G-III Apparel Group, Ltd. Announces Second Quarter Fiscal 2023 Results

— Net Sales of $605.2 Million for the Second Quarter Compared to $483.1 Million Last Year —
— Net Income Per Diluted Share of $0.74 for the Second Quarter Compared to $0.39 Last Year —
— Non-GAAP Net Income Per Diluted Share of $0.39 for the Second Quarter Compared to $0.41 Last Year —
G-III Updates Guidance for Fiscal Year 2023 —

NEW YORK--()--G-III Apparel Group, Ltd. (NasdaqGS: GIII), a global fashion leader with expertise in design, sourcing, and manufacturing, today announced operating results for the second quarter of fiscal 2023, ended July 31, 2022.

Morris Goldfarb, G-III’s Chairman and Chief Executive Officer, said, “We are pleased to have completed our previously announced acquisition of the remaining 81% of the iconic Karl Lagerfeld brand, further expanding our global reach. In the second quarter of fiscal 2023, we continued to see significant year-over-year sales growth across our power brands. We are managing the business prudently with a keen eye towards gaining market share and building on our strengths while further expanding our global reach. Looking ahead, we are in a good position for the Fall season and our order book remains strong.”

Mr. Goldfarb concluded, “Given the challenging environment that has rapidly developed over the last few months, we are taking a more conservative view for the balance of the year. We have a strong track record of managing through difficult business conditions and remain confident in our strategy and in our ability to deliver on our updated full year expectations, as the overall fundamentals of our business remain solid.”

Net sales for the second quarter ended July 31, 2022 increased 25% to $605.2 million from $483.1 million in the prior year’s quarter. The Company reported net income for the second quarter of $36.3 million, or $0.74 per diluted share, compared to $19.2 million, or $0.39 per diluted share, in the prior year’s quarter.

Non-GAAP net income per diluted share was $0.39 for the second quarter of this year compared to $0.41 in the same period last year. Non-GAAP net income per diluted share excludes (i) a $30.9 million gain in the fair value of the Company’s minority ownership in Karl Lagerfeld prior to the acquisition, (ii) $5.7 million of expenses related to the Karl Lagerfeld transaction which include incentive compensation, professional fees and amortization of inventory valuation adjustments and (iii) non-cash imputed interest expense of $1.7 million in this quarter related to the note issued to seller (the “Seller Note”) as part of the consideration for the acquisition of Donna Karan International compared to $1.6 million in the second quarter last year. The aggregate effect of these exclusions was equal to $(0.35) per diluted share in the second quarter of this year and $0.02 per diluted share in the second quarter of fiscal 2022.

Outlook

The Company today updated its guidance for the fiscal year ending January 31, 2023. The Company’s fiscal year 2023 guidance anticipates the expected impact from current levels of inflationary pressure on consumers and incremental costs associated with the supply chain conditions, including the timing of receipts of goods.

For fiscal 2023, the Company expects net sales of approximately $3.15 billion and net income between $182 million and $187 million, or between $3.69 and $3.79 per diluted share. This compares to net sales of $2.77 billion and net income of $200.6 million, or $4.05 per diluted share, last year. This guidance is inclusive of approximately $130.0 million in net sales and net income of approximately $0.10 per diluted share in connection with the operations of the Karl Lagerfeld business for the seven months in this fiscal year subsequent to Karl Lagerfeld becoming a wholly-owned subsidiary of the Company.

