Business Services Industry
Tommy Hilfiger Corporation Reports Fiscal 2000 First Quarter Results
Business Wire, July 30, 1999
HONG KONG--(BUSINESS WIRE)--July 30, 1999--
Tommy Hilfiger Corporation (NYSE:TOM) today reported its results for the first quarter ended June 30, 1999 of fiscal year 2000. The results reflect the acquisition on May 8, 1998 of the Company's licensees, Pepe Jeans USA and Tommy Hilfiger Canada. Pro forma results assume the businesses had been combined from the beginning of fiscal year 1999. The results also reflect a two-for-one stock split in the form of a 100 percent stock dividend paid on July 9, 1999.
For the first quarter of fiscal 2000, diluted earnings per share increased 33.3 percent to $0.40 from $0.30 before special charges, for the comparable pro forma period last year. Net revenue increased 24.7 percent to $419.1 million from pro forma net revenue of $336.1 million in the first quarter of last year. Net income rose 35.3 percent to $38.7 million from pro forma net income of $28.6 million, before special charges, in the same period a year ago. There were 96.0 million average shares and share equivalents outstanding during the quarter, compared to 94.6 million average shares and share equivalents outstanding on a pro forma basis last year.
Actual net earnings before special charges in the first quarter last year were $24.9 million or $0.28 per diluted share. After special charges, actual reported net earnings last year were $13.0 million or $0.15 per diluted share.
During the quarter ended June 30, 1998, the Company recorded special acquisition-related charges of $19.8 million before taxes, principally related to redundant fixed assets, lease terminations and employee costs.
"We are very pleased with our performance for the quarter," said Joel Horowitz, Chief Executive Officer. "Our increase in revenues was driven by greater than 20 percent growth in each of our business segments -- wholesale, retail and licensing. Within the wholesale segment, each component achieved revenue growth. Womenswear continued to show the strongest increases over last year and childrenswear benefited from the successful launch of girls sizes 4 to 16."
Mr. Horowitz continued, "We also achieved higher gross profit and net income margins than last year, which more than offset planned increases in our marketing efforts for this year through additional music promotions and advertising. We believe this investment will heighten our overall brand visibility without compromising our overall profitability. Additionally, we continue to incur expenses in connection with the start up of our new junior sportswear and womens dress up lines. They are scheduled to appear at retail late this fiscal year and early next fiscal year, respectively."
As previously announced, Wal-Mart Stores, Inc. (NYSE:WMT) has agreed to pay Tommy Hilfiger $6.4 million to settle two Federal Court contempt proceedings in which Wal-Mart has been found to have willfully counterfeited Tommy Hilfiger trademarks in violation of a 1996 injunction.
Referring to the settlement, Mr. Horowitz said, "This is an important victory for us, demonstrating that our ongoing commitment to maintain the integrity of our brand at retail is proving successful. In fact, we are increasing our global anti-counterfeiting and trademark protection budget for the balance of the year to expand our efforts in this key area. We hope it sends a strong message that we will not permit anyone to damage the value of our brand or trademarks."
Tommy Hilfiger Corporation, through its subsidiaries, designs, sources and markets men's and women's sportswear, jeanswear and childrenswear under the Tommy Hilfiger trademarks. Through a range of strategic licensing agreements, the Company is expanding its product lines to offer a broader array of apparel, accessories, footwear, fragrance and home furnishings. The Company's products can be found in leading department and specialty stores throughout the United States, Canada, Mexico, Central and South America, Europe, Japan, Hong Kong and other countries in the Far East.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are indicated by words or phrases such as "anticipate," "estimate," "project," "management expects," "the Company believes" and similar words or phrases. Such statements are based on current expectations and are subject to certain risks, uncertainties and assumptions, including, but not limited to, economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services and prices. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected.
