— Reports a Record Year of Net Sales,
Adjusted EBITDA, Net Income and Net Income Per Share—
— Net Sales for Fiscal 2019 Increased by
10%, Net Income per Diluted Share Increased 120%—
— Non-GAAP Net Income Per Diluted Share for
the Fiscal Year Increased 79%—
—Net Income Per Diluted Share for the Fourth
Quarter Increased to $0.48 vs. $(0.01) Last Year—
— Non-GAAP Net Income Per Diluted Share for
the Fourth Quarter Increased to $0.55 vs. $0.26 Last Year—
— Provides Fiscal 2020 Guidance —
G-III Apparel Group, Ltd. (NasdaqGS: GIII) today announced
operating results for the fourth quarter and full fiscal 2019 year
ended January 31, 2019 and provided financial guidance for the
first quarter and full fiscal 2020 year.
Net sales for the fiscal year ended January 31, 2019 increased
9.6% to $3.08 billion from $2.81 billion in the prior year. The
Company reported GAAP net income for the fiscal year ended January
31, 2019 of $138.1 million, or $2.75 per diluted share, compared to
$62.1 million, or $1.25 per diluted share, in the prior year.
Non-GAAP net income per diluted share was $2.86 for the fiscal
2019 year compared to $1.60 in the prior fiscal year. Non-GAAP net
income per diluted share excludes (i) non-cash imputed interest
expense related to the note issued to seller (the “Seller Note”) as
part of the consideration for the acquisition of Donna Karan
International (“DKI”) of $5.0 million in fiscal 2019 and $5.7
million in fiscal 2018, (ii) transitional expenses related to the
acquisition of DKI of $2.1 million in fiscal 2018, (iii) asset
impairments primarily related to leasehold improvements and
furniture and fixtures at certain of our retail stores of $2.8
million in fiscal 2019 and $7.9 million in fiscal 2018 and (iv)
income tax charges of $7.5 million related to the one-time effect
of the enactment of the Tax Cuts and Jobs Act in fiscal 2018. These
income tax charges primarily relate to a reduction of deferred tax
assets and taxes due on foreign earnings. The aggregate effect of
these exclusions was equal to $0.11 per diluted share in fiscal
2019 and $0.35 per diluted share in fiscal 2018.
For the fourth quarter ended January 31, 2019, net sales
increased by 7.3% to $766.8 million from $714.9 million in the
fourth quarter last year. The Company reported a fourth quarter
GAAP net income of $24.1 million, or $0.48 per diluted share,
compared to a net loss of $0.5 million, or $(0.01) per share, in
the fourth quarter last year.
Non-GAAP net income per diluted share was $0.55 for the fourth
quarter of fiscal 2019 compared to $0.26 per share in the fourth
quarter last year. Non-GAAP net income per diluted share excludes
(i) non-cash imputed interest expense related to the Seller Note of
$1.3 million in the fourth quarter of fiscal 2019 and $1.4 million
in the fourth quarter of fiscal 2018, (ii) transitional expenses
related to the acquisition of DKI of $0.3 million in the fourth
quarter of fiscal 2018, (iii) asset impairments primarily related
to leasehold improvements and furniture and fixtures at certain of
our retail stores of $2.8 million in the fourth quarter of fiscal
2019 and $7.9 million in the fourth quarter of fiscal 2018 and (iv)
income tax charges of $7.5 million related to the one-time effect
of the enactment of the Tax Cuts and Jobs Act in the fourth quarter
of fiscal 2018. These income tax charges primarily relate to a
reduction of deferred tax assets and taxes due on foreign earnings.
The aggregate effect of these exclusions was equal to $0.07 per
diluted share in the fourth quarter of 2019 and $0.27 per diluted
share in the fourth quarter of 2018.
Morris Goldfarb, G-III’s Chairman and Chief Executive Officer,
said, “We are pleased to have reported fourth quarter results that
capped off a record year for G-III in which we surpassed $3.0
billion in annual net sales and achieved record profits fueled by
our five global power brands, DKNY, Donna Karan, Calvin Klein,
Tommy Hilfiger and Karl Lagerfeld. This was also a transformative
year for our company as it was the first full year in which
products for DKNY and Donna Karan were created and developed by
us.”
Mr. Goldfarb concluded, “In this ever-changing retail landscape,
our consistent execution positions us to be a global provider of
fashion product. With the current power brands we have today, we
believe we can continue to achieve significant organic growth
opportunities over the next several years. In addition, the
strength of our balance sheet allows us to capitalize on the right
acquisition opportunity.”
Outlook
G-III Apparel Group today issued guidance for the fiscal year
ending January 31, 2020. For fiscal 2020, the Company is
forecasting net sales of approximately $3.28 billion and net income
between $162.0 mllion and $167.0 million, or between $3.18 and
$3.28 per diluted share.
The Company is anticipating non-GAAP net income for fiscal 2020
between $167.0 million and $172.0 million, or between $3.25 and
$3.35 per diluted share. Non-GAAP guidance excludes non-cash
imputed interest expense of approximately $5.4 million, or $0.07
per diluted share, related to the Seller Note.