The Company is anticipating non-GAAP net income for fiscal 2023 between $177.0 million and $182.0 million, or between $3.60 and $3.70 per diluted share. Non-GAAP results excludes (i) a $30.9 million gain in the fair value of the Company’s minority ownership in Karl Lagerfeld, (ii) $16.7 million of expenses related to the Karl Lagerfeld transaction which include incentive compensation, professional fees, foreign currency losses and amortization of inventory valuation adjustments and (iii) non-cash imputed interest expense of approximately $6.9 million related to the Seller Note. The aggregate effect of these exclusions is equal to $(0.09) per diluted share. This guidance compares to non-GAAP net income of $207.9 million, or $4.20 per diluted share, for fiscal 2022. Non-GAAP results for fiscal 2022 exclude (i) non-cash imputed interest expense of $6.4 million related to the Seller Note, (ii) expenses of $2.1 million related to the Karl Lagerfeld transaction and (iii) asset impairments net of gains on lease terminations of $1.5 million, primarily related to leasehold improvements and furniture and fixtures at certain of our retail stores. The aggregate effect of these exclusions was equal to $0.15 per diluted share in fiscal 2022.

The Company is projecting full-year adjusted EBITDA for fiscal 2023 between $318.0 million and $323.0 million compared to adjusted EBITDA of $350.2 million in fiscal 2022.

For the third quarter of fiscal year 2023, the Company expects net sales of approximately $1.07 billion compared to $1.02 billion in the same period last year. Net income for the third quarter of fiscal 2023 is expected to be between $83.0 million and $88.0 million, or $1.70 and $1.80 per diluted share. This compares to net income of $106.7 million, or $2.16 per diluted share, in last year’s third quarter.

The Company is anticipating non-GAAP net income for the third quarter of fiscal 2023 between $87.0 million and $92.0 million, or between $1.80 and $1.90 per diluted share. Non-GAAP results exclude (i) expenses of $3.4 million related to the Karl Lagerfeld transaction and (ii) non-cash imputed interest expense of approximately $1.8 million related to the Seller Note. This guidance compares to non-GAAP net income of $107.9 million, or $2.18 per diluted share, for fiscal 2022. Non-GAAP results for fiscal 2022 exclude non-cash imputed interest expense of $1.6 million related to the Seller Note. The effect of this exclusion was equal to $0.10 per diluted share in the third quarter of fiscal 2023 and $0.02 per diluted share in last year’s third quarter.

Non-GAAP Financial Measures

Reconciliations of GAAP net income to non-GAAP net income, GAAP net income per diluted share to non-GAAP net income per diluted share and GAAP net income to adjusted EBITDA are presented in tables accompanying the condensed financial statements included in this release and provide useful information to evaluate the Company’s operational performance. Non-GAAP net income, non-GAAP net income per diluted share and adjusted EBITDA should be evaluated in light of the Company’s financial statements prepared in accordance with GAAP.

About G-III Apparel Group, Ltd.

G-III designs, sources and markets apparel and accessories under owned, licensed and private label brands. G-III’s substantial portfolio of more than 30 licensed and proprietary brands is anchored by five global power brands: DKNY, Donna Karan, Karl Lagerfeld, Calvin Klein and Tommy Hilfiger. G-III’s owned brands include DKNY, Donna Karan, Karl Lagerfeld, Vilebrequin, G.H. Bass, Eliza J, Jessica Howard, Andrew Marc, Marc New York and Sonia Rykiel. G-III has fashion licenses under the Calvin Klein, Tommy Hilfiger, Kenneth Cole, Cole Haan, Guess?, Vince Camuto, Levi's and Dockers brands. Through its team sports business, G-III has licenses with the National Football League, National Basketball Association, Major League Baseball, National Hockey League and over 150 U.S. colleges and universities. G-III also distributes directly to consumers through its DKNY, Karl Lagerfeld, Karl Lagerfeld Paris and Vilebrequin stores and its digital channels for the DKNY, Donna Karan, Vilebrequin, Karl Lagerfeld, Karl Lagerfeld Paris, Andrew Marc, Wilsons Leather and G.H. Bass brands.

