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8-K - FORM 8-K - Kate Spade & Co | y89736e8vk.htm |
EXHBIT 99.1
Investor Relations Contact: |
Media Contact: | |
Robert J. Vill |
Jane Randel | |
Vice President Finance and Treasurer |
Senior Vice President, Corporate Communications | |
Liz Claiborne Inc. |
Liz Claiborne Inc. | |
201.295.7515 |
212.626.3408 |
LIZ CLAIBORNE INC. REPORTS 4th QUARTER AND FULL YEAR RESULTS
| Reports Q4 Results In-line with January 6th Pre-announcement | ||
| Provides Fiscal 2011 and 2012 Adjusted EBITDA Targets |
New York, NY February 17, 2011 Liz Claiborne Inc. (NYSE:LIZ) today announced earnings
for the fourth quarter of 2010. For the fourth quarter of 2010 on a GAAP basis, the loss per share
from continuing operations was ($0.24) compared to a loss per share from continuing operations of
($0.39) for the fourth quarter of 2009.
Adjusted loss per share from continuing operations for the fourth quarter was ($0.03), compared to
an adjusted loss per share from continuing operations of ($0.15) for the fourth quarter of 2009
(inclusive of income of $0.10 per share in the fourth quarter of 2010 and $0.03 in the fourth
quarter of 2009, primarily resulting from the impact of changes in foreign currency exchange rates
on our eurobond). Net sales for the fourth quarter were $704 million, a decrease of $53 million, or
7.0%, from the comparable 2009 period. Excluding the impact of a $61 million decrease in net sales
of the Liz Claiborne family of brands resulting from the transition to the licensing models under
the JCPenney and QVC arrangements, net sales increased $8 million, or 1.1%, primarily due to
increased sales in our Domestic-Based Direct Brands segment.
For the full year 2010, the Company recorded a loss from continuing operations of ($220) million,
or ($2.34) per share, compared to a loss from continuing operations for the full year 2009 of
($278) million, or ($2.96) per share. Adjusted loss per share from continuing operations in the
full year 2010 was ($0.78) compared to an adjusted loss per share from continuing operations of
($1.37) in the full year 2009 (inclusive of income (loss) of $0.17 per share in the full year 2010
and ($0.06) per share in the full year 2009, primarily resulting from the impact of changes in
foreign currency exchange rates on our eurobond). Net sales for the full year 2010 were
approximately $2.500 billion, a decrease of $416 million, or 14.3%, from the comparable 2009
period. Excluding the impact of a $228 million decrease in net sales of the Liz Claiborne family
of brands resulting from the transition to the licensing models under the JCPenney and QVC
arrangements, net sales decreased $188 million, or 6.5%.
William L. McComb, Chief Executive Officer of Liz Claiborne Inc., said: Our operating results in
the fourth quarter were consistent overall with the outlook we provided on our January 6th
pre-announcement. Net sales, gross margin, SG&A and operating loss for the fourth quarter were in
line or slightly better than the estimates provided. Despite the challenging results of the fourth
quarter, our balance sheet and cash flow positions remain quite strong at year-end. We ended the
year with total debt of $578 million, an $80 million decrease compared to year-end 2009. Cash flow
was strong in the fourth quarter, resulting in bank debt of $23 million at year-end, and
availability of $240 million under our bank credit facility.
1
Mr. McComb concluded, For fiscal 2011, we are targeting adjusted EBITDA in the range of $100
million to $120 million, compared to adjusted EBITDA of $50 million in 2010. This reflects the
current view of our businesses, as we continue to work through the turnarounds at Mexx Europe and
Lucky Brand, speed the roll out of Juicy Couture globally while re-energizing the domestic
business, and continue to drive profitable growth at kate spade and with our licensed Liz Claiborne
brand at JCPenney. Looking forward, we expect to see sequential improvement in most of our key
operating metrics through 2012. In light of where we finished 2010, our forecast for 2011 and our
view of current market conditions overall, we currently target adjusted EBITDA for 2012 in the
range of $180 million to $220 million. This range reflects the sensitivity in our overall corporate
performance to achieving profitability at Mexx Europe. Our management and board remain committed to
delivering meaningful value to our shareholders. While this target falls short of the goals we laid
out in our 2012 threshold framework, we remain focused on achieving the profits and cash flows
required to hit those threshold goals as quickly as possible. We recognize that we have a very
diverse and valuable portfolio of brands, and appreciate that there are many different ways to
create value for our shareholders over time. Today, our initiatives will be aimed at strengthening
these options and asset values over time by improving operations and consumer brand strength.
The adjusted results for the fourth quarter and full year 2010 and 2009, as well as forward-looking
targets, exclude the impact of expenses incurred in connection with the Companys streamlining
initiatives and brand-exiting activities, non-cash impairment charges and non-cash write-offs of
debt issuance costs. The Company believes that the adjusted results for such periods represent a
more meaningful presentation of its historical operations and financial performance since these
results provide period to period comparisons that are consistent and more easily understood. The
attached tables, captioned Reconciliation of Non-GAAP Financial Information, provide a full
reconciliation of actual results to the adjusted results. We present EBITDA, which we define as
income (loss) from continuing operations attributable to Liz Claiborne, Inc., adjusted to exclude
income tax provision (benefit), interest expense, net and depreciation and amortization. We also
present (i) Adjusted EBITDA, which is EBITDA adjusted to exclude the impact of expenses incurred in
connection with the Companys streamlining initiatives and brand-exiting activities, non-cash
impairment charges and non-cash share-based compensation expense, and (ii) Adjusted EBITDA
excluding foreign currency gains (losses), net, which is Adjusted EBITDA further adjusted to
exclude foreign currency gains (losses), net. We present the above-described EBITDA measures
because we consider them important supplemental measures of our performance and believe they are
frequently used by securities analysts, investors and other interested parties in the evaluation of
companies in our industry. Unless otherwise noted, references to loss from continuing
operations, net loss and adjusted loss from continuing operations and associated per share amounts
refer to such amounts attributable to Liz Claiborne Inc., which excludes amounts associated with
noncontrolling interests.
The Company will sponsor a conference call at 10:00 am EST today to discuss its results for the
fourth quarter of 2010. The dial-in number is 1-888-694-4676 with pass code 43034301. The web cast
and slides accompanying the prepared remarks can be accessed via the Investor Relations section of
the Liz Claiborne website at www.lizclaiborneinc.com. An archive of the webcast will be available
on the website. Additional information on the results of the Companys operations is available in
the Companys Form 10-K for the fiscal year 2010, filed with the Securities and Exchange
Commission.
