The Jones Group Inc. (ticker: JNY, exchange: New York Stock Exchange (.N))
News Release -
30-Jul-2008
Jones Apparel Group, Inc. Reports 2008 Second Quarter Results NEW YORK, July 30 /PRNewswire-FirstCall/ -- Jones Apparel Group, Inc.
(NYSE: JNY) today reported results for the second quarter ended July 5, 2008.
Reported revenues for the second quarter of 2008 were $829 million versus $904
million for the second quarter of 2007. The previously announced exiting of
certain moderate sportswear lines, which was substantially complete by
December 31, 2007, was the primary driver of the period over period decrease.
The Company reported earnings per share from continuing operations of
$0.13 for the quarter, as compared with a loss per share of $0.48 in the same
period last year. Adjusted earnings per share from continuing operations for
the second quarter of 2008 were $0.20, as compared with $0.17 for the same
period last year (as detailed in the accompanying schedule). Adjusted
earnings per share excludes the effects of the sale and operating results of
Barneys New York, which was completed in September 2007, the costs related to
the exiting of the moderate sportswear lines and the repositioning of the
l.e.i. brand.
The following notable events have recently occurred:
-- Successful launch of the l.e.i. program with Wal-Mart;
-- Acquisition of Rachel Roy brand;
-- Strategic investment in international licensing partner GRI Group
Limited;
-- Collaboration between Nine West Group and New Balance to create a
fashion-lifestyle footwear collection; and
-- Final settlement of the accelerated share repurchase program.
Wesley R. Card, Jones Apparel Group President and Chief Executive Officer,
stated, "Our second quarter results exceeded our expectations in the midst of
the challenging economic environment. We are especially pleased with the
results in our vertical retail operations, which were profitable for the
quarter. Comparable store sales for all of our concepts were essentially flat
for the period, and we achieved a 5.8% increase in comparable store sales in
our footwear stores. We believe our focus and efforts on store level
execution and product quality are bearing fruit."
Cash provided by continuing operating activities during the quarter was
$98 million, compared with cash used by continuing operations of $27 million
in the same period last year. The improvement in cash flow was largely driven
by improved working capital management, the receipt of an income tax refund
during 2008 and the absence of the final payment associated with the exiting
of the Polo Jeans Company business.
John T. McClain, Jones Apparel Group Chief Financial Officer, commented,
"Our financial position remains strong. Our on-hand cash balances increased
over $120 million to $322 million versus the first quarter of 2008. Our
revolver continues to be undrawn, and total debt balances remain unchanged at
approximately $780 million. As a result of our efforts, our debt to total
capitalization ratio, net of cash, is 18.6%. We will continue to control our
expenses and to focus on our inventory and supply chain management throughout
the remainder of 2008."
Mr. McClain continued, "While we are pleased with our second quarter
results, current consumer spending levels and the uncertain state of the
economy leave us cautious, and we are therefore maintaining our guidance for
2008 full year adjusted earnings per share from continuing operations at a
range of $1.20 to $1.35, compared with 2007 adjusted earnings per share from
continuing operations of $1.26."
Mr. Card concluded, "We continue to manage through the environment and
remain focused on growing our brands' market share by continuously improving
in the three key areas for success -- people, product and execution, as well
as leveraging our existing business relationships and exploring new ones. We
will continue to be mindful of the economic conditions and the challenges
being faced by our retail customers as we operate throughout the year."
The Company's Board of Directors has declared a regular quarterly cash
dividend of $0.14 per share to all common stockholders of record as of August
15, 2008 for payment on August 29, 2008.
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.jny.com (under Investor
Relations/Conference Schedule). The call will be recorded and made available
through August 7, 2008 and may be accessed by dialing 877-344-7529. Enter
account number 421207. 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. The Company
has not provided a reconciliation with respect to 2008 targeted earnings per
share projection given that it is an estimate derived from projected results.
About Jones Apparel Group, Inc.
