Jones Apparel Group, Inc. Reports 2009 Third Quarter Results
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NEW YORK, Oct. 28 /PRNewswire-FirstCall/ -- Jones Apparel Group, Inc. (NYSE: JNY) today reported results for the third quarter ended October 3, 2009. Reported revenues for the third quarter of 2009 were $856 million, as compared with $965 million for the third quarter of 2008. The decrease in revenues of 11% was as anticipated and reflective of overall economic conditions that continue to affect retail sales in general.
The Company reported adjusted earnings per share from continuing operations ("EPS") of $0.46 for the third quarter of 2009, as compared with adjusted earnings per share from continuing operations of $0.34 for the same period last year. The 2009 third quarter results exclude charges related to severance and other costs related to restructuring activities initiated across the Company, and certain other costs totaling approximately $13 million ($8 million after tax) (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 from continuing operations of $0.36 per share for the third quarter of 2009, as compared with earnings per share from continuing operations of $0.32 for the same period last year.
Wesley R. Card, Jones Apparel Group President and Chief Executive Officer, stated: "We maneuvered through this very difficult period in our economy by initiating a rigorous effort across the Company focused on controlling inventories and managing costs, while simultaneously invigorating our merchandising and product initiatives. These efforts allowed us to improve operating performance in all segments in the face of an anticipated sales decline. Our vertical retail business is showing signs of improvement as the changes we are making begin to take effect. Comparable store sales in our retail division were down, as anticipated, and consistent with the overall retail environment."
Cash provided by operating activities during the nine months was $149 million, compared with cash provided by operations of $8 million in the same period last year. The year-over-year change in cash provided is primarily due to better working capital management and lower working capital requirements.
John T. McClain, Jones Apparel Group Chief Financial Officer, commented: "Our balance sheet, liquidity and cash flow remain strong. We ended the quarter with over $155 million of cash, and our revolver remains undrawn. Our total debt balance is $537 million, $245 million less than a year ago, and our debt to total capitalization ratio, net of cash, is 23.7%. As a result of our aggressive management, inventories and expenses continue to be well controlled, with inventories down 24% compared with the prior year."
The Company continues to implement its previously-announced retail improvement plan to right-size the retail portfolio, with the goal of enhancing segment profitability, reducing capital expenditures and improving return on invested capital. To date, the Company has exited 69 locations and remains on track to exit a total of approximately 265 locations, which will continue to occur throughout the remainder of 2009 and 2010. The Company now anticipates expense savings and the elimination of unprofitable store locations to improve results by $4 million in 2009, $16 million in 2010 and $22 million in 2011.
The following notable events have recently occurred:
-- launched Rachel Rachel Roy, an affordable contemporary line of
sportswear, footwear, jewelry and accessories, utilizing a social media
marketing campaign;
-- launched an e-commerce site for the Rachel Roy brands at
www.rachelroy.com;
-- opened a flagship multi-brand retail footwear and accessory store,
ShoeWoo, on Lexington Avenue in Manhattan;
-- launched two collections for spring 2010 delivery: "Jones New York
Collection Knits" and "j. Jones New York," a soft, relaxed, casual
collection; and
-- continued to fine tune and execute the retail improvement strategy; to
date have closed 69 stores.
Mr. Card concluded: "We are operating from a position of strength in what continues to be an uncertain consumer environment. Plans for the balance of the year are conservative and we are encouraged that inventories remain well controlled across all retail channels. We are cautiously optimistic that the holiday season will generate better financial results across the industry. We are positioning the Company for the economic recovery and remain focused on enhancing our core brands, increasing market share and controlling our inventories and expenses."
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 13, 2009 for payment on November 27, 2009.
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.jonesapparel.com (under Investor Relations/Conference Schedule). The call will be recorded and made available through November 5, 2009 and may be accessed by dialing 877-344-7529. Enter account number 434852. A slide presentation will accompany the prepared remarks and has been posted with the webcast on 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 Jones Apparel Group, Inc.
