Delaware | 001-07572 | 13-1166910 | |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |
200 Madison Avenue, New York, New York | 10016 | ||
(Address of principal executive offices) | (Zip Code) |
Exhibit | Description |
99.1 | Press Release, dated March 27, 2013. |
Exhibit | Description |
99.1 | Press Release, dated March 27, 2013. |
• | FOURTH QUARTER RESULTS DRIVEN BY INCREASED EARNINGS ACROSS ALL BUSINESSES |
• | FULL YEAR NON-GAAP EPS WAS $6.58, WHICH INCLUDES A $0.15 FAVORABLE IMPACT RELATED TO CHANGE IN METHOD OF ACCOUNTING FOR RETIREMENT PLANS, AND $6.43 ABSENT THE CHANGE |
• | FULL YEAR GAAP EPS WAS $5.87, WHICH INCLUDES A $0.09 UNFAVORABLE IMPACT RELATED TO CHANGE IN METHOD OF ACCOUNTING FOR RETIREMENT PLANS |
• | COMPANY PROVIDES PRELIMINARY 2013 NON-GAAP EPS GUIDANCE OF $7.00 |
• | Earnings per share was $1.60 on a non-GAAP basis, which includes a favorable impact related to the change in the Company’s method of accounting for retirement plans and represents a 34% increase over the prior year period’s non-GAAP earnings per share of $1.19 (as adjusted for the change). Absent the change in accounting method, non-GAAP earnings per share would have been $1.54 for the fourth quarter, which exceeds the top end of the Company’s previous guidance by $0.05, and compares to $1.18 for the fourth quarter of 2011. |
• | GAAP earnings per share was $1.09, which includes a negative impact related to the change in the Company’s method of accounting for retirement plans and represents a 127% increase over the prior year period’s GAAP earnings per share of $0.48 (as adjusted for the change). The negative impact of the change was $0.17 in 2012 and $0.63 in 2011. |
• | Revenue of $1.636 billion increased 7% as compared to the prior year, including a 3% negative impact attributable to the exit from the Izod women’s and Timberland wholesale sportswear businesses and foreign currency translation and a 3% benefit from an additional week of revenue, as the 2012 fiscal year included 53 weeks of operations. |
• | Operating margin on a non-GAAP basis increased 250 basis points due to a 320 basis point gross margin increase, driven by continued faster growth in the higher-margin Calvin Klein and Tommy Hilfiger businesses, combined with decreased product costs across all of the Company’s businesses. GAAP operating margin increased 440 basis points due to the gross margin increase discussed above, combined with a decrease in pension expense. |
• | Earnings per share on a non-GAAP basis was $6.58, which includes a $0.15 favorable impact related to the retirement plan accounting change and represents an increase of 21% as compared to the prior year’s earnings per share of $5.44 (as adjusted for the change). Absent the accounting change, non-GAAP earnings per share would have been $6.43 for 2012, which exceeded the top end of the Company’s previous guidance by $0.05, and $5.38 for 2011. |
• | GAAP earnings per share was $5.87, which includes a negative impact related to the accounting change and represents an increase of 55% as compared to the prior year’s earnings per share of $3.78 (as adjusted for the change). The negative impact of the change was $0.09 per share in 2012 and $0.58 per share in 2011. |
• | Revenue increased 3% to $6.043 billion, including a negative impact of 4% attributable to foreign currency translation and the exited sportswear businesses. The overall increase in revenue was due to the net impact of: |
◦ | A 5%, or $166.2 million, increase in the Tommy Hilfiger business, including a negative impact of approximately $110 million, or 4%, related to foreign currency translation. Within the Tommy Hilfiger North America business, revenue increased 10%, principally driven by retail comparable store sales growth of 10%. Revenue in the Tommy Hilfiger International business increased 2%, including a negative impact of 6% related to foreign currency translation. On a constant currency basis, revenue for the Tommy Hilfiger International business increased 8%, driven by European retail comparable store sales growth of 11% and strength in the European wholesale business, partially offset by continued |
◦ | An 8%, or $85.1 million, increase in the Calvin Klein business, driven primarily by (i) a 12% increase in the Company’s Calvin Klein outlet retail business, which was attributable to new store openings, store expansions and a 5% increase in comparable store sales; and (ii) a 16% increase in the North American wholesale business. Royalty revenue increased 2% as compared to the prior year period, including a negative impact of 1% related to foreign currency translation. Continued global growth in women’s sportswear, dresses, footwear and handbags was partially offset by a decline in royalty revenue related to a reduction in the European bridge apparel and accessories business (relating to the Company’s announcement in the first quarter of 2012 that it would bring the business back in-house) and continued weakness in jeans and women’s underwear in Europe and the United States. |
◦ | A 6%, or $98.9 million, decrease in the Heritage Brands business, including the negative impact of 6% related to the exited sportswear businesses. The Company’s ongoing Heritage Brands wholesale sportswear businesses experienced strong growth, while the dress furnishings business experienced a 7% decline due principally to a reduction in sales to J.C. Penney. Comparable store sales in the Heritage Brands retail business were relatively flat. |
• | On a non-GAAP basis, earnings before interest and taxes increased $69.7 million to $751.6 million. This change resulted from: |
◦ | An $84.1 million increase in the Tommy Hilfiger business due principally to the revenue increase mentioned above combined with gross margin improvement due primarily to higher average unit retail selling prices globally. Partially offsetting this increase was the negative impact of approximately $15 million related to foreign currency translation. |
◦ | A $6.9 million increase in the Calvin Klein business attributed to the revenue increase discussed above, partially offset by a planned gross margin decline resulting principally from the impact of higher product costs experienced in the first half of the year. |
◦ | A $12.0 million decrease in the Heritage Brands business due principally to the revenue decline mentioned above, combined with the negative impact of higher product costs principally in the first half of the year. |
• | GAAP earnings before interest and taxes increased $169.2 million to $660.4 million. This change resulted from: |
◦ | An increase of $139.1 million in the Tommy Hilfiger business due to the items described above, combined with the absence of $20.7 million of expenses incurred in connection with the Company’s buyout of the perpetual license for Tommy Hilfiger in India and a $34.3 million decrease in integration and restructuring costs. |
◦ | An increase of $6.9 million in the Calvin Klein business as described above. |
◦ | A $27.1 million decrease in corporate expenses due principally to the net impact of (i) a decrease of $48.0 million in recognized actuarial losses on retirement plans and (ii) a net $30.9 million decrease in integration, restructuring and debt modification costs; partially offset by (iii) $42.6 million of costs incurred in the current year related to the acquisition of Warnaco. |
