The Jones Group Inc. (ticker: JNY, exchange: New York Stock Exchange (.N))
News Release -
29-Oct-2008
Jones Apparel Group, Inc. Reports 2008 Third Quarter Results NEW YORK, Oct. 29 /PRNewswire-FirstCall/ Jones Apparel Group, Inc.
(NYSE: JNY) today reported results for the third quarter ended October 4,
2008. Revenues for the third quarter of 2008 were $965 million, as compared
with $1.028 billion for the third quarter of 2007. The exit from certain
moderate sportswear lines, which was substantially complete by December 31,
2007, impacted the quarter by approximately $65 million and was the primary
driver of the period-over-period decrease. Gross profit margin increased 170
basis points to 33.5% for the quarter, reflecting the exit from the moderate
sportswear lines and the increased relative percentage contribution of the
Retail segment of our business.
The Company reported earnings per share from continuing operations of
$0.32 for the quarter, as compared with $1.37 in the same period last year.
Adjusted earnings per share from continuing operations for the third quarter
of 2008 were $0.34, as compared with $0.51 for the same period last year (as
detailed in the accompanying schedule). Results for the quarter were impacted
by the bankruptcy filings of two regional department store customers
($4.2 million pre-tax, $0.03 earnings per share) and a corresponding reduction
in shipping volumes. 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 exit from the moderate sportswear
lines and the repositioning of the l.e.i. brand.
The following notable events have recently occurred:
- expansion of the l.e.i. franchise through an exclusive footwear license
agreement with Steve Madden, Ltd. and through other license agreements
for intimate apparel, sleepwear, handbags and sunglasses;
- launching of a dedicated e-commerce site for the Jones New York brands
(www.jny.com);
- opening of a new-concept store, ShoeWoo, which houses multiple footwear
brands in one location; and
- completion of the remodeling of the Nine West flagship store in
New York City.
Wesley R. Card, Jones Apparel Group President and Chief Executive Officer,
stated: "As indicated in our release earlier this month, our results reflect
the challenging economic environment and drop in consumer confidence and
spending levels. We are managing through the current economic turmoil by
remaining committed to our strategy of enhancing our core brands to improve
performance and increase market share. The strategies we began implementing
last year, combined with new product initiatives, have revitalized and
strengthened our ability to better manage during these volatile times."
Mr. Card continued: "The comparable store sales results of our wholesale
customers, along with other retail sales trends, declined rapidly as we moved
through the quarter. Our own chain of retail stores had positive comparable
store sales in the combined July and August time period but experienced a
significant slowdown in September as consumer confidence plummeted. The
consumer reacted to the negative financial news and economic outlook by
spending less. As a result, our comparable store sales were down more than 8%
in September."
Cash provided by continuing operating activities for the nine-month period
during 2008 improved by $120 million when compared with the same period in
2007. 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 exiting the Polo Jeans Company
business. The Company has no amounts drawn under its $1.25 billion of
committed revolving credit facilities and expects to end the fiscal year with
approximately $300 million in cash.
John T. McClain, Jones Apparel Group Chief Financial Officer, commented:
"We ended the quarter with $200 million in cash, an increase of $90 million
compared with last year. We continue to maintain a strong financial position.
Our revolver continues to be undrawn, and total debt balances remain unchanged
at approximately $780 million. We will continue to manage our cash through
cautious inventory purchases and controlled spending as we move through the
remainder of 2008 and into 2009."
Mr. McClain continued: "As noted in our guidance earlier this month, we
are expecting a very promotional fourth quarter as we and our retail customers
aggressively work to control inventory balances. We anticipate that our 2008
full year adjusted earnings per share from continuing operations will be
within a range of $0.93 to $0.98, compared with 2007 adjusted earnings per
share from continuing operations of $1.26."
Mr. Card concluded: "In the face of a very uncertain retail and economic
climate, we remain committed to our strategy, bolstered by appropriate near-
term adaptations to deal with current conditions. These steps include
maintaining very careful management of working capital and inventory, a
significant slowing of capital expenditures, comprehensively reviewing
expenses and overhead, and taking a cautious approach to new projects. We
believe that these actions, coupled with the commitment of our experienced
management team, will allow us to weather these conditions and emerge as a
stronger and leaner Company when the economy turns upward."
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
November 14, 2008, for payment on November 28, 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.jonesapparel.com (under Investor
Relations/Conference Schedule). The call will be recorded and made available
through November 6, 2008 and may be accessed by dialing 877-344-7529. Enter
account number 424319. 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 reconciliation with respect to its 2008 targeted earnings per
share given that it is an estimate derived from projected results.