Jones Apparel Group, Inc. (www.jny.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. 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, footwear under the Dockers Women brand licensed from
Levi Strauss & Co., and apparel under the Rachel Roy brand licensed from
Rachel Roy IP Company, 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, Evan-Picone, Anne Klein New York,
Nine West, Gloria Vanderbilt and l.e.i., 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,"
"expect," "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 and regional economic
conditions;
-- lowered levels of consumer spending resulting from a general economic
downturn or lower levels of consumer confidence;
-- 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;
-- consolidation of the Company's retail customers;
financial difficulties encountered by 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 (while China has agreed to
safeguard quota on certain classes of apparel products through 2008, political
pressure will likely continue for restraint on importation of apparel);
-- 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, 2007, 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.
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 SECOND QUARTER SIX MONTHS
2008 2007 2008 2007
Income (loss) from continuing
operations (as reported) $10.6 $(51.1) $30.2 $(6.7)
Provision (benefit) for income taxes 5.6 (32.8) 16.5 (7.6)
Losses on assets held for sale (a) - 30.4 - 30.4
Gain on sale of Mexican operations (0.2) - (0.2) -
Items affecting segment income:
Trademark impairments (b) - 69.0 - 69.0
Severance and other costs related
to the exit of certain moderate
product lines and other
restructuring costs 9.7 11.8 28.4 21.7
Adjusted income from continuing
operations before taxes 25.7 27.3 74.9 106.8
Adjusted provision for income taxes 8.8 9.2 26.5 38.1
Adjusted income from continuing
operations $16.9 $18.1 $48.4 $68.7
Earnings (loss) per share from
continuing operations - diluted
(as reported) $0.13 $(0.48) $0.35 $(0.06)
Provision (benefit) for income taxes 0.07 (0.31) 0.19 (0.07)
Losses on assets held for sale (a) - 0.28 - 0.28
Gain on sale of Mexican operations - - - -
Items affecting segment income:
Trademark impairments (b) - 0.64 - 0.63
Severance and other costs related
to the exit of certain moderate
product lines and other
restructuring costs 0.11 0.11 0.33 0.20
Adjusted income from continuing
operations before taxes 0.31 0.24 0.87 0.98
Adjusted provision for income taxes 0.11 0.08 0.30 0.35
Adjustment for using diluted share
count (c) - 0.01 - -
Adjusted earnings per share from
continuing operations - diluted $0.20 $0.17 $0.57 $0.63
Non-GAAP adjustments affecting
revenue by segment:
Wholesale better apparel $- $- $- $-
Wholesale jeanswear (d) 2.3 6.1 9.2 6.1
Wholesale footwear and accessories - - - -
Retail - - - -
Licensing, other & eliminations (e) 0.5 - 0.5 -
Total $2.8 $6.1 $9.7 $6.1
Non-GAAP adjustments affecting
income by segment:
Wholesale better apparel (f) $0.6 $1.1 $(0.2) $8.5
Wholesale jeanswear (d) 6.4 8.6 22.8 9.9
Wholesale footwear and
accessories (g) 1.7 0.5 3.6 0.9
Retail (g) 0.3 1.2 0.6 1.6
Licensing, other & eliminations (e) 0.7 69.4 1.5 69.8
Total $9.7 $80.8 $28.3 $90.7
Adjusted segment margins
Wholesale better apparel 8.1 % 9.2 % 12.6 % 14.4 %
Wholesale jeanswear 4.0 4.6 6.9 6.5
Wholesale footwear and accessories 4.4 8.3 6.9 10.6
Retail 3.0 (2.0) (5.3) (6.0)
Total 4.2 % 4.3 % 5.2 % 6.6 %
(a) Represents the loss recorded relating to the adjustment of certain
assets to their net realizable value.
(b) Represents the impairments recorded in accordance with SFAS No. 142,
resulting from the shutdown of certain of our moderate sportswear
brands.
(c) In accordance with SFAS No. 128, the calculation of diluted shares
for the purpose of calculating GAAP EPS excludes antidilutive items.