◦ | A $3.9 million decrease in the Heritage Brands business due to the items described above, partially offset by the absence of $8.1 million of business exit costs. |
• | On a non-GAAP basis, the effective tax rate was 23.8% as compared to 28.3% in the prior year period. The GAAP effective tax rate was 20.1% as compared to 24.1% for the prior year period. The Company’s 2012 tax rates were positively impacted by an increase in the proportion of earnings attributable to foreign jurisdictions that are subject to favorable tax rates, as well as the continuation of the tax synergies achieved from the Tommy Hilfiger acquisition. In addition, positively impacting the 2012 GAAP effective tax rate was a benefit resulting from the recognition of previously unrecognized net operating loss assets and tax credits. Positively impacting the 2011 GAAP effective tax rate was the revaluation of certain deferred tax liabilities in connection with a fourth quarter decrease in the statutory tax rate in Japan. |
• | Pre-tax costs of approximately $125 million expected to be incurred in 2013 in connection with the acquisition of Warnaco, of which $50 million is expected to be incurred in the first quarter. |
• | Pre-tax costs of $20.5 million incurred in 2012 principally in connection with the integration of Tommy Hilfiger and the related restructuring, of which $3.3 million was incurred in the first quarter, $4.5 million was incurred in the second quarter, $6.6 million was incurred in the third quarter, and $6.1 million was incurred in the fourth quarter. |
• | Pre-tax costs of $42.6 million incurred in 2012 in connection with the acquisition of Warnaco, of which $6.4 million was incurred in the third quarter and $36.2 million was incurred in the fourth quarter. |
• | A pre-tax expense of $28.1 million recorded in the fourth quarter of 2012 related to recognized actuarial losses on retirement plans. |
• | Pre-tax interest expense of $3.7 million recorded in the fourth quarter of 2012 related to $700 million of new senior notes, which were issued during the fourth quarter to fund a portion of the purchase price for the Warnaco acquisition. |
• | A tax benefit of $14.0 million in 2012 related to the recognition of previously unrecognized net operating loss assets and tax credits, of which $4.5 million was recorded in the third quarter and $9.5 million was recorded in the fourth quarter. |
• | Pre-tax costs of $69.5 million incurred in 2011 in connection with the integration of Tommy Hilfiger and the related restructuring, of which $30.5 million was incurred in the first quarter, $11.2 million was incurred in the second quarter, $9.3 million was incurred in the third quarter, and $18.6 million was incurred in the fourth quarter. |
• | Pre-tax costs of $16.2 million incurred in the first quarter of 2011 in connection with the amendment and restatement of the Company’s credit facility. |
• | Pre-tax costs of $8.1 million incurred in 2011 in connection with the Company’s negotiated early termination of its license to market sportswear under the Timberland brand and the Company’s 2012 exit from the Izod women’s wholesale sportswear business, of which $6.7 million was incurred in the second quarter, $0.5 million was incurred in the third quarter and $1.0 million was incurred in the fourth quarter. |
• | A pre-tax expense of $20.7 million incurred in the third quarter of 2011 in connection with the Company’s reacquisition of the rights in India to the Tommy Hilfiger trademarks that had been subject to a perpetual license, as under accounting rules, the Company was required to record an expense due to settling the preexisting license agreement, which was unfavorable to the Company. |
• | A pre-tax expense of $76.1 million recorded in the fourth quarter of 2011 related to recognized actuarial losses on retirement plans. |
• | A tax benefit of $5.4 million recorded in the fourth quarter of 2011 resulting from revaluing certain deferred tax liabilities in connection with a decrease in the statutory tax rate in Japan. |
• | Estimated tax effects associated with the above pre-tax costs, which are based on the Company’s assessment of deductibility. In making this assessment, the Company evaluated each item that it has recorded as an acquisition, integration, restructuring or debt modification cost or actuarial loss on retirement plans immediately recognized in earnings to determine if such cost is tax deductible, and if so, in what jurisdiction the deduction would occur. All items above were identified as either primarily tax deductible in the United States, in which case the Company assumed a combined federal and state tax rate of 38.0%, or as non-deductible, in which case the Company assumed no tax benefit. |
Quarter Ended | Year Ended | ||||||||||||||||||
2/3/13 | 1/29/12 (1) | 2/3/13 | 1/29/12 (1) | ||||||||||||||||
Net sales | $ | 1,506,910 | $ | 1,407,818 | $ | 5,540,821 | $ | 5,410,028 | |||||||||||
Royalty revenue | 98,102 | 94,483 | 370,019 | 356,035 | |||||||||||||||
Advertising and other revenue | 31,188 | 30,535 | 132,159 | 124,561 | |||||||||||||||
Total revenue | $ | 1,636,200 | $ | 1,532,836 | $ | 6,042,999 | $ | 5,890,624 | |||||||||||
Gross profit on net sales | $ | 751,366 | $ | 649,192 | $ | 2,747,052 | $ | 2,575,293 | |||||||||||
Gross profit on royalty, advertising and other revenue | 129,290 | 125,018 | 502,178 | 480,596 | |||||||||||||||
Total gross profit | 880,656 | 774,210 | 3,249,230 | 3,055,889 | |||||||||||||||
Selling, general and administrative expenses | 771,172 | 740,057 | 2,594,315 | 2,549,850 | |||||||||||||||
Debt modification costs | 16,233 | ||||||||||||||||||
Equity in income of unconsolidated affiliates | 404 | 511 | 5,447 | 1,367 | |||||||||||||||
Earnings before interest and taxes | 109,888 | 34,664 | 660,362 | 491,173 | |||||||||||||||
Interest expense, net | 31,367 | 32,030 | 117,250 | 128,088 | |||||||||||||||
Pre-tax income | 78,521 | 2,634 | 543,112 | 363,085 | |||||||||||||||
Income tax expense (benefit) | (2,227 | ) | (32,890 | ) | 109,272 | 87,388 | |||||||||||||
Net income | $ | 80,748 | $ | 35,524 | $ | 433,840 | $ | 275,697 | |||||||||||
Diluted net income per common share(2) | $ | 1.09 | $ | 0.48 | $ | 5.87 | $ | 3.78 | |||||||||||
Quarter Ended | Year Ended | ||||||||||||||||||
2/3/13 | 1/29/12 | 2/3/13 | 1/29/12 | ||||||||||||||||
Depreciation and amortization expense | $ | 37,812 | $ | 33,242 | $ | 140,356 | $ | 132,010 | |||||||||||
(1) | In the fourth quarter of 2012, the Company changed its method of accounting for its retirement plans to (i) calculate expected return on plan assets using the fair value of plan assets; and (ii) immediately recognize actuarial gains and losses in its operating results in the year in which they occur. Prior periods have been retrospectively adjusted to reflect the effect of these accounting changes. |
(2) | Please see Note A in the Notes to Consolidated GAAP Income Statements for reconciliations of diluted net income per common share. |
Quarter Ended | Year Ended | ||||||||||||||||||
2/3/13 | 1/29/12 (1) | 2/3/13 | 1/29/12 (1) | ||||||||||||||||
