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Jones tightens 2011 buy plans to more conservative approach
21 Jan '11
4 min read
"In addition, continued cost inflation will present a significant challenge to margins. We believe that with selective price increases, disciplined execution and the full year impact of our 2010 acquisitions, 2011 gross margins can be at 2010 levels. In addition, we will control our expenses and reduce when necessary, with the goal of maintaining or improving our operating margin."
Mr. McClain continued: "Our financial position remains strong. We ended the year with approximately $200 million of cash and an undrawn $650 million revolving credit facility, while investing in working capital to support our growing business. Throughout 2011, we will maintain a prudent management of inventories and expenses to conserve cash and improve margins."
Non-Cash Impairment Charges
The Company has completed its required annual goodwill and trademark impairment analysis for 2010 and expects fourth quarter and full year 2010 reported results to include a pre-tax, non-cash charge of approximately $38 million ($24 million after-tax) for the impairment of certain trademarks primarily utilized in our wholesale jeanswear business.
Liquidity and Cash Provided By Operating Activities
The Company expects to report approximately $200 million of cash on hand at December 31, 2011, with no amounts drawn under its $650 million revolving credit facility. Additionally, the Company expects to report cash provided by operating activities from 2010 of approximately $140 million.
The Company's previous guidance was cash on hand of approximately $170 million and cash provided by operating activities of approximately $120 million. The increase in cash on hand and in cash provided by operating activities is primarily due to lower than planned working capital requirements.
Mr. McClain continued: "Our financial position remains strong. We ended the year with approximately $200 million of cash and an undrawn $650 million revolving credit facility, while investing in working capital to support our growing business. Throughout 2011, we will maintain a prudent management of inventories and expenses to conserve cash and improve margins."
Non-Cash Impairment Charges
The Company has completed its required annual goodwill and trademark impairment analysis for 2010 and expects fourth quarter and full year 2010 reported results to include a pre-tax, non-cash charge of approximately $38 million ($24 million after-tax) for the impairment of certain trademarks primarily utilized in our wholesale jeanswear business.
Liquidity and Cash Provided By Operating Activities
The Company expects to report approximately $200 million of cash on hand at December 31, 2011, with no amounts drawn under its $650 million revolving credit facility. Additionally, the Company expects to report cash provided by operating activities from 2010 of approximately $140 million.
The Company's previous guidance was cash on hand of approximately $170 million and cash provided by operating activities of approximately $120 million. The increase in cash on hand and in cash provided by operating activities is primarily due to lower than planned working capital requirements.
The Jones Group Inc
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