PhillipsVan Heusen Corp. (PVH, Financial) filed Quarterly Report for the period ended 2009-08-02.
PHILLIPS-VAN HEUSEN CORP. is a vertically integrated manufacturer marketer and retailer of men's women's and children's apparel and footwear. Their products include shirts sweaters and shoes and to a lesser extent neckwear furnishings bottoms outerwear and leather and canvas accessories. They are also a leading manufacturer and distributor of private label shirts and sweaters. Phillipsvan Heusen Corp. has a market cap of $2.14 billion; its shares were traded at around $41.54 with a P/E ratio of 16.3 and P/S ratio of 0.8. The dividend yield of Phillipsvan Heusen Corp. stocks is 0.4%. Phillipsvan Heusen Corp. had an annual average earning growth of 24.9% over the past 5 years.
Royalty, advertising and other revenue in the second quarter of 2009 decreased 10.9% to $71.9 million from the prior years second quarter amount of $80.7 million. Within the Calvin Klein Licensing segment, global licensee royalty revenue decreased 6% for the second quarter, which includes a $1.6 million negative impact from a stronger U.S. dollar. On a constant exchange rate basis, Calvin Klein global licensee royalty revenue decreased 3%. The royalty revenue decrease on a constant exchange rate basis was principally due to sales reductions in the fragrance business, which continues to be affected by reductions in travel and discretionary spending resulting from the difficult economic environment, and, to a lesser extent, sales reductions in the jeans business. These reductions were partially offset by strong performance in the footwear, womens apparel and outerwear businesses. Calvin Klein advertising and other revenue decreased $4.1 million in the second quarter of 2009 compared to the second quarter of 2008 as a result of less discretionary spending in 2009 as compared to 2008 by our licensees. Such advertising and other revenue is generally collected and spent, and is therefore presented as both a revenue and an expense within our income statement, with minimal net impact on earnings.
Interest expense of $16.7 million in the first half of 2009 was relatively flat to the prior years first half amount of $16.8 million. Interest income decreased to $0.9 million in the first half of 2009 from $3.4 million in the first half of the prior year due principally to a decrease in average investment rates of return, partially offset by an increase in our average cash position during the first half of 2009 as compared to the first half of 2008.
Income taxes for the first half of 2009 were provided for at a rate of 39.5% compared with last years first half rate of 38.6%. Our partial year tax rate tends to vary from our full year rate because discrete items do not occur in all quarters. Income taxes decreased by $14.3 million to $33.5 million in the first half of 2009 from $47.7 million in the first half of 2008, primarily due to a decrease in pre-tax income during the current years first half compared to the prior years first half.
Cash provided by operating activities was $80.9 million in the first half of 2009, which compares with $107.4 million in the first half of the prior year. This decrease was primarily due to a decrease of $24.7 million in net income. The net change in working capital was relatively flat to the prior year amount and consisted of the following:
For near-term liquidity, in addition to our cash balance, we have a $325.0 million secured revolving credit facility with JP Morgan Chase Bank, N.A. as the Administrative Agent and Collateral Agent that expires in July 2012 and provides for revolving credit borrowings, as well as the issuance of letters of credit. We may, at our option, borrow and repay amounts up to a maximum of $325.0 million for revolving credit borrowings and the issuance of letters of credit with a sublimit of $50.0 million for standby letters of credit and with no sublimit on trade letters of credit. The total amount of the facility may be increased by us under certain conditions by up to $100.0 million. Based on our working capital projections, we believe that our borrowing capacity under this facility provides us with adequate liquidity for our peak seasonal needs for the foreseeable future. During the first half of 2009, we had no revolving credit borrowings under the facility, and the maximum amount of letters of credit outstanding was $132.3 million. As of August 2, 2009, we had $116.1 million of outstanding letters of credit under this facility. We currently do not expect to have any revolving credit borrowings under the facility during the remainder of 2009.
Read the The complete ReportPVH is in the portfolios of HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, George Soros of Soros Fund Management LLC.
PHILLIPS-VAN HEUSEN CORP. is a vertically integrated manufacturer marketer and retailer of men's women's and children's apparel and footwear. Their products include shirts sweaters and shoes and to a lesser extent neckwear furnishings bottoms outerwear and leather and canvas accessories. They are also a leading manufacturer and distributor of private label shirts and sweaters. Phillipsvan Heusen Corp. has a market cap of $2.14 billion; its shares were traded at around $41.54 with a P/E ratio of 16.3 and P/S ratio of 0.8. The dividend yield of Phillipsvan Heusen Corp. stocks is 0.4%. Phillipsvan Heusen Corp. had an annual average earning growth of 24.9% over the past 5 years.