The Company is projecting full-year adjusted EBITDA for fiscal
2020 between $307.0 million and $313.0 million compared to adjusted
EBITDA of $269.4 million in fiscal 2019.
For the first fiscal quarter ending April 30, 2019, the Company
is forecasting net sales of approximately $650.0 million and net
income between $7.0 million and $12.0 million, or between $0.13 and
$0.23 per diluted share. This forecast compares to net sales of
$611.7 million and net income of $9.9 million, or $0.20 per diluted
share, reported in the first quarter of fiscal 2019. Non-GAAP
guidance excludes non-cash imputed interest expense related to the
Seller Note of approximately $1.3 million, or $0.02 per share in
the first quarter of fiscal 2020, and $1.2 million, or $0.02 per
share in the first quarter of prior year. On an adjusted
basis, excluding non-cash imputed interest, the Company is
forecasting a non-GAAP net income between $0.15 and $0.25 per
diluted share. This compares to net income of $0.22 per diluted
share in first quarter of fiscal year 2019.
Non-GAAP Financial
Measures
Reconciliations of GAAP net income per share to non-GAAP net
income per share and of GAAP net income to adjusted EBITDA are
presented in tables accompanying the condensed financial statements
included in this release and provide useful information to evaluate
the Company’s operational performance. Non-GAAP net income per
share and adjusted EBITDA should be evaluated in light of the
Company’s financial statements prepared in accordance with
GAAP.
About G-III Apparel Group,
Ltd.
G-III designs, sources and markets apparel and accessories under
owned, licensed and private label brands. G-III’s owned brands
include DKNY, Donna Karan, Vilebrequin, G. H. Bass, Andrew Marc,
Marc New York, Eliza J and Jessica Howard. G-III has fashion
licenses under the Calvin Klein, Tommy Hilfiger, Karl Lagerfeld
Paris, Kenneth Cole, Cole Haan, Guess?, Vince Camuto, Levi's and
Dockers brands. Through our team sports business, G-III has
licenses with the National Football League, National Basketball
Association, Major League Baseball, National Hockey League, and
over 150 U.S. colleges and universities. G-III also operates retail
stores under the DKNY, Wilsons Leather, G. H. Bass, Vilebrequin,
Karl Lagerfeld Paris and Calvin Klein Performance 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, risks relating
to G-III’s operations of Donna Karan International Inc., the impact
on our business of the imposition of tariffs by the United States
government and business 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(Nasdaq: GIII)CONSOLIDATED STATEMENTS OF
INCOME(In thousands, except per share amounts)
Three Months Ended January 31, Year
Ended January 31, 2019 2018
2019 2018 (Unaudited) (Unaudited) Net sales $
766,785 $ 714,897 $ 3,076,208 $ 2,806,938 Cost of goods sold
507,847 455,960 1,969,099
1,752,199 Gross profit 258,938 258,937 1,107,109 1,054,739
Selling, general and administrative
expenses
201,780 219,246 834,763 855,247 Depreciation and amortization 9,951
10,304 38,819 37,783 Asset impairments 2,813
7,884 2,813 7,884 Operating
profit 44,394 21,503 230,714 153,825 Other income (loss)
(2,657 ) 1,522 (2,960 ) (1,413 ) Interest and financing charges,
net (11,771 ) (11,096 ) (43,924 )
(42,363 ) Income before income taxes 29,966 11,929 183,830 110,049
Income tax expense 5,886 12,471
45,763 47,925 Net income (loss) $
24,080 $ (542 ) $ 138,067 $ 62,124 Net
income (loss) per common share: Basic $ 0.49 $ (0.01 ) $
2.81 $ 1.27 Diluted $ 0.48 $ (0.01 ) $ 2.75
$ 1.25 Weighted average shares outstanding:
Basic 49,032 49,091 49,140
48,820 Diluted 50,088
49,091 50,274 49,750
Selected Balance Sheet Data (in thousands): At
January 31, 2019 2018 (Unaudited)
Cash and cash equivalents $ 70,138 $ 45,776 Working capital
673,108 612,434 Inventories 576,383 553,323 Total Assets 2,204,540
1,915,177 Long-term debt 386,604 391,044 Total Stockholders' Equity
1,189,009 1,120,689
G-III APPAREL GROUP, LTD. AND
SUBSIDIARIESRECONCILIATION OF GAAP NET INCOME (LOSS) PER
SHARE TONON-GAAP NET INCOME PER SHARE
Three Months Ended Year Ended January
31, January 31, 2019 2018 2019
2018 (Unaudited) (Unaudited) GAAP diluted net income (loss)
per common share $ 0.48 $ (0.01 ) $ 2.75 $ 1.25 Excluded
from non-GAAP: Non-cash imputed interest 0.04 0.03 0.10 0.12
Transitional expenses associated with the
DKI acquisition
— —
—
0.04 Asset impairment charges 0.05 0.16 0.05 0.16 Tax Cuts and Jobs
Act enactment — 0.15 — 0.15 Income tax impact of non-GAAP
adjustments (0.02 ) (0.07 ) (0.04 ) (0.12 )
Non-GAAP diluted net income per common share, as defined $
0.55 $ 0.26 $ 2.86 $ 1.60
Non-GAAP diluted net income per common share is a “non-GAAP
financial measure” that excludes non-cash imputed interest expense
and asset impairments primarily related to leasehold improvements
and furniture and fixtures at certain of our retail stores and, for
the three months and year ended January 31, 2018, also excludes
transitional expenses associated with the DKI acquisition and
income tax charges related to the one-time effect of the enactment
of the Tax Cuts and Jobs Act. These income tax charges primarily
relate to reduction of deferred tax assets and taxes due on foreign
earnings. Income tax impacts of non-GAAP adjustments are calculated
using the effective tax rates for the respective periods.
