Exhibit 99.1
Investor Relations Contact: Media Contact:
Robert J. Vill Jane Randel
Vice President, Treasury and Investor Vice President, Public Relations
Relations
Liz Claiborne Inc. Liz Claiborne Inc.
201.295.7515 212.626.3408
LIZ CLAIBORNE INC. POSTS RECORD 1st QUARTER SALES AND EPS
---------------------------------------------------------
REAFFIRMS FISCAL 2005 EPS GUIDANCE IN THE RANGE OF $2.96 - $3.02
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New York, NY April 28, 2005 - Liz Claiborne Inc. (NYSE:LIZ) announced today
diluted earnings per share ("EPS") of $0.65 for the first quarter 2005, an
increase of 4.8%, compared to diluted EPS of $0.62 for the first quarter 2004.
Net sales for the first quarter 2005 were a record $1.212 billion, up 9.9% over
the comparable 2004 period.
The Company will sponsor a conference call today at 10:00 am EDT to discuss its
first quarter 2005 results. This call will be webcast to the general public and
can be accessed via the Investor Relations section of the Liz Claiborne website
at www.lizclaiborneinc.com. An archive of the webcast will be available through
Thursday, May 19, 2005.
Paul R. Charron, Chairman and Chief Executive Officer, stated: "We are pleased
to report these solid first quarter results in what is currently a difficult
retail environment. Macroeconomic factors such as high oil prices, rising
interest rates, growing concerns about inflation and a slowing economy, as well
as distractions caused by the current uncertainty resulting from the merger and
acquisition headlines in the retail sector, have impacted retail sales in
domestic channels of distribution. Despite this difficult backdrop and an
especially strong year-ago period for many of our business units, the
disciplined execution of our multi-brand, multi-channel, multi-geography
diversification strategy enabled us to achieve higher than planned sales and EPS
in our targeted range."
Mr. Charron continued: "As has been the case in recent quarters, our performance
was broad based, driven by contributions from our Juicy Couture, Dana Buchman,
Claiborne men's, DKNY(R) Jeans (both men's and women's), Axcess women's, JH
Collectibles, First Issue, Emma James and Villager wholesale apparel businesses,
our Juicy Couture, Liz Claiborne, Monet, Villager and Crazy Horse accessories
and cosmetics wholesale non-apparel businesses, our Lucky Brand and Monet Europe
retail businesses as well as our licensing business, validating the
appropriateness of our portfolio strategy in such a challenging environment. We
are especially pleased with the 8% organic sales growth generated in the
quarter, attesting to the quality, balance and broad diversification in our
portfolio of brands."
Mr. Charron concluded: "For fiscal 2005, we continue to plan conservatively,
reaffirming our previous guidance of a sales increase of 6 - 8% and EPS in the
range of $2.96 - $3.02. This includes
1
the impact, which we estimate will be $0.10 - $0.12, resulting from the planned
adoption in the third quarter of 2005 of FASB 123R ("Accounting for Share-Based
Payment") as well as the shift in the composition of the Company's 2005
equity-based management compensation toward restricted stock and away from stock
options. We believe that it is appropriate to remain consistent with previous
guidance and proceed with the adoption of FASB 123R in spite of the SEC's recent
announcement delaying the mandatory adoption period. It is also important to
note that the shift toward restricted stock should ultimately reduce dilution
and enhance shareholder value, as we expect that fewer shares will be used for
equity-based compensation purposes than was the case in prior years. For the
second quarter of 2005, we are providing our initial guidance, forecasting a
sales increase of 6 - 8% and EPS in the range of $0.46 - $0.48, including the
impact, which we estimate will be $0.01, resulting from the shift in the
composition of the Company's 2005 equity-based management compensation discussed
above. All of these forward looking statements exclude the impact of any future
acquisitions or additional stock repurchases."
FIRST QUARTER RESULTS
- ---------------------
Net Sales
- ---------
Net sales for the first quarter of 2005 were a record $1.212 billion, an
increase of $110 million, or 9.9%, over net sales for the first quarter of 2004.