TOMMY HILFIGER CORPORATION
SELECTED FINANCIAL INFORMATION
STATEMENT OF OPERATIONS DATA
(in millions, except per share amounts)
(Unaudited)
Three Months Ended June 30,
----------------------------------------
1999 1998 1998
-------- -------- --------
(Pro forma)(1)
NET REVENUE $ 419.1 $ 336.1 $ 287.7
COST OF GOODS SOLD 221.6 179.2 153.0
-------- -------- -------
GROSS PROFIT 197.5 156.9 134.7
DEPRECIATION AND AMORTIZATION 22.5 20.6 16.8
OTHER SG&A EXPENSES 112.8 84.7 76.1
--------- -------- -------
SG&A EXPENSES BEFORE
SPECIAL CHARGES 135.3 105.3 92.9
SPECIAL CHARGES - 19.8 19.8
-------- -------- -------
TOTAL SG&A EXPENSES 135.3 125.1 112.7
INCOME FROM OPERATIONS 62.2 31.8 22.0
INTEREST EXPENSE, NET 7.7 9.8 5.4
-------- -------- --------
INCOME BEFORE TAXES 54.5 22.0 16.6
INCOME TAXES 15.8 5.3 3.6
-------- -------- --------
NET INCOME $ 38.7 $ 16.7 $ 13.0
======== ======== ========
EARNINGS PER SHARE:
BASIC EARNINGS PER SHARE $ 0.41 $ 0.18 $ 0.15
======== ======== ========
WEIGHTED AVERAGE
SHARES OUTSTANDING 94.4 93.3 87.3
======== ======== ========
DILUTED EARNINGS PER SHARE $ 0.40 $ 0.18 $ 0.15
======== ======== ========
WEIGHTED AVERAGE SHARES
AND SHARE EQUIVALENTS
OUTSTANDING 96.0 94.6 88.6
======== ======== ========
RESULTS BEFORE SPECIAL CHARGES:
INCOME FROM OPERATIONS $ 62.2 $ 51.6 $ 41.8
======== ======== ========
INCOME BEFORE TAXES $ 54.5 $ 41.8 $ 36.4
======== ======== ========
NET INCOME $ 38.7 $ 28.6 $ 24.9
======== ======== ========
DILUTED EARNINGS PER SHARE $ 0.40 $ 0.30 $ 0.28
======== ======== ========
(1) The pro forma results assume the businesses had been combined for
the entire quarter ended June 30, 1998 and reflect (a) the
elimination of certain revenues, cost of sales and royalty
expense, (b) amortization of intangible assets, (c) incremental
interest and other expenses and (d) applicable income tax
effects. Pro forma results are not necessarily indicative of
results that would have occurred had the businesses been combined
for the periods indicated.
NOTE: All earnings per share and share equivalents have been restated
to reflect the two-for-one share split in the form of a 100%
stock dividend that was paid to shareholders on July 9, 1999.
TOMMY HILFIGER CORPORATION
SELECTED FINANCIAL INFORMATION
BALANCE SHEET DATA
(In millions)
(Unaudited)
June 30, June 30, March 31,
1999 1998 1999
-------- -------- --------
CASH AND CASH EQUIVALENTS $ 235.3 $ 51.6 $ 242.0
ACCOUNTS RECEIVABLE 144.2 127.0 186.6
INVENTORIES 267.4 263.6 222.9
WORKING CAPITAL 459.9 302.6 443.0
PROPERTY AND EQUIPMENT, NET 251.0 202.5 228.3
INTANGIBLE AND OTHER ASSETS 1,270.1 1,305.4 1,278.2
TOTAL ASSETS 2,223.5 1,996.1 2,206.6
CURRENT PORTION OF
LONG-TERM DEBT 42.5 10.0 40.0
OTHER CURRENT LIABILITIES 200.0 175.6 217.2
LONG-TERM DEBT 596.8 639.2 609.2
DEFERRED TAX AND
OTHER LIABILITIES 246.2 254.5 248.0
TOTAL LIABILITIES 1,085.5 1,079.3 1,114.4
SHAREHOLDERS' EQUITY 1,138.0 916.8 1,092.2
Most Recent Business Articles
- Multiple criteria evaluation and optimization of transportation systems
- Multi-criteria analysis procedure for sustainable mobility evaluation in urban areas
- A two-leveled multi-objective symbiotic evolutionary algorithm for the hub and spoke location problem
- Multi-criteria analysis for evaluating the impacts of intelligent speed adaptation
- The development of Taiwan arterial traffic-adaptive signal control system and its field test: a Taiwan experience
Most Recent Business Publications
Most Popular Business Articles
- 7 tips for effective listening: productive listening does not occur naturally. It requires hard work and practice - Back To Basics - effective listening is a crucial skill for internal auditors
- FAS 109: a primer for non-accountants - Financial Accounting Standards Board's "Statement 109: Accounting for Income Taxes"
- Design a commission plan that drives sales - Sales Commissions
- LIFO vs. FIFO: a return to the basics
- Too Young to Rent a Car? - 25-years-old the minimum age for car renting - Brief Article
Most Popular Business Publications
Content provided in partnership with
