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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended October 31, 2002
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-18183
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G-III APPAREL GROUP, LTD.
(Exact name of registrant as specified in its charter)
Delaware 41-1590959
- ---------------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
512 Seventh Avenue, New York, New York 10018
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(Address of Principal Executive Office) (Zip Code)
(212) 403-0500
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes No X
------ -----
The number of outstanding shares of the registrant's Common Stock as of December
2, 2002 was 6,849,752.
Part I FINANCIAL INFORMATION Page No.
Item 1. Financial Statements *
Condensed Consolidated Balance Sheets -
October 31, 2002 and January 31, 2002...................3
Condensed Consolidated Statements of Operations -
For the Three Months Ended
October 31, 2002 and 2001...............................4
Condensed Consolidated Statements of Operations -
For the Nine Months Ended
October 31, 2002 and 2001...............................5
Condensed Consolidated Statements of Cash Flows -
For the Nine Months Ended
October 31, 2002 and 2001...............................6
Notes to Condensed Consolidated Financial Statements............7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.............10
Item 3. Quantitative and Qualitative Disclosures About Market Risk..13
Item 4. Controls and Procedures.....................................13
* The Balance Sheet at January 31, 2002 has been taken from the audited
financial statements at that date. All other financial statements are
unaudited.
Part II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K................................ 13
Exhibits
99.1 Certification pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
-2-
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
OCTOBER 31, JANUARY 31,
2002 2002
---- ----
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 977 $ 2,481
Accounts receivable, net of allowance for doubtful accounts
and sales discounts totaling $8,607 and $6,169, respectively 69,953 9,922
Inventories 47,233 37,172
Deferred income taxes 5,286 5,286
Prepaid expenses and other current assets 3,842 3,749
--------- ----------
Total current assets 127,291 58,610
PROPERTY, PLANT AND EQUIPMENT, NET 2,536 3,021
DEFERRED INCOME TAXES 1,932 1,954
OTHER ASSETS 4,007 4,116
--------- ----------
$135,766 $ 67,701
======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 49,729 $ 800
Current maturities of obligations under capital leases 113 106
Income taxes payable 3,193 1,118
Accounts payable 16,172 5,079
Accrued expenses 6,102 5,262
Accrued nonrecurring charges 55 105
--------- ----------
Total current liabilities 75,364 12,470
OTHER LONG-TERM LIABILITIES 354 418
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, 1,000,000 shares authorized;
no shares issued and outstanding in all periods
Common stock - $.01 par value; authorized,
shares; 7,094,569 and 6,944,071 shares issued
at October 31, 2002 and January 31, 2002, respectively 71 69
Additional paid-in capital 25,912 25,581
Foreign currency translation adjustments 94 94
Retained earnings 34,941 30,039
-------- ----------
61,018 55,783
Less common stock held in treasury - 244,817 shares,
at cost, at October 31, 2002 and January 31, 2002 (970) (970)
--------- ----------
60,048 54,813
--------- ----------
$ 135,766 $ 67,701
========= ==========
The accompanying notes are an integral part of these statements.
-3-
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
(in thousands, except share and per share amounts)
THREE MONTHS ENDED OCTOBER 31,
----------------------------------
(Unaudited)
2002 2001
---- ----
Net sales $ 102,284 $ 90,623
Cost of goods sold 74,324 69,905
---------- ----------
Gross profit 27,960 20,718
Selling, general and administrative expenses 13,181 10,930
---------- ----------
Operating income 14,779 9,788
Interest and financing charges, net 853 1,399
---------- ----------
Income before income taxes 13,926 8,389
Income tax expense 5,431 3,356
---------- ----------
Net income $ 8,495 $ 5,033
========== ==========
INCOME PER COMMON SHARE:
Basic:
-----
Net income per common share $ 1.25 $ 0.75
========== ==========
Weighted average number of shares outstanding 6,778,757 6,689,787
========== ==========
Diluted:
-------
Net income per common share $ 1.16 $ 0.68
========== ==========
Weighted average number of shares outstanding 7,292,321 7,380,068
========== ==========
The accompanying notes are an integral part of these statements.