The inclusion of sales from our C & C California business (acquired January 6,
2005) added approximately $4 million in net sales during the quarter. The impact
of foreign currency exchange rates, primarily as a result of the strengthening
of the euro, in our international businesses added approximately $17 million in
sales during the quarter. Net sales results for our business segments are
provided below:
o Wholesale Apparel net sales increased $35 million, or 4.5%, to $810 million.
-----------------
This result reflected the following:
- The inclusion of $4 million of sales from the acquired C & C California
business;
- A $9 million increase resulting from the impact of foreign currency
exchange rates in our international businesses;
- A $22 million net increase across our other wholesale apparel businesses,
primarily driven by increases in our Juicy Couture, licensed DKNY(R) Jeans
(both men's and women's), Axcess women's, JH Collectibles, Mexx Europe,
First Issue, Lucky Brand, Claiborne men's and Dana Buchman businesses,
partially offset by a decrease in our domestic Liz Claiborne business as
well as the impact of the discontinuation of the Kenneth Cole womenswear
license. Net sales in our domestic Liz Claiborne business were down 9.2%
to last year.
o Wholesale Non-Apparel net sales increased $26 million, or 23.1%, to $137
----------------------
million, primarily due to the addition of our Juicy Couture accessories
business (launched in February 2004), as well as increases in Liz Claiborne,
Monet and Villager jewelry, in Liz Claiborne, Crazy Horse and First Issue
handbags and in our cosmetics businesses. Net sales in our domestic Liz
Claiborne business increased 6.9% to last year.
The impact of foreign currency exchange rates in our international businesses
was not material in this segment.
o Retail net sales increased $48 million, or 22.8%, to $256 million. The
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increase reflected the following:
- A $7 million increase resulting from the impact of foreign currency
exchange rates in our international businesses;
- A $41 million net increase primarily driven by higher comparable store
sales in our specialty retail business (including a 29.1% comparable store
sales increase in our Lucky Brand business and a 15.4% comparable store
sales increase in our Mexx Europe business), and the net addition over the
last twelve months of 20 new Mexx Europe specialty retail and outlet
stores, 18 new Sigrid Olsen specialty retail stores, 14 new specialty
retail and outlet
2
stores in Canada, 11 new Lucky Brand specialty retail stores, 9 new
domestic Liz Claiborne outlet stores and 5 new Mexx USA specialty retail
stores. We also opened 37 net new international concession stores in
Europe over the last twelve months.
Comparable store sales in our Company-operated stores increased by 3.6%
overall, driven by a 15.0% increase in our specialty retail business,
partially offset by a 5.2% decrease in our outlet business. We ended the
quarter with a total of 288 outlet stores, 273 specialty retail stores and
597 international concession stores.
o Corporate net sales, consisting of licensing revenue, increased $1 million to
---------
$11 million as a result of new licenses and growth from our existing license
portfolio.
Gross Profit
- ------------
Gross profit increased $57 million, or 11.4%, to $558 million in the first
quarter of 2005 over the first quarter of 2004. Approximately $9 million of the
increase in the quarter was due to the impact of foreign currency exchange
rates, primarily as a result of the strengthening of the euro, in our
international businesses. Gross profit as a percent of net sales increased to
46.0% in 2005 from 45.4% in 2004. The increased gross profit rate reflected the
positive impact of lower sourcing costs and a changing mix within our portfolio,
primarily reflecting an increased proportion of sales from our Mexx Europe and
domestic specialty retail businesses, which run at higher gross profit rates
than the Company average, partially offset by higher promotional activity in our
domestic wholesale businesses as well as additional liquidation of excess
inventory.
Selling, General & Administrative Expenses
- ------------------------------------------
Selling, General & Administrative expenses ("SG&A") increased $53 million, or
13.6%, to $439 million, in the first quarter of 2005 over the first quarter of
2004 and as a percent of net sales was 36.2%, compared to 35.1% in the first
quarter of 2004. The SG&A increase reflected the following:
o The inclusion of $2 million of expenses from the acquired C & C California
business and the start-up of new businesses;
o An $8 million increase resulting from the impact of foreign currency
exchange rates, primarily as a result of the strengthening of the euro, in
our international businesses;
o A $7 million increase resulting from an investment in marketing
activities, particularly focused on in-store activities to drive brand
preference and retail sales, across our portfolio;
o A $35 million increase primarily resulting from the expansion of our
domestic and international retail businesses and increased expenses
associated with the continued investment in building a multi-brand
platform in Europe;
o The inclusion of approximately $1 million of incremental equity-based
compensation expense resulting from the migration of our long-term
compensation plan primarily to restricted stock in anticipation of the
expensing of stock options.
