G-III Apparel Group, Ltd. Announces Record Third Quarter Fiscal 2000 Results
New York, December 2, 1999 G-III Apparel Group, Ltd.(Nasdaq: GIII) today announced operating results for the three andnine months ended October 31, 1999.
For the three-months ended October 31, 1999, net salesincreased 21.8% to $74.5 million compared to $61.2 millionduring the same period last year. Net income increased 56.3% toa record $6.9 million from $4.4 million reported last year.Diluted earnings per share increased 53% to a record $1.01 perdiluted share compared to $ 0.66 per diluted share reportedduring the same period last year.
On November 18, 1999, the Company announced it wouldbe dissolving its BET Design Studio joint venture with BlackEntertainment Television. During the three-month period endedOctober 31, 1999, the Company incurred approximately $1.3 millionof losses, net of minority interest, in connection with theCompany’s BET Design Studio compared to $419,000 of such netlosses during the same period last year. The current thirdquarter’s joint venture losses include a provision of $950,000,net of minority interest, which relates to the previouslyannounced closing. Excluding the BET Design Studio results, theCompany would have reported net income of $7.7 million for thethird quarter, a 64.6% increase over last year’s comparable netincome of $4.7 million. Diluted earnings per share for thequarter would have increased 62.3% to $1.12, compared to lastyear’s $0.69 per share.
For the nine-month period ended October 31, 1999, net salesincreased 14.1% to $116.3 million compared to $101.9 millionduring the same period last year. The Company’s net incomeincreased 166.7% to $5.1 million, compared to $1.9 millionreported during last year's nine-month period. Diluted earningsper share increased 177.8% to $0.75, compared to $0.27 reportedduring last year’s nine-month period.
During the nine-month period this year, the Company incurredapproximately $2.1 million of losses, net of minority interest,in connection with the Company’s BET Design Studio compared to$1.0 million of such net losses during the same period last year.The current nine-month period joint venture losses include aprovision of $950,000, net of minority interest, which relates tothe previously announced closing. Excluding the BET DesignStudio results, the Company would have reported net income of$6.4 million, a 152.8% increase over last year’s comparable$2.5 million. Diluted earnings per share for the nine-month period would have been $0.93, a 158.3% increase compared to last year’s $0.36.
Morris Goldfarb, Chief Executive Officer of G-III commented,"This is our third consecutive quarter of year to year increasesin operating results. Our record third quarter results areindicative of the strength of both our licensed and non-licensedbusinesses. We continued to experience improvements in bothaspects of our business, both from a revenue and profitabilitystandpoint."
Mr. Goldfarb concluded, "We are well-positioned tocomplete a profitable year and will strive to add new brandedbusinesses in fiscal 2001 that will complement our existingstrong portfolio and contribute to our profitability."
G-III Apparel Group is a leading manufacturer anddistributor of leather and non-leather outerwear apparel. TheCompany has fashion licenses with Kenneth Cole Productions, NineWest Group and Tommy Hilfiger, a distribution agreement forCaterpillar apparel, and licensing agreements with the NationalFootball League, National Hockey League, National BasketballAssociation, Major League Baseball and more than 20 universitiesnationwide.
Statements concerning the Company’s business outlook forfuture economic performance; anticipated revenues, expenses orother financial items; product introductions and plans andobjectives related thereto; and statements concerning assumptionsmade or expectations as to any future events, conditions,performance or other matters, are "forward-looking statements" asthat term is defined under the Federal Securities laws. Forward-looking statements are subject to risks, uncertainties and otherfactors which could cause actual results to differ materiallyfrom those stated in such statements. Such risks, uncertaintiesand factors include, but are not limited to, reliance on foreignmanufacturers, the nature of the apparel industry, includingchanging customer demand and tastes, seasonality, customeracceptance of new product, the impact of competitive products andpricing, dependence on existing management, general economicconditions, as well as other risks detailed in the Company’sfilings with the Securities and Exchange Commission.
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
(NASDAQ:GIII)
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
10/31/99 10/31/98 10/31/99 10/31/98
Net sales $ 74,544 $ 61,210 $116,260 $101,902
Cost of sales 54,009 45,952 85,407 77,543
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Gross profit 20,535 15,258 30,853 24,359
Selling, general and administrative
expenses 9,361 7,196 23,020 20,268
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Operating profit 11,174 8,062 7,833 4,091
Interest and financing charges, net 954 1,127 1,482 1,949
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Income before minority interest and
income taxes 10,220 6,935 6,351 2,142
Minority interest 1,303 419 2,116 1,012
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Income before income taxes 11,523 7,354 8,467 3,154
Income tax expense 4,606 2,928 3,384 1,248
--------- --------- --------- ---------
Net income $ 6,917 $ 4,426 $ 5,083 $ 1,906
========= ========= ========= =========
Basic net income per common share $ 1.03 $ .68 $ .76 $ .29
========= ========= ========= =========
Diluted net income per common share $ 1.01 $ .66 $ .75 $ .27
========= ========= ========= =========
Weighted average shares outstanding:
Basic 6,717,921 6,526,386 6,717,921 6,520,676
Diluted 6,867,529 6,751,744 6,806,789 6,989,565
CONTACT: Investor Relations
Cheryl Schneider
Press: David Nugent/Ellen Paz
(212) 850-5600
G-III Apparel Group, Ltd.
Wayne Miller, Chief Financial Officer
(212) 403-0507