Perry Ellis International, Inc. (NASDAQ:PERY) today reported
results for the first quarter ended April 30, 2008 (�first quarter
of fiscal 2009�). For the first quarter of fiscal 2009, total
revenues grew to $243.5 million, a $14.8 million increase compared
to $228.8 million reported in the first quarter of the fiscal year
ended April 30, 2007 (�first quarter of fiscal 2008�). Revenue
increases were driven by the Company�s growth platforms � Perry
Ellis collection, swimwear/action sports, Hispanic & golf
lifestyles, direct retail plus initial shipments of the recently
acquired women�s contemporary brands - Laundry and C&C
California. Gross profit increased by $6.8 million to $84.6 million
compared to $77.8 million during the first quarter of fiscal 2008
with gross margin rising 72 basis points to 34.7% of net revenues.
This improvement was driven by growth initiatives that focus on
higher margin platforms such as the Perry Ellis retail division and
the branded business � particularly Perry Ellis, Nike Swim,
Hispanic, golf lifestyle brands, women�s contemporary � and the
reduction in bottoms private label programs, particularly at the
mass distribution channel. �Our diversification strategy has proven
its validity once again, as we delivered increased revenues and
gross profit while exceeding analysts� expectations despite a
difficult domestic retail environment. We attribute our continued
strength to the advantages of our business model,� said Oscar
Feldenkreis, President and Chief Operating Officer. �Our brands
continue to perform strongly at retail, and we remain very
optimistic about achieving the goals we set for Perry Ellis
International this year,� Mr. Feldenkreis continued. First quarter
of fiscal 2009 operating expenditures grew by $7.7 million due to
expenses related to the integration of women�s contemporary brands
- Laundry and C&C California in February of 2008 and the
closing of the Company�s distribution facility in Winnsboro, S.C.
The Company also incurred incremental costs related to the Perry
Ellis retail expansion strategy, with two new stores, and
investment in the European and boys wear divisions. As a result,
EBITDA was $22.3 million for the first quarter of fiscal 2009,
compared to $23.2 million, representing a reduction of $0.9 million
over the same period last year. A table showing the reconciliation
of EBITDA to net income is attached. Net income was $9.1 million, a
4.3% reduction compared to $9.5 million reported in the first
quarter of fiscal 2008. Earnings at $0.60 per fully diluted share
were flat compared to $0.60 for the same period last year. �The
investments we have made in our new businesses and in our
strengthened infrastructure are a reflection of the many
opportunities that lie ahead for our company and our confidence in
our future growth prospects,� Mr. Feldenkreis concluded. The
Company strengthened its financial position for yet another
quarter. Proactive retail planning and strong sell-throughs led to
a decrease in inventories of $10.9 million compared to the same
period last year, and at quarter end were $140.8 million. This
decrease is in spite of a 6.5% revenue growth. Strong cash flow and
disciplined cash management also allowed the Company to reduce its
senior credit facility by $3.0 million to $65.3 million, compared
to $68.3 million at April 30, 2007. The Company�s total debt was
$240.1 million at the end of first quarter of fiscal 2009. Debt to
total capital ratio decreased to 46% from 49% compared to April 30,
2007. Excluding the contemporary women�s acquisitions, funded by
its senior credit facility in the amount of $33.1 million, the
Company�s total debt would be $207.0 million and its debt to total
capital ratio would be 42% as adjusted. �We delivered yet another
extraordinary quarter of profitable growth, strong cash flow and
disciplined management to our shareholders. Our positive outlook is
a testament to the strength of our brands, growth platforms and
