believes that the exclusion of such amounts facilitates comparing current results against past and future results by eliminating amounts that it believes are not comparable between periods, thereby permitting management to evaluate performance and investors to make decisions based on the ongoing operations of the Company. The Company believes that investors often look at ongoing operations of an enterprise as a measure of assessing performance. The Company uses its results excluding these amounts to evaluate its operating performance and to discuss its business with investment institutions, the Company’s Board of Directors and others. The Company’s results excluding the costs described above in (i) through (vi) are also the basis for certain incentive compensation calculations.

The following table presents the Company’s GAAP revenue and the non-GAAP measures that are discussed in this release. Please see Tables 1 through 5 for reconciliations of the GAAP amounts to non-GAAP amounts.

             
Quarter Ended Nine Months Ended
10/28/12 10/30/11 10/28/12 10/30/11
 
GAAP total revenue $ 1,642,770 $ 1,654,160 $ 4,406,799 $ 4,357,788
 
Non-GAAP Measures
Total gross profit (1) $ 832,389 $ 2,287,253
Selling, general and administrative expenses (2) $ 621,881 605,928 $ 1,813,458 1,742,301
Earnings before interest and taxes (3) 250,396 227,317 560,159 545,808
Income tax expense (4) 48,643 57,557 113,317 143,676
Net income (5) 173,469 138,218 360,959 306,074
Diluted net income per common share (6) $ 2.34 $ 1.89 $ 4.90 $ 4.20
 

(1)

 

Please see Table 3 for reconciliation of GAAP to non-GAAP gross profit.

(2)

Please see Table 4 for reconciliation of GAAP to non-GAAP selling, general and administrative expenses (“SG&A”).

(3)

Please see Table 2 for reconciliation of GAAP to non-GAAP earnings before interest and taxes.

(4)

Please see Table 5 for reconciliation of GAAP to non-GAAP income tax expense and an explanation of the calculation of the tax effects associated with acquisition, integration, restructuring and debt modification costs.

(5)

Please see Table 1 for reconciliation of GAAP to non-GAAP net income.

(6)

Please see Note A in the Notes to Consolidated GAAP Income Statements for reconciliations of diluted net income per common share.

 
 

PVH CORP.

Reconciliations of GAAP to Non-GAAP Amounts

(In thousands, except per share data)

 

Table 1 - Reconciliation of GAAP net income to non-GAAP net income

               
Quarter Ended Nine Months Ended
10/28/12 10/30/11 10/28/12 10/30/11
 
Net income $ 165,409 $ 112,239 $ 346,225 $ 236,635
 
Diluted net income per common share (1) $ 2.24 $ 1.54 $ 4.70 $ 3.25
 
Items excluded:
 
Inventory liquidation costs associated with exit of certain Tommy Hilfiger product categories (gross margin) 3,421 5,574
 
SG&A expenses associated with buyout of perpetual license for Tommy Hilfiger in India 20,709 20,709
 
SG&A expenses associated with Tommy Hilfiger integration and related restructuring 6,561 5,843 14,418 45,375
 
SG&A expenses associated with negotiated termination of license to market Timberland sportswear 502 7,152
 
SG&A expenses associated with pending acquisition of Warnaco 6,412 6,412
 
Debt modification costs 16,233
 
Tax effect of the items above (2) (413 ) (4,496 ) (1,596 ) (25,604 )
 
Tax benefit resulting from previously unrecognized tax credits (4,500 )   (4,500 )  
 
Non-GAAP net income $ 173,469 $ 138,218 $ 360,959 $ 306,074
 
Non-GAAP diluted net income per common share (1) $ 2.34     $ 1.89     $ 4.90     $ 4.20  
 

(1)

 

Please see Note A in the Notes to the Consolidated GAAP Income Statements for reconciliations of diluted net income per common share.

(2)

Please see Table 5 for an explanation of the calculation of the tax effects of the above items.

