Jones Apparel Group, Inc. Reports 2009 Fourth Quarter and Full Year Financial Results
NEW YORK, Feb. 10 /PRNewswire-FirstCall/ -- Jones Apparel Group, Inc. (NYSE: JNY) today reported results for the fourth quarter and year ended December 31, 2009. Revenues for the fourth quarter of 2009 were $777 million, as compared with $847 million for the fourth quarter of 2008. Revenues for the full year 2009 were $3,327 million, as compared with $3,616 million for the full year 2008. The fourth quarter decrease in revenues of 8% was as anticipated and reflective of the overall economic conditions that continue to affect retail sales in general. Gross profit margin increased 480 basis points to 34.3% for the fourth quarter, reflecting the benefits of careful inventory management.
The Company reported adjusted earnings per share from continuing operations ("EPS") of $0.11 for the fourth quarter of 2009, as compared with adjusted earnings per share of ($0.04) for the same period last year. The 2009 and 2008 fourth quarter adjusted results exclude charges related to the impairments of goodwill and trademarks in our retail, jeanswear and footwear and accessories businesses, the impact of severance and other costs related to restructuring activities initiated across the Company, and certain other costs. Adjusted earnings per share from continuing operations on a full year basis were $1.14 in 2009 versus $0.87 per share in the prior year (see reconciliation of adjusted earnings to reported earnings in the accompanying schedule).
As reported under generally accepted accounting principles ("GAAP"), the Company reported a loss of ($1.53) per share from continuing operations for the fourth quarter of 2009, as compared with a loss of ($9.86) for the same period last year. The 2009 results include non-cash impairment charges of approximately $150 million ($138 million after tax) for certain goodwill and trademarks within our Retail and Wholesale Jeanswear and Wholesale Footwear and Accessories businesses, while the 2008 results include non-cash impairment charges of approximately $838 million ($810 million after tax) for certain goodwill and trademarks within our Wholesale Footwear and Accessories business. Such charges were a result of the Company's required annual testing under GAAP. The fourth quarter results also include severance and other costs related to restructuring activities initiated across the Company, and certain other charges totaling $4 million ($2 million after tax) and $13 million ($9 million after tax) in 2009 and 2008, respectively.
Wesley R. Card, Jones Apparel Group Chief Executive Officer, stated: "We are encouraged by the strength of our brands and retail partnerships as we look ahead to 2010. We have focused on revitalizing our core brands and organizational structure and have enhanced our product offerings by acquiring new brands and developing new partnerships. We also streamlined our supply chain and distribution networks and closed marginally profitable businesses. Our retail improvement plan is showing positive results. We have already closed approximately 100 retail locations, with an additional 165 locations to close in 2010. Today, we are a leading department store resource, and we continue to explore new opportunities to offer consumers quality products at the right price points."
Mr. Card continued: "Our fourth quarter results were reflective of today's macroeconomic situation, which was marked by both low consumer confidence and spending levels. We are encouraged by our improved operating margins and the performance of our Retail business, which was profitable in the quarter and posted an increase in comparable store sales of 2.0%."
Cash provided by continuing operating activities during 2009 was $349 million, an improvement of $173 million when compared with 2008. The improvement in cash flow was largely driven by inventory control, lower working capital requirements and the timing of certain cash receipts and payments. The Company has no amounts drawn under its $650 million of committed revolving credit facilities.
John T. McClain, Jones Apparel Group Chief Financial Officer, commented: "Our financial position continues to be strong, ending the quarter with $333 million in cash, and our revolver remains undrawn. During the year, we repaid $250 million in long term debt, and our total debt balance is now $529 million. Aggressive management of inventories and expenses helped conserve cash and improve margins. We will maintain the same approach toward spending as we manage throughout 2010."
Mr. Card concluded: "For 2010, we are encouraged by trends in the retail market as supply and demand have come into balance. Additionally, we believe that our retail partners will be able to more accurately plan for the future as market visibility increases. As always, we will continue to take the necessary actions to achieve improved performance, increase our market share and enhance shareholder value."
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 26, 2010, for payment on March 12, 2010.