2
FOURTH QUARTER RESULTS
Overall Results
Net sales from continuing operations for the fourth quarter of 2010 were $704 million, a decrease
of $53 million, or 7.0% from the fourth quarter of 2009, reflecting (i) a decline in sales of our
Partnered Brands segment, including a $61 million decrease in sales in our Liz Claiborne family of
brands as we transitioned to the licensing model under the JCPenney and QVC arrangements; (ii) a
sales decline in our International-Based Direct Brands segment; and (iii) the impact of changes in
foreign currency exchange rates in our international businesses which decreased net sales by $8
million, or 1.1%, partially offset by an increase in sales in our Domestic-Based Direct Brands
segment.
Gross profit as a percentage of net sales was 50.6% in the fourth quarter of 2010 compared to 48.0%
in the comparable 2009 period, principally reflecting increased gross profit rates in our
International-Based Direct Brands and Partnered Brands segments. Although gross profit as a
percentage of sales decreased in our Domestic-Based Direct Brands segment compared to last year,
total Company gross profit rate was also positively impacted by an increased proportion of sales
from our Domestic-Based Direct Brands segment, since it runs at a higher gross profit rate than the
Company average.
Selling, general & administrative expenses (SG&A) were $378 million, or 53.7% of net sales in the
fourth quarter of 2010, compared to $478 million, or 63.2% of net sales in the fourth quarter of
2009. The $100 million decrease in SG&A primarily reflected the following:
| a $69 million decrease in expenses associated with our streamlining initiatives and
brand-exiting activities; |
||
| a $35 million decrease in our Partnered Brands segment and corporate SG&A, inclusive of
a decrease associated with our Liz Claiborne family of brands as we transitioned to the
licensing model under the JCPenney and QVC arrangements; |
||
| a $7 million decrease due to the impact of changes in foreign currency exchange rates in
our international businesses; |
||
| a $6 million decrease in our International-Based Direct Brands segment; and | ||
| a $17 million increase in our
Domestic-Based Direct Brands segment. |
Impairment of Intangible Assets in the fourth quarter of 2009 included aggregate non-cash charges
of $14 million related to the licensed DKNY® Jeans and DKNY® Active trademark intangible asset and
merchandising rights of the Liz Claiborne brand.
Operating loss was ($22) million ((3.2)% of net sales) in the fourth quarter of 2010 compared to an
operating loss of ($130) million ((17.1%) of net sales) in the fourth quarter of 2009. Adjusted
operating loss in the fourth quarter of 2010 was ($5) million ((0.7)% of net sales) compared to an
adjusted operating loss of ($11) million ((1.4%) of net sales) in 2009. The impact of changes in
foreign currency exchange rates in our international businesses decreased fourth quarter operating
loss by $4 million.
Other income, net was $14 million in the fourth quarter of 2010, compared to $7 million in the
fourth quarter of 2009, primarily reflecting (i) the impact of the partial de-designation of the
hedge of our investment in certain euro functional currency subsidiaries, which resulted in the
recognition of non-cash foreign currency translation gains of $10 million and $3 million for the
fourth quarter
3
of 2010 and 2009, respectively, on our euro-denominated notes and (ii) foreign currency transaction
gains and losses in the fourth quarter of 2010 and 2009.
Interest expense, net decreased $5 million, or 28.5%, to $13 million in the fourth quarter of 2010
compared to $18 million in the fourth quarter of 2009, primarily reflecting decreased interest
expense due to reduced levels of outstanding borrowings under our revolving credit facility.
Provision (benefit) for income taxes was $2 million in the fourth quarter of 2010 compared to
$(103) million in the fourth quarter of 2009. The income tax benefit in the fourth quarter of 2009
principally related to the carry back of federal tax losses, partially offset by increases in
valuation allowances.
Loss from continuing operations in the fourth quarter of 2010 was ($22) million, or ($0.24) per
share, compared to a loss from continuing operations in the fourth quarter of 2009 of ($37)
million, or ($0.39) per share. Adjusted loss per share from continuing operations in the fourth
quarter of 2010 was ($0.03) compared to adjusted loss per share from continuing operations of
($0.15) in the fourth quarter of 2009.
Net loss in the fourth quarter of 2010 was ($30) million, inclusive of losses related to
discontinued operations of ($8) million, compared to a net loss of ($42) million, inclusive of
losses related to discontinued operations of ($5) million, in the fourth quarter of 2009. Loss per
share was ($0.32) in the fourth quarter of 2010 compared to a loss per share of ($0.45) in the
fourth quarter of 2009.
Balance Sheet and Cash Flow
Accounts receivable decreased $55 million, or 21.0%, in the fourth quarter of 2010, compared to the
fourth quarter of 2009, primarily due to decreased wholesale sales in all of our segments. The
impact of changes in foreign currency exchange rates decreased accounts receivable by $4 million.
Inventories decreased $30 million, or 9.5%, to $289 million, compared to the fourth quarter of
2009, primarily reflecting: (i) the year-over-year impact of decreased sales in our Partnered
Brands and International-Based Direct Brands segments; and (ii) the impact of brands that have been
licensed or exited; partially offset by an increase in Domestic-Based Direct Brands inventory to
support growth initiatives, including retail store expansion. The impact of changes in foreign
currency exchange rates decreased inventories by approximately $4 million, or 1.3% in the fourth
quarter of 2010, compared to the fourth quarter of 2009.
Cash flow from continuing operating activities for 2010 was $167 million, including the receipt of
$171 million in net income tax refunds and the refund of $24 million to Li & Fung, as a result of
reduced sourcing due to our licensing agreements with JCPenney and QVC for Liz Claiborne branded
products.
Debt outstanding decreased $80 million to $578 million compared to $658 million at year-end 2009,
inclusive of a $35 million decrease due to the impact of changes in foreign currency exchange rates
on our euro-denominated notes.
Segment Highlights
Domestic-Based Direct Brands segment consists of the specialty retail, outlet,
wholesale apparel, wholesale non-apparel (including accessories, jewelry, and handbags), e-commerce
and licensing
4
operations of our three domestic retail-based operating segments: Juicy Couture, kate spade and
Lucky Brand.
