Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - JONES GROUP INC | july27_2011.htm |
| EX-99 - EXHIBIT 99.2 POWERPOINT SLIDE PRESENTATION - JONES GROUP INC | july27ex99_2.htm |
| EX-99 - EXHIBIT 99.3 SEGMETN INFORMATION - JONES GROUP INC | july27ex99_3.htm |
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
The Jones Group Inc.
Investor Contact:
John T. McClain, Chief Financial Officer
The Jones Group Inc.
(212) 703-9189
Media Contacts:
Joele Frank and Jennifer Friedman
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
THE JONES GROUP INC. REPORTS 2011 SECOND QUARTER RESULTS
New York, New York - July 27, 2011 - The Jones Group Inc. (NYSE: JNY) today reported results for the second quarter ended July 2, 2011. Revenues for the second quarter of 2011 were $888 million, as compared with $860 million for the second quarter of 2010.
The Company reported adjusted earnings per share ("EPS") of $0.33 for the second quarter of 2011, as compared with adjusted earnings per share of $0.45 in the same period last year. Results for both periods exclude the impact of acquisition-related charges, the impact of severance, restructuring activities and certain other charges (see reconciliation of adjusted earnings to reported earnings in the accompanying schedule).
As reported under generally accepted accounting principles ("GAAP"), the Company reported earnings per share of $0.06 for the second quarter of 2011, as compared with earnings per share of $0.30 for the same period last year. The 2011 second quarter results include costs and charges of approximately $23 million ($15 million after tax) related to the acquisition of the Stuart Weitzman business and $12 million ($8 million after tax) related to the lease of an unused facility, among other items. In the prior year quarter, results included charges of approximately $12 million ($8 million after tax) related to the acquisitions of the Stuart Weitzman and Robert Rodriguez businesses and $10 million ($6 million after tax) of other restructuring and strategic review costs.
Wesley R. Card, The Jones Group Chief Executive Officer, stated: "We are
pleased with our results for the second quarter. Our operating trends in the
core businesses continue to improve as a result of our focus on brand
management, inventory planning and controlling costs and expenses. Since we
completed the acquisition of Stuart Weitzman a year ago, the brand has performed
exceptionally well and experienced strong growth, both domestically and
internationally. We also continue to optimize our portfolios' existing and new
brands, and with the acquisition of Kurt Geiger, we are further expanding our
reach into the luxury sector and internationally."
The following notable events have recently occurred:
- acquired Kurt Geiger, Europe's largest luxury footwear retailer based in the United Kingdom;
- entered into an exclusive international license agreement with Philip Simon Brands Group, Inc. for the creation, production, marketing and global distribution of a fashion sneaker collection under the Nine West brand;
- enhanced its Board of Directors with the addition of three experienced, independent Directors; and
- amended and extended its $650 million senior secured credit facility.
Cash provided by operations during the six months was $66 million, compared with cash provided by operations of $26 million in the prior year. The current year results reflect lower working capital requirements and lower income tax payments, partially offset by lower earnings. The Company continues to have no amounts drawn under its $650 million of committed revolving credit facilities.
John T. McClain, The Jones Group Chief Financial Officer, commented: "We had another solid quarter and our financial position remains strong. We ended the quarter with $146 million of cash after funding the acquisition of Kurt Geiger and our revolver was undrawn. We entered 2011 with a more conservative, tightened inventory buy plan and we will continue operating in the same manner for the remainder of the year. We will continue to focus on inventory management and expense control to improve margins and maintain a strong balance sheet."
Mr. Card concluded: "While consumer confidence and sentiment continues to be impacted by mixed economic signals, we are cautiously optimistic about the retail environment for the second half. We continue to be disciplined in our spending and are prudently positioning our businesses for long-term growth."
The acquisition of Kurt Geiger has impacted the way the Company manages and analyzes its operating results. Effective with the reporting of the second quarter 2011 results, the Company modified and expanded its reporting segments to reflect the Company's expanding international operations and to enhance the clarity and transparency of operating results. The modified segments are Domestic Wholesale Sportswear, Domestic Wholesale Jeanswear, Domestic Wholesale Footwear and Accessories, International Wholesale, Domestic Retail and International Retail. The principal changes associated with the updated segment presentation were to segregate the international businesses from the domestic businesses and to adjust the manner in which intercompany transactions are reflected. The changes in reporting segments impact the segment results only and do not impact the consolidated financial results of The Jones Group.
