G-III Apparel Group net sales increased 21% to $83.9 million from $69.1 million last year. This compares favorably to the Company's prior guidance of approximately $75 million in net sales for the second quarter. The Company reported a net loss of $884,000, or five cents per share, for the three months ended July 31, 2007, compared to a net loss of $1.7 million or 14 cents per share in the same period last year. This performance also compares favorably to the Company's prior guidance of a net loss per share in the range of 19 cents to 24 cents.
Morris Goldfarb, Chairman and Chief Executive Officer, said, “We are pleased to have outperformed our financial plan for the second quarter and we are on pace to report strong performance for fiscal 2008. Our suite of licensed fashion outerwear brands has had a very strong booking season led by Calvin Klein, Guess?, Kenneth Cole, and Sean John. We have an excellent mix of brands and, despite a relatively challenging marketplace, we are confident that we will perform well in both our licensed and private label outerwear businesses.”
Mr. Goldfarb continued, “Our Calvin Klein dress line continues to be extremely well received by the market. The balance of our other Calvin Klein businesses, which include coats and women's suits, is also having a very good year and will show strong sales and operating profit increases from the prior year. We believe that we are well positioned to continue to attract new licenses and private label programs. We also continue to develop sportswear programs and believe that they will also become meaningful to our business.”
Mr. Goldfarb concluded, “We are excited about this year's progress toward achieving our stated goal of becoming an all-season, diversified apparel company.”
Outlook
For the full fiscal year ending January 31, 2008, the Company is now forecasting diluted net income per share between $0.98 and $1.03. This compares to its previous guidance of diluted net income per share between $0.90 and $0.95. The Company is also now forecasting net sales of approximately $510 million compared to its previous forecast of $500 million.
The Company now projects EBITDA to increase 18% to 22%, or to approximately $38.1 to $39.5 million, up from $32.3 million in fiscal 2007. EBITDA results should be evaluated in light of the Company's financial results prepared in accordance with US GAAP.
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
(NASDAQ:GIII - News)
CONSOLIDATED STATEMENTS OF OPERATIONS AND
SELECTED BALANCE SHEET DATA
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
July 31, July 31,
2007 2006 2007 2006
----------- ----------- ----------- -----------
Net sales $ 83,909 $ 69,082 $ 118,997 $ 83,471
Cost of sales 61,969 52,249 89,728 65,959
----------- ----------- ----------- -----------
Gross profit 21,940 16,833 29,269 17,512
Selling, general and
administrative
expenses 22,056 17,478 38,549 31,817
Depreciation and
amortization 1,247 1,112 2,841 2,197
----------- ----------- ----------- -----------
Operating loss (1,363) (1,757) (12,121) (16,502)
Interest and financing
charges, net 147 1,264 412 1,911
----------- ----------- ----------- -----------
Loss before income
taxes (1,510) (3,021) (12,533) (18,413)
Income tax benefit (626) (1,284) (5,201) (7,826)
----------- ----------- ----------- -----------
Net loss $ (884) $ (1,737) $ (7,332) $ (10,587)
=========== =========== =========== ===========
Net loss per common
share:
Basic and Diluted $ (0.05) $ (0.14) $ (0.46) $ (0.85)
=========== =========== =========== ===========
Weighted average
shares outstanding:
Basic and Diluted 16,376,000 12,756,000 15,823,000 12,410,000