Statements concerning G-III's business outlook or future economic performance, anticipated revenues, expenses or other financial items; product introductions and plans and objectives related thereto; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters are "forward-looking statements" as that term is defined under the Federal Securities laws. Forward-looking statements are subject to risks, uncertainties and factors which include, but are not limited to, risks related to the COVID-19 pandemic, reliance on licensed product, reliance on foreign manufacturers, risks of doing business abroad, the current economic and credit environment, risks related to our indebtedness, the nature of the apparel industry, including changing customer demand and tastes, customer concentration, seasonality, risks of operating a retail business, risks related to G-III’s ability to reduce the losses incurred in its retail operations, customer acceptance of new products, the impact of competitive products and pricing, dependence on existing management, possible disruption from acquisitions, the impact on G-III’s business of the imposition of tariffs by the United States government and business and general economic conditions, as well as other risks detailed in G-III's filings with the Securities and Exchange Commission. G-III assumes no obligation to update the information in this release.

G-III APPAREL GROUP, LTD. AND SUBSIDIARIES

(Nasdaq: GIII)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended July 31,

 

Six Months Ended July 31,

 

 

2022

 

2021

 

2022

 

2021

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

605,244

 

 

$

483,081

 

 

$

1,294,001

 

 

$

1,002,991

 

Cost of goods sold

 

 

376,318

 

 

 

290,203

 

 

 

819,036

 

 

 

614,644

 

Gross profit

 

 

228,926

 

 

 

192,878

 

 

 

474,965

 

 

 

388,347

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

191,041

 

 

 

146,840

 

 

 

376,458

 

 

 

288,443

 

Depreciation and amortization

 

 

6,656

 

 

 

7,098

 

 

 

12,751

 

 

 

14,142

 

Gain on lease terminations

 

 

(29

)

 

 

 

 

 

(38

)

 

 

 

Operating profit

 

 

31,258

 

 

 

38,940

 

 

 

85,794

 

 

 

85,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

30,325

 

 

 

1,975

 

 

 

27,618

 

 

 

3,795

 

Interest and financing charges, net

 

 

(12,550

)

 

 

(12,574

)

 

 

(24,753

)

 

 

(24,578

)

Income before income taxes

 

 

49,033

 

 

 

28,341

 

 

 

88,659

 

 

 

64,979

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

12,968

 

 

 

9,235

 

 

 

21,968

 

 

 

19,494

 

Net income

 

 

36,065

 

 

 

19,106

 

 

 

66,691

 

 

 

45,485

 

Less: Loss attributable to noncontrolling interests

 

 

(254

)

 

 

(62

)

 

 

(262

)

 

 

(4

)

Net income attributable to G-III Apparel Group, Ltd.

 

$

36,319

 

 

$

19,168

 

 

$

66,953

 

 

$

45,489

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to G-III Apparel Group, Ltd. per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.76

 

 

$

0.40

 

 

$

1.39

 

 

$

0.94

 

Diluted

 

$

0.74

 

 

$

0.39

 

 

$

1.36

 

 

$

0.92

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

47,999

 

 

 

48,476

 

 

 

48,007

 

 

 

48,427

 

Diluted

 

 

49,019

 

 

 

49,523

 

 

 

49,061

 

 

 

49,502

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Balance Sheet Data (in thousands):

 

As of July 31,

 

 

2022

 

2021

 

 

(Unaudited)

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

150,977

 

$

509,988

Working capital

 

 

996,024

 

 

976,289

Inventories

 

 

1,040,814

 

 

499,337

Total assets

 

 

3,082,354

 

 

2,553,586

Total debt

 

 

575,777

 

 

517,641

Operating lease liabilities

 

 

228,981

 

 

190,238

Total stockholders' equity

 

 

1,584,001

 

 

1,380,612

G-III APPAREL GROUP, LTD. AND SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME AND RECONCILIATION OF GAAP NET INCOME PER SHARE TO NON-GAAP NET INCOME PER SHARE

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

July 31, 2022

 

July 31, 2021

 

July 31, 2022

 

July 31, 2021

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income attributable to G-III Apparel Group, Ltd.

