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Michael Kors Holdings Limited Announces First Quarter Fiscal 2014 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 10-K for the fiscal year ended March 30, 2013 (File No. 001-35368), filed on May 29, 2013 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 29, June 30,
2013 2012
Net sales $ 616,248 $ 397,370
Licensing revenue   24,611     17,495  
Total revenue 640,859 414,865
Cost of goods sold   243,588     163,865  
Gross profit 397,271 251,000
Total operating expenses   199,709     139,057  
Income from operations 197,562 111,943
Interest expense, net 170 435
Foreign currency loss (gain)   258     (375 )
Income before provision for income taxes 197,134 111,883
Provision for income taxes   72,138     43,238  
Net income $ 124,996   $ 68,645  
 
Weighted average ordinary shares outstanding:
Basic 201,208,189 192,790,454
Diluted 204,336,124 199,391,127
 
Net income per ordinary share:
Basic $ 0.62 $ 0.36
Diluted $ 0.61 $ 0.34
 
Statements of Comprehensive Income:
Net income $ 124,996 $ 68,645
Foreign currency translation adjustments (1,358 ) (3,278 )

Net realized and unrealized loss on derivatives

  (621 )   -  
Comprehensive Income $ 123,017   $ 65,367  
           
 
SCHEDULE 2
MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
 
June 29, March 30, June 30,
Assets 2013 2013 2012
Current assets
Cash and cash equivalents $ 639,156 $ 472,511 $ 162,075
Receivables, net 170,391 206,454 104,700
Inventories 319,459 266,894 246,601
Deferred tax assets 8,683 8,480 15,518
Prepaid expenses and other current assets   36,523     34,850     40,298  
Total current assets 1,174,212 989,189 569,192
Property and equipment, net 258,021 242,113 180,317
Intangible assets, net 26,541 20,980 13,684
Goodwill 14,005 14,005 14,005
Deferred tax assets 5,191 4,389 3,942
Other assets   18,875     18,889     6,780  
Total assets $ 1,496,845   $ 1,289,565   $ 787,920  
 
Liabilities and Shareholders' Equity
Current liabilities
Revolving line of credit $ - $ - $ 27,667
Accounts payable 104,647 82,977 82,464
Accrued payroll and payroll related expenses 20,822 38,642 17,270
Accrued income taxes 33,244 9,074 40,342
Accrued expenses and other current liabilities   50,427     33,555     28,505  
Total current liabilities 209,140 164,248 196,248
Deferred rent 60,756 56,986 46,137
Deferred tax liabilities 15,288 13,163 6,816
Other long-term liabilities   11,145     7,922     3,069  
Total liabilities 296,329 242,319 252,270
Commitments and contingencies
Shareholders' equity

Ordinary shares, no par value; 650,000,000 shares authorized, and 202,811,756 shares issued and outstanding at June 29, 2013, 201,454,408 shares issued and outstanding at March 30, 2013 and 193,226,091 shares issued and outstanding at June 30, 2012

- - -
Additional paid-in capital 454,707 424,454 242,367
Accumulated other comprehensive loss (5,440 ) (3,461 ) (4,013 )
Retained earnings   751,249     626,253     297,296  
Total shareholders' equity   1,200,516     1,047,246     535,650  
Total liabilities and shareholders' equity $ 1,496,845   $ 1,289,565   $ 787,920  
                   
 
SCHEDULE 3
 
MICHAEL KORS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED SEGMENT DATA
(In thousands)
(Unaudited)
 
Three Months Ended
June 29, June 30,
2013 2012
Revenue by Region:
North America (U.S. and Canada) $ 551,554 $ 377,149
Europe 81,479 33,387
Other Regions 7,826 4,329
Total Revenue: $ 640,859 $ 414,865
 
Revenue by Segment:

Net sales:  Retail

$ 325,672 $ 215,004

   Wholesale

290,576 182,366
Licensing 24,611 17,495
Total Revenue: $ 640,859 $ 414,865
 
Income from Operations:
Retail $ 103,114 $ 59,879
Wholesale 81,046 40,718
Licensing 13,402 11,346
Total Income from Operations $ 197,562 $ 111,943




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