The Company is providing unaudited supplemental information presenting historical financial results under the new segment reporting format in its Current Report on Form 8-K, which will be filed with the Securities and Exchange Commission.
The Company's Board of Directors has declared a regular quarterly cash dividend of $0.05 per share to all common stockholders of record as of August 12, 2011 for payment on August 26, 2011.
The Company will host a conference call with management to discuss these
results at 8:30 a.m. eastern time today, which is accessible by dialing
412-858-4600 or through a web cast at www.jonesgroupinc.com. The call will be
recorded and made available through August 4, 2011 and may be accessed by
dialing 877-344-7529. Enter account number 452010. A slide presentation will
accompany the prepared remarks and has been posted on the investor relations
section of the Company's website.
Presentation of Information in the Press Release
Financial information discussed in this press release includes both GAAP
and non-GAAP measures, which include or exclude certain items. These non-GAAP
measures differ from reported results and are intended to illustrate what
management believes are relevant period-over-period comparisons. A complete
reconciliation of reported GAAP results to the comparable non-GAAP information
appears in the financial tables section of this press release.
About The Jones Group Inc.
The Jones Group Inc. (www.jonesgroupinc.com) is a leading global designer, marketer and wholesaler of over 35 brands with best-in-class product expertise across five divisions: apparel, footwear, jeanswear, jewelry and handbags. The Jones Group has a reputation for innovation, excellence in product quality and value, operational execution and talent. The Company also markets directly to consumers through branded specialty retail and outlet stores and through its e-commerce sites.
The Company's internationally recognized brands and licensing agreements (L)
include: Nine West, Jones New York, Anne Klein, Kurt Geiger, Rachel Roy (L),
Robert Rodriguez, Robbi & Nikki, Stuart Weitzman, B Brian Atwood (L), KG by Kurt
Geiger, Boutique 9, Easy Spirit, Carvela, Gloria Vanderbilt, l.e.i., Bandolino,
Enzo Angiolini, Nine & Co., GLO, Joan & David, Miss KG, Jones Wear, Andrew
Marc/Marc Moto (L), Kasper, Energie, Evan-Picone, Le Suit, Mootsies Tootsies,
Grane, Erika, Napier, Jessica Simpson (L), Dockers (L), Sam & Libby, Givenchy
(L), Judith Jack, Albert Nipon and Pappagallo.
Forward Looking Statements
Certain statements contained herein are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding the Company's expected financial position, business and financing plans are forward-looking statements. The words "believes," "expects," "plans," "intends," "anticipates" and similar expressions identify forward-looking statements. Forward-looking statements also include representations of the Company's expectations or beliefs concerning future events that involve risks and uncertainties, including:
- those associated with the effect of national, regional and international economic conditions;
- lowered levels of consumer spending resulting from a general economic downturn or lower levels of consumer confidence;
- the tightening of the credit markets and the Company's ability to obtain capital on satisfactory terms;
- given the uncertain economic environment, the possible unwillingness of committed lenders to meet their obligations to lend to borrowers, in general;
- the performance of the Company's products within the prevailing retail environment;
- customer acceptance of both new designs and newly-introduced product lines;
- the Company's reliance on a few department store groups for large portions of the Company's business;
- the Company's ability to identify acquisition candidates and, in a competitive environment for such acquisitions, acquire such businesses on reasonable financial and other terms;
- the integration of the organizations and operations of any acquired businesses into the Company's existing organization and operations;
- consolidation of the Company's retail customers;
- financial difficulties encountered by the Company's customers;
- the effects of vigorous competition in the markets in which the Company operates;
- the Company's ability to attract and retain qualified executives and other key personnel;
- the Company's reliance on independent foreign manufacturers, including political instability in countries where contractors and suppliers are located;
- changes in the costs of raw materials, labor, advertising and transportation, including the impact such changes may have on the pricing of the Company's products and the resulting impact on consumer acceptance of the Company's products at higher price points;
- the Company's ability to successfully implement new operational and financial computer systems; and
- the Company's ability to secure and protect trademarks and other intellectual property rights.
A further description of these risks and uncertainties and other important factors that could cause actual results to differ materially from the Company's expectations can be found in the Company's Annual Report on Form 10-K for the year ended December 31, 2010, including, but not limited to, the Statement Regarding Forward-Looking Disclosure and Item 1A-Risk Factors therein, and in the Company's other filings with the Securities and Exchange Commission. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such expectations may prove to be incorrect. The Company does not undertake to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.
THE JONES GROUP INC.