Net sales in our Domestic-Based Direct Brands segment in the fourth quarter were $365 million,
increasing $25 million, or 7.3%, reflecting the following:
Net sales for Juicy Couture were $190 million, a 15.9% increase compared to 2009, primarily driven
by increases in outlet and e-commerce. Store counts and key operating metrics are as follows:
| We ended the quarter with 74 specialty retail stores, 52 outlet stores and 5
concessions, reflecting the net addition over the last 12 months of 8 specialty retail
stores, 19 outlet stores and 5 concessions; |
||
| Average retail square footage in the fourth quarter was approximately 385 thousand
square feet, a 17.8% increase compared to 2009; |
||
| Sales per square foot for comparable
stores for the latest twelve months were $801; and |
||
| Comparable direct to consumer sales (inclusive of e-commerce) increased 0.5% in the
fourth quarter. Until September 2010, the Juicy Couture website was operated by a third
party, and our sales to that third party were reflected as wholesale sales. E-commerce
comparable sales calculations were based on the retail sales data provided by the third
party operator. |
Net sales for Lucky Brand were $111 million, a 15.8% decrease compared to 2009, primarily driven by
decreases in specialty retail, wholesale apparel and wholesale non-apparel. Store counts and key
operating metrics are as follows:
| We ended the quarter with 189 specialty retail stores and 38 outlet stores, reflecting
the net closure over the last 12 months of 5 specialty retail
stores and 8 outlet stores; |
||
| Average retail square footage in the fourth quarter was approximately 566 thousand
square feet, a 5.3% decrease compared to 2009; |
||
| Sales per square foot for comparable
stores for the latest twelve months were $372; and |
||
| Comparable direct to consumer sales (inclusive of e-commerce) decreased 9.5% in the
fourth quarter. |
Net sales for kate spade were $64 million, a 44.8% increase compared to 2009, primarily driven by
increases in wholesale non-apparel, e-commerce, outlet and specialty retail. Store counts and key
operating metrics are as follows:
| We ended the quarter with 44 specialty retail stores and 29 outlet stores, reflecting
the net addition over the last 12 months of 6 specialty retail
stores; |
||
| Average retail square footage in the fourth quarter was approximately 142 thousand
square feet, a 2.0% decrease compared to 2009; |
||
| Sales per square foot for comparable
stores for the latest twelve months were $663; and |
||
| Comparable direct to consumer sales (inclusive of e-commerce) increased 44.5% in the
fourth quarter. |
Domestic-Based Direct Brands segment operating income in the fourth quarter was $21 million (5.8%
of net sales), compared to operating income of $12 million (3.6% of net sales) in 2009.
Domestic-Based Direct Brands segment adjusted operating income in the fourth quarter was $25
million (6.8% of net sales), compared to an adjusted operating income of $42 million (12.4% of net
sales) in 2009.
International-Based Direct Brands segment consists of the specialty retail, outlet,
concession, wholesale apparel, wholesale non-apparel (including accessories, jewelry and handbags),
e-
5
commerce and licensing operations of Mexx Europe and Mexx Canada, our two international
retail-based operating segments.
Net sales in our International-Based Direct Brands segment were $201 million, a decrease of $10
million, or 4.6%, compared to 2009, primarily driven by a decrease in Mexx Europe retail, partially
offset by increases in Mexx Canada retail and Mexx Europe wholesale. Excluding the impact of
changes in foreign currency exchange rates, net sales for Mexx decreased 3.3% compared to last
year. Store counts and key operating metrics are as follows:
| We ended the quarter with 172 specialty retail stores, 93 outlets and 138 concessions,
reflecting the net addition over the last 12 months of 12 specialty retail stores and the
net closure of 8 outlet stores and 68 concessions; |
||
| Average retail square footage in the fourth quarter was approximately 1.563 million
square feet, a 1.4% increase compared to 2009; |
||
| Sales per square foot for comparable
stores for the latest twelve months were $301; and |
||
| Comparable direct to consumer sales (inclusive of e-commerce and concessions) decreased
2.2% in the fourth quarter. |
International-Based Direct Brands segment operating loss in the fourth quarter was ($31) million
((15.4)% of net sales), compared to an operating loss of ($68) million ((32.4)% of net sales) in
2009. International-Based Direct Brands segment adjusted operating loss in the fourth quarter was
($26) million ((13.1)% of net sales), compared to an adjusted operating loss of ($39) million
((18.6)% of net sales) in 2009.
Partnered Brands segment consists of one operating segment including the wholesale
apparel, wholesale non-apparel, licensing, outlet, concession and e-commerce operations of our Liz
Claiborne family of brands, Monet family of brands and our Axcess, Dana Buchman, Kensie, Mac & Jac,
and licensed DKNY® brands.
Net sales decreased $68 million, or 32.9%, in the fourth quarter to $138 million, primarily
reflecting a $61 million decrease in our Liz Claiborne family of brands resulting from the
transition to the licensing models under the JCPenney and QVC arrangements.
Partnered Brands segment operating loss in the fourth quarter was ($13) million ((9.1)% of net
sales), compared to an operating loss of ($74) million ((35.7)% of net sales) in 2009. Partnered
Brands segment adjusted operating loss in the fourth quarter was ($3) million ((2.8)% of adjusted
net sales), compared to an adjusted operating loss of ($14) million ((6.6)% of net sales) in 2009.
About Liz Claiborne Inc.
Liz Claiborne Inc. designs and markets a global portfolio of retail-based premium brands including
Juicy Couture, kate spade, Lucky Brand and Mexx. The Company also has a refined group of department
store-based brands with strong consumer franchises including the Monet family of brands, Kensie,
Kensiegirl, Mac & Jac, and the licensed DKNY® Jeans and DKNY® Active brands. The Liz Claiborne and
Claiborne brands are available at JCPenney, the Liz Claiborne New York brand designed by Isaac
Mizrahi is available at QVC, and the Dana Buchman and Axcess brands are sold at Kohls. Visit
www.lizclaiborneinc.com for more information.
