Perry Ellis finishes fiscal 2010 in outstanding liquidity position

22 Mar '10

5 min read

"We feel that we are past the worst and most severe global economic recession the country and the industry have ever seen, and we are very proud of our fiscal 2010 and fourth quarter earnings. Our performance was driven by the strength of our brands, the continued implementation and execution of all of our growth strategies, and because of the dedication and hard work of all of our associates around the world. All of these factors have ensured that Perry Ellis International will continue to emerge as an industry leader and deliver even better results in the current fiscal year," commented George Feldenkreis, Chairman and Chief Executive Officer.

Balance Sheet and Liquidity Review

Disciplined working capital management allowed the company to finish the year with its strongest balance sheet and liquidity position in 10 years. Generating $88.8 million in cash from operations and a free cash flow of $85.1 million during the year allowed the company to fully pay down its senior credit facility and also retire $21 million in senior notes, which the company expects will represent approximately $1.8 million in interest savings annually. Additionally, the company ended the year with $18.3 million in cash, an increase of $9.5 million year over year.

"As the macroeconomic environment and consumer confidence continues to show signs of improvement, Perry Ellis International will continue to be proactive and take decisive actions to continue strengthening our financial position and prepare ourselves for success in the years ahead," commented Mr. Feldenkreis.

Fiscal 2011 Guidance

The company announced that for the twelve months ending January 31, 2011 ("fiscal 2011") it anticipates earnings per fully diluted share in the range of $1.25 - $1.40 and revenues to be in the range of $770 - $790 million for the year, representing a low- to mid-single-digit increase. Additionally, with the exit of underperforming businesses in fiscal 2010 along with new higher margin growth initiatives such as Callaway, gross margins are expected to continue to improve throughout fiscal 2011.

"We are very excited about our multiple growth opportunities this year as we see most of our customers experiencing increased sales. Perry Ellis is experiencing the strongest sell thrus in the department store channel we have seen in years and we continue to capitalize on our position as the number one premier golf apparel supplier in the country. We also continue to read and meet the needs of the Hispanic consumer very well. Our retail and e-commerce operations showed 19% growth in gross profit during the fourth quarter compared to last year and we are also starting to see the turnaround in our contemporary businesses. All of this coupled with the new opportunities such as Callaway, Pierre Cardin, & Collegiate should position us extremely well for 2010," commented George Feldenkreis.

Perry Ellis International Inc

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