Perry Ellis International, Inc. (NASDAQ:PERY) today reported
results for the second quarter ended July 31, 2010 (“second quarter
fiscal 2011”) and six months ended July 31, 2010 (“first half of
fiscal 2011”).
Second Quarter Results from Operations
“We are very proud to report solid results for the second
quarter of this year. Our ability to continue delivering strong
results in this volatile economic environment remains a testament
to the strength of our business model, our portfolio of brands, and
our dedication to product innovation and delivery. As our wholesale
and direct-to-consumer businesses continue to see positive results
we look forward to a strong second half of fiscal 2011,” commented
Oscar Feldenkreis, President and Chief Operating Officer of Perry
Ellis International.
For the second quarter of fiscal 2011, total revenues increased
2% to $161.8 million compared to $159.2 million reported in the
comparable period ended August 1, 2009 (“second quarter fiscal
2010”). As previously announced, excluding the planned exit of $11
million in unprofitable businesses from last year the Company
increased revenues by 9% throughout the second quarter of this
year.
Gross margins for the second quarter of fiscal 2011 expanded by
510 basis points to 36.0% compared to 30.9% in the comparable prior
year period. This expansion was driven by continued operational
improvements in several of our more challenged businesses and
strong inventory discipline resulting in higher levels of
full-price selling across many of the Company’s businesses in the
wholesale channels of distribution. The Company’s owned retail
stores also continue to experience higher gross margins,
contributing to the overall enhanced performance of the
business.
Earnings before interest, tax, depreciation and amortization
(“EBITDA”) for the second quarter of fiscal 2011 reached $4.2
million compared to $1.5 million in the prior year comparable
period. A table showing the reconciliation of net income to EBITDA
is attached. Also for the second quarter of fiscal 2011 the Company
reported a net loss of ($2.0) million, representing a loss per
fully diluted share of ($0.15) compared to a net loss of ($5.3)
million or ($0.42) per fully diluted share, in the comparable
period.
First Half Operations Review
For the six months ended July 31, 2010 total revenues increased
1% to $382.1 million from $379.2 million during the six months
ended August 1, 2009 (“first half of fiscal 2010”). However,
excluding the planned exit of a total of $28 million in
unprofitable businesses throughout the first half of fiscal year
2011, total revenues increased approximately 9%.
Throughout the first half of fiscal 2011 the Company’s excellent
financial performance and growth story has been fueled by the
execution of its strategy to increase sales of higher-margin
branded product categories and brands in an effort to drive gross
margin and position the Company for sustained long term growth and
enhanced profitability. For the first half of the year gross
margins have expanded 460 basis points to 35.8% compared to 31.2%
during the comparable period last year.
The Company also improved EBITDA margin by 280 basis points to
7.1% for the first half of the year compared to the same period
last year. Net income significantly increased to $9.2 million
compared to net income of $0.5 million during the same period last
year.
Balance Sheet Update
Throughout the second quarter of fiscal 2011 the Company
continued improving its balance sheet and remains in a solid
financial position. The continued discipline in working capital
management allowed the Company to keep its senior credit facility
undrawn at the end of second quarter fiscal 2011. Additionally, the
Company reported $43.4 million in cash and cash equivalents at
quarter end.
Strong cash flow continued to allow the Company to significantly
reduce its debt level. At the end of the first half of fiscal 2011,
senior subordinated notes decreased to $105.5 million, a reduction
of $24.4 million compared to the beginning of fiscal 2011. As a
result, net debt to total capital declined to 24% as compared to
34% for the prior fiscal year ended January 30, 2010.
Fiscal 2011 Guidance
“Despite the continued uncertainty in the consumer environment
today, we remain vigilant yet confident that our business platforms
will continue to perform to our expectations and allow us to
continue on our path of revenue growth and gross margin expansion
throughout the remainder of the year,” commented George
Feldenkreis, Chairman and Chief Executive Officer.
“The men’s market continues to outpace all other areas in the
retail arena today, as evidenced by most retailers’ announcements.
We are well positioned to continue our positive performance in the
second half of the year, and are pleased to raise our full earnings
guidance. We remain confident that we will continue to deliver
outstanding results for all of our stakeholders,” continued Mr.
Feldenkreis.
Based on better-than-expected results throughout the first half
of fiscal 2011, the Company has updated its fiscal 2011 full year
earnings per share guidance to a range of $1.53 - $1.68, compared
to it previous range of $1.45 - $1.60. The Company has maintained
and reconfirmed its full year revenue guidance in the range of $775
– $795 million for fiscal 2011.
