NEW YORK, April 18, 2017 /PRNewswire/ -- Kate
Spade & Company (NYSE: KATE) today announced results for
the first quarter ended April 1, 2017.
Net sales for the first quarter of 2017 were $271 million, a decrease of $3 million, or 1.2%, compared to the first
quarter of 2016. For the first quarter of 2017 on a GAAP basis, the
Company recorded income from continuing operations of $1 million, or $0.01 per diluted share, including $7 million of pretax store impairment charges and
$2 million of pretax fees and
expenses related to the Company's ongoing review of strategic
alternatives. Income from continuing operations for the first
quarter of 2016 was $11 million, or
$0.08 per diluted share. Diluted
earnings per share from continuing operations for the first quarter
of 2017 were $0.01 using a normalized
tax rate and including $0.04 of after
tax impact from the previously noted charges, fees and expenses,
compared to $0.05 for the first
quarter of 2016. Adjusted EBITDA was $30
million for the first quarter of 2017, including the
previously mentioned fees and expenses of $2
million related to the Company's ongoing review of strategic
alternatives, compared to Adjusted EBITDA of $35 million for the first quarter of
2016.
Craig A. Leavitt, Chief Executive
Officer of Kate Spade & Company,
said: "Despite a challenging retail environment and the later
Easter holiday, we achieved yet another quarter of double-digit
eCommerce comparable sales growth, which helped offset softness in
bricks and mortar stores. Against this backdrop, we delivered
strong gross margin expansion while working to drive profitable
growth across our categories and channels. At the same time, our
Board of Directors, together with management, continue to evaluate
strategic alternatives to further maximize value for our
shareholders."
George Carrara, President and
Chief Operating Officer of Kate
Spade & Company, added: "We delivered over 140 basis
points of gross margin expansion in the first quarter driven by
operational efficiencies and our continued focus on quality of sale
amidst a highly promotional environment. In addition, we continued
to generate robust cash flow over the past twelve months and ended
the quarter with $422 million in
cash. We delivered these solid results despite the factors that
negatively impacted our first quarter performance."
REVIEW OF STRATEGIC ALTERNATIVES
On February 16, 2017, Kate Spade & Company announced that its
Board of Directors, together with management and in consultation
with Perella Weinberg Partners as its financial advisor and Paul,
Weiss, Rifkind, Wharton & Garrison as its legal counsel, is
conducting a process to explore and evaluate strategic alternatives
to further enhance shareholder value. The Board is proceeding in a
timely manner, but has not set a definitive timetable for
completion of this process. There can be no assurance that this
review process will result in a transaction or other strategic
alternative of any kind. The Company does not intend to disclose
developments or provide updates on the progress or status of this
process or discuss with investors the Company's results of
operations until it deems further disclosure is appropriate or
required. No forward-looking guidance will be provided at this
time. Due to the ongoing review process, the Company will not host
an earnings call or webcast for its first quarter results.
FIRST QUARTER RESULTS
Overall Results
Net sales for the first quarter of 2017 were $271 million, a decrease of $3 million, or 1.2%, compared to the first
quarter of 2016. First quarter 2017 direct-to-consumer comparable
sales declined (2.4)%, or (8.1)% excluding eCommerce. Comparable
sales per square foot for kate spade new york stores were
$1,516 for the latest twelve months,
compared to $1,557 for the twelve
month period ended December 31,
2016.
Gross profit as a percentage of net sales was 63.2% for
the first quarter of 2017, compared to 61.8% for the first quarter
of 2016.
Selling, general & administrative expenses were
$165 million in the first quarter of
2017 and $152 million in the first
quarter of 2016, or 60.7% and 55.3% of net sales, respectively,
including $7 million of store
impairment charges and $2 million of
fees and expenses related to the Company's ongoing review of
strategic alternatives.
Income from continuing operations was $1 million, or $0.01 per diluted share in the first quarter of
2017, compared to $11 million, or
$0.08 per diluted share, in the first
quarter of 2016. Diluted earnings per share from continuing
operations in the first quarter of 2017 using a normalized tax rate
were $0.01, compared to $0.05 in the first quarter of 2016.