CONSOLIDATED OPERATING RESULTS
(UNAUDITED)
| All amounts in millions, except per share data |
SECOND QUARTER |
FISCAL SIX MONTHS |
|||||||||||||||||||
|
2011 |
2010 |
2011 |
2010 | ||||||||||||||||||
| Net sales | $ | 876.7 | 98.8 | % | $ | 849.0 | 98.8 | % | $ | 1,825.7 | 98.8 | % | $ | 1,725.2 | 98.8 | % | |||||
| Licensing income | 10.4 | 1.2 | 10.3 | 1.2 | 22.5 | 1.2 | 21.3 | 1.2 | |||||||||||||
| Other revenues | 0.3 | 0.0 | 0.3 | 0.0 | 0.5 | 0.0 | 0.4 | 0.0 | |||||||||||||
| Total revenues | 887.4 | 100.0 | 859.6 | 100.0 | 1,848.7 | 100.0 | 1,746.9 | 100.0 | |||||||||||||
| Cost of goods sold | 564.3 | 63.6 | 542.4 | 63.1 | 1,194.9 | 64.6 | 1,103.5 | 63.2 | |||||||||||||
| Gross profit | 323.1 | 36.4 | 317.2 | 36.9 | 653.8 | 35.4 | 643.4 | 36.8 | |||||||||||||
| SG&A expenses | 278.2 | 31.4 | 261.9 | 30.5 | 547.7 | 29.6 | 511.8 | 29.3 | |||||||||||||
| Income from operations | 44.9 | 5.1 | 55.3 | 6.4 | 106.1 | 5.7 | 131.6 | 7.5 | |||||||||||||
| Net interest expense and financing costs | (37.0 | ) | (4.2 | ) | (14.3 | ) | (1.7 | ) | (58.2 | ) | (3.1 | ) | (26.3 | ) | (1.5 | ) | |||||
| Equity in income (loss) of unconsolidated affiliate | 0.7 | 0.1 | - | - | 2.0 | 0.1 | (1.8 | ) | (0.1 | ) | |||||||||||
| Income before provision for income taxes | 8.6 | 1.0 | 41.0 | 4.8 | 49.9 | 2.7 | 103.5 | 5.9 | |||||||||||||
| Provision for income taxes | 3.2 | 0.4 | 15.2 | 1.8 | 18.7 | 1.0 | 38.3 | 2.2 | |||||||||||||
| Net income | 5.4 | 0.6 | 25.8 | 3.0 | 31.2 | 1.7 | 65.2 | 3.7 | |||||||||||||
| Less: income attributable to noncontrolling interest | 0.2 | 0.0 | 0.1 | 0.0 | 0.4 | 0.0 | 0.3 | 0.0 | |||||||||||||
| Income attributable to Jones | $ | 5.2 | 0.6 | % | $ | 25.7 | 3.0 | % | $ | 30.8 | 1.7 | % | $ | 64.9 | 3.7 | % | |||||
| Earnings per share (1) | |||||||||||||||||||||
| Net income | $ | 5.4 | $ | 25.8 | $ | 31.2 | $ | 65.2 | |||||||||||||
| Less: income attributable to noncontrolling interest | 0.2 | 0.1 | 0.4 | 0.3 | |||||||||||||||||
| Income attributable to Jones | 5.2 | 25.7 | 30.8 | 64.9 | |||||||||||||||||
| Less: income allocated to participating securities | 0.2 | 1.2 | 0.8 | 3.0 | |||||||||||||||||
| Income available to common stockholders of Jones | $ | 5.0 | $ | 24.5 | $ | 30.0 | $ | 61.9 | |||||||||||||
| Shares outstanding - diluted | 83.2 | 82.7 | 83.3 | 82.6 | |||||||||||||||||
| Earnings per share - diluted | $ | 0.06 | $ | 0.30 | $ | 0.36 | $ | 0.75 | |||||||||||||
Percentages may not add due to rounding.
| (1) | Earnings per share is calculated under the "two-class method," where income is allocated between common shares and participating securities (unvested restricted shares held by employees that have a nonforfeitable right to dividends). Both our common shares and participating securities share equally in dividend payments and earnings. |
THE JONES GROUP INC.