Since the non-GAAP adjustments would result in projected adjusted
net income, these items would become dilutive to EPS. This
adjustment represents the impact of including these dilutive items
in the calculation of diluted shares for generating the projected
adjusted EPS.
(d) 2008 includes costs related to the moderate sportswear shutdown
announced in 2007, and the repositioning of l.e.i. as an exclusive
product for Wal-Mart Stores, Inc. announced in February 2008, and
other restructuring costs. 2007 is inclusive of the shutdown of
certain moderate sportswear brands announced in May 2007, and the
gain on the sale of facility and equipment under the Mexico
restructuring, along with other restructuring costs.
(e) 2008 includes items related to the repositioning of l.e.i. as an
exclusive product for Wal-Mart Stores, Inc. announced in February
2008, and other restructuring costs. 2007 relates to the trademark
impairments discussed above under letter (b), and other
restructuring costs.
(f) 2008 and 2007 include severance and occupancy expenses related to
the shutdown of two distribution centers, and other restructuring
costs.
(g) 2008 and 2007 include severance, accelerated depreciation and other
restructuring related costs.
JONES APPAREL GROUP, INC.
CONSOLIDATED OPERATING RESULTS
(UNAUDITED)
All amounts in millions,
except per share data
SECOND QUARTER
2008 2007
Net sales $820.2 98.9 % $894.5 99.0 %
Licensing income 9.0 1.1 9.2 1.0
Service and other revenue 0.2 0.0 0.2 0.0
Total revenues 829.4 100.0 903.9 100.0
Cost of goods sold 547.0 66.0 613.7 67.9
Gross profit 282.4 34.0 290.2 32.1
SG&A expenses 256.9 31.0 263.1 29.1
Trademark impairments - - 69.0 7.6
Losses on assets held for sale - - 30.4 3.4
Income (loss) from operations 25.5 3.1 (72.3) (8.0)
Net interest expense and financing
costs (9.8) (1.2) (13.1) (1.4)
Gain on sale of interest in
Australian joint venture 0.5 0.1 - 0.0
Equity in earnings of unconsolidated
affiliates - - 1.5 0.2
Income (loss) from continuing
operations before taxes 16.2 2.0 (83.9) (9.3)
Provision (benefit) for income taxes 5.6 0.7 (32.8) (3.6)
Income (loss) from continuing
operations 10.6 1.3 (51.1) (5.7)
Income from discontinued operations,
net of tax - - 4.0 0.4
Net income (loss) $10.6 1.3 % $(47.1) (5.2)%
Shares outstanding - diluted 84.9 107.1
Earnings (loss) per share - diluted
Income (loss) from continuing
operations $0.13 $(0.48)
Income from discontinued
operations $- $0.04
Net income (loss) $0.13 $(0.44)
SIX MONTHS
2008 2007
Net sales $1,783.6 98.8 % $1,959.0 98.8 %
Licensing income 20.5 1.1 21.4 1.1
Service and other revenue 0.7 0.0 2.0 0.1
Total revenues 1,804.8 100.0 1,982.4 100.0
Cost of goods sold 1,201.7 66.6 1,327.1 66.9
Gross profit 603.1 33.4 655.3 33.1
SG&A expenses 537.6 29.8 544.9 27.5
Trademark impairments - - 69.0 3.5
Losses on assets held for sale - - 30.4 1.5
Income (loss) from operations 65.5 3.6 11.0 0.6
Net interest expense and financing
costs (19.6) (1.1) (27.4) (1.4)
Gain on sale of interest in
Australian joint venture 0.8 0.0 - 0.0
Equity in earnings of
unconsolidated affiliates - - 2.1 0.1
Income (loss) from continuing
operations before taxes 46.7 2.6 (14.3) (0.7)
Provision (benefit) for income
taxes 16.5 0.9 (7.6) (0.4)
Income (loss) from continuing
operations 30.2 1.7 (6.7) (0.3)
Income from discontinued
operations, net of tax - - 7.5 0.4
Net income (loss) $30.2 1.7 % $0.8 0.0 %
Shares outstanding - diluted 85.2 109.0
Earnings (loss) per share - diluted
Income (loss) from continuing
operations $0.35 $(0.06)
Income from discontinued
operations $- $0.07
Net income (loss) $0.35 $0.01
Percentages may not add due to rounding.