Jones Apparel Group, Inc. (www.jonesapparel.com) is a leading designer, marketer and wholesaler of branded apparel, footwear and accessories. The Company also markets directly to consumers through its chain of specialty retail and value-based stores and through its e-commerce web sites. The Company's nationally recognized brands include Jones New York, Nine West, Anne Klein, Gloria Vanderbilt, Kasper, Bandolino, Easy Spirit, Evan-Picone, l.e.i., Energie, Enzo Angiolini, Joan & David, Mootsies Tootsies, Sam & Libby, Napier, Judith Jack, Albert Nipon and Le Suit. The Company also markets costume jewelry under the Givenchy brand licensed from Givenchy Corporation, footwear under the Dockers Women brand licensed from Levi Strauss & Co., and apparel under the Rachel Roy brand licensed from Rachel Roy IP Company, LLC. Each brand is differentiated by its own distinctive styling, pricing strategy, distribution channel and target consumer. The Company contracts for the manufacture of its products through a worldwide network of quality manufacturers. The Company has capitalized on its nationally known brand names by entering into various licenses for several of its trademarks, including Jones New York, Anne Klein New York, Nine West, Gloria Vanderbilt, l.e.i. and Evan-Picone, with select manufacturers of women's and men's products which the Company does not manufacture. For more than 30 years, the Company has built a reputation for excellence in product quality and value, and in operational execution.
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 our ability to obtain credit 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;
-- consolidation of the Company's retail customers;
-- financial difficulties encountered by 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;
-- changes in the costs of raw materials, labor, advertising and
transportation;
-- the general inability to obtain higher wholesale prices for the
Company's products that the Company has experienced for many years;
-- the uncertainties of sourcing associated with an environment in which
general quota has expired on apparel products but litigation and
political activity seeking to re-impose quotas have been initiated;
-- 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, 2008, 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.
JONES APPAREL GROUP, INC.
CONSOLIDATED OPERATING RESULTS
(UNAUDITED)
All amounts in millions,
except per share data
THIRD QUARTER
-------------
2009 2008
---- ----
Net sales $843.9 98.6% $948.6 98.3%
Licensing income 11.6 1.4 16.0 1.7
Other revenues 0.2 0.0 0.1 0.0
--- --- --- ---
Total revenues 855.7 100.0 964.7 100.0
Cost of goods sold 551.3 64.4 641.4 66.5
----- ---- ----- ----
Gross profit 304.4 35.6 323.3 33.5
SG&A expenses 243.5 28.5 271.5 28.1
----- ---- ----- ----
Income from operations 60.9 7.1 51.8 5.4
Net interest expense and
financing costs (11.5) (1.3) (10.5) (1.1)
Loss and costs associated with
repurchase of 4.250% Senior
Notes - - - -
Gain on sale of interest in
Australian joint venture - - - -
Equity in loss of
unconsolidated affiliate (2.3) (0.3) (0.4) 0.0
---- ---- ---- ---
Income before provision for
taxes 47.1 5.5 40.9 4.2
Provision for income taxes 16.5 1.9 14.6 1.5
---- --- ---- ---
Income from continuing
operations 30.6 3.6 26.3 2.7
Income from discontinued
operations, net of tax - - 1.0 0.1
-- -- --- ---
Net income 30.6 3.6 27.3 2.8
Less: income attributable to
noncontrolling interest 0.2 0.0 - -
--- --- -- --
Net income attributable to
Jones $30.4 3.6% $27.3 2.8%
===== === ===== ===
Earnings per share (1)
Income from continuing
operations $30.6 $26.3
Less: income attributable to
noncontrolling interest 0.2 -
--- --
Income from continuing
operations attributable to
Jones 30.4 26.3
Less: income allocated to
participating securities 1.3 0.5
--- ---
Income from continuing
operations available to
common stockholders of
Jones 29.1 25.8
Income from discontinued
operations - 1.0
-- ---
Income available to common
stockholders of Jones $29.1 $26.8
===== =====
Common shares outstanding -
diluted 81.8 81.7
Earnings per share - diluted
Income from continuing
operations $0.36 $0.32
Income from discontinued
operations - 0.01
-- ----
Net income $0.36 $0.33
===== =====
Percentages may not add due to rounding.
