Kellwood (NYSE:KWD)
Historical Stock Chart
From Jul 2019 to Jul 2024
![Click Here for more Kellwood Charts. Click Here for more Kellwood Charts.](/p.php?pid=staticchart&s=NY%5EKWD&p=8&t=15)
Kellwood (NYSE: KWD) Reports First Quarter Results
Sales Up 2 Percent - Net Earnings Up 19 Percent
ST. LOUIS, MO., June 3 /PRNewswire-FirstCall/ -- Kellwood Company reported
operating results for the first quarter ended May 1, 2004, according to Hal J.
Upbin, chairman and chief executive officer.
(Logo: http://www.newscom.com/cgi-bin/prnh/20011220/CGTH038LOGO )
Sales for the first quarter increased $14 million to $686 million, versus $672
million last year due to a combination of organic growth of $5 million, or
approximately 1 percent, and the acquisition of Phat Fashions which provided $9
million of revenue. Phat Fashions was acquired on February 3, 2004, and is
being reported within the Men's Sportswear segment.
The organic growth was driven by the new marketing initiatives put in place
during the last nine months of fiscal year 2003 which includes Calvin Klein(R),
IZOD(R), XOXO(R), and Lucy Pereda(TM) women's sportswear, Liz Claiborne(R)
dresses and suits, and Def Jam University(TM) urban sportswear. Nearly
two-thirds of this growth was offset by the planned elimination of certain low
margin business. All of the organic growth for the quarter came from the
Women's Sportswear segment, up 6 percent, and the Men's Sportswear segment, up
1 percent. Sales of Other Soft Goods were down 16 percent from last year due
principally to sourcing and logistical challenges in Intimate Apparel. These
issues are being addressed and should be resolved during the second half.
Net earnings from continuing operations for the quarter were strong, increasing
$3.9 million, or 19 percent to $25.0 million, or $0.90 per diluted share,
versus $21.1 million, or $0.80 per share last year. The increase in earnings
was driven by a 2.2 percentage point increase in gross profit as a percent of
sales, which was partially offset by an increase in SG&A spending attendant
with the new marketing initiatives. The improvement in gross profit as a
percent of sales came from the acquisition of Phat Fashions, a mix of higher
margin branded business, improved sourcing, less markdown pressure, and lower
surplus and obsolete inventory. This is the eighth consecutive quarter in
which Kellwood has reported a significant year-to-year improvement in gross
profit as a percent of sales reflecting the continued underlying strengthening
of operations, quality of inventory, and improving mix of business.
Kellwood ended the quarter with an exceptionally strong balance sheet. Total
debt continues to drop and represented 30 percent of total capital at the end
of the first quarter, versus 34 percent at the same time last year. Total
inventory was $27 million below last year and represented 56 days supply,
versus 68 days at the end of the first quarter last year.
As Kellwood looks ahead to the second quarter and total year, the Company is
encouraged by the improving economy and improving same store sales being
reported by the retailers. In spite of these favorable and encouraging trends,
the retailers are continuing to place orders closer to the selling season and
are not stepping up with big increases in open-to-buy. Cautious optimism
continues to be the mindset at retail which is good for the entire supply chain
- retail and wholesale. More emphasis is being placed on gross margin,
inventory turnover and return on investment which benefits everyone.
As a result, the Company expects sales in the second quarter to increase 10 to
12 percent and to be in the range of $560 to $570 million, versus $509 million
reported last year. Net earnings from continuing operations are forecasted to
increase by approximately 20 percent and to be in the range of $9-$10 million,
or $0.32-$0.35 per diluted share, versus $7.9 million, or $0.29 per share last
year.
The Company expects to be on target with its financial plan through the first
six months. At this time, Kellwood remains comfortable in staying with its
original financial plan and guidance for the year which calls for sales to
increase by 11 percent to approximately $2.6 billion, versus $2.35 billion last
year. Net earnings from continuing operations for the year are planned to
increase by $15-$17 million, or approximately 23 percent to $88-$90 million, or
$3.15-$3.25 per diluted share, versus $72.6 million, or $2.68 per share
reported last year.
The Company held its forty-second Annual Shareowners' meeting today at its
headquarters in St. Louis. Approximately 90 percent of the outstanding shares
were represented either in person or by proxy. Robert C. Skinner, Jr.,
Kellwood president and chief operating officer, was elected a new Board member.