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®, Centro®, Solero®,
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 Pierre Cardin® for men’s sportswear, Nike® and
Jag® for swimwear, and Callaway®, TOP-FLITE®, 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," "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, 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 Six Months
Ended July 31, 2010 August 1, 2009 July 31,
2010 August 1, 2009 Revenues Net sales $ 155,622
$ 152,980 $ 369,864 $ 367,018 Royalty income 6,132
6,189 12,239 12,195 Total revenues
161,754 159,169 382,103 379,213 Cost of sales 103,601
109,961 245,206 260,771 Gross profit
58,153 49,208 136,897 118,442 Operating expenses Selling, general
and administrative expenses 53,249 47,700 108,875 102,074
Depreciation and amortization 3,018 3,390
6,137 7,013 Total operating expenses
56,267 51,090 115,012 109,087
Operating income (loss) 1,886 (1,882 ) 21,885 9,355 Cost on early
extinguishment of debt 730 - 730 - Interest expense 3,361
3,966 7,108 8,584 Income
(loss) before income taxes (2,205 ) (5,848 ) 14,047 771 Income tax
(benefit) provision (317 ) (694 ) 4,559
133 Net (loss) income (1,888 ) (5,154 ) 9,488 638 Less: net
income attributed to noncontrolling interest 85 154 262 97
Net (loss) income attributed to Perry Ellis
International, Inc. $ (1,973 ) $ (5,308 ) $ 9,226 $ 541 Net
(loss) income attributed to Perry Ellis International, Inc. per
share Basic $ (0.15 ) $ (0.42 ) $ 0.71 $ 0.04 Diluted $ (0.15 ) $
(0.42 ) $ 0.66 $ 0.04 Weighted average number of shares
outstanding Basic 13,170 12,669 13,019 12,685 Diluted 13,170 12,669
14,029 12,719
PERRY ELLIS INTERNATIONAL, INC. AND
SUBSIDIARIES SELECTED FINANCIAL DATA (UNAUDITED)
(amounts in 000's) BALANCE SHEET DATA:
As of July 31, 2010 January 30, 2010
Assets Current assets: Cash and cash equivalents $
43,388 $ 18,269 Accounts receivable, net 85,319 139,934 Inventories
114,907 112,315 Other current assets 28,969
24,822 Total current assets 272,583
295,340 Property and equipment, net 55,988 60,467
Intangible assets 200,315 200,315 Other assets 4,664
5,194 Total assets $ 533,550 $ 561,316
Liabilities and equity Current
liabilities: Accounts payable $ 41,574 $ 65,203 Accrued
expenses and other liabilities 23,605 31,597 Accrued interest
payable 3,642 4,482 Unearned revenues 5,880
6,002 Total current liabilities 74,701
107,284
Long term liabilities: Senior
subordinated notes payable 105,487 129,870 Real estate mortgages
26,136 13,712 Deferred pension obligation 15,060 17,237 Unearned
revenues and other long-term liabilities 25,967
23,097 Total long-term liabilities 172,650
183,916 Total liabilities
247,351 291,200
Equity:
Preferred stock - - Common stock 166 161 Additional paid-in-capital
114,146 107,527 Retained earnings 189,064 179,838 Accumulated other
comprehensive loss (3,684 ) (3,655 ) Treasury stock at cost
(17,415 ) (17,415 ) Total Perry Ellis International, Inc.
stockholders' equity 282,277 266,456 Noncontrolling interest
3,922 3,660 Total stockholders' equity 286,199
270,116 Total liabilities and
stockholders' equity $ 533,550 $ 561,316
PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO EBITDA(1) (UNAUDITED)
(amounts in 000's) Three Months Ended
Six Months Ended July 31, 2010
August 1, 2009 July 31, 2010 August 1,
2009 Net (loss) income attributed to Perry Ellis
International, Inc. $ (1,973 ) $ (5,308 ) $ 9,226 $ 541 Plus:
Depreciation and amortization 3,018 3,390 6,137 7,013 Interest
expense 3,361 3,966 7,108 8,584 Net income attributable to
noncontrolling interest 85 154 262 97 Income tax (benefit)
provision (317 ) (694 ) 4,559
133 EBITDA $ 4,174 $ 1,508 $ 27,292 $
16,368 Gross profit $ 58,153 $ 49,208 $ 136,897 $
118,442 Less: Selling, general and administrative expenses and cost
on early extinguishment of debt (53,979 ) (47,700 )
(109,605 ) (102,074 ) EBITDA $ 4,174 $ 1,508
$ 27,292 $ 16,368 Total revenues
$ 161,754 $ 159,169 $ 382,103 $ 379,213 EBITDA margin
percentage of revenues 2.6 % 0.9 % 7.1 % 4.3 %
(1)EBITDA consists of earnings
before interest, taxes, depreciation, amortization and
noncontrolling 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. (delisted) (NASDAQ:PERY)
Historical Stock Chart
From May 2024 to Jun 2024
Perry Ellis International Inc. (delisted) (NASDAQ:PERY)
Historical Stock Chart
From Jun 2023 to Jun 2024