NINE MONTHS
-----------
2009 2008
---- ----
Net sales $2,516.8 98.7% $2,732.2 98.7%
Licensing income 33.3 1.3 36.5 1.3
Other revenues 0.6 0.0 0.8 0.0
--- --- --- ---
Total revenues 2,550.7 100.0 2,769.5 100.0
Cost of goods sold 1,670.9 65.5 1,843.2 66.6
------- ---- ------- ----
Gross profit 879.8 34.5 926.3 33.4
SG&A expenses 763.1 29.9 809.1 29.2
----- ---- ----- ----
Income from operations 116.7 4.6 117.2 4.2
Net interest expense and
financing costs (44.2) (1.7) (30.0) (1.1)
Loss and costs associated
with repurchase of
4.250% Senior Notes (2.0) (0.1) - -
Gain on sale of interest in
Australian joint venture - - 0.8 -
Equity in loss of
unconsolidated affiliate (2.8) 0.0 (0.4) -
---- --- ---- --
Income before provision for
taxes 67.7 2.7 87.6 3.2
Provision for income taxes 23.7 0.9 31.1 1.1
---- --- ---- ---
Income from continuing
operations 44.0 1.7 56.5 2.0
Income from discontinued
operations, net of tax - - 1.0 0.0
-- -- --- ---
Net income 44.0 1.7 57.5 2.1
Less: income attributable to
noncontrolling interest 0.2 0.0 - -
--- --- -- --
Net income attributable to
Jones $43.8 1.7% $57.5 2.1%
===== === ===== ===
Earnings per share (1)
Income from continuing
operations $44.0 $56.5
Less: income attributable to
noncontrolling interest 0.2 -
--- --
Income from continuing
operations attributable to
Jones 43.8 56.5
Less: income allocated to
participating securities 1.7 1.0
--- ---
Income from continuing operations
available to common stockholders
of Jones 42.1 55.5
Income from discontinued
operations - 1.0
- ---
Income available to common
stockholders of Jones $42.1 $56.5
===== =====
Common shares outstanding -
diluted 81.7 83.4
Earnings per share - diluted
Income from continuing
operations $0.51 $0.67
Income from discontinued
operations - 0.01
- ----
Net income $0.51 $0.68
===== =====
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.
JONES APPAREL GROUP, INC.
SELECTED OPERATING RESULTS
(UNAUDITED)
As required by the Securities and Exchange Commission Regulation G, the
following table contains information regarding the non-GAAP adjustments
used by the Company in the presentation of its financial results:
All amounts in millions,
except per share data THIRD QUARTER NINE MONTHS
------------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Income from continuing
operations attributable to
Jones $30.4 $26.3 $43.8 $56.5
Provision for income taxes 16.5 14.6 23.7 31.1
Gain on sale of Mexican
operations - - - (0.2)
Loss and costs associated with
repurchase of 4.250%
Senior Notes (a) - - 2.0 -
Write-off of line of credit
fees (b) - - 7.9 -
Items affecting segment income:
Impairment and other expenses
related to retail store
closure plan 1.7 - 24.3 -
Charges associated with
bankruptcy of former U.K.
licensee 0.5 - 3.8 -
Severance related to
restructuring activities 4.2 0.1 15.9 2.3
Other restructuring
expenses and certain other
charges 7.1 3.3 12.9 29.5
--- --- ---- ----
Adjusted income from
continuing operations before
provision for taxes 60.4 44.3 134.3 119.2
Adjusted provision for
income taxes 21.2 15.8 47.1 42.4
---- ---- ---- ----
Adjusted income from
continuing operations
attributable to Jones 39.2 28.5 87.2 76.8
Less: adjusted income
from continuing operations
allocated to participating
securities (1.7) (0.6) (3.4) (1.4)
---- ---- ---- ----
Adjusted income from
continuing operations
available to common
stockholders $37.5 $27.9 $83.8 $75.4
===== ===== ===== =====
Earnings per share from
continuing operations -
diluted (as reported) $0.36 $0.32 $0.51 $0.67
Provision for income taxes 0.19 0.17 0.28 0.36
Gain on sale of Mexican
operations - - - -
Loss and costs associated
with repurchase of
4.250% Senior Notes (a) - - 0.02 -
Write-off of line of credit
fees (b) - - 0.09 -
Items affecting segment income:
Impairment and other
expenses related to
retail store closure
plan 0.02 - 0.29 -
Charges associated with
bankruptcy of former U.K.
