UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-KCURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
October 26, 2011
THE JONES GROUP INC.
Pennsylvania (State or Other Jurisdiction of Incorporation) |
1-10746 (Commission File Number) |
06-0935166 (IRS Employer Identification No.) |
1411 Broadway New York, New York 10018 (Address of principal executive offices) |
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(212) 642-3860
(Registrant's telephone number, including area code) |
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Not Applicable
Former name or former address, if changed since last report |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On October 26, 2011, The Jones Group Inc. (the "Company") issued a press release reporting its results of operations for the fiscal quarter ended October 1, 2011.
A copy of the press release is attached as Exhibit 99.1 to this report.
This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
The press release attached as Exhibit 99.1 contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles. To supplement the Company's consolidated financial statements presented in accordance with GAAP, it is presenting non-GAAP information regarding the effect on earnings per share from costs related to, among other things:
severance, fixed asset impairment and other charges and credits related to the closure of underperforming retail locations;
the amortization of the acquired order backlog from the acquisitions of Moda Nicola International, LLC ("Robert Rodriguez"), Stuart Weitzman Holdings, LLC ("Stuart Weitzman") and KG Group Holdings Limited ("Kurt Geiger") and the fair value adjustment of the contingent consideration payable for the Robert Rodriguez and Stuart Weitzman acquisitions;
investment consulting fees, legal fees, accounting fees and other items related to the Robert Rodriguez, Stuart Weitzman and Kurt Geiger acquisitions and other business development activities;
present value accruals and adjustments for liabilities related to leases on properties currently not in use;
the write-off of deferred financing fees related to the amendment and extension of the Company's credit facility;
severance, occupancy, and other costs related to the exit from or restructuring of certain other product lines and other charges not considered by management to be part of ongoing operations; and
severance and other expenses associated with the closure of the Texas warehouse.
These non-GAAP measures are provided to enhance the user's overall understanding of the Company's current financial performance. Specifically, the Company believes the non-GAAP results provide useful information to both management and investors by excluding certain expenses that may not be indicative of the Company's core operating results. In addition, because the Company has historically reported certain non-GAAP results to investors, the Company believes the inclusion of non-GAAP numbers provides consistency in its financial reporting. These measures should be considered in addition to results prepared in accordance with GAAP, but are not a substitute for or superior to GAAP results. The non-GAAP measures of adjusted net income and adjusted diluted earnings per share included in the attached press release have been reconciled to the equivalent GAAP measure.
Item 7.01 Regulation FD Disclosure.
PowerPoint Slide Presentation
A copy of the PowerPoint slide presentation to be made during the conference call with Company management on October 26, 2011 concerning the Company's results of operation for the fiscal quarter ended October 1, 2011 is attached as Exhibit 99.2 to this report.
This information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. | Description |
99.1 | Press Release of the Registrant dated October 26, 2011. |
99.2 | PowerPoint slide presentation dated October 26, 2011. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
THE JONES GROUP INC. (Registrant) By: /s/ John T. McClain |
Date: October 26, 2011
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Exhibit Index
Exhibit No. | Description |
99.1 | Press Release of the Registrant dated October 26, 2011. |
99.2 | PowerPoint slide presentation dated October 26, 2011. |
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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 / Annabelle Rinehart / Jennifer Friedman
Joele Frank, Wilkinson Brimmer Katcher
(212) 355-4449
THE JONES GROUP INC. REPORTS 2011 THIRD QUARTER RESULTS
New York, New York - October 26, 2011 - The Jones Group Inc. (NYSE: JNY) today reported results for the third quarter ended October 1, 2011. Revenues for the third quarter of 2011 were $1,044 million, as compared with $1,022 million for the third quarter of 2010.
The Company reported adjusted earnings per share of $0.48 for the third quarter of 2011, as compared with adjusted earnings per share of $0.54 in the same period last year. The results for the current year quarter include charges related to balances denominated in foreign currencies of approximately $6 million ($4 million after tax), or $0.04 per share, whereas in the prior year period such amounts were not material. The results for the current year quarter also include the favorable impact of a tax law change in the United Kingdom of approximately $4 million after tax, or $0.05 per share. Results for both periods exclude the impact of acquisition-related charges, severance, planned Company-operated retail store closure costs, 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 $0.49 for the third quarter of 2011, as compared with earnings per share of $0.34 for the same period last year. The 2011 third quarter results include a reduction of the acquisition consideration liabilities associated with the Stuart Weitzman and Robert Rodriguez businesses of $15 million ($10 million after tax), partially offset by other net costs and charges of approximately $12 million ($8 million after tax), consisting of acquisition and business development costs, restructuring and other costs. Results in the prior year third quarter include costs and charges of approximately $11 million ($7 million after tax) related to the acquisitions of the Stuart Weitzman and Robert Rodriguez businesses, an intangible asset impairment of approximately $3 million ($2 million after tax) in the Stuart Weitzman business and $15 million ($10 million after tax) of other restructuring, strategic review costs and certain other charges.
