Perry Ellis International Inc. (PERY, Financial) filed Quarterly Report for the period ended 2009-10-31.
Perry Ellis International, Inc. is a leading designer, distributor and licensor of a broad line of high quality men's and women's apparel, accessories, and fragrances. The company's collection of dress and casual shirts, golf sportswear, sweaters, dress and casual pants and shorts, jeans wear, active wear and men's and women's swimwear is available through all major levels of retail distribution. The company, through its wholly owned subsidiaries, owns a portfolio of nationally and internationally recognized brands including Perry Ellis, Jantzen, Cubavera, Munsingwear, Savane, Original Penguin, Grand Slam, Natural Issue, Pro Player, the Havanera Co., Axis, Tricots St. Raphael, Gotcha, Girl Star and MCD. The company enhances its roster of brands by licensing trademarks from third parties including Dockers for outerwear, Nike and JAG for swimwear, and PING and PGA TOUR for golf apparel. Perry Ellis International Inc. has a market cap of $217.2 million; its shares were traded at around $13.54 with a P/E ratio of 1354 and P/S ratio of 0.3. Perry Ellis International Inc. had an annual average earning growth of 11.9% over the past 10 years.
Depreciation and amortization. Depreciation and amortization for the three months ended October 31, 2009 was $3.3 million, a decrease of $0.3 million, or 8.3%, from $3.6 million for the three months ended October 31, 2008. Depreciation and amortization for the nine months ended October 31, 2009, was $10.3 million, a decrease of $0.6 million, or 5.5%, from $10.9 million for the nine months ended October 31, 2008. Depreciation and amortization decreased as compared to the prior year, due to the write-off of long lived assets in the amount of $1.6 million during the fourth quarter of fiscal 2009.
Interest expense. Interest expense for the three months ended October 31, 2009 was $4.7 million, an increase of $0.3 million, or 6.8%, from $4.4 million for the three months ended October 31, 2008. Interest expense for the nine months ended October 31, 2009 was $13.3 million, an increase of $0.2 million, or 1.5%, from $13.1 million for the nine months ended October 31, 2008. The overall increase in interest expense is primarily attributable to the change in fair value of our interest rate swap and interest rate cap in the amount of $0.8 million, partially offset by a lower average balance on our senior credit facility as compared to the prior year. We began the first fiscal quarter of 2010 with $54.4 million in borrowings on our senior credit facility and ended the third quarter with no outstanding borrowings as compared to $48.2 million as of October 31, 2008.
Net cash provided by operating activities was $74.4 million for the nine months ended October 31, 2009, as compared to cash used in operating activities of $7.1 million for the nine months ended October 31, 2008. The increase of $81.5 million in the level of cash provided by operating activities for the nine months ended October 31, 2009, as compared to the nine months ended October 31, 2008, is primarily attributable to a decrease in accounts receivable of $20.7 million due to lower sales and increased collection efforts, a decrease in inventory of $42.8 million due to improved inventory planning and a decrease of other current assets of $2.1 million; offset by the decrease in net income of $4.0 million, the reduction of accounts payable, accrued expenses and other liabilities in the amount of $9.2 million and the decrease of unearned revenues and other liabilities of $2.9 million. For the nine months ended October 31, 2008, cash used by operating is primarily attributable to a decrease in net income of $9.6 million, an increase in accounts receivable of $14.0 million, an increase in prepaid income taxes of $8.2 million, and the reduction of accounts payable, accrued expenses and other liabilities in the amount of $22.1 million; partially offset by a decrease in inventory of $16.7 million due to tighter controls in inventory planning and an anticipated reduction in certain replenishment programs.
Net cash used in investing activities was $1.6 million for the nine months ended October 31, 2009, as compared to cash used in investing activities of $42.5 million for the nine months ended October 31, 2008. The net cash used during the first nine months of fiscal 2010 primarily reflects the purchase of property and equipment in the amount of $2.3 million offset by the proceeds received in the amount of $0.7 million from the sale of an intangible asset for a total sales price of $1.8 million of which the balance is expected to be collected in the second quarter of fiscal 2011. The net cash used during the first nine months of fiscal 2009 primarily reflects the purchase of property and equipment in the amount of $8.5 million and the acquisition of the C&C California and Laundry by Shelli Segal brands and inventory for $33.6 million. We anticipate capital expenditures during fiscal 2010 of $5 million to $6 million in technology and systems, retail stores, and other expenditures.
In October 2008, we amended our senior credit facility. In connection with the amendment, we paid approximately $338,000 in financing fees. These fees will be amortized over the term of our senior credit facility. The following is a description of the terms of our senior credit facility with Wachovia Bank, National Association, et al, as amended, and does not purport to be complete and is subject to, and qualified in its entirety by reference to, all the provisions of the senior credit facility: (i) the line is up to $125 million with the opportunity to increase this amount in $25 million increments up to $200 million; (ii) the inventory borrowing limit is $75 million; (iii) the sublimit for letters of credit is up to $40 million; (iv) the amount of letter of credit facilities allowed outside of the facility is $110 million and (v) the outstanding balance is due at the maturity date of February 1, 2012. At October 31, 2009, we did not have any borrowings under the senior credit facility.
Read the The complete ReportPERY is in the portfolios of Bruce Kovner of Caxton Associates, Chuck Royce of ROYCE & ASSOCIATES.