licensee 0.01 - 0.05 -
Severance related to
restructuring activities 0.05 - 0.19 0.03
Other restructuring
expenses and certain other
charges 0.08 0.04 0.15 0.34
---- ---- ---- ----
Adjusted income from
continuing operations before
taxes 0.71 0.53 1.58 1.40
Adjusted provision for
income taxes 0.25 0.19 0.55 0.50
---- ---- ---- ----
Adjusted earnings per share
from continuing operations -
diluted $0.46 $0.34 $1.03 $0.90
===== ===== ===== =====
Non-GAAP adjustments affecting
revenue by segment:
Wholesale better apparel $- $- $- $-
Wholesale jeanswear (e) 0.7 0.7 2.9 9.9
Wholesale footwear and
accessories - - - -
Retail (c) 0.1 - 0.1 -
Licensing, other &
eliminations (d) - - - 0.5
-- -- -- ---
Total $0.8 $0.7 $3.0 $10.4
==== ==== ==== =====
Non-GAAP adjustments affecting
income by segment:
Wholesale better apparel (f) $2.1 $0.1 $5.0 $(0.2)
Wholesale jeanswear (e, f) 2.1 1.6 8.5 24.4
Wholesale footwear and
accessories (d, f) 2.2 0.1 12.4 3.8
Retail (c, f) 6.6 0.1 30.5 0.7
Licensing, other &
eliminations (d, f) 0.5 1.5 0.5 3.1
--- --- --- ---
Total $13.5 $3.4 $56.9 $31.8
===== ==== ===== =====
Adjusted segment margins
Wholesale better apparel 14.0% 10.4% 13.2% 11.8%
Wholesale jeanswear 11.4 6.1 10.6 6.6
Wholesale footwear and
accessories 12.6 10.3 8.9 8.1
Retail (6.2) (11.5) (8.6) (7.3)
---- ----- ---- ----
Total 8.7% 5.7% 6.8% 5.4%
=== === === ===
(a) 2009 includes the loss and costs associated with the
repurchase of 4.250% Senior Notes.
(b) 2009 includes the write-off of deferred financing fees
related to our prior revolving credit facility.
(c) 2009 includes fixed asset impairment and other charges
related to the closure of underperforming retail locations
announced in April 2009.
(d) 2009 and 2008 include severance related to the restructuring
of our costume jewelry business and certain charges associated with
the bankruptcy of our former U.K. licensee.
(e) 2009 and 2008 include costs related to the exit from or
restructuring of certain moderate sportswear lines. 2008 also
includes costs related to the repositioning of l.e.i. as an exclusive
product for Walmart.
(f) 2009 and 2008 include severance and other expenses related to
restructuring activities and certain other charges.
JONES APPAREL GROUP, INC.
