Perry Ellis International Inc. (PERY, Financial) filed Quarterly Report for the period ended 2010-05-01.
Perry Ellis International Inc. has a market cap of $280.8 million; its shares were traded at around $20.51 with a P/E ratio of 15 and P/S ratio of 0.4. PERY is in the portfolios of Chuck Royce of Royce& Associates.
Net cash provided by operating activities was $9.8 million for the three months ended May 1, 2010, as compared to cash provided by operating activities of $17.4 million for the three months ended May 2, 2009. The cash provided by operating activities for three months ended May 1, 2010 is primarily attributable to a decrease in accounts receivable due to better collection efforts, a decrease in inventory of $7.8 million due to tighter controls in inventory planning and a decrease of other current assets and prepaid taxes in the amount of $3.1 million; offset by a reduction of our accounts payable, accrued expenses and accrued interest payable. The cash provided by operating activities for the three months ended May 2, 2009 is primarily attributable to a decrease in inventory of $24.9 million due to tighter controls in inventory planning and a decrease of other current assets, primarily prepaid taxes in the amount of $6 million; offset by an increase in accounts receivable and a reduction of our accounts payable, accrued expenses and accrued interest payable.
Net cash used in investing activities was $0.5 million for the three months ended May 1, 2010, as compared to cash used in investing activities of $0.9 million for the three months ended May 2, 2009. The net cash used during the first three months of fiscal 2011 primarily reflects the purchase of property and equipment in the amount of $0.5 million, as compared to net cash used in the purchase of property and equipment in the amount of $0.9 million during the same period in fiscal 2010. We anticipate capital expenditures during fiscal 2011 of $7 million to $8 million in technology and systems, retail stores, and other expenditures.
Net cash provided by financing activities for the three months ended May 1, 2010, was $4.0 million, as compared to net cash used in financing activities for the three months ended May 2, 2009 of $18.1 million. The net cash provided during the first three months of fiscal 2011 primarily reflects proceeds from exercises of stock options of $2.2 million and a tax benefit from the exercise of stock options of $2.0 million offset by payments of $0.1 million on our mortgage loans. The net cash used during the first three months of fiscal 2010 primarily reflects the net payments on our senior credit facility of $16.2 million, payments of $0.1 million on our mortgage loans, and the purchase of treasury stock of $1.8 million.
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 May 1, 2010 we did not have any borrowings under the senior credit facility.
In August 2009, we entered into an interest rate cap agreement (the $75 million Cap Agreement) for an aggregate notional amount of $75 million associated with our senior subordinated notes. The $75 million Cap Agreement is scheduled to become effective on December 15, 2010 and terminate on September 15, 2013. The $75 million Cap Agreement is being used to manage cash flow risk associated with our floating interest rate exposure pursuant to the Swap Agreement. The $75 million Cap Agreement limits the maximum interest rate on $75 million of our senior subordinated notes to 9.32%. The $75 million Cap Agreement does not qualify for hedge accounting treatment. The change in fair value resulted in an increase to interest expense of $0.7 million for the three months ended May 1, 2010. The fair value of the $75 million Cap Agreement recorded on our consolidated balance sheet was $1.5 million and $1.2 million as of May 1, 2010 and January 30, 2010, respectively.
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Perry Ellis International Inc. has a market cap of $280.8 million; its shares were traded at around $20.51 with a P/E ratio of 15 and P/S ratio of 0.4. PERY is in the portfolios of Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Net sales. Net sales for the three months ended May 1, 2010 were $214.2 million, an increase of $0.2 million, or 0.1%, from $214.0 million for the three months ended May 2, 2009. Net sales increased primarily due to the Perry Ellis apparel and accessories business, our new Callaway product, which amounted to $5.0 million, the addition of the new Top-Flite and Solero products, sales from our new Pierre Cardin licensed brand and the overall increase in our direct to consumer sales. These increases were partially offset by our planned reduction of $13.0 million in mass market private label business during fiscal 2010 and the reduction of $4.0 million in green grass volume, which was driven by the exit of our licensing agreement with PING.Net cash provided by operating activities was $9.8 million for the three months ended May 1, 2010, as compared to cash provided by operating activities of $17.4 million for the three months ended May 2, 2009. The cash provided by operating activities for three months ended May 1, 2010 is primarily attributable to a decrease in accounts receivable due to better collection efforts, a decrease in inventory of $7.8 million due to tighter controls in inventory planning and a decrease of other current assets and prepaid taxes in the amount of $3.1 million; offset by a reduction of our accounts payable, accrued expenses and accrued interest payable. The cash provided by operating activities for the three months ended May 2, 2009 is primarily attributable to a decrease in inventory of $24.9 million due to tighter controls in inventory planning and a decrease of other current assets, primarily prepaid taxes in the amount of $6 million; offset by an increase in accounts receivable and a reduction of our accounts payable, accrued expenses and accrued interest payable.
Net cash used in investing activities was $0.5 million for the three months ended May 1, 2010, as compared to cash used in investing activities of $0.9 million for the three months ended May 2, 2009. The net cash used during the first three months of fiscal 2011 primarily reflects the purchase of property and equipment in the amount of $0.5 million, as compared to net cash used in the purchase of property and equipment in the amount of $0.9 million during the same period in fiscal 2010. We anticipate capital expenditures during fiscal 2011 of $7 million to $8 million in technology and systems, retail stores, and other expenditures.
Net cash provided by financing activities for the three months ended May 1, 2010, was $4.0 million, as compared to net cash used in financing activities for the three months ended May 2, 2009 of $18.1 million. The net cash provided during the first three months of fiscal 2011 primarily reflects proceeds from exercises of stock options of $2.2 million and a tax benefit from the exercise of stock options of $2.0 million offset by payments of $0.1 million on our mortgage loans. The net cash used during the first three months of fiscal 2010 primarily reflects the net payments on our senior credit facility of $16.2 million, payments of $0.1 million on our mortgage loans, and the purchase of treasury stock of $1.8 million.
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 May 1, 2010 we did not have any borrowings under the senior credit facility.
In August 2009, we entered into an interest rate cap agreement (the $75 million Cap Agreement) for an aggregate notional amount of $75 million associated with our senior subordinated notes. The $75 million Cap Agreement is scheduled to become effective on December 15, 2010 and terminate on September 15, 2013. The $75 million Cap Agreement is being used to manage cash flow risk associated with our floating interest rate exposure pursuant to the Swap Agreement. The $75 million Cap Agreement limits the maximum interest rate on $75 million of our senior subordinated notes to 9.32%. The $75 million Cap Agreement does not qualify for hedge accounting treatment. The change in fair value resulted in an increase to interest expense of $0.7 million for the three months ended May 1, 2010. The fair value of the $75 million Cap Agreement recorded on our consolidated balance sheet was $1.5 million and $1.2 million as of May 1, 2010 and January 30, 2010, respectively.
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