Kate Spade & Co - FORM 8-K - EX-99.1 - November 6, 2013

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EXHIBIT 99.1

 

FIFTH & PACIFIC COMPANIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA FINANCIAL INFORMATION

 

The following Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 29, 2013 and the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the six and three months ended June 29, 2013 and June 30, 2012 and for the years ended December 29, 2012, December 31, 2011 and January 1, 2011 have been derived from the historical financial statements of Fifth & Pacific Companies, Inc. and Subsidiaries (the “Company”) and adjusted to give effect to the sale of the Juicy Couture brand name and related intellectual property assets (the “Juicy Couture IP”) of Juicy Couture, Inc., a wholly-owned subsidiary of the Company (“Juicy Couture”) and certain other subsidiaries to ABG - Juicy LLC (“ABG”), for $195.0 million (the “Transaction”), which closed on November 6, 2013, as well as the wind-down of the Juicy Couture operations pursuant to the Purchase Agreement by and among ABG, Fifth & Pacific Companies, Inc. and Juicy Couture, Inc. (the “Purchase Agreement”). Additional consideration may be payable to the Company in an amount of up to $10.0 million if certain conditions regarding future performance are achieved. To effect the Transaction, Juicy Couture formed a new wholly-owned subsidiary to which it transferred the Juicy Couture IP.  ABG purchased (i) the equity interests of the new subsidiary holding the domestic intellectual property of Juicy Couture, and (ii) Juicy Couture’s foreign intellectual property assets, at the closing of the Transaction. The Juicy Couture IP has been licensed back to Juicy Couture until December 31, 2014 to accommodate the wind-down of operations. Juicy Couture will pay guaranteed minimum royalties to ABG of $10.0 million during the term of the wind-down license.

 

The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 29, 2013 assumes the Transaction had been consummated on that date. The Unaudited Pro Forma Condensed Consolidated Statements of Operations assume the Transaction was consummated on the first fiscal day of the earliest fiscal period and carried through all periods presented. The pro forma adjustments reflect transactions and events that: (i) are directly attributable to the Transaction, (ii) are factually supportable and (iii) are expected to have a continuing impact on consolidated results. The pro forma adjustments are described in the accompanying notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements. Additionally, the Unaudited Pro Forma Condensed Consolidated Statements of Operations present information separating the sale of the Juicy Couture IP and certain licensing agreements assumed by ABG from the wind-down of the Juicy Couture operations, which are also required pursuant to the terms of the Purchase Agreement.

 

Management believes that the assumptions used to derive the Unaudited Pro Forma Condensed Consolidated Financial Statements are reasonable under the circumstances and given the information available. The Unaudited Pro Forma Condensed Consolidated Financial Statements have been provided for information purposes and are not necessarily indicative of the financial condition or results of future operations or the actual financial condition or results that would have been achieved had the Transaction occurred on the dates indicated. These Unaudited Pro Forma Condensed Consolidated Financial Statements (together with the footnotes thereto) should be read in conjunction with the Company’s historical consolidated financial statements and accompanying notes thereto, which can be found in the Company’s Quarterly Report on Form 10-Q for the period ended June 29, 2013, filed with the Securities and Exchange Commission on August 8, 2013 and the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2012, filed with the Securities and Exchange Commission on February 21, 2013.

 

The Unaudited Pro Forma Condensed Consolidated Statements of Operations do not reflect material non-recurring charges which are expected to impact net income within the 12 months following the Transaction, including: (i)  estimated cash restructuring charges of $50.0 - $60.0 million, including contract termination, employee related and other costs and charges; (ii) estimated non-cash asset impairment charges of $30.0 - $40.0 million; (iii) estimated transaction costs, including professional fees of $10.0 million; and (iv) the $10.0 million minimum royalty payable to ABG during the term of the wind-down license. The Unaudited Pro Forma Condensed Consolidated Balance Sheet reflects the aggregate impact of $70.0 million of estimated restructuring and transaction costs.  Changes in these estimates, based on more accurate information, may affect amounts reported in future periods.

