PERY Perry Ellis International Inc. (delisted)

Perry Ellis International, Inc. (NASDAQ:PERY) today reported results for the fourth quarter (�fourth quarter of fiscal 2008�) and fiscal year ended January 31, 2008 (�fiscal 2008�). Fiscal 2008 results Fiscal 2008 total revenues grew to a record level of $863.9 million, a 4.1% increase compared to $829.8 million reported in the year ended January 31, 2007 (�fiscal 2007�), driven by growth in Perry Ellis Collection, Swim, Golf, Hispanic, Licensing and Retail businesses. Gross margin rose 52 basis points to 33.8% from 33.2% in fiscal 2007, driven by the Company�s focus on higher margin branded products. �We had an outstanding year at Perry Ellis International. We attribute our success to initiatives aimed at expanding our growth platforms while reducing private label offerings,� said Oscar Feldenkreis, president and COO. �Our key growth platforms � Perry Ellis Collection, Swim, Golf, Hispanic, Licensing and Retail, are well positioned for future growth following a record performance in fiscal 2008.� Fiscal 2008 EBITDA grew to a record $75.8 million, a $4.9 million or 6.8% increase over fiscal 2007 levels, and EBITDA margins improved 22 basis points to 8.8% of revenues. A table showing the reconciliation of EBITDA to net income is attached. Fiscal 2008 net earnings were $28.2 million compared to fiscal 2007 net earnings of $22.4 million and to pro forma net earnings of $24.4 million. This represents a 25.7% and 15.6% improvement over last year�s earnings, respectively. Pro forma results exclude the after tax impact of $1.9 million in debt extinguishment costs ($0.13 per fully diluted share) incurred as a result of the March 2006 repayment of the Company's $57 million senior secured notes. A table showing the reconciliation of actual to pro forma results is attached. Earnings per diluted share were $1.80 for fiscal 2008, an increase of $0.35 or 24.1% compared to fiscal 2007 reported earnings per diluted share of $1.45. On a pro forma basis, fiscal 2008 diluted earnings per share of $1.80 represented an increase of $0.22 or 13.9% from diluted earnings per share of $1.58 last year. The Company ended Fiscal 2008 in a very strong financial position. Strong cash flows allowed the Company to completely pay-off its revolving credit facility as of January 31, 2008, reducing its debt to total capital ratio to 39% from 49% in January 31, 2007. Working capital was also significantly improved. The Company finished the year with Inventories at $136.4 million, a reduction of $3.3 million or 2.3% compared to last year. �We are proud of our fiscal 2008 results. We believe that our organic initiatives and strong financial discipline allow us to start fiscal 2009 in great financial shape and positioned to maximize market share during this difficult macroeconomic environment. Our positive outlook is a testament to the strength of our brands, growth platforms and diversified business model,� George Feldenkreis, chairman and CEO, commented. Fourth Quarter Fiscal 2008 results Overall, fourth quarter results were in line with management�s expectations. Fiscal 2008 fourth quarter total revenue was $212.3 million, an 8.3% decrease compared to $231.6 million reported in the fourth quarter of fiscal 2007. Although Perry Ellis, Swimwear, Golf, Retail and Licensing reported results at or above plan, this year�s fourth quarter results were negatively impacted by a $20 million reduction in the bottoms platform due to the previously announced deceleration in replenishment programs and the Company�s exit from a large mass merchant private label program. However, these reductions positively impacted gross margins, which improved to 35.4%, up 128 bps from 34.1% in the fourth quarter of fiscal 2007. Fourth quarter EBITDA was $23.4 million compared to $25.7 million, a $2.3 million reduction over the same period last year. EBITDA margin remained relatively flat at 11% of net revenues. A table showing the reconciliation of EBITDA to