GAAP total revenue | $ | 1,636,200 | $ | 1,532,836 | $ | 6,042,999 | $ | 5,890,624 | |||||||||||
Non-GAAP Measures | |||||||||||||||||||
Total gross profit(2) | $ | 776,263 | $ | 3,063,516 | |||||||||||||||
Selling, general and administrative expenses(3) | $ | 700,756 | 646,451 | $ | 2,503,069 | 2,383,008 | |||||||||||||
Earnings before interest and taxes(4) | 180,304 | 130,323 | 751,608 | 681,875 | |||||||||||||||
Interest expense(5) | 27,711 | 113,594 | |||||||||||||||||
Income tax expense(6) | 34,059 | 10,982 | 151,654 | 156,864 | |||||||||||||||
Net income(7) | 118,534 | 87,311 | 486,360 | 396,923 | |||||||||||||||
Diluted net income per common share(8) | $ | 1.60 | $ | 1.19 | $ | 6.58 | $ | 5.44 | |||||||||||
(1) In the fourth quarter of 2012, the Company changed its method of accounting for its retirement plans to (i) calculate expected return on plan assets using the fair value of plan assets; and (ii) immediately recognize actuarial gains and losses in its operating results in the year in which they occur. Prior periods have been retrospectively adjusted to reflect the effect of these accounting changes. |
(2) Please see Table 3 for reconciliation of GAAP to non-GAAP gross profit. |
(3) Please see Table 4 for reconciliation of GAAP to non-GAAP selling, general and administrative expenses (“SG&A”). |
(4) Please see Table 2 for reconciliation of GAAP to non-GAAP earnings before interest and taxes. |
(5) Please see Table 5 for reconciliation of GAAP to non-GAAP interest expense. |
(6) Please see Table 6 for reconciliation of GAAP to non-GAAP income tax expense and an explanation of the calculation of the tax effects associated with acquisition, integration, restructuring and debt modification costs and actuarial losses on retirement plans. |
(7) Please see Table 1 for reconciliation of GAAP to non-GAAP net income. |
(8) Please see Note A in the Notes to Consolidated GAAP Income Statements for reconciliations of diluted net income per common share. |
Table 1 - Reconciliation of GAAP net income to non-GAAP net income | |||||||||||||||||||
Quarter Ended | Year Ended | ||||||||||||||||||
2/3/13 | 1/29/12 (1) | 2/3/13 | 1/29/12 (1) | ||||||||||||||||
Net income | $ | 80,748 | $ | 35,524 | $ | 433,840 | $ | 275,697 | |||||||||||
Diluted net income per common share(2) | $ | 1.09 | $ | 0.48 | $ | 5.87 | $ | 3.78 | |||||||||||
Items excluded: | |||||||||||||||||||
Inventory liquidation costs associated with exit of certain Tommy Hilfiger product categories (gross margin) | 2,053 | 7,627 | |||||||||||||||||
Actuarial losses on retirement plans | 28,142 | 76,120 | 28,142 | 76,120 | |||||||||||||||
SG&A expenses associated with buyout of perpetual license for Tommy Hilfiger in India | 20,709 | ||||||||||||||||||
SG&A expenses associated with Tommy Hilfiger integration and related restructuring | 6,107 | 16,520 | 20,525 | 61,895 | |||||||||||||||
SG&A expenses associated with negotiated termination of license to market Timberland sportswear and exit from the Izod women’s wholesale sportswear business | 966 | 8,118 | |||||||||||||||||
SG&A expenses associated with acquisition of Warnaco | 36,167 | 42,579 | |||||||||||||||||
Debt modification costs | 16,233 | ||||||||||||||||||
Interest expense associated with issuance of $700M of senior notes related to acquisition of Warnaco | 3,656 | 3,656 | |||||||||||||||||
Tax effect of the items above(3) | (26,835 | ) | (38,520 | ) | (28,431 | ) | (64,124 | ) | |||||||||||
Tax benefit resulting from recognition of previously unrecognized net operating loss assets and tax credits | (9,451 | ) | (13,951 | ) | |||||||||||||||
Tax benefit resulting from revaluing certain deferred tax liabilities in connection with a decrease in the statutory tax rate in Japan | (5,352 | ) | (5,352 | ) | |||||||||||||||
Non-GAAP net income | $ | 118,534 | $ | 87,311 | $ | 486,360 | $ | 396,923 | |||||||||||
Non-GAAP diluted net income per common share(2) | $ | 1.60 | $ | 1.19 | $ | 6.58 | $ | 5.44 | |||||||||||
(1) In the fourth quarter of 2012, the Company changed its method of accounting for its retirement plans to (i) calculate expected return on plan assets using the fair value of plan assets; and (ii) immediately recognize actuarial gains and losses in its operating results in the year in which they occur. Prior periods have been retrospectively adjusted to reflect the effect of these accounting changes. | |||||||||||||||||||
(2) Please see Note A in the Notes to the Consolidated GAAP Income Statements for reconciliations of diluted net income per common share. | |||||||||||||||||||
(3) Please see Table 6 for an explanation of the calculation of the tax effects of the above items. |
Table 2 - Reconciliation of GAAP earnings before interest and taxes to non-GAAP earnings before interest and taxes | |||||||||||||||||||
Quarter Ended | Year Ended | ||||||||||||||||||
2/3/13 | 1/29/12 (1) | 2/3/13 | 1/29/12 (1) | ||||||||||||||||
Earnings before interest and taxes | $ | 109,888 | $ | 34,664 | $ | 660,362 | $ | 491,173 | |||||||||||
Items excluded: | |||||||||||||||||||
Inventory liquidation costs associated with exit of certain Tommy Hilfiger product categories (gross margin) | 2,053 | 7,627 | |||||||||||||||||
Actuarial losses on retirement plans | 28,142 | 76,120 | 28,142 | 76,120 | |||||||||||||||
SG&A expenses associated with buyout of perpetual license for Tommy Hilfiger in India | 20,709 | ||||||||||||||||||
SG&A expenses associated with Tommy Hilfiger integration and related restructuring | 6,107 | 16,520 | 20,525 | 61,895 | |||||||||||||||
SG&A expenses associated with negotiated termination of license to market Timberland sportswear and exit from the Izod women’s wholesale sportswear business | 966 | 8,118 | |||||||||||||||||
SG&A expenses associated with acquisition of Warnaco | 36,167 | 42,579 | |||||||||||||||||
Debt modification costs | 16,233 | ||||||||||||||||||
Non-GAAP earnings before interest and taxes | $ | 180,304 | $ | 130,323 | $ | 751,608 | $ | 681,875 | |||||||||||
(1) In the fourth quarter of 2012, the Company changed its method of accounting for its retirement plans to (i) calculate expected return on plan assets using the fair value of plan assets; and (ii) immediately recognize actuarial gains and losses in its operating results in the year in which they occur. Prior periods have been retrospectively adjusted to reflect the effect of these accounting changes. | |||||||||||||||||||
Table 3 - Reconciliation of GAAP gross profit to non-GAAP gross profit | ||||||||||||
Quarter Ended | Year Ended | |||||||||||
1/29/12 | 1/29/12 | |||||||||||
Gross profit | $ | 774,210 | $ | 3,055,889 | ||||||||
Items excluded: | ||||||||||||
Inventory liquidation costs associated with exit of certain Tommy Hilfiger product categories | 2,053 | 7,627 | ||||||||||
Non-GAAP gross profit | $ | 776,263 | $ | 3,063,516 | ||||||||
Table 4 - Reconciliation of GAAP SG&A to non-GAAP SG&A | ||||||||||||||||||||
Quarter Ended | Year Ended | |||||||||||||||||||
2/3/13 | 1/29/12 (1) | 2/3/13 | 1/29/12 (1) | |||||||||||||||||
SG&A | $ | 771,172 | $ | 740,057 | $ | 2,594,315 | $ | 2,549,850 | ||||||||||||
Items excluded: | ||||||||||||||||||||
Actuarial losses on retirement plans | (28,142 | ) | (76,120 | ) | (28,142 | ) | (76,120 | ) | ||||||||||||