 
 

Table 2 - Reconciliation of GAAP earnings before interest and taxes to non-GAAP earnings before interest and taxes

             
Quarter Ended Nine Months Ended
10/28/12 10/30/11 10/28/12 10/30/11
 
Earnings before interest and taxes $ 237,423 $ 196,842 $ 539,329 $ 450,765
 
Items excluded:
 
Inventory liquidation costs associated with exit of certain Tommy Hilfiger product categories (gross margin) 3,421 5,574
 
SG&A expenses associated with buyout of perpetual license for Tommy Hilfiger in India 20,709 20,709
 
SG&A expenses associated with Tommy Hilfiger integration and related restructuring 6,561 5,843 14,418 45,375
 
SG&A expenses associated with negotiated termination of license to market Timberland sportswear 502 7,152
 
SG&A expenses associated with pending acquisition of Warnaco 6,412 6,412
 
Debt modification costs       16,233
 
Non-GAAP earnings before interest and taxes $ 250,396   $ 227,317   $ 560,159   $ 545,808
   

Table 3 - Reconciliation of GAAP gross profit to non-GAAP gross profit

   

 

Quarter Ended

 

Nine Months Ended

10/30/11 10/30/11
 
Gross profit $ 828,968 $ 2,281,679
 
Items excluded:
 
Inventory liquidation costs associated with exit of certain Tommy Hilfiger product categories 3,421 5,574
 
Non-GAAP gross profit $ 832,389 $ 2,287,253
 
 

PVH CORP.

Reconciliations of GAAP to Non-GAAP Amounts (continued)

(In thousands)

 

Table 4 - Reconciliation of GAAP SG&A to non-GAAP SG&A

               
Quarter Ended Nine Months Ended
10/28/12 10/30/11 10/28/12 10/30/11
 
SG&A $ 634,854 $ 632,982 $ 1,834,288 $ 1,815,537
 
Items excluded:
 
SG&A expenses associated with buyout of perpetual license for Tommy Hilfiger in India (20,709 ) (20,709 )
 
SG&A expenses associated with Tommy Hilfiger integration and related restructuring (6,561 ) (5,843 ) (14,418 ) (45,375 )
 
SG&A expenses associated with negotiated termination of license to market Timberland sportswear (502 ) (7,152 )
 
SG&A expenses associated with pending acquisition of Warnaco (6,412 )   (6,412 )  
 
Non-GAAP SG&A $ 621,881   $ 605,928   $ 1,813,458   $ 1,742,301  
 
 

Table 5 - Reconciliation of GAAP income tax expense to non-GAAP income tax expense

                 
Quarter Ended Nine Months Ended
10/28/12 10/30/11 10/28/12 10/30/11
 
Income tax expense $ 43,730 $ 53,061 $ 107,221 $ 118,072
 
Items excluded:
 
Income tax effect of acquisition, integration, restructuring and debt modification costs (1) 413 4,496 1,596 25,604
 
Tax benefit resulting from previously unrecognized tax credits 4,500     4,500    
 
Non-GAAP income tax expense $ 48,643   $ 57,557   $ 113,317     $ 143,676
 

(1)

 

The estimated tax effects of the Company’s acquisition, integration, restructuring and debt modification costs are based on the Company’s assessment of deductibility. In making this assessment, the Company evaluated each item that it has recorded as an acquisition, integration, restructuring and debt modification cost to determine if such cost is tax deductible, and if so, in what jurisdiction the deduction would occur. All of the Company’s acquisition, integration, restructuring and debt modification costs were identified as either primarily tax deductible in the United States, in which case the Company assumed a combined federal and state tax rate of 38.0%, or as non-deductible, in which case the Company assumed no tax benefit.

 
       

PVH CORP.

Notes to Consolidated GAAP Income Statements

(In thousands, except per share data)

 

A. The Company computed its diluted net income per common share as follows:

 
Quarter Ended Quarter Ended
10/28/12 10/30/11
GAAP         Non-GAAP GAAP         Non-GAAP
Results Adjustments Results Results Adjustments Results
 
Net income $ 165,409 $ (8,060 ) (1) $ 173,469 $ 112,239 $ (25,979 ) (2) $ 138,218
 
Weighted average common shares 70,586 70,586 67,225 67,225
Weighted average dilutive securities 1,304 1,304 1,549 1,549
Weighted average impact of assumed convertible preferred stock conversion 2,095 2,095 4,189 4,189
Total shares 73,985 73,985 72,963 72,963
 
Diluted net income per common share $ 2.24 $ 2.34 $ 1.54 $ 1.89
 
     
Nine Months Ended Nine Months Ended
10/28/12 10/30/11
GAAP         Non-GAAP GAAP         Non-GAAP
Results Adjustments Results Results Adjustments Results
 
Net income $ 346,225 $ (14,734 ) (1) $ 360,959 $ 236,635 $ (69,439 ) (2) $ 306,074
 