 

Additionally, the Unaudited Pro Forma Condensed Consolidated Balance Sheet does not present adjustments for the following items that will be wound down in connection with the exit of the remaining Juicy Couture operations: (i) the expected collection of $16.3 million of accounts receivable; (ii) the expected sell-off of $55.2 million of inventory on hand; (iii) the expected write-down or disposal of $55.5 million of property and equipment; (iv) the expected write-off of $8.8 million of other assets; and (v) the expected settlement of various obligations including $89.6 million of accrued expenses and other liabilities  (inclusive of estimated restructuring charges in connection with the Transaction) and $38.7 million of accounts payable.

 

The Unaudited Pro Forma Financial Information does not reflect any transactions that the Company may enter into in the future to mitigate the restructuring and transition costs related to the Transaction, and such efforts could materially reduce such costs.

 


 

FIFTH & PACIFIC COMPANIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

June 29, 2013

(In thousands)

 

 

 

 

 

Sale of

 

 

 

 

 

As Reported

 

Juicy Couture IP

 

Pro Forma

 

Assets

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

 $

9,155

 

 $

171,679

(a)

 $

180,834

 

Accounts receivable - trade, net

 

91,350

 

-    

 

91,350

 

Inventories, net

 

238,390

 

-    

 

238,390

 

Deferred income taxes

 

755

 

-    

 

755

 

Other current assets

 

52,915

 

-    

 

52,915

 

Total current assets

 

392,565

 

171,679

 

564,244

 

 

 

 

 

 

 

 

 

Property and Equipment, Net

 

236,232

 

-    

 

236,232

 

Goodwill

 

52,147

 

-    

 

52,147

 

Intangibles, Net

 

126,999

 

(27,343)

(b)

99,656

 

Deferred Income Taxes

 

63

 

-    

 

63

 

Other Assets

 

38,178

 

-    

 

38,178

 

Total Assets

 

 $

846,184

 

 $

144,336

 

 $

990,520

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Deficit

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

Short-term borrowings

 

 $

90,002

 

 $

-    

 

 $

90,002

 

Convertible Senior Notes

 

8,269

 

-    

 

8,269

 

Accounts payable

 

158,214

 

-    

 

158,214

 

Accrued expenses

 

199,271

 

54,205

(c)

253,476

 

Income taxes payable

 

1,409

 

-    

 

1,409

 

Total current liabilities

 

457,165

 

54,205

 

511,370

 

 

 

 

 

 

 

 

 

Long-Term Debt

 

391,746

 

-    

 

391,746

 

Other Non-Current Liabilities

 

189,713

 

(20,291)

(d)

169,422

 

Deferred Income Taxes

 

21,238

 

(6,894)

(b)

14,344

 

Stockholders’ Deficit

 

(213,678)

 

117,316

(e)

(96,362)

 

Total Liabilities and Stockholders’ Deficit

 

 $

846,184

 

 $

144,336

 

 $

990,520

 

 


 

FIFTH & PACIFIC COMPANIES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

JUNE 29, 2013

 

On November 6, 2013, the Company completed the sale of the Juicy Couture IP to ABG for a total purchase price of $195.0 million. An additional payment may be payable to the Company in an amount of up to $10.0 million if certain conditions regarding future performance are achieved.  ABG purchased from Juicy Couture (i) the equity interests of the new subsidiary holding the domestic intellectual property of Juicy Couture and (ii) Juicy Couture’s foreign intellectual property assets. The Juicy Couture IP is licensed back to Juicy Couture until December 31, 2014 to accommodate the wind-down of operations. Juicy Couture will pay guaranteed minimum royalties to ABG of $10.0 million during the term of the wind-down license.

 

The following notes are included in the Unaudited Pro Forma Condensed Consolidated Balance Sheet:

 

(a)

Represents cash inflows of $195.0 million from the sale of the Juicy Couture IP, partially offset by estimated cash outflows of: (i) a minimum royalty payment payable to ABG of $10.0 million related to the wind-down license; (ii) estimated unpaid transaction fees of $6.9 million; and (iii) an estimated repayment to Li & Fung Limited (“Li & Fung”) of $6.4 million related to a buying/sourcing arrangement.

 

 

(b)

Represents the write-off of the carrying value of the trademark rights and related deferred tax liabilities for the Juicy Couture IP.

 

 

(c)

Represents the accrual of estimated cash restructuring charges associated with the Transaction of $60.0 million, write-off of deferred licensing revenue of $3.3 million, an estimated repayment to Li & Fung of $1.1 million related to a buying/sourcing arrangement and other items.