SG&A expenses associated with buyout of perpetual license for Tommy Hilfiger in India | (20,709 | ) | ||||||||||||||||||
SG&A expenses associated with Tommy Hilfiger integration and related restructuring | (6,107 | ) | (16,520 | ) | (20,525 | ) | (61,895 | ) | ||||||||||||
SG&A expenses associated with negotiated termination of license to market Timberland sportswear and exit from the Izod women’s wholesale sportswear business | (966 | ) | (8,118 | ) | ||||||||||||||||
SG&A expenses associated with acquisition of Warnaco | (36,167 | ) | (42,579 | ) | ||||||||||||||||
Non-GAAP SG&A | $ | 700,756 | $ | 646,451 | $ | 2,503,069 | $ | 2,383,008 | ||||||||||||
(1) In the fourth quarter of 2012, the Company changed its method of accounting for its retirement plans to (i) calculate expected return on plan assets using the fair value of plan assets; and (ii) immediately recognize actuarial gains and losses in its operating results in the year in which they occur. Prior periods have been retrospectively adjusted to reflect the effect of these accounting changes. | ||||||||||||||||||||
Table 5 - Reconciliation of GAAP net interest expense to non-GAAP net interest expense | ||||||||||||
Quarter Ended | Year Ended | |||||||||||
2/3/13 | 2/3/13 | |||||||||||
Interest expense, net | $ | 31,367 | $ | 117,250 | ||||||||
Items excluded: | ||||||||||||
Interest expense associated with issuance of $700M of senior notes related to acquisition of Warnaco | (3,656 | ) | (3,656 | ) | ||||||||
Non-GAAP interest expense, net | $ | 27,711 | $ | 113,594 | ||||||||
Table 6 - Reconciliation of GAAP income tax expense to non-GAAP income tax expense | ||||||||||||||||||||
Quarter Ended | Year Ended | |||||||||||||||||||
2/3/13 | 1/29/12 (1) | 2/3/13 | 1/29/12 (1) | |||||||||||||||||
Income tax expense (benefit) | $ | (2,227 | ) | $ | (32,890 | ) | $ | 109,272 | $ | 87,388 | ||||||||||
Items excluded: | ||||||||||||||||||||
Income tax effect of acquisition, integration, restructuring and debt modification costs and actuarial losses on retirement plans (2) | 26,835 | 38,520 | 28,431 | 64,124 | ||||||||||||||||
Tax benefit resulting from recognition of previously unrecognized net operating loss assets and tax credits | 9,451 | 13,951 | ||||||||||||||||||
Tax benefit resulting from revaluing certain deferred tax liabilities in connection with a decrease in the statutory tax rate in Japan | 5,352 | 5,352 | ||||||||||||||||||
Non-GAAP income tax expense | $ | 34,059 | $ | 10,982 | $ | 151,654 | $ | 156,864 | ||||||||||||
(1) In the fourth quarter of 2012, the Company changed its method of accounting for its retirement plans to (i) calculate expected return on plan assets using the fair value of plan assets; and (ii) immediately recognize actuarial gains and losses in its operating results in the year in which they occur. Prior periods have been retrospectively adjusted to reflect the effect of these accounting changes. | ||||||||||||||||||||
(2) The estimated tax effects of the Company’s acquisition, integration, restructuring and debt modification costs and actuarial losses on retirement plans are based on the Company’s assessment of deductibility. In making this assessment, the Company evaluated each item that it has recorded as an acquisition, integration, restructuring and debt modification cost and actuarial loss on retirement plans to determine if such item is tax deductible, and if so, in what jurisdiction the deduction would occur. All of the Company’s acquisition, integration, restructuring and debt modification costs and actuarial losses on retirement plans were identified as either primarily tax deductible in the United States, in which case the Company assumed a combined federal and state tax rate of 38.0%, or as non-deductible, in which case the Company assumed no tax benefit. | ||||||||||||||||||||
Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||
2/3/13 | 1/29/12 (1) | ||||||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | ||||||||||||||||||||||||
Results | Adjustments | Results | Results | Adjustments | Results | ||||||||||||||||||||||
Net income | $ | 80,748 | $ | (37,786 | ) | (2) | $ | 118,534 | $ | 35,524 | $ | (51,787 | ) | (3) | $ | 87,311 | |||||||||||
Weighted average common shares | 72,040 | 72,040 | 67,478 | 67,478 | |||||||||||||||||||||||
Weighted average dilutive securities | 1,589 | 1,589 | 1,601 | 1,601 | |||||||||||||||||||||||
Weighted average impact of assumed convertible preferred stock conversion | 684 | 684 | 4,189 | 4,189 | |||||||||||||||||||||||
Total shares | 74,313 | 74,313 | 73,268 | 73,268 | |||||||||||||||||||||||
Diluted net income per common share | $ | 1.09 | $ | 1.60 | $ | 0.48 | $ | 1.19 | |||||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||||||||||||
2/3/13 | 1/29/12 (1) | ||||||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | ||||||||||||||||||||||||
Results | Adjustments | Results | Results | Adjustments | Results | ||||||||||||||||||||||
Net income | $ | 433,840 | $ | (52,520 | ) | (2) | $ | 486,360 | $ | 275,697 | $ | (121,226 | ) | (3) | $ | 396,923 | |||||||||||
Weighted average common shares | 70,392 | 70,392 | 67,158 | 67,158 | |||||||||||||||||||||||
Weighted average dilutive securities | 1,397 | 1,397 | 1,576 | 1,576 | |||||||||||||||||||||||
Weighted average impact of assumed convertible preferred stock conversion | 2,087 | 2,087 | 4,189 | 4,189 | |||||||||||||||||||||||
Total shares | 73,876 | 73,876 | 72,923 | 72,923 | |||||||||||||||||||||||
Diluted net income per common share | $ | 5.87 | $ | 6.58 | $ | 3.78 | $ | 5.44 | |||||||||||||||||||
(2) | Represents the impact on net income in the quarter and year ended February 3, 2013 from the elimination of (i) the costs incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring; (ii) the costs incurred in connection with the Company’s acquisition of Warnaco, which closed on February 13, 2013; (iii) the interest expense incurred in connection with the issuance of $700 million of senior notes related to the Company’s acquisition of Warnaco; (iv) the recognized actuarial loss on retirement plans; (v) the tax effects associated with these costs; and (vi) the tax benefit resulting from the recognition of previously unrecognized net operating loss assets and tax credits. Please see Table 1 for a reconciliation of GAAP net income to non-GAAP net income. |
February 3, | January 29, | ||||||
2013 | 2012 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and Cash Equivalents (1) | $ | 892,209 | $ | 233,197 | |||
Receivables | 441,324 | 480,965 | |||||
Inventories | 878,415 | 809,009 | |||||
Other Current Assets | 225,058 | 216,064 | |||||
Total Current Assets | 2,437,006 | 1,739,235 | |||||
Property, Plant and Equipment | 561,335 | 458,891 | |||||
Goodwill and Other Intangible Assets | 4,539,892 | 4,380,853 | |||||
Other Assets | 243,316 | 173,382 | |||||
$ | 7,781,549 | $ | 6,752,361 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts Payable and Accrued Expenses | $ | 1,063,600 | $ | 960,880 | |||
Short-Term Borrowings | 10,847 | 13,040 | |||||
Current Portion of Long-Term Debt | 88,000 | 69,951 | |||||
Other Liabilities | 1,154,891 | 1,160,116 | |||||
Long-Term Debt (1) | 2,211,642 | 1,832,925 | |||||