net income is attached. Net income was $9.9 million, an 8% reduction compared to $10.7 million reported in the fourth quarter of fiscal 2007, and fourth quarter of fiscal 2008 earnings were $0.65 per fully diluted share, a 4.4% decrease from $0.68 per fully diluted share reported in the fourth quarter of fiscal 2007. Fiscal 2009 guidance �In spite of a challenging retail environment, we are confident that our growth platforms and diversified strategy will deliver another record year for our company. We anticipate continuous growth in Perry Ellis, Swim, Golf, Action Sports, Hispanic and Retail businesses plus solid performances by our recently acquired Women�s Contemporary brands Laundry by Shelli Segal and C&C California,� George Feldenkreis commented. The Company announced that for the twelve months ending January 31, 2009 (�fiscal 2009�) it anticipates revenue growth in the range of 5 - 7% to $910 - $925 million and earnings growth in the range of 8% - 11% to $1.95 - $2.00 per fully diluted share. �We believe it is prudent to remain conservative in our business outlook for fiscal 2009, yet we are optimistic that we can expand our business in a difficult environment, given the strengths of our brands and offerings, as well as added growth from our recent acquisitions of C&C of California and Laundry. We look forward to updating you as to our progress as the year advances,� Mr. Feldenkreis concluded. 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. The Company's collection of dress and casual shirts, golf sportswear, sweaters, dress and casual pants and shorts, jeans wear, active wear 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�, Cubavera�, Munsingwear�, Savane�, Original Penguin�, Grand Slam�, Natural Issue�, Pro Player�, the Havanera Co. �, Axis�, Tricots St. Raphael�, Gotcha�, Girl Star� and MCD�. The Company enhances its roster of brands by licensing trademarks from third parties including Dockers� for outerwear, Nike� and JAG� for swimwear, and PING� and PGA 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," "could," "may," "might," "potential," "predict," "should," "estimate," "expect," "project," "believe," "plan," "envision," "continue," "intend," "target," "contemplate," 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, 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 integrate acquired businesses, trademarks, tradenames 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 January 31, Year Ended January 31, � 2008 � 2007 2008 2007 Revenues Net sales $ 206,075 $ 225,869 $ 838,465 $ 807,616 Royalty income � 6,263 � 5,714 � 25,401 � 22,226 Total revenues 212,338 231,583 863,866 829,842 Cost of sales � 137,137 � 152,540 � 572,232 � 554,046 Gross profit 75,201 79,043 291,634 275,796 Operating expenses Selling, general and administrative expenses 51,806 53,369 215,873 204,883 Depreciation and amortization � 3,684 � 3,258 � 13,278 � 11,608 Total operating expenses � 55,490 � 56,627 � 229,151 � 216,491 Operating income 19,711 22,416 62,483 59,305 Costs on early extinguishment of debt - - - 2,963 Interest expense � 3,704 � 5,464 � 17,594 � 21,114 � Income before minority interest and income taxes 16,007 16,952 44,889 35,228 Minority interest 559 272 931 508 Income tax provision � 5,588 � 5,969 � 15,785 � 12,311 Net income $ 9,860 $ 10,711 $ 28,173 $ 22,409 � Net income per share Basic $ 0.67 $ 0.73 $ 1.92 $ 1.55 Diluted $ 0.65 $ 0.68 $ 1.80 $ 1.45 � Weighted average number of shares outstanding Basic 14,630 14,610 14,675 14,504 Diluted 15,165 15,824 15,657 15,455 PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (UNAUDITED) (amounts in 000's) � BALANCE SHEET DATA: As of January 31, 2008 January 31, 2007 Assets Current assets: Cash and cash equivalents $ 13,360 $ 4,514 Accounts receivable, net 138,086 157,420 Inventories, net 136,431 139,690 Other current assets � 19,283 � � 12,972 Total current assets � 307,160 � � 314,596 � Property and equipment, net 78,954 71,989 Intangible assets, net 192,656 192,656 