6
Liz Claiborne Inc. Forward-Looking Statement
Statements contained herein that relate to the Companys future performance, financial condition,
liquidity or business or any future event or action are forward-looking statements under the
Private Securities Litigation Reform Act of 1995. Such statements are indicated by words or phrases
such as intend, anticipate, plan, estimate, target, forecast, project, expect,
believe, we are optimistic that we can, current visibility indicates that we forecast or
currently envisions and similar phrases. Such statements are based on current expectations only,
are not guarantees of future performance, and are subject to certain risks, uncertainties and
assumptions. The Company may change its intentions, belief or expectations at any time and without
notice, based upon any change in the Companys assumptions or otherwise. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual
results may vary materially from those anticipated, estimated or projected. In addition, some risks
and uncertainties involve factors beyond the Companys control. Among the risks and uncertainties
are the following: our ability to continue to have the necessary liquidity, through cash flows from
operations, and availability under our amended and restated revolving credit facility may be
adversely impacted by a number of factors, including the level of our operating cash flows, our
ability to maintain established levels of availability under, and to comply with the financial and
other covenants included in, our amended and restated revolving credit facility and the borrowing
base requirement in our amended and restated revolving credit facility that limits the amount of
borrowings we may make based on a formula of, among other things, eligible accounts receivable and
inventory; the minimum availability covenant in our amended and restated revolving credit facility
that requires us to maintain availability in excess of an agreed upon level and whether holders of
our Convertible Notes issued in June 2009 will, if and when such notes are convertible, elect to
convert a substantial portion of such notes, the par value of which we must currently settle in
cash; general economic conditions in the United States, Europe and other parts of the world; lower
levels of consumer confidence, consumer spending and purchases of discretionary items, including
fashion apparel and related products, such as ours; continued restrictions in the credit and
capital markets, which would impair our ability to access additional sources of liquidity, if
needed; changes in the cost of raw materials, labor, advertising and transportation, including the
impact such changes may have on the pricing of our product and the resulting impact on consumer
acceptance of our products at higher price points; our dependence on a limited number of large US
department store customers, and the risk of consolidations, restructurings, bankruptcies and other
ownership changes in the retail industry and financial difficulties at our larger department store
customers; our ability to effect a turnaround of our Mexx Europe business; our ability to
successfully re-launch our Lucky Brand product offering; our ability to successfully implement our
long-term strategic plans; risks associated with the licensing arrangements with J.C. Penney
Corporation, Inc. and J.C. Penney Company, Inc. and with QVC, Inc., including, without limitation,
our ability to efficiently change our operational model and infrastructure as a result of such
licensing arrangements, our ability to continue a good working relationship with these licensees
and possible changes or disputes in our other brand relationships or relationships with other
retailers and existing licensees as a result; our ability to anticipate and res
pond to constantly
changing consumer demands and tastes and fashion trends across multiple brands, product lines,
shopping channels and geographies; our ability to attract and retain talented, highly qualified
executives, and maintain satisfactory relationships with our employees, both union and non-union;
possible exposure to multiemployer union pension plan liability as a result of current market
conditions and possible withdrawal liabilities; our ability to adequately establish, defend and
protect our trademarks and other proprietary rights; our ability to successfully develop or acquire
new product lines or enter new markets or product categories, and risks related to such new lines,
markets or categories; the
7
impact of the highly competitive nature of the markets within which we operate, both within the US
and abroad; our reliance on independent foreign manufacturers, including the risk of their failure
to comply with safety standards or our policies regarding labor practices; risks associated with
our agreement with Li & Fung Limited, which results in a single foreign buying/sourcing agent for a
significant portion of our products; a variety of legal, regulatory, political and economic factors
that can impact our operations and results and the shopping and spending patterns of consumers,
including risks related to the importation and exportation of product, tariffs and other trade
barriers, to which our international operations are subject,; our ability to adapt to and compete
effectively in the current quota environment in which general quota has expired on apparel products
but political activity seeking to re-impose quota has been initiated or threatened; our exposure to
domestic and foreign currency fluctuations; risks associated with material disruptions in our
information technology systems; risks associated with privacy breaches; limitations on our ability
to utilize all or a portion of our US deferred tax assets if we experience an ownership change;
the outcome of current and future litigations and other proceedings in which we are involved; and
such other factors as are set forth in the Companys 2010 Annual Report on Form 10-K, filed today
with the Securities and Exchange Commission, including in the section entitled Item 1A- Risk
Factors. The Company undertakes no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.
8
LIZ CLAIBORNE INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands, except per common share data)
CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands, except per common share data)
Three Months Ended | Three Months Ended | |||||||||||||||
January 1, 2011 | % of | January 2, 2010 | % of | |||||||||||||
(13 Weeks) | Sales | (13 Weeks) | Sales | |||||||||||||
Net Sales |
$ | 703,746 | 100.0 | % | $ | 756,474 | 100.0 | % | ||||||||
Cost of goods sold |
347,856 | 49.4 | % | 393,385 | 52.0 | % | ||||||||||
Gross Profit |
355,890 | 50.6 | % | 363,089 | 48.0 | % | ||||||||||
Selling, general & administrative expenses |
378,142 | 53.7 | % | 478,381 | 63.2 | % | ||||||||||
Impairment of intangible assets |
| | 14,222 | 1.9 | % | |||||||||||
Operating Loss |
(22,252 | ) | (3.2 | )% | (129,514 | ) | (17.1 | )% | ||||||||
Other income, net |
14,403 | 2.0 | % | 7,464 | 1.0 | % | ||||||||||
Interest expense, net |
(13,023 | ) | (1.9 | )% | (18,222 | ) | (2.4 | )% | ||||||||
Loss Before Provision (Benefit) for Income
Taxes |
(20,872 | ) | (3.0 | )% | (140,272 | ) | (18.5 | )% | ||||||||
Provision (benefit) for income taxes |
1,699 | 0.2 | % | (103,164 | ) | (13.6 | )% | |||||||||
Loss from Continuing Operations |
(22,571 | ) | (3.2 | )% | (37,108 | ) | (4.9 | )% | ||||||||
Discontinued operations, net of income taxes |
(7,697 | ) | (4,722 | ) | ||||||||||||
Net Loss |
(30,268 | ) | (41,830 | ) | ||||||||||||
Net loss attributable to the noncontrolling
interest |
(119 | ) | (127 | ) | ||||||||||||
Net Loss Attributable to Liz Claiborne, Inc. |
$ | (30,149 | ) | $ | (41,703 | ) | ||||||||||
Earnings per Share: |
||||||||||||||||
Basic and Diluted |
||||||||||||||||
Loss from
Continuing
Operations
Attributable to Liz
Claiborne, Inc. |
$ | (0.24 | ) | $ | (0.39 | ) | ||||||||||
Net Loss
Attributable to Liz
Claiborne, Inc. |
$ | (0.32 | ) | $ | (0.45 | ) | ||||||||||
Weighted Average Shares, Basic and Diluted
(a) |
94,301 | 93,954 |
(a) | Because the Company incurred a loss from continuing operations for the three months ended January
1, 2011 and January 2, 2010, all potentially dilutive shares are antidilutive. Accordingly, basic
and diluted weighted average shares outstanding are equal for such periods.
|
LIZ CLAIBORNE INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands, except per common share data)
CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands, except per common share data)
Twelve Months Ended | Twelve Months Ended | |||||||||||||||
January 1, 2011 | % of | January 2, 2010 | % of | |||||||||||||
(52 Weeks) | Sales | (52 Weeks) | Sales | |||||||||||||
Net Sales |
$ | 2,500,072 | 100.0 | % | $ | 2,915,919 | 100.0 | % | ||||||||
Cost of goods sold |
1,261,551 | 50.5 | % | 1,563,594 | 53.6 | % | ||||||||||
Gross Profit |
1,238,521 | 49.5 | % | 1,352,325 | 46.4 | % | ||||||||||
Selling, general & administrative expenses |
1,415,441 | 56.6 | % | 1,653,376 | 56.7 | % | ||||||||||
Goodwill impairment |
| | 2,785 | 0.1 | % | |||||||||||
Impairment of other intangible assets |
2,594 | 0.1 | % | 14,222 | 0.5 | % | ||||||||||
Operating Loss |
(179,514 | ) | (7.2 | )% | (318,058 | ) | (10.9 | )% | ||||||||
Other income (expense), net |
26,665 | 1.1 | % | (4,007 | ) | (0.1 | )% | |||||||||
Interest expense, net |
(60,193 | ) | (2.4 | )% | (65,084 | ) | (2.2 | )% | ||||||||
Loss Before Provision (Benefit) for Income
Taxes |
(213,042 | ) | (8.5 | )% | (387,149 | ) | (13.3 | )% | ||||||||
Provision (benefit) for income taxes |
7,941 | 0.3 | % | (108,238 | ) | (3.7 | )% | |||||||||
Loss from Continuing Operations |
(220,983 | ) | (8.8 | )% | (278,911 | ) | (9.6 | )% | ||||||||
Discontinued operations, net of income taxes |
(31,326 | ) | (27,499 | ) | ||||||||||||
Net Loss |
(252,309 | ) | (306,410 | ) | ||||||||||||
Net loss attributable to the noncontrolling
interest |
(842 | ) | (681 | ) | ||||||||||||
Net Loss Attributable to Liz Claiborne, Inc. |
$ | (251,467 | ) | $ | (305,729 | ) | ||||||||||
Earnings per Share: |
||||||||||||||||
Basic and Diluted |
||||||||||||||||
Loss from
Continuing
Operations
Attributable to Liz
Claiborne, Inc. |
$ | (2.34 | ) | $ | (2.96 | ) | ||||||||||
Net Loss
Attributable to Liz
Claiborne, Inc. |
$ | (2.67 | ) | $ | (3.26 | ) | ||||||||||
Weighted Average Shares, Basic and Diluted
(a) |
94,243 | 93,880 |
(a) | Because the Company incurred a loss from continuing operations for the twelve months ended January 1, 2011 and January 2,
2010, all potentially dilutive shares are antidilutive. Accordingly, basic and diluted weighted average shares outstanding
are equal for such periods.