Weighted average common shares 69,843 69,843 67,051 67,051
Weighted average dilutive securities 1,332 1,332 1,568 1,568
Weighted average impact of assumed convertible preferred stock conversion 2,555 2,555 4,189 4,189
Total shares 73,730 73,730 72,808 72,808
 
Diluted net income per common share $ 4.70 $ 4.90 $ 3.25 $ 4.20
 

(1)

 

Represents the impact on net income in the period ended October 28, 2012 from the elimination of (i) the costs incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring; (ii) the costs incurred in connection with the Company’s pending acquisition of Warnaco, which is expected to close in early 2013; (iii) the tax effects associated with these costs; and (iv) the tax benefit resulting from previously unrecognized tax credits. Please see Table 1 for a reconciliation of GAAP net income to non-GAAP net income.

(2)

Represents the impact on net income in the period ended October 30, 2011 from the elimination of (i) the costs incurred in connection with the Company’s integration of Tommy Hilfiger and related restructuring; (ii) the costs incurred in connection with the Company’s modification of its credit facility; (iii) the costs incurred in connection with the Company’s negotiated early termination of its license to market sportswear under the Timberland brand; (iv) the expense incurred associated with settling the unfavorable preexisting license agreement in connection with its buyout of the perpetual license for Tommy Hilfiger in India; and (v) the tax effects associated with these costs. Please see Table 1 for a reconciliation of GAAP net income to non-GAAP net income.

 
       

PVH CORP.

Consolidated Balance Sheets

(In thousands)

 
October 28, October 30,
2012 2011
ASSETS
Current Assets:
Cash and Cash Equivalents $ 276,630 $ 159,981
Receivables 607,465 621,593
Inventories 855,359 841,928
Other Current Assets 172,665   168,988
Total Current Assets 1,912,119 1,792,490
Property, Plant and Equipment 519,863 436,286
Goodwill and Other Intangible Assets 4,383,520 4,519,889
Other Assets 170,469   173,514
$ 6,985,971   $ 6,922,179
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts Payable and Accrued Expenses $ 913,452 $ 921,531
Short-Term Borrowings 142,514 12,820
Current Portion of Long-Term Debt 84,000 61,111
Other Liabilities 1,151,785 1,121,379
Long-Term Debt 1,647,596 2,030,445
Stockholders’ Equity 3,046,624   2,774,893
$ 6,985,971   $ 6,922,179
 
       
PVH CORP.
Segment Data
(In thousands)
 

REVENUE BY SEGMENT

Quarter Ended Quarter Ended
10/28/12 10/30/11

Heritage Brand Wholesale Dress Furnishings

Net sales $ 155,436 $ 163,173
Royalty revenue 1,314 1,681
Advertising and other revenue 620 496
Total 157,370 165,350
 

Heritage Brand Wholesale Sportswear

Net sales 157,761 187,344
Royalty revenue 2,470 2,498
Advertising and other revenue 778 408
Total 161,009 190,250
 

Heritage Brand Retail

Net sales 169,407 169,269
Royalty revenue 1,285 1,268
Advertising and other revenue 438 143
Total 171,130 170,680
             

Total Heritage Brands

Net sales 482,604 519,786
Royalty revenue 5,069 5,447
Advertising and other revenue 1,836 1,047
Total     489,509     526,280
 

Other (Calvin Klein Apparel)

Net sales 196,746 174,632
Total 196,746 174,632
 

Calvin Klein Licensing

Net sales 12,104 16,339
Royalty revenue 78,888 80,052
Advertising and other revenue 31,909 30,216
Total 122,901 126,607
             

Total Calvin Klein

Net sales 208,850 190,971
Royalty revenue 78,888 80,052
Advertising and other revenue 31,909 30,216
Total     319,647     301,239
 

Tommy Hilfiger North America

Net sales 376,267 350,281
Royalty revenue 6,553 5,537
Advertising and other revenue 2,429 2,002
Total 385,249 357,820
 

Tommy Hilfiger International

Net sales 433,721 456,456
Royalty revenue 13,434 11,505
Advertising and other revenue 1,210 860
Total 448,365 468,821
             

Total Tommy Hilfiger

Net sales 809,988 806,737
Royalty revenue 19,987 17,042
Advertising and other revenue 3,639   2,862
Total     833,614     826,641
 

Total Revenue

Net sales 1,501,442 1,517,494
Royalty revenue 103,944 102,541
Advertising and other revenue 37,384   34,125
Total $ 1,642,770   $ 1,654,160
 