 

$

36,319

 

 

$

19,168

 

 

$

66,953

 

 

$

45,489

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excluded from non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

Karl Lagerfeld investment gain

 

 

(30,925

)

 

 

 

 

 

(30,925

)

 

 

 

Gain on lease terminations

 

 

(29

)

 

 

 

 

 

(38

)

 

 

 

Expenses related to Karl Lagerfeld acquisition

 

 

5,693

 

 

 

 

 

 

9,872

 

 

 

 

Non-cash imputed interest

 

 

1,740

 

 

 

1,599

 

 

 

3,411

 

 

 

3,135

 

Income tax impact of non-GAAP adjustments

 

 

6,220

 

 

 

(510

)

 

 

4,380

 

 

 

(940

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income attributable to G-III Apparel Group, Ltd., as defined

 

$

19,018

 

 

$

20,257

 

 

$

53,653

 

 

$

47,684

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

July 31, 2022

 

July 31, 2021

 

July 31, 2022

 

July 31, 2021

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted net income attributable to G-III Apparel Group, Ltd. per common share

 

$

0.74

 

 

$

0.39

 

 

$

1.36

 

 

$

0.92

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excluded from non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

Karl Lagerfeld investment gain

 

 

(0.63

)

 

 

 

 

 

(0.63

)

 

 

 

Gain on lease terminations

 

 

(0.00

)

 

 

 

 

 

(0.00

)

 

 

 

Expenses related to Karl Lagerfeld acquisition

 

 

0.12

 

 

 

 

 

 

0.20

 

 

 

 

Non-cash imputed interest

 

 

0.03

 

 

 

0.03

 

 

 

0.07

 

 

 

0.06

 

Income tax impact of non-GAAP adjustments

 

 

0.13

 

 

 

(0.01

)

 

 

0.09

 

 

 

(0.02

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP diluted net income attributable to G-III Apparel Group, Ltd. per common share, as defined

 

$

0.39

 

 

$

0.41

 

 

$

1.09

 

 

$

0.96

 

Non-GAAP net income and diluted net income per common share are each a “non-GAAP financial measure” that excludes (i) gain in the fair value of the Company’s minority ownership in Karl Lagerfeld prior to the acquisition, (ii) gain on lease terminations, (iii) expenses related to the Karl Lagerfeld transaction that include incentive compensation, professional fees, amortization of inventory valuation adjustments and foreign currency losses and (iv) non-cash imputed interest expense. The income tax impact of non-GAAP adjustments is calculated using the effective tax rates for the respective periods. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding items that are not indicative of our core business operating results. Management uses these non-GAAP financial measures to assess our performance on a comparative basis and believes that they are also useful to investors to enable them to assess our performance on a comparative basis across historical periods and facilitate comparisons of our operating results to those of our competitors. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

G-III APPAREL GROUP, LTD. AND SUBSIDIARIES

RECONCILIATION OF FORECASTED AND ACTUAL NET INCOME TO FORECASTED AND ACTUAL ADJUSTED EBITDA

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forecasted Twelve

 

Actual Twelve

 

 

Three Months Ended

 

Months Ended

 

Months Ended

 

 

July 31, 2022

 

July 31, 2021

 

January 31, 2023

 

January 31, 2022

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to G-III Apparel Group, Ltd.

 

$

36,319

 

 

$

19,168

 

$

182,000 - 187,000

 

$

200,593

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Karl Lagerfeld investment gain

 

 

(30,925

)

 

 

 

 

(30,925

)

 

 

Expenses related to Karl Lagerfeld acquisition

 

 

5,693

 

 

 

 

 

16,715

 

 

 

Asset impairments, net of gain on lease terminations

 

 

(29

)

 

 

 

 

(38

)

 

 

1,455

Depreciation and amortization

 

 

6,656

 

 

 

7,098

 

 

30,888

 

 

 

27,626

Interest and financing charges, net

 

 

12,550

 

 

 

12,574

 

 

55,258

 

 

 

49,666

Income tax expense

 

 

12,968

 

 

