THE JONES GROUP INC. 
By NEW YORK, Oct. 30, 2013 /PRNewswire/ -- The Jones Group Inc. (NYSE: JNY; the "Company") today reported results for the third quarter ended October 5, 2013. Revenues for the third quarter of 2013 were $1,022 million, as compared with $1,035 million for the third quarter of 2012.
The Company reported adjusted earnings per share ("EPS") of $0.48 for the third quarter of 2013, as compared with adjusted EPS of $0.57 for the same period last year. The adjusted results exclude charges such as those 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 (see reconciliation of adjusted earnings to reported earnings in the accompanying schedule).
As reported under generally accepted accounting principles ("GAAP"), the Company reported earnings per share of $0.38 for the third quarter of 2013, as compared with earnings per share of $0.22 for the same period in 2012. The 2013 and the 2012 third quarter results include, among other things, costs and charges of $12 million ($7 million after tax) and $35 million ($27 million after tax), respectively, relating to the planned closure of certain Company-operated retail stores, business development costs, restructuring and other cost saving initiatives. The 2012 period also included adjustments to the future payment liabilities associated with the Stuart Weitzman acquisition, charges related to lease liabilities of unused facilities and a gain relating to the sale of the Sam and Libby trademark.
Wesley R. Card, The Jones Group Chief Executive Officer, stated: "Third quarter revenues were in line with our expectations, with the Jeanswear segment again registering the largest improvement in operating results, as those product lines continue to perform well. The Domestic Retail, International Wholesale and International Retail segments also showed improved operating results, led by the Nine West Outlet and Stuart Weitzman domestic retail businesses and the Jones New York businesses in Canada and Spain. Our new and refocused sportswear product offerings for Fall are performing significantly better, and we anticipate that trend will continue."
The Company ended the quarter with $28 million in cash and used $93 million of cash from operating activities during the first nine months of 2013, compared with generating $13 million in the prior year period. The current year results reflect a higher level of required investment in working capital, higher tax and interest payments and lower operating earnings. At October 5, 2013, the Company had $78 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 $28 million in cash and $78 million drawn on our revolver, to meet seasonal working capital needs. Our approach to inventory commitments remains conservative, and we continue to emphasize tight expense control. Our plans to create operational efficiencies, reduce costs within the wholesale channel and improve the performance of our domestic retail business are on track. We believe these actions will enable us to maintain a strong balance sheet."
Mr. Card concluded: "We believe that we are well-positioned for the fourth quarter and early 2014 as we continue to execute on our strategic plan. We have received positive reactions from wholesale customers to our enhanced products across our brands that will ship in the fourth quarter of 2013 and Spring 2014. We are confident that continued product improvement will translate into improved retail performance and, ultimately, increased profitability."
The Company's Board of Directors has declared a regular quarterly cash dividend of $0.05 per share to all common stockholders of record as of November 15, 2013, for payment on November 29, 2013.
The Company will host a conference call with management to discuss these results at 8:30 a.m. eastern time today, which is accessible by dialing 412-858-4600 or through a web-cast at www.jonesgroupinc.com (under Investor Relations/Conference Schedule). The call will be recorded and made available through November 7, 2013 and may be accessed by dialing 877-344-7529 (International 412-317-0088). Enter account number 10035419. A slide presentation will accompany the prepared remarks and has been posted with the webcast on the Company's website.
Presentation of Information in the Press Release
Financial information discussed in this press release includes both GAAP and non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported results and are intended to illustrate what management believes are relevant period-over-period comparisons. A reconciliation of the GAAP measures presented to the comparable non-GAAP information appears in the financial tables section of this press release.
About The Jones Group Inc.
The Jones Group Inc. (www.jonesgroupinc.com) is a leading global designer, marketer and wholesaler of over 35 brands with product expertise in apparel, footwear, jeanswear, jewelry and handbags. The Jones Group has a reputation for innovation, excellence in product quality and value, operational execution and talent. The Company also markets directly to consumers through branded specialty retail and outlet stores, through concessions at upscale department stores and through its e-commerce sites.
