Delaware | 001-07572 | 13-1166910 | |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |
200 Madison Avenue, New York, New York | 10016 | ||
(Address of principal executive offices) | (Zip Code) |
Exhibit | Description |
99.1 | Press Release, dated August 30, 2011. |
Exhibit | Description |
99.1 | Press Release, dated August 30, 2011. |
• | SECOND QUARTER REVENUE AND EPS EXCEEDED COMPANY’S GUIDANCE AND CONSENSUS ESTIMATE |
• | RAISED FULL YEAR REVENUE AND EPS GUIDANCE |
• | TOMMY HILFIGER AND CALVIN KLEIN CONTINUE TO OUTPERFORM GLOBALLY |
• | Earnings per share was $1.07 on a non-GAAP basis, which exceeded the Company’s guidance and the Consensus estimate and represents an increase of 39% over the prior year’s second quarter non-GAAP earnings per share of $0.77. |
• | GAAP earnings per share was $0.92, which exceeded the Company’s guidance. GAAP loss per share in the prior year’s second quarter was $(1.07). |
• | Revenue increased $231.2 million, or 21%, to $1,334.4 million over the prior year's |
• | Earnings before interest and taxes on a non-GAAP basis increased 24% to $151.4 million, despite the anticipated gross margin pressures. This increase was driven by the Company’s 21% revenue growth over last year’s second quarter reflecting strong performance across all businesses. |
• | GAAP earnings before interest and taxes improved to $133.5 million from a GAAP loss before interest and taxes of $(44.1) million in the prior year’s second quarter, primarily due to a decrease in one-time costs associated with the acquisition and integration of Tommy Hilfiger and the related restructuring. Revenue growth as discussed above was also a contributing factor to the increase, partially offset by gross margin pressures. |
• | Earnings per share on a non-GAAP basis was $2.31 for the current year’s six months, as compared to $1.59 for the prior year’s six month period. |
• | GAAP earnings per share was $1.71, as compared to the prior year’s six month period GAAP loss per share of $(1.67). |
• | Revenue was $2,703.6 million, which represents an increase of $981.3 million over the prior year’s amount of $1,722.3 million. The Tommy Hilfiger business, which was |
• | Earnings before interest and taxes increased 57% to $318.5 million on a non-GAAP basis, due to the addition of first quarter earnings in the Tommy Hilfiger business and revenue growth across all businesses, partially offset by gross margin pressures and planned increases in advertising expenses during the first half of 2011. |
• | GAAP earnings before interest and taxes improved to $253.9 million, as compared to a GAAP loss before interest and taxes of $(66.7) million in the prior year’s six months, due primarily to a decrease in one-time costs associated with the acquisition and integration of Tommy Hilfiger and the related restructuring. Also contributing to the increase was the addition of first quarter earnings in the Tommy Hilfiger business and the revenue increase mentioned above, partially offset by gross margin pressures and planned increases in advertising expenses during the first half of 2011. |
• | Pre-tax costs of $338.3 million incurred in 2010 in connection with the acquisition and integration of Tommy Hilfiger, including the following: |
◦ | a loss of $140.5 million associated with hedges against Euro to U.S. dollar exchange rates relating to the purchase price, of which $52.4 million was recorded in the first quarter and $88.1 million was recorded in the second quarter; |
◦ | transaction, related restructuring and debt extinguishment costs of approximately $121.0 million, of which $51.6 million was incurred in the first quarter, $24.6 million was incurred in the second quarter, $13.7 million was incurred in the third quarter and $31.0 million was incurred in the fourth quarter; and |
◦ | short-lived non-cash valuation amortization charges of approximately $76.8 million, of which $53.3 million was recorded in the second quarter and $23.5 million was recorded in the third quarter. |
• | Pre-tax costs of $6.6 million incurred in the fourth quarter of 2010 in connection with the Company’s exit from its United Kingdom and Ireland Van Heusen dress furnishings and accessories business, principally consisting of non-cash charges. |
