PRESS RELEASE
SOURCE: Kellwood Company
KELLWOOD (NYSE) REPORTS SALES UP 11% FOR THE 3RD QUARTER, EPS UP 24% SALES UP 5
PERCENT FOR THE FIRST NINE MONTHS, EPS UP 19 PERCENT
4TH QTR EARNINGS EXPECTED TO BE LOWER THAN FORECAST
COMPANY COMFORTABLE WITH ANALYSTS' ESTIMATE OF $3.25 FOR 2001 REGULAR QUARTERLY
DIVIDEND DECLARED
ST. LOUIS, Nov. 21 /PRNewswire/ -- Kellwood Company reported sales and earnings
today for the third quarter ended October 31, 2000. Sales for the quarter came
in a bit higher than expected at $703.1 million, up $70 million or 11 percent
from the prior year. Four acquisitions completed since October 31, 1999,
contributed $31 million to the year-to-year growth in sales. Excluding
acquisitions, sales were up six percent in a very difficult market.
Net earnings for the quarter were up slightly at $26.7 million versus
$26.1 million reported last year. Earnings per share increased 24 percent to
$1.15 per share from $0.93 per share on a diluted basis. As a result of
Kellwood's share repurchase program initiated in December 1999, average diluted
shares in the current quarter were 23.3 million versus 28.0 million last year,
according to Hal J. Upbin, chairman, president, and chief executive officer.
"Sales growth for the quarter was broad based in terms of business
segments and channels of distribution. Each of Kellwood's three business
segments contributed to the 11 percent growth for the total company. Sales of
Women's Sportswear were up 8 percent -- Men's Sportswear up 4 percent -- and
Other Soft Goods, which includes Intimate Apparel and Recreation Products, were
up 48 percent. Excluding acquisitions, Women's Sportswear sales were up 5
percent -- and Other Soft Goods were up 16 percent. Kellwood's sales were also
up in every channel of distribution including department stores, national
chains, discounters, specialty stores and mail order."
<PAGE>
Sales for the nine-month period increased five percent to $1.82 billion,
compared to $1.73 billion a year earlier. Net earnings, excluding unusual items,
increased two percent to $62.4 million versus $61.1 million last year. Earnings
per share, excluding unusual items, increased 19 percent to $2.60 per share from
$2.18 on a diluted basis reported last year. Average diluted shares for the
current nine-month period were 24.0 million versus 28.1 million shares last
year.
"Each of Kellwood's business segments contributed to the year-to-year
growth of the Company with sales of Women's Sportswear up one percent, Men's
Sportswear up 11 percent, and Other Soft Goods up 23 percent. With the market
for Women's Sportswear being very soft, Kellwood's diversity of product and
extensive customer base are core strengths which provide us with a competitive
advantage," stated Upbin.
During the quarter, the Company continued to buy back shares of its
stock at advantageous prices. Since December 1999, Kellwood has acquired 5.27
million shares at an average price of $17.23, or $90.8 million. This average
price is below book value, currently $19.27 per share.
Regarding the outlook for the balance of the year, Upbin stated, "The
Company has put into place several growth initiatives in each of our four
strategic platforms -- Women's Sportswear, Men's Sportswear, Intimate Apparel
and Recreation Products. However, the market for apparel at retail has been soft
throughout most of the year and highly promotional. As the year is drawing to a
close, the rate of growth in consumption at retail is slowing from an already
anemic rate. The apparel market grew only 1.7 percent during the most recent
three months and the market at retail for our Women's Sportswear segment, which
represents 70 percent of Kellwood's sales, grew less than one percent during
this same period."
"In addition, the back-to-school selling season was extremely soft,
falling below retailers' expectations, which resulted in an over bought
position. Further aggravating the situation, October, which is typically a soft
sales month, was yet another disappointment," said Upbin.
<PAGE>
"As a result, orders from our retail customers for the upcoming Spring season
are running somewhat below our earlier expectations. We also expect the stores
to push out delivery of new Spring merchandise from January into February, which
will take some volume out of the fourth quarter of the current fiscal year. And,
due to the soft and highly promotional market for apparel at retail, we expect
markdown pressure to be more severe than we anticipated at the beginning of the
Fall season," Upbin reported.
The outlook for the fourth quarter ending January 31 indicates sales of
$523 million, up $62 million, or 13 percent, with Kellwood's three recently
announced acquisitions contributing $34 million. Net earnings for the fourth
quarter are expected to be approximately $1.0 million, or $0.03 per share on a
diluted basis, versus $5.4 million, or $0.20 per share reported last year.
Although early in the planning process, management feels comfortable with Wall
Street's estimate of $3.25 per share for Fiscal 2001.