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.jonesapparel.com (under Investor Relations/Conference Schedule). The call will be recorded and made available through February 17, 2010 and may be accessed by dialing 877-344-7529. Enter account number 437170. A slide presentation will accompany the prepared remarks and has been posted with the webcast on the Company's website.
Presentation of Financial Information
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 reported GAAP results to the comparable non-GAAP information appears in the financial tables section of this press release.
About Jones Apparel Group, Inc.
Jones Apparel Group, Inc. (www.jonesapparel.com) is a leading designer, marketer and wholesaler of branded apparel, footwear and accessories. The Company also markets directly to consumers through its chain of specialty retail and value-based stores and through its e-commerce web sites. The Company's nationally recognized brands include Jones New York, Nine West, Anne Klein, Gloria Vanderbilt, Kasper, Bandolino, Easy Spirit, Evan-Picone, l.e.i., Energie, Enzo Angiolini, Joan & David, Mootsies Tootsies, Sam & Libby, Napier, Judith Jack, Albert Nipon and Le Suit. The Company also markets costume jewelry under the Givenchy brand licensed from Givenchy Corporation, women's footwear under the Dockers® and Dockers® Women brands and infants', toddlers' and boys' footwear (excluding girls' footwear) under the Dockers® and Dockers® Premium brands, licensed from Levi Strauss & Co., apparel and accessories under the Rachel Roy brand licensed from Rachel Roy IP Company, LLC, and Jessica Simpson jeanswear licensed from VCJS, LLC. Each brand is differentiated by its own distinctive styling, pricing strategy, distribution channel and target consumer. The Company contracts for the manufacture of its products through a worldwide network of quality manufacturers. The Company has capitalized on its nationally known brand names by entering into various licenses for several of its trademarks, including Jones New York, Anne Klein New York, Nine West, Gloria Vanderbilt, l.e.i. and Evan-Picone, with select manufacturers of women's and men's products which the Company does not manufacture. For more than 30 years, the Company has built a reputation for excellence in product quality and value, and in operational execution.
Forward Looking Statements
Certain statements contained herein are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding the Company's expected financial position, business and financing plans are forward-looking statements. The words "believes," "expects," "plans," "intends," "anticipates" and similar expressions identify forward-looking statements. Forward-looking statements also include representations of the Company's expectations or beliefs concerning future events that involve risks and uncertainties, including:
- those associated with the effect of national, regional and international economic conditions;
- lowered levels of consumer spending resulting from a general economic downturn or lower levels of consumer confidence;
- the tightening of the credit markets and our ability to obtain capital on satisfactory terms;
- given the uncertain economic environment, the possible unwillingness of committed lenders to meet their obligations to lend to borrowers, in general;
- the performance of the Company's products within the prevailing retail environment;
- customer acceptance of both new designs and newly-introduced product lines;
- the Company's reliance on a few department store groups for large portions of the Company's business;
- the Company's ability to identify acquisition candidates and, in a competitive environment for such acquisitions, acquire such businesses on reasonable financial and other terms;
- the integration of the organizations and operations of any acquired businesses into the Company's existing organization and operations;
- consolidation of the Company's retail customers;
- financial difficulties encountered by the Company's customers;
- the effects of vigorous competition in the markets in which the Company operates;
- the Company's ability to attract and retain qualified executives and other key personnel;
- the Company's reliance on independent foreign manufacturers;
- changes in the costs of raw materials, labor, advertising and transportation;
- the general inability to obtain higher wholesale prices for the Company's products that the Company has experienced for many years;
- the uncertainties of sourcing associated with an environment in which general quota has expired on apparel products but litigation and political activity seeking to re-impose quotas have been initiated;
- the Company's ability to successfully implement new operational and financial computer systems; and
- the Company's ability to secure and protect trademarks and other intellectual property rights.
A further description of these risks and uncertainties and other important factors that could cause actual results to differ materially from the Company's expectations can be found in the Company's Annual Report on Form 10-K for the year ended December 31, 2008, including, but not limited to, the Statement Regarding Forward-Looking Disclosure and Item 1A-Risk Factors therein, and in the Company's other filings with the Securities and Exchange Commission. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such expectations may prove to be incorrect. The Company does not undertake to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.