Stockholders’ Equity | 3,252,569 | 2,715,449 | |||||
$ | 7,781,549 | $ | 6,752,361 |
PVH CORP. | |||||||||||
Segment Data | |||||||||||
(In thousands) | |||||||||||
REVENUE BY SEGMENT | |||||||||||
Quarter Ended | Quarter Ended | ||||||||||
2/3/13 | 1/29/12 | ||||||||||
Heritage Brand Wholesale Dress Furnishings | |||||||||||
Net sales | $ | 142,906 | $ | 143,265 | |||||||
Royalty revenue | 1,430 | 1,524 | |||||||||
Advertising and other revenue | 718 | 855 | |||||||||
Total | 145,054 | 145,644 | |||||||||
Heritage Brand Wholesale Sportswear | |||||||||||
Net sales | 98,060 | 118,379 | |||||||||
Royalty revenue | 2,424 | 2,362 | |||||||||
Advertising and other revenue | 399 | 398 | |||||||||
Total | 100,883 | 121,139 | |||||||||
Heritage Brand Retail | |||||||||||
Net sales | 180,494 | 170,611 | |||||||||
Royalty revenue | 1,054 | 1,017 | |||||||||
Advertising and other revenue | 241 | 111 | |||||||||
Total | 181,789 | 171,739 | |||||||||
Total Heritage Brands | |||||||||||
Net sales | 421,460 | 432,255 | |||||||||
Royalty revenue | 4,908 | 4,903 | |||||||||
Advertising and other revenue | 1,358 | 1,364 | |||||||||
Total | 427,726 | 438,522 | |||||||||
Other (Calvin Klein Apparel) | |||||||||||
Net sales | 211,050 | 167,896 | |||||||||
Total | 211,050 | 167,896 | |||||||||
Calvin Klein Licensing | |||||||||||
Net sales | 5,644 | 14,022 | |||||||||
Royalty revenue | 73,762 | 70,511 | |||||||||
Advertising and other revenue | 26,913 | 26,042 | |||||||||
Total | 106,319 | 110,575 | |||||||||
Total Calvin Klein | |||||||||||
Net sales | 216,694 | 181,918 | |||||||||
Royalty revenue | 73,762 | 70,511 | |||||||||
Advertising and other revenue | 26,913 | 26,042 | |||||||||
Total | 317,369 | 278,471 | |||||||||
Tommy Hilfiger North America | |||||||||||
Net sales | 399,594 | 362,151 | |||||||||
Royalty revenue | 6,186 | 4,192 | |||||||||
Advertising and other revenue | 1,672 | 1,723 | |||||||||
Total | 407,452 | 368,066 | |||||||||
Tommy Hilfiger International | |||||||||||
Net sales | 469,162 | 431,494 | |||||||||
Royalty revenue | 13,246 | 14,877 | |||||||||
Advertising and other revenue | 1,245 | 1,406 | |||||||||
Total | 483,653 | 447,777 | |||||||||
Total Tommy Hilfiger | |||||||||||
Net sales | 868,756 | 793,645 | |||||||||
Royalty revenue | 19,432 | 19,069 | |||||||||
Advertising and other revenue | 2,917 | 3,129 | |||||||||
Total | 891,105 | 815,843 | |||||||||
Total Revenue | |||||||||||
Net sales | 1,506,910 | 1,407,818 | |||||||||
Royalty revenue | 98,102 | 94,483 | |||||||||
Advertising and other revenue | 31,188 | 30,535 | |||||||||
Total | $ | 1,636,200 | $ | 1,532,836 | |||||||
PVH CORP. | |||||||||||||||||||||||||||
Segment Data (continued) | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
EARNINGS BEFORE INTEREST AND TAXES BY SEGMENT | |||||||||||||||||||||||||||
Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||
2/3/13 | 1/29/12 (1) | ||||||||||||||||||||||||||
Results | Results | ||||||||||||||||||||||||||
Under | Non-GAAP | Under | Non-GAAP | ||||||||||||||||||||||||
GAAP | Adjustments(2) | Results | GAAP | Adjustments(3) | Results | ||||||||||||||||||||||
Heritage Brand Wholesale Dress Furnishings | $ | 20,585 | $ | 20,585 | $ | 17,571 | $ | 17,571 | |||||||||||||||||||
Heritage Brand Wholesale Sportswear | 3,542 | 3,542 | (8,720 | ) | $ | (966 | ) | (7,754 | ) | ||||||||||||||||||
Heritage Brand Retail | 2,431 | 2,431 | 704 | 704 | |||||||||||||||||||||||
Total Heritage Brands | 26,558 | 26,558 | 9,555 | (966 | ) | 10,521 | |||||||||||||||||||||
Other (Calvin Klein Apparel) | 27,412 | 27,412 | 18,836 | 18,836 | |||||||||||||||||||||||
Calvin Klein Licensing | 46,378 | 46,378 | 51,299 | 51,299 | |||||||||||||||||||||||
Total Calvin Klein | 73,790 | 73,790 | 70,135 | 70,135 | |||||||||||||||||||||||
Tommy Hilfiger North America | 52,491 | 52,491 | 20,406 | (11,141 | ) | 31,547 | |||||||||||||||||||||
Tommy Hilfiger International | 43,636 | $ | (5,643 | ) | 49,279 | 35,222 | (3,471 | ) | 38,693 | ||||||||||||||||||
Total Tommy Hilfiger | 96,127 | (5,643 | ) | 101,770 | 55,628 | (14,612 | ) | 70,240 | |||||||||||||||||||
Corporate | (86,587 | ) | (64,773 | ) | (21,814 | ) | (100,654 | ) | (80,081 | ) | (20,573 | ) | |||||||||||||||
Total earnings before interest and taxes | $ | 109,888 | $ | (70,416 | ) | $ | 180,304 | $ | 34,664 | $ | (95,659 | ) | $ | 130,323 | |||||||||||||
(1) | In the fourth quarter of 2012, the Company changed its method of accounting for its retirement plans to (i) calculate expected return on plan assets using the fair value of plan assets; and (ii) immediately recognize actuarial gains and losses in its operating results in the year in which they occur. Prior periods have been retrospectively adjusted to reflect the effect of these accounting changes. |
(2) | Adjustments for the quarter ended February 3, 2013 represent the elimination of (i) the costs incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring; (ii) the costs incurred in connection with the Company’s acquisition of Warnaco, which closed on February 13, 2013; and (iii) the recognized actuarial loss on retirement plans. |
(3) | Adjustments for the quarter ended January 29, 2012 represent the elimination of (i) the costs incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring; (ii) the costs incurred in connection with the Company’s negotiated early termination of its license to market sportswear under the Timberland brand and its exit from the Izod women’s wholesale sportswear business; and (iii) the recognized actuarial loss on retirement plans. |
PVH CORP. | |||||||||||
Segment Data (continued) | |||||||||||
(In thousands) | |||||||||||
REVENUE BY SEGMENT | |||||||||||
Year Ended | Year Ended | ||||||||||
2/3/13 | 1/29/12 | ||||||||||
Heritage Brand Wholesale Dress Furnishings | |||||||||||
Net sales | $ | 523,795 | $ | 564,898 | |||||||
Royalty revenue | 5,576 | 6,158 | |||||||||
Advertising and other revenue | 2,875 | 2,169 | |||||||||
Total | 532,246 | 573,225 | |||||||||
Heritage Brand Wholesale Sportswear | |||||||||||
Net sales | 467,986 | 537,284 | |||||||||
Royalty revenue | 9,901 | 10,008 | |||||||||
Advertising and other revenue | 1,997 | 1,687 | |||||||||
Total | 479,884 | 548,979 | |||||||||
Heritage Brand Retail | |||||||||||
Net sales | 657,556 | 646,769 | |||||||||
Royalty revenue | 4,771 | 4,822 | |||||||||
Advertising and other revenue | 1,186 | 772 | |||||||||
Total | 663,513 | 652,363 | |||||||||
Total Heritage Brands | |||||||||||
Net sales | 1,649,337 | 1,748,951 | |||||||||
Royalty revenue | 20,248 | 20,988 | |||||||||
Advertising and other revenue | 6,058 | 4,628 | |||||||||
Total | 1,675,643 | 1,774,567 | |||||||||
Other (Calvin Klein Apparel) | |||||||||||
Net sales | 724,962 | 637,870 | |||||||||
Total | 724,962 | 637,870 | |||||||||
Calvin Klein Licensing | |||||||||||
Net sales | 34,971 | 45,796 | |||||||||
Royalty revenue | 277,369 | 273,002 | |||||||||
Advertising and other revenue | 113,064 | 108,588 | |||||||||
Total | 425,404 | 427,386 | |||||||||
Total Calvin Klein | |||||||||||
Net sales | 759,933 | 683,666 | |||||||||
Royalty revenue | 277,369 | 273,002 | |||||||||
Advertising and other revenue | 113,064 | 108,588 | |||||||||
Total | 1,150,366 | 1,065,256 | |||||||||
Tommy Hilfiger North America | |||||||||||