Segment Highlights
- Kate Spade North America
net sales for the first quarter of 2017 were $217 million, a decrease of $1 million, or 0.6%, compared to the first
quarter of 2016. Kate Spade North America Segment Adjusted EBITDA
was $23 million (10.5% of net sales)
for the first quarter of 2017, compared to $25 million (11.2% of net sales) for the first
quarter of 2016.
- Kate Spade International net sales for the first quarter
of 2017 were $49 million, flat
compared to the first quarter of 2016. Kate Spade International
Segment Adjusted EBITDA was $8
million (15.9% of net sales) for the first quarter of 2017,
compared to $9 million (17.5% of net
sales) for the first quarter of 2016.
- Adelington Design Group net sales for the first quarter
of 2017 were $5 million, a decrease
of $2 million, or 29.3%, compared to
the first quarter of 2016. Adelington Design Group Segment Adjusted
EBITDA was $1 million (10.5% of net
sales) for the first quarter of 2017, compared to $2 million (31.8% of net sales) for the first
quarter of 2016.
Store Count Information
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2017
|
|
|
|
|
|
Q4 2016
|
|
Net Store Openings
|
|
Q1 2017
|
|
|
North America
Owned Stores
|
|
|
|
|
|
|
|
|
Specialty
|
|
108
|
|
1
|
|
109
|
|
|
Outlet
|
|
68
|
|
-
|
|
68
|
|
|
Total North
America Owned Stores
|
|
176
|
|
1
|
|
177
|
|
|
Average Square
Feet (in '000s)
|
|
409
|
|
|
|
411
|
|
|
|
|
|
|
|
|
|
|
International
Owned Stores
|
|
|
|
|
|
|
|
|
Specialty
|
|
25
|
|
2
|
|
27
|
|
|
Outlet
|
|
14
|
|
-
|
|
14
|
|
|
Concessions
|
|
54
|
|
(1)
|
|
53
|
|
|
Total
International Owned Stores
|
|
93
|
|
1
|
|
94
|
|
|
Average Square
Feet (in '000s)
|
|
87
|
|
|
|
88
|
|
|
|
|
|
|
|
|
|
|
Total Owned Store
Count
|
|
269
|
|
2
|
|
271
|
|
|
Average Owned
Square Feet (in '000s)
|
|
496
|
|
|
|
499
|
|
|
|
|
|
|
|
|
|
|
Partner Operated
Stores
|
|
105
|
|
-
|
|
105
|
|
|
Greater China Joint
Venture Stores
|
|
45
|
|
2
|
|
47
|
|
|
Total Partnered
Store Count
|
|
150
|
|
2
|
|
152
|
|
|
|
|
|
|
|
|
|
|
Total Store
Count
|
|
419
|
|
4
|
|
423
|
|
|
|
|
|
|
|
|
|
|
Total Licensee
Operated Partnered Stores
|
|
29
|
|
-
|
|
29
|
|
|
|
|
|
|
|
|
|
|
Total Store
Footprint
|
|
448
|
|
4
|
|
452
|
|
PRESENTATION OF NON-GAAP FINANCIAL INFORMATION AND KEY
OPERATING METRICS
The income from continuing operations for 2017 and 2016 is
presented on a GAAP basis and also adjusted by multiplying pretax
income by a normalized tax rate. The Company presents the
below-described Adjusted EBITDA measure and the 2017 and 2016
results using a normalized tax rate because it considers them
important supplemental measures of its performance and believes
they are frequently used by securities analysts, investors and
other interested parties in the evaluation of companies in its
industry.
The attached table, captioned "Reconciliation of Non-GAAP
Financial Information," provides a full reconciliation of actual
results to the adjusted results. The Company presents Adjusted
EBITDA, which it defines as income from continuing operations,
adjusted to exclude income tax provision, interest
expense, net, depreciation and amortization, net, non-cash
impairment charges, losses on asset disposals, non-cash share-based
compensation expense and unrealized and certain realized foreign
currency transaction adjustments, net. The Company presents
non-GAAP financial measures because it uses such measures to
monitor the performance of its business on a comparable basis and
to determine certain levels of compensation. The Company believes
the presentation of these measures enhances the ability of its
investors to analyze trends in its business and provides them with
a means to compare periods that may be affected by various items
that might obscure trends or developments in its business.