|
LIZ CLAIBORNE INC.
CONSOLIDATED BALANCE SHEETS
(All amounts in thousands)
CONSOLIDATED BALANCE SHEETS
(All amounts in thousands)
January 1, 2011 | January 2, 2010 | |||||||
Assets |
||||||||
Current Assets: |
||||||||
Cash and cash equivalents |
$ | 22,714 | $ | 20,372 | ||||
Accounts receivable trade, net |
208,081 | 263,508 | ||||||
Inventories, net |
289,439 | 319,713 | ||||||
Other current assets |
91,689 | 268,268 | ||||||
Assets held for sale |
| 15,070 | ||||||
Total current assets |
611,923 | 886,931 | ||||||
Property and Equipment, Net |
375,529 | 444,688 | ||||||
Goodwill and Intangibles, Net |
228,110 | 231,229 | ||||||
Other Assets |
42,097 | 43,055 | ||||||
Total Assets |
$ | 1,257,659 | $ | 1,605,903 | ||||
Liabilities and Stockholders (Deficit) Equity |
||||||||
Current Liabilities: |
||||||||
Short-term borrowings |
$ | 26,951 | $ | 70,868 | ||||
Convertible Senior Notes |
74,542 | 71,137 | ||||||
Other current liabilities |
471,387 | 500,547 | ||||||
Total current liabilities |
572,880 | 642,552 | ||||||
Long-Term Debt |
476,319 | 516,146 | ||||||
Other Non-Current Liabilities |
230,141 | 227,326 | ||||||
Stockholders (Deficit) Equity |
(21,681 | ) | 219,879 | |||||
Total Liabilities and Stockholders (Deficit) Equity |
$ | 1,257,659 | $ | 1,605,903 | ||||
LIZ CLAIBORNE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All amounts in thousands)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All amounts in thousands)
Twelve Months Ended | ||||||||
January 1, 2011 | January 2, 2010 | |||||||
(52 weeks) | (52 weeks) | |||||||
Cash Flows from Operating Activities: |
||||||||
Net Loss |
$ | (252,309 | ) | $ | (306,410 | ) | ||
Adjustments to arrive at loss from continuing operations |
31,326 | 27,499 | ||||||
Loss from continuing operations |
(220,983 | ) | (278,911 | ) | ||||
Adjustments to reconcile loss from continuing operations to
net cash provided
by operating activities: |
||||||||
Depreciation and amortization |
142,820 | 159,197 | ||||||
Impairment of goodwill and other
intangible assets |
2,594 | 17,007 | ||||||
Loss on asset disposals and impairments,
including streamlining initiatives, net |
31,983 | 49,609 | ||||||
Deferred income taxes |
3,564 | (10,124 | ) | |||||
Share-based compensation |
6,939 | 8,744 | ||||||
Foreign currency gains, net |
(24,636 | ) | | |||||
Other, net |
(957 | ) | (104 | ) | ||||
Changes in assets and liabilities: |
||||||||
Decrease in accounts receivable trade,
net |
47,615 | 82,190 | ||||||
Decrease in inventories, net |
28,945 | 146,049 | ||||||
Decrease in other current and non-current
assets |
769 | 33,251 | ||||||
Increase (decrease) in accounts payable |
50,903 | (64,013 | ) | |||||
(Decrease) increase in accrued expenses
and other non-current liabilities |
(74,430 | ) | 85,625 | |||||
Increase in income taxes payable |
172,271 | 2,016 | ||||||
Net cash used in operating activities of discontinued
operations |
(16,756 | ) | (23,246 | ) | ||||
Net cash provided
by operating
activities |
150,641 | 207,290 | ||||||
Cash Flows from Investing Activities: |
||||||||
Proceeds from sales of property and equipment |
8,257 | | ||||||
Purchases of property and equipment |
(77,369 | ) | (64,379 | ) | ||||
Payments for purchases of businesses |
(5,000 | ) | (8,755 | ) | ||||
Payments for in-store merchandise shops |
(3,540 | ) | (7,306 | ) | ||||
Investments in and advances to equity investee |
(4,033 | ) | (7,237 | ) | ||||
Other, net |
(387 | ) | 773 | |||||
Net cash (used in) provided by investing activities of
discontinued operations |
(5,227 | ) | 1,069 | |||||
Net cash used in
investing
activities |
(87,299 | ) | (85,835 | ) | ||||
Cash Flows from Financing Activities: |
||||||||
Short-term borrowings, net |
(6,608 | ) | (169,231 | ) | ||||
Proceeds from borrowings under revolving credit agreement |
692,878 | | ||||||
Repayment of borrowings under revolving credit agreement |
(728,158 | ) | | |||||
Proceeds from issuance of Convertible Senior Notes |
| 90,000 | ||||||
Principal payments under capital lease obligations |
(5,642 | ) | (4,361 | ) | ||||
Proceeds from exercise of stock options |
24 | | ||||||
Payment of deferred financing fees |
(16,141 | ) | (42,209 | ) | ||||
Net cash used in
financing
activities |
(63,647 | ) | (125,801 | ) | ||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents |
2,647 | (713 | ) | |||||
Net Change in Cash and Cash Equivalents |
2,342 | (5,059 | ) | |||||
Cash and Cash Equivalents at Beginning of Year |
20,372 | 25,431 | ||||||
Cash and Cash Equivalents at End of Year |
$ | 22,714 | $ | 20,372 | ||||
LIZ CLAIBORNE INC.