                       
PVH CORP.
Segment Data (continued)
(In thousands)
 

EARNINGS BEFORE INTEREST AND TAXES BY SEGMENT

 
Quarter Ended Quarter Ended
10/28/12   10/30/11
Results Results  
Under Non-GAAP Under Non-GAAP
GAAP Adjustments (1) Results GAAP (3) Adjustments (2) Results (3)
 
Heritage Brand Wholesale Dress Furnishings $ 27,162 $ 27,162 $ 26,026 $ 26,026
 
Heritage Brand Wholesale Sportswear 15,807 15,807 11,033 $ (502 ) 11,535
 
Heritage Brand Retail 4,409       4,409   8,535       8,535  
                                             
Total Heritage Brands     47,378               47,378         45,594       (502 )     46,096  
 
Other (Calvin Klein Apparel) 30,073 30,073 26,898 26,898
 
Calvin Klein Licensing 62,350       62,350   59,271       59,271  
                                             
Total Calvin Klein     92,423               92,423         86,169             86,169  
 
Tommy Hilfiger North America 66,174 66,174 41,752 (3,421 ) 45,173
 
Tommy Hilfiger International 62,583   $ (6,301 ) 68,884   48,820     (22,209 ) 71,029  
                                             
Total Tommy Hilfiger     128,757         (6,301 )     135,058         90,572       (25,630 )     116,202  
 
Corporate (31,135 )   (6,672 ) (24,463 ) (25,493 )   (4,343 ) (21,150 )
 
Total earnings before interest and taxes $ 237,423   $ (12,973 ) $ 250,396   $ 196,842   $ (30,475 ) $ 227,317  
 

(1)

 

Adjustments for the quarter ended October 28, 2012 represent the elimination of the costs incurred in connection with the Company’s (i) integration of Tommy Hilfiger and the related restructuring; and (ii) pending acquisition of Warnaco, which is expected to close in early 2013.

 

(2)

Adjustments for the quarter ended October 30, 2011 represent the elimination of the costs incurred in connection with the Company’s (i) integration of Tommy Hilfiger and the related restructuring; (ii) settlement of the unfavorable preexisting license agreement in connection with the Company’s buyout of the perpetual license for Tommy Hilfiger in India; and (iii) negotiated early termination of its license to market sportswear under the Timberland brand.

 

(3)

In the fourth quarter of 2011, the Company changed the way actuarial gains and losses from its defined benefit pension plans are allocated to its reportable segments. Actuarial gains and losses are now included as part of corporate expenses and are not allocated to any reportable segment. Prior periods have been restated in order to present that information on a basis consistent with the current year.

 
       
PVH CORP.
Segment Data (continued)
(In thousands)
 

REVENUE BY SEGMENT

Nine Months Ended Nine Months Ended
10/28/12 10/30/11

Heritage Brand Wholesale Dress Furnishings

Net sales $ 380,889 $ 421,633
Royalty revenue 4,146 4,634
Advertising and other revenue 2,157 1,314
Total 387,192 427,581
 

Heritage Brand Wholesale Sportswear

Net sales 369,926 418,905
Royalty revenue 7,477 7,646
Advertising and other revenue 1,598 1,289
Total 379,001 427,840
 

Heritage Brand Retail

Net sales 477,062 476,158
Royalty revenue 3,717 3,805
Advertising and other revenue 945 661
Total 481,724 480,624
             

Total Heritage Brands

Net sales 1,227,877 1,316,696
Royalty revenue 15,340 16,085
Advertising and other revenue 4,700 3,264
Total     1,247,917     1,336,045
 

Other (Calvin Klein Apparel)

Net sales 513,912 469,974
Total 513,912 469,974
 

Calvin Klein Licensing

Net sales 29,327 31,774
Royalty revenue 203,607 202,491
Advertising and other revenue 86,151 82,546
Total 319,085 316,811
             

Total Calvin Klein

Net sales 543,239 501,748
Royalty revenue 203,607 202,491
Advertising and other revenue 86,151 82,546
Total     832,997     786,785
 

Tommy Hilfiger North America

Net sales 999,729 911,678
Royalty revenue 16,178 12,658
Advertising and other revenue 6,401 5,293
Total 1,022,308 929,629
 

Tommy Hilfiger International

Net sales 1,263,066 1,272,088
Royalty revenue 36,792 30,318
Advertising and other revenue 3,719 2,923
Total 1,303,577 1,305,329
             