The Company evaluates comparable sales productivity based on
comparable net sales per average square foot, which is defined as
net sales divided by the average of beginning and end of period
gross square feet and excludes e-commerce net sales. The
Company's policy regarding its calculation of comparable
direct-to-consumer net sales is discussed in the "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" section of its most recent Annual Report on Form 10-K
filed with the SEC on February 23,
2017. The Company presents the above described key operating
metrics because it considers them important supplemental measures
of its performance and believes they are frequently used by
securities analysts, investors and other interested parties in the
evaluation of companies in its industry.
ABOUT KATE SPADE & COMPANY
Kate Spade & Company (NYSE:
KATE) operates principally under two global, multichannel lifestyle
brands: kate spade new york and Jack Spade New York™.
The Company's four category pillars – women's, men's,
children's and home – span demographics, genders and geographies.
Known for crisp color, graphic prints and playful
sophistication, kate spade new york aims to inspire a
more interesting life. The kate spade new york
collection includes the Madison Avenue, Broome Street and on
purpose labels. Jack Spade New York offers a
timeless and versatile assortment of bags, sportswear and tailored
clothing founded on the aesthetic of simple, purposeful design.
The Company also owns Adelington Design Group, a private
brand jewelry design and development group.
Visit www.katespadeandcompany.com for more
information.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
Statements contained in, or incorporated by reference into, this
press release, future filings by us with the Securities and
Exchange Commission ("SEC"), and oral statements made by, or with
the approval of, our authorized personnel, that relate to our plans
and expectations for future periods are forward-looking statements
under the Private Securities Litigation Reform Act of 1995. Words
such as "intend," "expect," "contemplate," "anticipate," "believe,"
"plan," "forecast," "target," "aim," "project," "on track," "are
positioned to," "estimate," "may," "will," "should" and variations
of such words and similar expressions and phrases are intended to
identify such forward-looking statements. You should not place
undue reliance on such forward-looking statements, as they are not
guarantees of performance or results. Although we believe that the
expectations reflected in these forward-looking statements are
reasonable, these expectations may not prove to be correct or we
may not achieve the financial results, savings or other benefits
anticipated in the forward-looking statements. These
forward-looking statements are simply estimates reflecting the best
judgment of our senior management and involve, and are subject to,
a number of risks and uncertainties, many of which are beyond our
control and which could cause actual results to differ materially
from those suggested by the forward-looking statements. These risks
are more fully discussed in the "Risk Factors" section and
elsewhere in the Company's most recent Annual Report on Form 10-K
filed with the SEC on February 23,
2017 and any subsequent quarterly reports on Form 10-Q. All
subsequent written and oral forward-looking statements concerning
the matters addressed herein and attributable to us or any person
acting on our behalf are qualified by these cautionary statements.
We may change our intentions, beliefs or expectations at any time
and without notice, based upon any change in our assumptions or
otherwise. We undertake no obligation to publicly update or revise