The SG&A rate primarily reflected the unfavorable impact of the increased
proportion of expenses described above related to our Mexx Europe business,
which runs at a higher SG&A rate than the Company average, and reduced expense
leverage resulting from the decreased proportion of expenses related to our Liz
Claiborne business, which runs at a lower SG&A rate than the Company average, as
well as the impact of the increased investment in marketing activities discussed
above, partially offset by Company-wide expense control initiatives.
Operating Income
- ----------------
Operating income for the first quarter of 2005 was $119 million (or 9.8% of net
sales), compared to $114 million (or 10.4% of net sales) in the first quarter of
2004. The impact of foreign currency exchange rates, primarily as a result of
the strengthening of the euro, in our international businesses
3
added approximately $1 million. The decrease in operating income as a percent of
sales primarily resulted from increased investment in marketing activities,
higher promotional activity in our wholesale businesses and continued investment
in building a multi-brand platform in Europe, as discussed above. Operating
income by business segment is provided below:
o Wholesale Apparel operating income was $105 million in the first quarter of
------------------
2005, compared to $107 million in the first quarter of 2004, principally
reflecting reduced profits in our Liz Claiborne, Lucky Brand and Ellen Tracy
businesses, partially offset by increased profits in our Juicy Couture, Mexx
Europe, Axcess, JH Collectibles, First Issue, Dana Buchman, Villager and Emma
James businesses as well as the favorable impact of the discontinuation of
the Kenneth Cole womenswear license. Operating income as a percent of sales
decreased to 13.0% in the first quarter of 2005 from 13.8% in the first
quarter of 2004.
o Wholesale Non-Apparel operating income was $12 million (8.7% of net sales) in
---------------------
the first quarter of 2005 compared to $6 million (5.6% of net sales) in the
first quarter of 2004, principally due to the addition of our Juicy Couture
accessories business as well as increased profits in our Liz Claiborne and
Monet jewelry and cosmetics businesses, partially offset by decreased profits
in our fashion accessories business.
o Retail operating loss was $7 million in the first quarter of 2005, flat to
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last year, principally reflecting continued investment in retail
infrastructure and new stores, as well as decreased profits in our Mexx
Europe business resulting from the continued investment in building a
multi-brand platform as well as the aggressive liquidation of inventory in
our European outlet business, offset by increased profits in our Lucky Brand
and Monet Europe concession businesses. It is important to note that the
first quarter traditionally represents the least profitable quarter of the
year, due to the seasonality of our retail business.
o Corporate operating income, primarily consisting of licensing income, was $9
---------
million in the first quarter of 2005, compared to $8 million in the first
quarter of 2004.
Net Interest Expense
- --------------------
Net interest expense in the first quarter of 2005 was $8 million, flat to last
year.
Net Income
- ----------
Net income in the first quarter of 2005 increased to $71 million, or 5.9% of net
sales, from $69 million in the first quarter of 2004, or 6.2% of net sales.
Diluted earnings per common share increased to $0.65 in the first quarter of
2005, from $0.62 in the first quarter of 2004, a 4.8% increase.
Average diluted shares outstanding decreased by 1.2 million shares to 110.1
million in the first quarter of 2005 compared to 2004 as a result of the impact
of shares repurchased during the second quarter of 2004, partially offset by the
exercise of stock options and the effect of dilutive securities.
