NEW YORK, March 1, 2012 /PRNewswire/ -- Kenneth Cole
Productions, Inc. (NYSE: KCP) today reported financial
results for the fourth quarter and full year ended December 31, 2011.
(Logo: http://photos.prnewswire.com/prnh/20111101/MM98089LOGO
)
For the full year revenues increased 4.7% to $478.9 million, gross margins were down 410 basis
points, and selling, general and administrative expenses as a
percentage of revenues decreased 460 basis points. The
Company reported a loss of $(2.9)
million for the full year, or $(0.16) per share, compared to a profit of
$2.1 million or $0.11 per fully diluted share in 2010.
For the fourth quarter, net revenues increased 8.6% to
$131.2 million versus $120.8 million in the fourth quarter last year.
Wholesale revenues were up 47% to $62.3 million versus the year-ago period. Over
75% of the revenue increase was driven by the inclusion of non-comp
Kenneth Cole New York women's sportswear in Wholesale,
increased doors in Reaction men's sportswear and a one-time
special holiday handbag program. Consumer Direct revenues
decreased 16.6% to $54.7 million
versus the year-ago period due to the closing earlier in the year
of several unproductive full-priced stores and a comparable store
sales decline of 5.0%. Licensing revenues in the fourth quarter
improved approximately 10% to $14.2
million versus $12.9 million
in the year-ago period, driven primarily by higher than anticipated
inventory purchases by one international licensee.
Gross margin declined 230 basis points to 41.2% in the fourth
quarter compared to 43.5% in the year ago period. This
resulted primarily from the combination of higher sourcing costs
and a mix shift in revenues toward Wholesale.
Selling, general and administrative expenses, which do not
include one-time charges in each fourth quarter, improved 680 basis
points to 33.8% from 40.6% in the year ago period. This improvement
was primarily the result of the elimination of overhead related to
unproductive stores closed in the first quarter of 2011 and
leverage achieved on Wholesale growth.
Net income on a GAAP basis for the fourth quarter was
$8.0 million, or $0.43 per fully diluted share versus a loss of
$2.7 million, or $(0.15) in the year ago period. The Company
noted that due to losses in prior years it did not provide
for any federal income taxes in its earnings per share calculation.
The Company ended the year with $58
million in cash and no long-term debt. Inventory
increased 12.2% to $42.2 million
versus the prior year's level of $37.7
million.
In addition, the Company repurchased 107,627 shares of its stock
for approximately $1.1 million during
the quarter. The company has subsequently suspended activity under
the repurchase program.
About Kenneth Cole Productions, Inc.
Kenneth Cole Productions, Inc. designs, sources, and markets a
broad range of footwear, handbags, apparel and accessories under
the brand names Kenneth Cole New York; Kenneth Cole
Reaction; Unlisted; and Le
Tigre, as well as footwear under the proprietary
trademark Gentle Souls. The Company has also granted a
wide variety of third party licenses for the production of men's,
women's and children's apparel as well as fragrances, watches,
jewelry, eyewear, and several other accessory categories. The
Company's products are distributed through department stores,
better specialty stores, company-owned retail stores and its
e-commerce website. Further information can be found at
http://www.kennethcole.com/.
Forward Looking Statement Disclosure
The statements contained in this release, which are not
historical facts, may be deemed to constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Actual future results might differ
materially from those projected in such statements due to a number
of risks and uncertainties, including but not limited to, demand
and competition for the Company's products, the ability to enter
into new product license agreements or to renew or replace existing
product licensee agreements, changes in consumer preferences or
fashion trends, delays in anticipated store openings, and changes
in the Company's relationships with retailers, licensees, vendors
and other resources. The forward looking statements contained
herein are also subject to other risks and uncertainties that are
described in the Company's reports and registration statements
filed with the Securities and Exchange Commission.
Kenneth Cole
Productions, Inc.
|
|
(In thousands,
except
|
Quarter Ended
|
|
Year Ended
|
|
per share &
outstanding share amounts)
|
|
|
|
|
|
|
|
12/31/11
|
|
12/31/10
|
|
12/31/11
|
|
12/31/10
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$117,034
|
|
$107,878
|
|
$432,606
|
|
$411,652
|
|
|
|
|
|
|
|
|
|
|
Royalty Revenue
|
14,177
|
|
12,929
|
|
46,338
|
|
45,676
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
$131,211
|
|
$120,807
|
|
$478,944
|
|
$457,328
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
54,062
|
|
52,500
|
|
185,441
|
|
195,863
|
|
|
|
|
|
|
|
|
|
|
Selling, gen'l &
administrative expenses
|
44,301
|
|
49,077
|
|
173,163
|
|
186,498
|
|
Store closings, severance,
impairment of intangible and long-lived assets
|
1,124
|
|
6,316
|
|
13,771
|
|
7,885
|
|
Total operating
expense
|
45,425
|
|
55,393
|
|
186,934
|
|
194,383
|
|
|
|
|
|
|
|
|
|
|
Operating
income/(loss)
|
8,637
|
|
(2,893)
|
|
(1,493)
|
|
1,480
|
|
|
|
|
|
|
|
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Interest & other
(loss)/income, net
|
(277)
|
|
61
|
|
(113)
|
|
326
|
|
Investment
gains/(impairments)
|
-
|
|
677
|
|
(405)
|
|
1,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) before
taxes
|
8,360
|
|
(2,155)
|
|
(2,011)
|
|
2,980
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
410
|
|
550
|
|
904
|
|
896
|
|
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
$7,950
|
|
$(2,705)
|
|
$(2,915)
|
|
$2,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) per
share: Basic
|
$0.44
|
|
$(0.15)
|
|
$(0.16)
|
|
$0.11
|
|
|
|
|
|
|
|
|
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Net income/(loss) per
share: Diluted
|
$0.43
|
|
$(0.15)
|
|
$(0.16)
|
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$0.11
|
|
|
|
|
|
|
|
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|
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Average shares
outstanding: Basic
|
18,116,000
|
|
18,223,000
|
|
18,211,000
|
|
18,169,000
|
|
|
|
|
|
|
|
|
|
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Average shares
outstanding: Diluted
|
18,437,000
|
|
18,223,000
|
|
18,211,000
|
|
18,533,000
|
|
|
|
|
|
|
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Balance
Sheet Data:
|
12/31/11
|
|
12/31/10
|
|
|
|
|
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Cash & Cash
Equivalents
|
$58,043
|
|
$83,395
|
|
|
|
|
|
Accounts
Receivable
|
45,564
|
|
34,660
|
|
|
|
|
|
Inventory
|
42,249
|
|
37,658
|
|
|
|
|
|
Total Assets
|
249,818
|
|
262,969
|
|
|
|
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Working Capital
|
92,302
|
|
100,286
|
|
|
|
|
Accounts Payable &
Accrued Expenses
|
46,435
|
|
43,608
|
|
|
|
|
Long-term Debt
|
-
|
|
-
|
|
|
|
Total Shareholders'
Equity
|
143,866
|
|
146,735
|
|
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SOURCE Kenneth Cole Productions, Inc.