Net sales | 1,399,323 | 1,273,829 | |||||||||
Royalty revenue | 22,364 | 16,850 | |||||||||
Advertising and other revenue | 8,073 | 7,016 | |||||||||
Total | 1,429,760 | 1,297,695 | |||||||||
Tommy Hilfiger International | |||||||||||
Net sales | 1,732,228 | 1,703,582 | |||||||||
Royalty revenue | 50,038 | 45,195 | |||||||||
Advertising and other revenue | 4,964 | 4,329 | |||||||||
Total | 1,787,230 | 1,753,106 | |||||||||
Total Tommy Hilfiger | |||||||||||
Net sales | 3,131,551 | 2,977,411 | |||||||||
Royalty revenue | 72,402 | 62,045 | |||||||||
Advertising and other revenue | 13,037 | 11,345 | |||||||||
Total | 3,216,990 | 3,050,801 | |||||||||
Total Revenue | |||||||||||
Net sales | 5,540,821 | 5,410,028 | |||||||||
Royalty revenue | 370,019 | 356,035 | |||||||||
Advertising and other revenue | 132,159 | 124,561 | |||||||||
Total | $ | 6,042,999 | $ | 5,890,624 | |||||||
PVH CORP. | |||||||||||||||||||||||||||
Segment Data (continued) | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
EARNINGS BEFORE INTEREST AND TAXES BY SEGMENT | |||||||||||||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||||||||||||
2/3/13 | 1/29/12 (1) | ||||||||||||||||||||||||||
Results | Results | ||||||||||||||||||||||||||
Under | Non-GAAP | Under | Non-GAAP | ||||||||||||||||||||||||
GAAP | Adjustments(2) | Results | GAAP | Adjustments(3) | Results | ||||||||||||||||||||||
Heritage Brand Wholesale Dress Furnishings | $ | 66,204 | $ | 66,204 | $ | 78,400 | $ | 78,400 | |||||||||||||||||||
Heritage Brand Wholesale Sportswear | 34,883 | 34,883 | 11,327 | $ | (8,118 | ) | 19,445 | ||||||||||||||||||||
Heritage Brand Retail | 13,498 | 13,498 | 28,731 | 28,731 | |||||||||||||||||||||||
Total Heritage Brands | 114,585 | 114,585 | 118,458 | (8,118 | ) | 126,576 | |||||||||||||||||||||
Other (Calvin Klein Apparel) | 89,921 | 89,921 | 88,700 | 88,700 | |||||||||||||||||||||||
Calvin Klein Licensing | 194,747 | 194,747 | 189,105 | 189,105 | |||||||||||||||||||||||
Total Calvin Klein | 284,668 | 284,668 | 277,805 | 277,805 | |||||||||||||||||||||||
Tommy Hilfiger North America | 200,121 | $ | (379 | ) | 200,500 | 81,142 | (44,704 | ) | 125,846 | ||||||||||||||||||
Tommy Hilfiger International | 220,812 | (15,441 | ) | 236,253 | 200,697 | (26,128 | ) | 226,825 | |||||||||||||||||||
Total Tommy Hilfiger | 420,933 | (15,820 | ) | 436,753 | 281,839 | (70,832 | ) | 352,671 | |||||||||||||||||||
Corporate | (159,824 | ) | (75,426 | ) | (84,398 | ) | (186,929 | ) | (111,752 | ) | (75,177 | ) | |||||||||||||||
Total earnings before interest and taxes | $ | 660,362 | $ | (91,246 | ) | $ | 751,608 | $ | 491,173 | $ | (190,702 | ) | $ | 681,875 | |||||||||||||
(1) | In the fourth quarter of 2012, the Company changed its method of accounting for its retirement plans to (i) calculate expected return on plan assets using the fair value of plan assets; and (ii) immediately recognize actuarial gains and losses in its operating results in the year in which they occur. Prior periods have been retrospectively adjusted to reflect the effect of these accounting changes. |
(2) | Adjustments for the year ended February 3, 2013 represent the elimination of (i) the costs incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring; (ii) the costs incurred in connection with the Company’s acquisition of Warnaco, which closed on February 13, 2013; and (iii) the recognized actuarial loss on retirement plans. |
(3) | Adjustments for the year ended January 29, 2012 represent the elimination of (i) the costs incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring; (ii) the expense incurred associated with settling the unfavorable preexisting license agreement in connection with its buyout of the perpetual license for Tommy Hilfiger in India; (iii) the costs incurred in connection with the Company’s modification of its credit facility; (iv) the costs incurred in connection with the Company’s negotiated early termination of its license to market sportswear under the Timberland brand and its exit from the Izod women’s wholesale sportswear business; and (v) the recognized actuarial loss on retirement plans. |
2013 Net Income Per Common Share Reconciliations | Full Year 2013 (Estimated) | First Quarter 2013 (Estimated) | |||
GAAP net income per common share | $5.88 | $0.88 | |||
Estimated per common share impact of after tax acquisition, integration and restructuring costs and actuarial loss on retirement plans | $1.12 | $0.45 | |||
Net income per common share excluding impact of acquisition, integration and restructuring costs and actuarial loss on retirement plans | $7.00 | $1.33 |
Quarter Ended | Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||||||||||
4/29/12 | 7/29/12 | 10/28/12 | ||||||||||||||||||||||||||||||||||
As Originally Reported | Effect of Accounting Policy Change | As Retrospectively Adjusted | As Originally Reported | Effect of Accounting Policy Change | As Retrospectively Adjusted | As Originally Reported | Effect of Accounting Policy Change | As Retrospectively Adjusted | ||||||||||||||||||||||||||||
GAAP | ||||||||||||||||||||||||||||||||||||
Earnings before interest and taxes | $ | 152,248 | $ | 3,834 | $ | 156,082 | $ | 149,658 | $ | 3,596 | $ | 153,254 | $ | 237,423 | $ | 3,715 | $ | 241,138 | ||||||||||||||||||
Net income | 93,114 | 2,362 | 95,476 | 87,702 | 2,216 | 89,918 | 165,409 | 2,289 | 167,698 | |||||||||||||||||||||||||||
Diluted net income per common share | 1.27 | 0.03 | 1.30 | 1.19 | 0.03 | 1.22 | 2.24 | 0.03 | 2.27 | |||||||||||||||||||||||||||
Non-GAAP | ||||||||||||||||||||||||||||||||||||
Earnings before interest and taxes | $ | 155,564 | $ | 3,834 | $ | 159,398 | $ | 154,199 | $ | 3,596 | $ | 157,795 | $ | 250,396 | $ | 3,715 | $ | 254,111 | ||||||||||||||||||
Net income | 95,498 | 2,362 | 97,860 | 91,992 | 2,216 | 94,208 | 173,469 | 2,289 | 175,758 | |||||||||||||||||||||||||||
Diluted net income per common share | 1.30 | 0.03 | 1.33 | 1.25 | 0.03 | 1.28 | 2.34 | 0.04 | 2.38 |
Quarter Ended | Year Ended | |||||||||||||||||||||||
2/3/13 | 2/3/13 | |||||||||||||||||||||||
Recognized Under Previous Method | Effect of Accounting Policy Change | Recognized Under New Method | Recognized Under Previous Method | Effect of Accounting Policy Change | Recognized Under New Method | |||||||||||||||||||
GAAP | ||||||||||||||||||||||||
Earnings before interest and taxes | $ | 131,091 | $ | (21,203 | ) | $ | 109,888 | $ | 670,420 | $ | (10,058 | ) | $ | 660,362 | ||||||||||
Net income | 93,809 | (13,061 | ) | 80,748 | 440,034 | (6,194 | ) | 433,840 | ||||||||||||||||
Diluted net income per common share | 1.26 | (0.17 | ) | 1.09 | 5.96 | (0.09 | ) | 5.87 | ||||||||||||||||
Non-GAAP | ||||||||||||||||||||||||
Earnings before interest and taxes | $ | 173,365 | $ | 6,939 | $ | 180,304 | $ | 733,524 | $ | 18,084 | $ | 751,608 | ||||||||||||
Net income | 114,260 | 4,274 | 118,534 | 475,219 | 11,141 | 486,360 | ||||||||||||||||||
Diluted net income per common share | 1.54 | 0.06 | 1.60 | 6.43 | 0.15 | 6.58 |
Quarter Ended | Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||||||||||
5/1/11 | 7/31/11 | 10/30/11 | ||||||||||||||||||||||||||||||||||
