June 1, 2016

G-III Apparel Group, Ltd. Announces First Quarter Fiscal 2017 Results

Net Sales Increase 6% to First Quarter Record of $457 million

Net Income of $0.06 per Diluted Share

Full-Year Guidance for Net Sales and Net Income Reaffirmed

NEW YORK--(BUSINESS WIRE)-- G-III Apparel Group, Ltd. (NasdaqGS: GIII) today announced operating results for the first quarter of fiscal 2017 that ended April 30, 2016.

For the quarter ended April 30, 2016, G-III reported that net sales increased 6% to a first quarter record of $457.4 million compared to $433.0 million in the year-ago period. The Company's net income for the first quarter was $2.8 million, or $0.06 per diluted share, compared to $6.8 million, or $0.15 per diluted share, in the prior year's comparable period.

Morris Goldfarb, G-III's Chairman, Chief Executive Officer and President, said, "Fiscal 2017 got off to a strong start in our wholesale business, particularly with respect to our Calvin Klein products and our dress businesses including Eliza J and the newly launched Tommy Hilfiger dress line. Although our own retail businesses did not perform to plan, we expect many of the measures we are taking to improve top and bottom line performance for these businesses in the second half of the year. We are looking forward to our upcoming multi-category product launches for Tommy Hilfiger, as well as further penetration and distribution of the Karl Lagerfeld brand."

Mr. Goldfarb concluded, "We believe that our leadership in product design, merchandising and sourcing will continue to drive our strong sell-through performance in department stores. In spite of the challenging retail climate, we are positioned well to continue to build our wholesale business, and remain confident with respect to our financial performance and forecast for the full year."

Outlook

The Company today reiterated its prior guidance for the full fiscal 2017 year ending January 31, 2017. The Company continues to expect net sales of approximately $2.56 billion and net income between $120 million and $125 million, or a range between $2.55 and $2.65 per diluted share. For the fiscal 2016 year ended January 31, 2016, net sales were $2.34 billion and net income was $114.3 million, or $2.46 per diluted share.

On an adjusted basis, excluding items resulting in other income in Fiscal 2016 of $0.02 per share, net of taxes, non-GAAP net income per diluted share was $2.44 for the 2016 fiscal year.

The Company also continues to project adjusted EBITDA for fiscal 2017 to increase between 9% and 12%, to between approximately $228 million and $236 million. Adjusted EBITDA for fiscal 2016 was $210.1 million.

For its second fiscal quarter ending July 31, 2016, the Company is forecasting net sales of approximately $485.0 million compared to $473.9 million in the comparable quarter last year. The Company is also forecasting net income for the second fiscal quarter between $7.0 million and $9.0 million, or between $0.15 and $0.19 per diluted share, compared to net income of $12.5 million, or $0.27 per diluted share, in last year's second quarter.

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 results prepared in accordance with GAAP.

About G-III Apparel Group, Ltd.

G-III is a leading manufacturer and distributor of apparel and accessories under licensed brands, owned brands and private label brands. G-III's owned brands include Vilebrequin, Andrew Marc, Marc New York, Bass, G.H. Bass, Weejuns, G-III Sports by Carl Banks, Eliza J, Black Rivet and Jessica Howard. G-III has fashion licenses under the Calvin Klein, Tommy Hilfiger, Karl Lagerfeld, Kenneth Cole, Cole Haan, Guess?, Jones New York, Jessica Simpson, Vince Camuto, Ivanka Trump, Ellen Tracy, Kensie, 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, Hands High, Touch by Alyssa Milano and more than 100 U.S. colleges and universities. G-III also operates retail stores under the Wilsons Leather, Bass, G.H. Bass & Co., Vilebrequin 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 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


(NASDAQGS: GIII)

CONSOLIDATED STATEMENTS OF INCOME AND SELECTED BALANCE SHEET DATA

 (In thousands, except per share amounts)

       

First Quarter Ended April 30,

(Unaudited)

2016

   

2015

Net sales $ 457,403 $ 432,965
Cost of sales   291,734         278,538  
Gross profit 165,669 154,427
Selling, general and administrative expenses 153,105 137,034
Depreciation and amortization   7,193         5,687  
Operating profit 5,371 11,706
Equity gain in investment 269
Interest and financing charges, net   (1,242 )       (975 )
Income before taxes 4,398 10,731
Income tax expense   1,627         3,971  
Net income $ 2,771       $ 6,760  
 
Net income per common share:
Basic

$

0.06

$

0.15

Diluted

$

0.06

$

0.15

Weighted average shares outstanding:
Basic

45,549

44,965

Diluted

46,942

46,210

 

At April 30,

Selected Balance Sheet Data (in thousands):

2016

2015

Cash $ 95,448 $ 85,708
Working Capital 633,510 565,461
Inventory 406,720 371,224
Total Assets 1,106,681 952,050
Total Stockholders' Equity 901,651 761,155
 
 

G-III APPAREL GROUP, LTD. AND SUBSIDIARIES

RECONCILIATION OF FORECASTED AND ACTUAL GAAP NET INCOME PER SHARE TO

FORECASTED AND ACTUAL NON-GAAP NET INCOME PER SHARE

(Unaudited)

         

Forecasted Twelve

Months Ending

January 31, 2017

Actual Twelve

Months Ended

January 31, 2016

GAAP diluted net income per common share $2.55 - $ 2.65 $2.46
Excluded from non-GAAP:
Other income, net of taxes (0.02)

Non-GAAP diluted net income per common share

$2.55 - $2.65 $2.44
 
Non-GAAP diluted net income per share is a "non-GAAP financial measure" that excludes other income in fiscal 2016 which consisted of the reduction of the estimated contingent consideration payable in connection with the acquisition of Vilebrequin. Management believes that this non-GAAP financial measure provides meaningful supplemental information regarding our performance by excluding other income that is 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 SUBSIDIARIES

RECONCILIATION OF FORECASTED AND ACTUAL NET INCOME TO FORECASTED AND ACTUAL ADJUSTED EBITDA

(In thousands)

(Unaudited)

       

 

Forecasted Twelve

Months Ending

January 31, 2017

Actual

Twelve Months Ended

January 31, 2016

Net income $120,000 -$125,000 $114,333
Other income (1,068)
Depreciation and amortization 31,000 25,392
Interest and financing charges, net 7,000 6,691
Income tax expense 70,000 - 73,000 64,800
Adjusted EBITDA, as defined $228,000 - $236,000 $210,148
 
Adjusted EBITDA is a "non-GAAP financial measure" which represents earnings before depreciation and amortization, interest and financing charges, net, and income tax expense and excludes other income in fiscal 2016 which consisted of the reduction of the estimated contingent consideration payable in connection with the acquisition of Vilebrequin. 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 generally accepted accounting principles.
 

Investor Relations:
ICR, Inc.
James Palczynski, 203-682-8229
or
G-III Apparel Group, Ltd.
Neal S. Nackman, 212-403-0500
Chief Financial Officer

Source: G-III Apparel Group, Ltd.

News Provided by Acquire Media


Close window | Back to top

Copyright 2017 G-III Apparel Group