 

 

(d)

Represents the write-off of deferred licensing revenue of $15.0 million and an estimated repayment to Li & Fung Limited of $5.3 million related to a buying/sourcing arrangement.

 

 

(e)

Represents decreases to the Company’s Stockholders’ deficit due to: (i) the receipt of proceeds of $195.0 million in connection with the sale of the Juicy Couture IP; (ii) the write-off of deferred revenue of $18.3 million; and (iii) the write-off of deferred tax liabilities of $6.9 million. Such decreases to the Company’s Stockholders’ deficit are estimated to be partially offset by: (i) estimated cash restructuring charges of $60.0 million; (ii) the write-off of the carrying value of the Juicy Couture IP; (iii) estimated cash outflows of $10.0 million related to the minimum royalty payable to ABG; and (iv) estimated unpaid transaction fees of $6.9 million.

 


 

FIFTH & PACIFIC COMPANIES, INC. AND SUBSIDIARIES

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

FOR THE SIX MONTHS ENDED JUNE 29, 2013

 

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

Exit of

 

 

 

 

 

 

 

Sale of

 

 

 

Juicy Couture

 

 

 

 

 

 

 

Juicy Couture IP

 

 

 

Operations

 

 

 

 

 

As Reported

 

(a)

 

As Adjusted

 

(b)

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

  $

753,763

 

  $

(8,445)

 

  $

745,318

 

  $

(183,613)

 

  $

561,705

 

Cost of goods sold

 

333,897

 

-

 

333,897

 

(98,738)

 

235,159

 

Gross Profit

 

419,866

 

(8,445)

 

411,421

 

(84,875)

 

326,546

 

Selling, general & administrative expenses

 

459,122

 

(3,025)

 

456,097

 

(115,559)

 

340,538

 

Operating Loss

 

(39,256)

 

(5,420)

 

(44,676)

 

30,684

 

(13,992)

 

Other expense, net

 

(2,823)

 

-

 

(2,823)

 

52

 

(2,771)

 

Impairment of cost investment

 

(6,109)

 

-

 

(6,109)

 

-

 

(6,109)

 

Loss on extinguishment of debt

 

(1,108)

 

-

 

(1,108)

 

-

 

(1,108)

 

Interest expense, net

 

(23,975)

 

-

 

(23,975)

 

-

 

(23,975)

 

Loss Before Provision for Income Taxes

 

(73,271)

 

(5,420)

 

(78,691)

 

30,736

 

(47,955)

 

Provision for income taxes

 

2,609

 

(354)

 

2,255

 

(171)

 

2,084

 

Net Loss from Continuing Operations Attributable to Fifth & Pacific Companies, Inc.

 

  $

(75,880)

 

  $

(5,066)

 

  $

 (80,946)

 

  $

30,907

 

  $

(50,039)

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share:

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

 

 

 

 

 

 

 

 

 

Loss from Continuing Operations Attributable to Fifth & Pacific Companies, Inc.

 

  $

(0.63)

 

 

 

 

 

 

 

  $

(0.42)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares, Basic and Diluted

 

119,523

 

 

 

 

 

 

 

119,523

 

 


 

FIFTH & PACIFIC COMPANIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2012

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

Exit of

 

 

 

 

 

 

 

Sale of

 

 

 

Juicy Couture

 

 

 

 

 

 

 

Juicy Couture IP

 

 

 

Operations

 

 

 

 

 

As Reported

 

(a)

 

As Adjusted

 

(b)

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

654,005

 

$

(9,382)

 

$

644,623

 

$

(205,765)

 

$

438,858

 

Cost of goods sold

 

284,181

 

-

 

284,181

 

(95,445)

 

188,736

 

Gross Profit

 

369,824

 

(9,382)

 

360,442

 

(110,320)

 

250,122

 

Selling, general & administrative expenses

 

440,309

 

-

 

440,309

 

(130,056)

 

310,253

 

Operating Loss

 

(70,485)

 

(9,382)

 

(79,867)

 

19,736

 

(60,131)

 

Other income, net

 

2,517

 

-

 

2,517

 

(100)

 

2,417

 

Loss on extinguishment of debt

 

(5,646)

 

-

 

(5,646)

 

-

 

(5,646)

 

Interest expense, net

 

(24,608)

 

-

 

(24,608)

 

-

 

(24,608)

 

Loss Before Provision for Income Taxes

 

(98,222)

 

(9,382)

 

(107,604)

 

19,636

 

(87,968)

 

Provision for income taxes

 

3,059

 

(354)

 

2,705

 

(229)

 

2,476

 

Net Loss from Continuing Operations Attributable to Fifth & Pacific Companies, Inc.