• | A tax benefit of approximately $7.9 million in 2010 (recorded in the third quarter) related to the lapse of the statute of limitations with respect to certain previously unrecognized tax positions. |
• | Pre-tax costs of approximately $61 million expected to be incurred in 2011 in connection with the integration of Tommy Hilfiger and the related restructuring, of which $30.5 million was incurred in the first quarter, $11.2 million was incurred in the second quarter and approximately $15 million is expected to be incurred in the third quarter. |
• | Pre-tax costs of approximately $16.2 million incurred in the first quarter of 2011 in connection with the modification of the Company’s credit facility. |
• | Pre-tax costs of approximately $8 million expected to be incurred in 2011 in connection with the Company’s negotiated early termination of its license to market sportswear under the Timberland brand, which will become effective in 2012. Of the total, $6.7 million was incurred in the second quarter. |
• | Estimated tax effects associated with the above pre-tax costs, which are based on the Company’s assessment of deductibility. In making this assessment, the Company evaluated each item that it has recorded as an acquisition, integration, exit, termination, restructuring, debt modification or debt extinguishment cost to determine if such cost is tax deductible, and if so, in what jurisdiction the deduction would occur. All items above were identified as either primarily tax deductible in the United States, in which case the Company assumed a combined federal and state tax rate of 38.0%, or as non-deductible, in which case the Company assumed no tax benefit. The assumptions used were consistently applied for both GAAP and non-GAAP earnings amounts. |
Quarter Ended | Six Months Ended | ||||||||||||||||||
7/31/11 | 8/1/10 | 7/31/11 | 8/1/10 | ||||||||||||||||
Net sales | $ | 1,227,730 | $ | 1,011,439 | $ | 2,484,716 | $ | 1,542,127 | |||||||||||
Royalty revenue | 78,202 | 68,106 | 161,084 | 132,965 | |||||||||||||||
Advertising and other revenue | 28,512 | 23,723 | 57,828 | 47,220 | |||||||||||||||
Total revenue | $ | 1,334,444 | $ | 1,103,268 | $ | 2,703,628 | $ | 1,722,312 | |||||||||||
Gross profit on net sales | $ | 617,418 | $ | 483,412 | $ | 1,233,799 | $ | 712,089 | |||||||||||
Gross profit on royalty, advertising and other | |||||||||||||||||||
revenue | 106,714 | 91,829 | 218,912 | 180,185 | |||||||||||||||
Total gross profit | 724,132 | 575,241 | 1,452,711 | 892,274 | |||||||||||||||
Selling, general and administrative expenses | 590,653 | 524,637 | 1,182,555 | 811,837 | |||||||||||||||
Debt modification and extinguishment costs | 6,650 | 16,233 | 6,650 | ||||||||||||||||
Other loss | 88,100 | 140,490 | |||||||||||||||||
Earnings (loss) before interest and taxes | 133,479 | (44,146 | ) | 253,923 | (66,703 | ) | |||||||||||||
Interest expense, net | 31,446 | 39,225 | 64,516 | 47,500 | |||||||||||||||
Pre-tax income (loss) | 102,033 | (83,371 | ) | 189,407 | (114,203 | ) | |||||||||||||
Income tax expense (benefit) | 35,304 | (12,747 | ) | 65,011 | (15,966 | ) | |||||||||||||
Net income (loss) | $ | 66,729 | $ | (70,624 | ) | $ | 124,396 | $ | (98,237 | ) | |||||||||
Diluted net income (loss) per common share(1) | $ | 0.92 | $ | (1.07 | ) | $ | 1.71 | $ | (1.67 | ) | |||||||||
Quarter Ended | Six Months Ended | ||||||||||||||||||
7/31/11 | 8/1/10 | 7/31/11 | 8/1/10 | ||||||||||||||||
Depreciation and amortization expense | $ | 31,966 | $ | 50,174 | $ | 66,447 | $ | 62,240 | |||||||||||
(1) | Please see Note A to the Notes to Consolidated GAAP Income Statements for reconciliations of diluted net income (loss) per common share. |
Quarter Ended | Six Months Ended | ||||||||||||||||||
7/31/11 | 8/1/10 | 7/31/11 | 8/1/10 | ||||||||||||||||
GAAP total revenue | $ | 1,334,444 | $ | 1,103,268 | $ | 2,703,628 | $ | 1,722,312 | |||||||||||
Non-GAAP Measures | |||||||||||||||||||
Total gross profit(1) | $ | 726,285 | $ | 612,921 | $ | 1,454,864 | $ | 929,954 | |||||||||||
Selling, general and administrative expenses(2) | 574,930 | 490,985 | 1,136,373 | 726,547 | |||||||||||||||
Earnings before interest and taxes(3) | 151,355 | 121,936 | 318,491 | 203,407 | |||||||||||||||
Income tax expense(4) | 41,609 | 27,709 | 86,119 | 56,079 | |||||||||||||||
Net income(5) | 78,300 | 55,002 | 167,856 | 99,828 | |||||||||||||||