Wesley R. Card,
The Jones Group Chief Executive Officer, stated: "
Our performance for the third
quarter is a reflection of our focus on controlling costs and inventory.
Despite a promotional retail environment, we achieved results that were in line
with our expectations."
The following notable events have recently occurred:
Cash provided by operations during the first nine months of 2011 was $6 million, compared with cash used in operations of $71 million in the comparable period last year. The current year results reflect lower working capital utilization partially offset by lower earnings. At October 1, 2011, the Company had $55 million outstanding under its $650 million of committed revolving credit facilities, which it subsequently repaid.
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 $61 million of cash and $55 million outstanding under our revolver, which we have repaid. We entered 2011 with a more conservative, tightened inventory buy plan, and we will continue to approach inventory commitments in the same manner as we look to 2012. With a focus on inventory management and expense control, we believe we will continue to improve margins and to maintain a strong balance sheet."
Mr. Card concluded: "Although we are operating in an uncertain retail landscape, we are confident that we are taking the right steps to position Jones for continued operating improvement. We have successfully aligned our plans with the current consumer environment and will continue to be prudent in our spending, while actively pursuing the Company's strategy."
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 November 11, 2011 for payment on November 25, 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 November 3, 2011 and may be accessed by dialing 877-344-7529. Enter account number 10005357. International callers may dial 412-317-0088. 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, 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:
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 |
THIRD QUARTER |
FISCAL NINE MONTHS |
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2011 |
2010 |
2011 |
2010 | ||||||||||||||||||
Net sales | $ | 1,030.1 | 98.8 | % | $ | 1,009.9 | 98.8 | % | $ | 2,855.9 | 98.8 | % | $ | 2,735.0 | 98.8 | % | |||||
Licensing income | 12.7 | 1.2 | 12.0 | 1.2 | 35.1 | 1.2 | 33.3 | 1.2 | |||||||||||||
Other revenues | 0.2 | 0.0 | 0.2 | 0.0 | 0.7 | 0.0 | 0.6 | 0.0 | |||||||||||||
Total revenues | 1,043.0 | 100.0 | 1,022.1 | 100.0 | 2,891.7 | 100.0 | 2,768.9 | 100.0 | |||||||||||||
Cost of goods sold | 671.1 | 64.3 | 679.5 | 66.5 | 1,866.1 | 64.5 | 1,782.9 | 64.4 | |||||||||||||
Gross profit | 371.9 | 35.7 | 342.6 | 33.5 | 1,025.6 | 35.5 | 986.0 | 35.6 | |||||||||||||
SG&A expenses | 311.5 | 29.9 | 282.5 | 27.6 | 859.2 | 29.7 | 794.3 | 28.7 | |||||||||||||
Income from operations | 60.4 | 5.8 | 60.1 | 5.9 | 166.4 | 5.8 | 191.7 | 6.9 | |||||||||||||
Net interest expense and financing costs (1) | (0.7 | ) | (0.1 | ) | (14.2 | ) | (1.4 | ) | (58.8 | ) | (2.0 | ) | (40.5 | ) | (1.5 | ) | |||||
Equity in income (loss) of unconsolidated affiliate | 0.5 | 0.0 | 0.5 | 0.0 | 2.6 | 0.1 | (1.3 | ) | (0.0 | ) | |||||||||||
Income before provision for income taxes | 60.2 | 5.8 | 46.4 | 4.5 | 110.2 | 3.8 | 149.9 | 5.4 | |||||||||||||