-4-
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
(in thousands, except share and per share amounts)
NINE MONTHS ENDED OCTOBER 31,
-----------------------------------
(Unaudited)
2002 2001
----- ----
Net sales $ 154,997 $ 170,703
Cost of goods sold 115,321 130,420
--------- ---------
Gross profit 39,676 40,283
Selling, general and administrative expenses 30,148 27,422
--------- ---------
Operating income 9,528 12,861
Interest and financing charges, net 1,374 2,817
--------- ---------
Income before income taxes 8,154 10,044
Income tax expense 3,252 4,018
--------- ---------
Net income $ 4,902 $ 6,026
========= =========
INCOME PER COMMON SHARE:
Basic:
-----
Net income per common share $ 0.73 $ 0.90
========= =========
Weighted average number of shares outstanding 6,732,107 6,671,444
========= =========
Diluted:
-------
Net income per common share $ 0.67 $ 0.82
========= =========
Weighted average number of shares outstanding 7,350,505 7,393,126
========= =========
The accompanying notes are an integral part of these statements.
-5-
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
NINE MONTHS ENDED OCTOBER 31,
----------------------------------
(Unaudited)
-----------
2002 2001
---- ----
Cash flows from operating activities
Net income $ 4,902 $ 6,026
Adjustments to reconcile net income to
net cash used in operating activities
Depreciation and amortization 1,109 897
Deferred income tax 22 -
Changes in operating assets and liabilities:
Accounts receivable (60,031) (43,913)
Inventories (10,061) (10,522)
Income taxes, net 2,075 690
Prepaid expenses and other current assets (93) (1,410)
Other assets (178) (142)
Accounts payable and accrued expenses 11,933 1,776
Accrued nonrecurring charge (77) (71)
Other long term liabilities 49 50
-------- ---------
Net cash used in operating activities
(50,350) (46,619)
-------- ---------
Cash flows from investing activities
Capital expenditures (356) (1,021)
Capital dispositions - 24
Purchase of certain assets of Gloria Gay Coats, LLC 19 (205)
-------- ---------
Net cash used in investing activities
(337) (1,202)
-------- ---------
Cash flows from financing activities
Increase in notes payable, net 48,929 39,900
Proceeds from capital lease obligations - 381
Payments for capital lease obligations (79) (127)
Proceeds from exercise of stock options 333 128
-------- ---------
Net cash provided by financing activities
49,183 40,282
-------- ---------
Effect of exchange rate changes on cash and cash equivalents - 2
-------- ---------
Net decrease in cash and cash equivalents (1,504) (7,537)
Cash and cash equivalents at beginning of period 2,481 9,231
-------- ---------
Cash and cash equivalents at end of period $ 977 $ 1,694
======== =========
Supplemental disclosures of cash flow information:
Cash paid during the period for
Interest $ 1,069 $ 2,428
Income taxes $ 1,160 $ 3,269
The accompanying notes are an integral part of these statements.
-6-
G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - General Discussion
- ---------------------------
The results for the nine month period ended October 31, 2002 are not necessarily
indicative of the results expected for the entire fiscal year, given the
seasonal nature of the Company's business. The accompanying financial statements
included herein are unaudited. In the opinion of management, all adjustments
(consisting of only normal recurring adjustments) necessary for a fair
presentation of the financial position, results of operations and cash flows for
the interim periods presented have been reflected.
The Company consolidates the accounts of all its majority-owned subsidiaries.
All material intercompany balances and transactions have been eliminated.
The accompanying financial statements should be read in conjunction with the
financial statements and notes included in the Company's Annual Report on Form
10K filed with the Securities and Exchange Commission for the year ended January
31, 2002.
Certain reclassifications have been made to conform to the fiscal 2002
presentation.