Diluted net income per common share(6) | $ | 1.07 | $ | 0.77 | $ | 2.31 | $ | 1.59 | |||||||||||
Depreciation and amortization(7) | $ | 32,944 | $ | 65,277 | $ | 45,010 | |||||||||||||
(1) Please see Table 3 for reconciliation of GAAP to non-GAAP gross profit. |
(2) Please see Table 4 for reconciliation of GAAP to non-GAAP selling, general and administrative expenses (“SG&A”). |
(3) Please see Table 2 for reconciliation of GAAP earnings (loss) before interest and taxes to non-GAAP earnings before interest and taxes. |
(4) Please see Table 5 for reconciliation of GAAP income tax expense (benefit) to non-GAAP income tax expense and an explanation of the calculation of the tax effects associated with acquisition, integration, exit, termination, restructuring and debt modification and extinguishment costs. |
(5) Please see Table 1 for reconciliation of GAAP net income (loss) to non-GAAP net income. |
(6) Please see Note A to the Notes to Consolidated GAAP Income Statements for reconciliations of diluted net income (loss) per common share. |
(7) Please see Table 6 for reconciliation of GAAP depreciation and amortization to non-GAAP depreciation and amortization. |
Table 1 - Reconciliation of GAAP net income (loss) to Non-GAAP net income | |||||||||||||||||||
Quarter Ended | Six Months Ended | ||||||||||||||||||
7/31/11 | 8/1/10 | 7/31/11 | 8/1/10 | ||||||||||||||||
Net income (loss) | $ | 66,729 | $ | (70,624 | ) | $ | 124,396 | $ | (98,237 | ) | |||||||||
Diluted net income (loss) per common share(1) | $ | 0.92 | $ | (1.07 | ) | $ | 1.71 | $ | (1.67 | ) | |||||||||
Items excluded from GAAP net income (loss): | |||||||||||||||||||
Short-lived non-cash valuation amortization related to Tommy Hilfiger acquisition (gross margin) | 37,680 | 37,680 | |||||||||||||||||
Inventory liquidation costs associated with exit of certain Tommy Hilfiger product categories (gross margin) | 2,153 | 2,153 | |||||||||||||||||
SG&A expenses associated with Tommy Hilfiger acquisition, integration and related restructuring | 9,073 | 33,652 | 39,532 | 85,290 | |||||||||||||||
SG&A expenses associated with negotiated termination of license to market Timberland sportswear | 6,650 | 6,650 | |||||||||||||||||
Debt modification and extinguishment costs | 6,650 | 16,233 | 6,650 | ||||||||||||||||
Losses on hedges against Euro to U.S. dollar exchange rates relating to Tommy Hilfiger purchase price | 88,100 | 140,490 | |||||||||||||||||
Tax effect on the items above(2) | (6,305 | ) | (40,456 | ) | (21,108 | ) | (72,045 | ) | |||||||||||
Non-GAAP net income | $ | 78,300 | $ | 55,002 | $ | 167,856 | $ | 99,828 | |||||||||||
Non-GAAP diluted net income per common share(1) | $ | 1.07 | $ | 0.77 | $ | 2.31 | $ | 1.59 | |||||||||||
(1) Please see Note A to the Notes to the Consolidated GAAP Income Statements for reconciliations of diluted net income (loss) per common share. | |||||||||||||||||||
(2) Please see Table 5 for an explanation of the calculation of the tax effects of the above items. |
Table 2 - Reconciliation of GAAP earnings (loss) before interest and taxes to non-GAAP earnings before interest and taxes | |||||||||||||||||||
Quarter Ended | Six Months Ended | ||||||||||||||||||
7/31/11 | 8/1/10 | 7/31/11 | 8/1/10 | ||||||||||||||||
Earnings (loss) before interest and taxes | $ | 133,479 | $ | (44,146 | ) | $ | 253,923 | $ | (66,703 | ) | |||||||||
Items excluded from GAAP earnings (loss) before interest and taxes: | |||||||||||||||||||
Short-lived non-cash valuation amortization related to Tommy Hilfiger acquisition (gross margin) | 37,680 | 37,680 | |||||||||||||||||
Inventory liquidation costs associated with exit of certain Tommy Hilfiger product categories (gross margin) | 2,153 | 2,153 | |||||||||||||||||
SG&A expenses associated with Tommy Hilfiger acquisition, integration and related restructuring | 9,073 | 33,652 | 39,532 | 85,290 | |||||||||||||||
SG&A expenses associated with negotiated termination of license to market Timberland sportswear | 6,650 | 6,650 | |||||||||||||||||
Debt modification and extinguishment costs | 6,650 | 16,233 | 6,650 | ||||||||||||||||
Losses on hedges against Euro to U.S. dollar exchange rates relating to Tommy Hilfiger purchase price | 88,100 | 140,490 | |||||||||||||||||