JONES APPAREL GROUP, INC.
SEGMENT INFORMATION
(UNAUDITED)
All amounts in millions
Wholesale Wholesale
Better Wholesale Footwear &
Apparel Jeanswear Accessories
For the fiscal quarter ended
July 5, 2008
Revenues from external customers $235.0 $172.2 $215.6
Intersegment revenues 30.3 0.8 15.4
Total revenues 265.3 173.0 231.0
Segment income $20.9 $0.6 $8.5
Segment margin 7.9% 0.3% 3.7%
Net interest expense
Gain on sale of Mexican
operations and interest in
Australian joint venture
Income from continuing
operations before provision for
income taxes
Segment revenues $265.3 $173.0 $231.0
Adjustments affecting segment
revenues - 2.3 -
Adjusted segment revenues $265.3 $175.3 $231.0
Segment income $20.9 $0.6 $8.5
Adjustments affecting segment
income 0.6 6.4 1.7
Adjusted segment income $21.5 $7.0 $10.2
Adjusted segment margin 8.1% 4.0% 4.4%
For the fiscal quarter ended
July 7, 2007
Revenues from external customers $230.0 $255.6 $215.9
Intersegment revenues 35.1 4.2 10.9
Total revenues 265.1 259.8 226.8
Segment income (loss) $23.4 $3.5 $18.4
Segment margin 8.8% 1.3% 8.1%
Net interest expense
Losses on assets held for sale
Equity in earnings of
unconsolidated affiliates
Loss from continuing operations
before benefit for income taxes
Segment revenues $265.1 $259.8 $226.8
Adjustments affecting segment
revenues - 6.1 -
Adjusted segment revenues $265.1 $265.9 $226.8
Segment income (loss) $23.4 $3.5 $18.4
Adjustments affecting segment
income 1.1 8.6 0.5
Adjusted segment income (loss) $24.5 $12.1 $18.9
Adjusted segment margin 9.2% 4.6% 8.3%
Licensing,
Other &
Retail Eliminations Consolidated
For the fiscal quarter ended
July 5, 2008
Revenues from external customers $197.5 $9.1 $829.4
Intersegment revenues - (46.5) -
Total revenues 197.5 (37.4) 829.4
Segment income $5.5 $(10.2) 25.3
Segment margin 2.8% 3.1%
Net interest expense (9.8)
Gain on sale of Mexican
operations and interest in
Australian joint venture 0.7
Income from continuing
operations before provision for
income taxes $16.2
Segment revenues $197.5 $(37.4) $829.4
Adjustments affecting segment
revenues - 0.5 2.8
Adjusted segment revenues $197.5 $(36.9) $832.2
Segment income $5.5 $(10.2) $25.3
Adjustments affecting segment
income 0.3 0.7 9.7
Adjusted segment income $5.8 $(9.5) $35.0
Adjusted segment margin 3.0% 4.2%
For the fiscal quarter ended
July 7, 2007
Revenues from external customers $193.2 $9.2 $903.9
Intersegment revenues - (50.2) -
Total revenues 193.2 (41.0) 903.9
Segment income (loss) $(5.1) $(82.1) (41.9)
Segment margin (2.6%) (4.6%)
Net interest expense (13.1)
Losses on assets held for sale (30.4)
Equity in earnings of
unconsolidated affiliates 1.5
Loss from continuing operations
before benefit for income taxes $(83.9)
Segment revenues $193.2 $(41.0) $903.9
Adjustments affecting segment
revenues - - 6.1
Adjusted segment revenues $193.2 $(41.0) $910.0
Segment income (loss) $(5.1) $(82.1) $(41.9)
Adjustments affecting segment
income 1.2 69.4 80.8
Adjusted segment income (loss) $(3.9) $(12.7) $38.9
Adjusted segment margin (2.0%) 4.3%
JONES APPAREL GROUP, INC.
