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 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 |