Perry Ellis International, Inc. reported 4.1% growth in revenues for fiscal 2008 to a record level of $863.9 million from $829.8 million for the previous fiscal year. The company said the increased revenues came from growth in the Perry Ellis Collection, Swim, Golf, Hispanic, Licensing and Retail businesses. Gross margin rose 52 basis points to 33.8% from 33.2% in fiscal 2007, driven by the company’s focus on higher margin branded products.


“We had an outstanding year at Perry Ellis International. We attribute our success to initiatives aimed at expanding our growth platforms while reducing private label offerings,” said Oscar Feldenkreis, president and COO. “Our key growth platforms – Perry Ellis Collection, Swim, Golf, Hispanic, Licensing and Retail, are well positioned for future growth following a record performance in fiscal 2008.”


Fiscal 2008 EBITDA grew to a record $75.8 million, a $4.9 million or 6.8% increase over fiscal 2007 levels, and EBITDA margins improved 22 basis points to 8.8% of revenues. Fiscal 2008 net earnings were $28.2 million compared to fiscal 2007 net earnings of $22.4 million and to pro forma net earnings of $24.4 million. This represents a 25.7% and 15.6% improvement over last year’s earnings, respectively. Pro forma results exclude the after tax impact of $1.9 million in debt extinguishment costs (13 cents per fully diluted share) incurred as a result of the March 2006 repayment of the company's $57 million senior secured notes. A table showing the reconciliation of actual to pro forma results is attached. Earnings per diluted share were $1.80 for fiscal 2008, an increase of $0.35 or 24.1% compared to fiscal 2007 reported earnings per diluted share of $1.45. On a pro forma basis, fiscal 2008 diluted earnings per share of $1.80 represented an increase of 22 cents or 13.9% from diluted earnings per share of $1.58 last year.


The company ended Fiscal 2008 in a very strong financial position. Strong cash flows allowed the company to completely pay-off its revolving credit facility as of January 31, 2008, reducing its debt to total capital ratio to 39% from 49% in January 31, 2007. Working capital was also significantly improved. The company finished the year with Inventories at $136.4 million, a reduction of $3.3 million or 2.3% compared to last year.


“We are proud of our fiscal 2008 results. We believe that our organic initiatives and strong financial discipline allow us to start fiscal 2009 in great financial shape and positioned to maximize market share during this difficult macroeconomic environment. Our positive outlook is a testament to the strength of our brands, growth platforms and diversified business model,” George Feldenkreis, chairman and CEO, commented.


Fourth Quarter Fiscal 2008 results


Overall, fourth quarter results were in line with management’s expectations. Fiscal 2008 fourth quarter total revenue was $212.3 million, an 8.3% decrease compared to $231.6 million reported in the fourth quarter of fiscal 2007. Although Perry Ellis, Swimwear, Golf, Retail and Licensing reported results at or above plan, this year’s fourth quarter results were negatively impacted by a $20 million reduction in the bottoms platform due to the previously announced deceleration in replenishment programs and the company’s exit from a large mass merchant private label program. However, these reductions positively impacted gross margins, which improved to 35.4%, up 128 bps from 34.1% in the fourth quarter of fiscal 2007. Fourth quarter EBITDA was $23.4 million compared to $25.7 million, a $2.3 million reduction over the same period last year. EBITDA margin remained relatively flat at 11% of net revenues. A table showing the reconciliation of EBITDA to net income is attached. Net income was $9.9 million, an 8% reduction compared to $10.7 million reported in the fourth quarter of fiscal 2007, and fourth quarter of fiscal 2008 earnings were 65 cents per fully diluted share, a 4.4% decrease from 68 cents per fully diluted share reported in the fourth quarter of fiscal 2007.


Fiscal 2009 guidance


“In spite of a challenging retail environment, we are confident that our growth platforms and diversified strategy will deliver another record year for our company. We anticipate continuous growth in Perry Ellis, Swim, Golf, Action Sports, Hispanic and Retail businesses plus solid performances by our recently acquired Women’s Contemporary brands Laundry by Shelli Segal and C&C California,” George Feldenkreis commented.


For the twelve months ending January 31, 2009, the company anticipates revenue growth in the range of 5% to 7% to $910 million to $925 million and earnings growth in the range of 8% to 11% to $1.95 to $2.00 per fully diluted share.


“We believe it is prudent to remain conservative in our business outlook for fiscal 2009, yet we are optimistic that we can expand our business in a difficult environment, given the strengths of our brands and offerings, as well as added growth from our recent acquisitions of C&C of California and Laundry. We look forward to updating you as to our progress as the year advances,” Mr. Feldenkreis concluded.
































































































































































































































































































































































PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA (UNAUDITED)
(amounts in 000's, except per share information)
 
INCOME STATEMENT DATA:    
 
Three Months Ended January 31, Year Ended January 31,
  2008   2007 2008 2007
Revenues
Net sales $ 206,075 $ 225,869 $ 838,465 $ 807,616
Royalty income   6,263   5,714   25,401   22,226
Total revenues 212,338 231,583 863,866 829,842
Cost of sales   137,137   152,540   572,232   554,046
Gross profit 75,201 79,043 291,634 275,796
Operating expenses
Selling, general and administrative expenses 51,806 53,369 215,873 204,883
Depreciation and amortization   3,684   3,258   13,278   11,608
Total operating expenses   55,490   56,627   229,151   216,491
Operating income 19,711 22,416 62,483 59,305
Costs on early extinguishment of debt – – – 2,963
Interest expense   3,704   5,464   17,594   21,114
 
Income before minority interest and income taxes 16,007 16,952 44,889 35,228
Minority interest 559 272 931 508
Income tax provision   5,588   5,969   15,785   12,311
Net income $ 9,860 $ 10,711 $ 28,173 $ 22,409
 
Net income per share
Basic $ 0.67 $ 0.73 $ 1.92 $ 1.55
Diluted $ 0.65 $ 0.68 $ 1.80 $ 1.45
 
Weighted average number of shares outstanding
Share This