Non-GAAP earnings before interest and taxes | $ | 151,355 | $ | 121,936 | $ | 318,491 | $ | 203,407 | |||||||||||
Table 3 - Reconciliation of GAAP gross profit to non-GAAP gross profit | |||||||||||||||||||
Quarter Ended | Six Months Ended | ||||||||||||||||||
7/31/11 | 8/1/10 | 7/31/11 | 8/1/10 | ||||||||||||||||
Gross profit | $ | 724,132 | $ | 575,241 | $ | 1,452,711 | $ | 892,274 | |||||||||||
Items excluded from GAAP gross profit: | |||||||||||||||||||
Short-lived non-cash valuation amortization related to Tommy Hilfiger acquisition | 37,680 | 37,680 | |||||||||||||||||
Inventory liquidation costs associated with exit of certain Tommy Hilfiger product categories | 2,153 | 2,153 | |||||||||||||||||
Non-GAAP gross profit | $ | 726,285 | $ | 612,921 | $ | 1,454,864 | $ | 929,954 | |||||||||||
Table 4 - Reconciliation of GAAP SG&A to non-GAAP SG&A | |||||||||||||||||||
Quarter Ended | Six Months Ended | ||||||||||||||||||
7/31/11 | 8/1/10 | 7/31/11 | 8/1/10 | ||||||||||||||||
SG&A | $ | 590,653 | $ | 524,637 | $ | 1,182,555 | $ | 811,837 | |||||||||||
Items excluded from GAAP SG&A: | |||||||||||||||||||
SG&A expenses associated with Tommy Hilfiger acquisition, integration and related restructuring | (9,073 | ) | (33,652 | ) | (39,532 | ) | (85,290 | ) | |||||||||||
SG&A expenses associated with negotiated termination of license to market Timberland sportswear | (6,650 | ) | (6,650 | ) | |||||||||||||||
Non-GAAP SG&A | $ | 574,930 | $ | 490,985 | $ | 1,136,373 | $ | 726,547 | |||||||||||
Table 5 - Reconciliation of GAAP income tax expense (benefit) to non-GAAP income tax expense | |||||||||||||||||||
Quarter Ended | Six Months Ended | ||||||||||||||||||
7/31/11 | 8/1/10 | 7/31/11 | 8/1/10 | ||||||||||||||||
Income tax expense (benefit) | $ | 35,304 | $ | (12,747 | ) | $ | 65,011 | $ | (15,966 | ) | |||||||||
Items excluded from GAAP income tax expense (benefit): | |||||||||||||||||||
Income tax effect of acquisition, integration, exit, termination, restructuring and debt modification and extinguishment costs(1) | 6,305 | 40,456 | 21,108 | 72,045 | |||||||||||||||
Non-GAAP income tax expense | $ | 41,609 | $ | 27,709 | $ | 86,119 | $ | 56,079 | |||||||||||
(1) The estimated tax effects of the Company’s acquisition, integration, exit, termination, restructuring and debt modification and extinguishment costs are based on the Company’s assessment of deductibility. In making this assessment, the Company evaluated each item that it has recorded as an acquisition, integration, exit, termination, restructuring, debt modification and debt extinguishment cost to determine if such cost is tax deductible, and if so, in what jurisdiction the deduction would occur. All of the Company’s acquisition, integration, exit, termination, restructuring, debt modification and debt extinguishment costs were identified as either primarily tax deductible in the United States, in which case the Company assumed a combined federal and state tax rate of 38.0%, or as non-deductible, in which case the Company assumed no tax benefit. The assumptions used were consistently applied for both GAAP and non-GAAP amounts. | |||||||||||||||||||
Table 6 - Reconciliation of GAAP depreciation and amortization to non-GAAP depreciation and amortization | ||||||||||||||||
Quarter Ended | Six Months Ended | |||||||||||||||
8/1/10 | 7/31/11 | 8/1/10 | ||||||||||||||
Depreciation and amortization | $ | 50,174 | $ | 66,447 | $ | 62,240 | ||||||||||
Items excluded from GAAP depreciation and amortization: | ||||||||||||||||
Depreciation and amortization related to Tommy Hilfiger acquisition | (17,230 | ) | (1,170 | ) | (17,230 | ) | ||||||||||
Non-GAAP depreciation and amortization | $ | 32,944 | $ | 65,277 | $ | 45,010 | ||||||||||
Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||
7/31/11 | 8/1/10 | ||||||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | ||||||||||||||||||||||||
Results | Adjustments | Results | Results | Adjustments | Results | ||||||||||||||||||||||
Net income (loss) | $ | 66,729 | $ | (11,571 | ) | (1) | $ | 78,300 | $ | (70,624 | ) | $ | (125,626 | ) | (2) | $ | 55,002 | ||||||||||
Less: Common stock dividends paid to holders of Series A convertible preferred stock | (157 | ) | (157 | ) | |||||||||||||||||||||||