 

9,235

 

 

64,102

 

 

 

70,875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA, as defined

 

$

43,232

 

 

$

48,075

 

$

318,000 - 323,000

 

$

350,215

Adjusted EBITDA is a “non-GAAP financial measure” which represents earnings before depreciation and amortization, interest and financing charges, net and income tax expense and excludes the Karl Lagerfeld investment gain and expenses related to the Karl Lagerfeld acquisition and asset impairments, net of gain on lease terminations. Adjusted EBITDA is being presented as a supplemental disclosure because management believes that it is a common measure of operating performance in the apparel industry. Adjusted EBITDA should not be construed as an alternative to net income, as an indicator of the Company’s operating performance, or as an alternative to cash flows from operating activities as a measure of the Company’s liquidity, as determined in accordance with GAAP.

G-III APPAREL GROUP, LTD. AND SUBSIDIARIES

RECONCILIATION OF FORECASTED AND ACTUAL NET INCOME TO FORECASTED AND ACTUAL NON-GAAP INCOME

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forecasted Three

 

Actual Three

 

Forecasted Twelve

 

Actual Twelve

 

 

Months Ending

 

Months Ended

 

Months Ended

 

Months Ended

 

 

October 31, 2022

 

October 31, 2021

 

January 31, 2023

 

January 31, 2022

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to G-III Apparel Group, Ltd.

 

$

83,000 - 88,000

 

 

$

106,674

 

 

$

182,000 - 187,000

 

 

$

200,593

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excluded from non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Karl Lagerfeld investment gain

 

 

 

 

 

 

 

 

(30,925

)

 

 

 

Expenses related to Karl Lagerfeld acquisition

 

 

3,421

 

 

 

 

 

 

16,715

 

 

 

2,093

 

Non-cash imputed interest

 

 

1,750

 

 

 

1,608

 

 

 

6,947

 

 

 

6,385

 

Asset impairments, net of gain on lease terminations

 

 

 

 

 

 

 

 

(38

)

 

 

1,455

 

Income tax impact of non-GAAP adjustments

 

 

(1,171

)

 

 

(397

)

 

 

2,301

 

 

 

(2,598

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income attributable to G-III Apparel Group, Ltd., as defined

 

$

87,000 - 92,000

 

 

$

107,885

 

 

$

177,000 - 182,000

 

 

$

207,928

 

Non-GAAP net income is a “non-GAAP financial measure” that excludes (i) gain in the fair value of the Company’s minority ownership in Karl Lagerfeld prior to the acquisition, (ii) asset impairments, net of gain on lease terminations, (iii) expenses related to the Karl Lagerfeld transaction that include incentive compensation, professional fees, amortization of inventory valuation adjustments and foreign currency losses and (iv) non-cash imputed interest expense. The income tax impact of non-GAAP adjustments is calculated using the effective tax rates for the respective periods. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding items that are not indicative of our core business operating results. Management uses these non-GAAP financial measures to assess our performance on a comparative basis and believes that they are also useful to investors to enable them to assess our performance on a comparative basis across historical periods and facilitate comparisons of our operating results to those of our competitors. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

G-III APPAREL GROUP, LTD. AND SUBSIDIARIES

RECONCILIATION OF FORECASTED AND ACTUAL NET INCOME PER SHARE TO FORECASTED AND ACTUAL NON-GAAP INCOME PER SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forecasted Three

 

Actual Three

 

Forecasted Twelve

 

Actual Twelve

 

 

Months Ending

 

Months Ended

 

Months Ended

 

Months Ended

 

 

October 31, 2022

 

October 31, 2021

 

January 31, 2023

 

January 31, 2022

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted net income attributable to G-III Apparel Group, Ltd. per common share

 

$

1.70 - 1.80

 

 

$

2.16

 

 

$

3.69 - 3.79

 

 

$

4.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excluded from non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Karl Lagerfeld investment gain

 

 

 

 

 

 

 