Other Directors standing for election this year were Martin Bloom, Martin J.
Granoff and Hal J. Upbin. All were elected.
The Board of Directors declared a regular quarterly dividend of $0.16 per
common share, payable June 25, 2004 to shareholders of record June 14, 2004.
The Company will conduct a conference call on June 4 at 10:00 a.m. EDT.
Interested parties who wish to participate, may do so by dialing 646-862-1100.
An updated version of Kellwood's analyst presentation is accessible on its
website at http://www.kellwood.com/ .
Kellwood (NYSE:KWD), a $2.35 billion marketer of apparel and consumer soft
goods. Kellwood specializes in branded as well as private label products, and
markets to all channels of distribution with product specific to a particular
channel. Kellwood brands include Phat Farm(R), Baby Phat(R), Sag Harbor(R),
Koret(R), Jax(R), David Dart(R), Democracy(R), David Meister(TM), Dorby(TM), My
Michelle(R), Briggs New York(R), Northern Isles(R), David Brooks(R), Kelty(R),
and Sierra Designs(R). Calvin Klein(R), XOXO(R), Liz Claiborne(R) Dresses and
Suits, IZOD(R), Dockers(R), Gerber(R), Slates(R) and Bill Burns(R) are produced
under licensing agreements. For more information, visit
http://www.kellwood.com/ .
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995. This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. The words
"believe", "expect", "will", "estimate", "project", "forecast", "should",
"anticipate" and similar expressions may identify forward-looking statements.
These forward-looking statements represent the Company's expectations
concerning future events, are based on various assumptions and are subject to a
number of risks and uncertainties. These risks include, without limitation:
changes in the retail environment; an economic downturn in the retail market,
including deflationary pressures; economic uncertainty due to the elimination
of quotas on Chinese imports; a decline in the demand for the Company's
products; the lack of customer acceptance of the Company's new designs and/or
product lines; the increasingly competitive and consolidating retail
environment; financial or operational difficulties of customers or suppliers;
disruptions to transportation systems used by the Company or its suppliers;
continued satisfactory relationships with licensees and licensors of trademarks
and brands; ability to generate sufficient sales and profitability related to
licenses containing minimum royalty payments; the economic impact of
uncontrollable factors, such as terrorism and war; the effect of economic
conditions and trade, legal social and economic risks (such as import,
licensing and trade restrictions); stable governments and business conditions
in the countries where the Company's products are manufactured; the impact of
acquisition activity and the ability to effectively integrate acquired
operations; and changes in the Company's strategies and expectations. These
risks are more fully described in the Company's periodic filings with the SEC.
Actual results could differ materially from those expressed or implied in
forward-looking statements. The Company disclaims any obligation to publicly
update or revise any of its forward-looking statements.
KELLWOOD COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
(Amounts in thousands, except per share data)
Three Months Ended
5/1/2004 5/3/2003
Net sales by segment:
Women's Sportswear $437,977 $411,926
Men's Sportswear 128,157 117,214
Other Soft Goods 119,969 143,206
Total net sales 686,103 672,346
Costs and expenses:
Cost of products sold 531,538 536,043
Selling, general and
administrative expenses 106,908 94,078
Amortization of intangible assets 3,466 2,818
Interest expense, net 6,288 6,443
Other (income) and expense, net (180) 178
Earnings before income taxes 38,083 32,786
Income taxes 13,044 11,663
Net earnings from continuing operations 25,039 21,123
Net earnings (loss)
from discontinued operations - (295)
Net earnings $25,039 $20,828
Weighted average shares outstanding:
Basic 27,090 26,174
Diluted 27,832 26,554
Earnings (loss) per share:
Basic:
Continuing operations $.92 $.81
Discontinued operations - (.01)
Net earnings $.92 $.80
Diluted:
Continuing operations $.90 $.80
Discontinued operations - (.02)
Net earnings $.90 $.78
KELLWOOD COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(Amounts in thousands)
As of
5/1/2004 5/3/2003
ASSETS
Current assets:
