Perry Ellis International reported record total revenue for Q3 ended October 31, 2003 of $159.5 million, an increase of $88.9 million, or 125.9%, over the $70.6 million reported for the same period last year. The increase is primarily attributable to the inclusion of revenue from the company's recent acquisition of Salant,
a 17.4% growth in our Perry Ellis branded business, a $2 million increase in our swimwear sales for the quarter and a 16.1% organic growth in the company's other core wholesale business. For the nine months ended October 31, 2003, total revenue was $360.5 million, up 64.4% over the same period last year.
Operating income for the third quarter was $14.7 million, up
145.1% from $6.0 million from the same period last year. Fully diluted
earnings per share, before a pre-tax charge relating to certain note
refinancing costs were $0.69, as compared to the $0.16 per fully
diluted share reported for the same period last year. As previously
indicated in a prior press release, the company has taken a $7.3
million pre-tax charge to earnings ($0.51 per fully diluted share) in
the quarter ended October 31, 2003 for certain costs related to the
September 15, 2003 refinancing of its $100 million 12 1/4% senior
subordinated notes with a new issue of $150 million of 8 7/8% senior
subordinated notes. After giving effect to the costs associated with
the note refinancing, fully diluted earnings per share are $0.18 for
the quarter ended October 31, 2003. For the nine month period ended
October 31, 2003, the company reported fully diluted earnings per
share (excluding refinancing costs) of $1.15 and $0.58 after taking
into account the pre-tax charge relating to certain refinancing costs.
“We are pleased that in spite of a difficult men's retail
environment, our revenues increased across the board in all of our
wholesale business units this quarter compared to the same period a
year ago,” said George Feldenkreis, chairman and chief executive
officer. “Furthermore, our newly acquired Salant/Perry Ellis menswear
division is benefiting from consolidation of our design, sales and
marketing strategies. We believe our strong top-line revenue growth
will continue; however, we remain concerned with the continued price
deflation and margin compression occurring in our industry and with
the overall weakness in men's apparel at retail.”
Oscar Feldenkreis, the company's president and chief operating
officer, reported the continued success of the company's brand focused
strategy. “We continue to invest significant marketing and promotional
dollars on brand building; and as a result of that investment, we are
beginning to see the fruits of that effort with the strong top-line
growth we experienced this quarter. Three years ago, we made the
strategic decision to commit our resources to acquire new brands and
to grow the brands that we own. To that end, we acquired the Perry
Ellis men's wholesale business as well as the Axis(R) and Tricots St.
Raphael(R) brands from Salant this year following the acquisition of
the Jantzen(R) brand and the Nike(R) and Tommy Hilfiger(R) swimwear
licenses in 2002. In addition, we have internally developed the very
successful Latin lifestyle brands, Cubavera(R) and the Havanera
Co.(TM) brands and are now beginning to focus resources on the young
men's business with our exciting retro Original Penguin(R) brand and
the recently acquired Redsand(R) brand. We believe that strong brands
and product diversification is the key to the company's long-term
success and we will continue to deploy our resources in that
direction.”
The company confirms its previous full fiscal 2004 (year ending
January 31, 2004) guidance of approximately $500 million in revenue
and earnings of $2.50 per fully diluted share (before giving effect to
the note refinancing costs) and $1.98 per fully diluted share after
the pre-tax charge relating to certain refinancing costs. The company
also confirms guidance for next year of approximately $600 million of
revenue and earnings of $2.80 per fully diluted share.
Perry Ellis International, Inc. Third Quarter Fiscal 2004 Results
Perry Ellis International, Inc.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in 000's, except per share information)
Three Months Ended Nine Months Ended
October 31, October 31,
-----------------------------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Net
sales $154,954 $63,037 $343,887 $198,050
Royalty income 4,530 7,561 16,641 21,239
---------- ---------- ---------- ----------
Total revenue 159,484 70,598 360,528 219,289
Cost of sales 106,810 46,046 242,550 146,514
---------- ---------- ---------- ----------
Gross profit 52,674 24,552 117,978 72,775
---------- ---------- ---------- ----------
SG&A expenses 36,301 17,710 85,865 45,704
Depreciation &
amortization 1,695 853 4,222 2,256
---------- ---------- ---------- ----------
Total operating expenses 37,996 18,563 90,087 47,960
---------- ---------- ---------- ----------
Operating income 14,678 5,989 27,891 24,815
Refinancing costs 7,317 - 7,317 -
Interest expense 4,430 4,153 12,783 11,807
---------- ---------- ---------- ----------
Total other expenses 11,747 4,153 20,100 11,807
---------- ---------- ---------- ----------
Income Before Minority
Interest and Income
Taxes 2,931 1,836 7,791 13,008
Minority Interest 214 (79) 240 (89)
Income tax provision 1,043 695 2,884 4,906
---------- ---------- ---------- ----------
Net income (loss) $1,674 $1,062 $4,667 $8,013
========== ========== ========== ==========
Earnings per share:
Basic 0.20 0.17 0.63 1.26
Diluted 0.18 0.16 0.58 1.24
Weighted average
outstanding shares:
Basic 8,406,741 6,416,390 7,420,689 6,376,215
Diluted 9,181,480 6,601,985 8,073,859 6,481,413