Reconciliation of Non-GAAP Measures to GAAP
for the quarters and six months ended July 2, 2011 and July 3, 2010
| All amounts in millions, except per share data | SECOND QUARTER | FISCAL SIX MONTHS | |||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||
| Operating income | $ | 44.9 | $ | 55.3 | $ | 106.1 | $ | 131.6 | |||||
| Adjustments: | |||||||||||||
| Items affecting segment income: | |||||||||||||
| Impairment and other expenses related to retail store closure plan (a) | 0.8 | 0.3 | 0.3 | 0.1 | |||||||||
| Charges related to acquired businesses (b) | (0.8 | ) | 11.7 | (0.9 | ) | 15.0 | |||||||
| Present value adjustments to lease liabilities for properties not in use (c) | 12.0 | 6.2 | 12.4 | 4.9 | |||||||||
| Other restructuring expenses and certain other charges (d) | (0.2 | ) | 3.3 | 1.9 | 4.2 | ||||||||
| Total adjustments to operating income | 11.8 | 21.5 | 13.7 | 24.2 | |||||||||
| Adjusted operating income | $ | 56.7 | $ | 76.8 | $ | 119.8 | $ | 155.8 | |||||
|
Income attributable to Jones (as reported) |
$ | 5.2 | $ | 25.7 | $ | 30.8 | $ | 64.9 | |||||
| Provision for income taxes | 3.2 | 15.2 | 18.7 | 38.3 | |||||||||
| Adjustments to operating income, from above | 11.8 | 21.5 | 13.7 | 24.2 | |||||||||
| Adjustments to deferred financing costs (e) | 1.9 | - | 1.9 | - | |||||||||
| Adjustment of remaining consideration payable related to acquisition of Stuart Weitzman (f) | 22.9 | 0.1 | 31.8 | 0.1 | |||||||||
| Adjusted income before provision for income taxes | 45.0 | 62.5 | 96.9 | 127.5 | |||||||||
| Adjusted provision for income taxes | 16.9 | 23.2 | 36.5 | 47.3 | |||||||||
| Adjusted income attributable to Jones | 28.1 | 39.3 | 60.4 | 80.2 | |||||||||
| Less: adjusted income allocated to participating securities | (0.9 | ) | (1.8 | ) | (1.8 | ) | (3.7 | ) | |||||
| Adjusted income available to common stockholders | $ | 27.2 | $ | 37.5 | $ | 58.6 | $ | 76.5 | |||||
| Earnings per share - diluted (as reported) |
$ | 0.06 | $ | 0.30 | $ | 0.36 | $ | 0.75 | |||||
| Provision for income taxes | 0.04 | 0.18 | 0.22 | 0.44 | |||||||||
| Items affecting segment income: | |||||||||||||
| Impairment and other expenses related to retail store closure plan (a) | 0.01 | - | - | - | |||||||||
| Charges related to acquired businesses (b) | (0.01 | ) | 0.13 | (0.01 | ) | 0.17 | |||||||
| Present value adjustments to lease liabilities for properties not in use (c) | 0.14 | 0.07 | 0.14 | 0.06 | |||||||||
| Other restructuring expenses and certain other charges (d) | - | 0.04 | 0.02 | 0.05 | |||||||||
| Adjustments to deferred financing costs (e) | 0.02 | - | 0.02 | - | |||||||||
| Adjustment of remaining consideration payable related to acquisition of Stuart Weitzman (f) | 0.27 | - | 0.37 | - | |||||||||
| Adjusted income before provision for income taxes | 0.53 | 0.72 | 1.12 | 1.47 | |||||||||
| Adjusted provision for income taxes | 0.20 | 0.27 | 0.42 | 0.54 | |||||||||
| Adjusted earnings per share - diluted | $ | 0.33 | $ | 0.45 | $ | 0.70 | $ | 0.93 | |||||
|