SEGMENT INFORMATION
(UNAUDITED)
All amounts in millions
Wholesale Wholesale
Better Wholesale Footwear &
Apparel Jeanswear Accessories
------- --------- -----------
For the fiscal quarter ended
October 3, 2009
Revenues from external
customers $245.5 $204.4 $227.2
Intersegment revenues 41.7 0.2 15.0
---- --- ----
Total revenues 287.2 204.6 242.2
----- ----- -----
Segment income (loss) $38.1 $21.3 $28.3
===== ===== =====
Segment margin 13.3% 10.4% 11.7%
Net interest expense
Equity in loss of
unconsolidated affiliate
Income from continuing
operations before provision
for income taxes
Segment revenues $287.2 $204.6 $242.2
Adjustments affecting segment
revenues - 0.7 -
--- --- ---
Adjusted segment revenues $287.2 $205.3 $242.2
====== ====== ======
Segment income (loss) $38.1 $21.3 $28.3
Adjustments affecting segment
income 2.1 2.1 2.2
--- --- ---
Adjusted segment income (loss) $40.2 $23.4 $30.5
===== ===== =====
Adjusted segment margin 14.0% 11.4% 12.6%
For the fiscal quarter ended
October 4, 2008
Revenues from external
customers $303.8 $202.0 $269.6
Intersegment revenues 46.8 1.1 27.6
---- --- ----
Total revenues 350.6 203.1 297.2
----- ----- -----
Segment income (loss) $36.4 $10.8 $30.4
===== ===== =====
Segment margin 10.4% 5.3% 10.2%
Net interest expense
Equity in loss of
unconsolidated affiliate
Income from continuing
operations before provision
for income taxes
Segment revenues $350.6 $203.1 $297.2
Adjustments affecting segment
revenues - 0.7 -
--- --- ---
Adjusted segment revenues $350.6 $203.8 $297.2
====== ====== ======
Segment income (loss) $36.4 $10.8 $30.4
Adjustments affecting segment
income 0.1 1.6 0.1
--- --- ---
Adjusted segment income (loss) $36.5 $12.4 $30.5
===== ===== =====
Adjusted segment margin 10.4% 6.1% 10.3%
Licensing,
Other &
Retail Eliminations Consolidated
------ ------------ ------------
For the fiscal quarter ended
October 3, 2009
Revenues from external
customers $167.0 $11.6 $855.7
Intersegment revenues - (56.9) -
--- ----- ---
Total revenues 167.0 (45.3) 855.7
----- ----- -----
Segment income (loss) $(16.9) $(9.9) 60.9
====== =====
Segment margin (10.1%) 7.1%
Net interest expense (11.5)
Equity in loss of
unconsolidated affiliate (2.3)
----
Income from continuing
operations before
provision for income taxes $47.1
=====
Segment revenues $167.0 $(45.3) $855.7
Adjustments affecting segment
revenues 0.1 - 0.8
--- --- ---
Adjusted segment revenues $167.1 $(45.3) $856.5
====== ====== ======
Segment income (loss) $(16.9) $(9.9) $60.9
Adjustments affecting segment
income 6.6 0.5 13.5
--- --- ----
Adjusted segment income (loss) $(10.3) $(9.4) $74.4
====== ===== =====
Adjusted segment margin (6.2%) 8.7%
For the fiscal quarter ended
October 4, 2008
Revenues from external
customers $173.2 $16.1 $964.7
Intersegment revenues - (75.5) -
--- ----- ---
Total revenues 173.2 (59.4) 964.7
----- ----- -----
Segment income (loss) $(20.1) $(5.7) 51.8
====== =====
Segment margin (11.6%) 5.4%
Net interest expense (10.5)
Equity in loss of
unconsolidated affiliate (0.4)
----
Income from continuing
operations before
provision for income taxes $40.9
=====
Segment revenues $173.2 $(59.4) $964.7
Adjustments affecting segment
revenues - - 0.7
- - ---
Adjusted segment revenues $173.2 $(59.4) $965.4
====== ====== ======
Segment income (loss) $(20.1) $(5.7) $51.8
Adjustments affecting segment
income 0.1 1.5 3.4
--- --- ---
Adjusted segment income (loss) $(20.0) $(4.2) $55.2
====== ===== =====
Adjusted segment margin (11.5%) 5.7%
JONES APPAREL GROUP, INC.