Other assets � 7,495 � � 13,965 � Total assets $ 586,265 � $ 593,206 � Liabilities and stockholders' equity Current liabilities: Accounts payable $ 52,041 $ 44,295 Accrued expenses and other liabilities 27,945 31,914 Accrued interest 5,200 5,822 Unearned revenues � 4,104 � � 2,883 Total current liabilities � 89,290 � � 84,914 � � Long term liabilities: Senior subordinated notes payable 149,244 149,079 Senior credit facility - 61,347 Real estate mortgage 26,066 26,604 Deferred pension obligation 12,905 13,412 Unearned revenues and other liabilities � 31,940 � � 8,854 Total long term liabilities � 220,155 � � 259,296 � Total liabilities � 309,445 � � 344,210 � Minority interest � 3,293 � � 2,362 � Stockholders' equity � Preferred stock - - Common stock 147 146 Additional paid in capital 96,389 94,252 Retained earnings 179,561 151,388 Accumulated other comprehensive income � 1,518 � � 848 Total 277,615 246,634 � Common stock in treasury (4,088 ) - � � Total stockholders' equity � 273,527 � � 246,634 � Total liabilities and stockholders' equity $ 586,265 � $ 593,206 PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES RECONCILIATION OF NET INCOME AND GROSS PROFIT TO EBITDA(1) (UNAUDITED) (amounts in 000's) � � � � Three Months Ended January 31, Year Ended January 31, 2008 2007 2008 2007 � � Net income as reported $ 9,860 $ 10,711 $ 28,173 $ 22,409 Plus: Depreciation and amortization 3,684 3,258 13,278 11,608 Interest expense 3,704 5,464 17,594 21,114 Costs on early extinguishment of debt - - - 2,963 Minority interest 559 272 931 508 Income tax provision � 5,588 � � 5,969 � � 15,785 � � 12,311 � EBITDA $ 23,395 � $ 25,674 � $ 75,761 � $ 70,913 � � � Gross profit $ 75,201 $ 79,043 $ 291,634 $ 275,796 Less: Selling, general and administrative expenses � (51,806 ) � (53,369 ) � (215,873 ) � (204,883 ) EBITDA $ 23,395 � $ 25,674 � $ 75,761 � $ 70,913 � � � Total revenues $ 212,338 $ 231,583 $ 863,866 $ 829,842 � EBITDA margin percentage of revenues 11.0 % 11.1 % 8.8 % 8.5 % � (1) EBITDA consists of earnings before interest, costs on early extinguishment of debt, taxes, depreciation, amortization and minority interest. 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. EBITDA is presented solely as a supplemental disclosure because management believes that it is a common measure of operating performance in the apparel industry. PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES RECONCILIATION OF DILUTED EARNINGS PER SHARE TO PROFORMA DILUTED EARNINGS PER SHARE (2) (amounts in 000's, except per share information) (UNAUDITED) � � � � Three Months Ended January 31, Year Ended January 31, 2008 2007 2008 2007 � Net income $ 9,860 $ 10,711 $ 28,173 $ 22,409 Plus: Effect of debt extinguishment costs, net of tax effect � - � - � - � 1,953 Proforma net income $ 9,860 $ 10,711 $ 28,173 $ 24,362 � � Diluted earnings per share $ 0.65 $ 0.68 $ 1.80 $ 1.45 Plus: Effect of debt extinguishment costs, net of tax effect � - � - � - � 0.13 Proforma diluted earnings per share $ 0.65 $ 0.68 $ 1.80 $ 1.58 � � (2) Proforma net income and proforma diluted earnings per share for the year ended January 31, 2007, respectively, consists of net income and diluted earnings per share excluding the effect of approximately $3.0 million ($1.9 million, net of taxes) or $0.13 per share net of taxes, respectively, for debt extinguishment costs related to the call of our $57 million senior secured notes. Neither proforma net income nor proforma diluted earnings per share is a measurement of financial performance under accounting principles generally accepted in the United States of America. Accordingly, you should not regard this figure as an alternative to actual net income and/or diluted earnings per share. Proforma net income and proforma diluted earnings per share are presented solely as a supplemental disclosure, because management believes it is useful to compare the Company's current results to the prior year results without the charge incurred during Fiscal 2007.