Non-GAAP adjustments affecting revenue by segment (g): |
|||||||||||||
| Domestic wholesale sportswear | $ | - | $ | - | $ | - | $ | - | |||||
| Domestic wholesale jeanswear (d) | 0.3 | - | 0.3 | - | |||||||||
| Domestic wholesale footwear and accessories | - | - | - | - | |||||||||
| Domestic retail | - | - | - | - | |||||||||
| International wholesale | - | - | - | - | |||||||||
| International retail | - | - | - | - | |||||||||
| Licensing, other & eliminations | - | - | - | - | |||||||||
| Total | $ | 0.3 | $ | - | $ | 0.3 | $ | - | |||||
| Non-GAAP adjustments affecting income by segment (g): | |||||||||||||
| Domestic wholesale sportswear (b,d) | $ | (6.9 | ) | $ | 6.1 | $ | (7.1 | ) | $ | 8.3 | |||
| Domestic wholesale jeanswear (c,d) | 0.5 | 5.5 | 1.4 | 5.0 | |||||||||
| Domestic wholesale footwear and accessories (b,c,d) | 12.6 | 4.2 | 14.0 | 4.3 | |||||||||
| Domestic retail (a,d) | (0.8 | ) | 0.3 | (1.1 | ) | (0.1 | ) | ||||||
| International wholesale (b,d) | 0.5 | 0.8 | 0.5 | 1.0 | |||||||||
| International retail (b) | 0.5 | - | 0.5 | - | |||||||||
| Licensing, other & eliminations (b,d) | 5.4 | 4.6 | 5.5 | 5.7 | |||||||||
| Total | $ | 11.8 | $ | 21.5 | $ | 13.7 | $ | 24.2 | |||||
| (a) | 2011 and 2010 include severance, fixed asset impairment and other charges and credits related to the closure of underperforming retail locations. |
| (b) | 2011 and 2010 include consulting fees, legal fees, accounting fees and the amortization of certain acquired intangible assets related to the acquisitions of Stuart Weitzman, Kurt Geiger (2011 only) and Robert Rodriguez. 2011 and 2010 also include the fair value adjustment of the contingent consideration payable for the Robert Rodriguez acquisition. |
| (c) | 2011and 2010 include present value accruals and adjustments for liabilities related to leases on properties currently not in use. |
| (d) | 2011 and 2010 include severance, occupancy, and other costs related to the exit from or restructuring of certain product lines and the closure of the Texas warehouse and certain other charges not considered by management to be part of ongoing operations. 2011 and 2010 also include consulting, legal, and accounting fees related to business development activities. |
| (e) | 2011 includes the write-off of certain deferred financing fees related to amendment and extension of our credit facility. |
| (f) | Represents the periodic adjustment in accordance with GAAP of the remaining consideration payable related to the acquisition of Stuart Weitzman. |
| (g) | See "Segment Information" page for the presentation of GAAP and Adjusted amounts. |
THE JONES GROUP INC.
SEGMENT INFORMATION
(UNAUDITED)
| Dollars in millions |
Domestic Wholesale Sportswear |
Domestic Wholesale Jeanswear |
Domestic Wholesale Footwear & Accessories |
Domestic Retail |
International Wholesale |
International Retail |
Licensing, Other & Eliminations |
Consolidated |
||||||||||||||||
| For the fiscal quarter ended July 2, 2011 | ||||||||||||||||||||||||