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. 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 tightening of the credit markets and the Company's ability to
obtain credit on favorable terms;
- 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.
CONSOLIDATED OPERATING RESULTS
(UNAUDITED)
All amounts in millions, except per share data
THIRD QUARTER
2008 2007
Net sales $948.6 98.3 % $1,011.8 98.5 %
Licensing income 16.0 1.7 15.4 1.5
Service and other revenue 0.1 0.0 0.4 0.0
Total revenues 964.7 100.0 1,027.6 100.0
Cost of goods sold 641.4 66.5 701.1 68.2
Gross profit 323.3 33.5 326.5 31.8
SG&A expenses 271.5 28.1 286.2 27.9
Trademark impairments - - 11.5 1.1
Reversal of losses on assets held for
sale - - 30.4 3.0
Income from operations 51.8 5.4 59.2 5.8
Net interest expense and financing
costs (10.5) (1.1) (12.7) (1.2)
Gain on sale of interest in Australian
joint venture - - - -
Equity in (loss) earnings of
unconsolidated affiliates (0.4) (0.0) 1.0 0.1
Income from continuing operations
before taxes 40.9 4.2 47.5 4.6
Provision (benefit) for income taxes 14.6 1.5 (90.9) (8.8)
Income from continuing operations 26.3 2.7 138.4 13.5
Income from discontinued operations,
net of tax 1.0 0.1 261.7 25.5
Net income $27.3 2.8 % $400.1 38.9 %
Shares outstanding - diluted 83.0 100.7
Earnings per share - diluted
Income from continuing operations $0.32 $1.37
Income from discontinued operations $0.01 $2.60
Net income $0.33 $3.97
NINE MONTHS
2008 2007
Net sales $2,732.2 98.7 % $2,970.8 98.7 %
Licensing income 36.5 1.3 36.8 1.2
Service and other revenue 0.8 0.0 2.3 0.1
Total revenues 2,769.5 100.0 3,009.9 100.0
Cost of goods sold 1,843.2 66.6 2,028.1 67.4
Gross profit 926.3 33.4 981.8 32.6
SG&A expenses 809.1 29.2 831.2 27.6
Trademark impairments - - 80.5 2.7
Reversal of losses on assets held
for sale - - - -
Income from operations 117.2 4.2 70.1 2.3
Net interest expense and financing
costs (30.0) (1.1) (40.0) (1.3)
Gain on sale of interest in
Australian joint venture 0.8 0.0 - -
Equity in (loss) earnings of
unconsolidated affiliates (0.4) (0.0) 3.1 0.1
Income from continuing operations
before taxes 87.6 3.2 33.2 1.1
Provision (benefit) for income
taxes 31.1 1.1 (98.5) (3.3)
Income from continuing operations 56.5 2.0 131.7 4.4
Income from discontinued
operations, net of tax 1.0 0.0 269.2 8.9
Net income $57.5 2.1 % $400.9 13.3 %
Shares outstanding - diluted 84.4 106.3
Earnings per share - diluted
Income from continuing operations $0.67 $1.24
Income from discontinued operations $0.01 $2.53
Net income $0.68 $3.77
Percentages may not add due to rounding.