Provision for income taxes | 19.0 | 1.8 | 17.2 | 1.7 | 37.8 | 1.3 | 55.5 | 2.0 | |||||||||||||
Net income | 41.2 | 4.0 | 29.2 | 2.9 | 72.4 | 2.5 | 94.4 | 3.4 | |||||||||||||
Less: income attributable to noncontrolling interest | 0.2 | 0.0 | 0.1 | 0.0 | 0.6 | 0.0 | 0.5 | 0.0 | |||||||||||||
Income attributable to Jones | $ | 41.0 | 3.9 | % | $ | 29.1 | 2.8 | % | $ | 71.8 | 2.5 | % | $ | 93.9 | 3.4 | % | |||||
Earnings per share (2) | |||||||||||||||||||||
Net income | $ | 41.2 | $ | 29.2 | $ | 72.4 | $ | 94.4 | |||||||||||||
Less: income attributable to noncontrolling interest | 0.2 | 0.1 | 0.6 | 0.5 | |||||||||||||||||
Income attributable to Jones | 41.0 | 29.1 | 71.8 | 93.9 | |||||||||||||||||
Less: income allocated to participating securities | 1.4 | 1.3 | 2.2 | 4.2 | |||||||||||||||||
Income available to common stockholders of Jones | $ | 39.6 | $ | 27.8 | $ | 69.6 | $ | 89.7 | |||||||||||||
Shares outstanding - diluted | 80.3 | 82.9 | 82.3 | 82.7 | |||||||||||||||||
Earnings per share - diluted | $ | 0.49 | $ | 0.34 | $ | 0.85 | $ | 1.09 |
Percentages may not add due to rounding.
(1) | Refer to item "f" on the Reconciliation of Non-GAAP Measures to GAAP for amounts impacting interest expense relating to Adjustment of remaining consideration payable related to acquisition of Stuart Weitzman. |
(2) | 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 nine months ended October 1, 2011 and October 2, 2010
All amounts in millions, except per share data | THIRD QUARTER | FISCAL NINE MONTHS | |||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||
Operating income | $ | 60.4 | $ | 60.1 | $ | 166.4 | $ | 191.7 | |||||
Adjustments: | |||||||||||||
Items affecting segment income: | |||||||||||||
Impairment and other expenses related to retail store closure plan (a) | 3.1 | 5.5 | 3.4 | 5.6 | |||||||||
Charges related to acquired businesses (b) | 2.1 | 5.9 | 1.5 | 20.8 | |||||||||
Present value adjustments to lease liabilities for properties not in use (c) | (0.1 | ) | 1.8 | 12.4 | 6.6 | ||||||||
Impairment of acquired intangible asset | - | 2.6 | - | 2.6 | |||||||||
Other restructuring expenses and certain other charges (d) | 4.3 | 7.5 | 5.8 | 11.9 | |||||||||
Total adjustments to operating income | 9.4 | 23.3 | 23.1 | 47.5 | |||||||||
Adjusted operating income | $ | 69.8 | $ | 83.4 | $ | 189.5 | $ | 239.2 | |||||
Income attributable to Jones (as reported) |
$ | 41.0 | $ | 29.1 | $ | 71.8 | $ | 93.9 | |||||
Provision for income taxes | 19.0 | 17.2 | 37.8 | 55.5 | |||||||||
Adjustments to operating income, from above | 9.4 | 23.3 | 23.1 | 47.5 | |||||||||
Adjustments to deferred financing costs (e) | - | - | 1.9 | - | |||||||||
Adjustment of remaining consideration payable related to acquisition of Stuart Weitzman (f) | (12.8 | ) | 5.4 | 19.0 | 5.5 | ||||||||
Adjusted income before provision for income taxes | 56.6 | 75.0 | 153.6 | 202.4 | |||||||||
Adjusted provision for income taxes | 16.3 | 27.8 | 52.9 | 75.1 | |||||||||
Adjusted income attributable to Jones | 40.3 | 47.2 | 100.7 | 127.3 | |||||||||
Less: adjusted income allocated to participating securities | (1.3 | ) | (2.1 | ) | (3.2 | ) | (5.7 | ) | |||||
Adjusted income available to common stockholders | $ | 39.0 | $ | 45.1 | $ | 97.5 | $ | 121.6 | |||||