| Revenues | $ | 203.0 | $ | 189.1 | $ | 188.4 | $ | 166.5 | $ | 76.6 | $ | 53.4 | $ | 10.4 | $ | 887.4 | ||||||||
| Segment income (loss) | $ | 22.3 | $ | 11.9 | $ | (2.4 | ) | $ | 4.9 | $ | 9.5 | $ | 3.5 | $ | (4.8 | ) | 44.9 | |||||||
| Segment margin | 11.0% | 6.3% | (1.3% | ) | 2.9% | 12.4% | 6.6% | 5.1% | ||||||||||||||||
| Net interest expense | (37.0 | ) | ||||||||||||||||||||||
| Equity in income of unconsolidated affiliate | 0.7 | |||||||||||||||||||||||
| Income before provision for income taxes | $ | 8.6 | ||||||||||||||||||||||
| Segment revenues | $ | 203.0 | $ | 189.1 | $ | 188.4 | $ | 166.5 | $ | 76.6 | $ | 53.4 | $ | 10.4 | $ | 887.4 | ||||||||
| Adjustments affecting segment revenues (a) | - | 0.3 | - | - | - | - | - | 0.3 | ||||||||||||||||
| Adjusted segment revenues | $ | 203.0 | $ | 189.4 | $ | 188.4 | $ | 166.5 | $ | 76.6 | $ | 53.4 | $ | 10.4 | $ | 887.7 | ||||||||
| Segment income (loss) | $ | 22.3 | $ | 11.9 | $ | (2.4 | ) | $ | 4.9 | $ | 9.5 | $ | 3.5 | $ | (4.8 | ) | $ | 44.9 | ||||||
| Adjustments affecting segment income (a) | (6.9 | ) | 0.5 | 12.6 | (0.8 | ) | 0.5 | 0.5 | 5.4 | 11.8 | ||||||||||||||
| Adjusted segment income | $ | 15.4 | $ | 12.4 | $ | 10.2 | $ | 4.1 | $ | 10.0 | $ | 4.0 | $ | 0.6 | $ | 56.7 | ||||||||
| Adjusted segment margin | 7.6% | 6.5% | 5.4% | 2.5% | 13.1% | 7.5% | 6.4% | |||||||||||||||||
| For the fiscal quarter ended July 3, 2010 | ||||||||||||||||||||||||
| Revenues | $ | 219.6 | $ | 189.3 | $ | 193.6 | $ | 165.0 | $ | 69.3 | $ | 12.5 | $ | 10.3 | $ | 859.6 | ||||||||
| Segment income | $ | 21.1 | $ | 13.2 | $ | 12.9 | $ | 1.1 | $ | 7.2 | $ | 3.1 | $ | (3.3 | ) | 55.3 | ||||||||
| Segment margin | 9.6% | 7.0% | 6.7% | 0.7% | 10.4% | 24.8% | 6.4% | |||||||||||||||||
| Net interest expense | (14.3 | ) | ||||||||||||||||||||||
| Income before provision for income taxes | $ | 41.0 | ||||||||||||||||||||||
| Segment revenues | $ | 219.6 | $ | 189.3 | $ | 193.6 | $ | 165.0 | $ | 69.3 | $ | 12.5 | $ | 10.3 | $ | 859.6 | ||||||||
| Adjustments affecting segment revenues (a) | - | - | - | - | - | - | - | - | ||||||||||||||||
| Adjusted segment revenues | $ | 219.6 | $ | 189.3 | $ | 193.6 | $ | 165.0 | $ | 69.3 | $ | 12.5 | $ | 10.3 | $ | 859.6 | ||||||||
| Segment income | $ | 21.1 | $ | 13.2 | $ | 12.9 | $ | 1.1 | $ | 7.2 | $ | 3.1 | $ | (3.3 | ) | $ | 55.3 | |||||||
| Adjustments affecting segment income (a) | 6.1 | 5.5 | 4.2 | 0.3 | 0.8 | - | 4.6 | 21.5 | ||||||||||||||||
| Adjusted segment income | $ | 27.2 | $ | 18.7 | $ | 17.1 | $ | 1.4 | $ | 8.0 | $ | 3.1 | $ | 1.3 | $ | 76.8 | ||||||||
| Adjusted segment margin | 12.4% | 9.9% | 8.8% | 0.8% | 11.5% | 24.8% | 8.9% | |||||||||||||||||
(a) See "Reconciliation of Non-GAAP Measures to GAAP" page.
THE JONES GROUP INC.
SEGMENT INFORMATION
(UNAUDITED)
| Dollars in millions |
Domestic Wholesale Sportswear |
Domestic Wholesale Jeanswear |
Domestic Wholesale Footwear & Accessories |
Domestic Retail |
International Wholesale |
International Retail |
Licensing, Other & Eliminations |
Consolidated |
