The Company reported adjusted earnings per share ("EPS") of $0.15 for the first quarter of 2013, as compared with adjusted EPS of $0.31 for the same period last year. The results for both periods include charges and gains relating to balances denominated in foreign currencies.
The current year quarter includes net charges of approximately $6 million ($4 million after tax), or $0.05 per share, whereas in the prior year quarter, net gains of $4 million ($3 million after tax), or $0.03 per share, were realized. The adjusted results exclude charges related to the impairments of certain intangible assets, the impact of severance and other costs related to restructuring activities, certain acquisition-related costs and other costs not considered relevant for period-over-period comparisons .
As reported under generally accepted accounting principles ("GAAP"), the Company reported first quarter earnings per share of $0.01 in 2013 and a ($0.01) loss per share in 2012. The results for 2013 include charges of $17 million ($11 million after tax) relating to the planned closure of certain Company-operated retail stores, restructuring, acquisitions, and other cost saving initiatives. The results for 2012 include charges of $28 million ($18 million after tax) related to the Stuart Weitzman acquisition and $12 million ($8 million after tax) of restructuring and strategic review costs.
Wesley R. Card, The Jones Group Chief Executive Officer, stated: "First quarter revenues were in line with our revised expectations, with the jeanswear business registering the largest improvement in operating results. For other areas of the business, the cold weather negatively impacted seasonal spring product sales and, accordingly, gross margins for the first quarter were approximately 210 basis points below last year.
"The domestic wholesale footwear and accessories business registered improved operating results; while the international businesses, primarily retail, were negatively impacted by economic conditions and cold weather, particularly in Europe. We expect continued margin pressure in sportswear in the second quarter, as we clear spring merchandise in anticipation of our new and refocused product offerings for fall."
Net cash used by operating activities during the first quarter of 2013 was $137 million, compared with $60 million in the prior period. The current year results reflect a higher level of required investment in working capital and higher tax and interest payments. At April 6, 2013, the Company had $45 million in cash and $65 million drawn under its $650 million of committed revolving credit facilities.
John T. McClain, The Jones Group Chief Financial Officer, commented: "Our financial position remains strong. We ended the quarter with $45 million in cash and $65 million drawn on our revolver, to meet seasonal working capital needs. Our approach to inventory commitments continues to be conservative, and we continue to emphasize tight expense control. We believe these actions will enable us to maintain a strong balance sheet."
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