Earnings per share - diluted (as reported) |
$ | 0.49 | $ | 0.34 | $ | 0.85 | $ | 1.09 | |||||
Provision for income taxes | 0.23 | 0.20 | 0.45 | 0.64 | |||||||||
Items affecting segment income: | |||||||||||||
Impairment and other expenses related to retail store closure plan (a) | 0.04 | 0.06 | 0.04 | 0.06 | |||||||||
Charges related to acquired businesses (b) | 0.02 | 0.07 | 0.02 | 0.24 | |||||||||
Present value adjustments to lease liabilities for properties not in use (c) | - | 0.02 | 0.14 | 0.08 | |||||||||
Impairment of acquired intangible asset | - | 0.03 | - | 0.03 | |||||||||
Other restructuring expenses and certain other charges (d) | 0.05 | 0.08 | 0.07 | 0.14 | |||||||||
Adjustments to deferred financing costs (e) | - | - | 0.02 | - | |||||||||
Adjustment of remaining consideration payable related to acquisition of Stuart Weitzman (f) | (0.15 | ) | 0.06 | 0.22 | 0.06 | ||||||||
Adjusted income before provision for income taxes | 0.68 | 0.86 | 1.81 | 2.34 | |||||||||
Adjusted provision for income taxes | 0.20 | 0.32 | 0.62 | 0.87 | |||||||||
Adjusted earnings per share - diluted | $ | 0.48 | $ | 0.54 | $ | 1.19 | $ | 1.47 | |||||
Non-GAAP adjustments affecting revenue by segment (g): |
|||||||||||||
Domestic wholesale sportswear | $ | - | $ | - | $ | - | $ | - | |||||
Domestic wholesale jeanswear (d) | 1.3 | - | 1.6 | - | |||||||||
Domestic wholesale footwear and accessories | - | - | - | - | |||||||||
Domestic retail | - | - | - | - | |||||||||
International wholesale | - | - | - | - | |||||||||
International retail | - | - | - | - | |||||||||
Licensing, other & eliminations | - | - | - | - | |||||||||
Total | $ | 1.3 | $ | - | $ | 1.6 | $ | - | |||||
Non-GAAP adjustments affecting income by segment (g): | |||||||||||||
Domestic wholesale sportswear (b,d) | $ | (1.8 | ) | $ | (2.3 | ) | $ | (8.8 | ) | $ | 6.0 | ||
Domestic wholesale jeanswear (c,d) | 2.0 | 2.6 | 3.4 | 7.6 | |||||||||
Domestic wholesale footwear and accessories (b,c,d) | 1.8 | 7.7 | 15.7 | 12.0 | |||||||||
Domestic retail (a,d) | 2.5 | 7.9 | 1.4 | 7.8 | |||||||||
International wholesale (b,d) | 1.7 | 2.3 | 2.2 | 3.3 | |||||||||
International retail (b) | 1.5 | - | 2.0 | - | |||||||||
Licensing, other & eliminations (b,d) | 1.7 | 5.1 | 7.2 | 10.8 | |||||||||
Total | $ | 9.4 | $ | 23.3 | $ | 23.1 | $ | 47.5 |
(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 October 1, 2011 | ||||||||||||||||||||||||
Revenues | $ | 243.9 | $ | 187.1 | $ | 264.3 | $ | 150.1 | $ | 99.6 | $ | 85.3 | $ | 12.7 | $ | 1,043.0 | ||||||||
Segment income (loss) | $ | 28.2 | $ | 8.9 | $ | 27.8 | $ | (16.2 | ) | $ | 11.7 | $ | 0.6 | $ | (0.6 | ) | 60.4 | |||||||
Segment margin | 11.6% | 4.8% | 10.5% | (10.8% | ) | 11.7% | 0.7% | 5.8% | ||||||||||||||||
Net interest expense (a) | (0.7 | ) | ||||||||||||||||||||||
Equity in income of unconsolidated affiliate | 0.5 | |||||||||||||||||||||||
Income before provision for income taxes | $ | 60.2 | ||||||||||||||||||||||
Segment revenues | $ | 243.9 | $ | 187.1 | $ | 264.3 | $ | 150.1 | $ | 99.6 | $ | 85.3 | $ | 12.7 | $ | 1,043.0 | ||||||||
Adjustments affecting segment revenues (b) | - | 1.3 | - | - | - | - | - | 1.3 | ||||||||||||||||