Cash and cash equivalents $72,672 $94,419
Receivables, net 388,317 380,251
Inventories 247,384 274,129
Prepaid taxes and expenses 70,506 41,759
Current assets of discontinued operations - 24,144
Total current assets 778,879 814,702
Property, plant and equipment, net 97,388 97,824
Intangible assets, net 227,298 129,847
Goodwill 186,597 150,196
Other assets 28,568 37,673
Long-term assets of discontinued operations - 8,206
Total assets $1,318,730 $1,238,448
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
Notes payable and current
portion of long-term debt $18,153 $28,629
Accounts payable 152,353 155,357
Accrued expenses 116,797 106,627
Current liabilities of discontinued
operations 2,120 14,840
Total current liabilities 289,423 305,453
Long-term debt 271,875 278,022
Deferred income taxes and other 73,435 59,444
Long-term liabilities of discontinued operations - 2,500
Shareowners' equity 683,997 593,029
Total liabilities & shareowners' equity $1,318,730 $1,238,448
KELLWOOD COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(Amounts in thousands)
Three Months Ended
5/1/2004 5/3/2003
OPERATING ACTIVITIES
Net earnings $25,039 $20,828
Add/(deduct) items not affecting operating
cash flows:
Depreciation and amortization 10,247 9,451
Deferred income taxes and other 2,674 4,280
Changes in working capital components:
Receivables, net (65,665) (40,614)
Inventories 68,697 86,954
Prepaid taxes and expenses (3,934) (615)
Accounts payable and accrued expenses (20,864) (59,492)
Net cash from operating activities 16,194 20,792
INVESTING ACTIVITIES
Additions to property, plant and equipment (4,442) (4,705)
Acquisitions, net of cash acquired (143,473) (132,517)
Dispositions of fixed assets 692 1,629
Net cash from investing activities (147,223) (135,593)
FINANCING ACTIVITIES
Proceeds from notes payable and
short-term borrowings, net 15,657 1,408
Reduction of long-term debt - (303)
Stock transactions under incentive plans 13,230 1,989
Dividends paid (4,341) (4,197)
Net cash from financing activities 24,546 (1,103)
Net increase (decrease) in cash and cash
equivalents (106,483) (115,904)
Cash and cash equivalents, beginning
of period 179,155 210,323
Cash and cash equivalents, end of period $72,672 $94,419
Significant non-cash investing and
financing activities:
Issuance of stock for acquisitions $- $11,891
Supplemental cash flow Information:
Interest paid $6,197 $7,593
Income taxes paid (refunded), net $(2,552) $10,925
Note Regarding Discontinued Operations
(Amounts in thousands, except per share data)
On October 30, 2003, the Company finalized an agreement to sell its domestic
and European hosiery (Hosiery) operations for $7,500 plus reimbursement of
$2,800 for costs incurred by the Company in connection with the closure of
certain facilities. In addition, during the fourth quarter of 2003, the
Company decided to discontinue its True Beauty by Emme(R) (True Beauty)
operations. This included the termination of the related license agreement
before its expiration. The operations of True Beauty ceased in the fourth
quarter of 2003. Accordingly, both the Hosiery and True Beauty businesses have
been accounted for as discontinued operations. As such, their operating
results and assets and liabilities are segregated in the accompanying condensed
consolidated statement of earnings and condensed consolidated balance sheet.
Prior to being classified as discontinued, the Hosiery operations were included
in the Men's Sportswear segment, and True Beauty was included in the Women's
Sportswear segment.
For the three months ended May 1, 2004, there was no operating activity for the
discontinued operations. For the three months ended May 3, 2003, the operating
results for the discontinued Hosiery and True Beauty businesses are as follows:
Three-months ended May 3, 2003
Hosiery True Beauty Total
Net sales $12,979 $3,898 $16,877
Earnings (loss) before income
taxes (920) 462 (458)
Income taxes (327) 164 (163)
Net earnings (loss) $(593) $298 $(295)
http://www.newscom.com/cgi-bin/prnh/20011220/CGTH038LOGO
http://photoarchive.ap.org/
DATASOURCE: Kellwood Company
CONTACT: Financial, Roger D. Joseph, VP Treasurer & IR, +1-314-576-3437,
or fax, +1-314-576-3325, , or W. Lee Capps III,
Executive VP Finance & CFO, +1-314-576-3486, or fax, +1-314-576-3439,
; Media, Donna Weaver, VP Corp. Comm., +1-314-576-3391, or
fax, +1-314-576-3434, , all of Kellwood Co.
Web site: http://www.kellwood.com/