JONES APPAREL GROUP, INC.
CONSOLIDATED OPERATING RESULTS
All amounts in millions, except per share data
FOURTH QUARTER (Unaudited)
--------------------------
2009 2008
---- ----
Net sales $762.8 98.2% $830.5 98.1%
Licensing income 13.5 1.7 15.6 1.8
Other revenues 0.4 0.1 0.8 0.1
--- --- --- ---
Total revenues 776.7 100.0 846.9 100.0
Cost of goods sold 510.6 65.7 597.0 70.5
----- ---- ----- ----
Gross profit 266.1 34.3 249.9 29.5
SG&A expenses 245.6 31.6 260.1 30.7
Trademark
impairments 28.7 3.7 25.2 3.0
Goodwill
impairments 120.6 15.5 813.2 96.0
----- ---- ----- ----
Operating loss (128.8) (16.6) (848.6) (100.2)
Net interest
expense and
financing costs (8.5) (1.1) (11.6) (1.4)
Loss and costs
associated with
repurchase of
4.250% Senior
Notes 0.4 0.1 - -
Gain on sale of
interest in
Australian joint
venture - - - -
Equity in loss of
unconsolidated
affiliate (0.9) (0.1) (0.3) 0.0
---- ---- ---- ---
Loss from
continuing
operations before
taxes (137.8) (17.7) (860.5) (101.6)
(Benefit)
provision for
income taxes (7.5) (1.0) (37.7) (4.5)
---- ---- ----- ----
Loss from
continuing
operations (130.3) (16.8) (822.8) (97.2)
(Loss) income from
discontinued
operations, net of
tax - - (0.1) 0.0
- - ---- ---
Net loss (130.3) (16.8) (822.9) (97.2)
Less: income
attributable to
noncontrolling
interest 0.1 0.0 - -
--- --- - -
Net loss
attributable to
Jones $(130.4) (16.8)% $(822.9) (97.2)%
======= ===== ======= =====
Earnings per share (1)
Loss from
continuing
operations $(130.3) $(822.8)
Less: income
attributable to
noncontrolling
interest 0.1 -
--- -
Income from
continuing
operations
attributable to
Jones (130.4) (822.8)
Less: loss
allocated to
participating
securities (5.5) (18.0)
---- -----
Loss from continuing
operations available
to common
stockholders
of Jones (124.9) (804.8)
(Loss) income
from discontinued
operations - (0.1)
- ----
Loss available
to common
stockholders of
Jones $(124.9) $(804.9)
======= =======
Common shares
outstanding -
diluted 81.8 81.6
Earnings per share
- diluted
Loss from
continuing
operations
attributable
to Jones $(1.53) $(9.86)
Income from
discontinued
operations
attributable
to Jones - -
- -
Diluted loss
per share
attributable
to Jones $(1.53) $(9.86)
====== ======
Percentages may not add due to rounding.