SEGMENT INFORMATION
(UNAUDITED)
All amounts in millions
Wholesale Wholesale
Better Wholesale Footwear &
Apparel Jeanswear Accessories
For the fiscal six months ended
July 5, 2008
Revenues from external customers $566.4 $392.8 $468.2
Intersegment revenues 70.2 1.9 35.7
Total revenues 636.6 394.7 503.9
Segment income (loss) $80.2 $5.0 $31.1
Segment margin 12.6% 1.3% 6.2%
Net interest expense
Gain on sale of Mexican
operations and interest in
Australian joint venture
Income from continuing
operations before provision for
income taxes
Segment revenues $636.6 $394.7 $503.9
Adjustments affecting segment
revenues - 9.2 -
Adjusted segment revenues $636.6 $403.9 $503.9
Segment income (loss) $80.2 $5.0 $31.1
Adjustments affecting segment
income (0.2) 22.8 3.6
Adjusted segment income (loss) $80.0 $27.8 $34.7
Adjusted segment margin 12.6% 6.9% 6.9%
For the fiscal six months ended
July 7, 2007
Revenues from external customers $569.9 $560.5 $465.2
Intersegment revenues 78.2 7.3 27.9
Total revenues 648.1 567.8 493.1
Segment income (loss) $85.0 $27.6 $51.5
Segment margin 13.1% 4.9% 10.4%
Net interest expense
Losses on assets held for sale
Equity in earnings of
unconsolidated affiliates
Loss from continuing operations
before benefit for income taxes
Segment revenues $648.1 $567.8 $493.1
Adjustments affecting segment
revenues - 6.1 -
Adjusted segment revenues $648.1 $573.9 $493.1
Segment income (loss) $85.0 $27.6 $51.5
Adjustments affecting segment
income 8.5 9.9 0.9
Adjusted segment income (loss) $93.5 $37.5 $52.4
Adjusted segment margin 14.4% 6.5% 10.6%
Licensing,
Other &
Retail Eliminations Consolidated
For the fiscal six months ended
July 5, 2008
Revenues from external customers $356.3 $21.1 $1,804.8
Intersegment revenues - (107.8) -
Total revenues 356.3 (86.7) 1,804.8
Segment income (loss) $(19.4) $(31.6) 65.3
Segment margin (5.4%) 3.6%
Net interest expense (19.6)
Gain on sale of Mexican
operations and interest in
Australian joint venture 1.0
Income from continuing operations
before provision for income
taxes $46.7
Segment revenues $356.3 $(86.7) $1,804.8
Adjustments affecting segment
revenues - 0.5 9.7
Adjusted segment revenues $356.3 $(86.2) $1,814.5
Segment income (loss) $(19.4) $(31.6) $65.3
Adjustments affecting segment
income 0.6 1.5 28.3
Adjusted segment income (loss) $(18.8) $(30.1) $93.6
Adjusted segment margin (5.3%) 5.2%
For the fiscal six months ended
July 7, 2007
Revenues from external customers $365.1 $21.7 $1,982.4
Intersegment revenues - (113.4) -
Total revenues 365.1 (91.7) 1,982.4
Segment income (loss) $(23.6) $(99.1) 41.4
Segment margin (6.5%) 2.1%
Net interest expense (27.4)
Losses on assets held for sale (30.4)
Equity in earnings of
unconsolidated affiliates 2.1
Loss from continuing operations
before benefit for income taxes $(14.3)
Segment revenues $365.1 $(91.7) $1,982.4
Adjustments affecting segment
revenues - - 6.1
Adjusted segment revenues $365.1 $(91.7) $1,988.5
Segment income (loss) $(23.6) $(99.1) $41.4
Adjustments affecting segment
income 1.6 69.8 90.7
Adjusted segment income (loss) $(22.0) $(29.3) $132.1
Adjusted segment margin (6.0%) 6.6%
JONES APPAREL GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
All amounts in millions
July 5, 2008 July 7, 2007
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $322.2 $53.6
Accounts receivable 382.6 374.5
Inventories 466.7 535.7
Assets held for sale - 645.3
Prepaid income taxes 25.2 -