BALANCE SHEET AND CASH FLOW
- ---------------------------
We ended the first quarter of 2005 with $131 million in cash and marketable
securities, compared to $240 million at the end of the first quarter of 2004,
and with $507 million of debt outstanding compared to $456 million at the end of
the first quarter of 2004. This $160 million increase in our net debt position
is primarily attributable to $117 million in share repurchases, the $192 million
final payment made related to the fiscal 2001 acquisition of Mexx Europe, $141
million in capital and in-store expenditures, the $30 million payment made
related to the acquisition of C & C California and the $35 million payment made
related to the purchase of an additional 8.25% of the
4
equity interest of Lucky Brand over the prior twelve months, in addition to the
effect of foreign currency translation on our Eurobond (which added $29 million
to our debt balance), partially offset by cash flow from operations for the
prior twelve months of $399 million. We ended the quarter with a record $1.903
billion in stockholders' equity, giving us a total debt to total capital ratio
of 21.0% at the end of the first quarter of 2005, compared to 21.3% at the end
of the first quarter of 2004. As of the end of the first quarter of 2005, we had
approximately $102 million remaining on our share repurchase authorization.
Accounts receivable increased $73 million, or 12.2%, at the end of the first
quarter of 2005 compared to the end of the first quarter of 2004, primarily due
to increased sales volume and the timing of shipments in the quarter as well as
the $10 million impact of foreign currency exchange rates, primarily as a result
of the strengthening of the euro, in our international businesses.
Inventories increased $61 million, or 12.2%, at the end of the first quarter of
2005 compared to the end of the first quarter of 2004. New business initiatives
and the expansion of our retail business added $34 million to our inventory
levels. Approximately $11 million of the increase is related to the impact of
foreign currency exchange rates, primarily as a result of the strengthening of
the euro, in our international businesses.
Net cash used in operating activities was $167 million in the three months of
2005, compared to $108 million used in the three months of 2004. This $59
million decrease in cash flow was primarily due to changes in working capital in
2005 compared to 2004, driven primarily by year-over-year changes in our
accounts receivable and inventory balances described above as well as
year-over-year changes in accounts payable due to the timing of payments for
inventory purchases and in accrued expenses due to the payment of
employment-related obligations.
Net cash used in investing activities was $89 million in the three months of
2005, compared to $38 million in the three months of 2004. Net cash used in 2005
primarily reflected the $30 million payment made related to the acquisition of C
& C California and the $35 million payment made related to the purchase of an
additional 8.25% of the equity interest of Lucky Brand as well as $26 million
for capital and in-store expenditures. Net cash used in 2004 primarily reflected
$31 million in capital and in-store expenditures.
FORWARD OUTLOOK
- ---------------
For the full year 2005, we are reaffirming our previous guidance, forecasting a
net sales increase of 6 - 8%, an operating margin in the range of 10.9 - 11.1%
and EPS in the range of $2.96 - $3.02, including the impact, which we estimate
will be $0.10 - $0.12, resulting from the planned adoption in the third quarter
of 2005 of FASB 123R ("Accounting for Share-Based Payment") and a shift in the
composition of the Company's 2005 equity-based compensation discussed above. We
do not expect foreign currency exchange rates in our international businesses to
have a material impact on full year 2005 results.
o In our wholesale apparel segment, we expect fiscal 2005 net sales to
increase in the range of 3 - 4%, primarily driven by the acquisition of C
& C California in addition to increases in our Juicy Couture, Mexx Europe,
JH Collectibles, Emma James, Axcess men's and women's, First Issue, Lucky
Brand, licensed DKNY(R) Jeans, Sigrid Olsen and Laundry businesses, as
well as the addition of our Tint, Metroconcepts, Belongings and
Tapemeasure businesses, partially offset by the impact of the
discontinuation of our Kenneth Cole womenswear license. We consider it
prudent to expect net sales in our domestic Liz Claiborne business to
decrease in the mid teens year-over-year, as a result of uncertainty
5
around retail consolidation which may impact the better segment of
department stores disproportionately.
o In our wholesale non-apparel segment, we expect fiscal 2005 net sales to
increase in the range of 10 - 12%, primarily driven by increases in our
cosmetics, Juicy Couture accessories, handbags and jewelry businesses. We
expect net sales in our domestic Liz Claiborne businesses to increase high
single digits year-over-year, as a result of recent strength in these
businesses.
o In our retail segment, we expect fiscal 2005 net sales to increase in the
range of 14 - 17%, primarily driven by increases in our Lucky Brand, Mexx
Europe, outlet, Sigrid Olsen, Liz Claiborne Canada, Mexx Canada and Mexx
USA businesses. We project comparable store sales to be flat to up low
single digits over fiscal 2004.
o In our corporate segment, we expect fiscal 2005 licensing revenue to
increase by 15% over fiscal 2004.