any forward‑looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
|
KATE SPADE &
COMPANY
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
(All amounts in
thousands, except per common share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
April 1, 2017
|
|
% of
|
|
April 2, 2016
|
|
% of
|
|
|
(13
Weeks)
|
|
Sales
|
|
(13
Weeks)
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales
|
|
$
|
271,225
|
|
100.0
|
%
|
|
$
|
274,422
|
|
100.0
|
%
|
|
Cost of goods
sold
|
|
|
99,763
|
|
36.8
|
%
|
|
|
104,941
|
|
38.2
|
%
|
|
Gross
Profit
|
|
|
171,462
|
|
63.2
|
%
|
|
|
169,481
|
|
61.8
|
%
|
|
Selling, general &
administrative expenses
|
|
|
164,580
|
|
60.7
|
%
|
|
|
151,768
|
|
55.3
|
%
|
|
Operating
Income
|
|
|
6,882
|
|
2.5
|
%
|
|
|
17,713
|
|
6.5
|
%
|
|
Other income
(expense), net
|
|
|
607
|
|
0.2
|
%
|
|
|
(247)
|
|
(0.1)
|
%
|
|
Interest expense,
net
|
|
|
(4,545)
|
|
(1.7)
|
%
|
|
|
(4,996)
|
|
(1.8)
|
%
|
|
Income Before
Provision for Income Taxes
|
|
|
2,944
|
|
1.1
|
%
|
|
|
12,470
|
|
4.5
|
%
|
|
Provision for income
taxes
|
|
|
1,750
|
|
0.6
|
%
|
|
|
1,554
|
|
0.6
|
%
|
|
Income from
Continuing Operations
|
|
|
1,194
|
|
0.4
|
%
|
|
|
10,916
|
|
4.0
|
%
|
|
Discontinued
operations, net of income taxes
|
|
|
165
|
|
|
|
|
|
720
|
|
|
|
|
Net
Income
|
|
$
|
1,359
|
|
|
|
|
$
|
11,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing
Operations
|
|
$
|
0.01
|
|
|
|
|
$
|
0.09
|
|
|
|
|
Net Income
|
|
$
|
0.01
|
|
|
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing
Operations
|
|
$
|
0.01
|
|
|
|
|
$
|
0.08
|
|
|
|
|
Net Income
|
|
$
|
0.01
|
|
|
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares, Basic
|
|
|
128,387
|
|
|
|
|
|
127,931
|
|
|
|
|
Weighted Average
Shares, Diluted
|
|
|
128,954
|
|
|
|
|
|
128,636
|
|
|
|
|
KATE
SPADE & COMPANY
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
(All amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
April 1, 2017
|
|
April 2, 2016
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
422,332
|
|
$
|
260,647
|
|
|
Accounts receivable -
trade, net
|
|
|
64,336
|
|
|
68,626
|
|
|
Inventories,
net
|
|
|
215,097
|
|
|
220,666
|
|
|
Other current
assets
|
|
|
36,871
|
|
|
33,793
|
|
|
Total current
assets
|
|
|
738,636
|
|
|
583,732
|
|
|
|
|
|
|
|
|
|
|
Property and
Equipment, Net
|
|
|
159,395
|
|
|
175,290
|
|
|
Goodwill
|
|
|
52,173
|
|
|
52,315
|
|
|
Intangibles,
Net
|
|
|
85,881
|
|
|
87,285
|
|
|
Other
Assets
|
|
|
56,020
|
|
|
53,279
|
|
|
Total
Assets
|
|
$
|
1,092,105
|
|
$
|
951,901
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
3,701
|
|
$
|
3,638
|
|
|
Other current
liabilities
|
|
|
198,204
|
|
|
218,566
|
|
|
Total current
liabilities
|
|
|
201,905
|
|
|
222,204
|
|
|
|
|
|
|
|
|
|
|
Long-Term
Debt
|
|
|
388,878
|
|
|
391,317
|
|
|
Other Non-Current
Liabilities
|
|
|
65,005
|
|
|
70,839
|
|
|
Stockholders'
Equity
|
|
|
436,317
|
|
|
267,541
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
1,092,105
|
|
$
|
951,901
|
|
|
KATE
SPADE & COMPANY
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(All amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
April 1, 2017
|
|
April 2, 2016
|
|
|
|
(13
Weeks)
|
|
(13
Weeks)
|
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,359
|
|
$
|
11,636
|
|
|
Adjustments to arrive
at income from continuing operations
|
|
|
(165)
|
|
|
(720)
|
|
|
Income from continuing
operations
|
|
|
1,194
|
|
|
10,916
|
|
|
|
|
|
|
|
|
|
|
Adjustments to
reconcile income from continuing operations to net cash used in
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
12,459
|
|
|
11,539
|
|
|
Loss on asset
disposals and impairments, including streamlining initiatives,
net
|
|
|
6,767
|
|
|
206
|
|
|
Share-based
compensation
|
|
|
6,199
|
|
|
7,910
|
|
|
Foreign currency