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 THIRD QUARTER NINE MONTHS
2008 2007 2008 2007
Income from continuing operations
(as reported) $26.3 $138.4 $56.5 $131.7
Provision (benefit) for income taxes 14.6 (90.9) 31.1 (98.5)
Reversal of losses on assets held
for sale (a) - (30.4) - -
Gain on sale of Mexican operations - - (0.2) -
Items affecting segment income:
Trademark impairments (b) - 11.5 - 80.5
Severance and other costs related
to the exit of certain
moderate product lines and other
restructuring costs 3.4 48.6 31.8 70.3
Adjusted income from continuing
operations before taxes 44.3 77.2 119.2 184.0
Adjusted provision for income taxes 15.8 25.5 42.3 63.7
Adjusted income from continuing
operations $28.5 $51.7 $76.9 $120.3
Earnings per share from continuing
operations - diluted (as reported) $0.32 $1.37 $0.67 $1.24
Provision (benefit) for income taxes 0.17 (0.90) 0.37 (0.93)
Reversal of losses on assets held
for sale (a) - (0.30) - -
Gain on sale of Mexican operations - - - -
Items affecting segment income:
Trademark impairments (b) - 0.11 - 0.76
Severance and other costs related
to the exit of certain moderate
product lines and other
restructuring costs 0.04 0.48 0.37 0.66
Adjusted income from continuing
operations before taxes 0.53 0.76 1.41 1.73
Adjusted provision for income taxes 0.19 0.25 0.50 0.60
Adjusted earnings per share from
continuing operations - diluted $0.34 $0.51 $0.91 $1.13
Non-GAAP adjustments affecting
revenue by segment:
Wholesale better apparel $- $- $- $-
Wholesale jeanswear ( c ) 0.7 17.2 9.9 23.4
Wholesale footwear and accessories - - - -
Retail - - - -
Licensing, other & eliminations (d) - - 0.5 -
Total $0.7 $17.2 $10.4 $23.4
Non-GAAP adjustments affecting
income by segment:
Wholesale better apparel (e) $0.1 $1.0 $(0.2) $9.5
Wholesale jeanswear ( c ) 1.6 28.0 24.4 37.9
Wholesale footwear and
accessories (f) 0.1 0.5 3.8 1.4
Retail (f) 0.1 0.8 0.7 2.4
Licensing, other & eliminations (d) 1.5 29.8 3.1 99.6
Total $3.4 $60.1 $31.8 $150.8
Adjusted segment margins
Wholesale better apparel 10.4 % 12.5 % 11.8 % 13.7 %
Wholesale jeanswear 6.1 6.8 6.6 6.6
Wholesale footwear and accessories 10.3 14.1 8.1 11.9
Retail (11.5) (8.2) (7.3) (6.7)
Total 5.7 % 8.5 % 5.4 % 7.3 %
(a) Represents the reversal of the loss recorded in the second quarter
of 2007 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 exit from certain of our moderate sportswear
brands.
( c ) 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.
(d) 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.
(e) 2008 and 2007 include severance and occupancy expenses related to
the shutdown of two distribution centers, and other restructuring
costs.
(f) 2008 and 2007 include severance, accelerated depreciation and other
restructuring related costs.
JONES APPAREL GROUP, INC.
SEGMENT INFORMATION
(UNAUDITED)
All amounts in millions
Wholesale Wholesale
Better Wholesale Footwear &
Apparel Jeanswear Accessories
For the fiscal quarter ended
October 4, 2008
Revenues from external customers $303.8 $202.0 $269.6
Intersegment revenues 46.8 1.1 27.6
Total revenues 350.6 203.1 297.2
Segment income (loss) $36.4 $10.8 $30.4
Segment margin 10.4% 5.3% 10.2%
Net interest expense
Equity in loss of unconsolidated
affiliates
Income from continuing operations
before provision for income
taxes
Segment revenues $350.6 $203.1 $297.2
Adjustments affecting segment
revenues - 0.7 -
Adjusted segment revenues $350.6 $203.8 $297.2
Segment income (loss) $36.4 $10.8 $30.4
Adjustments affecting segment
income 0.1 1.6 0.1
Adjusted segment income (loss) $36.5 $12.4 $30.5
Adjusted segment margin 10.4% 6.1% 10.3%
For the fiscal quarter ended
October 6, 2007
Revenues from external customers $320.5 $246.9 $267.8
Intersegment revenues 46.9 2.0 24.8
Total revenues 367.4 248.9 292.6
Segment income (loss) $44.9 $(9.9) $40.8
Segment margin 12.2% (4.0%) 13.9%
Net interest expense
Reversal of losses on assets held
for sale
Equity in earnings of
unconsolidated affiliates
Income from continuing operations
before benefit for income taxes
Segment revenues $367.4 $248.9 $292.6
Adjustments affecting segment
revenues - 17.2 -
Adjusted segment revenues $367.4 $266.1 $292.6
Segment income (loss) $44.9 $(9.9) $40.8