All amounts in millions, except per share data
TOTAL YEAR
----------
2009 2008
---- ----
Net sales $3,279.7 98.6% $3,562.6 98.5%
Licensing income 46.8 1.4 52.1 1.4
Other revenues 0.9 0.0 1.7 0.0
--- --- --- ---
Total revenues 3,327.4 100.0 3,616.4 100.0
Cost of goods sold 2,181.5 65.6 2,440.2 67.5
------- ---- ------- ----
Gross profit 1,145.9 34.4 1,176.2 32.5
SG&A expenses 1,008.7 30.3 1,069.2 29.6
Trademark
impairments 28.7 0.9 25.2 0.7
Goodwill
impairments 120.6 3.6 813.2 22.5
----- --- ----- ----
Operating loss (12.1) (0.4) (731.4) (20.2)
Net interest
expense and
financing costs (52.8) (1.6) (41.6) (1.2)
Loss and costs
associated with
repurchase of
4.250% Senior
Notes (1.5) 0.0 - -
Gain on sale of
interest in
Australian joint
venture - - 0.8 0.0
Equity in loss of
unconsolidated
affiliate (3.7) (0.1) (0.7) -
---- ---- ---- -
Loss from
continuing
operations before
taxes (70.1) (2.1) (772.9) (21.4)
(Benefit)
provision for
income taxes 16.2 0.5 (6.6) (0.2)
---- --- ---- ----
Loss from
continuing
operations (86.3) (2.6) (766.3) (21.2)
(Loss) income from
discontinued
operations, net of
tax - - 0.9 0.0
- - --- ---
Net loss (86.3) (2.6) (765.4) (21.2)
Less: income
attributable to
noncontrolling
interest 0.3 0.0 - -
--- --- - -
Net loss
attributable to
Jones $(86.6) (2.6)% $(765.4) (21.2)%
====== ==== ======= =====
Earnings per share (1)
Loss from
continuing
operations $(86.3) $(766.3)
Less: income
attributable to
noncontrolling
interest 0.3 -
--- -
Income from
continuing
operations
attributable to
Jones (86.6) (766.3)
Less: loss
allocated to
participating
securities (3.5) (16.0)
---- -----
Loss from continuing
operations available
to common
stockholders
of Jones (83.1) (750.3)
(Loss) income
from
discontinued
operations - 0.9
- ---
Loss available
to common
stockholders of
Jones $(83.1) $(749.4)
====== =======
Common shares
outstanding -
diluted 81.7 82.9
Earnings per share
- diluted
Loss from
continuing
operations
attributable
to Jones $(1.02) $(9.05)
Income from
discontinued
operations
attributable
to Jones - 0.01
- ----
Diluted loss
per share
attributable
to Jones $(1.02) $(9.04)
====== ======
(1) Earnings per share is calculated under the "two-class method," where
income is allocated between common shares and participating
securities (unvested restricted shares held by employees that have
a nonforfeitable right to dividends). Both our common shares and
participating securities share equally in dividend payments and
earnings.
JONES APPAREL GROUP, INC.
SELECTED OPERATING RESULTS
(UNAUDITED)
As required by the Securities and Exchange Commission Regulation G, the
following table contains information regarding the non-GAAP adjustments
used by the Company in the presentation of its financial results:
All amounts in millions,
except per share data
FOURTH QUARTER TOTAL YEAR
-------------- -----------
2009 2008 2009 2008
---- ---- ---- ----
Loss from
continuing
operations
attributable to
Jones $(130.4) $(822.8) $(86.6) $(766.3)
(Benefit)
provision for
income taxes (7.5) (37.7) 16.2 (6.6)
Gain on sale of
Mexican
operations - - - (0.2)
Loss and costs associated
with repurchase of
4.250% Senior Notes (a) (0.4) - 1.5 -
Adjustments to
deferred financing
costs (b) (3.6) 0.8 4.4 0.8
Goodwill impairments (c) 120.6 813.2 120.6 813.2
Items affecting
segment income:
Trademark
impairments (c) 28.7 25.2 28.7 25.2
Impairment and
other expenses
related to
retail store
closure plan (d) (0.2) - 24.1 -
Charges
associated
with
bankruptcy of
former U.K.