Adjusted segment revenues | $ | 243.9 | $ | 188.4 | $ | 264.3 | $ | 150.1 | $ | 99.6 | $ | 85.3 | $ | 12.7 | $ | 1,044.3 | ||||||||
Segment income (loss) | $ | 28.2 | $ | 8.9 | $ | 27.8 | $ | (16.2 | ) | $ | 11.7 | $ | 0.6 | $ | (0.6 | ) | $ | 60.4 | ||||||
Adjustments affecting segment income (b) | (1.8 | ) | 2.0 | 1.8 | 2.5 | 1.7 | 1.5 | 1.7 | 9.4 | |||||||||||||||
Adjusted segment income (loss) | $ | 26.4 | $ | 10.9 | $ | 29.6 | $ | (13.7 | ) | $ | 13.4 | $ | 2.1 | $ | 1.1 | $ | 69.8 | |||||||
Adjusted segment margin | 10.8% | 5.8% | 11.2% | (9.1% | ) | 13.5% | 2.5% | 6.7% | ||||||||||||||||
For the fiscal quarter ended October 2, 2010 | ||||||||||||||||||||||||
Revenues | $ | 273.2 | $ | 229.9 | $ | 251.3 | $ | 159.6 | $ | 83.6 | $ | 12.5 | $ | 12.0 | $ | 1,022.1 | ||||||||
Segment income (loss) | $ | 25.6 | $ | 21.1 | $ | 22.5 | $ | (20.9 | ) | $ | 11.1 | $ | 2.4 | $ | (1.7 | ) | 60.1 | |||||||
Segment margin | 9.4% | 9.2% | 9.0% | (13.1% | ) | 13.3% | 19.2% | 5.9% | ||||||||||||||||
Net interest expense (a) | (14.2 | ) | ||||||||||||||||||||||
Equity in income of unconsolidated affiliate | 0.5 | |||||||||||||||||||||||
Income before provision for income taxes | $ | 46.4 | ||||||||||||||||||||||
Segment revenues | $ | 273.2 | $ | 229.9 | $ | 251.3 | $ | 159.6 | $ | 83.6 | $ | 12.5 | $ | 12.0 | $ | 1,022.1 | ||||||||
Adjustments affecting segment revenues (b) | - | - | - | - | - | - | - | - | ||||||||||||||||
Adjusted segment revenues | $ | 273.2 | $ | 229.9 | $ | 251.3 | $ | 159.6 | $ | 83.6 | $ | 12.5 | $ | 12.0 | $ | 1,022.1 | ||||||||
Segment income (loss) | $ | 25.6 | $ | 21.1 | $ | 22.5 | $ | (20.9 | ) | $ | 11.1 | $ | 2.4 | $ | (1.7 | ) | $ | 60.1 | ||||||
Adjustments affecting segment income (b) | (2.3 | ) | 2.6 | 7.7 | 7.9 | 2.3 | - | 5.1 | 23.3 | |||||||||||||||
Adjusted segment income (loss) | $ | 23.3 | $ | 23.7 | $ | 30.2 | $ | (13.0 | ) | $ | 13.4 | $ | 2.4 | $ | 3.4 | $ | 83.4 | |||||||
Adjusted segment margin | 8.5% | 10.3% | 12.0% | (8.1% | ) | 16.0% | 19.2% | 8.2% |
(a) | Refer to item "f" on the Reconciliation of Non-GAAP Measures to GAAP for amounts impacting interest expense relating to Adjustment of remaining consideration payable related to acquisition of Stuart Weitzman. |
(b) | 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 nine months ended October 1, 2011 | ||||||||||||||||||||||||
Revenues | $ | 715.6 | $ | 611.7 | $ | 673.3 | $ | 451.8 | $ | 255.3 | $ | 148.9 | $ | 35.1 | $ | 2,891.7 | ||||||||
Segment income (loss) | $ | 81.2 | $ | 48.8 | $ | 43.6 | $ | (34.2 | ) | $ | 30.4 | $ | 2.5 | $ | (5.9 | ) | 166.4 | |||||||
Segment margin | 11.3% | 8.0% | 6.5% | (7.6% | ) | 11.9% | 1.7% | 5.8% | ||||||||||||||||
Net interest expense (a) | (58.8 | ) | ||||||||||||||||||||||
Equity in income of unconsolidated affiliate | 2.6 | |||||||||||||||||||||||
Income before provision for income taxes | $ | 110.2 | ||||||||||||||||||||||
Segment revenues | $ | 715.6 | $ | 611.7 | $ | 673.3 | $ | 451.8 | $ | 255.3 | $ | 148.9 | $ | 35.1 | $ | 2,891.7 | ||||||||
Adjustments affecting segment revenues (b) | - | 1.6 | - | - | - | - | - | 1.6 | ||||||||||||||||
Adjusted segment revenues | $ | 715.6 | $ | 613.3 | $ | 673.3 | $ | 451.8 | $ | 255.3 | $ | 148.9 | $ | 35.1 | $ | 2,893.3 | ||||||||