The Company's internationally recognized brands and licensing agreements (L) include: Nine West, Jones New York, Anne Klein, Kurt Geiger, Rachel Roy (L), Robert Rodriguez, Robbi & Nikki, Stuart Weitzman, Brian Atwood (L), Boutique 9, Easy Spirit, Carvela, Gloria Vanderbilt, l.e.i., Bandolino, Enzo Angiolini, Nine & Co., GLO, Joan & David, Miss KG, Kasper, Energie, Evan-Picone, Le Suit, Mootsies Tootsies, Grane, Erika, Napier, Jessica Simpson (L), Givenchy (L), Judith Jack, Albert Nipon, Pappagallo and Rafe (L).
Forward Looking Statements
Certain statements contained herein are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding the Company's expected financial position, business and financing plans are forward-looking statements. The words "believes," "expects," "plans," "intends," "anticipates" and similar expressions identify forward-looking statements. Forward-looking statements also include representations of the Company's expectations or beliefs concerning future events that involve risks and uncertainties, including:
-- those associated with the effect of national, regional and international
economic conditions;
-- lowered levels of consumer spending resulting from a general economic
downturn or lower levels of consumer confidence;
-- the tightening of the credit markets and the Company's ability to obtain
capital on satisfactory terms;
-- given the uncertain economic environment, the possible unwillingness of
committed lenders to meet their obligations to lend to borrowers, in
general;
-- the performance of the Company's products within the prevailing retail
environment;
-- customer acceptance of both new designs and newly-introduced product
lines;
-- the Company's reliance on a few department store groups for large
portions of the Company's business;
-- the Company's ability to identify acquisition candidates and, in a
competitive environment for such acquisitions, acquire such businesses
on reasonable financial and other terms;
-- the integration of the organizations and operations of any acquired
businesses into the Company's existing organization and operations;
-- consolidation of the Company's retail customers;
-- financial difficulties encountered by the Company's customers;
-- the effects of vigorous competition in the markets in which the Company
operates;
-- the Company's ability to attract and retain qualified executives and
other key personnel;
-- the Company's reliance on independent foreign manufacturers, including
political instability in countries where contractors and suppliers are
located;
-- changes in the costs of raw materials, labor, advertising and
transportation, including the impact such changes may have on the
pricing of the Company's products and the resulting impact on consumer
acceptance of the Company's products at higher price points;
-- the Company's ability to successfully implement new operational and
financial information systems;
-- the Company's ability to secure and protect trademarks and other
intellectual property rights;
-- the effects of extreme or unseasonable weather conditions; and
-- the Company's ability to implement its strategic initiatives to enhance
profitability.
A further description of these risks and uncertainties and other important factors that could cause actual results to differ materially from the Company's expectations can be found in the Company's Annual Report on Form 10-K for the year ended December 31, 2012, including, but not limited to, the Statement Regarding Forward-Looking Disclosure and Item 1A-Risk Factors therein, and in the Company's other filings with the Securities and Exchange Commission. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such expectations may prove to be incorrect. The Company does not undertake to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.
THE JONES GROUP INC.
CONSOLIDATED OPERATING RESULTS