SEGMENT REPORTING
(All amounts in thousands)
SEGMENT REPORTING
(All amounts in thousands)
Three Months Ended | Three Months Ended | |||||||||||||||
January 1, 2011 | % to | January 2, 2010 | % to | |||||||||||||
(13 Weeks) | Total | (13 Weeks) | Total | |||||||||||||
NET SALES: |
||||||||||||||||
Domestic-Based Direct Brands |
$ | 364,687 | 51.8 | % | $ | 339,769 | 44.9 | % | ||||||||
International-Based Direct Brands |
200,660 | 28.5 | % | 210,440 | 27.8 | % | ||||||||||
Partnered Brands |
138,399 | 19.7 | % | 206,265 | 27.3 | % | ||||||||||
Total Net Sales |
$ | 703,746 | 100.0 | % | $ | 756,474 | 100.0 | % | ||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
January 1, 2011 | % of | January 2, 2010 | % of | |||||||||||||
(13 Weeks) | Sales | (13 Weeks) | Sales | |||||||||||||
OPERATING INCOME (LOSS) (a): |
||||||||||||||||
Domestic-Based Direct Brands |
$ | 21,315 | 5.8 | % | $ | 12,234 | 3.6 | % | ||||||||
International-Based Direct Brands |
(30,941 | ) | (15.4 | )% | (68,154 | ) | (32.4 | )% | ||||||||
Partnered Brands |
(12,626 | ) | (9.1 | )% | (73,594 | ) | (35.7 | )% | ||||||||
Total Operating Loss |
$ | (22,252 | ) | (3.2 | )% | $ | (129,514 | ) | (17.1 | )% | ||||||
Three Months Ended | Three Months Ended | |||||||||||||||
January 1, 2011 | % to | January 2, 2010 | % to | |||||||||||||
(13 Weeks) | Total | (13 Weeks) | Total | |||||||||||||
NET SALES: |
||||||||||||||||
Domestic |
$ | 473,130 | 67.2 | % | $ | 514,962 | 68.1 | % | ||||||||
International |
230,616 | 32.8 | % | 241,512 | 31.9 | % | ||||||||||
Total Net Sales |
$ | 703,746 | 100.0 | % | $ | 756,474 | 100.0 | % | ||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
January 1, 2011 | % of | January 2, 2010 | % of | |||||||||||||
(13 Weeks) | Sales | (13 Weeks) | Sales | |||||||||||||
OPERATING INCOME (LOSS): |
||||||||||||||||
Domestic |
$ | 8,188 | 1.7 | % | $ | (82,161 | ) | (16.0 | )% | |||||||
International |
(30,440 | ) | (13.2 | )% | (47,353 | ) | (19.6 | )% | ||||||||
Total Operating Loss |
$ | (22,252 | ) | (3.2 | )% | $ | (129,514 | ) | (17.1 | )% | ||||||
(a) | Operating income (loss)
includes charges related to
streamlining initiatives
and brand-exiting
activities and impairment
of intangible assets. Refer
to the table entitled
Reconciliation of Non-GAAP
Financial Information
Segment Reporting for
further information. |
LIZ CLAIBORNE INC.
SEGMENT REPORTING
(All amounts in thousands)
SEGMENT REPORTING
(All amounts in thousands)
Twelve Months Ended | Twelve Months Ended | |||||||||||||||
January 1, 2011 | % to | January 2, 2010 | % to | |||||||||||||
(52 Weeks) | Total | (52 Weeks) | Total | |||||||||||||
NET SALES: |
||||||||||||||||
Domestic-Based Direct Brands |
$ | 1,137,960 | 45.5 | % | $ | 1,120,664 | 38.4 | % | ||||||||
International-Based Direct Brands |
731,819 | 29.3 | % | 831,889 | 28.5 | % | ||||||||||
Partnered Brands |
630,293 | 25.2 | % | 963,366 | 33.1 | % | ||||||||||
Total Net Sales |
$ | 2,500,072 | 100.0 | % | $ | 2,915,919 | 100.0 | % | ||||||||
Twelve Months Ended | Twelve Months Ended | |||||||||||||||
January 1, 2011 | % of | January 2, 2010 | % of | |||||||||||||
(52 Weeks) | Sales | (52 Weeks) | Sales | |||||||||||||
OPERATING INCOME (LOSS) (a): |
||||||||||||||||
Domestic-Based Direct Brands |
$ | 2,992 | 0.3 | % | $ | (25,425 | ) | (2.3 | )% | |||||||
International-Based Direct Brands |
(100,573 | ) | (13.7 | )% | (137,625 | ) | (16.5 | )% | ||||||||
Partnered Brands |
(81,933 | ) | (13.0 | )% | (155,008 | ) | (16.1 | )% | ||||||||
Total Operating Loss |
$ | (179,514 | ) | (7.2 | )% | $ | (318,058 | ) | (10.9 | )% | ||||||
Twelve Months Ended | Twelve Months Ended | |||||||||||||||
January 1, 2011 | % to | January 2, 2010 | % to | |||||||||||||
(52 Weeks) | Total | (52 Weeks) | Total | |||||||||||||
NET SALES: |
||||||||||||||||
Domestic |
$ | 1,656,595 | 66.3 | % | $ | 1,973,944 | 67.7 | % | ||||||||
International |
843,477 | 33.7 | % | 941,975 | 32.3 | % | ||||||||||
Total Net Sales |
$ | 2,500,072 | 100.0 | % | $ | 2,915,919 | 100.0 | % | ||||||||
Twelve Months Ended | Twelve Months Ended | |||||||||||||||
January 1, 2011 | % of | January 2, 2010 | % of | |||||||||||||
(52 Weeks) | Sales | (52 Weeks) | Sales | |||||||||||||
OPERATING LOSS: |
||||||||||||||||
Domestic |
$ | (76,068 | ) | (4.6 | )% | $ | (176,501 | ) | (8.9 | )% | ||||||
International |
(103,446 | ) | (12.3 | )% | (141,557 | ) | (15.0 | )% | ||||||||
Total Operating Loss |
$ | (179,514 | ) | (7.2 | )% | $ | (318,058 | ) | (10.9 | )% | ||||||
(a) | Operating income (loss) includes charges
related to streamlining initiatives and
brand-exiting activities and impairment of
goodwill and other intangible assets. Refer
to the table entitled Reconciliation of
Non-GAAP Financial Information Segment
Reporting for further information. |
LIZ CLAIBORNE INC.