Management believes that this non-GAAP financial measure provides
meaningful supplemental information regarding our performance by
excluding items 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
SUBSIDIARIESRECONCILIATION OF FORECASTED AND ACTUAL NET
INCOME TOFORECASTED AND ACTUAL ADJUSTED EBITDA(In
thousands)
Forecasted Year Ending Actual Year
Ended Actual Year Ended January 31, 2020
January 31, 2019 January 31, 2018 (Unaudited)
(Unaudited) (Unaudited) Net income $ 162,000 - 167,000 $ 138,067 $
62,124 Transitional expenses associated with the DKI
acquisition — — 2,050 Asset impairment charges — 2,813 7,884
Depreciation and amortization 40,000 38,819 37,783 Interest and
financing charges, net 46,000 43,924 43,488 Income tax expense
59,000 - 60,000 45,763 47,925
Adjusted EBITDA, as defined $ 307,000 - 313,000 $ 269,386 $
201,254
Adjusted EBITDA is a “non-GAAP financial measure” which
represents earnings before depreciation and amortization, interest
and financing charges, net, asset impairment charges primarily
related to leasehold improvements and furniture and fixtures at
certain of our retail stores and income tax expense and, for fiscal
2018, also excludes transitional expenses associated with the DKI
acquisition. 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 GAAP.
G-III APPAREL GROUP, LTD. AND
SUBSIDIARIESRECONCILIATION OF FORECASTED AND ACTUAL NET
INCOME TO NON-GAAP NET INCOME(In thousands)
Forecasted Actual Actual Year
Ending Year Ended Year Ended January 31,
2020 January 31, 2019 January 31, 2018
(Unaudited) (Unaudited) (Unaudited) Net income $ 162,000 - 167,000
$ 138,067 $ 62,124 Excluded from non-GAAP: Transition
expenses associated with the DKI acquisition — — 2,050 Non-cash
imputed interest 5,400 4,951 5,714 Asset impairment charges — 2,813
7,884 Tax Cuts and Jobs Act enactment — — 7,477 Income tax impact
of non-GAAP adjustments (400) (1,932) (5,871)
Non-GAAP net income, as defined $ 167,000 -
172,000 $ 143,899 $ 79,378
Non-GAAP net income is a “non-GAAP financial measure” that
excludes non-cash imputed interest and asset impairment charges
primarily related to leasehold improvements and furniture and
fixtures at certain of our retail stores and, in fiscal 2018, also
excludes transitional expenses associated with the DKI acquisition
and income tax charges related to the one-time effect of the
enactment of the Tax Cuts and Jobs Act. Income tax impacts of
non-GAAP adjustments are calculated using the effective tax rates
for the respective periods. Management believes that this non-GAAP
financial measure provides meaningful supplemental information
regarding our performance by excluding items 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
SUBSIDIARIESRECONCILIATION OF FORECASTED AND ACTUAL NET
INCOME PER SHARE TOFORECASTED AND ACTUAL NON-GAAP NET INCOME
PER SHARE
Three Months Ended Year Ended April 30,
January 31, Forecast 2019 2018 Forecast
2020 2019 (Unaudited) (Unaudited) GAAP diluted net
income per common share $ 0.13 - 0.23 $ 0.20 $ 3.18 - 3.28 $ 2.75
Excluded from non-GAAP: Non-cash imputed interest 0.02 0.02
0.08 0.10 Asset impairment charges — — — 0.05 Income tax impact of
non-GAAP adjustments — — (0.01) (0.04)
Non-GAAP diluted net income per common
share, as defined $ 0.15 - 0.25 $ 0.22 $ 3.25 - 3.35 $ 2.86
Non-GAAP diluted net income per common share is a “non-GAAP
financial measure” that excludes non-cash imputed interest and
asset impairment charges primarily related to leasehold
improvements and furniture and fixtures at certain of our retail
stores. Management believes that this non-GAAP financial measure
provides meaningful supplemental information regarding our
performance by excluding items 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190321005211/en/
G-III Apparel Group, Ltd.Company:Priya TrivediVP
of Investor Relations and Treasurer(646) 473-5157Investor
Relations:Tom FilandroICR, Inc.(646) 277-1235
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