(UNAUDITED)
All amounts in millions, except per share data
THIRD QUARTER FISCAL NINE MONTHS
2013 2012 2013 2012
Net sales $1,011.0 99.0% $1,024.6 99.0% $2,843.8 98.9% $2,792.3 98.8%
Licensing income 10.7 1.0 10.5 1.0 31.6 1.1 33.0 1.2
Other revenues - - 0.3 0.0 0.6 0.0 0.9 0.0
--- --- --- --- --- --- --- ---
Total revenues 1,021.7 100.0 1,035.4 100.0 2,876.0 100.0 2,826.2 100.0
Cost of goods sold 662.4 64.8 670.8 64.8 1,867.6 64.9 1,792.0 63.4
Gross profit 359.3 35.2 364.6 35.2 1,008.4 35.1 1,034.2 36.6
SG&A expenses 296.5 29.0 301.9 29.2 917.9 31.9 909.6 32.2
----- ---- ----- ---- ----- ---- ----- ----
Operating income 62.8 6.1 62.7 6.1 90.5 3.1 124.6 4.4
Net interest expense and financing
costs (1) (14.8) (1.4) (37.7) (3.6) (46.3) (1.6) (89.2) (3.2)
Equity in (loss) income of
unconsolidated affiliate (0.9) (0.1) - - (0.8) (0.0) 1.4 0.0
---- ---- --- --- ---- ---- --- ---
Income before provision for income
taxes 47.1 4.6 25.0 2.4 43.4 1.5 36.8 1.3
Provision for income taxes 17.4 1.7 7.2 0.7 16.0 0.6 11.6 0.4
---- --- --- --- ---- --- ---- ---
Net income 29.7 2.9 17.8 1.7 27.4 1.0 25.2 0.9
Less: income attributable to
noncontrolling interest 0.4 0.0 0.4 0.0 1.0 0.0 0.9 0.0
--- --- --- --- --- --- --- ---
Income attributable to Jones $29.3 2.9% $17.4 1.7% $26.4 0.9% $24.3 0.9%
Earnings per share (2)
Net income $29.7 $17.8 $27.4 $25.2
Less:
income
attributable
to
noncontrolling
interest 0.4 0.4 1.0 0.9
--------
Income
attributable
to Jones 29.3 17.4 26.4 24.3
Less:
income
allocated
to
participating
securities 1.0 0.4 0.9 0.4
--------
Income
available
to common
stockholders
of Jones $28.3 $17.0 $25.5 $23.9
Shares outstanding - diluted 74.1 75.4 74.4 76.1
Earnings per share - diluted $0.38 $0.22 $0.34 $0.31
Percentages may not add due to rounding.
(1) Refer to item "h" on the Reconciliation of Non-GAAP Measures to
GAAP for amounts impacting interest expense relating to adjustment
of remaining consideration payable related to acquisition of
Stuart Weitzman.
(2) Earnings per share is calculated under the "two-class method,"
where income is allocated between common shares and participating
securities (unvested restricted shares held by employees that have
a nonforfeitable right to dividends). Both our common shares and
participating securities share equally in dividend payments and
earnings.
THE JONES GROUP INC.
Reconciliation of Non-GAAP Measures to GAAP
for the quarters and nine months ended October 5, 2013 and September 29, 2012
(UNAUDITED)
All amounts in millions, except per share data THIRD QUARTER FISCAL NINE
MONTHS
------------- ------------
2013 2012 2013 2012
---- ---- ---- ----
Operating income $62.8 $62.7 $90.5 $124.6
Adjustments:
Items affecting segment income:
Expenses
related
to retail
store
closure
plan (a) 3.3 (0.1) 11.1 1.5
Charges
related
to
acquired
businesses
(b) 1.9 3.3 7.2 3.5
Other
business
development
costs (c) 3.7 0.2 3.9 0.9
Present
value
adjustments
to lease
liabilities
for
properties
not in
use (d) 0.7 8.3 2.7 17.6
Severance
and other
charges
related
to
executive
management
changes
(e) - - 1.0 5.9
Gain on
the sale
of a
trademark
(f) - (3.1) - (3.1)
Other
restructuring
expenses
and
certain
other
charges
(g) 2.0 1.7 10.3 15.1
Total adjustments to operating income 11.6 10.3 36.2 41.4
---- ---- ---- ----
Adjusted operating income $74.4 $73.0 $126.7 $166.0
===== ===== ====== ======
Income attributable to Jones (as reported) $29.3 $17.4 $26.4 $24.3
Provision for income taxes 17.4 7.2 16.0 11.6
Adjustments to operating income, from above 11.6 10.3 36.2 41.4
Adjustment of remaining consideration payable
related to acquisition
of Stuart
Weitzman
(h) - 24.3 (0.4) 47.8
Write off of intangible assets owned by
unconsolidated affiliate (i) 0.4 - 0.4 -
--- --- --- ---
Adjusted income before provision for income taxes 58.7 59.2 78.6 125.1
Adjusted provision for income taxes (21.9) (15.1) (29.4) (39.7)
----- ----- ----- -----