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
(All amounts in thousands, except per common share data)
(Unaudited)
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
(All amounts in thousands, except per common share data)
(Unaudited)
The following tables provide reconciliations of (i) Loss from Continuing Operations
Attributable to Liz Claiborne, Inc. to Adjusted Loss from Continuing Operations Attributable to Liz
Claiborne, Inc.(a) and (ii) Operating Loss to Adjusted Loss from Continuing Operations
Attributable to Liz Claiborne, Inc.(a)
Three Months Ended | Twelve Months Ended | |||||||||||||||
January 1, 2011 | January 2, 2010 | January 1, 2011 | January 2, 2010 | |||||||||||||
(13 Weeks) | (13 Weeks) | (52 Weeks) | (52 Weeks) | |||||||||||||
Loss from Continuing Operations Attributable to Liz Claiborne, Inc. |
$ | (22,452 | ) | $ | (36,981 | ) | $ | (220,141 | ) | $ | (278,230 | ) | ||||
Streamlining initiatives and brand-exiting activities (b)(c) |
17,515 | 104,586 | 89,374 | 178,203 | ||||||||||||
Impairment of goodwill and other intangible assets |
| 14,222 | 2,594 | 17,007 | ||||||||||||
Interest expense (d) |
| | 6,925 | | ||||||||||||
Benefit (provision) for income taxes |
1,878 | (95,909 | ) | 47,737 | (45,163 | ) | ||||||||||
Loss from Continuing Operations Attributable to
Liz Claiborne, Inc. (a) |
$ | (3,059 | ) | $ | (14,082 | ) | $ | (73,511 | ) | $ | (128,183 | ) | ||||
Operating Loss |
$ | (22,252 | ) | $ | (129,514 | ) | $ | (179,514 | ) | $ | (318,058 | ) | ||||
Streamlining initiatives and brand-exiting activities (b)(c) |
17,515 | 104,586 | 89,374 | 178,203 | ||||||||||||
Impairment of goodwill and other intangible assets |
| 14,222 | 2,594 | 17,007 | ||||||||||||
Adjusted Operating Loss (a) |
(4,737 | ) | (10,706 | ) | (87,546 | ) | (122,848 | ) | ||||||||
Adjusted interest expense, net (e) |
(13,023 | ) | (18,222 | ) | (53,268 | ) | (65,084 | ) | ||||||||
Other income (expense), net |
14,403 | 7,464 | 26,665 | (4,007 | ) | |||||||||||
Net loss attributable to the noncontrolling interest |
(119 | ) | (127 | ) | (842 | ) | (681 | ) | ||||||||
Benefit for income taxes |
(179 | ) | (7,255 | ) | (39,796 | ) | (63,075 | ) | ||||||||
Adjusted Loss from Continuing Operations Attributable to Liz
Claiborne, Inc. (a) |
$ | (3,059 | ) | $ | (14,082 | ) | $ | (73,511 | ) | $ | (128,183 | ) | ||||
Adjusted Basic and Diluted Earnings per Common Share from
Continuing Operations Attributable to Liz Claiborne, Inc.(a)(f) |
$ | (0.03 | ) | $ | (0.15 | ) | $ | (0.78 | ) | $ | (1.37 | ) | ||||
(a) | Adjusted Operating Loss excludes streamlining
initiatives and brand-exiting activities and
impairment of goodwill and other intangible assets.
In addition to those items, Adjusted Loss from
Continuing Operations Attributable to Liz Claiborne,
Inc. and Adjusted Basic and Diluted Earnings per
Common Share from Continuing Operations Attributable
to Liz Claiborne, Inc. exclude non-cash write-offs of
debt issuance costs. |
|
(b) | During the three and twelve months ended January
1, 2011 and January 2, 2010, the Company recorded
expenses related to its streamlining initiatives and
brand-exiting activities as follows: |
Three Months Ended | Twelve Months Ended | |||||||||||||||
January 1, 2011 | January 2, 2010 | January 1, 2011 | January 2, 2010 | |||||||||||||
(13 Weeks) | (13 Weeks) | (52 Weeks) | (52 Weeks) | |||||||||||||
Payroll, lease terminations, asset write-downs
and other costs |
$ | 15,296 | $ | 85,292 | $ | 80,854 | $ | 158,977 | ||||||||
Store closure and other brand-exiting activities |
2,219 | 19,294 | 8,520 | 19,226 | ||||||||||||
$ | 17,515 | $ | 104,586 | $ | 89,374 | $ | 178,203 | |||||||||
(c) | Excludes non-cash impairment charges of $0, $4,538, $386 and $4,538 primarily related to Liz Claiborne merchandising rights for the three and twelve months ended
January 1, 2011 and January 2, 2010, respectively. |
|
(d) | Represents a non-cash write-off of debt issuance costs associated with the
amended and restated revolving credit facility for the twelve months ended January 1, 2011. |
|
(e) | Excludes
a non-cash write-off of debt issuance costs associated with the amended and restated revolving credit facility
for the twelve months ended January 1, 2011. |
|
(f) | As the Company incurred an adjusted loss from continuing operations attributable to Liz Claiborne, Inc. for the three and twelve months ended January 1, 2011 and
January 2, 2010, all potentially dilutive shares are antidilutive. As such, basic and diluted weighted
average shares outstanding are equal for such periods. |
LIZ CLAIBORNE INC.
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
SEGMENT REPORTING
(All amounts in thousands)
(Unaudited)
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
SEGMENT REPORTING
(All amounts in thousands)
(Unaudited)
The following tables provide a reconciliation of Net Sales to Adjusted Net Sales, which excludes
Store Closure and Brand-Exiting Activities and of Operating Income (Loss) to Adjusted Operating
Income (Loss), which excludes Streamlining Initiatives and Brand-Exiting Activities and Impairment
of Intangible Assets.
Three Months Ended | ||||||||||||||||
January 1, 2011 (13 Weeks) | ||||||||||||||||
International- | ||||||||||||||||
Domestic-Based | Based | Partnered | ||||||||||||||
Direct Brands | Direct Brands | Brands | Total | |||||||||||||
Net Sales: |
||||||||||||||||
As Reported |
$ | 364,687 | $ | 200,660 | $ | 138,399 | $ | 703,746 | ||||||||
Store Closure and Brand-Exiting Activities |
| | (24,260 | ) | (24,260 | ) | ||||||||||
Adjusted Net Sales |
$ | 364,687 | $ | 200,660 | $ | 114,139 | $ | 679,486 | ||||||||
Operating Income (Loss): |
||||||||||||||||
As Reported |
$ | 21,315 | $ | (30,941 | ) | $ | (12,626 | ) | $ | (22,252 | ) | |||||
Streamlining Initiatives and Brand-Exiting Activities |
3,459 | 4,577 | 9,479 | 17,515 | ||||||||||||
Adjusted Operating Income (Loss) |
$ | 24,774 | $ | (26,364 | ) | $ | (3,147 | ) | $ | (4,737 | ) | |||||
% of Net Sales |
6.8 | % | (13.1 | )% | (2.8 | )% | (0.7 | )% |
Three Months Ended | ||||||||||||||||
January 2, 2010 (13 Weeks) | ||||||||||||||||
International- | ||||||||||||||||
Domestic-Based | Based | Partnered | ||||||||||||||
Direct Brands | Direct Brands | Brands | Total | |||||||||||||
Net Sales: |
||||||||||||||||
As Reported |
$ | 339,769 | $ | 210,440 | $ | 206,265 | $ | 756,474 | ||||||||
Operating Income (Loss): |
||||||||||||||||
As Reported |
$ | 12,234 | $ | (68,154 | ) | $ | (73,594 | ) | $ | (129,514 | ) | |||||
Streamlining Initiatives and Brand-Exiting Activities |
29,834 | 29,054 | 45,698 | 104,586 | ||||||||||||
Impairment of Intangible Assets |
| | 14,222 | 14,222 | ||||||||||||
Adjusted Operating Income (Loss) |
$ | 42,068 | $ | (39,100 | ) | $ | (13,674 | ) | $ | (10,706 | ) | |||||
% of Net Sales |
12.4 | % | (18.6 | )% | (6.6 | )% | (1.4 | )% |
LIZ CLAIBORNE INC.
