The Jones Group Inc. (ticker: JNY, exchange: New York Stock Exchange (.N))
News Release -
6-Feb-2002
Jones Apparel Group, Inc. Reports Revenues and Earnings for the Fourth Quarter And Full Year 2001 and Announces the Appointment of Rhonda Brown To the Executive Management Committee NEW YORK, Feb. 6 /PRNewswire-FirstCall/ -- Jones Apparel Group, Inc.
(NYSE: JNY) today announced earnings per share of $.25 for its fourth quarter
ended December 31, 2001, as compared to $.52 for the fourth quarter of 2000.
Revenues for the quarter were $887 million, as compared to $962 million for
the fourth quarter of 2000. Revenues approximated $4.1 billion in both fiscal 2001 and 2000. Earnings
per share for the full year 2001 totaled $2.31, as compared to $2.49 for the
full year 2000 (excluding purchase accounting adjustments of $.08 and $.01,
respectively, to write up inventories of acquirees to fair market value, and
$.41 for a non-recurring charge taken in the third quarter of 2001 to reflect
the write-down of goods to net realizable value and incremental customer
allowance provisions by the Company resulting from the economic climate in the
aftermath of the events of September 11, 2001). Sidney Kimmel, Chairman, commented, "As anticipated, the retail
environment was very challenging during the fourth quarter of 2001, with an
unprecedented level of promotional activity. We believed that this was
inevitable, given the economic climate following the terrorist events of
September 11, 2001. Accordingly, we supported our wholesale customers
initiatives to clear our products through the retail channel as quickly and
efficiently as possible. As a result, we believe that retail stocks of our
merchandise are in balance with retailer stock plans and that we are
transitioning well to current season product." Mr. Kimmel continued, "We remain in excellent financial health.
Inventories totaled $573 million at year-end 2001, or $510 million, excluding
McNaughton Apparel Group and the special reserve noted above, which were not
reflected in year-end 2000 balances. This compares to a year-end 2000
inventory balance of $557 million, representing an 8.4% reduction. Strong
cash flow during the fourth quarter enabled us to repay all short-term
borrowings, which totaled $478 million at the end of the third quarter.
Funded debt, net of $77 million in cash and short-term investments, totaled
$908 million at year-end, representing 32.3% of book capitalization. Net cash
provided by operating activities for the year 2001 totaled $562 million." Mr. Kimmel concluded, "We remain cautious in our planning process for
2002. We believe that the retail landscape will continue to remain
challenging given the many uncertain economic indicators. However, we believe
that we are positioned operationally and financially, to capitalize on any
sign of a turnaround. Accordingly, we are maintaining our previous guidance
of $2.50 for 2002 earnings per share. Earnings per share for 2001, adjusted
for comparability for the adoption of SFAS No. 142 (Accounting for Goodwill
and Certain Other Intangibles) effective January 1, 2002, were $2.71 per share
(excluding the purchase accounting adjustment and the non-recurring charge
discussed above). We estimate that revenues for 2002 will remain even with
2001 at approximately $4.1 billion." Mr. Kimmel added, "I am also pleased to announce the appointment of Rhonda
Brown to the Executive Management Committee. Ms. Brown is President and Chief
Executive Officer, Footwear, Accessories and Retail Group, and President and
Chief Executive Officer of Nine West Group Inc."
Jones Apparel Group, Inc. (www.jny.com) is a leading designer and marketer
of branded apparel, footwear and accessories. The Company's nationally
recognized brands include: Jones New York; Lauren by Ralph Lauren, Ralph by
Ralph Lauren, and Polo Jeans Company, which are licensed from Polo Ralph
Lauren Corporation; Evan-Picone, Rena Rowan, Norton McNaughton, Erika,
Energie, Currants, Jamie Scott, Todd Oldham, Nine West, Easy Spirit, Enzo
Angiolini, Bandolino, Napier and Judith Jack. The Company also markets costume
jewelry under the Tommy Hilfiger brand licensed from Tommy Hilfiger
Corporation and the Givenchy brand licensed from Givenchy Corporation.
Celebrating more than 30 years of service, the Company has built a reputation
for excellence in product quality and value, and in operational execution.
Certain statements herein are "forward-looking statements" made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements represent the Company's expectations
or beliefs concerning future events that involve risks and uncertainties,
including the strength of the economy and the overall level of consumer
spending, the performance of the Company's products within the prevailing
retail environment, and other factors which are set forth in the Company's
2000 Form 10-K and in all filings with the SEC made by the Company subsequent
to the filing of the Form 10-K. 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.
CONDENSED OPERATING RESULTS
all amounts in millions except per share data
Fiscal Quarter Ended Year Ended
-------------------------- --------------------------
December 31, December 31, December 31, December 31,
2001 2000 2001 2000
-------------------------- --------------------------
Total revenues $887 $962 $4,073 $4,143
Operating income 71 130 480 605
Net interest expense 16 24 80 102
-------- -------- -------- --------
Income before taxes 55 106 400 503
Provision for income
taxes 24 43 164 201
-------- -------- -------- --------
Net income $31 $63 $236 $302
======== ======== ======== ========
Diluted earnings
per share $0.25 $0.52 $1.82 $2.48
Non-recurring Charge* - - $0.41 -
Purchase Accounting
Adjustment** - - $0.08 $0.01
Proforma earnings
per share $0.25 $0.52 $2.31 $2.49
Diluted shares
outstanding 136 123 134 122
* Reflects the write-down to net realizable value of goods that the
Company owns or is committed for and will need to dispose of through off-price
channels and an incremental provision for markdowns. ** Reflects an increase in cost of goods sold attributable to the fair
value of inventory over cost, recorded as a result of the acquisitions of
Judith Jack and McNaughton in 2001 and Victoria in 2000.