Note 2 - Inventories
- --------------------
Inventories consist of:
OCTOBER 31, January 31,
2002 2002
---- ----
(in thousands)
Finished products $ 37,353 $ 18,240
Work-in-process 2,471 576
Raw materials 7,409 18,356
-------- --------
$ 47,233 $ 37,172
======== ========
Note 3 - Net Income per Common Share
- ------------------------------------
Basic net income per share amounts have been computed using the weighted average
number of common shares outstanding during each period. Diluted income per share
amounts have been computed using the weighted average number of common shares
and the dilutive potential common shares outstanding during the period.
-7-
Note 4 - Notes Payable
- ----------------------
The Company's domestic loan agreement, which expires on May 31, 2005, is a
collateralized working capital line of credit with six banks that provides for a
maximum line of credit in amounts that range from $45 million to $85 million at
specific times during the year. The line of credit provides for maximum direct
borrowings ranging from $30 million to $72 million during the year. The unused
balance may be used for letters of credit. Amounts available for borrowing are
subject to borrowing base formulas and overadvances specified in the agreement.
The loan agreement contains financial covenants relating to earnings before
interest, taxes, depreciation and amortization ("EBITDA") and tangible net
worth. The Company was in compliance with these covenants for the nine months
ended October 31, 2002. There was $48.9 million outstanding at October 31, 2002
and no loan balance outstanding at January 31, 2002 under this agreement.
Notes payable include foreign notes payable by PT Balihides, the Company's
Indonesian subsidiary. The foreign notes payable of approximately $800,000 at
October 31, 2002 and January 31, 2002 represent maximum borrowings under a line
of credit with an Indonesian bank. The loan is secured by the property, plant,
and equipment of the Indonesian subsidiary (See Note 7).
Note 5 - Accrued Nonrecurring Charges
- -------------------------------------
The accrued nonrecurring charge refers to the reserve associated with the
closure of the Company's domestic factory that was completed by January 31,
1995. The balances of $55,000 at October 31, 2002 and $132,000 at January 31,
2002 relate to the remaining obligation under an operating lease. At October 31,
2002, the entire nonrecurring charge is a current liability. Other long-term
liabilities include $27,000 of nonrecurring charges at January 31, 2002.
-8-
Note 6 - Segments
- -----------------
The Company's reportable segments are business units that offer different
products and are managed separately. The Company operates in two segments,
licensed and non-licensed apparel. The following information is presented for
the three and nine month periods indicated below:
THREE MONTHS ENDED OCTOBER 31,
------------------------------
2002 2001
---- ----
NON- Non-
LICENSED LICENSED Licensed Licensed
-------- -------- -------- --------
Net sales $ 51,681 $ 50,603 $ 39,897 $ 50,726
Cost of goods sold 37,041 37,283 29,782 40,123
--------- --------- --------- ----------
Gross profit 14,640 13,320 10,115 10,603
Selling, general and administrative 7,992 5,189 5,838 5,092
--------- --------- --------- ----------
Operating income 6,648 8,131 4,277 5,511
Interest expense, net 386 467 590 809
--------- --------- --------- ----------
Income before income taxes $ 6,262 $ 7,664 $ 3,687 $ 4,702
========= ========= ========= ==========
NINE MONTHS ENDED OCTOBER 31,
-----------------------------
2002 2001
---- ----
NON- Non-
LICENSED LICENSED Licensed Licensed
-------- -------- -------- ---------
Net sales $ 77,449 $ 77,548 $ 69,596 $ 101,107
Cost of goods sold 56,468 58,853 51,800 78,620
-------- -------- -------- ---------
Gross profit 20,981 18,695 17,796 22,487
Selling, general and administrative 17,851 12,297 14,753 12,669
-------- -------- -------- ---------
Operating income 3,130 6,398 3,043 9,818
Interest expense, net 545 829 1,237 1,580
-------- -------- -------- ---------
Income before income taxes $ 2,585 $ 5,569 $ 1,806 $ 8,238
======== ======== ======== =========
Note 7 - Subsequent Events
- --------------------------
On December 10, 2002, the Company's management and Board of Directors approved a
plan to close its manufacturing facility in Indonesia due to rapidly rising
costs and losses associated with this facility, as well as the political and
economic instability in Indonesia. The Company currently estimates that the
results for the fourth quarter and fiscal year ending January 31, 2003 will
include a pre-tax charge in the range of $3.0 to $5.0 million in connection with
closing this facility.