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
SEGMENT REPORTING
(All amounts in thousands)
(Unaudited)
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
SEGMENT REPORTING
(All amounts in thousands)
(Unaudited)
The following tables provide a reconciliation of Net Sales to Adjusted Net Sales, which excludes
Store Closure and Brand-Exiting Activities and of Operating Income (Loss) to Adjusted Operating
Income (Loss), which excludes Streamlining Initiatives and Brand-Exiting Activities and Impairment
of Goodwill and Other Intangible Assets.
Twelve Months Ended | ||||||||||||||||
January 1, 2011 (52 Weeks) | ||||||||||||||||
International- | ||||||||||||||||
Domestic-Based | Based | Partnered | ||||||||||||||
Direct Brands | Direct Brands | Brands | Total | |||||||||||||
Net Sales: |
||||||||||||||||
As Reported |
$ | 1,137,960 | $ | 731,819 | $ | 630,293 | $ | 2,500,072 | ||||||||
Store Closure and Brand-Exiting Activities |
| | (34,270 | ) | (34,270 | ) | ||||||||||
Adjusted Net Sales |
$ | 1,137,960 | $ | 731,819 | $ | 596,023 | $ | 2,465,802 | ||||||||
Operating Income (Loss): |
||||||||||||||||
As Reported |
$ | 2,992 | $ | (100,573 | ) | $ | (81,933 | ) | $ | (179,514 | ) | |||||
Streamlining Initiatives and Brand-Exiting Activities |
23,859 | 10,967 | 54,548 | 89,374 | ||||||||||||
Impairment of Intangible Assets |
339 | | 2,255 | 2,594 | ||||||||||||
Adjusted Operating Income (Loss) |
$ | 27,190 | $ | (89,606 | ) | $ | (25,130 | ) | $ | (87,546 | ) | |||||
% of Net Sales |
2.4 | % | (12.2 | )% | (4.2 | )% | (3.6 | )% |
Twelve Months Ended | ||||||||||||||||
January 2, 2010 (52 Weeks) | ||||||||||||||||
International- | ||||||||||||||||
Domestic-Based | Based | Partnered | ||||||||||||||
Direct Brands | Direct Brands | Brands | Total | |||||||||||||
Net Sales: |
||||||||||||||||
As Reported |
$ | 1,120,664 | $ | 831,889 | $ | 963,366 | $ | 2,915,919 | ||||||||
Operating Loss: |
||||||||||||||||
As Reported |
$ | (25,425 | ) | $ | (137,625 | ) | $ | (155,008 | ) | $ | (318,058 | ) | ||||
Streamlining Initiatives and Brand-Exiting Activities |
53,532 | 47,369 | 77,302 | 178,203 | ||||||||||||
Impairment of Goodwill and Other Intangible Assets |
| | 17,007 | 17,007 | ||||||||||||
Adjusted Operating Income (Loss) |
$ | 28,107 | $ | (90,256 | ) | $ | (60,699 | ) | $ | (122,848 | ) | |||||
% of Net Sales |
2.5 | % | (10.8 | )% | (6.3 | )% | (4.2 | )% |
LIZ CLAIBORNE INC.
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
(All amounts in thousands, except per common share data)
(Unaudited)
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
(All amounts in thousands, except per common share data)
(Unaudited)
The following table provides reconciliations of Loss from Continuing Operations Attributable
to Liz Claiborne, Inc. to: (i) EBITDA; (ii) Adjusted EBITDA; (iii) Adjusted EBITDA, Excluding
Foreign Currency Gains, Net; and (iv) Net Cash Provided by Operating Activities.
Twelve Months Ended | ||||
January 1, 2011 | ||||
(52 Weeks) | ||||
Loss from Continuing Operations Attributable to Liz Claiborne, Inc. |
$ | (220,141 | ) | |
Provision for income taxes |
7,941 | |||
Interest expense, net |
60,193 | |||
Depreciation and amortization, net (a) |
118,199 | |||
EBITDA |
(33,808 | ) | ||
Charges due to streamlining initiatives and brand-exiting activities |
87,161 | |||
Impairment of intangible assets |
2,594 | |||
Share-based compensation |
6,939 | |||
Loss on asset disposals and impairments, net |
11,681 | |||
Adjusted EBITDA |
74,567 | |||
Foreign currency gains, net |
(24,636 | ) | ||
Adjusted EBITDA, Excluding Foreign Currency Gains, Net |
49,931 | |||
Net income tax refunds |
171,452 | |||
Interest expense, net of amortization |
(35,572 | ) | ||
Streamlining initiatives and brand-exiting activities, excluding non-cash charges |
(66,859 | ) | ||
Changes in working capital and other assets and liabilities |
53,802 | |||
Other (b) |
(22,113 | ) | ||
Net Cash Provided by Operating Activities |
$ | 150,641 | ||
(a) | Excludes amortization included in Interest expense, net. |
|
(b) | Includes discontinued operations, equity in earnings of
the unconsolidated subsidiary and net loss attributable to
the noncontrolling interest. |
LIZ CLAIBORNE INC.
AVAILABILITY UNDER REVOLVING CREDIT FACILITY
(In thousands)
AVAILABILITY UNDER REVOLVING CREDIT FACILITY
(In thousands)
January 1, 2011 | ||||
Total Revolving Credit Facility Size (a) |
$ | 350,000 | ||
Borrowing Base (a) |
$ | 291,156 | ||
Outstanding Borrowings |
22,735 | |||
Letters of Credit Issued |
28,870 | |||
Available Capacity |
$ | 239,551 | ||
Excess Capacity (b) |
$ | 194,551 | ||
(a) | Availability under the revolving
credit facility is the lesser of
$350 million or a borrowing base
comprised primarily of eligible
accounts receivable and inventory. |
|
(b) | Excess capacity represents available
capacity reduced by the minimum
required aggregate borrowing
availability of $45 million. |