diversified business model,� George Feldenkreis, Chairman and CEO,
commented. Fiscal 2009 Guidance The Company confirmed its guidance
for the twelve months ending January 31, 2009 (�fiscal 2009�) at
$910 - $925 million in revenues and at $1.95 - $2.00 per fully
diluted share. �We remain confident in our ability to sustain our
positive performance throughout fiscal 2009. Strength across our
platforms is providing for our near term growth and we expect our
current investments in new initiatives � women�s contemporary, boys
and retail expansion - to start delivering results during the
second half of the year,� 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� by Munsingwear, Grand
Slam�, Natural Issue�, Pro Player�, the Havanera Co. �, Axis�,
Tricots St. Raphael�, Gotcha�, Girl Star�, MCD� John Henry�, Mondo
di Marco�, Redsand�, Manhattan�, Axist� and Farah�. 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 April 30, 2008 2007 �
Revenues Net sales $ 237,762 $ 222,619 Royalty income � 5,787 �
6,151 Total revenues 243,549 228,770 Cost of sales � 158,982 �
150,980 Gross profit 84,567 77,790 Operating expenses Selling,
general and administrative expenses 62,268 54,593 Depreciation and
amortization � 3,666 � 2,928 Total operating expenses � 65,934 �
57,521 Operating income 18,633 20,269 Interest expense � 4,491 �
5,248 � Income before minority interest and income taxes 14,142
15,021 Minority interest 327 147 Income tax provision � 4,708 �
5,362 Net income $ 9,107 $ 9,512 � Net income per share Basic $
0.63 $ 0.65 Diluted $ 0.60 $ 0.60 � Weighted average number of
shares outstanding Basic 14,484 14,660 Diluted 15,161 15,973 �
PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES SELECTED FINANCIAL
DATA (UNAUDITED) (amounts in 000's) � � BALANCE SHEET DATA: As of
April 30, 2008 January 31, 2008 � Assets Current assets: Cash and
cash equivalents $ 12,249 $ 13,360 Accounts receivable, net 172,411
138,086 Inventories, net 140,784 136,431 Other current assets �
20,907 � � 19,283 � Total current assets � 346,351 � � 307,160 � �
Property and equipment, net 75,155 78,954 Intangible assets, net
220,685 192,656 Other assets � 7,145 � � 7,495 � � Total assets $
649,336 � $ 586,265 � � Liabilities and stockholders' equity
Current liabilities: Accounts payable $ 38,732 $ 52,041 Accrued
expenses and other liabilities 31,470 27,945 Senior credit facility
65,325 - Accrued interest 2,120 5,200 Unearned revenues � 4,699 � �
4,104 � Total current liabilities � 142,346 � � 89,290 � � � Long
term liabilities: Senior subordinated notes payable 149,285 149,244
Real estate mortgage 25,047 26,066 Deferred pension obligation
12,905 12,905 Unearned revenues and other liabilities � 31,238 � �
31,940 � Total long term liabilities � 218,475 � � 220,155 � �
Total liabilities � 360,821 � � 309,445 � � Minority interest �
3,022 � � 3,293 � � Stockholders' equity � Preferred stock - -
Common stock 150 147 Additional paid in capital 101,438 96,389
Retained earnings 188,668 179,561 Accumulated other comprehensive
income � (486 ) � 1,518 � Total 289,770 277,615 � Common stock in
treasury (4,277 ) (4,088 ) � � Total stockholders' equity � 285,493
� � 273,527 � � Total liabilities and stockholders' equity $
649,336 � $ 586,265 � � PERRY ELLIS INTERNATIONAL, INC. AND
SUBSIDIARIES RECONCILIATION OF NET INCOME AND GROSS PROFIT TO
EBITDA(1) (UNAUDITED) (amounts in 000's) � � Three Months Ended
April 30, 2008 2007 � Net income as reported $ 9,107 $ 9,512 Plus:
Depreciation and amortization 3,666 2,928 Interest expense 4,491
5,248 Minority interest 327 147 Income tax provision � 4,708 � �
5,362 � EBITDA $ 22,299 � $ 23,197 � � � Gross profit $ 84,567 $
77,790 Less: Selling, general and administrative expenses � (62,268
) � (54,593 ) EBITDA $ 22,299 � $ 23,197 � � � Total revenues $
243,549 $ 228,770 � EBITDA margin percentage of revenues 9.2 % 10.1
% � � (1) EBITDA consists of earnings before interest, 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.
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