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Perry Ellis International Reports Fourth Quarter & Full Fiscal 2013 Results

About Perry Ellis International

Perry Ellis International, Inc. is a leading designer, distributor and licensor of a broad line of high quality men's and women's apparel, accessories and fragrances, as well as select children's apparel. The Company's collection of dress and casual shirts, golf sportswear, sweaters, dress pants, casual pants and shorts, jeans wear, active wear, dresses and men's and women's swimwear is available through all major levels of retail distribution. The Company, through its wholly owned subsidiaries, owns a portfolio of nationally and internationally recognized brands, including: Perry Ellis®, Jantzen®, Laundry by Shelli Segal®, C&C California®, Rafaella®, Cubavera®, Ben Hogan®, Centro®, Solero®, Munsingwear®, Savane®, Original Penguin® by Munsingwear®, Grand Slam®, Natural Issue®, Pro Player®, the Havanera Co.®, Axis®, Gotcha®, Girl Star®, MCD®, John Henry®, Mondo di Marco®, Redsand®, Manhattan®, Axist®, Farah®, Anchor Blue®, Miller's Outpost®, Tahoe River Outfitters®, Original Khaki Company® and Techworks®. The Company enhances its roster of brands by licensing trademarks from third parties, including: Nike® and Jag® for swimwear, and Callaway®, PGA TOUR® and Champions Tour® for golf apparel. Additional information on the Company is available at http://www.pery.com .

Safe Harbor Statement

We caution readers that the forward-looking statements (statements which are not historical facts) in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations rather than historical facts and they are indicated by words or phrases such as "anticipate," "believe," "budget," "contemplate," "continue," "could," "estimate," "expect," "guidance," "indicate," "intend," "may," "might," "plan," "possibly," "potential," "predict," "probably," "proforma," "project," "seek," "should," "target," or "will" and similar words or phrases or comparable terminology. We have based such forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, many of which are beyond our control. These factors include: general economic conditions, a significant decrease in business from or loss of any of our major customers or programs, anticipated and unanticipated trends and conditions in our industry, including the impact of recent or future retail and wholesale consolidation, recent and future economic conditions, including turmoil in the financial and credit markets, the effectiveness of our planned advertising, marketing and promotional campaigns, our ability to contain costs, disruptions in the supply chain, our future capital needs and our ability to obtain financing, our ability to protect our trademarks, our ability to integrate acquired businesses, trademarks, trade names and licenses, our ability to predict consumer preferences and changes in fashion trends and consumer acceptance of both new designs and newly introduced products, the termination or non-renewal of any material license agreements to which we are a party, changes in the costs of raw materials, labor and advertising, our ability to carry out growth strategies including expansion in international and direct to consumer retail markets, the level of consumer spending for apparel and other merchandise, our ability to compete, exposure to foreign currency risk and interest rate risk, possible disruption in commercial activities due to terrorist activity and armed conflict, and other factors set forth in Perry Ellis International's filings with the Securities and Exchange Commission. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those risks and uncertainties detailed in Perry Ellis' filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which are valid only as of the date they were made. We undertake no obligation to update or revise any forward-looking statements to reflect new information or the occurrence of unanticipated events or otherwise.

 
PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA (UNAUDITED)
(amounts in 000's, except per share information)
         
INCOME STATEMENT DATA:        
  Three Months Ended  Years Ended
  February 2, 2013 January 28, 2012 February 2, 2013 January 28, 2012
         
Revenues        
Net sales  $ 251,015  $ 222,062  $ 942,451  $ 955,549
Royalty income  7,330  7,386  27,102  25,043
Total revenues  258,345  229,448  969,553  980,592
Cost of sales  174,004  157,394  652,352  656,850
Gross profit  84,341  72,054  317,201  323,742
Operating expenses        
Selling, general and administrative expenses  67,010  55,517  263,444  248,618
Depreciation and amortization  3,582  3,691  13,896  13,673
Impairment on long-lived assets  3,516  6,066  3,516  6,066
Total operating expenses  74,108  65,274  280,856  268,357
Operating income   10,233  6,780  36,345  55,385
Costs on early extinguishment of debt  --   --   --   1,306
Interest expense  3,825  3,800  14,836  16,103
         
Net income before income taxes  6,408  2,980  21,509  37,976
Income tax provision  2,021  1,197  6,708  12,459
Net income  4,387  1,783  14,801  25,517
         
Net income, per share         
Basic  $ 0.30  $ 0.12  $ 1.01  $ 1.71
Diluted  $ 0.28  $ 0.12  $ 0.97  $ 1.60
         
Weighted average number of shares outstanding        
Basic  14,842  14,680  14,715  14,927
Diluted  15,426  15,408  15,315  15,950
 
 
PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA (UNAUDITED)
(amounts in 000's)
     
BALANCE SHEET DATA:    
  As of 
  February 2, 2013 January 28, 2012
     
Assets    
Current assets:    
Cash and cash equivalents  $ 54,957  $ 24,116
Accounts receivable, net  174,484  145,563
Inventories  183,127  198,264
Other current assets  30,536  33,733
Total current assets  443,104  401,676
     
Property and equipment, net  50,749  56,496
Intangible assets, net  246,681  242,634
Goodwill  13,794  13,794
Other assets  8,801  9,595
     
Total assets  $ 763,129  $ 724,195
     
Liabilities and stockholders' equity    
Current liabilities:    
Accounts payable  $ 132,028  $ 80,253
Accrued expenses and other liabilities  28,595  23,142
Accrued interest payable  4,061  4,186
Unearned revenues  4,647  4,179
Total current liabilities  169,331  111,760
     