licensee - - 3.9 -
Severance
related to
restructuring
activities (e) 3.5 6.4 19.4 13.1
Other
restructuring
expenses and
certain other
charges (f) 4.3 5.9 17.1 31.0
--- --- ---- ----
Adjusted income
(loss) from
continuing
operations
before provision
for taxes 15.0 (9.0) 149.3 110.2
Adjusted
provision
(benefit) for
income taxes 5.3 (5.7) 52.5 36.6
--- ---- ---- ----
Adjusted income
(loss) from
continuing
operations
attributable to
Jones 9.7 (3.3) 96.8 73.6
Less: adjusted (income)
loss from continuing
operations allocated
to participating
securities (0.5) 0.1 (3.9) (1.6)
---- --- ---- ----
Adjusted income (loss)
from continuing
operations available
to common
stockholders $9.2 $(3.2) $92.9 $72.0
==== ===== ===== =====
Earnings per
share from
continuing
operations -
diluted (as
reported) $(1.53) $(9.86) $(1.02) $(9.05)
(Benefit)
provision for
income taxes (0.09) (0.45) 0.19 (0.08)
Gain on sale of
Mexican
operations - - - -
Loss and costs associated
with repurchase of
4.250% Senior Notes (a) - - 0.02 -
Adjustments to
deferred
financing costs (b) (0.04) 0.01 0.05 0.01
Goodwill
impairments (c) 1.41 9.75 1.42 9.60
Items affecting segment
income:
Trademark
impairments (c) 0.33 0.30 0.34 0.30
Impairment and
other expenses
related to
retail store
closure plan (d) - - 0.28 -
Charges associated
with bankruptcy of
former U.K. licensee - - 0.05 -
Severance
related to
restructuring
activities (e) 0.04 0.07 0.23 0.15
Other
restructuring
expenses and
certain other
charges (f) 0.05 0.07 0.20 0.37
---- ---- ---- ----
Adjusted income
(loss) from
continuing
operations
before taxes 0.17 (0.11) 1.76 1.30
Adjusted
provision
(benefit) for
income taxes 0.06 (0.07) 0.62 0.43
---- ----- ---- ----
Adjusted
earnings (loss)
per share from
continuing
operations -
diluted $0.11 $(0.04) $1.14 $0.87
===== ====== ===== =====
Non-GAAP adjustments
affecting revenue
by segment:
Wholesale
better apparel $0.1 $- $0.1 $-
Wholesale
jeanswear (f) - 0.9 2.9 10.8
Wholesale
footwear and
accessories - - - -
Retail (d) - - 0.1 -
Licensing,
other &
eliminations (f) - - - 0.5
- - - ---
Total $0.1 $0.9 $3.1 $11.3
==== ==== ==== =====
Non-GAAP adjustments
affecting income by segment:
Wholesale
better apparel
(e,f) $1.5 $1.8 $6.5 $1.6
Wholesale
jeanswear
(e,f) 4.5 2.1 13.1 26.5
Wholesale
footwear and
accessories
(e,f) 0.8 6.0 13.2 9.8
Retail (d,f) (0.1) 1.3 30.4 2.0
Licensing,
other &
eliminations
(e,f) 29.6 26.3 30.0 29.4
---- ---- ---- ----
Total $36.3 $37.5 $93.2 $69.3
===== ===== ===== =====
Adjusted segment margins
Wholesale
better apparel 3.1% 2.9% 11.2% 10.0%
Wholesale
jeanswear 5.1 2.5 9.5 5.6
Wholesale
footwear and
accessories 6.6 0.4 8.3 6.5
Retail 0.8 (6.7) (5.9) (7.2)
--- ---- ---- ----
Total 3.6% 0.2% 6.1% 4.2%
=== === === ===
(a) 2009 includes the loss and costs associated with the repurchase of
4.250% Senior Notes.
(b) 2009 and 2008 are comprised of adjustments to deferred financing
costs related to our prior revolving credit facility.
(c) Represents the impairments recorded as a result of the required
annual review of our indefinite-lived intangible assets and goodwill
in accordance with GAAP.
(d) 2009 includes fixed asset impairment and other charges related to the
closure of underperforming retail locations announced in April 2009.
(e) 2009 includes severance related to the restructuring of our costume
jewelry business. 2009 and 2008 include severance related to other
cost saving initiatives.
(f) 2009 and 2008 include costs related to the exit from or restructuring
of our moderate sportswear and certain other product lines. 2008
also includes costs related to the repositioning of l.e.i. as an
exclusive product for Walmart. Both periods contain certain other
charges not considered by management to be part of ongoing
operations.
JONES APPAREL GROUP, INC.