Net income (loss) available to common stockholders | $ | 66,729 | $ | (11,571 | ) | $ | 78,300 | $ | (70,781 | ) | $ | (125,783 | ) | $ | 55,002 | ||||||||||||
Weighted average common shares | 67,129 | 67,129 | 65,875 | 65,875 | |||||||||||||||||||||||
Weighted average dilutive securities | 1,551 | 1,551 | 1,430 | 1,430 | |||||||||||||||||||||||
Weighted average impact of assumed convertible preferred stock conversion | 4,189 | 4,189 | 4,051 | 4,051 | |||||||||||||||||||||||
Total shares | 72,869 | 72,869 | 65,875 | 5,481 | 71,356 | ||||||||||||||||||||||
Diluted net income (loss) per common share | $ | 0.92 | $ | 1.07 | $ | (1.07 | ) | $ | 0.77 | ||||||||||||||||||
Six Months Ended | Six Months Ended | ||||||||||||||||||||||||||
7/31/11 | 8/1/10 | ||||||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | ||||||||||||||||||||||||
Results | Adjustments | Results | Results | Adjustments | Results | ||||||||||||||||||||||
Net income (loss) | $ | 124,396 | $ | (43,460 | ) | (1) | $ | 167,856 | $ | (98,237 | ) | $ | (198,065 | ) | (2) | $ | 99,828 | ||||||||||
Less: Common stock dividends paid to holders of Series A convertible preferred stock | (157 | ) | (157 | ) | |||||||||||||||||||||||
Net income (loss) available to common stockholders | $ | 124,396 | $ | (43,460 | ) | $ | 167,856 | $ | (98,394 | ) | $ | (198,222 | ) | $ | 99,828 | ||||||||||||
Weighted average common shares | 66,964 | 66,964 | 59,077 | 59,077 | |||||||||||||||||||||||
Weighted average dilutive securities | 1,578 | 1,578 | 1,513 | 1,513 | |||||||||||||||||||||||
Weighted average impact of assumed convertible preferred stock conversion | 4,189 | 4,189 | 2,026 | 2,026 | |||||||||||||||||||||||
Total shares | 72,731 | 72,731 | 59,077 | 3,539 | 62,616 | ||||||||||||||||||||||
Diluted net income (loss) per common share | $ | 1.71 | $ | 2.31 | $ | (1.67 | ) | $ | 1.59 | ||||||||||||||||||
(1) | Represents the impact on net income in the period ended July 31, 2011 from the elimination of (i) the costs incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring; (ii) the costs incurred in connection with the Company’s modification of its credit facility; (iii) the costs incurred in connection with the Company’s negotiated early termination of its license to market sportswear under the Timberland brand, which will become effective in 2012; and (iv) the tax effects associated with these costs. Please see Table 1 for a reconciliation of GAAP net income to non-GAAP net income. |
(2) | Represents the impact on net income in the period ended August 1, 2010 from the elimination of the costs incurred in connection with the Company’s acquisition and integration of Tommy Hilfiger, including transaction, restructuring and debt extinguishment costs, short-lived non-cash valuation amortization charges and the effects of hedges against Euro to U.S. dollar exchange rates relating to the purchase price, and tax effects associated with these costs. Please see Table 1 for a reconciliation of GAAP net loss to non-GAAP net income. |
July 31, | August 1, | ||||||
2011 | 2010 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and Cash Equivalents | $ | 287,691 | $ | 475,340 | |||
Receivables | 413,846 | 311,613 | |||||
Inventories | 877,450 | 693,872 | |||||
Other Current Assets | 161,855 | 185,834 | |||||
Total Current Assets | 1,740,842 | 1,666,659 | |||||
Property, Plant and Equipment | 426,367 | 394,929 | |||||
Goodwill and Other Intangible Assets | 4,569,737 | 4,310,136 | |||||
Other Assets | 133,203 | 116,871 | |||||
$ | 6,870,149 | $ | 6,488,595 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts Payable and Accrued Expenses | $ | 907,370 | $ | 791,336 | |||
Short-Term Borrowings | 13,006 | 4,617 | |||||
Current Portion of Long-Term Debt | 51,816 | ||||||
Other Liabilities | 1,096,690 | 1,037,544 | |||||
Long-Term Debt | 2,090,062 | 2,491,635 | |||||
Stockholders’ Equity | 2,711,205 | 2,163,463 | |||||
$ | 6,870,149 | $ | 6,488,595 |
PVH CORP. | |||||||||||
Segment Data | |||||||||||
(In thousands) | |||||||||||
REVENUE BY SEGMENT | |||||||||||
Quarter Ended | Quarter Ended | ||||||||||
7/31/11 | 8/1/10 | ||||||||||
Heritage Brand Wholesale Dress Furnishings | |||||||||||
Net sales | $ | 123,771 | $ | 102,928 | |||||||
Royalty revenue | 1,468 | 1,299 | |||||||||
Advertising and other revenue | 414 | 637 | |||||||||
Total | 125,653 | 104,864 | |||||||||