Adjusted income attributable to Jones 36.8 44.1 49.2 85.4
Less: adjusted income allocated to participating
securities (1.2) (1.2) (1.6) (2.1)
---- ---- ---- ----
Adjusted income available to common stockholders of
Jones $35.6 $42.9 $47.6 $83.3
===== ===== ===== =====
Earnings per share - diluted (as reported) $0.38 $0.22 $0.34 $0.31
Provision for income taxes 0.23 0.09 0.21 0.15
Items affecting segment income:
Expenses
related
to retail
store
closure
plan (a) 0.04 - 0.15 0.02
Charges
related
to
acquired
businesses
(b) 0.02 0.05 0.09 0.05
Other
business
development
costs (c) 0.05 - 0.05 0.01
Present
value
adjustments
to lease
liabilities
for
properties
not in
use (d) 0.01 0.11 0.04 0.23
Severance
and other
charges
related
to
executive
management
changes
(e) - - 0.01 0.08
Gain on
the sale
of a
trademark
(f) - (0.04) (0.04)
Other
restructuring
expenses
and
certain
other
charges
(g) 0.03 0.02 0.13 0.19
Adjustment of remaining consideration payable
related to acquisition
of Stuart
Weitzman
(h) - 0.31 (0.01) 0.61
Write off of intangible assets owned by
unconsolidated affiliate (i) 0.01 - 0.01 -
---- --- ---- ---
Adjusted income before provision for income taxes 0.77 0.76 1.02 1.61
Adjusted provision for income taxes (0.29) (0.19) (0.38) (0.51)
Adjusted earnings per share - diluted $0.48 $0.57 $0.64 $1.10
===== ===== ===== =====
Non-GAAP adjustments affecting revenue by segment
(j):
Domestic
wholesale
sportswear $ - $ - $ - $ -
Domestic
wholesale
jeanswear - - - -
Domestic
wholesale
footwear
and
accessories
(g) 0.3 - 0.3 -
Domestic
retail - - - -
International
wholesale - - - -
International
retail - - - -
Licensing,
other &
eliminations - - - -
Total $0.3 $ - $0.3 $ -
Non-GAAP adjustments affecting income by segment
(j):
Domestic
wholesale
sportswear
(b,e,g) $0.1 $1.4 $5.0 $5.6
Domestic
wholesale
jeanswear
(d,e,g) 0.1 (0.6) 0.9 1.4
Domestic
wholesale
footwear
and
accessories
(d,e,g) 1.4 9.6 4.5 22.4
Domestic
retail
(a,e,g) 3.3 - 11.4 4.5
International
wholesale
(b,e,g) - 0.7 2.3 0.9
International
retail
(b,g) 1.6 1.5 4.7 4.6
Licensing,
other &
eliminations
(b,c,e,f,g) 5.1 (2.3) 7.4 2.0
Total $11.6 $10.3 $36.2 $41.4
(a) 2013 and 2012 include severance, fixed asset
impairment and other charges and credits
related to the closure of underperforming
retail locations.
(b) 2013 and 2012 include the fair value
adjustments of the contingent consideration
payable for the Robert Rodriguez
acquisition and the amortization of certain
acquired intangible assets related to the
acquisition of Kurt Geiger and Brian Atwood
(2012 only).
(c) 2013 and 2012 include investment consulting
fees, legal fees, accounting fees and other
items related to acquisitions and other
business development activities.
(d) 2013 and 2012 include present value accruals
and adjustments for liabilities related to
leases on properties currently not in use.
(e) 2013 and 2012 include severance and
restricted stock charges related to
executive management changes.
(f) 2012 includes the gain on the sale of the
Sam & Libby trademark.
(g) 2013 and 2012 include severance, occupancy,
and other costs related to the
restructuring of corporate and business
support functions and other charges not
considered by management to be part of
ongoing operations.
(h) 2013 and 2012 represent the fair value
adjustment of the remaining consideration
payable related to the acquisition of
Stuart Weitzman.
(i) 2013 includes the write off of a
discontinued trade name owned by an
unconsolidated affiliate.
(j) See "Segment Information" page for the
presentation of GAAP and Adjusted amounts.
THIRD QUARTER FISCAL NINE
MONTHS
------------- ------------
2013 2012 2013 2012
---- ---- ---- ----
GAAP gross
profit $359.3 $364.6 $1,008.4 $1,034.2
Other
restructuring
expenses
and
certain
other
charges
(g) 0.7 0.4 1.2 0.7
Adjusted
gross
profit $360.0 $365.0 $1,009.6 $1,034.9
THE JONES GROUP INC.