As Originally Reported | Effect of Accounting Policy Change | As Retrospectively Adjusted | As Originally Reported | Effect of Accounting Policy Change | As Retrospectively Adjusted | As Originally Reported | Effect of Accounting Policy Change | As Retrospectively Adjusted | ||||||||||||||||||||||||||||
GAAP | ||||||||||||||||||||||||||||||||||||
Earnings before interest and taxes | $ | 120,444 | $ | 2,047 | $ | 122,491 | $ | 133,479 | $ | 1,782 | $ | 135,261 | $ | 196,842 | $ | 1,915 | $ | 198,757 | ||||||||||||||||||
Net income | 57,667 | 1,261 | 58,928 | 66,729 | 1,098 | 67,827 | 112,239 | 1,179 | 113,418 | |||||||||||||||||||||||||||
Diluted net income per common share | 0.79 | 0.02 | 0.81 | 0.92 | 0.01 | 0.93 | 1.54 | 0.01 | 1.55 | |||||||||||||||||||||||||||
Non-GAAP | ||||||||||||||||||||||||||||||||||||
Earnings before interest and taxes | $ | 167,136 | $ | 2,047 | $ | 169,183 | $ | 151,355 | $ | 1,782 | $ | 153,137 | $ | 227,317 | $ | 1,915 | $ | 229,232 | ||||||||||||||||||
Net income | 89,556 | 1,261 | 90,817 | 78,300 | 1,098 | 79,398 | 138,218 | 1,179 | 139,397 | |||||||||||||||||||||||||||
Diluted net income per common share | 1.23 | 0.02 | 1.25 | 1.07 | 0.02 | 1.09 | 1.89 | 0.02 | 1.91 |
Quarter Ended | Year Ended | |||||||||||||||||||||||
1/29/12 | 1/29/12 | |||||||||||||||||||||||
As Originally Reported | Effect of Accounting Policy Change | As Retrospectively Adjusted | As Originally Reported | Effect of Accounting Policy Change | As Retrospectively Adjusted | |||||||||||||||||||
GAAP | ||||||||||||||||||||||||
Earnings before interest and taxes | $ | 108,888 | $ | (74,224 | ) | $ | 34,664 | $ | 559,653 | $ | (68,480 | ) | $ | 491,173 | ||||||||||
Net income | 81,246 | (45,722 | ) | 35,524 | 317,881 | (42,184 | ) | 275,697 | ||||||||||||||||
Diluted net income per common share | 1.11 | (0.63 | ) | 0.48 | 4.36 | (0.58 | ) | 3.78 | ||||||||||||||||
Non-GAAP | ||||||||||||||||||||||||
Earnings before interest and taxes | $ | 128,427 | $ | 1,896 | $ | 130,323 | $ | 674,235 | $ | 7,640 | $ | 681,875 | ||||||||||||
Net income | 86,143 | 1,168 | 87,311 | 392,217 | 4,706 | 396,923 | ||||||||||||||||||
Diluted net income per common share | 1.18 | 0.01 | 1.19 | 5.38 | 0.06 | 5.44 |
PVH CORP. | |||||||||||||||||||||||||||
Appendix A (continued) | |||||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||||
The following pages present retrospectively adjusted GAAP results, which reflect the Company’s changed accounting method for its retirement plans, for the third, second and first quarters of 2012 and 2011 to allow readers to sum the adjusted quarterly results to arrive at the full year results presented herein. The Adjustments columns in each table are unchanged from amounts presented in prior periods. | |||||||||||||||||||||||||||
EARNINGS BEFORE INTEREST AND TAXES BY SEGMENT AND DILUTED NET INCOME PER COMMON SHARE - AS ADJUSTED | |||||||||||||||||||||||||||
Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||
10/28/12 (1) | 10/30/11 (1) | ||||||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | ||||||||||||||||||||||||
Results | Adjustments (2) | Results | Results | Adjustments (3) | Results | ||||||||||||||||||||||
Heritage Brand Wholesale Dress Furnishings | $ | 27,129 | $ | 27,129 | $ | 25,982 | $ | 25,982 | |||||||||||||||||||
Heritage Brand Wholesale Sportswear | 15,794 | 15,794 | 11,015 | $ | (502 | ) | 11,517 | ||||||||||||||||||||
Heritage Brand Retail | 4,357 | 4,357 | 8,470 | 8,470 | |||||||||||||||||||||||
Total Heritage Brands | 47,280 | 47,280 | 45,467 | (502 | ) | 45,969 | |||||||||||||||||||||
Other (Calvin Klein Apparel) | 30,048 | 30,048 | 26,867 | 26,867 | |||||||||||||||||||||||
Calvin Klein Licensing | 62,337 | 62,337 | 59,253 | 59,253 | |||||||||||||||||||||||
Total Calvin Klein | 92,385 | 92,385 | 86,120 | 86,120 | |||||||||||||||||||||||
Tommy Hilfiger North America | 66,117 | 66,117 | 41,675 | (3,421 | ) | 45,096 | |||||||||||||||||||||
Tommy Hilfiger International | 62,583 | $ | (6,301 | ) | 68,884 | 48,820 | (22,209 | ) | 71,029 | ||||||||||||||||||
Total Tommy Hilfiger | 128,700 | (6,301 | ) | 135,001 | 90,495 | (25,630 | ) | 116,125 | |||||||||||||||||||
Corporate | (27,227 | ) | (6,672 | ) | (20,555 | ) | (23,325 | ) | (4,343 | ) | (18,982 | ) | |||||||||||||||
Total earnings before interest and taxes | $ | 241,138 | $ | (12,973 | ) | $ | 254,111 | $ | 198,757 | $ | (30,475 | ) | $ | 229,232 | |||||||||||||
Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||
10/28/12 (1) | 10/30/11 (1) | ||||||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | ||||||||||||||||||||||||
Results | Adjustments (2) | Results | Results | Adjustments (3) | Results | ||||||||||||||||||||||
Net income | $ | 167,698 | $ | (8,060 | ) | $ | 175,758 | $ | 113,418 | $ | (25,979 | ) | $ | 139,397 | |||||||||||||
Weighted average common shares | 70,586 | 70,586 | 67,225 | 67,225 | |||||||||||||||||||||||
Weighted average dilutive securities | 1,304 | 1,304 | 1,549 | 1,549 | |||||||||||||||||||||||
Weighted average impact of assumed convertible preferred stock conversion | 2,095 | 2,095 | 4,189 | 4,189 | |||||||||||||||||||||||
Total shares | 73,985 | 73,985 | 72,963 | 72,963 | |||||||||||||||||||||||
Diluted net income per common share | $ | 2.27 | $ | 2.38 | $ | 1.55 | $ | 1.91 | |||||||||||||||||||
(1) In the fourth quarter of 2012, the Company changed its method of accounting for its retirement plans to (i) calculate expected return on plan assets using the fair value of plan assets; and (ii) immediately recognize actuarial gains and losses in its operating results in the year in which they occur. Prior periods have been retrospectively adjusted to reflect the effect of these accounting changes. | |||||||||||||||||||||||||||
(2) Adjustments for the quarter ended October 28, 2012 represent the elimination of (i) $6,561 incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring; (ii) $6,412 incurred in connection with the Company’s acquisition of Warnaco, which closed on February 13, 2013; (iii) the tax benefit of $413 associated with these costs (with respect to net income and net income per common share only); and (iv) the tax benefit of $4,500 resulting from previously unrecognized tax credits (with respect to net income and net income per common share only). | |||||||||||||||||||||||||||
(3) Adjustments for the quarter ended ended October 30, 2011 represent the elimination of (i) $9,264 incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring; (ii) the $20,709 expense incurred associated with settling the unfavorable preexisting license agreement in connection with the Company’s buyout of the perpetual license for Tommy Hilfiger in India; (iii) $502 incurred in connection with the Company’s negotiated early termination of its license to market sportswear under the Timberland brand; and (iv) the tax benefit of $4,496 associated with these costs (with respect to net income and net income per common share only). |
PVH CORP. | |||||||||||||||||||||||||||
Appendix A (continued) | |||||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||||
EARNINGS BEFORE INTEREST AND TAXES BY SEGMENT AND DILUTED NET INCOME PER COMMON SHARE - AS ADJUSTED | |||||||||||||||||||||||||||
Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||
7/29/12 (1) | 7/31/11 (1) | ||||||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | ||||||||||||||||||||||||