Heritage Brand Wholesale Sportswear | |||||||||||
Net sales | 96,107 | 88,545 | |||||||||
Royalty revenue | 2,707 | 2,624 | |||||||||
Advertising and other revenue | 475 | 440 | |||||||||
Total | 99,289 | 91,609 | |||||||||
Heritage Brand Retail | |||||||||||
Net sales | 175,212 | 171,432 | |||||||||
Royalty revenue | 1,239 | 1,185 | |||||||||
Advertising and other revenue | 277 | 164 | |||||||||
Total | 176,728 | 172,781 | |||||||||
Total Heritage Brands | |||||||||||
Net sales | 395,090 | 362,905 | |||||||||
Royalty revenue | 5,414 | 5,108 | |||||||||
Advertising and other revenue | 1,166 | 1,241 | |||||||||
Total | 401,670 | 369,254 | |||||||||
Other (Calvin Klein Apparel) | |||||||||||
Net sales | 148,911 | 123,396 | |||||||||
Total | 148,911 | 123,396 | |||||||||
Calvin Klein Licensing | |||||||||||
Net sales | 7,993 | 5,701 | |||||||||
Royalty revenue | 58,738 | 52,293 | |||||||||
Advertising and other revenue | 24,258 | 20,449 | |||||||||
Total | 90,989 | 78,443 | |||||||||
Total Calvin Klein | |||||||||||
Net sales | 156,904 | 129,097 | |||||||||
Royalty revenue | 58,738 | 52,293 | |||||||||
Advertising and other revenue | 24,258 | 20,449 | |||||||||
Total | 239,900 | 201,839 | |||||||||
Tommy Hilfiger North America | |||||||||||
Net sales | 293,760 | 256,144 | |||||||||
Royalty revenue | 4,260 | 4,051 | |||||||||
Advertising and other revenue | 2,005 | 833 | |||||||||
Total | 300,025 | 261,028 | |||||||||
Tommy Hilfiger International | |||||||||||
Net sales | 381,976 | 263,293 | |||||||||
Royalty revenue | 9,790 | 6,654 | |||||||||
Advertising and other revenue | 1,083 | 1,200 | |||||||||
Total | 392,849 | 271,147 | |||||||||
Total Tommy Hilfiger | |||||||||||
Net sales | 675,736 | 519,437 | |||||||||
Royalty revenue | 14,050 | 10,705 | |||||||||
Advertising and other revenue | 3,088 | 2,033 | |||||||||
Total | 692,874 | 532,175 | |||||||||
Total Revenue | |||||||||||
Net sales | 1,227,730 | 1,011,439 | |||||||||
Royalty revenue | 78,202 | 68,106 | |||||||||
Advertising and other revenue | 28,512 | 23,723 | |||||||||
Total | $ | 1,334,444 | $ | 1,103,268 | |||||||
PVH CORP. | |||||||||||||||||||||||||||
Segment Data (Continued) | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
EARNINGS (LOSS) BEFORE INTEREST AND TAXES BY SEGMENT | |||||||||||||||||||||||||||
Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||
7/31/11 | 8/1/10 | ||||||||||||||||||||||||||
Results | Results | ||||||||||||||||||||||||||
Under | Non-GAAP | Under | Non-GAAP | ||||||||||||||||||||||||
GAAP | Adjustments(1) | Results | GAAP | Adjustments(2) | Results | ||||||||||||||||||||||
Heritage Brand Wholesale Dress Furnishings | $ | 14,086 | $ | 14,086 | $ | 7,059 | $ | 7,059 | |||||||||||||||||||
Heritage Brand Wholesale Sportswear | (5,770 | ) | $ | (6,650 | ) | 880 | 7,194 | 7,194 | |||||||||||||||||||
Heritage Brand Retail | 15,234 | 15,234 | 16,794 | 16,794 | |||||||||||||||||||||||
Total Heritage Brands | 23,550 | (6,650 | ) | 30,200 | 31,047 | 31,047 | |||||||||||||||||||||
Other (Calvin Klein Apparel) | 22,124 | 22,124 | 14,666 | 14,666 | |||||||||||||||||||||||
Calvin Klein Licensing | 43,461 | 43,461 | 39,350 | 39,350 | |||||||||||||||||||||||
Total Calvin Klein | 65,585 | 65,585 | 54,016 | 54,016 | |||||||||||||||||||||||
Tommy Hilfiger North America | 31,316 | (6,651 | ) | 37,967 | 6,424 | $ | (24,479 | ) | 30,903 | ||||||||||||||||||
Tommy Hilfiger International | 37,673 | 37,673 | (13,633 | ) | (39,376 | ) | 25,743 | ||||||||||||||||||||
Total Tommy Hilfiger | 68,989 | (6,651 | ) | 75,640 | (7,209 | ) | (63,855 | ) | 56,646 | ||||||||||||||||||
Corporate | (24,645 | ) | (4,575 | ) | (20,070 | ) | (122,000 | ) | (102,227 | ) | (19,773 | ) | |||||||||||||||
Total earnings (loss) before interest and taxes | $ | 133,479 | $ | (17,876 | ) | $ | 151,355 | $ | (44,146 | ) | $ | (166,082 | ) | $ | 121,936 | ||||||||||||
(1) | Adjustments for the quarter ended July 31, 2011 represent the elimination of the costs incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring and the Company’s negotiated early termination of its license to market sportswear under the Timberland brand, which will become effective in 2012. |