||||||||||||||||
| For the fiscal six months ended July 2, 2011 | ||||||||||||||||||||||||
| Revenues | $ | 471.7 | $ | 424.6 | $ | 409.0 | $ | 301.7 | $ | 155.7 | $ | 63.6 | $ | 22.4 | $ | 1,848.7 | ||||||||
| Segment income (loss) | $ | 53.1 | $ | 39.9 | $ | 15.6 | $ | (18.0 | ) | $ | 18.8 | $ | 1.9 | $ | (5.2 | ) | 106.1 | |||||||
| Segment margin | 11.3% | 9.4% | 3.8% | (6.0% | ) | 12.1% | 3.0% | 5.7% | ||||||||||||||||
| Net interest expense | (58.2 | ) | ||||||||||||||||||||||
| Equity in income of unconsolidated affiliate | 2.0 | |||||||||||||||||||||||
| Income before provision for income taxes | $ | 49.9 | ||||||||||||||||||||||
| Segment revenues | $ | 471.7 | $ | 424.6 | $ | 409.0 | $ | 301.7 | $ | 155.7 | $ | 63.6 | $ | 22.4 | $ | 1,848.7 | ||||||||
| Adjustments affecting segment revenues (a) | - | 0.3 | - | - | - | - | - | 0.3 | ||||||||||||||||
| Adjusted segment revenues | $ | 471.7 | $ | 424.9 | $ | 409.0 | $ | 301.7 | $ | 155.7 | $ | 63.6 | $ | 22.4 | $ | 1,849.0 | ||||||||
| Segment income (loss) | $ | 53.1 | $ | 39.9 | $ | 15.6 | $ | (18.0 | ) | $ | 18.8 | $ | 1.9 | $ | (5.2 | ) | $ | 106.1 | ||||||
| Adjustments affecting segment income (a) | (7.1 | ) | 1.4 | 14.0 | (1.1 | ) | 0.5 | 0.5 | 5.5 | 13.7 | ||||||||||||||
| Adjusted segment income (loss) | $ | 46.0 | $ | 41.3 | $ | 29.6 | $ | (19.1 | ) | $ | 19.3 | $ | 2.4 | $ | 0.3 | $ | 119.8 | |||||||
| Adjusted segment margin | 9.8% | 9.7% | 7.2% | (6.3% | ) | 12.4% | 3.8% | 6.5% | ||||||||||||||||
| For the fiscal six months ended July 3, 2010 | ||||||||||||||||||||||||
| Revenues | $ | 491.6 | $ | 410.8 | $ | 391.2 | $ | 299.3 | $ | 112.6 | $ | 20.1 | $ | 21.3 | $ | 1,746.9 | ||||||||
| Segment income (loss) | $ | 65.1 | $ | 49.5 | $ | 34.0 | $ | (19.8 | ) | $ | 9.3 | $ | 2.3 | $ | (8.8 | ) | 131.6 | |||||||
| Segment margin | 13.2% | 12.0% | 8.7% | (6.6% | ) | 8.3% | 11.4% | 7.5% | ||||||||||||||||
| Net interest expense | (26.3 | ) | ||||||||||||||||||||||
| Equity in loss of unconsolidated affiliate | (1.8 | ) | ||||||||||||||||||||||
| Income before provision for income taxes | $ | 103.5 | ||||||||||||||||||||||
| Segment revenues | $ | 491.6 | $ | 410.8 | $ | 391.2 | $ | 299.3 | $ | 112.6 | $ | 20.1 | $ | 21.3 | $ | 1,746.9 | ||||||||
| Adjustments affecting segment revenues (a) | - | - | - | - | - | - | - | - | ||||||||||||||||
| Adjusted segment revenues | $ | 491.6 | $ | 410.8 | $ | 391.2 | $ | 299.3 | $ | 112.6 | $ | 20.1 | $ | 21.3 | $ | 1,746.9 | ||||||||
| Segment income (loss) | $ | 65.1 | $ | 49.5 | $ | 34.0 | $ | (19.8 | ) | $ | 9.3 | $ | 2.3 | $ | (8.8 | ) | $ | 131.6 | ||||||
| Adjustments affecting segment income (a) | 8.3 | 5.0 | 4.3 | (0.1 | ) | 1.0 | - | 5.7 | 24.2 | |||||||||||||||
| Adjusted segment income (loss) | $ | 73.4 | $ | 54.5 | $ | 38.3 | $ | (19.9 | ) | $ | 10.3 | $ | 2.3 | $ | (3.1 | ) | $ | 155.8 | ||||||
| Adjusted segment margin | 14.9% | 13.3% | 9.8% | (6.6% | ) | 9.1% | 11.4% | 8.9% | ||||||||||||||||
(a) See "Reconciliation of Non-GAAP Measures to GAAP" page.