Highlight of Business Operations:
We announced in the fourth quarter of 2008 a series of actions to respond to the current economic conditions by restructuring certain of our operations and implementing a number of other cost reduction efforts. We recorded pre-tax charges in the fourth quarter of 2008 that totaled approximately $82 million, of which approximately $64 million related to non-cash asset impairments, principally associated with our retail stores, and approximately $18 million related to lease terminations, severance and other costs in connection with these restructuring initiatives. We recorded additional pre-tax charges of $11.0 million related principally to severance, non-cash asset impairments and other costs during the first half of 2009. We expect to incur additional charges of approximately $6.0 million related principally to lease terminations pursuant to recent agreements for certain of our Calvin Klein specialty retail stores. Although lease termination costs were included in our previously announced initiatives, these costs relate to new agreements that we did not originally expect to be able to conclude. Such costs are expected to be incurred in the third quarter of 2009.Royalty, advertising and other revenue in the second quarter of 2009 decreased 10.9% to $71.9 million from the prior years second quarter amount of $80.7 million. Within the Calvin Klein Licensing segment, global licensee royalty revenue decreased 6% for the second quarter, which includes a $1.6 million negative impact from a stronger U.S. dollar. On a constant exchange rate basis, Calvin Klein global licensee royalty revenue decreased 3%. The royalty revenue decrease on a constant exchange rate basis was principally due to sales reductions in the fragrance business, which continues to be affected by reductions in travel and discretionary spending resulting from the difficult economic environment, and, to a lesser extent, sales reductions in the jeans business. These reductions were partially offset by strong performance in the footwear, womens apparel and outerwear businesses. Calvin Klein advertising and other revenue decreased $4.1 million in the second quarter of 2009 compared to the second quarter of 2008 as a result of less discretionary spending in 2009 as compared to 2008 by our licensees. Such advertising and other revenue is generally collected and spent, and is therefore presented as both a revenue and an expense within our income statement, with minimal net impact on earnings.
Interest expense of $16.7 million in the first half of 2009 was relatively flat to the prior years first half amount of $16.8 million. Interest income decreased to $0.9 million in the first half of 2009 from $3.4 million in the first half of the prior year due principally to a decrease in average investment rates of return, partially offset by an increase in our average cash position during the first half of 2009 as compared to the first half of 2008.
Income taxes for the first half of 2009 were provided for at a rate of 39.5% compared with last years first half rate of 38.6%. Our partial year tax rate tends to vary from our full year rate because discrete items do not occur in all quarters. Income taxes decreased by $14.3 million to $33.5 million in the first half of 2009 from $47.7 million in the first half of 2008, primarily due to a decrease in pre-tax income during the current years first half compared to the prior years first half.
Cash provided by operating activities was $80.9 million in the first half of 2009, which compares with $107.4 million in the first half of the prior year. This decrease was primarily due to a decrease of $24.7 million in net income. The net change in working capital was relatively flat to the prior year amount and consisted of the following:
For near-term liquidity, in addition to our cash balance, we have a $325.0 million secured revolving credit facility with JP Morgan Chase Bank, N.A. as the Administrative Agent and Collateral Agent that expires in July 2012 and provides for revolving credit borrowings, as well as the issuance of letters of credit. We may, at our option, borrow and repay amounts up to a maximum of $325.0 million for revolving credit borrowings and the issuance of letters of credit with a sublimit of $50.0 million for standby letters of credit and with no sublimit on trade letters of credit. The total amount of the facility may be increased by us under certain conditions by up to $100.0 million. Based on our working capital projections, we believe that our borrowing capacity under this facility provides us with adequate liquidity for our peak seasonal needs for the foreseeable future. During the first half of 2009, we had no revolving credit borrowings under the facility, and the maximum amount of letters of credit outstanding was $132.3 million. As of August 2, 2009, we had $116.1 million of outstanding letters of credit under this facility. We currently do not expect to have any revolving credit borrowings under the facility during the remainder of 2009.
Read the The complete ReportPVH is in the portfolios of HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, George Soros of Soros Fund Management LLC.