(2) | Adjustments for the quarter ended August 1, 2010 represent the elimination of the costs incurred in connection with the Company’s acquisition and integration of Tommy Hilfiger, including transaction, restructuring and debt extinguishment costs, short-lived non-cash valuation amortization charges and the effects of hedges against Euro to U.S. dollar exchange rates relating to the purchase price. |
PVH CORP. | |||||||||||
Segment Data (Continued) | |||||||||||
(In Thousands) | |||||||||||
REVENUE BY SEGMENT | |||||||||||
Six Months Ended | Six Months Ended | ||||||||||
7/31/11 | 8/1/10 | ||||||||||
Heritage Brand Wholesale Dress Furnishings | |||||||||||
Net sales | $ | 258,460 | $ | 235,099 | |||||||
Royalty revenue | 2,953 | 2,764 | |||||||||
Advertising and other revenue | 818 | 1,016 | |||||||||
Total | 262,231 | 238,879 | |||||||||
Heritage Brand Wholesale Sportswear | |||||||||||
Net sales | 231,561 | 223,875 | |||||||||
Royalty revenue | 5,148 | 5,101 | |||||||||
Advertising and other revenue | 881 | 898 | |||||||||
Total | 237,590 | 229,874 | |||||||||
Heritage Brand Retail | |||||||||||
Net sales | 306,889 | 306,615 | |||||||||
Royalty revenue | 2,537 | 2,368 | |||||||||
Advertising and other revenue | 518 | 424 | |||||||||
Total | 309,944 | 309,407 | |||||||||
Total Heritage Brands | |||||||||||
Net sales | 796,910 | 765,589 | |||||||||
Royalty revenue | 10,638 | 10,233 | |||||||||
Advertising and other revenue | 2,217 | 2,338 | |||||||||
Total | 809,765 | 778,160 | |||||||||
Other (Calvin Klein Apparel) | |||||||||||
Net sales | 295,342 | 242,446 | |||||||||
Total | 295,342 | 242,446 | |||||||||
Calvin Klein Licensing | |||||||||||
Net sales | 15,435 | 14,655 | |||||||||
Royalty revenue | 124,512 | 112,027 | |||||||||
Advertising and other revenue | 50,257 | 42,849 | |||||||||
Total | 190,204 | 169,531 | |||||||||
Total Calvin Klein | |||||||||||
Net sales | 310,777 | 257,101 | |||||||||
Royalty revenue | 124,512 | 112,027 | |||||||||
Advertising and other revenue | 50,257 | 42,849 | |||||||||
Total | 485,546 | 411,977 | |||||||||
Tommy Hilfiger North America | |||||||||||
Net sales | 561,397 | 256,144 | |||||||||
Royalty revenue | 7,121 | 4,051 | |||||||||
Advertising and other revenue | 3,291 | 833 | |||||||||
Total | 571,809 | 261,028 | |||||||||
Tommy Hilfiger International | |||||||||||
Net sales | 815,632 | 263,293 | |||||||||
Royalty revenue | 18,813 | 6,654 | |||||||||
Advertising and other revenue | 2,063 | 1,200 | |||||||||
Total | 836,508 | 271,147 | |||||||||
Total Tommy Hilfiger | |||||||||||
Net sales | 1,377,029 | 519,437 | |||||||||
Royalty revenue | 25,934 | 10,705 | |||||||||
Advertising and other revenue | 5,354 | 2,033 | |||||||||
Total | 1,408,317 | 532,175 | |||||||||
Total Revenue | |||||||||||
Net sales | 2,484,716 | 1,542,127 | |||||||||
Royalty revenue | 161,084 | 132,965 | |||||||||
Advertising and other revenue | 57,828 | 47,220 | |||||||||
Total | $ | 2,703,628 | $ | 1,722,312 | |||||||
PVH CORP. | |||||||||||||||||||||||||||
Segment Data (Continued) | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
EARNINGS (LOSS) BEFORE INTEREST AND TAXES BY SEGMENT | |||||||||||||||||||||||||||
Six Months Ended | Six Months Ended | ||||||||||||||||||||||||||
7/31/11 | 8/1/10 | ||||||||||||||||||||||||||
Results | Results | ||||||||||||||||||||||||||
Under | Non-GAAP | Under | Non-GAAP | ||||||||||||||||||||||||
GAAP | Adjustments(1) | Results | GAAP | Adjustments(2) | Results | ||||||||||||||||||||||
Heritage Brand Wholesale Dress Furnishings | $ | 34,518 | $ | 34,518 | $ | 25,519 | $ | 25,519 | |||||||||||||||||||
Heritage Brand Wholesale Sportswear | 7,912 | $ | (6,650 | ) | 14,562 | 28,082 | 28,082 | ||||||||||||||||||||
Heritage Brand Retail | 19,761 | 19,761 | 25,478 | 25,478 | |||||||||||||||||||||||
Total Heritage Brands | 62,191 | (6,650 | ) | 68,841 | 79,079 | 79,079 | |||||||||||||||||||||
Other (Calvin Klein Apparel) | 43,065 | 43,065 | 28,371 | 28,371 | |||||||||||||||||||||||
Calvin Klein Licensing | 77,603 | 77,603 | 76,333 | 76,333 | |||||||||||||||||||||||
Total Calvin Klein | 120,668 | 120,668 | 104,704 | 104,704 | |||||||||||||||||||||||
Tommy Hilfiger North America | 18,995 | (30,142 | ) | 49,137 | 6,424 | $ | (24,479 | ) | 30,903 | ||||||||||||||||||
Tommy Hilfiger International | 116,655 | (448 | ) | 117,103 | (13,633 | ) | (39,376 | ) | 25,743 | ||||||||||||||||||
