The Jones Group Inc. reported revenues for the fourth quarter were $894 million, as compared with $874 million for the fourth quarter of 2010. The company reported adjusted earnings per share of 10 cents for the fourth quarter of 2011, as compared with adjusted earnings per share of 4 cents for the same period last year.
The 2011 fourth quarter results include certain tax benefits of $0.07 per share. Adjusted earnings per share from continuing operations on a full year basis were $1.30 in 2011 as compared with $1.51 per share in the prior year. The adjusted results exclude charges related to the impairments of certain intangible assets, the impact of severance and other costs related to restructuring activities, certain acquisition-related costs and other costs not considered relevant for period-over-period comparisons (see reconciliation of adjusted earnings to reported earnings in the accompanying schedule).
As reported under generally accepted accounting principles (“GAAP”), the Company reported a fourth quarter loss per share of ($0.27) and ($0.47) for 2011 and 2010, respectively. On a full year basis, the Company reported GAAP earnings of $0.61 per share for 2011 as compared with $0.62 per share for 2010. The results for both periods include non-cash impairment charges relating to certain trademarks. The non-cash impairment charges of $32 million ($20 million after tax) and $38 million ($24 million after tax) for 2011 and 2010, respectively, were primarily related to tradenames utilized in our Wholesale Jeanswear business. Such charges in both periods were a result of the Company's required annual testing under GAAP.
Revenues for the full year 2011 were $3,785 million, as compared with $3,643 million for the full year 2010.
Wesley R. Card, The Jones Group Chief Executive Officer, stated: “Fourth quarter revenues were lower than expected due to the highly promotional retail environment and a slowdown in replenishment orders. Our gross margins were much improved due to the inclusion of the Kurt Geiger business and an improvement in our core businesses, which generated a modest improvement in operating income.”
Cash provided by operating activities during 2011 was $272 million, compared with $141 million in 2010. The current year results reflect a lower level of required investment in working capital and lower tax payments, somewhat offset by slightly lower earnings. The Company had $239 million in cash and no amounts drawn under its $650 million of committed revolving credit facilities.
John T. McClain, The Jones Group Chief Financial Officer, commented: “Our financial position remains strong. We ended the year with $239 million in cash and our revolver undrawn. We are approaching our 2012 inventory commitments with a conservative, tightened buy plan, which is the same approach we had in 2011. With a focus on inventory management, expense control, and operational efficiencies, we believe we will continue to improve margins and maintain a strong balance sheet.”
Mr. Card concluded: “We are committed to driving profitability and continue to operate efficiently, control costs and execute at a high level. At the same time, we are concentrating our efforts on the areas we believe offer the greatest opportunity for revenue growth upscale and contemporary brands, international and our traditional core brands. We believe our new brand management approach and creative design talents, including the addition of Stefani Greenfield, as Chief Creative Officer, will advance the reinvigoration of our core brands.”
The Company's Board of Directors has declared a regular quarterly cash dividend of $0.05 per share to all common stockholders of record as of February 24, 2012, for payment on March 9, 2012.
The Company will host a conference call with management to discuss these results at 8:30 a.m. eastern time today, which is accessible by dialing 412-858-4600 or through a web cast at www.jonesgroupinc.com (under Investor Relations/Conference Schedule). The call will be recorded and made available through February 16, 2012 and may be accessed by dialing 877-344-7529. Enter account number 10008702. A slide presentation will accompany the prepared remarks and has been posted with the webcast on the Company's website.
Presentation of Information in the Press Release
Financial information discussed in this press release includes both GAAP and non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported results and are intended to illustrate what management believes are relevant period-over-period comparisons. A complete reconciliation of the GAAP measures presented to the comparable non-GAAP information appears in the financial tables section of this press release.
About The Jones Group Inc.
The Jones Group Inc. (www.jonesgroupinc.com) is a leading global designer, marketer and wholesaler of over 35 brands with product expertise in apparel, footwear, jeanswear, jewelry and handbags. The Jones Group has a reputation for innovation, excellence in product quality and value, operational execution and talent. The Company also markets directly to consumers through branded specialty retail and outlet stores and through its e-commerce sites.
The Company's internationally recognized brands and licensing agreements (L) include: Nine West, Jones New York, Anne Klein, Kurt Geiger, Rachel Roy (L), Robert Rodriguez, Robbi & Nikki, Stuart Weitzman, B Brian Atwood (L), Boutique 9, Easy Spirit, Carvela, Gloria Vanderbilt, l.e.i., Bandolino, Enzo Angiolini, Nine & Co., GLO, Joan & David, Miss KG, Jones Wear, Kasper, Energie, Evan-Picone, Le Suit, Mootsies Tootsies, Grane, Erika, Napier, Jessica Simpson (L), Sam & Libby, Givenchy (L), Judith Jack, Albert Nipon, Pappagallo and Rafe(L).