 

(0.63

)

 

 

 

Expenses related to Karl Lagerfeld acquisition

 

 

0.07

 

 

 

 

 

 

0.34

 

 

 

0.04

 

Non-cash imputed interest

 

 

0.04

 

 

 

0.03

 

 

 

0.14

 

 

 

0.13

 

Asset impairments, net of gain on lease terminations

 

 

 

 

 

 

 

 

(0.00

)

 

 

0.03

 

Income tax impact of non-GAAP adjustments

 

 

(0.01

)

 

 

(0.01

)

 

 

0.06

 

 

 

(0.05

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP diluted net income attributable to G-III Apparel Group, Ltd. per common share, as defined

 

$

1.80 - 1.90

 

 

$

2.18

 

 

$

3.60 - 3.70

 

 

$

4.20

 

Non-GAAP diluted net income per share is a “non-GAAP financial measure” that excludes (i) gain in the fair value of the Company’s minority ownership in Karl Lagerfeld prior to the acquisition, (ii) asset impairments, net of gain on lease terminations, (iii) expenses related to the Karl Lagerfeld transaction that include incentive compensation, professional fees, amortization of inventory valuation adjustments and foreign currency losses and (iv) non-cash imputed interest expense. The income tax impact of non-GAAP adjustments is calculated using the effective tax rates for the respective periods. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding items that are not indicative of our core business operating results. Management uses these non-GAAP financial measures to assess our performance on a comparative basis and believes that they are also useful to investors to enable them to assess our performance on a comparative basis across historical periods and facilitate comparisons of our operating results to those of our competitors. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

G-III APPAREL GROUP, LTD. AND SUBSIDIARIES

FISCAL 2022 QUARTERLY RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Fiscal Year Ended

 

 

April 30,

 

July 31,

 

October 31,

 

January 31,

 

January 31,

 

 

2021

 

2021

 

2021

 

2022

 

2022

 

 

(Unaudited)

Net income attributable to G-III Apparel Group, Ltd.

 

$

26,321

 

 

$

19,168

 

 

$

106,674

 

 

$

48,430

 

 

$

200,593

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excluded from non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses related to Karl Lagerfeld acquisition

 

 

 

 

 

 

 

 

 

 

 

2,093

 

 

 

2,093

 

Non-cash imputed interest

 

 

1,536

 

 

 

1,599

 

 

 

1,608

 

 

 

1,642

 

 

 

6,385

 

Asset impairments, net of gain on lease terminations

 

 

 

 

 

 

 

 

 

 

 

1,455

 

 

 

1,455

 

Income tax impact of non-GAAP adjustments

 

 

(430

)

 

 

(510

)

 

 

(397

)

 

 

(1,260

)

 

 

(2,598

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income attributable to G-III Apparel Group, Ltd., as defined

 

$

27,427

 

 

$

20,257

 

 

$

107,885

 

 

$

52,360

 

 

$

207,928

 

Non-GAAP net income is a “non-GAAP financial measure” that excludes (i) expenses related to the Karl Lagerfeld transaction that include professional fees and foreign currency losses, (ii) non-cash imputed interest expense and (iii) asset impairments, net of gains on lease terminations. The income tax impact of non-GAAP adjustments is calculated using the effective tax rates for the respective periods. Management believes that this non-GAAP financial measure provides meaningful supplemental information regarding our performance by excluding items that are not indicative of our core business operating results. Management uses this non-GAAP financial measure to assess our performance on a comparative basis and believes that it is also useful to investors to enable them to assess our performance on a comparative basis across historical periods and facilitate comparisons of our operating results to those of our competitors. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

G-III APPAREL GROUP, LTD. AND SUBSIDIARIES

FISCAL 2022 QUARTERLY RECONCILIATION OF GAAP NET INCOME PER SHARE TO NON-GAAP NET INCOME PER SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Fiscal Year Ended

 

 

April 30,

 

July 31,

 