Total Tommy Hilfiger | 135,650 | (30,590 | ) | 166,240 | (7,209 | ) | (63,855 | ) | 56,646 | ||||||||||||||||||
Corporate | (64,586 | ) | (27,328 | ) | (37,258 | ) | (243,277 | ) | (206,255 | ) | (37,022 | ) | |||||||||||||||
Total earnings (loss) before interest and taxes | $ | 253,923 | $ | (64,568 | ) | $ | 318,491 | $ | (66,703 | ) | $ | (270,110 | ) | $ | 203,407 | ||||||||||||
(1) | Adjustments for the six months ended July 31, 2011 represent the elimination of the costs incurred in connection with the Company's (i) integration of Tommy Hilfiger and the related restructuring; (ii) modification of its credit facility; and (iii) negotiated early termination of its license to market sportswear under the Timberland brand, which will become effective in 2012. |
(2) | Adjustments for the six months ended August 1, 2010 represent the elimination of the costs incurred in connection with the Company’s acquisition and integration of Tommy Hilfiger, including transaction, restructuring and debt extinguishment costs, short-lived non-cash valuation amortization charges and the effects of hedges against Euro to U.S. dollar exchange rates relating to the purchase price. |
2011 Integration, Exit, Termination, Restructuring and Debt Modification Costs and Net Income Per Common Share Reconciliations | |||||
Full Year | Third Quarter | ||||
2011 | 2011 | ||||
(Estimated) | (Estimated) | ||||
Integration, exit, termination, restructuring and debt modification costs expected to be incurred (please see “Non-GAAP Exclusions” section for detail): | |||||
Pre-tax | $85.0 | $15.0 | |||
Tax impacts | (26.0) | (5.0) | |||
After tax | $59.0 | $10.0 | |||
GAAP net income per common share | $4.19 - $4.31 | $1.61 - $1.67 | |||
Estimated per common share impact of after tax integration, exit, termination, restructuring and debt modification costs | $0.81 | $0.14 | |||
Net income per common share excluding impact of integration, exit, termination, restructuring and debt modification costs | $5.00 - $5.12 | $1.75 - $1.81 |
Full Year 2011 | ||||||||
(Estimated) | ||||||||
GAAP | ||||||||
Revenue | $ | 5,780 | - | $ | 5,820 | |||
Earnings before interest and taxes | 570 | - | 585 | |||||
Operating margin | 9.9 | % | - | 10.1 | % | |||
Pre-tax integration, exit, termination, restructuring and debt modification costs expected to be incurred | 85 | 85 | ||||||
Excluding integration, exit, termination, restructuring and debt modification costs expected to be incurred | ||||||||
Revenue | $ | 5,780 | - | $ | 5,820 | |||
Earnings before interest and taxes | 655 | - | 670 | |||||
Operating margin | 11.3 | % | - | 11.5 | % | |||
Full Year and Third Quarter 2010 Reconciliation of GAAP Diluted Net Income Per Common Share to Non-GAAP Diluted Net Income Per Common Share | |||||||||||||||||||||||||||
Full Year 2010 | Third Quarter 2010 | ||||||||||||||||||||||||||
(Actual) | (Actual) | ||||||||||||||||||||||||||
Results Under GAAP | Adjustments | Non-GAAP Results | Results Under GAAP | Adjustments | Non-GAAP Results | ||||||||||||||||||||||
Net income | $ | 53.8 | $ | (233.2 | ) | (1) | $ | 287.0 | $ | 99.8 | $ | (19.8 | ) | (2) | $ | 119.7 | |||||||||||
Total weighted average shares | 67.4 | 67.4 | 71.8 | 71.8 | |||||||||||||||||||||||
Diluted net income per common share | $ | 0.80 | $ | 4.26 | $ | 1.39 | $ | 1.67 |
(1) | Represents the impact on net income in the year ended January 30, 2011 from the elimination of (i) costs incurred in connection with the Company’s acquisition and integration of Tommy Hilfiger, including transaction, restructuring and debt extinguishment costs, short-lived non-cash valuation amortization charges and the effects of hedges against Euro to U.S. dollar exchange rates relating to the purchase price; (ii) the costs incurred in connection with the Company’s exit from its United Kingdom and Ireland Van Heusen dress furnishings and accessories business; and (iii) a tax benefit related to the lapse of the statute of limitations with respect to certain previously unrecognized tax positions. |
(2) | Represents the impact on net income in the quarter ended October 31, 2010 from the elimination of costs incurred in connection with the Company’s acquisition and integration of Tommy Hilfiger, principally including restructuring and short-lived non-cash valuation amortization charges. |