 

$

(101,281)

 

$

(9,028)

 

$

(110,309)

 

$

19,865

 

$

(90,444)

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share:

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

 

 

 

 

 

 

 

 

 

Loss from Continuing Operations Attributable to Fifth & Pacific Companies, Inc.

 

$

(0.96)

 

 

 

 

 

 

 

$

(0.86)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares, Basic and Diluted

 

104,984

 

 

 

 

 

 

 

104,984

 

 


 

FIFTH & PACIFIC COMPANIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 29, 2013

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

Exit of

 

 

 

 

 

 

 

Sale of

 

 

 

Juicy Couture

 

 

 

 

 

 

 

Juicy Couture IP

 

 

 

Operations

 

 

 

 

 

As Reported

 

(a)

 

As Adjusted

 

(b)

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

381,961

 

$

(4,143)

 

$

377,818

 

$

(89,537)

 

$

288,281

 

Cost of goods sold

 

166,284

 

-

 

166,284

 

(47,002)

 

119,282

 

Gross Profit

 

215,677

 

(4,143)

 

211,534

 

(42,535)

 

168,999

 

Selling, general & administrative expenses

 

231,769

 

(1,752)

 

230,017

 

(54,969)

 

175,048

 

Operating Loss

 

(16,092)

 

(2,391)

 

(18,483)

 

12,434

 

(6,049)

 

Other expense, net

 

(958)

 

-

 

(958)

 

30

 

(928)

 

Impairment of cost investment

 

(6,109)

 

-

 

(6,109)

 

-

 

(6,109)

 

Interest expense, net

 

(11,632)

 

-

 

(11,632)

 

-

 

(11,632)

 

Loss Before Provision for Income Taxes

 

(34,791)

 

(2,391)

 

(37,182)

 

12,464

 

(24,718)

 

Provision for income taxes

 

1,601

 

(177)

 

1,424

 

(87)

 

1,337

 

Net Loss from Continuing Operations Attributable to Fifth & Pacific Companies, Inc.

 

$

(36,392)

 

$

(2,214)

 

$

(38,606)

 

$

12,551

 

$

(26,055)

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share:

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

 

 

 

 

 

 

 

 

 

Loss from Continuing Operations Attributable to Fifth & Pacific Companies, Inc.

 

$

(0.30)

 

 

 

 

 

 

 

$

(0.22)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares, Basic and Diluted

 

120,013

 

 

 

 

 

 

 

120,013

 

 


 

FIFTH & PACIFIC COMPANIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2012

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

Exit of

 

 

 

 

 

 

 

Sale of

 

 

 

Juicy Couture

 

 

 

 

 

 

 

Juicy Couture IP

 

 

 

Operations

 

 

 

 

 

As Reported

 

(a)

 

As Adjusted

 

(b)

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

336,858

 

$

(4,626)

 

$

332,232

 

$

(100,321)

 

$

231,911

 

Cost of goods sold

 

146,141

 

-

 

146,141

 

(48,937)

 

97,204

 

Gross Profit

 

190,717

 

(4,626)

 

186,091

 

(51,384)

 

134,707

 

Selling, general & administrative expenses

 

228,260

 

-

 

228,260

 

(63,773)

 

164,487

 

Operating Loss

 

(37,543)

 

(4,626)

 

(42,169)

 

12,389

 

(29,780)

 

Other income, net

 

4,842

 

-

 

4,842

 

162

 

5,004

 

Loss on extinguishment of debt

 

(2,788)

 

-

 

(2,788)

 

-

 

(2,788)

 

Interest expense, net

 

(12,268)

 

-

 

(12,268)

 

-

 

(12,268)

 

Loss Before Provision for Income Taxes

 

(47,757)

 

(4,626)

 

(52,383)

 

12,551

 

(39,832)

 

Provision for income taxes

 

1,794

 

(177)

 

1,617

 

(114)

 

1,503

 

Net Loss from Continuing Operations Attributable to Fifth & Pacific Companies, Inc.