For the second quarter of 2005, we are providing our initial guidance,
forecasting a net sales increase of 6 - 8% (including an approximate 1% sales
increase due to the projected impact of foreign currency exchange rates), an
operating margin in the range of 7.8 - 8.2% and EPS in the range of $0.46 -
$0.48, including the impact, which we estimate will be $0.01, resulting from the
shift in the composition of the Company's 2005 equity-based management
compensation discussed above.
o In our wholesale apparel segment, we expect second quarter 2005 net sales
to increase in the range of 2 - 4%, primarily driven by the acquisition of
C & C California as well as increases in our Mexx Europe, Juicy Couture,
Lucky Brand, JH Collectibles and Axcess men's and women's businesses,
partially offset by a decrease in our Liz Claiborne business as well as
the impact of the discontinuation of our licensed Kenneth Cole womenswear
business.
o In our wholesale non-apparel segment, we expect second quarter 2005 net
sales to increase in the range of 10 - 12%, primarily driven by increases
in our cosmetics, jewelry and handbags businesses.
o In our retail segment, we expect second quarter 2005 net sales to increase
in the range of 13 - 15%, primarily driven by increases in our Mexx
Europe, Lucky Brand, Liz Claiborne Canada, Mexx Canada and Sigrid Olsen
businesses.
o In our corporate segment, we expect second quarter 2005 licensing revenue
to increase by 10%.
All of these forward-looking statements exclude the impact of any future
acquisitions or additional stock repurchases.
Liz Claiborne Inc. designs and markets an extensive range of women's and men's
fashion apparel and accessories appropriate to wearing occasions ranging from
casual to dressy. The Company also markets fragrances for women and men. Liz
Claiborne Inc.'s brands include Axcess, Bora Bora, C & C California, Claiborne,
Crazy Horse, Curve, Dana Buchman, Elisabeth, Ellen Tracy, Emma James, Enyce,
First Issue, Intuitions, Jane Street, J.H. Collectibles, Juicy Couture, Laundry
by Shelli Segal, LIZ, Liz Claiborne, Lucky Brand, Mambo, Marvella, Mexx, Monet,
Monet 2, Realities, Sigrid Olsen, Spark, Swe, Trifari and Villager. In addition,
Liz Claiborne Inc. holds the exclusive, long-term license to produce and sell
men's and women's collections of DKNY(R) Jeans and DKNY(R) Active, as well as
CITY DKNY(R) better women's sportswear in the Western Hemisphere. The Company
also has the exclusive license to produce jewelry under the Kenneth Cole New
York and Reaction Kenneth Cole brand names.