Results | Adjustments (2) | Results | Results | Adjustments (3) | Results | ||||||||||||||||||||||
Heritage Brand Wholesale Dress Furnishings | $ | 9,607 | $ | 9,607 | $ | 14,240 | $ | 14,240 | |||||||||||||||||||
Heritage Brand Wholesale Sportswear | 4,190 | 4,190 | (5,222 | ) | $ | (6,650 | ) | 1,428 | |||||||||||||||||||
Heritage Brand Retail | 9,306 | 9,306 | 15,122 | 15,122 | |||||||||||||||||||||||
Total Heritage Brands | 23,103 | 23,103 | 24,140 | (6,650 | ) | 30,790 | |||||||||||||||||||||
Other (Calvin Klein Apparel) | 14,888 | 14,888 | 22,083 | 22,083 | |||||||||||||||||||||||
Calvin Klein Licensing | 45,301 | 45,301 | 43,922 | 43,922 | |||||||||||||||||||||||
Total Calvin Klein | 60,189 | 60,189 | 66,005 | 66,005 | |||||||||||||||||||||||
Tommy Hilfiger North America | 52,636 | 52,636 | 31,349 | (6,651 | ) | 38,000 | |||||||||||||||||||||
Tommy Hilfiger International | 41,113 | $ | (3,497 | ) | 44,610 | 37,673 | 37,673 | ||||||||||||||||||||
Total Tommy Hilfiger | 93,749 | (3,497 | ) | 97,246 | 69,022 | (6,651 | ) | 75,673 | |||||||||||||||||||
Corporate | (23,787 | ) | (1,044 | ) | (22,743 | ) | (23,906 | ) | (4,575 | ) | (19,331 | ) | |||||||||||||||
Total earnings before interest and taxes | $ | 153,254 | $ | (4,541 | ) | $ | 157,795 | $ | 135,261 | $ | (17,876 | ) | $ | 153,137 | |||||||||||||
Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||
7/29/12 (1) | 7/31/11 (1) | ||||||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | ||||||||||||||||||||||||
Results | Adjustments (2) | Results | Results | Adjustments (3) | Results | ||||||||||||||||||||||
Net income | $ | 89,918 | $ | (4,290 | ) | $ | 94,208 | $ | 67,827 | $ | (11,571 | ) | $ | 79,398 | |||||||||||||
Weighted average common shares | 70,403 | 70,403 | 67,129 | 67,129 | |||||||||||||||||||||||
Weighted average dilutive securities | 1,105 | 1,105 | 1,551 | 1,551 | |||||||||||||||||||||||
Weighted average impact of assumed convertible preferred stock conversion | 2,095 | 2,095 | 4,189 | 4,189 | |||||||||||||||||||||||
Total shares | 73,603 | 73,603 | 72,869 | 72,869 | |||||||||||||||||||||||
Diluted net income per common share | $ | 1.22 | $ | 1.28 | $ | 0.93 | $ | 1.09 | |||||||||||||||||||
(1) In the fourth quarter of 2012, the Company changed its method of accounting for its retirement plans to (i) calculate expected return on plan assets using the fair value of plan assets; and (ii) immediately recognize actuarial gains and losses in its operating results in the year in which they occur. Prior periods have been retrospectively adjusted to reflect the effect of these accounting changes. | |||||||||||||||||||||||||||
(2) Adjustments for the quarter ended July 29, 2012 represent the elimination of (i) $4,541 incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring; and (ii) the tax benefit of $251 associated with these costs (with respect to net income and net income per common share only). | |||||||||||||||||||||||||||
(3) Adjustments for the quarter ended July 31, 2011 represent the elimination of (i) $11,226 incurred in connection with Company’s integration of Tommy Hilfiger and the related restructuring; (ii) $6,650 incurred in connection with the Company’s negotiated early termination of its license to market sportswear under the Timberland brand; and (iii) the tax benefit of $6,305 associated with these costs (with respect to net income and net income per common share only). |
PVH CORP. | |||||||||||||||||||||||||||
Appendix A (continued) | |||||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||||
EARNINGS BEFORE INTEREST AND TAXES BY SEGMENT AND DILUTED NET INCOME PER COMMON SHARE - AS ADJUSTED | |||||||||||||||||||||||||||
Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||
4/29/12 (1) | 5/1/11 (1) | ||||||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | ||||||||||||||||||||||||
Results | Adjustments (2) | Results | Results | Adjustments (3) | Results | ||||||||||||||||||||||
Heritage Brand Wholesale Dress Furnishings | $ | 8,883 | $ | 8,883 | $ | 20,607 | $ | 20,607 | |||||||||||||||||||
Heritage Brand Wholesale Sportswear | 11,357 | 11,357 | 14,254 | 14,254 | |||||||||||||||||||||||
Heritage Brand Retail | (2,596 | ) | (2,596 | ) | 4,435 | 4,435 | |||||||||||||||||||||
Total Heritage Brands | 17,644 | 17,644 | 39,296 | 39,296 | |||||||||||||||||||||||
Other (Calvin Klein Apparel) | 17,573 | 17,573 | 20,914 | 20,914 | |||||||||||||||||||||||
Calvin Klein Licensing | 40,731 | 40,731 | 34,631 | 34,631 | |||||||||||||||||||||||
Total Calvin Klein | 58,304 | 58,304 | 55,545 | 55,545 | |||||||||||||||||||||||
Tommy Hilfiger North America | 28,877 | $ | (379 | ) | 29,256 | (12,288 | ) | $ | (23,491 | ) | 11,203 | ||||||||||||||||
Tommy Hilfiger International | 73,480 | 73,480 | 78,982 | (448 | ) | 79,430 | |||||||||||||||||||||
Total Tommy Hilfiger | 102,357 | (379 | ) | 102,736 | 66,694 | (23,939 | ) | 90,633 | |||||||||||||||||||
Corporate | (22,223 | ) | (2,937 | ) | (19,286 | ) | (39,044 | ) | (22,753 | ) | (16,291 | ) | |||||||||||||||
Total earnings before interest and taxes | $ | 156,082 | $ | (3,316 | ) | $ | 159,398 | $ | 122,491 | $ | (46,692 | ) | $ | 169,183 | |||||||||||||
Quarter Ended | Quarter Ended | ||||||||||||||||||||||||||
4/29/12 (1) | 5/1/11 (1) | ||||||||||||||||||||||||||
GAAP | Non-GAAP | GAAP | Non-GAAP | ||||||||||||||||||||||||
Results | Adjustments (2) | Results | Results | Adjustments (3) | Results | ||||||||||||||||||||||
Net income | $ | 95,476 | $ | (2,384 | ) | $ | 97,860 | $ | 58,928 | $ | (31,889 | ) | $ | 90,817 | |||||||||||||
Weighted average common shares | 68,539 | 68,539 | 66,798 | 66,798 | |||||||||||||||||||||||
Weighted average dilutive securities | 1,588 | 1,588 | 1,605 | 1,605 | |||||||||||||||||||||||
Weighted average impact of assumed convertible preferred stock conversion | 3,475 | 3,475 | 4,189 | 4,189 | |||||||||||||||||||||||
Total shares | 73,602 | 73,602 | 72,592 | 72,592 | |||||||||||||||||||||||
Diluted net income per common share | $ | 1.30 | $ | 1.33 | $ | 0.81 | $ | 1.25 | |||||||||||||||||||
(1) In the fourth quarter of 2012, the Company changed its method of accounting for its retirement plans to (i) calculate expected return on plan assets using the fair value of plan assets; and (ii) immediately recognize actuarial gains and losses in its operating results in the year in which they occur. Prior periods have been retrospectively adjusted to reflect the effect of these accounting changes. | |||||||||||||||||||||||||||
(2) Adjustments for the quarter ended April 29, 2012 represent the elimination of (i) $3,316 incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring; and (ii) the tax benefit of $932 associated with these costs (with respect to net income and net income per common share only). | |||||||||||||||||||||||||||
(3) Adjustments for the quarter ended May 1, 2011 represent the elimination of (i) $30,459 incurred in connection with the Company’s integration of Tommy Hilfiger and the related restructuring; (ii) $16,233 incurred in connection with the Company’s modification of its credit facility; and (iii) the tax benefit of $14,803 associated with these costs (with respect to net income and net income per common share only). |