SEGMENT INFORMATION
(UNAUDITED)
All amounts in millions
Wholesale Wholesale
Better Wholesale Footwear &
Apparel Jeanswear Accessories Retail
------- --------- ----------- ------
For the fiscal quarter
ended December 31, 2009
Revenues from
external
customers $182.8 $175.0 $208.1 $197.3
Intersegment
revenues 23.4 0.2 13.1 -
---- --- ---- -
Total revenues 206.2 175.2 221.2 197.3
----- ----- ----- -----
Segment income
(loss) $4.8 $4.4 $13.8 $1.6
==== ==== ===== ====
Segment margin 2.3% 2.5% 6.2% 0.8%
Segment revenues $206.2 $175.2 $221.2 $197.3
Adjustments
affecting segment
revenues 0.1 - - -
--- - - -
Adjusted segment
revenues $206.3 $175.2 $221.2 $197.3
====== ====== ====== ======
Segment income
(loss) $4.8 $4.4 $13.8 $1.6
Adjustments
affecting segment
income 1.5 4.5 0.8 (0.1)
--- --- --- ----
Adjusted segment
income $6.3 $8.9 $14.6 $1.5
==== ==== ===== ====
Adjusted segment
margin 3.1% 5.1% 6.6% 0.8%
For the fiscal quarter ended
December 31, 2008
Revenues from
external
customers $228.5 $201.6 $200.5 $200.7
Intersegment
revenues 29.6 0.8 18.4 -
---- --- ---- -
Total revenues 258.1 202.4 218.9 200.7
----- ----- ----- -----
Segment income
(loss) $5.6 $2.9 $(5.1) $(14.8)
==== ==== ===== ======
Segment margin 2.2% 1.4% (2.3%) (7.4%)
Segment revenues $258.1 $202.4 $218.9 $200.7
Adjustments
affecting segment
revenues - 0.9 - -
- --- - -
Adjusted segment
revenues $258.1 $203.3 $218.9 $200.7
====== ====== ====== ======
Segment income
(loss) $5.6 $2.9 $(5.1) $(14.8)
Adjustments
affecting segment
income 1.8 2.1 6.0 1.3
--- --- --- ---
Adjusted segment
income (loss) $7.4 $5.0 $0.9 $(13.5)
==== ==== ==== ======
Adjusted segment
margin 2.9% 2.5% 0.4% (6.7%)
All amounts in millions
Licensing,
Other &
Eliminations Consolidated
------------ ------------
For the fiscal quarter
ended December 31, 2009
Revenues from
external
customers $13.5 $776.7
Intersegment
revenues (36.7) -
----- -
Total revenues (23.2) 776.7
----- -----
Segment income
(loss) $(32.8) (8.2)
======
Segment margin (1.1%)
Net interest expense (8.5)
Adjustment of loss associated
with repurchase of 4.250%
Senior Notes 0.4
Goodwill impairment (120.6)
Equity in loss of
unconsolidated affiliate (0.9)
----
Loss from continuing operations
before benefit for income taxes $(137.8)
=======
Segment revenues $(23.2) $776.7
Adjustments
affecting segment
revenues - 0.1
- ---
Adjusted segment
revenues $(23.2) $776.8
====== ======
Segment income
(loss) $(32.8) $(8.2)
Adjustments
affecting segment
income 29.6 36.3
---- ----
Adjusted segment
income $(3.2) $28.1
===== =====
Adjusted segment margin 3.6%
For the fiscal quarter
ended December 31, 2008
Revenues from
external
customers $15.6 $846.9
Intersegment
revenues (48.8) -
----- -
Total revenues (33.2) 846.9
----- -----
Segment income
(loss) $(24.0) (35.4)
======
Segment margin (4.2%)
Net interest expense (11.6)
Goodwill impairment (813.2)
Equity in loss of
unconsolidated affiliate (0.3)
----
Loss from continuing operations
before benefit for income taxes $(860.5)
=======
Segment revenues $(33.2) $846.9
Adjustments
affecting segment
revenues - 0.9
- ---
Adjusted segment
revenues $(33.2) $847.8
====== ======
Segment income
(loss) $(24.0) $(35.4)
Adjustments
affecting segment
income 26.3 37.5
---- ----
Adjusted segment
income (loss) $2.3 $2.1
==== ====
Adjusted segment margin 0.2%
JONES APPAREL GROUP, INC.