THE JONES GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| All amounts in millions | July 2, 2011 | July 3, 2010 | |||||
| ASSETS | |||||||
| CURRENT ASSETS: | |||||||
| Cash and cash equivalents | $ | 146.4 | $ | 133.2 | |||
| Accounts receivable | 378.3 | 380.7 | |||||
| Inventories | 523.2 | 414.9 | |||||
| Prepaid income taxes | 11.5 | 9.0 | |||||
| Deferred taxes | 26.2 | 25.9 | |||||
| Other current assets | 44.3 | 33.3 | |||||
| TOTAL CURRENT ASSETS | 1,129.9 | 997.0 | |||||
| Property, plant and equipment, at cost, less accumulated depreciation and amortization | 270.2 | 241.4 | |||||
| Goodwill | 258.9 | 161.8 | |||||
| Other intangibles, less accumulated amortization | 947.3 | 778.3 | |||||
| Other assets | 152.7 | 129.4 | |||||
| $ | 2,759.0 | $ | 2,307.9 | ||||
| LIABILITIES AND EQUITY | |||||||
| CURRENT LIABILITIES: | |||||||
| Current portion of long-term debt and capital lease obligations | $ | 1.9 | $ | 2.2 | |||
| Current portion of acquisition consideration payable | 23.0 | 10.3 | |||||
| Accounts payable | 230.2 | 200.6 | |||||
| Accrued expenses and other current liabilities | 142.9 | 116.4 | |||||
| TOTAL CURRENT LIABILITIES | 398.0 | 329.5 | |||||
| NONCURRENT LIABILITIES: | |||||||
| Long-term debt and obligations under capital leases | 849.7 | 529.8 | |||||
| Income taxes payable | 8.7 | 9.2 | |||||
| Deferred taxes | 74.9 | 2.7 | |||||
| Acquisition consideration payable | 206.7 | 196.2 | |||||
| Other | 79.1 | 79.4 | |||||
| TOTAL NONCURRENT LIABILITIES | 1,219.1 | 817.3 | |||||
| TOTAL LIABILITIES | 1,617.1 | 1,146.8 | |||||
| EQUITY | 1,141.9 | 1,161.1 | |||||
| $ | 2,759.0 | $ | 2,307.9 | ||||
THE JONES GROUP INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| All amounts in millions |
Six Months Ended |
||||||||
| July 2, 2011 | July 3, 2010 | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
| Net income | $ | 31.2 | $ | 65.2 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities, net of acquisitions: | |||||||||
| Amortization of employee stock options and restricted stock | 11.1 | 13.7 | |||||||
| Depreciation and other amortization | 38.5 | 44.2 | |||||||
| Impairments of property, plant and equipment | 2.9 | 2.1 | |||||||
| Adjustments to acquisition consideration payable | 25.3 | 5.2 | |||||||
| Equity in (income) loss of unconsolidated affiliate | (2.0 | ) | 1.8 | ||||||
| Provision for (recovery of) losses on accounts receivable | 0.3 | (0.3 | ) | ||||||
| Deferred taxes | 13.5 | 8.2 | |||||||
| Fair value adjustments related to interest rate swaps and cap | 1.9 | 2.6 | |||||||
| Other items, net | 4.8 | 0.2 | |||||||
| Changes in operating assets and liabilities: | |||||||||
| Accounts receivable | (12.4 | ) | (55.5 | ) | |||||
| Inventories | (2.8 | ) | (20.0 | ) | |||||
| Accounts payable | (13.3 | ) | 12.1 | ||||||
| Income taxes payable/prepaid taxes | 9.9 | (8.2 | ) | ||||||
| Acquisition consideration payable | (4.8 | ) | - | ||||||
| Other assets and liabilities, net | (38.5 | ) | (45.3 | ) | |||||
| Total adjustments | 34.4 | (39.2 | ) | ||||||
| Net cash provided by operating activities | 65.6 | 26.0 | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
| Capital expenditures | (49.5 | ) | (16.3 | ) | |||||
| Acquisition of KG Group Holdings Limited, net of cash acquired | (143.1 | ) | - | ||||||
| Acquisition of Stuart Weitzman Holdings, LLC, net of cash acquired | - | (159.3 | ) | ||||||
| Acquisition of Moda Nicola International, LLC | - | (14.4 | ) | ||||||
| Other | - | 0.1 | |||||||
| Net cash used in investing activities | (192.6 | ) | (189.9 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
| Issuance of 6.875% Senior Notes due 2019 | 300.0 | - | |||||||
| Debt issuance costs | (6.8 | ) | - | ||||||
| Costs related to secured revolving credit agreement | (2.9 | ) | (7.2 | ) | |||||
| Repayment of acquired debt of KG Group Holdings Limited | (174.1 | ) | - | ||||||
| Cash distributions to former owners of Stuart Weitzman Holdings, LLC | - | (19.0 | ) | ||||||
| Acquisition of treasury stock | (28.0 | ) | - | ||||||
| Dividends paid | (8.5 | ) | (8.6 | ) | |||||
| Payments of acquisition consideration payable | (6.2 | ) | (0.7 | ) | |||||
| Other | 0.3 | (1.1 | ) | ||||||
| Net cash provided by (used in) financing activities | 73.8 | (36.6 | ) | ||||||
| EFFECT OF EXCHANGE RATES ON CASH | (1.2 | ) | 0.3 | ||||||
| NET DECREASE IN CASH AND CASH EQUIVALENTS | (54.4 | ) | (200.2 | ) | |||||
| CASH AND CASH EQUIVALENTS, BEGINNING | 200.8 | 333.4 | |||||||
| CASH AND CASH EQUIVALENTS, ENDING | $ | 146.4 | $ | 133.2 | |||||