Exhibit 99.1
PERRY ELLIS INTERNATIONAL, INC. REPORTS FISCAL 2005 THIRD
QUARTER EARNINGS OF $0.72 PER SHARE VS. $0.18 PER SHARE FOR
LAST YEAR’S THIRD QUARTER EARNINGS
MIAMI - November 22, 2004 - Perry Ellis International, Inc. (NASDAQ: PERY) today reported total revenue for the third quarter ended October 31, 2004 of $160.7 million, compared to $159.5 million reported for the same period last year. For the nine months ended October 31, 2004, total revenue was $484.5 million, an increase of $124.0 million, or 34.4 %, over the same period last year. As a reminder, year to date results include the addition of net sales and reduction in royalty income from the June 2003 acquisition of Salant Corporation.
Net income for the third quarter was $7.2 million, or $0.72 per fully diluted share, up from $1.7 million, or $0.18 per fully diluted share, from the same period last year. Last year’s fully diluted earnings per share include a charge of $0.51 per fully diluted share for certain note refinancing expenses. For the nine-month period ended October 31, 2004, net income was $12.7 million, or $1.32 per fully diluted share, compared to $4.7 million or $0.58 per fully diluted share, for the same period a year ago ($1.15 per share after excluding the note refinancing costs mentioned above).
George Feldenkreis, Chairman and Chief Executive officer commented: “While overall net shipments for the third quarter were flat with last year, as some of our shipments were postponed to the fourth quarter, our menswear business continues to be very strong and we expect double digit growth in the current fourth quarter compared to last year.”
“Our earnings this quarter were negatively impacted by approximately $0.10 per share from our swimwear business as we realized lower than anticipated margins associated with the final resolution of markdown support and inventory disposition for the 2004 line year. As we have previously indicated, we are taking a number of steps that we believe will position the swimwear business to be a positive contributor to our earnings in our next fiscal year.”
“For fiscal 2005, we expect to report record revenue and net income. Earnings per fully diluted share are projected in the $2.10-$2.20 per fully diluted share range, below our previous guidance of $2.35. This shortfall is primarily due to lower than anticipated swimwear earnings, as well as higher than anticipated fourth quarter logistics costs due to the end of apparel import quotas on January 1, 2005.”
Oscar Feldenkreis, the Company’s President and Chief Operating Officer, added: “We are disappointed with our performance in the swimwear business this year. We believe that the actions we are taking, including a rationalization of our product offering, changes in our sourcing and overhead expense structure and a significant reduction in inventory levels will position us for a profitable swimwear line in fiscal 2006. Our menswear brands especially Perry Ellis®, Original Penguin®, Cubavera®, PING®, and PGA Tour® are achieving record sales and we expect this momentum to continue into next year.”
About Perry Ellis International
Perry Ellis International, Inc. is a leading designer, distributor and licensor of a broad line of high quality men’s and women’s apparel, accessories, and fragrances, including dress and casual shirts, golf sportswear, sweaters, dress and casual pants and shorts, jeans wear, active wear and men’s and women’s swimwear to all major levels of retail distribution. The company, through its wholly owned subsidiaries, owns a portfolio of highly recognized brands including Perry Ellis®, Jantzen®, Cubavera®, Munsingwear®, John Henry®, Original Penguin®, Grand Slam®, Natural Issue®, Penguin Sport®, the Havanera Co.®, Axis®, and Tricots St. Raphael®. The company also licenses trademarks from third parties including Nike® and Tommy Hilfiger® for swimwear, PING® and PGA Tour® for golf apparel and Ocean Pacific® for men’s sportswear. Additional information on the company is available at http://www.pery.com.
Safe Harbor Statement
Forward-looking statements (statements which are not historical facts) in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The actual results of Perry Ellis could differ materially from those expressed or indicated by forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, a significant decrease in business from or loss of any of Perry Ellis’ major customers, the effectiveness of Perry Ellis’ planned advertising, marketing and promotional campaigns, the ability of Perry Ellis to contain costs, disruption in the supply chain, general economic conditions, Perry Ellis’ future capital needs and ability to obtain financing, changes in fashion trends and consumer acceptance of both new designs and newly introduced products, ability to predict consumer preferences, anticipated trends and conditions in Perry Ellis’ industry, including future consolidation, the seasonality of Perry Ellis’ swimwear business, termination or non-renewal of any material license agreements to which Perry Ellis is a party, ability to integrate businesses, trademarks, trade names and licenses, including Salant, the level of consumer spending for apparel and other merchandise, exposure to foreign currency risk, possible disruption in commercial activities due to terrorist activity and armed conflict and other factors, including those set forth in Perry Ellis’ filings with the Securities and Exchange Commission. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those risks and uncertainties detailed in Perry Ellis’ filings with the SEC. Any forward-looking statements speak only as of the day hereof and Perry Ellis disclaims any intent or obligation to update the same.
PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA (UNAUDITED)
(amounts in 000’s, except per share information)
INCOME STATEMENT DATA:
Three Months Ended October 31, | Nine Months Ended October 31, | |||||||||||
2004 | 2003 | 2004 | 2003 | |||||||||
Revenues | ||||||||||||
Net sales | $ | 154,716 | $ | 154,954 | $ | 467,869 | $ | 343,887 | ||||
Royalty income | 5,989 | 4,530 | 16,621 | 16,641 | ||||||||
Total revenues | 160,705 | 159,484 | 484,490 | 360,528 | ||||||||
Cost of sales | 108,192 | 107,620 | 331,307 | 244,017 | ||||||||
Gross profit | 52,513 | 51,864 | 153,183 | 116,511 | ||||||||
Operating expenses | ||||||||||||
Selling, general and administrative expenses | 35,663 | 35,491 | 117,064 | 84,398 | ||||||||
Depreciation and amortization | 1,685 | 1,697 | 4,724 | 4,222 | ||||||||
Total operating expenses | 37,348 | 37,188 | 121,788 | 88,620 | ||||||||
Operating income | 15,165 | 14,676 | 31,395 | 27,891 | ||||||||
Costs on early extinguishment of debt | — | 7,317 | — | 7,317 | ||||||||
Interest expense | 3,621 | 4,429 | 10,822 | 12,783 | ||||||||
Income before minority interest and income taxes | 11,544 | 2,930 | 20,573 | 7,791 | ||||||||
Minority interest | 180 | 214 | 334 | 240 | ||||||||
Income tax provision | 4,179 | 1,043 | 7,492 | 2,884 | ||||||||
Net income | $ | 7,185 | $ | 1,673 | $ | 12,747 | $ | 4,667 | ||||
Net income per share | ||||||||||||
Basic | $ | 0.76 | $ | 0.20 | $ | 1.41 | $ | 0.63 | ||||
Diluted | $ | 0.72 | $ | 0.18 | $ | 1.32 | $ | 0.58 | ||||
Weighted average number of shares outstanding | ||||||||||||
Basic | 9,454 | 8,407 | 9,011 | 7,421 | ||||||||
Diluted | 10,007 | 9,181 | 9,648 | 8,074 |
PERRY ELLIS INTERNATIONAL, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA (UNAUDITED)
(amounts in 000’s)
BALANCE SHEET DATA:
As of | |||||||
October 31, 2004 | January 31, 2004 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 7,570 | $ | 1,011 | |||
Accounts receivable, net | 123,737 | 115,678 | |||||
Inventories, net | 95,182 | 110,910 | |||||
Deferred income taxes | 8,541 | 9,621 | |||||
Prepaid income taxes | 3,338 | 5,002 | |||||
Other current assets | 5,152 | 6,418 | |||||
Total current assets | 243,520 | 248,640 | |||||
Property and equipment, net | 46,001 | 39,093 | |||||
Intangible assets, net | 160,885 | 152,266 | |||||
Deferred income taxes | 17,227 | 28,591 | |||||
Other assets | 15,953 | 11,811 | |||||
Total assets | $ | 483,586 | $ | 480,401 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 54,042 | $ | 51,734 | |||
Unearned revenues | 1,020 | 984 | |||||
Other current liabilities | 3,484 | 2,991 | |||||
Total current liabilities | 58,546 | 55,709 | |||||
Senior subordinated notes payable | 151,246 | 150,454 | |||||
Senior secured notes payable | 59,247 | 60,389 | |||||
Senior credit facility | — | 34,715 | |||||
Real estate mortgage | 11,600 | 11,600 | |||||
Deferred pension obligation | 15,390 | 15,734 | |||||
Total long term liabilities | 237,483 | 272,892 | |||||
Total liabilities | 296,029 | 328,601 | |||||
Minority interest | 1,251 | 917 | |||||
Stockholders’ equity | |||||||
Preferred stock | — | — | |||||
Common stock | 95 | 85 | |||||
Additional paid in capital | 87,437 | 66,074 | |||||
Retained earnings | 98,082 | 85,335 | |||||
Accumulated other comprehensive income | 692 | 322 | |||||
Total | 186,306 | 151,816 | |||||
Common stock in treasury | — | (933 | ) | ||||
Total stockholders’ equity | 186,306 | 150,883 | |||||
Total liabilities and stockholders’ equity | $ | 483,586 | $ | 480,401 | |||
CONTACT: | Perry Ellis International Inc., Miami Rosemary Trudeau, 305-873-1294 rosemary.trudeau@pery.com |