SEGMENT INFORMATION
All amounts in millions
Wholesale Wholesale
Better Wholesale Footwear &
Apparel Jeanswear Accessories Retail
------- --------- ----------- ------
For the year ended December 31, 2009
Revenues from
external customers $922.8 $828.9 $839.6 $689.3
Intersegment
revenues 133.7 2.0 56.4 -
----- --- ---- -
Total revenues 1,056.5 830.9 896.0 689.3
------- ----- ----- -----
Segment income
(loss) $112.1 $65.7 $61.4 $(71.4)
====== ===== ===== ======
Segment margin 10.6% 7.9% 6.9% (10.4%)
Segment revenues $1,056.5 $830.9 $896.0 $689.3
Adjustments
affecting segment
revenues 0.1 2.9 - 0.1
--- --- - ---
Adjusted segment
revenues $1,056.6 $833.8 $896.0 $689.4
======== ====== ====== ======
Segment income
(loss) $112.1 $65.7 $61.4 $(71.4)
Adjustments
affecting segment
income 6.5 13.1 13.2 30.4
--- ---- ---- ----
Adjusted segment
income (loss) $118.6 $78.8 $74.6 $(41.0)
====== ===== ===== ======
Adjusted segment
margin 11.2% 9.5% 8.3% (5.9%)
For the year ended December 31, 2008
Revenues from
external customers $1,098.7 $796.5 $938.3 $730.2
Intersegment
revenues 146.5 3.8 81.8 -
----- --- ---- ---
Total revenues 1,245.2 800.3 1,020.1 730.2
------- ----- ------- -----
Segment income
(loss) $122.3 $18.8 $56.4 $(54.3)
====== ===== ===== ======
Segment margin 9.8% 2.3% 5.5% (7.4%)
Segment revenues $1,245.2 $800.3 $1,020.1 $730.2
Adjustments
affecting segment
revenues - 10.8 - -
--- ---- --- ---
Adjusted segment
revenues $1,245.2 $811.1 $1,020.1 $730.2
======== ====== ======== ======
Segment income
(loss) $122.3 $18.8 $56.4 $(54.3)
Adjustments
affecting segment
income 1.6 26.5 9.8 2.0
--- ---- --- ---
Adjusted segment
income (loss) $123.9 $45.3 $66.2 $(52.3)
====== ===== ===== ======
Adjusted segment
margin 10.0% 5.6% 6.5% (7.2%)
All amounts in millions
Licensing,
Other &
Eliminations Consolidated
------------ ------------
For the year ended
December 31, 2009
Revenues from
external customers $46.8 $3,327.4
Intersegment
revenues (192.1) -
------ ---
Total revenues (145.3) 3,327.4
------ -------
Segment income
(loss) $(59.3) 108.5
======
Segment margin 3.3%
Net interest expense (52.8)
Goodwill impairment (120.6)
Loss and costs associated with
repurchase of 4.250% Senior Notes (1.5)
Equity in loss of unconsolidated
affiliate (3.7)
----
Loss from continuing operations
before provision for income taxes $(70.1)
======
Segment revenues $(145.3) $3,327.4
Adjustments
affecting segment
revenues - 3.1
--- ---
Adjusted segment
revenues $(145.3) $3,330.5
======= ========
Segment income
(loss) $(59.3) $108.5
Adjustments
affecting segment
income 30.0 93.2
---- ----
Adjusted segment
income (loss) $(29.3) $201.7
====== ======
Adjusted segment margin 6.1%
For the year ended
December 31, 2008
Revenues from
external customers $52.7 $3,616.4
Intersegment
revenues (232.1) -
------ ---
Total revenues (179.4) 3,616.4
------ -------
Segment income
(loss) $(61.6) 81.6
======
Segment margin 2.3%
Net interest expense (41.6)
Goodwill impairment (813.2)
Equity in loss of unconsolidated
affiliate (0.7)
Gain on sale of Mexican
operations and interest in
Australian joint venture 1.0
---
Loss from continuing operations
before benefit for income taxes $(772.9)
=======
Segment revenues $(179.4) $3,616.4
Adjustments
affecting segment
revenues 0.5 11.3
--- ----
Adjusted segment
revenues $(178.9) $3,627.7
======= ========
Segment income
(loss) $(61.6) $81.6
Adjustments
affecting segment
income 29.4 69.3
---- ----
Adjusted segment
income (loss) $(32.2) $150.9
====== ======
Adjusted segment margin 4.2%
JONES APPAREL GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