Perry Ellis International, Inc. is a leading designer, distributor and licensor of a broad line of high quality men's and women's apparel, accessories, and fragrances. The company's collection of dress and casual shirts, golf sportswear, sweaters, dress and casual pants and shorts, jeans wear, active wear and men's and women's swimwear is available through all major levels of retail distribution. The company, through its wholly owned subsidiaries, owns a portfolio of nationally and internationally recognized brands including Perry Ellis, Jantzen, Cubavera, Munsingwear, Savane, Original Penguin, Grand Slam, Natural Issue, Pro Player, the Havanera Co., Axis, Tricots St. Raphael, Gotcha, Girl Star and MCD. The company enhances its roster of brands by licensing trademarks from third parties including Dockers for outerwear, Nike and JAG for swimwear, and PING and PGA TOUR for golf apparel. Perry Ellis International Inc. has a market cap of $217.2 million; its shares were traded at around $13.54 with a P/E ratio of 1354 and P/S ratio of 0.3. Perry Ellis International Inc. had an annual average earning growth of 11.9% over the past 10 years.
Highlight of Business Operations:
Net sales. Net sales for the three months ended October 31, 2009 were $172.1 million, a decrease of $44.1 million, or 20.4%, from $216.2 million for the three months ended October 31, 2008. This decrease was primarily driven by the exiting of Dockers Outwear and numerous specialty store programs of approximately $7.0 million, the door count reduction for the Perry Ellis Collection at the department store distribution channel, which accounted for a $14.0 million reduction, and the anticipated reduction due to the deceleration of the PING golf business of approximately $4.0 million. Also, several of our previous customers, including Mervyns and Goodys, which accounted for sales of approximately $2.0 million during the third quarter of fiscal 2009, subsequently filed for bankruptcy and liquidated as a result. Further adding to the decrease was our planned reduction of $12.0 million in our private label and replenishment business. These decreases were partially offset by organic growth of several of our platforms golf lifestyle, John Henry, Laundry by Shelli Segal and our Hispanic brands.Depreciation and amortization. Depreciation and amortization for the three months ended October 31, 2009 was $3.3 million, a decrease of $0.3 million, or 8.3%, from $3.6 million for the three months ended October 31, 2008. Depreciation and amortization for the nine months ended October 31, 2009, was $10.3 million, a decrease of $0.6 million, or 5.5%, from $10.9 million for the nine months ended October 31, 2008. Depreciation and amortization decreased as compared to the prior year, due to the write-off of long lived assets in the amount of $1.6 million during the fourth quarter of fiscal 2009.
Interest expense. Interest expense for the three months ended October 31, 2009 was $4.7 million, an increase of $0.3 million, or 6.8%, from $4.4 million for the three months ended October 31, 2008. Interest expense for the nine months ended October 31, 2009 was $13.3 million, an increase of $0.2 million, or 1.5%, from $13.1 million for the nine months ended October 31, 2008. The overall increase in interest expense is primarily attributable to the change in fair value of our interest rate swap and interest rate cap in the amount of $0.8 million, partially offset by a lower average balance on our senior credit facility as compared to the prior year. We began the first fiscal quarter of 2010 with $54.4 million in borrowings on our senior credit facility and ended the third quarter with no outstanding borrowings as compared to $48.2 million as of October 31, 2008.
Net cash provided by operating activities was $74.4 million for the nine months ended October 31, 2009, as compared to cash used in operating activities of $7.1 million for the nine months ended October 31, 2008. The increase of $81.5 million in the level of cash provided by operating activities for the nine months ended October 31, 2009, as compared to the nine months ended October 31, 2008, is primarily attributable to a decrease in accounts receivable of $20.7 million due to lower sales and increased collection efforts, a decrease in inventory of $42.8 million due to improved inventory planning and a decrease of other current assets of $2.1 million; offset by the decrease in net income of $4.0 million, the reduction of accounts payable, accrued expenses and other liabilities in the amount of $9.2 million and the decrease of unearned revenues and other liabilities of $2.9 million. For the nine months ended October 31, 2008, cash used by operating is primarily attributable to a decrease in net income of $9.6 million, an increase in accounts receivable of $14.0 million, an increase in prepaid income taxes of $8.2 million, and the reduction of accounts payable, accrued expenses and other liabilities in the amount of $22.1 million; partially offset by a decrease in inventory of $16.7 million due to tighter controls in inventory planning and an anticipated reduction in certain replenishment programs.
Net cash used in investing activities was $1.6 million for the nine months ended October 31, 2009, as compared to cash used in investing activities of $42.5 million for the nine months ended October 31, 2008. The net cash used during the first nine months of fiscal 2010 primarily reflects the purchase of property and equipment in the amount of $2.3 million offset by the proceeds received in the amount of $0.7 million from the sale of an intangible asset for a total sales price of $1.8 million of which the balance is expected to be collected in the second quarter of fiscal 2011. The net cash used during the first nine months of fiscal 2009 primarily reflects the purchase of property and equipment in the amount of $8.5 million and the acquisition of the C&C California and Laundry by Shelli Segal brands and inventory for $33.6 million. We anticipate capital expenditures during fiscal 2010 of $5 million to $6 million in technology and systems, retail stores, and other expenditures.
In October 2008, we amended our senior credit facility. In connection with the amendment, we paid approximately $338,000 in financing fees. These fees will be amortized over the term of our senior credit facility. The following is a description of the terms of our senior credit facility with Wachovia Bank, National Association, et al, as amended, and does not purport to be complete and is subject to, and qualified in its entirety by reference to, all the provisions of the senior credit facility: (i) the line is up to $125 million with the opportunity to increase this amount in $25 million increments up to $200 million; (ii) the inventory borrowing limit is $75 million; (iii) the sublimit for letters of credit is up to $40 million; (iv) the amount of letter of credit facilities allowed outside of the facility is $110 million and (v) the outstanding balance is due at the maturity date of February 1, 2012. At October 31, 2009, we did not have any borrowings under the senior credit facility.
Read the The complete ReportPERY is in the portfolios of Bruce Kovner of Caxton Associates, Chuck Royce of ROYCE & ASSOCIATES.