Adjustments affecting segment
income 1.0 28.0 0.5
Adjusted segment income (loss) $45.9 $18.1 $41.3
Adjusted segment margin 12.5% 6.8% 14.1%
Licensing,
Other &
Retail Eliminations Consolidated
For the fiscal quarter ended
October 4, 2008
Revenues from external customers $173.2 $16.1 $964.7
Intersegment revenues - (75.5) -
Total revenues 173.2 (59.4) 964.7
Segment income (loss) $(20.1) $(5.7) 51.8
Segment margin (11.6%) 5.4%
Net interest expense (10.5)
Equity in loss of unconsolidated
affiliates (0.4)
Income from continuing operations
before provision for income
taxes $40.9
Segment revenues $173.2 $(59.4) $964.7
Adjustments affecting segment
revenues - - 0.7
Adjusted segment revenues $173.2 $(59.4) $965.4
Segment income (loss) $(20.1) $(5.7) $51.8
Adjustments affecting segment
income 0.1 1.5 3.4
Adjusted segment income (loss) $(20.0) $(4.2) $55.2
Adjusted segment margin (11.5%) 5.7%
For the fiscal quarter ended
October 6, 2007
Revenues from external customers $176.8 $15.6 $1,027.6
Intersegment revenues - (73.7) -
Total revenues 176.8 (58.1) 1,027.6
Segment income (loss) $(15.3) $(31.7) 28.8
Segment margin (8.7%) 2.8%
Net interest expense (12.7)
Reversal of losses on assets held
for sale 30.4
Equity in earnings of
unconsolidated affiliates 1.0
Income from continuing operations
before benefit for income taxes $47.5
Segment revenues $176.8 $(58.1) $1,027.6
Adjustments affecting segment
revenues - - 17.2
Adjusted segment revenues $176.8 $(58.1) $1,044.8
Segment income (loss) $(15.3) $(31.7) $28.8
Adjustments affecting segment
income 0.8 29.8 60.1
Adjusted segment income (loss) $(14.5) $(1.9) $88.9
Adjusted segment margin (8.2%) 8.5%
JONES APPAREL GROUP, INC.
SEGMENT INFORMATION
(UNAUDITED)
All amounts in millions
Wholesale Wholesale
Better Wholesale Footwear &
Apparel Jeanswear Accessories
For the fiscal nine months ended
October 4, 2008
Revenues from external customers $870.2 $594.9 $737.8
Intersegment revenues 117.0 3.0 63.3
Total revenues 987.2 597.9 801.1
Segment income (loss) $116.7 $15.8 $61.4
Segment margin 11.8% 2.6% 7.7%
Net interest expense
Equity in loss of unconsolidated
affiliates
Gain on sale of Mexican
operations and interest in
Australian joint venture
Income from continuing operations
before provision for income
taxes
Segment revenues $987.2 $597.9 $801.1
Adjustments affecting segment
revenues - 9.9 -
Adjusted segment revenues $987.2 $607.8 $801.1
Segment income (loss) $116.7 $15.8 $61.4
Adjustments affecting segment
income (0.2) 24.4 3.8
Adjusted segment income (loss) $116.5 $40.2 $65.2
Adjusted segment margin 11.8% 6.6% 8.1%
For the fiscal nine months ended
October 6, 2007
Revenues from external customers $890.4 $807.4 $732.9
Intersegment revenues 125.1 9.2 52.8
Total revenues 1,015.5 816.6 785.7
Segment income (loss) $129.9 $17.6 $92.3
Segment margin 12.8% 2.2% 11.7%
Net interest expense
Equity in earnings of
unconsolidated affiliates
Income from continuing operations
before benefit for income taxes
Segment revenues $1,015.5 $816.6 $785.7
Adjustments affecting segment
revenues - 23.4 -
Adjusted segment revenues $1,015.5 $840.0 $785.7
Segment income (loss) $129.9 $17.6 $92.3
Adjustments affecting segment income 9.5 37.9 1.4
Adjusted segment income (loss) $139.4 $55.5 $93.7
Adjusted segment margin 13.7% 6.6% 11.9%
Licensing,
Other &
Retail Eliminations Consolidated
For the fiscal nine months ended
October 4, 2008
Revenues from external customers $529.5 $37.1 $2,769.5
Intersegment revenues - (183.3) -
Total revenues 529.5 (146.2) 2,769.5
Segment income (loss) $(39.4) $(37.5) 117.0
Segment margin (7.4%) 4.2%
Net interest expense (30.0)
Equity in loss of unconsolidated
affiliates (0.4)
Gain on sale of Mexican
operations and interest in
Australian joint venture 1.0
Income from continuing operations
before provision for income
taxes $87.6
Segment revenues $529.5 $(146.2) $2,769.5
Adjustments affecting segment
revenues - 0.5 10.4
Adjusted segment revenues $529.5 $(145.7) $2,779.9
Segment income (loss) $(39.4) $(37.5) $117.0
Adjustments affecting segment
income 0.7 3.1 31.8
Adjusted segment income (loss) $(38.7) $(34.4) $148.8
Adjusted segment margin (7.3%) 5.4%
For the fiscal nine months ended
October 6, 2007