     
Long term liabilities:    
Senior subordinated notes payable, net  150,000  150,000
Senior credit facility  --   21,679
Real estate mortgages  24,202  25,114
Deferred pension obligation  14,686  17,326
Unearned revenues and other long-term liabilities  33,670  31,821
Total long-term liabilities  222,558  245,940
     
Total liabilities  391,889  357,700
     
Equity    
Total equity  371,240  366,495
     
Total liabilities and equity  $ 763,129  $ 724,195
 
 
PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES
Table 1
Reconciliation of the three and twelve months ended February 2, 2013 and January 28, 2012 net income and earnings per share to adjusted net income and adjusted earnings per share.
(UNAUDITED)
(amounts in 000's, except per share information)
         
  Three Months Ended  Years Ended
  February 2, 2013 January 28, 2012 February 2, 2013 January 28, 2012
Net income   $ 4,387  $ 1,783  $ 14,801  $ 25,517
Plus:        
Impairment on long-lived assets  3,516  6,066  3,516  6,066
Costs on exited brands  431  --   2,676  -- 
Costs of streamlining and consolidation of operations, and other strategic initiatives  944  --   3,341  -- 
Costs of voluntary retirement  --   --   2,420  -- 
Costs on early extinguishment of debt  --   --   --   1,306
Duplicate interest from March 8 to April 6, 2011  --   --   --   745
Less:        
Gain on asset sales  --   --   (410)  -- 
Tax benefit   (1,574)  (1,965)  (4,118)  (2,748)
Net income, as adjusted  $ 7,704  $ 5,884  $ 22,226  $ 30,886
         
         
         
  Three Months Ended  Years Ended
  February 2, 2013 January 28, 2012 February 2, 2013 January 28, 2012
Net income per share, diluted  $ 0.28  $ 0.12  $ 0.97  $ 1.60
Net per share impairment on long-lived assets  0.16  0.26  0.16  0.26
Net per share costs on exited brands  0.02  --   0.11  -- 
Net per share costs of streamlining and consolidation of operations, and other strategic initiatives  0.04  --   0.13  -- 
Net per share costs of voluntary retirement  --   --   0.10  -- 
Net per share costs on early extinguishment of debt  --   --   --   0.05
Net per share duplicate interest from March 8 to April 6, 2011  --   --   --   0.03
Net per share gain on asset sales  --   --   (0.02)  -- 
Adjusted net income per share, diluted  $ 0.50  $ 0.38  $ 1.45  $ 1.94
         
"Adjusted net income per share, diluted" consists of "net income per share, diluted" adjusted for the impact of impairment on long-lived assets, the costs on exited brands, costs of streamlining and consolidation of operations, and other strategic initiatives, costs of voluntary retirement, early extinguishment of debt, duplicate interest from March 8, 2011 to April 6, 2011, the time during which the retired debt and the new debt were simultaneously outstanding, and gain on asset sales. These costs and gain are not indicative of our core operations and thus to get a more comparable result with the operating performance of the apparel industry, they have been removed, net of taxes, from the calculation.
 
 
PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES
Table 2
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA(1) 
(UNAUDITED)
(amounts in 000's)
         
  Three Months Ended  Years Ended
  February 2, 2013 January 28, 2012 February 2, 2013 January 28, 2012
         
Net income  $ 4,387  $ 1,783  $ 14,801  $ 25,517
Plus:        
Depreciation and amortization  3,582  3,691  13,896  13,673
Interest expense  3,825  3,800  14,836  16,103
Costs on early extinguishment of debt  --   --   --   1,306
Income tax provision  2,021  1,197  6,708  12,459
EBITDA  13,815  10,471  50,241  69,058
         
Impairment on long-lived assets  3,516  6,066  3,516  6,066
Costs on exited brands  431  --   2,676  -- 
Costs of streamlining and consolidation of operations, and other strategic initiatives  778  --   2,954  -- 
Costs of voluntary retirement  --   --   2,420  -- 
Gain on asset sales  --   --   (410)  -- 
         
EBITDA, as adjusted  $ 18,540  $ 16,537  $ 61,397  $ 75,124
         
         
Gross profit  $ 84,341  $ 72,054  $ 317,201  $ 323,742
Less:        
Selling, general and administrative expenses   (67,010)  (55,517)  (263,444)  (248,618)
Plus:        
Costs on exited brands  431  --   2,676  -- 
Costs of streamlining and consolidation of operations, and other strategic initiatives   778  --   2,954  -- 
Costs of voluntary retirement  --   --   2,420  -- 
Gain on asset sales  --   --   (410)  -- 
         
EBITDA, as adjusted  18,540  16,537  61,397  75,124
         
Total revenues  $ 258,345  $ 229,448  $ 969,553  $ 980,592
         
EBITDA margin percentage of revenues 7.2% 7.2% 6.3% 7.7%
         
(1) Adjusted EBITDA consists of earnings before interest, taxes, depreciation, amortization, impairment on long-lived assets, costs on early extinguishment of debt, costs on exited brands, costs of streamlining and consolidation of operations, and other strategic initiatives, as well as, costs associated with voluntary retirements and the gain on sale of assets. Adjusted EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States of America, and does not represent cash flow from operations. Adjusted EBITDA is presented solely as a supplemental disclosure because management believes that it is a common measure of operating performance in the apparel industry. In addition, we present Adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across periods on a consistent basis by excluding items that we do not believe are indicators of our core operating performance.
CONTACT: Perry Ellis International, Inc.
         Anita Britt, CFO
         305-592-2830

Perry Ellis International, Inc. logo

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