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

About G-III Apparel Group, Ltd.

G-III is a leading manufacturer and distributor of outerwear, dresses, sportswear, swimwear, beachwear and women's suits, as well as handbags and luggage, under licensed brands, our own brands and private label brands. G-III sells swimwear, accessories and resort wear under our own Vilebrequin brand. G-III also sells outerwear and dresses under our own Andrew Marc, Marc New York and Marc Moto brands and has licensed these brands to select third parties in certain product categories. G-III has fashion licenses under the Calvin Klein, Sean John, Kenneth Cole, Cole Haan, Guess?, Jones New York, Jessica Simpson, Vince Camuto, Nine West, Ellen Tracy, Tommy Hilfiger, Kensie, Mac & Jac, Levi's and Dockers brands and sports licenses with the National Football League, National Basketball Association, Major League Baseball, National Hockey League, Touch by Alyssa Milano and more than 100 U.S. colleges and universities. Our other owned brands include Jessica Howard, Eliza J, Black Rivet, G-III, G-III Sports by Carl Banks and Winlit. G-III also operates retail stores under the Wilsons Leather, Vilebrequin, Calvin Klein Performance and Andrew Marc names.

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 (NASDAQGS:GIII) CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share amounts)(Unaudited)
 

 

 

   

Three Months Ended October 31,

   

Nine Months Ended October 31,

 

2012

 

2011

2012

 

2011

 
 
Net sales $ 543,513 $ 510,009 $ 1,024,441 $ 936,855
Cost of sales   353,306   347,734   690,702   649,554
Gross profit 190,207 162,275 333,739 287,301
Selling general and administrative
expenses 106,287 86,958 242,355 204,708
Depreciation and amortization  

2,811

  1,875   6,964   5,251
Operating profit 81,109 73,442 84,420 77,342
Equity loss in joint venture 273 337 706 812
Interest and financing charges, net   3,073   2,297   5,211   4,009
Income before taxes 77,763 70,808 78,503 72,521
Income tax expense   29,550   27,253   29,831   27,921
Net income 48,213 43,555 48,672 44,600

Add: Loss attributable to noncontrolling interest

  78   -   133   -
Income attributable to G-III $ 48,291 $ 43,555 $ 48,805 $ 44,600
Net income per common share:

Basic

$ 2.41 $ 2.19 $ 2.44 $ 2.25
Diluted $ 2.37 $ 2.16 $ 2.40 $ 2.21
Weighted average shares outstanding:
Basic 20,053 19,845 19,971 19,804
Diluted 20,401 20,172 20,309 20,209
 
 
Selected Balance Sheet Data (in thousands):

At October 31,

2012

2011

Cash $ 39,646 $ 16,083

Working Capital

274,171 280,373
Inventory 307,477 273,161
Total Assets 934,881 760,979

Short-term Revolving Debt

265,092 245,058
Long-term Debt 18,633 -
Total Stockholders' Equity 419,000 351,922
 
 
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 EndedOctober 31,

 

Nine Months EndedOctober 31,

2012

2011

2012

2011

GAAP diluted net income per common share

$

2.37

$

2.16

$

2.40

$

2.21

Excluded from Non-GAAP:
Expenses associated with Vilebrequin acquisition, net of taxes   0.06

 

  -     0.11     -
Non-GAAP diluted net income per common share $ 2.43

 

$ 2.16   $ 2.51   $ 2.21
 

 

Forecasted Twelve MonthsEnding January 31, 2013

 

Actual Twelve Months EndedJanuary 31, 2012

 
GAAP diluted net income per common share $2.71 - $2.81

$    2.46

Excluded from Non-GAAP:

Expenses associated with Vilebrequin acquisition, net of taxes

0.11  

-

Non-GAAP diluted net income per common share $2.82 - $2.92  

$    2.46

Non-GAAP diluted net income per share is a “non-GAAP financial measure” that excludes the expenses and integration costs associated with the acquisition of Vilebrequin. The non-GAAP information in the tables above reflects an adjustment for expenses and integration costs associated with the Vilebrequin acquisition that were incurred through October 31, 2012, but does not reflect expenses and integration costs that may be incurred in the fourth quarter 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)

 

 

     

ForecastedTwelve Months Ending January 31, 2013

 

ActualTwelve Months Ended January 31, 2012

Net income $55,500 - $57,600 $49,620
Expenses associated with Vilebrequin acquisition 3,700 -
Depreciation and amortization 10,100 7,473
Interest and financing charges, net 7,500 5,713
Income tax expense 34,000 – 35,300   29,620
Adjusted EBITDA, as defined $110,800 - $114,200   $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 and integration costs related to the acquisition of Vilebrequin. The non-GAAP information in the table above reflects an adjustment for expenses and integration costs associated with the Vilebrequin acquisition that were incurred through October 31, 2012, but does not reflect expenses and integration costs that may be incurred in the fourth quarter 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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