 

$

(49,551)

 

$

(4,449)

 

$

(54,000)

 

$

12,665

 

$

(41,335)

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share:

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

 

 

 

 

 

 

 

 

 

Loss from Continuing Operations Attributable to Fifth & Pacific Companies, Inc.

 

$

(0.46)

 

 

 

 

 

 

 

$

(0.38)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares, Basic and Diluted

 

108,863

 

 

 

 

 

 

 

108,863

 

 


 

FIFTH & PACIFIC COMPANIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE FISCAL YEAR ENDED DECEMBER 29, 2012

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

Exit of

 

 

 

 

 

 

 

Sale of

 

 

 

Juicy Couture

 

 

 

 

 

 

 

Juicy Couture IP

 

 

 

Operations

 

 

 

 

 

As Reported

 

(a)

 

As Adjusted

 

(b)

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

 1,505,094

 

$

 (18,340)

 

$

1,486,754

 

$

 (480,297)

 

$

1,006,457

 

Cost of goods sold

 

662,119

 

-     

 

662,119

 

(239,483)

 

422,636

 

Gross Profit

 

842,975

 

(18,340)

 

824,635

 

(240,814)

 

583,821

 

Selling, general & administrative expenses

 

877,426

 

-     

 

877,426

 

(274,036)

 

603,390

 

Operating Loss

 

(34,451)

 

(18,340)

 

(52,791)

 

33,222

 

(19,569)

 

Other expense, net

 

(168)

 

-     

 

(168)

 

(138)

 

(306)

 

Gain on acquisition of subsidiary

 

40,065

 

-     

 

40,065

 

-     

 

40,065

 

Loss on extinguishment of debt

 

(9,754)

 

-     

 

(9,754)

 

-     

 

(9,754)

 

Interest expense, net

 

(51,684)

 

-     

 

(51,684)

 

-     

 

(51,684)

 

Loss Before Provision for Income Taxes

 

(55,992)

 

(18,340)

 

(74,332)

 

33,084

 

(41,248)

 

Provision for income taxes

 

3,464

 

(707)

 

2,757

 

(457)

 

2,300

 

Net Loss from Continuing Operations Attributable to Fifth & Pacific Companies, Inc.

 

$

 (59,456)

 

$

 (17,633)

 

$

(77,089)

 

$

33,541

 

$

(43,548)

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share:

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

 

 

 

 

 

 

 

 

 

Loss from Continuing Operations Attributable to Fifth & Pacific Companies, Inc.

 

$

 (0.54)

 

 

 

 

 

 

 

$

(0.40)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares, Basic and Diluted

 

109,292

 

 

 

 

 

 

 

109,292

 

 


 

FIFTH & PACIFIC COMPANIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

Exit of

 

 

 

 

 

 

 

Sale of

 

 

 

Juicy Couture

 

 

 

 

 

 

 

Juicy Couture IP

 

 

 

Operations

 

 

 

 

 

As Reported

 

(a)

 

As Adjusted

 

(b)

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

1,518,721

 

$

(18,125)

 

$

1,500,596

 

$

(512,563)

 

$

988,033

 

Cost of goods sold

 

709,330

 

-     

 

709,330

 

(242,643)

 

466,687

 

Gross Profit

 

809,391

 

(18,125)

 

791,266

 

(269,920)

 

521,346

 

Selling, general & administrative expenses

 

904,619

 

-     

 

904,619

 

(249,049)

 

655,570

 

Impairment of intangible assets

 

1,024

 

-     

 

1,024

 

-     

 

1,024

 

Operating Loss

 

(96,252)

 

(18,125)

 

(114,377)

 

(20,871)

 

(135,248)

 

Other income, net

 

282

 

-     

 

282

 

407

 

689

 

Gain on sales of trademarks, net

 

286,979

 

-     

 

286,979

 

-     

 

286,979

 

Gain on extinguishment of debt, net

 

5,157

 

-     

 

5,157

 

-     

 

5,157

 

Interest expense, net

 

(57,188)

 

-     

 

(57,188)

 

-     

 

(57,188)

 

Income Before Provision for Income Taxes

 

138,978

 

(18,125)

 

120,853

 

(20,464)

 

100,389

 

Benefit for income taxes

 

(5,770)

 

-     

 

(5,770)

 

(252)

 

(6,022)

 

Net Income from Continuing Operations Attributable to Fifth & Pacific Companies, Inc.