Deferred taxes 23.8 68.8
Other current assets 50.6 60.6
TOTAL CURRENT ASSETS 1,271.1 1,738.5
Property, plant and equipment, at
cost, less accumulated depreciation
and amortization 305.4 283.3
Goodwill 974.6 1,051.9
Other intangibles, less accumulated
amortization 616.9 626.6
Deferred taxes - 14.5
Other assets 58.0 52.9
$3,226.0 $3,767.7
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $- $184.1
Current portion of capital lease
obligations 4.2 3.9
Accounts payable 215.3 219.1
Liabilities related to assets held
for sale - 165.9
Income taxes payable 13.8 5.9
Accrued expenses and other current
liabilities 124.7 127.2
TOTAL CURRENT LIABILITIES 358.0 706.1
NONCURRENT LIABILITIES:
Long-term debt and obligation
under capital leases 775.9 779.0
Deferred taxes 14.8 -
Other 67.4 73.0
TOTAL NONCURRENT LIABILITIES 858.1 852.0
TOTAL LIABILITIES 1,216.1 1,558.1
STOCKHOLDERS' EQUITY 2,009.9 2,209.6
$3,226.0 $3,767.7
JONES APPAREL GROUP, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
All amounts in millions Six Months Ended
July 5, 2008 July 7, 2007
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income $30.2 $0.8
Less: Income from discontinued operations - (7.5)
Income (loss) from continuing operations 30.2 (6.7)
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities, net of acquisitions and
divestitures:
Amortization expense in connection with
employee stock options and restricted stock 9.1 8.6
Depreciation and other amortization 41.4 37.9
Trademark impairments - 69.0
Losses on assets held for sale - 30.4
Provision for losses on accounts receivable 4.7 0.3
Deferred taxes 26.7 (35.1)
Other items, net (0.7) (5.4)
Changes in operating assets and liabilities:
Accounts receivable (50.5) (36.9)
Inventories 57.1 (25.1)
Accounts payable (8.6) (54.3)
Other assets and liabilities, net (11.2) (10.0)
Total adjustments 68.0 (20.6)
Net cash provided by (used in) operating
activities of continuing operations 98.2 (27.3)
Net cash provided by operating activities
of discontinued operations - 21.4
Net cash provided by (used in) operating
activities 98.2 (5.9)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (38.4) (47.7)
Investment in GRI Group Limited (20.0) -
Other 7.0 2.8
Net cash used in investing activities of
continuing operations (51.4) (44.9)
Net cash used in investing activities of
discontinued operations - (26.9)
Net cash used in investing activities (51.4) (71.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under credit facilities - 84.1
Proceeds from exercise of employee stock
options - 10.3
Dividends paid (24.1) (30.4)
Other (1.6) (5.1)
Net cash (used in) provided by financing
activities of continuing operations (25.7) 58.9
Net cash provided by financing activities
of discontinued operations - 1.8
Net cash (used in) provided by financing
activities (25.7) 60.7
EFFECT OF EXCHANGE RATES ON CASH (1.7) 2.6
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 19.4 (14.4)
CASH AND CASH EQUIVALENTS, BEGINNING,
including $7.2 reported under assets held
for sale in 2007 302.8 71.5
CASH AND CASH EQUIVALENTS, ENDING, including
$3.5 reported under assets held for sale in
2007 $322.2 $57.1
SOURCE Jones Apparel Group, Inc.
CONTACT: Investors, John T. McClain, Chief Financial Officer of Jones
Apparel Group, +1-212-642-3860;
Media, Joele Frank and Sharon Stern of Joele
Frank, Wilkinson Brimmer Katcher, +1-212-355-4449/
/Web site: http://www.jny.com/
(JNY)
|
The Jones Group Inc.