6
Statements contained herein that relate to the Company's future performance,
including, without limitation, statements with respect to the Company's
anticipated results of operations or level of business for 2005 or any other
future period, are forward-looking statements within the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Such statements are
based on current expectations only, and are subject to certain risks,
uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected. Among the factors that could cause actual results to materially
differ include risks related to the continuing challenging retail and
macro-economic conditions, including the levels of consumer confidence and
discretionary spending and the levels of customer traffic within department
stores, malls and other shopping and selling environments, and a continuation of
the deflationary trend in prices for apparel products; risks related to retailer
and consumer acceptance of the Company's products; risks related to the
Company's ability, especially through its sourcing, logistics and technology
functions, to operate within substantial production and delivery constraints,
including risks associated with the possible failure of the Company's
unaffiliated manufacturers to manufacture and deliver products in a timely
manner, to meet quality standards or to comply with Company policies regarding
labor practices or applicable laws or regulations; risks related to the
Company's ability to adapt to and compete effectively in the new quota
environment, including changes in sourcing patterns resulting from the
elimination of quota on apparel products, as well as lowered barriers to entry;
risks associated with the Company's dependence on sales to a limited number of
large United States department store customers; risks associated with the
Company's ability to maintain and enhance favorable brand recognition; risks
associated with the operation and expansion of the Company's own retail
business; risks associated with the Company's ability to correctly balance the
level of its commitments with actual orders; risks associated with the Company's
ability to identify appropriate acquisition candidates and negotiate favorable
financial and other terms, against the background of increasing market
competition (from both strategic and financial buyers) for the types of
acquisitions the Company has made; risks associated with acquisitions and new
product lines and markets, including risks relating to integration of
acquisitions, retaining and motivating key personnel of acquired businesses and
achieving projected or satisfactory levels of sales, profits and/or return on
investment; risks associated with the Company's ability to attract and retain
talented, highly qualified executives and other key personnel; risks associated
with any significant disruptions in the Company's relationship with, and any
work stoppages by, its employees, including its union employees; risks
associated with providing for the succession of senior management; risks
associated with changes in social, political, economic, legal and other
conditions affecting foreign operations, sourcing or international trade,
including the impact of foreign currency exchange rates, currency devaluations
in countries in which the Company sources product; risks associated with war,
the threat of war and terrorist activities; work stoppages or slowdowns by
suppliers or service providers; risks relating to protecting and managing
intellectual property; and such other economic, competitive, governmental and
technological factors affecting the Company's operations, markets, products,
services and prices as are set forth in our 2004 Annual Report on Form 10-K,
including, without limitation, those set forth under the heading
"Business-Competition; Certain Risks" and under the heading "Statement Regarding
Forward-Looking Statements". The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Financial tables attached
7
LIZ CLAIBORNE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(All amounts in thousands except per share data)
(Unaudited)
13 weeks ended 13 weeks ended
April 2, 2005 April 3, 2004
------------- -------------
Net Sales $ 1,212,407 $ 1,102,767
Cost of Goods Sold 654,177 601,737
------------ ------------
Gross Profit 558,230 501,030
Selling, General & Administrative
Expenses 439,474 386,703
------------ ------------
Operating Income 118,756 114,327
Other Expense - net (614) (590)
Interest Expense - net (7,588) (7,610)
------------ ------------
Income Before Provision for Income Taxes 110,554 106,127
Provision for Income Taxes 39,136 37,357
------------ ------------
Net Income $ 71,418 $ 68,770
============ ============
Weighted Average Common Shares
Outstanding 108,063 109,281
Basic Earnings per Common Share $0.66 $0.63
===== =====
Weighted Average Common Shares and
Share Equivalents Outstanding 110,059 111,245
Diluted Earnings per Common Share $0.65 $0.62