October 31,

 

January 31,

 

January 31,

 

 

2021

 

2021

 

2021

 

2022

 

2022

 

 

(Unaudited)

GAAP diluted net income attributable to G-III Apparel Group, Ltd. per common share

 

$

0.53

 

 

$

0.39

 

 

$

2.16

 

 

$

0.98

 

 

$

4.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excluded from non-GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses related to Karl Lagerfeld acquisition

 

 

 

 

 

 

 

 

 

 

 

0.04

 

 

 

0.04

 

Non-cash imputed interest

 

 

0.04

 

 

 

0.03

 

 

 

0.03

 

 

 

0.03

 

 

 

0.13

 

Asset impairments, net of gain on lease terminations

 

 

 

 

 

 

 

 

 

 

 

0.03

 

 

 

0.03

 

Income tax impact of non-GAAP adjustments

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.01

)

 

 

(0.02

)

 

 

(0.05

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP diluted net income attributable to G-III Apparel Group, Ltd. per common share, as defined

 

$

0.56

 

 

$

0.41

 

 

$

2.18

 

 

$

1.06

 

 

$

4.20

 

Non-GAAP diluted net income per share is a “non-GAAP financial measure” that excludes (i) expenses related to the Karl Lagerfeld transaction that include professional fees and foreign currency losses, (ii) non-cash imputed interest expense and (iii) asset impairments, net of gains on lease terminations. The income tax impact of non-GAAP adjustments is calculated using the effective tax rates for the respective periods. Management believes that this non-GAAP financial measure provides meaningful supplemental information regarding our performance by excluding items that are not indicative of our core business operating results. Management uses this non-GAAP financial measure to assess our performance on a comparative basis and believes that it is also useful to investors to enable them to assess our performance on a comparative basis across historical periods and facilitate comparisons of our operating results to those of our competitors. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

G-III APPAREL GROUP, LTD. AND SUBSIDIARIES

FISCAL 2022 QUARTERLY RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Fiscal Year Ended

 

 

April 30,

 

July 31,

 

October 31,

 

January 31,

 

January 31,

 

 

2021

 

2021

 

2021

 

2022

 

2022

 

 

(Unaudited)

Net income attributable to G-III Apparel Group, Ltd.

 

$

26,321

 

$

19,168

 

$

106,674

 

$

48,430

 

$

200,593

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset impairments, net of gain on lease terminations

 

 

 

 

 

 

 

 

1,455

 

 

1,455

Depreciation and amortization

 

 

7,044

 

 

7,098

 

 

7,024

 

 

6,460

 

 

27,626

Interest and financing charges, net

 

 

12,004

 

 

12,574

 

 

12,354

 

 

12,734

 

 

49,666

Income tax expense

 

 

10,259

 

 

9,235

 

 

40,198

 

 

11,183

 

 

70,875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA, as defined

 

$

55,628

 

$

48,075

 

$

166,250

 

$

80,262

 

$

350,215

Adjusted EBITDA is a “non-GAAP financial measure” which represents earnings before depreciation and amortization, interest and financing charges, net, asset impairments, net of gains on lease terminations and income tax expense. Adjusted EBITDA is being presented as a supplemental disclosure because management believes that it is a common measure of operating performance in the apparel industry. Adjusted EBITDA should not be construed as an alternative to net income, as an indicator of the Company’s operating performance, or as an alternative to cash flows from operating activities as a measure of the Company’s liquidity, as determined in accordance with GAAP.

Contacts

G-III Apparel Group, Ltd.
Company:
Priya Trivedi
SVP of Investor Relations and Treasurer
(646) 473-5228

Investor Relations:
Tom Filandro
ICR, Inc.
(646) 277-1235

Contacts

G-III Apparel Group, Ltd.
Company:
Priya Trivedi
SVP of Investor Relations and Treasurer
(646) 473-5228

Investor Relations:
Tom Filandro
ICR, Inc.
(646) 277-1235