SEGMENT INFORMATION
(UNAUDITED)
All amounts in millions
Wholesale Wholesale
Better Wholesale Footwear &
Apparel Jeanswear Accessories
------- --------- -----------
For the fiscal nine months
ended October 3, 2009
Revenues from external
customers $740.0 $653.9 $631.5
Intersegment revenues 110.3 1.8 43.3
----- --- ----
Total revenues 850.3 655.7 674.8
----- ----- -----
Segment income (loss) $107.3 $61.4 $47.6
====== ===== =====
Segment margin 12.6% 9.4% 7.1%
Net interest expense
Loss and costs associated
with repurchase of 4.250%
Senior Notes
Equity in loss of
unconsolidated affiliate
Income from continuing
operations before provision
for income taxes
Segment revenues $850.3 $655.7 $674.8
Adjustments affecting
segment revenues - 2.9 -
-- --- --
Adjusted segment revenues $850.3 $658.6 $674.8
====== ====== ======
Segment income (loss) $107.3 $61.4 $47.6
Adjustments affecting
segment income 5.0 8.5 12.4
--- --- ----
Adjusted segment income
(loss) $112.3 $69.9 $60.0
====== ===== =====
Adjusted segment margin 13.2% 10.6% 8.9%
For the fiscal nine months
ended October 4, 2008
Revenues from external
customers $870.2 $594.9 $737.8
Intersegment revenues 117.0 3.0 63.3
----- --- ----
Total revenues 987.2 597.9 801.1
----- ----- -----
Segment income (loss) $116.7 $15.8 $61.4
====== ===== =====
Segment margin 11.8% 2.6% 7.7%
Net interest expense
Equity in loss of
unconsolidated affiliate
Gain on sale of Mexican
operations and interest in
Australian joint venture
Income from continuing
operations before provision
for income taxes
Segment revenues $987.2 $597.9 $801.1
Adjustments affecting
segment revenues - 9.9 -
-- --- --
Adjusted segment revenues $987.2 $607.8 $801.1
====== ====== ======
Segment income (loss) $116.7 $15.8 $61.4
Adjustments affecting
segment income (0.2) 24.4 3.8
---- ---- ---
Adjusted segment income
(loss) $116.5 $40.2 $65.2
====== ===== =====
Adjusted segment margin 11.8% 6.6% 8.1%
Licensing,
Other &
Retail Eliminations Consolidated
------ ------------ ------------
For the fiscal nine months
ended October 3, 2009
Revenues from external
customers $492.0 $33.3 $2,550.7
Intersegment revenues - (155.4) -
-- ------ --
Total revenues 492.0 (122.1) 2,550.7
----- ------ -------
Segment income (loss) $(73.0) $(26.6) 116.7
====== ======
Segment margin (14.8%) 4.6%
Net interest expense (44.2)
Loss and costs associated
with repurchase of 4.250%
Senior Notes (2.0)
Equity in loss of
unconsolidated affiliate (2.8)
----
Income from continuing
operations before provision
for income taxes $67.7
=====
Segment revenues $492.0 $(122.1) $2,550.7
Adjustments affecting
segment revenues 0.1 - 3.0
--- - ---
Adjusted segment revenues $492.1 $(122.1) $2,553.7
====== ======= ========
Segment income (loss) $(73.0) $(26.6) $116.7
Adjustments affecting
segment income 30.5 0.5 56.9
---- --- ----
Adjusted segment income
(loss) $(42.5) $(26.1) $173.6
====== ====== ======
Adjusted segment margin (8.6%) 6.8%
For the fiscal nine months
ended October 4, 2008
Revenues from external
customers $529.5 $37.1 $2,769.5
Intersegment revenues - (183.3) -
-- ------ --
Total revenues 529.5 (146.2) 2,769.5
----- ------ -------
Segment income (loss) $(39.4) $(37.5) 117.0
====== ======
Segment margin (7.4%) 4.2%
Net interest expense (30.0)
Equity in loss of
unconsolidated affiliate (0.4)
Gain on sale of Mexican
operations and interest in
Australian joint venture 1.0
---
Income from continuing
operations before provision
for income taxes $87.6
=====
Segment revenues $529.5 $(146.2) $2,769.5
Adjustments affecting
segment revenues - 0.5 10.4
-- --- ----
Adjusted segment revenues $529.5 $(145.7) $2,779.9