===== =====
Supplemental Information:
Dividends Paid per Common Share
(Rounded to the nearest penny) $0.06 $0.06
===== =====
8
LIZ CLAIBORNE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(All dollar amounts in thousands)
(Unaudited)
April 2, 2005 April 3, 2004
------------- -------------
Assets
Current Assets:
Cash and Cash Equivalents $ 123,384 $ 181,344
Marketable Securities 7,578 58,727
Accounts Receivable - trade, net 669,811 596,790
Inventories, net 563,133 501,982
Deferred Income Taxes 51,351 44,531
Other Current Assets 104,093 94,174
------------ ------------
Total Current Assets 1,519,350 1,477,548
------------ ------------
Property and Equipment - Net 467,169 414,316
Goodwill and Intangibles - Net 1,111,627 842,658
Other Assets 10,901 6,298
------------ ------------
Total Assets $ 3,109,047 $ 2,740,820
============ ============
Liabilities and Stockholders' Equity
Current Liabilities $ 637,764 $ 549,286
Long-Term Debt 461,348 425,743
Other Non-Current Liabilities 51,694 21,958
Deferred Income Taxes 52,043 48,722
Minority Interest 3,350 10,532
Stockholders' Equity 1,902,848 1,684,579
------------ ------------
Total Liabilities and Stockholders' Equity $ 3,109,047 $ 2,740,820
============ ============
9
LIZ CLAIBORNE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All dollar amounts in thousands)
(Unaudited)
13 weeks ended 13 weeks ended
April 2, 2005 April 3, 2004
------------- -------------
Cash Flows from Operating Activities:
Net income $ 71,418 $ 68,770
Adjustments to reconcile net income to net cash in
operating activities:
Depreciation and amortization 29,040 26,049
Deferred income taxes (1,069) 969
Other - net 5,279 6,404
Change in current assets and liabilities, exclusive of
acquisitions:
(Increase) in accounts receivable - trade, net (241,975) (210,646)
(Increase) in inventories (24,393) (22,840)
(Increase) in other current assets (13,850) (12,711)
Increase in accounts payable 17,117 28,973
(Decrease) in accrued expenses (26,141) (9,852)
Increase in income taxes payable 18,064 16,594
------------ ------------
Net cash used in operating activities (166,510) (108,290)
------------ ------------
Cash Flows from Investing Activities:
Purchases of investment instruments (67) (25)
Purchases of property and equipment excluding capital
leases (24,325) (29,408)
Payments for acquisitions, net of cash acquired (62,451) (4,979)
Payments for in-store merchandise shops (1,430) (1,295)
Other - net (1,068) (2,393)
------------ ------------
Net cash used in investing activities (89,341) (38,100)
------------ ------------
Cash Flows from Financing Activities:
Short-term borrowings (10,289) 10,998
Principal payments under capital lease obligations (517) --
Proceeds from exercise of common stock options 9,280 21,391
Dividends paid (6,091) (6,146)
------------ ------------
Net cash (used in) provided by financing
activities (7,617) 26,243
------------ ------------
Effect of Exchange Rate Changes on Cash 1,215 7,988
------------ ------------
Net Change in Cash and Cash Equivalents (262,253) (112,159)
Cash and Cash Equivalents at Beginning of Period 385,637 293,503
------------ ------------
Cash and Cash Equivalents at End of Period $ 123,384 $ 181,344
============ ============
10
LIZ CLAIBORNE, INC.
SEGMENT REPORTING
(All dollar amounts in thousands)
(Unaudited)
13 weeks ended % to 13 weeks ended % to
April 2, 2005 Total April 3, 2004 Total
------------- ----- ------------- -----
NET SALES:
Wholesale Apparel $ 809,646 66.8% $ 774,435 70.2%
Wholesale Non-Apparel 136,660 11.3% 111,006 10.1%
Retail 255,534 21.1% 208,023 18.9%
Corporate 10,567 0.8% 9,303 0.8%
------------ ------- ------------ -------
Total Net Sales $ 1,212,407 100.0% $ 1,102,767 100.0%
============ ======= ============ =======
13 weeks ended % of 13 weeks ended % of
April 2, 2005 Sales April 3, 2004 Sales
------------- ----- ------------- -----
OPERATING INCOME:
Wholesale Apparel $ 105,425 13.0% $ 107,097 13.8%
Wholesale Non-Apparel 11,948 8.7% 6,163 5.6%
Retail (7,463) -2.9% (6,758) -3.2%
Corporate 8,846 83.7% 7,825 84.1%
------------ ------- ------------ -------
Total Operating Income $ 118,756 9.8% $ 114,327 10.4%
============ ======= ============= =======
13 weeks ended % to 13 weeks ended % to
April 2, 2005 Total April 3, 2004 Total
------------- ----- ------------- -----
NET SALES:
Domestic $ 900,064 74.2% $ 834,513 75.7%
International 312,343 25.8% 268,254 24.3%
------------ ------- ------------ -------
Total Net Sales $ 1,212,407 100.0% $ 1,102,767 100.0%
============ ======= ============ =======
13 weeks ended % of 13 weeks ended % of
April 2, 2005 Sales April 3, 2004 Sales
------------- ----- ------------- -----
OPERATING INCOME:
Domestic $ 99,651 11.1% $ 94,616 11.3%
International 19,105 6.1% 19,711 7.3%
------------ ------- ------------ -------
Total Operating Income $ 118,756 9.8% $ 114,327 10.4%
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