 

$

144,748

 

$

(18,125)

 

$

126,623

 

$

(20,212)

 

$

106,411

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to Fifth & Pacific Companies, Inc.

 

$

1.53

 

 

 

 

 

 

 

$

1.12

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations Attributable to Fifth & Pacific Companies, Inc.

 

$

1.28

 

 

 

 

 

 

 

$

0.96

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares, Basic

 

94,664

 

 

 

 

 

 

 

94,664

 

Weighted Average Shares, Diluted

 

120,692

 

 

 

 

 

 

 

120,692

 

 


 

FIFTH & PACIFIC COMPANIES, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE FISCAL YEAR ENDED JANUARY 1, 2011

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

Exit of

 

 

 

 

 

 

 

Sale of

 

 

 

Juicy Couture

 

 

 

 

 

 

 

Juicy Couture IP

 

 

 

Operations

 

 

 

 

 

As Reported

 

(a)

 

As Adjusted

 

(b)

 

Pro Forma

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

1,623,235

 

$

(18,209)

 

$

1,605,026

 

$

(548,553)

 

$

1,056,473

 

Cost of goods sold

 

831,939

 

-      

 

831,939

 

(256,984)

 

574,955

 

Gross Profit

 

791,296

 

(18,209)

 

773,087

 

(291,569)

 

481,518

 

Selling, general & administrative expenses

 

849,968

 

-      

 

849,968

 

(226,123)

 

623,845

 

Impairment of intangible assets

 

2,594

 

-      

 

2,594

 

(339)

 

2,255

 

Operating Loss

 

(61,266)

 

(18,209)

 

(79,475)

 

(65,107)

 

(144,582)

 

Other income, net

 

26,689

 

-      

 

26,689

 

2,176

 

28,865

 

Interest expense, net

 

(55,741)

 

-      

 

(55,741)

 

-      

 

(55,741)

 

Loss Before Provision for Income Taxes

 

(90,318)

 

(18,209)

 

(108,527)

 

(62,931)

 

(171,458)

 

Provision for income taxes

 

9,044

 

-      

 

9,044

 

(374)

 

8,670

 

Net Loss from Continuing Operations Attributable to Fifth & Pacific Companies, Inc.

 

$

(99,362)

 

$

(18,209)

 

$

(117,571)

 

$

(62,557)

 

$

(180,128)

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Share:

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

 

 

 

 

 

 

 

 

 

Loss from Continuing Operations Attributable to Fifth & Pacific Companies, Inc.

 

$

(1.05)

 

 

 

 

 

 

 

$

(1.91)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares, Basic and Diluted

 

94,243

 

 

 

 

 

 

 

94,243

 

 


 

FIFTH & PACIFIC COMPANIES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE SIX AND THREE MONTHS ENDED JUNE 29, 2013 AND JUNE 28, 2012

AND FOR THE FISCAL YEARS ENDED DECEMBER 29, 2012, DECEMBER 31, 2011 AND JANUARY 1, 2011

 

On November 6, 2013, the Company completed the Transaction.

 

The following notes are included in the Unaudited Pro Forma Condensed Consolidated Statements of Operations:

 

(a)                                                     Represents the elimination of the historical revenues associated with certain licensing agreements assumed by ABG as part of the Purchase Agreement and Selling, general & administrative expenses associated with the Transaction.

 

(b)                                                    Represents the elimination of the historical remaining operations of Juicy Couture, which the Company has committed to exit pursuant to the terms of the Purchase Agreement.

 

In accordance with accounting principles generally accepted in the United Sates of America, the amounts eliminated on the Unaudited Pro Forma Condensed Consolidated Statements of Operations do not include certain indirect corporate overhead included in Selling, general & administrative expenses that were allocated to Juicy Couture.

 

Kate Spade & Co Reports