Total Tommy Hilfiger

Net sales 2,262,795 2,183,766
Royalty revenue 52,970 42,976
Advertising and other revenue 10,120 8,216
Total     2,325,885     2,234,958
 

Total Revenue

Net sales 4,033,911 4,002,210
Royalty revenue 271,917 261,552
Advertising and other revenue 100,971 94,026
Total $ 4,406,799 $ 4,357,788
 
                         
PVH CORP.
Segment Data (continued)
(In thousands)
 

EARNINGS BEFORE INTEREST AND TAXES BY SEGMENT

 
Nine Months Ended Nine Months Ended
  10/28/12 10/30/11
Results Results
Under Non-GAAP Under Non-GAAP
GAAP Adjustments (1) Results GAAP (3) Adjustments (2) Results (3)
 
Heritage Brand Wholesale Dress Furnishings $ 45,718 $ 45,718 $ 60,961 $ 60,961
 
Heritage Brand Wholesale Sportswear 31,380 31,380 20,100 $ (7,152 ) 27,252
 
Heritage Brand Retail 11,223       11,223   28,224     28,224  
                                             
Total Heritage Brands     88,321               88,321         109,285       (7,152 )       116,437  
 
Other (Calvin Klein Apparel) 62,584 62,584 69,955 69,955
 
Calvin Klein Licensing 148,408       148,408   137,862     137,862  
                                             
Total Calvin Klein     210,992               210,992         207,817             207,817  
 
Tommy Hilfiger North America 147,801 $ (379 ) 148,180 60,967 (33,563 ) 94,530
 
Tommy Hilfiger International 177,176     (9,798 ) 186,974   165,475   (22,657 )   188,132  
                                             
Total Tommy Hilfiger     324,977         (10,177 )     335,154         226,442       (56,220 )       282,662  
 
Corporate (84,961 )   (10,653 ) (74,308 ) (92,779 ) (31,671 )   (61,108 )
 
Total earnings before interest and taxes $ 539,329   $ (20,830 ) $ 560,159   $ 450,765   $ (95,043 )   $ 545,808  
 

(1)

 

Adjustments for the period ended October 28, 2012 represent the elimination of the costs incurred in connection with the Company’s (i) integration of Tommy Hilfiger and the related restructuring; and (ii) pending acquisition of Warnaco, which is expected to close in early 2013.

 

(2)

Adjustments for the period ended October 30, 2011 represent the elimination of the costs incurred in connection with the Company’s (i) integration of Tommy Hilfiger and the related restructuring; (ii) settlement of the unfavorable preexisting license agreement in connection with the Company’s buyout of the perpetual license for Tommy Hilfiger in India; (iii) modification of its credit facility; and (iv) negotiated early termination of its license to market sportswear under the Timberland brand.

 

(3)

In the fourth quarter of 2011 the Company changed the way actuarial gains and losses from its defined benefit pension plans are allocated to its reportable segments. Actuarial gains and losses are now included as part of corporate expenses not allocated to any reportable segments. Prior periods have been restated in order to present that information on a basis consistent with the current year.

 

PVH CORP. Full Year and Fourth Quarter Reconciliations of GAAP to Non-GAAP Amounts

