Liz Claiborne Inc. (LIZ) filed Quarterly Report for the period ended 2009-10-03.
Liz Claiborne Inc. designs and markets an extensive range of brandedwomen's and men's fashion apparel and accessories appropriate for occasions ranging from casual to dressy. The company also markets fragrances for women and men. The company's brands include Claiborne Crazy Horse Curve Dana Buchman Elisabeth Emma Jeans First Issue Laundry by Shelli Segal Liz Claiborne Lucky Brand Russ Sigrid Olsen and Villager. Liz Claiborne Inc. has a market cap of $521 million; its shares were traded at around $5.48 with and P/S ratio of 0.1.
Highlight of Business Operations:
During the nine months ended October 4, 2008, we recognized a pretax charge of $10.6 million on the Ellen Tracy transaction, of which $2.5 million was allocated to the Ellen Tracy retail operations and therefore recorded within discontinued operations. The remaining charge of $8.1 million was allocated to the Ellen Tracy wholesale operations was recorded within Selling, general & administrative expenses (“SG&A”).
A total of 5.7% of this decline in net sales is due to the impact of (i) brands or certain brand activities that have been licensed, closed or exited and have not been presented as part of discontinued operations, which reduced net sales by $89.7 million (2.9%) and (ii) fluctuations in foreign currency exchange rates, which reduced net sales by $86.5 million (2.8%).
We ended the first nine months of 2009 with a net debt position of $803.0 million as compared to $923.4 million at the end of the first nine months of 2008. Including the receipt of $136.9 million of net income tax refunds and $75.0 million related to our transaction with Li & Fung, we generated $336.2 million in cash from continuing operations over the past 12 months, which enabled us to fund $24.7 million of acquisition related payments and capital expenditures of $107.6 million, while decreasing our net debt by $120.4 million. The effect of changes in foreign currency exchange rates on our Eurobond increased our debt balance by $27.2 million at October 3, 2009 compared to October 4, 2008.
Net sales for the first nine months of 2009 were $2.233 billion, a decrease of $840.7 million, or 27.4%, when compared to the first nine months of 2008. This reduction reflects (i) sales declines in all of our segments; (ii) an $89.7 million decrease associated with brands or certain brand activities that have been licensed, closed or exited and have not been presented as part of discontinued operations; and (iii) the impact of changes in foreign currency exchange rates in our international businesses, which decreased net sales by $86.5 million in the first nine months of 2009.
Viewed on a geographic basis, Domestic net sales decreased by $446.5 million, or 23.0%, to $1.494 billion, principally reflecting the declines within JUICY wholesale and LUCKY retail and wholesale as well as in our domestic Partnered Brands Segment. International net sales decreased by $394.2 million, or 34.8%, to $739.5 million primarily due to declines in our MEXX Europe and MEXX Canada operations, and the $86.5 million impact of fluctuations in foreign currency exchange rates on international sales.
Gross profit in the first nine months of 2009 was $1.024 billion (45.9% of net sales), compared to $1.487 billion (48.4% of net sales) in the first nine months of 2008. These decreases are primarily due to reduced sales as well as the impact of decreased gross profit rates in our International-Based Direct Brands and Partnered Brands segments, partially offset by an increased proportion of sales from retail operations in our Domestic-Based Direct Brands segment, which runs at a higher gross profit rate than the Company average, as well as the impact of fluctuations in foreign currency exchange rates in our international businesses, which decreased gross profit by $45.7 million.
LIZ is in the portfolios of Bill Miller of Legg Mason Value Trust, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, David Einhorn of Greenlight Capital Inc.
Rate This Article: |
  |