Perry Ellis International, Inc. saw record revenues of $849.4 million for the fiscal year, up 29.4% over the $656.6 million reported for the comparable period a year ago. The company's fiscal 2006 revenue includes a 30% increase due primarily to the acquisition of the Tropical Sportswear International business, a 3% organic increase in core menswear operations, offset by a 4% planned decline in swimwear operations and a slight decline in royalty income.
Fiscal 2006 EBITDA grew to $67.3 million, a 22.8% increase, or $12.5 million, over the $54.8 million reported in fiscal 2005, reflecting the company's successful integration of TSI. Net income for fiscal 2006 was a record $22.7 million, an 8.1% increase over fiscal 2005's level of $21 million. Earnings per diluted share were a record $2.26 in fiscal 2006, compared to $2.15, a 5% increase, over fiscal 2005.
For the 4th quarter ended January 31, 2006, total revenues were $213.9 million, a 24.3% increase over the $172.1 million reported in the 4th quarter of fiscal 2005. This increase was primarily driven by the TSI acquisition and includes the impact of the previously announced reduction of private label and branded programs at a national mid-tier chain. Net income for the 4th quarter ended January 31, 2006 was $8.1 million compared to $8.2 million reported in the 4th quarter ended January 31, 2005.
George Feldenkreis, Chairman and Chief Executive Officer commented, “We are very pleased to report record revenue, EBITDA and earnings per share results for fiscal 2006. We successfully completed the integration of Tropical Sportswear by improving profit margins, reducing expenses and transitioning the sourcing structure. In addition, we completed the strategic acquisition of Gotcha, MCD, and Girl Star, strengthening our brand portfolio and providing an additional growth vehicle in a younger demographic.”
Mr. Feldenkreis continued: “In addition, we generated strong cash flow and debt repayment. During fiscal 2006 we funded approximately $95 million for acquisitions, and yet borrowings under our credit facility at year end only increased by $30 million. Our fiscal 2006 pay down of $65 million of borrowings reflects our ability to generate strong cash flow from operations, inventory control and other working capital management.”
Oscar Feldenkreis, President and Chief Operating Officer, remarked, “The enthusiastic response from retailers at the February 2006 MAGIC show is a testament to the power of our brands and the fashionable, value product they deliver. Our new product offerings have been very well received by our retail customers and our successful mens bottoms operation continues to increase its market share. We continue to have major success in sportswear and bottoms in all channels of distribution. Perry Ellis' new management and design teams have transformed the Perry Ellis brand into one of the best performing collections in department stores, and we are confident that more efficient planning will continue to improve profit margins in the current year.”
Oscar Feldenkreis concluded: “For fiscal 2007, we anticipate revenues to grow to $860 – $870 million and proforma earnings per share (excluding the net of tax impact of approximately $3.5 million of debt extinguishment costs related to the call and repayment of our $57 million senior secured notes) in the $2.30 – $2.40 range. Fiscal 2007 earnings guidance includes a reduction of approximately $0.08 per share associated with the adoption of FAS 123R requiring the expensing of stock options. Our anticipated revenue level includes the impact of both (i) the reduction of branded and private label programs at a national mid-tier chain and (ii) anticipated disruptions from the closing of Federated/May department stores. We remain poised to take advantage of strategic improvements in the future as retail environment consolidation uncertainties are beginning to settle. All of our divisions will benefit from improved sourcing and planning, while we will continue to expand growth platforms such as our international operations, and domestic expansion of Original Penguin, Mens Bottoms, Hispanic Lifestyle brands and Action sports brands. In addition we are excited about the opportunities to expand both of our direct retail platforms, Perry Ellis Outlets and Original Penguin stores. We remain confident about the growth opportunities that the continued development of all our brands across all levels of distribution provides us.”
PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA (UNAUDITED)
(amounts in 000's, except per share information)
INCOME STATEMENT DATA:
Three Months Ended Year Ended
January 31, January 31,
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2006 2005 2006 2005
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Revenues
Net sales $ 208,147 $ 165,905 $ 827,504 $ 633,774
Royalty income 5,728 6,186 21,910 22,807
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Total revenues 213,875 172,091 849,414 656,581
Cost of sales 148,486 117,224 586,900 448,531
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Gross profit 65,389 54,867 262,514 208,050
Operating expenses
Selling, general and
administrative expenses 44,478 36,218 195,236 153,282
Depreciation and
amortization 2,662 1,833 9,557 6,557
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Total operating
expenses 47,140 38,051 204,793 159,839
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Operating income 18,249 16,816 57,721 48,211
Interest expense 5,528 3,753 21,930 14,575
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Income before minority interest
and income taxes 12,721 13,063 35,791 33,636
Minority interest 43 133 470 467
Income tax provision 4,576 4,715 12,639 12,207
--------- --------- --------- ---------
Net income $ 8,102 $ 8,215 $ 22,682 $ 20,962
========= ========= ========= =========
Net income per share
Basic $ 0.85 $ 0.87 $ 2.38 $ 2.30
========= ========= ========= =========
Diluted $ 0.81 $ 0.83 $ 2.26 $ 2.15
