G-III Apparel Group, Ltd reported that net sales increased by 9.4 percent to $251.5 million for the quarter ended July 31, from $230.0 million in the year-ago period.



The company’s net income for the second quarter was $1.4 million, or $0.07 per diluted share, compared to net income of $1.6 million, or $0.08 per diluted share, in the prior year’s comparable period. On an adjusted basis, excluding expenses associated with the company’s acquisition of Vilebrequin, non-GAAP net income per diluted share for the second quarter was $0.13.


“This was an excellent second quarter,” said Morris Goldfarb, G-III’s chairman and CEO. “We have exceeded our short-term financial goals, built an order book that supports our annual plan, and completed the acquisition of a powerful, global brand in the men’s luxury market. This combination of financial, operational and strategic progress, along with a strong balance sheet that supports further business development, gives us confidence that we are well positioned to drive superior value to our shareholders both now and well into the future.”

Mr. Goldfarb concluded, “At present, we are focused on shipping for our peak Fall selling season, as well as integrating Vilebrequin’s operations into our business. We are also off to a good start with our Spring ’13 market showings to retailers. We feel very good about our ability to deliver solid profit improvements in both the third and fourth quarter this year over last year.”



Guidance edges up

The company revised its prior guidance for the full fiscal year ending Jan. 31, 2013. The company is now forecasting net sales of approximately $1.41 billion and net income between $55.2 million and $57.2 million, or a range of $2.68 and $2.78 per diluted share, compared to its previous guidance of net sales of approximately $1.35 billion and net income between $54.0 million and $56.0 million, or a range of $2.62 and $2.72 per diluted share.

 

The forecasted net income and net income per share for the full fiscal year reflect the expenses of the Vilebrequin acquisition incurred through July 31, 2012, but do not reflect any additional expenses or integration costs related to this acquisition that may be incurred in the second half of the fiscal year. Non-GAAP net income per diluted share for the full fiscal year is now forecast to range between $2.74 and $2.84. The company’s previous guidance did not include any acquisition or integration expenses.

The company is now projecting adjusted EBITDA for fiscal 2013 to increase approximately 17 percent to 21 percent to between $108.2 million and $111.5 million compared to its previous guidance of between approximately $102.5 million and $106.0 million.


The forecasted non-GAAP net income per share and forecasted adjusted EBITDA for the full fiscal year reflect adjustments that exclude the expenses of the Vilebrequin acquisition incurred through July 31, 2012.


For its third fiscal quarter ending Oct. 31, 2012, the company is forecasting net sales of approximately $570 million compared to $510 million in the comparable quarter last year. The company is also forecasting net income for the third fiscal quarter between $46.4 million and $48.4 million, or between $2.25 and $2.35 per diluted share, compared to net income of $43.6 million, or $2.16 per diluted share, in last year's third quarter. The company’s forecast for the third fiscal quarter does not take into account any additional expenses or integration costs that may be incurred during the quarter with respect to the acquisition of Vilebrequin.



G-III's sports related apparel lines include Vilebrequin swimwear and beachwear and sports licenses with the National Football League, National Basketball Association, Major League Baseball, National Hockey League, Touch by Alyssa Milano and more than 100 U.S. colleges and universities.































































































































































































































































































































































































































G-III APPAREL GROUP, LTD. AND SUBSIDIARIES

(GIII)


CONSOLIDATED STATEMENTS OF OPERATIONS AND


SELECTED BALANCE SHEET DATA


(In thousands, except per share amounts)


(Unaudited)


Three Months Ended


July 31,


Six Months Ended


July 31,


2012

2011

2012

2011
Net sales $ 251,479 $ 229,975 $ 480,928 $ 426,846
Cost of sales 176,636 164,404 337,395 301,820
Gross profit 74,843 65,571 143,533 125,026
Selling, general and administrative expenses
69,454

59,826

136,068

117,751
Depreciation and amortization 2,100 1,852 4,153 3,376
Operating profit 3,289 3,893 3,312 3,899
Equity loss in joint venture 146 376 433 475
Interest and financing charges, net 1,034 952 2,138 1,711
Income before taxes 2,109 2,565 741 1,713
Income tax expense 802 1,000 282 668
Net income 1,307 1,565 459 1,045
Add: Loss attributable to noncontrolling interest (55 ) (55 )
Income attributable to G-III $ 1,362 $ 1,565 $ 514 $ 1,045
Net income per common share:
Basic $ 0.07 $ 0.08 $ 0.03 $ 0.05
Diluted $ 0.07 $ 0.08 $ 0.03 $ 0.05