transaction gains, net
|
|
|
(3,924)
|
|
|
(4,325)
|
|
|
Equity losses of
equity investees
|
|
|
260
|
|
|
1,241
|
|
|
Other, net
|
|
|
5
|
|
|
31
|
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
Decrease in accounts
receivable - trade, net
|
|
|
13,752
|
|
|
29,279
|
|
|
Increase in
inventories, net
|
|
|
(46,261)
|
|
|
(26,306)
|
|
|
Increase in other
current and non-current assets
|
|
|
(9,727)
|
|
|
(448)
|
|
|
Increase (decrease) in
accounts payable
|
|
|
800
|
|
|
(9,589)
|
|
|
Decrease in accrued
expenses and other non-current liabilities
|
|
|
(21,517)
|
|
|
(33,368)
|
|
|
Net change in income
tax assets and liabilities
|
|
|
(226)
|
|
|
462
|
|
|
Net cash used in
operating activities of discontinued operations
|
|
|
(71)
|
|
|
(119)
|
|
|
Net cash used in
operating activities
|
|
|
(40,290)
|
|
|
(12,571)
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(9,903)
|
|
|
(11,822)
|
|
|
Proceeds from sales of
joint venture interests, net
|
|
|
—
|
|
|
(2,350)
|
|
|
Investments in and
advances to equity investees
|
|
|
—
|
|
|
(6,500)
|
|
|
Payments for in-store
merchandise shops
|
|
|
(1,664)
|
|
|
(660)
|
|
|
Purchase of
trademarks
|
|
|
—
|
|
|
(1,200)
|
|
|
Other, net
|
|
|
(11)
|
|
|
45
|
|
|
Net cash used in
investing activities
|
|
|
(11,578)
|
|
|
(22,487)
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
Repayment of Term
Loan
|
|
|
(1,000)
|
|
|
(2,000)
|
|
|
Principal payments
under capital lease obligations
|
|
|
(138)
|
|
|
(123)
|
|
|
Proceeds from exercise
of stock options
|
|
|
810
|
|
|
65
|
|
|
Payment of deferred
financing fees
|
|
|
(171)
|
|
|
(315)
|
|
|
Withholding taxes on
share-based compensation
|
|
|
(5,344)
|
|
|
(761)
|
|
|
Net cash used in
financing activities
|
|
|
(5,843)
|
|
|
(3,134)
|
|
|
|
|
|
|
|
|
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
|
|
1,507
|
|
|
988
|
|
|
|
|
|
|
|
|
|
|
Net Change in Cash
and Cash Equivalents
|
|
|
(56,204)
|
|
|
(37,204)
|
|
|
Cash and Cash
Equivalents at Beginning of Period
|
|
|
478,536
|
|
|
297,851
|
|
|
Cash and Cash
Equivalents at End of Period
|
|
$
|
422,332
|
|
$
|
260,647
|
|
|
KATE
SPADE & COMPANY
|
|
RECONCILIATION OF
NON-GAAP FINANCIAL INFORMATION
|
|
(All amounts in
thousands, except per common share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
April 1, 2017
|
|
April 2,
2016
|
|
|
|
(13
Weeks)
|
|
(13
Weeks)
|
|
|
|
|
|
|
|
|
|
|
Total Net
Sales
|
|
$
|
271,225
|
|
$
|
274,422
|
|
|
KATE SPADE North
America
|
|
|
217,398
|
|
|
218,677
|
|
|
KATE SPADE
International
|
|
|
48,976
|
|
|
48,883
|
|
|
Adelington Design
Group
|
|
|
4,851
|
|
|
6,862
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
|
|
171,462
|
|
|
169,481
|
|
|
|
|
|
|
|
|
|
|
SG&A
|
|
|
164,580
|
|
|
151,768
|
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
$
|
6,882
|
|
$
|
17,713
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense), net
|
|
|
607
|
|
|
(247)
|
|
|
Interest expense,
net
|
|
|
(4,545)
|
|
|
(4,996)
|
|
|
Provision for income
taxes
|
|
|
1,750
|
|
|
1,554
|
|
|
Income from
Continuing Operations
|
|
$
|
1,194
|
|
$
|
10,916
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operations, net of income taxes
|
|
|
165
|
|
|
720
|
|
|
|
|
|
|
|
|
|
|
Net
Income
|
|
$
|
1,359
|
|
$
|
11,636
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings per
Common Share from Continuing Operations
|
|
$
|
0.01
|
|
$
|
0.09
|
|
|
Diluted Earnings per
Common Share from Continuing Operations
|
|
$
|
0.01
|
|
$
|
0.08
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted Income from Continuing Operations:
|
|
|
|
|
|
|
|
|
Net Income, per
above
|
|
$
|
1,359
|
|
$
|
11,636
|
|
|
Less: discontinued
operations, net of income taxes
|
|
|
(165)
|
|
|
(720)
|
|
|
Adjustment to benefit
(provision) for income taxes
