Perry Ellis International, Inc. first quarter total revenues grew to $228.8 million, a 7% increase compared to $214.0 million reported in the first quarter of 2006. Revenue increases were driven by several of the Company's growth platforms – golf lifestyle, swimwear/action sports, direct retail and international.
As anticipated, the shift in the retail calendar moved certain shipments from April into May, thus slightly impacting revenue growth during the first quarter of fiscal 2008.
EBITDA for the first quarter of fiscal 2008 grew to $23.2 million, a $2.6 million or 12% increase over EBITDA for the same period last year. A table showing the reconciliation of EBITDA to net income is attached.
Net income was $9.5 million compared to net income of $5.9 million and pro forma net income of $7.8 million for the same period last year. Earnings per share were $0.60 per fully diluted share, compared to earnings of $0.39 per fully diluted share and pro forma earnings of $0.52 per fully diluted share for the same period last year. Last year's pro forma results exclude the impact of $3.0 million in debt extinguishment costs ($1.9 million net of taxes or $0.13 per fully diluted share) incurred as a result of the March 2006 repayment of the Company's $57 million senior secured notes. Pro forma results are presented solely as a supplemental disclosure, because management believes it is useful to compare the Company's current results to the prior year results without the charge incurred during Fiscal 2007. A table showing the reconciliation of actual to pro forma results is attached.
First quarter of fiscal 2008 results were in line with management's expectations and included a 108 basis point improvement in gross profit margin and a 50 basis point improvement in EBITDA margin to 10.1% of revenues compared to the first quarter of fiscal 2007.
George Feldenkreis, Chairman and Chief Executive Officer, commented: “We are very satisfied with our results for this quarter. During the quarter, we successfully capitalized on the positive momentum built last year, as evidenced by our strong results across all of our businesses, and especially in our key growth platforms. Perry Ellis, AXIST, Grand Slam, Cubavera, PGA Tour and Swimwear brands remain on track for a record year in fiscal 2008. ”
The Company ended the quarter with a strong balance sheet and cash flow. As of April 30, 2007, overall long term debt levels decreased to $244 million, a reduction of approximately $26 million compared to a year ago. Inventory levels at quarter end increased to approximately $152 million reflecting the shift in the retail calendar, along with higher levels of replenishment inventory in core styles to support our up trending business and maintain optimal fulfillment rates.
The Company confirmed its previously announced fiscal 2008 guidance with total revenues expected to be in the range of approximately $900 to $910 million and earnings in the range of $1.81 to $1.84 per fully diluted share.
“Our brand-channel-product diversification strategy remains core to our business philosophy and has proven successful once again. Our ability to balance opportunities across multiple channels allowed us to achieve a record first quarter both in revenues and profitability. Our branded product continues to perform strongly at retail, gaining doors and floor space across all distribution channels. We remain very optimistic about achieving the goals we set for Perry Ellis International this year,” Oscar Feldenkreis, President and Chief Operating Officer concluded.
PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA (UNAUDITED)
(amounts in 000s, except per share information)
INCOME STATEMENT DATA:
Three Months Ended April 30,
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2007 2006
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Revenues
Net sales $ 222,619 $ 208,254
Royalty income 6,151 5,744
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Total revenues 228,770 213,998
Cost of sales 150,980 143,549
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Gross profit 77,790 70,449
Operating expenses
Selling, general and administrative
expenses 54,593 49,821
Depreciation and amortization 2,928 2,685
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Total operating expenses 57,521 52,506
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Operating income 20,269 17,943
Costs on early extinguishment of debt - 2,963
Interest expense 5,248 5,895
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Income before minority interest and
income taxes 15,021 9,085
Minority interest 147 (1)
Income tax provision 5,362 3,172
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Net income $ 9,512 $ 5,914
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Net income per share
Basic $ 0.65 $ 0.41
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Diluted $ 0.60 $ 0.39
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Weighted average number of shares
outstanding(a)
Basic 14,660 14,411
Diluted 15,973 15,146