The Company is presenting its (1) 2012 estimated results excluding (a) the costs expected to be incurred in connection with its integration of Tommy Hilfiger and the related restructuring; (b) the costs expected to be incurred in connection with its pending acquisition of Warnaco, which is expected to close in early 2013; (c) the estimated tax effects associated with these costs; and (d) the tax benefit resulting from previously unrecognized tax credits, and (2) 2011 results excluding (a) the costs incurred in connection with its integration of Tommy Hilfiger and the related restructuring; (b) the costs incurred in connection with the negotiated early termination of its license to market sportswear under the Timberland brand and the 2012 exit from its Izod women’s wholesale sportswear business; (c) the expense associated with settling the unfavorable preexisting license agreement in connection with its buyout of the perpetual license for Tommy Hilfiger in India; (d) the costs incurred in connection with the modification of its credit facility; (e) the estimated tax effects associated with these costs; and (f) the tax benefit resulting from revaluing certain deferred tax liabilities in connection with a decrease in the statutory tax rate in Japan. Both the 2012 estimated results and 2011 results are on a non-GAAP basis. The Company believes presenting these results on a non-GAAP basis provides useful additional information to investors. The Company believes that the exclusion of the amounts identified facilitates comparing current results against past and future results by eliminating amounts that it believes are not comparable between periods, thereby permitting management to evaluate performance and investors to make decisions based on the ongoing operations of the Company. The Company believes that investors often look at ongoing operations of an enterprise as a measure of assessing performance. The Company has provided the reconciliations set forth below to present its estimates on a GAAP basis and excluding these amounts. The Company uses its results excluding these amounts to evaluate its operating performance and to discuss its business with investment institutions, the Company’s Board of Directors and others. The costs associated with the Company’s integration of Tommy Hilfiger and the related restructuring, the pending acquisition of Warnaco, the negotiated early termination of its Timberland license and the 2012 exit from the Izod women’s wholesale sportswear business, its buyout of the perpetual license for Tommy Hilfiger in India and the modification of its credit facility are also excluded from earnings per share calculations for purposes of incentive compensation awards. The estimated tax effects associated with the above costs are based on the Company’s assessment of deductibility. In making this assessment, the Company evaluated each item that it has recorded or expects to record as an acquisition, integration, restructuring or debt modification cost to determine if such cost is tax deductible, and if so, in what jurisdiction the deduction would occur. All items above were identified as either primarily tax deductible in the United States, in which case the Company assumed a combined federal and state tax rate of 38.0%, or as non-deductible, in which case the Company assumed no tax benefit.

       

(Dollar amounts in millions, except per share data)

 

2012 Net Income Per Common Share Reconciliations

Full Year

2012

(Estimated)

Fourth Quarter

2012

(Estimated)

 
GAAP net income per common share $5.84 - $5.85 $1.15 - $1.16
Estimated per common share impact of after tax acquisition, integration and restructuring costs $0.53 $0.33
Net income per common share excluding impact of acquisition, integration and restructuring costs $6.37 - $6.38 $1.48 - $1.49
 

The GAAP net income per common share amounts presented in the above table are being provided solely to comply with applicable SEC rules and are not, and should not be construed to be, guidance for the Company’s 2012 fiscal year. The Company’s net income per common share, as well as the amounts excluded in providing non-GAAP earnings guidance, would be expected to change as a result of acquisition, restructuring, divestment or similar transactions or activities or other one-time events, if any, that the Company engages in or suffers during the period. Other than the Company’s previously announced acquisition of Warnaco, the Company has no current understanding or agreement regarding any such transaction or definitive plans regarding any such activity.

       

PVH CORP.

Full Year and Fourth Quarter Reconciliations of GAAP to Non-GAAP Amounts (Continued)

 

Reconciliation of GAAP Diluted Net Income Per Common Share to Non-GAAP Diluted Net Income Per Common Share

 
Full Year 2011 Fourth Quarter 2011
(Actual) (Actual)
Results Under GAAP     Adjustments     Non-GAAP Results Results Under GAAP     Adjustments     Non-GAAP Results
 
Net income $ 317.9 $ (74.3 ) (1) $ 392.2 $ 81.2 $ (4.9 ) (2) $ 86.1
Total weighted average shares 72.9 72.9 73.3 73.3
 
Diluted net income per common share $ 4.36 $ 5.38 $ 1.11 $ 1.18
 

(1)

 

Represents the impact on net income in the year ended January 29, 2012 from the elimination of (i) the costs incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring; (ii) the costs incurred in connection with the Company’s negotiated early termination of its license to market sportswear under the Timberland brand and the 2012 exit from its Izod women’s wholesale sportswear business; (iii) the expense incurred associated with settling the unfavorable preexisting license agreement in connection with the Company’s buyout of the perpetual license for Tommy Hilfiger in India; (iv) the costs incurred in connection with the modification of the Company’s credit facility; (v) the estimated tax effects associated with these costs; and (vi) the tax benefit resulting from revaluing certain deferred tax liabilities in connection with a decrease in the statutory tax rate in Japan.

 

(2)

Represents the impact on net income in the quarter ended January 29, 2011 from the elimination of (i) the costs incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring; (ii) the costs incurred in connection with the Company’s negotiated early termination of its license to market sportswear under the Timberland brand and the 2012 exit from its Izod women’s wholesale sportswear business; (iii) the tax effects associated with these costs; and (iv) the tax benefit resulting from revaluing certain deferred tax liabilities in connection with a decrease in the statutory tax rate in Japan.





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