-9-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
- --------------------------------------------------------------------------------
Unless the context otherwise requires, "G-III", "us", "we" and "our" refer to
G-III Apparel Group, Ltd. and its subsidiaries. References to fiscal years refer
to the year ended or ending on January 31 of that year.
Statements in this Quarterly Report on Form 10-Q concerning our business outlook
or future economic performance; anticipated revenues, expenses or other
financial items; product introductions and plans and objectives related thereto;
and statements concerning assumptions made or expectations as to any future
events, conditions, performance or other matters, are "forward-looking
statements" as that term is defined under the Federal securities laws.
Forward-looking statements are subject to risks, uncertainties and other factors
which could cause actual results to differ materially from those stated in such
statements. Such risks, uncertainties and factors include, but are not limited
to, reliance on foreign manufacturers, risks of doing business abroad, the
nature of the apparel industry, including changing consumer demand and tastes,
seasonality, customer acceptance of new products, the impact of competitive
products and pricing, dependence on existing management, general economic
conditions, as well as other risks detailed in the Company's filings with the
Securities and Exchange Commission, including this Quarterly Report on Form
10-Q.
CLOSING OF INDONESIAN FACILITY
In December, 2002, G-III decided to close our manufacturing facility in
Indonesia due to rapidly rising costs and losses associated with this facility,
as well as the political and economic instability in Indonesia. We currently
estimate that our results for the fourth quarter and fiscal year ending January
31, 2003 will reflect a pre-tax charge in the range of $3.0 to $5.0 million in
connection with closing this facility. We believe that closing this facility
will not affect our ability to produce product and will enable us to become more
efficient in meeting our sourcing needs.
RESULTS OF OPERATIONS
Net sales for the three months ended October 31, 2002 were $102.3 million
compared to $90.6 million for the same period last year. The increase in net
sales during the quarter was attributable to an $11.8 million increase in sales
of licensed apparel. Sales of non-licensed apparel decreased by $123,000. The
continuing trend of customers requiring delivery of goods closer to selling
floor needs had a favorable impact on our net sales for the three month period
ended October 31, 2002. Net sales for the nine months ended October 31, 2002
were $155.0 million compared to $170.7 million for the same period in the prior
year. The decrease in net sales in the nine month period was attributable to a
$23.6 million decrease in sales of non-licensed apparel, partially offset by a
$7.9 million increase in sales of licensed apparel. Net sales of non-licensed
apparel decreased primarily due to selling a higher proportion of non-leather
product in this segment. Non-leather apparel has a lower price per garment than
leather apparel. In addition, our net sales last year were positively impacted
by the higher allowances and discounts that we granted to customers as a result
of the economic climate in the post-September 11 time period.
Gross profit was $28.0 million, or 27.3% of net sales, for the three months
ended October 31, 2002, compared to $20.7 million, or 22.9% of net sales, for
the same period last year. Gross profit percentage for the three month period
ended October 31, 2002 increased in both the
-10-
licensed and non-licensed apparel segments. Commission fee income, which is
primarily generated in the non-licensed apparel segment, increased to $2.4
million during the three months ended October 31, 2002 from $1.7 million in the
comparable period of the prior year. There is no cost of goods sold component
associated with commission transactions. The gross profit percentages in both
the licensed and non-licensed apparel segments were also favorably impacted by
better inventory management and shipments of a higher proportion of goods at
regular prices, resulting in lower reserve requirements. The gross margin
percentage last year had been negatively impacted by the higher allowances and
discounts we granted.
Gross profit was $39.7 million, or 25.6% of net sales, for the nine months ended
October 31, 2002, compared to $40.3 million, or 23.6% of net sales, for the same
period last year. An increase of $3.2 million in the gross profit of the
licensed segment was more than offset by a decrease of $3.8 million in the gross
profit of the non-licensed segment. Gross profit percentage increased in both
segments and was favorably impacted by better inventory management and shipments
of a higher proportion of goods at regular prices, resulting in lower reserve
requirements.