Segment income (loss) | $ | 81.2 | $ | 48.8 | $ | 43.6 | $ | (34.2 | ) | $ | 30.4 | $ | 2.5 | $ | (5.9 | ) | $ | 166.4 | ||||||
Adjustments affecting segment income (b) | (8.8 | ) | 3.4 | 15.7 | 1.4 | 2.2 | 2.0 | 7.2 | 23.1 | |||||||||||||||
Adjusted segment income (loss) | $ | 72.4 | $ | 52.2 | $ | 59.3 | $ | (32.8 | ) | $ | 32.6 | $ | 4.5 | $ | 1.3 | $ | 189.5 | |||||||
Adjusted segment margin | 10.1% | 8.5% | 8.8% | (7.3% | ) | 12.8% | 3.0% | 6.5% | ||||||||||||||||
For the fiscal nine months ended October 2, 2010 | ||||||||||||||||||||||||
Revenues | $ | 764.8 | $ | 640.7 | $ | 642.4 | $ | 458.9 | $ | 196.2 | $ | 32.6 | $ | 33.3 | $ | 2,768.9 | ||||||||
Segment income (loss) | $ | 90.7 | $ | 70.6 | $ | 56.5 | $ | (40.7 | ) | $ | 20.4 | $ | 4.7 | $ | (10.5 | ) | 191.7 | |||||||
Segment margin | 11.9% | 11.0% | 8.8% | (8.9% | ) | 10.4% | 14.4% | 6.9% | ||||||||||||||||
Net interest expense (a) | (40.5 | ) | ||||||||||||||||||||||
Equity in loss of unconsolidated affiliate | (1.3 | ) | ||||||||||||||||||||||
Income before provision for income taxes | $ | 149.9 | ||||||||||||||||||||||
Segment revenues | $ | 764.8 | $ | 640.7 | $ | 642.4 | $ | 458.9 | $ | 196.2 | $ | 32.6 | $ | 33.3 | $ | 2,768.9 | ||||||||
Adjustments affecting segment revenues (b) | - | - | - | - | - | - | - | - | ||||||||||||||||
Adjusted segment revenues | $ | 764.8 | $ | 640.7 | $ | 642.4 | $ | 458.9 | $ | 196.2 | $ | 32.6 | $ | 33.3 | $ | 2,768.9 | ||||||||
Segment income (loss) | $ | 90.7 | $ | 70.6 | $ | 56.5 | $ | (40.7 | ) | $ | 20.4 | $ | 4.7 | $ | (10.5 | ) | $ | 191.7 | ||||||
Adjustments affecting segment income (b) | 6.0 | 7.6 | 12.0 | 7.8 | 3.3 | - | 10.8 | 47.5 | ||||||||||||||||
Adjusted segment income (loss) | $ | 96.7 | $ | 78.2 | $ | 68.5 | $ | (32.9 | ) | $ | 23.7 | $ | 4.7 | $ | 0.3 | $ | 239.2 | |||||||
Adjusted segment margin | 12.6% | 12.2% | 10.7% | (7.2% | ) | 12.1% | 14.4% | 8.6% |
(a) | Refer to item "f" on the Reconciliation of Non-GAAP Measures to GAAP for amounts impacting interest expense relating to Adjustment of remaining consideration payable related to acquisition of Stuart Weitzman. |
(b) | See "Reconciliation of Non-GAAP Measures to GAAP" page. |
THE JONES GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
All amounts in millions | October 1, 2011 | October 2, 2010 | |||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 61.2 | $ | 34.0 | |||
Accounts receivable | 490.9 | 523.1 | |||||
Inventories | 555.2 | 513.6 | |||||
Prepaid income taxes | 9.1 | 0.7 | |||||
Deferred taxes | 32.3 | 33.2 | |||||
Other current assets | 39.1 | 36.3 | |||||
TOTAL CURRENT ASSETS | 1,187.8 | 1,140.9 | |||||
Property, plant and equipment, at cost, less accumulated depreciation and amortization | 270.5 | 230.5 | |||||
Goodwill | 256.2 | 161.8 | |||||
Other intangibles, less accumulated amortization | 935.2 | 766.7 | |||||
Other assets | 146.5 | 135.7 | |||||
$ | 2,796.2 | $ | 2,435.6 | ||||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Short-term borrowings | $ | 55.0 | $ | 16.3 | |||
Current portion of long-term debt and capital lease obligations | 2.0 | 2.0 | |||||
Current portion of acquisition consideration payable | 22.2 | 9.3 | |||||
Accounts payable | 231.4 | 237.9 | |||||
Income taxes payable | 0.4 | 13.2 | |||||
Accrued expenses and other current liabilities | 134.7 | 146.6 | |||||