|
|
|
372
|
|
|
(4,028)
|
|
|
Adjusted Income
from Continuing Operations (a)
|
|
$
|
1,566
|
|
$
|
6,888
|
|
|
|
|
|
|
|
|
|
|
Adjusted Basic
Earnings per Common Share from Continuing Operations
|
|
$
|
0.01
|
|
$
|
0.05
|
|
|
Adjusted Diluted
Earnings per Common Share from Continuing Operations
(b)
|
|
$
|
0.01
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
Net Income, per
above
|
|
$
|
1,359
|
|
$
|
11,636
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization, asset impairments and losses on asset disposals, net
(c)
|
|
|
18,252
|
|
|
10,927
|
|
|
Share-based
compensation
|
|
|
6,199
|
|
|
7,910
|
|
|
Foreign currency
adjustments, net
|
|
|
(1,665)
|
|
|
(1,135)
|
|
|
Interest expense,
net
|
|
|
4,545
|
|
|
4,996
|
|
|
Provision for income
taxes
|
|
|
(1,750)
|
|
|
(1,554)
|
|
|
Discontinued
operations, net of income taxes
|
|
|
(165)
|
|
|
(720)
|
|
|
Adjusted
EBITDA
|
|
$
|
30,275
|
|
$
|
35,168
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
Reportable Segments
Adjusted EBITDA (d):
|
|
|
|
|
|
|
|
|
KATE SPADE North
America
|
|
$
|
22,788
|
|
$
|
24,587
|
|
|
KATE SPADE
International (e)
|
|
|
7,778
|
|
|
8,537
|
|
|
Adelington Design
Group
|
|
|
507
|
|
|
2,185
|
|
|
Other
(f)
|
|
|
(798)
|
|
|
(141)
|
|
|
Adjusted
EBITDA
|
|
$
|
30,275
|
|
$
|
35,168
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Margin
|
|
|
|
|
|
|
|
|
KATE SPADE North
America
|
|
|
10.5
|
%
|
|
11.2
|
%
|
|
KATE SPADE
International (e)
|
|
|
15.9
|
%
|
|
17.5
|
%
|
|
Adelington Design
Group
|
|
|
10.5
|
%
|
|
31.8
|
%
|
|
Kate
Spade & Company
|
|
|
11.2
|
%
|
|
12.8
|
%
|
|
______________________________
|
|
(a)
|
Adjusted amounts for
the three months ended April 1, 2017 and April 2, 2016 represent
pretax income multiplied by a normalized tax rate of 40.0%, plus
$0.1 million and $0.1 million, respectively, for interest and
penalties on uncertain tax positions. The normalized tax rates were
derived by reference to statutory tax rates in the regions in which
the Company operates, without giving effect to the impact of income
tax consequences of share-based compensation, the Company's
valuation allowance or potential use of its net operating loss
carryforwards.
|
|
(b)
|
Adjusted diluted
earnings per share for the three months ended April 1, 2017 and
April 2, 2016 are based on 128,954 shares outstanding and 128,636
shares outstanding, respectively.
|
|
(c)
|
Excludes amortization
included in Interest expense, net.
|
|
(d)
|
Segment Adjusted
EBITDA excludes (i) depreciation and amortization and (ii) losses
on asset disposals and impairments. The costs of all corporate
departments that serve the respective segment are fully allocated,
other than non-cash share-based compensation expense. The Company
does not allocate amounts reported below Operating income to its
reportable segments, other than equity loss in its equity method
investees. The Company's definition of Segment Adjusted EBITDA may
not be comparable to similarly titled measures of other
companies.
|
|
(e)
|
Amounts include
equity in the losses of equity method investees for the three
months ended April 1, 2017 and April 2, 2016 of $260 and $1,241,
respectively.
|
|
(f)
|
Amounts represent
Other expense, net as shown above, net of foreign currency
transaction adjustment of $(1,665) and equity in the losses of
equity method investees of $260 for the three months ended April 1,
2017 and Other expense, net as shown above, net of foreign currency
transaction adjustment of $(1,135) and equity in the losses of
equity method investees of $1,241 for the three months ended April
2, 2016.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/kate-spade--company-reports-first-quarter-2017-results-300440575.html
SOURCE Kate Spade &
Company