Revenues from external customers $541.9 $37.3 $3,009.9
Intersegment revenues - (187.1) -
Total revenues 541.9 (149.8) 3,009.9
Segment income (loss) $(38.9) $(130.8) 70.1
Segment margin (7.2%) 2.3%
Net interest expense (40.0)
Equity in earnings of
unconsolidated affiliates 3.1
Income from continuing operations
before benefit for income taxes $33.2
Segment revenues $541.9 $(149.8) $3,009.9
Adjustments affecting segment
revenues - - 23.4
Adjusted segment revenues $541.9 $(149.8) $3,033.3
Segment income (loss) $(38.9) $(130.8) $70.1
Adjustments affecting segment
income 2.4 99.6 150.8
Adjusted segment income (loss) $(36.5) $(31.2) $220.9
Adjusted segment margin (6.7%) 7.3%
JONES APPAREL GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
All amounts in millions
October 4, 2008 October 6, 2007
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $200.3 $109.0
Accounts receivable 474.6 505.9
Inventories 547.9 590.3
Prepaid income taxes 7.8 -
Deferred taxes 25.4 57.3
Other current assets 57.8 63.6
TOTAL CURRENT ASSETS 1,313.8 1,326.1
Property, plant and equipment, at cost, less
accumulated depreciation and amortization 306.7 297.5
Goodwill 973.9 1,051.9
Other intangibles, less accumulated
amortization 616.7 626.1
Deferred taxes - 6.3
Other assets 56.6 53.8
$3,267.7 $3,361.7
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of capital lease obligations $3.5 $4.5
Accounts payable 222.9 190.9
Income taxes payable 15.2 55.5
Accrued expenses and other current
liabilities 132.4 165.9
TOTAL CURRENT LIABILITIES 374.0 416.8
NONCURRENT LIABILITIES:
Long-term debt and obligation
under capital leases 779.4 779.0
Deferred taxes 19.8 -
Other 68.7 72.3
TOTAL NONCURRENT LIABILITIES 867.9 851.3
TOTAL LIABILITIES 1,241.9 1,268.1
STOCKHOLDERS' EQUITY 2,025.8 2,093.6
$3,267.7 $3,361.7
JONES APPAREL GROUP, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
All amounts in millions Nine Months Ended
October 4, 2008 October 6, 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $57.5 $400.9
Less: Income from discontinued operations (1.0) (269.2)
Income from continuing operations 56.5 131.7
Adjustments to reconcile income from
continuing operations 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 11.0 12.3
Depreciation and other amortization 61.7 55.9
Trademark impairments - 80.5
Provision for losses on accounts receivable 8.7 2.3
Deferred taxes 28.9 (18.4)
Other items, net 1.5 (2.0)
Changes in operating assets and liabilities:
Accounts receivable (147.1) (148.5)
Inventories (25.4) (56.7)
Accounts payable (0.7) (88.0)
Income taxes payable 15.3 (107.7)
Other assets and liabilities, net (2.5) 27.1
Total adjustments (48.6) (243.2)
Net cash provided by (used in) operating
activities of continuing operations 7.9 (111.5)
Net cash provided by operating
activities of discontinued operations - 38.9
Net cash provided by (used in)
operating activities 7.9 (72.6)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of Barneys, net
of cash sold and selling costs - 858.7
Capital expenditures (56.8) (79.0)
Investment in GRI Group Limited (20.2) -
Other 7.1 2.8
Net cash (used in) provided by investing
activities of continuing operations (69.9) 782.5
Net cash used in investing
activities of discontinued operations - (40.5)
Net cash (used in) provided by
investing activities (69.9) 742.0
CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments under credit facilities - (100.0)
Proceeds from exercise of employee
stock options 0.1 11.1
Purchases of treasury stock 1.0 (496.9)
Dividends paid (35.8) (45.3)
Other (3.8) (22.3)
Net cash used in financing activities
of continuing operations (38.5) (653.4)
Net cash provided by financing
activities of discontinued operations - 18.0
Net cash used in financing activities (38.5) (635.4)
EFFECT OF EXCHANGE RATES ON CASH (2.0) 3.5
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (102.5) 37.5
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 $200.3 $109.0
SOURCE Jones Apparel Group, Inc.
CONTACT: Investor Contact: John T. McClain,
Chief Financial Officer of
Jones Apparel Group, +1-212-642-3860;
or Media Contacts: Joele Frank and
Sharon Stern of Joele Frank,
Wilkinson Brimmer Katcher, +1-212-355-4449/
|
The Jones Group Inc.