All amounts in millions
December 31, 2009 December 31, 2008
----------------- -----------------
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $333.4 $338.3
Accounts
receivable 303.1 370.2
Inventories 375.0 509.5
Prepaid and
refundable
income taxes - 16.9
Deferred taxes 28.1 28.0
Prepaid expenses
and other
current assets 25.6 42.6
---- ----
TOTAL CURRENT
ASSETS 1,065.2 1,305.5
Property, plant and
equipment, at cost, less
accumulated
depreciation and
amortization 239.0 301.0
Goodwill 40.1 160.7
Other
intangibles,
less accumulated
amortization 559.8 590.8
Prepaid and
refundable
income taxes 4.7 -
Deferred taxes 3.9 14.2
Investment in
and loans to
unconsolidated
affiliate 42.1 19.6
Other assets 70.2 35.7
---- ----
$2,025.0 $2,427.5
======== ========
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current portion
of long-term
debt and capital
lease
obligations $2.6 $253.1
Accounts
payable 185.3 231.4
Income taxes
payable 11.8 0.1
Accrued expenses
and other
current
liabilities 124.4 127.3
----- -----
TOTAL CURRENT
LIABILITIES 324.1 611.9
----- -----
NONCURRENT LIABILITIES:
Long-term debt
and obligations
under capital
leases 526.4 528.9
Income taxes - 20.8
Other 82.0 83.7
---- ----
TOTAL NONCURRENT
LIABILITIES 608.4 633.4
----- -----
TOTAL LIABILITIES 932.5 1,245.3
----- -------
TOTAL EQUITY 1,092.5 1,182.2
------- -------
$2,025.0 $2,427.5
======== ========
JONES APPAREL GROUP, INC.
CONDENSED STATEMENTS OF CASH FLOWS
All amounts in millions Year Ended
----------
December 31, 2009 December 31, 2008
----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(86.3) $(765.4)
Less: income from
discontinued operations - (0.9)
- ----
Loss from continuing
operations (86.3) (766.3)
----- ------
Adjustments to reconcile loss
from continuing operations to net
cash provided by operating activities,
net of acquisitions:
Loss and costs
associated with
repurchase of 4.250%
Senior Notes 1.5 -
Amortization of
employee stock
options and
restricted stock 13.0 12.3
Depreciation and
other amortization 78.7 80.8
Goodwill impairments 120.6 813.2
Trademark impairments 28.7 25.2
Impairment losses on
property, plant and
equipment 24.4 0.9
Equity in loss of
unconsolidated
affiliate 3.7 0.7
Provision for losses
on accounts
receivable 1.7 10.3
Deferred taxes 10.7 (5.0)
Write-off of deferred
financing fees 4.4 1.1
Other items, net 1.3 1.5
Changes in operating assets
and liabilities:
Accounts receivable 56.3 (45.2)
Inventories 136.9 11.1
Accounts payable (46.8) 8.6
Income taxes
payable/prepaid and
refundable income
taxes 0.6 12.8
Other assets and
liabilities, net (0.4) 13.5
---- ----
Total adjustments 435.3 941.8
----- -----
Net cash provided by
operating activities 349.0 175.5
----- -----
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (30.0) (71.2)
Investment in GRI Group
Limited (15.2) (20.2)
Other - 7.0
--- ---
Net cash used in
investing activities (45.2) (84.4)
----- -----
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchase of 4.250%
Senior Notes, including
consent fees and related
costs (252.4) -
Redemption at maturity of
4.250% Senior Notes (7.5) -
Costs related to secured
revolving credit
agreement (30.1) -
Dividends paid (17.0) (47.4)
Other (3.3) (4.0)
---- ----
Net cash used in
financing activities (310.3) (51.4)
------ -----
EFFECT OF EXCHANGE RATES ON
CASH 1.6 (4.2)
--- ----
NET (DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS (4.9) 35.5
CASH AND CASH EQUIVALENTS, BEGINNING 338.3 302.8
----- -----
CASH AND CASH EQUIVALENTS, ENDING $333.4 $338.3
====== ======
SOURCE Jones Apparel Group, Inc.
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