Selling, general and administrative expenses for the three months ended October
31, 2002 were $13.2 million compared to $10.9 million in the three months ended
October 31, 2001. Selling, general and administrative expenses for the nine
months ended October 31, 2002 were $30.1 million compared to $27.4 million for
the same period last year. The increases in both the three and nine month
periods are the result of increased expenses in the licensed apparel segment
($2.2 million in the three month period and $3.1 million in the nine month
period) relating primarily to the expansion of our Sports Licensing business and
our new Timberland and Sean John lines, offset by a reduction of $125,000 in
expenses in connection with discontinued licenses. Advertising expenses for both
segments increased by an aggregate of $600,000 in both the three and nine month
periods ended October 31, 2002 primarily due to increased cooperative
advertising with our customers. Third party shipping costs for both segments
increased by an aggregate of $800,000 in the three month period and $1.0 million
in the nine month period ended October 31, 2002 due to selling more units
compared to last year. Overall, sales in the current year were at a lower
average price point primarily due to selling a larger proportion of woven than
leather goods.
Interest expense and finance charges for the three months ended October 31, 2002
were $853,000 compared to $1.4 million in the same period last year. Interest
expense and finance charges for the nine month period ended October 31, 2002
were $1.4 million compared to $2.8 million in the same period last year. The
decrease in interest expense in both the three and nine month periods is
primarily attributable to reduced financing needs resulting from lower average
inventories maintained during the current year, coupled with lower interest
rates.
Income tax expense was $5.4 million for the three months ended October 31, 2002
compared to $3.4 million in the same period in the prior year. Income tax
expense was $3.3 million for the nine months ended October 31, 2002 compared to
$4.0 million in the same period last year. Our effective tax rate was 39% in the
three month period ended October 31, 2002 compared to a 40% effective tax rate
in the same period of the prior year, and was 40% in each of the nine month
periods.
As a result of the foregoing, for the three months ended October 31, 2002, we
had net income of $8.5 million, or $1.16 per diluted share, compared to $5.0
million, or $0.68 per diluted share, for the same period in the prior year. For
the nine months ended October 31, 2002, we had net income of $4.9 million, or
$0.67 per diluted share, compared to net income of $6.0 million, or $0.82 per
diluted share, for the same period in the prior year.
-11-
LIQUIDITY AND CAPITAL RESOURCES
Our loan agreement, which expires on May 31, 2005, is a collateralized working
capital line of credit with six banks that provides for a maximum line of credit
in amounts that range from $45 million to $85 million at specific times during
the year. The line of credit provides for maximum direct borrowings ranging from
$30 million to $72 million during the year. The unused balance may be used for
letters of credit. Amounts available for borrowing are subject to borrowing base
formulas and overadvances specified in the agreement. The loan agreement also
includes a requirement that we have no loans and acceptances outstanding for 45
consecutive days during each year of the agreement.
Direct borrowings under the line of credit bear interest at our option at either
the prevailing prime rate (4.25% as of December 2, 2002) or LIBOR plus 225 basis
points (3.63% at December 2, 2002). Our assets collateralize all borrowings. The
loan agreement requires us, among other covenants, to maintain specified
earnings and tangible net worth levels, and prohibits the payment of cash
dividends. The charge we will take in the quarter ending January 31, 2003
relating to closing our Indonesian manufacturing facility could result in our
not being in compliance with covenants contained in our loan agreement. We
believe we will be able to secure a waiver from our lenders with respect to any
covenant violations that may arise as a result of taking this charge.
The amount borrowed under the line of credit varies based on our seasonal
requirements. As of October 31, 2002, direct borrowings were $48.9 million and
contingent liability under open letters of credit was approximately $8.5 million
compared to direct borrowings of $40.6 million and contingent liability under
open letters of credit of approximately $4.5 million as of October 31, 2001. The
increase in borrowings under our credit facility as of the end of the third
quarter compared to last year resulted primarily from higher accounts receivable
caused by customers requiring that goods be shipped later in the third fiscal
quarter.
