G-III Raises Guidance After Strong Fiscal Second Quarter

G-III Apparel Group, Ltd. reported that net sales, driven by a strong wholesale performance across several categories, increased by 39 percent to $424.0 million in the second fiscal quarter ended July 31 compared with $304.2 million in the year-ago period. Of this increase, $53.6 million was the result of net sales by the G.H. Bass business that was acquired in November 2013.

The company’s net income for the second quarter was $6.2 million, or $0.29 per diluted share, compared to net income of $3.6 million, or $0.17 per diluted share, in the prior year’s comparable period.

In spite of losses related to the transition and repositioning of our recently acquired G.H. Bass business, G-III was able to show higher overall profits due to strong shipments in licensed and non-licensed businesses. Through its team sports business, G-III has 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.

“There were strong performances by a number of Calvin Klein divisions and several of our outerwear and dress businesses, all of which enabled us to exceed our forecast for the second quarter,” said Morris Goldfarb, G-III’s Chairman, Chief Executive Officer and President.  “We intend to continue to execute our growth strategy which calls for both organic growth and for acquisitions. Our recent public offering, which added net proceeds of $128.7 million to our balance sheet, is expected to support our growth initiatives.

“Our presence in several wholesale businesses, including sportswear, dresses, and handbags, continues to provide us with organic growth opportunities, as does our ongoing initiatives to grow our productivity and store count in each of our major specialty retail businesses,” Goldfarb continued. “Our new G.H. Bass products are arriving in our stores this month and we are confident in our ability to make this a profitable business. We continue to be well positioned to take advantage of acquisition opportunities, deploy our strategic capital and drive enhanced returns for our shareholders.”

Outlook
The company today revised its prior guidance for the full fiscal year ending January 31, 2015. The company is now forecasting net sales of approximately $2.11 billion and net income between $90.6 million and $93.9 million, or a range between $4.00 and $4.15 per diluted share, compared to its previous guidance of net sales of approximately $2.06 billion and net income between $87.9 million and $91.2 million, or a range between $4.05 and $4.20 per diluted share. The revised guidance includes $0.16 of dilution from the impact of our recent sale of 1,725,000 shares in a public offering completed in June of this year.

The company is now projecting adjusted EBITDA for fiscal 2015 to increase between 18 percent and 22 percent to between $174.0 million and $179.4 million compared to its previous guidance of adjusted EBITDA between approximately $170.2 million and $175.5 million. Adjusted EBITDA should be evaluated in light of the company’s financial results prepared in accordance with U.S. GAAP. A reconciliation of GAAP net income to adjusted EBITDA is included in a table accompanying the condensed financial statements in this release.

For its third fiscal quarter ending October 31, 2014, the company is forecasting net sales of approximately $805 million compared to $668.7 million in the comparable quarter last year. The company is also forecasting net income for the third fiscal quarter between $63.9 million and $67.3 million, or between $2.75 and $2.90 per diluted share, compared to net income of $59.6 million, or $2.85 per diluted share, in last year's third quarter. The revised third quarter guidance includes $0.21 of dilution from the impact of our recent sale of 1,725,000 shares in a public offering completed in June of this year. Net income in the third quarter of last year included expenses of approximately $1.0 million, equal to $0.03 per diluted share, associated with the company’s acquisition of G.H. Bass & Co. and other potential transactions.
About G-III Apparel Group, Ltd.

G-III is a leading manufacturer and distributor of outerwear, dresses, sportswear, swimwear, women’s suits and women’s performance wear, as well as footwear, luggage and women’s handbags, small leather goods and cold weather accessories, under licensed brands, our own brands and private label brands. G-III sells swimwear, resort wear and related accessories under our own Vilebrequin brand. G-III also sells outerwear, dresses and performance wear under our own Andrew Marc and Marc New York brands and has licensed these brands to select third parties in certain product categories. G-III has fashion licenses under the Calvin Klein, Kenneth Cole, Cole Haan, Guess?, Tommy Hilfiger, Jones New York, Jessica Simpson, Vince Camuto, Ivanka Trump, Nine West, Ellen Tracy, Kensie, Mac & Jac, Levi’s and Dockers brands. Through our team sports business, we have 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. Our other owned brands include Bass, G.H. Bass, G-III Sports by Carl Banks, Eliza J, Black Rivet, Jessica Howard and Winlit. G-III also operates retail stores under the Wilsons Leather, Bass, G.H. Bass & Co., Vilebrequin, Calvin Klein Performance and Andrew Marc names.