SEGMENT INFORMATION
(UNAUDITED)
Dollars in millions Domestic
Domestic Domestic Wholesale Licensing,
Wholesale Wholesale Footwear & Domestic International International Other &
Sportswear Jeanswear Accessories Retail Wholesale Retail Eliminations Consolidated
For the fiscal quarter ended October 5, 2013
Revenues $186.9 $214.2 $289.9 $136.8 $88.4 $94.8 $10.7 $1,021.7
Segment income (loss) $8.3 $19.6 $35.4 $(16.3) $11.0 $3.4 $1.4 62.8
Segment margin 4.4% 9.2% 12.2% (11.9%) 12.4% 3.6% 6.1%
Net interest expense (14.8)
Equity in loss of
unconsolidated affiliate (0.9)
Income before provision for
income taxes $47.1
Segment revenues $186.9 $214.2 $289.9 $136.8 $88.4 $94.8 $10.7 $1,021.7
Adjustments affecting segment
revenues (b) - - 0.3 - - - - 0.3
Adjusted segment revenues $186.9 $214.2 $290.2 $136.8 $88.4 $94.8 $10.7 $1,022.0
====== ====== ====== ====== ===== ===== ===== =====
Segment income (loss) $8.3 $19.6 $35.4 $(16.3) $11.0 $3.4 $1.4 $62.8
Adjustments affecting segment
income (b) 0.1 0.1 1.4 3.3 - 1.6 5.1 11.6
Adjusted segment income (loss) $8.4 $19.7 $36.8 $(13.0) $11.0 $5.0 $6.5 $74.4
==== ==== ===== ===== ===== ==== ==== ====
Adjusted segment margin 4.5% 9.2% 12.7% (9.5%) 12.4% 5.3% 7.3%
For the fiscal quarter ended September 29, 2012
Revenues $208.7 $202.3 $289.9 $140.0 $94.3 $89.7 $10.5 $1,035.4
Segment income (loss) $12.9 $15.3 $29.3 $(15.5) $9.4 $2.3 $9.0 62.7
Segment margin 6.2% 7.6% 10.1% (11.1%) 10.0% 2.6% 6.1%
Net interest expense (a) (37.7)
Income before provision for
income taxes $25.0
Segment income (loss) $12.9 $15.3 $29.3 $(15.5) $9.4 $2.3 $9.0 $62.7
Adjustments affecting segment
income (b) 1.4 (0.6) 9.6 - 0.7 1.5 (2.3) 10.3
Adjusted segment income (loss) $14.3 $14.7 $38.9 $(15.5) $10.1 $3.8 $6.7 $73.0
===== ===== ===== ===== ===== ==== ==== ====
Adjusted segment margin 6.9% 7.3% 13.4% (11.1%) 10.7% 4.2% 7.1%
(a) Refer to item "h" on the Reconciliation of Non-GAAP Measures to GAAP for amounts
impacting interest expense relating to adjustment of remaining consideration payable
related to acquisition of Stuart Weitzman.
(b) See "Reconciliation of Non-GAAP Measures to GAAP" page.
THE JONES GROUP INC.