TOTAL CURRENT LIABILITIES | 445.7 | 425.3 | |||||
NONCURRENT LIABILITIES: | |||||||
Long-term debt and obligations under capital leases | 857.0 | 534.9 | |||||
Income taxes payable | 8.8 | 9.5 | |||||
Deferred taxes | 93.2 | 3.0 | |||||
Acquisition consideration payable | 190.6 | 198.2 | |||||
Other | 81.2 | 72.8 | |||||
TOTAL NONCURRENT LIABILITIES | 1,230.8 | 818.4 | |||||
TOTAL LIABILITIES | 1,676.5 | 1,243.7 | |||||
EQUITY | 1,119.7 | 1,191.9 | |||||
$ | 2,796.2 | $ | 2,435.6 |
THE JONES GROUP INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
All amounts in millions |
Fiscal Nine Months Ended |
||||||||
October 1, 2011 | October 2, 2010 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
Net income | $ | 72.4 | $ | 94.4 | |||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities, net of acquisitions: | |||||||||
Amortization of employee stock options and restricted stock | 13.9 | 19.1 | |||||||
Depreciation and other amortization | 64.3 | 72.5 | |||||||
Impairment losses | 5.1 | 9.7 | |||||||
Adjustments to acquisition consideration payable | 10.7 | 8.7 | |||||||
Equity in (income) loss of unconsolidated affiliate | (2.6 | ) | 1.3 | ||||||
Provision for (recovery of) losses on accounts receivable | 0.5 | (0.4 | ) | ||||||
Deferred taxes | 26.4 | 1.2 | |||||||
Fair value adjustments related to interest rate swaps and cap | 2.0 | 2.6 | |||||||
Write-off of deferred financing fees | 1.9 | - | |||||||
Other items, net | 5.3 | 0.2 | |||||||
Changes in operating assets and liabilities: | |||||||||
Accounts receivable | (127.4 | ) | (196.3 | ) | |||||
Inventories | (38.2 | ) | (117.5 | ) | |||||
Accounts payable | (10.9 | ) | 49.3 | ||||||
Income taxes payable/prepaid taxes | 12.1 | 13.3 | |||||||
Acquisition consideration payable | (5.0 | ) | (0.7 | ) | |||||
Other assets and liabilities, net | (24.1 | ) | (28.1 | ) | |||||
Total adjustments | (66.0 | ) | (165.1 | ) | |||||
Net cash provided by (used in) operating activities | 6.4 | (70.7 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
Capital expenditures | (72.7 | ) | (27.5 | ) | |||||
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 | (2.5 | ) | (14.4 | ) | |||||
Other | 0.1 | 0.4 | |||||||
Net cash used in investing activities | (218.2 | ) | (200.8 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
Issuance of 6.875% Senior Notes due 2019 | 300.0 | - | |||||||
Debt issuance costs | (6.6 | ) | - | ||||||
Costs related to secured revolving credit agreement | (3.0 | ) | (7.3 | ) | |||||
Net increase in short-term borrowings | 55.0 | 16.2 | |||||||
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 | (78.0 | ) | - | ||||||
Dividends paid | (12.7 | ) | (13.0 | ) | |||||
Payments of acquisition consideration payable | (8.2 | ) | (2.5 | ) | |||||
Other | (0.2 | ) | (1.6 | ) | |||||
Net cash provided by (used in) financing activities | 72.2 | (27.2 | ) | ||||||
EFFECT OF EXCHANGE RATES ON CASH | - | (0.7 | ) | ||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (139.6 | ) | (299.4 | ) | |||||
CASH AND CASH EQUIVALENTS, BEGINNING | 200.8 | 333.4 | |||||||
CASH AND CASH EQUIVALENTS, ENDING | $ | 61.2 | $ | 34.0 |
EXHIBIT 99.2
PowerPoint slide presentation dated October 26, 2011.
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