PT Balihides, our Indonesian subsidiary, has a separate credit facility with an
Indonesian bank. There were notes payable outstanding under this facility of
approximately $800,000 as of October 31, 2002 and October 31, 2001. The loan is
secured by the property, plant, and equipment of the Indonesian subsidiary.
EFFECT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No.
13, and Technical Corrections
In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections."
This statement rescinds SFAS No. 4, "Reporting Gains and Losses from
Extinguishment of Debt", and an amendment of that statement, SFAS No. 64,
"Extinguishment of Debt Made to Satisfy Sinking-Fund Requirements." SFAS No. 145
also rescinds SFAS No. 44, "Accounting for Intangible Assets of Motor Carriers."
SFAS No. 145 also amends SFAS No. 13, "Accounting for Leases", to eliminate an
inconsistency between the required accounting for sales-leaseback transactions
and the required accounting for certain lease modifications that have economic
effects that are similar to sale-leaseback transactions. SFAS No. 145 also
amends other existing authoritative pronouncements to make various technical
corrections, clarify meanings or describe their applicability under changed
conditions. We adopted the provisions of SFAS No. 145 upon its effective date.
This adoption did not have a material impact on our results of operations and
financial position.
-12-
Accounting for Costs Associated with Exit or Disposal Activities
In October 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," which changes the accounting for costs such
as lease termination costs and certain employee severance costs that are
associated with a restructuring, discontinued operation, plant closing, or other
exit or disposal activity initiated after December 31, 2002. The standard
requires companies to recognize the fair value of costs associated with exit or
disposal activities when they are incurred rather than at the date of a
commitment to an exit or disposal plan. We do not expect the adoption of this
standard to have a material effect on our results of operations and financial
position.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has no material changes to the disclosure made with respect to these
matters in the Company's Annual Report on Form 10-K for the year ended January
31, 2002.
ITEM 4. CONTROLS AND PROCEDURES
Within 90 days prior to the date of this report, the Company's management,
including the Chief Executive Officer and Chief Financial Officer, carried out
an evaluation of the effectiveness of the design and operation of the Company's
disclosure controls and procedures. Based on that evaluation, the Company's
Chief Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective in alerting them to material
information, on a timely basis, required to be included in the Company's
periodic SEC filings. There have been no significant changes in the Company's
internal controls or in other factors that could significantly affect internal
controls subsequent to the date the Company's management carried out its
evaluation.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS
99.1 Certification pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
-13-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
G-III APPAREL GROUP, LTD.
(Registrant)
Date: December 16, 2002 By: /s/ Morris Goldfarb
-------------------------
Morris Goldfarb
Chief Executive Officer
Date: December 16, 2002 By: /s/ Wayne Miller
-------------------------
Wayne S. Miller
Chief Financial Officer
CERTIFICATIONS
I, Morris Goldfarb, certify that:
1. I have reviewed this quarterly report on Form 10-Q of G-III Apparel Group,
Ltd.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 16, 2002
/s/ Morris Goldfarb
----------------------------
Morris Goldfarb
Chief Executive Officer
I, Wayne S. Miller, certify that:
1. I have reviewed this quarterly report on Form 10-Q of G-III Apparel Group,
Ltd.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 16, 2002
/s/ Wayne Miller
---------------------------
Wayne S. Miller
Chief Financial Officer
EXHIBIT 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of G-III Apparel Group, Ltd.
(the "Company") on Form 10-Q for the quarterly period ended October 31, 2002, as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Morris Goldfarb, Chief Executive Officer of the Company, hereby
certify that, to my knowledge, (a) the Report fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934
and (b) the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ Morris Goldfarb
----------------------------
Morris Goldfarb
Chief Executive Officer
Dated: December 16, 2002
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of G-III Apparel Group, Ltd.
(the "Company") on Form 10-Q for the quarterly period ended October 31, 2002, as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, Wayne Miller, Chief Financial Officer of the Company, hereby
certify that, to my knowledge, (a) the Report fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934
and (b) the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ Wayne Miller
----------------------------
Wayne S. Miller
Chief Financial Officer
Dated: December 16, 2002