====== ======= ========
Segment income (loss) $(39.4) $(37.5) $117.0
Adjustments affecting
segment income 0.7 3.1 31.8
--- --- ----
Adjusted segment income
(loss) $(38.7) $(34.4) $148.8
====== ====== ======
Adjusted segment margin (7.3%) 5.4%
JONES APPAREL GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
All amounts in millions
October 3, 2009 October 4, 2008
--------------- ---------------
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $156.9 $200.3
Accounts
receivable 413.7 474.6
Inventories 417.0 547.9
Prepaid income
taxes 9.1 7.8
Deferred taxes 22.1 25.4
Other current
assets 37.3 57.8
---- ----
TOTAL CURRENT
ASSETS 1,056.1 1,313.8
Property, plant and
equipment, at cost, less
accumulated depreciation
and amortization 246.8 306.7
Goodwill 160.7 973.9
Other intangibles,
less accumulated
amortization 589.1 616.7
Other assets 114.3 56.6
----- ----
$2,167.0 $3,267.7
======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion
of long-term
debt and capital
lease obligations $10.2 $3.5
Accounts
payable 194.7 222.9
Income taxes
payable - 15.2
Accrued expenses
and other
current
liabilities 120.4 132.4
----- -----
TOTAL CURRENT
LIABILITIES 325.3 374.0
----- -----
NONCURRENT LIABILITIES:
Long-term debt
and obligation
under capital
leases 527.0 779.4
Income taxes 11.3 -
Deferred taxes 2.4 19.8
Other 77.8 68.7
---- ----
TOTAL NONCURRENT
LIABILITIES 618.5 867.9
----- -----
TOTAL
LIABILITIES 943.8 1,241.9
----- -------
STOCKHOLDERS'
EQUITY 1,223.2 2,025.8
------- -------
$2,167.0 $3,267.7
======== ========
JONES APPAREL GROUP, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
All amounts in millions Fiscal Nine Months Ended
------------------------
October 3, 2009 October 4, 2008
--------------- ---------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income $44.0 $57.5
Less: income from
discontinued operations - (1.0)
- ----
Income from continuing
operations 44.0 56.5
---- ----
Adjustments to reconcile net income
to net cash provided by
operating activities:
Loss and costs
associated with
repurchase of 4.250%
Senior Notes 2.0 -
Amortization expense in
connection with employee stock
options and restricted stock 9.2 11.0
Depreciation and
other amortization 58.0 61.7
Impairment losses on
property, plant and
equipment 22.8 -
Provision for losses
on accounts
receivable 1.6 8.7
Deferred taxes 22.3 28.9
Write-off of deferred
financing fees 7.9 -
Other items, net 3.4 1.5
Changes in operating assets
and liabilities:
Accounts receivable (54.2) (147.1)
Inventories 94.6 (25.4)
Accounts payable (37.3) (0.7)
Income taxes payable (5.2) 15.3
Other assets and
liabilities, net (19.9) (2.5)
----- ----
Total adjustments 105.2 (48.6)
----- -----
Net cash provided by
operating activities 149.2 7.9
----- ---
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (20.1) (56.8)
Investment in GRI Group
Limited (15.2) (20.2)
Other - 7.1
- ---
Net cash used in
investing activities (35.3) (69.9)
----- -----
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of 4.250%
Senior Notes, including
consent fees and related
costs (252.4) -
Costs related to secured
revolving credit
agreement (30.0) -
Dividends paid (12.7) (35.8)
Other (2.4) (2.7)
---- ----
Net cash used in
financing activities (297.5) (38.5)
------ -----
EFFECT OF EXCHANGE RATES ON
CASH 2.2 (2.0)
--- ----
NET DECREASE IN CASH AND
CASH EQUIVALENTS (181.4) (102.5)
CASH AND CASH EQUIVALENTS,
BEGINNING 338.3 302.8
----- -----
CASH AND CASH EQUIVALENTS,
ENDING $156.9 $200.3
====== ======
SOURCE Jones Apparel Group, Inc.
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