For the fiscal year 2000, the Company expects sales to come in at about
$2.34 billion, up $151 million, or 7 percent. Net earnings for the year should
be approximately $63 million versus $67 million before unusual items last year.
Earnings per share are expected to be up approximately 11 percent to $2.65 per
share versus $2.39 per share before unusual items last year on a diluted basis.
The Board of Directors declared a regular quarterly dividend of $0.16
per common share, payable December 15, 2000 to shareholders of record December
1, 2000.
Kellwood Company (NYSE: KWD - news) is a $2.3 billion marketer of apparel and
recreational camping products. For more about Kellwood, visit the Company's web
site at www.kellwood.com.
Statements in this news release that are not strictly historical are
"forward-looking" statements within the meaning of the safe harbor provisions of
the federal securities laws. Actual results may differ materially due to risks
and uncertainties that are described in the Company's Form 10-K for the
transition period ended January 31, 2000 and other filings with the Securities
and Exchange Commission.
<PAGE>
KELLWOOD COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
(Amounts in thousands except per share data)
Three Months Ended Nine Months Ended
October 31, October 31,
---------------------- ------------------------
2000 1999 2000 1999
-------- -------- ---------- ----------
Net sales by Segment:
Women's sportswear $501,587 $466,119 $1,281,268 $1,269,228
Men's sportswear 109,883 105,539 268,812 242,987
Other soft goods 91,670 61,798 271,783 220,260
-------- -------- ---------- ----------
Total net sales 703,140 633,456 1,821,863 1,732,475
-------- -------- ---------- ----------
Costs and expenses:
Cost of products
sold 558,029 495,657 1,438,302 1,350,467
Selling, general and
administrative 91,660 84,216 253,535 248,994
Amortization of
intangible assets 2,019 1,640 5,553 7,503
Interest expense 8,048 8,453 22,554 22,862
Interest income and
other, net 154 (276) (254) (679)
-------- -------- ---------- ----------
Earnings before
unusual items
and income taxes 43,230 43,766 102,173 103,328
Costs of Koret merger - - - 5,288
Provision for
facilities shut-down - - - 6,793
Provision for
goodwill impairment - - - 48,945
-------- -------- ---------- ----------
Earnings before
income taxes 43,230 43,766 102,173 42,302
Income taxes 16,500 17,700 39,800 37,690
-------- -------- ---------- ----------
Net earnings $26,730 $26,066 $62,373 $4,612
======== ======== ========== ==========
Net earnings -
excluding unusual
items $26,730 $26,066 $62,373 $61,125
======== ======== ========== ==========
Weighted average shares outstanding:
Basic 23,241 27,805 23,964 27,612
======== ======== ========== ==========
Diluted 23,292 28,046 24,009 28,091
======== ======== ========== ==========
Basic Earnings per Share:
Earnings before
unusual items $1.15 $0.94 $2.60 $2.21
Costs of Koret merger - - - (0.13)
Provision for
facilities shut-down - - - (0.14)
Provision for
goodwill impairment - - - (1.77)
======== ======== ========== ==========
Basic earnings per
share - reported $1.15 $.94 $2.60 $0.17
======== ======== ========== ==========
Diluted Earnings per Share:
Earnings before
unusual items $1.15 $0.93 $2.60 $2.18
Costs of Koret merger - - - (0.13)
Provision for
facilities shut-down - - - (0.14)
Provision for
goodwill impairment - - - (1.74)
Diluted earnings per
share - reported $1.15 $.93 $2.60 $0.16
======== ======== ========== ==========
<PAGE>
KELLWOOD COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(Amounts in thousands)
October 31,
-------------------------
2000 1999
---------- ----------
ASSETS
Current assets:
Cash and time deposits $ 23,071 $ 111,958
Receivables, net 452,141 417,138
Inventories 413,208 301,580
Prepaid taxes and expenses 36,470 38,093
---------- ----------
Total current assets 924,890 868,769
Property, plant and equipment, net 111,422 108,647
Intangible assets, net 119,962 57,255
Other assets 108,654 101,833
---------- ----------
Total assets $1,264,928 $1,136,504
========== ==========
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
Current portion of long-term debt $9,245 $15,791
Notes payable 65,722 2,609
Accounts payable 165,940 129,507
Accrued expenses 108,828 93,049
---------- ----------
Total current liabilities 349,735 240,956
Long-term debt 418,625 369,544
Deferred income taxes and other 59,949 50,699
Shareowners' equity 436,619 475,305
========== ==========
Total liabilities & shareowners' equity $1,264,928 $1,136,504
========== ==========