JONES APPAREL GROUP, INC.
CONSOLIDATED PRO FORMA OPERATING RESULTS
(UNAUDITED)
all amounts in millions except per share data
Fiscal Quarter Ended Year Ended
-------------------------- --------------------------
December 31, December 31, December 31, December 31,
2001 2000 2001 2000
-------------------------- --------------------------
Total revenues $887 $962 $4,097 $4,143
Cost of goods sold 565 560 2,491 2,433
-------- -------- -------- --------
Gross profit 322 402 1,606 1,710
SG&A expenses 239 261 978 1,065
Amortization of
goodwill 12 10 44 37
-------- -------- -------- --------
Operating income 71 131 584 608
Net interest expense 16 24 80 102
-------- -------- -------- --------
Income before taxes 55 107 504 506
Provision for income
taxes 24 43 203 202
-------- -------- -------- --------
Net income $31 $64 $301 $304
======== ======== ======== ========
Proforma diluted
earnings per share
adjusted for
non-recurring
charges $0.25 $0.52 $2.31 $2.49
Diluted shares
outstanding 136 123 134 122
Note: Proforma adjusted for non-recurring charge and purchase accounting
adjustments
JONES APPAREL GROUP, INC.
PRO FORMA SEGMENT INFORMATION
(UNAUDITED)
all amounts in millions
Wholesale Other &
Wholesale Footwear & Elimi- Consol-
Apparel Accessories Retail nations idated
-----------------------------------------------------
For the fiscal quarter
ended December 31, 2001
Revenues from
external customers $485 $199 $197 $6 $887
Intersegment
revenues 15 19 - (34) -
-----------------------------------------------------
Total revenues 500 218 197 (28) 887
-----------------------------------------------------
Segment Income $42 $26 $27 ($12) 83
============================================
8.4% 11.9% 13.7% 9.4%
Amortization of
goodwill 12
Net interest expense 16
--------
Income before
provision for
income taxes $55
========
For the fiscal quarter
ended December 31, 2000
Revenues from
external customers $467 $230 $259 $6 $962
Intersegment
revenues 15 22 - (37) -
-----------------------------------------------------
Total revenues 482 252 259 (31) 962
-----------------------------------------------------
Segment Income $50 $62 $26 $3 141
============================================
10.4% 24.6% 10.0% 14.7%
Amortization of
goodwill 10
Net interest expense 24
--------
Income before provision
for income taxes $107
========
For the year ended
December 31, 2001
Revenues from
external
customers $2,382 $979 $712 $24 $4,097
Intersegment
revenues 85 77 - (162) -
-----------------------------------------------------
Total revenues 2,467 1,056 712 (138) 4,097
-----------------------------------------------------
Segment Income $411 $196 $66 ($45) 628
============================================
16.7% 18.6% 9.3% 15.3%
Amortization of
goodwill 44
Net interest expense 80
--------
Income before provision
for income taxes $504
========
For the year ended
December 31, 2000
Revenues from
external
customers $2,168 $940 $1,013 $22 $4,143
Intersegment
revenues 88 109 - (197) -
-----------------------------------------------------
Total revenues 2,256 1,049 1,013 (175) 4,143
-----------------------------------------------------
Segment Income $352 $229 $91 ($27) 645
============================================
15.6% 21.8% 9.0% 15.6%
Amortization of
goodwill 37
Net interest expense 102
--------
Income before provision
for income taxes $506
========
NOTE: Proforma adjusted for non-recurring charge and purchase accounting
adjustments.
JONES APPAREL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
all amounts in millions
December 31, December 31,
2001 2000
------------- -------------
ASSETS
CURRENT:
Cash and cash equivalents $77 $61
Accounts receivable, net of
allowance of $12 and $12 for
doubtful accounts 396 398
Inventories 573 557
Other current assets 95 166
--------- ---------
TOTAL CURRENT ASSETS 1,141 1,182
Property, plant and equipment, at
cost, less accumulated depreciation
and amortization 243 222
Goodwill, less accumulated
amortization 1,368 1,087
Other intangibles, less accumulated
amortization 533 372
Other assets 89 116
--------- ---------
$3,374 $2,979
========= =========
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT:
Short-term borrowings and current
portion of long-term debt and capital
lease obligations $8 $500
Accounts payable 192 211
Accrued expenses and other current
liabilities 178 176
--------- ---------
TOTAL CURRENT LIABILITIES 378 887
--------- ---------
NONCURRENT LIABILITIES:
Long-term debt and obligation
under capital leases 977 576
Other 113 39
--------- ---------
TOTAL NONCURRENT LIABILITIES 1,090 615
--------- ---------
TOTAL LIABILITIES 1,468 1,502
STOCKHOLDERS' EQUITY 1,906 1,477
--------- ---------
$3,374 $2,979
========= =========
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SOURCE Jones Apparel Group, Inc.
Web site: http: //www.jny.com
CONTACT: Wesley R. Card, Chief Financial and Operations Officer, or Anita Britt, Senior Vice President, Finance and Investor Relations, both of Jones Apparel Group, +1-215-785-4000 |
The Jones Group Inc.