SEGMENT INFORMATION
(UNAUDITED)
Dollars in millions Domestic
Domestic Domestic Wholesale Licensing,
Wholesale Wholesale Footwear & Domestic International International Other &
Sportswear Jeanswear Accessories Retail Wholesale Retail Eliminations Consolidated
For the fiscal nine months ended October 5, 2013
Revenues $536.8 $653.4 $712.8 $411.0 $250.3 $280.1 $31.6 $2,876.0
Segment income (loss) $9.2 $68.0 $57.8 $(56.3) $27.4 $(4.5) $(11.1) 90.5
Segment margin 1.7% 10.4% 8.1% (13.7%) 10.9% (1.6%) 3.1%
Net interest expense (a) (46.3)
Equity in loss of
unconsolidated affiliate (0.8)
Income before provision for
income taxes $43.4
Segment revenues $536.8 $653.4 $712.8 $411.0 $250.3 $280.1 $31.6 $2,876.0
Adjustments affecting segment
revenues (b) - - 0.3 - - - - 0.3
Adjusted segment revenues $536.8 $653.4 $713.1 $411.0 $250.3 $280.1 $31.6 $2,876.3
====== ====== ====== ====== ====== ====== ===== =====
Segment income (loss) $9.2 $68.0 $57.8 $(56.3) $27.4 $(4.5) $(11.1) $90.5
Adjustments affecting segment
income (b) 5.0 0.9 4.5 11.4 2.3 4.7 7.4 36.2
Adjusted segment income (loss) $14.2 $68.9 $62.3 $(44.9) $29.7 $0.2 $(3.7) $126.7
===== ===== ===== ===== ===== ==== ==== =====
Adjusted segment margin 2.6% 10.5% 8.7% (10.9%) 11.9% 0.1% 4.4%
For the fiscal nine months ended September 29, 2012
Revenues $617.1 $538.1 $711.2 $418.7 $243.1 $264.9 $33.1 $2,826.2
Segment income (loss) $45.1 $38.9 $46.0 $(40.8) $29.0 $1.0 $5.4 124.6
Segment margin 7.3% 7.2% 6.5% (9.7%) 11.9% 0.4% 4.4%
Net interest expense (a) (89.2)
Equity in income of
unconsolidated affiliate 1.4
Income before provision for
income taxes $36.8
Segment income (loss) $45.1 $38.9 $46.0 $(40.8) $29.0 $1.0 $5.4 $124.6
Adjustments affecting segment
income (b) 5.6 1.4 22.4 4.5 0.9 4.6 2.0 41.4
Adjusted segment income (loss) $50.7 $40.3 $68.4 $(36.3) $29.9 $5.6 $7.4 $166.0
===== ===== ===== ===== ===== ==== ==== ====
Adjusted segment margin 8.2% 7.5% 9.6% (8.7%) 12.3% 2.1% 5.9%
(a) Refer to item "h" on the Reconciliation of Non-GAAP Measures to GAAP for amounts
impacting interest expense relating to adjustment of remaining consideration payable
related to acquisition of Stuart Weitzman.
(b) See "Reconciliation of Non-GAAP Measures to GAAP" page.
THE JONES GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
All amounts in millions
October 5, 2013 September 29, 2012
ASSETS
Current assets:
Cash and
cash
equivalents $27.8 $234.1
Accounts
receivable 461.1 486.2
Inventories 568.8 523.7
Prepaid
income
taxes 2.7 2.2
Deferred
taxes 38.5 32.5
Other
current
assets 53.8 42.4
Total
current
assets 1,152.7 1,321.1
Property, plant and equipment, at cost, less
accumulated
depreciation
and
amortization 260.4 276.2
Goodwill 215.1 262.5
Other
intangibles,
less
accumulated
amortization 858.5 901.5
Other assets 147.9 138.2
Total assets $2,634.6 $2,899.5
LIABILITIES AND EQUITY
Current liabilities:
Short-term
borrowings $78.0 $ -
Current
portion of
long-term
debt and
capital
lease
obligations 2.2 2.1
Current
portion of
acquisition
consideration
payable 2.4 230.2
Accounts
payable 253.0 252.2
Income taxes
payable 4.2 17.5
Accrued
expenses
and other
current
liabilities 147.5 152.0
Total
current
liabilities 487.3 654.0
Long-term
debt and
obligations
under
capital
leases 950.9 958.1
Deferred
taxes 67.2 66.5
Acquisition
consideration
payable 4.0 5.0
Other 104.7 117.7
Total
liabilities 1,614.1 1,801.3
Redeemable
noncontrolling
interest 0.7 0.6
Equity 1,019.8 1,097.6
Total
liabilities
and equity $2,634.6 $2,899.5
THE JONES GROUP INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
All amounts in millions Nine Months Ended
-----------------
October 5, 2013 September 29, 2012
--------------- ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $27.4 $25.2
----- -----
Adjustments to reconcile net income to net cash (used
in)
provided by operating activities, net of acquisitions:
Amortization of
restricted stock 19.5 16.4
Depreciation and other
amortization 66.3 67.3
Impairment losses 6.9 0.4
Adjustments to
acquisition
consideration payable - 44.0
Equity in loss
(income) of
unconsolidated
affiliate 0.8 (1.4)
Deferred taxes 1.0 (16.7)
Other items, net 1.3 (3.2)
Changes in operating assets and liabilities:
Accounts receivable (80.8) (134.7)
Inventories (81.4) (28.5)
Accounts payable (5.0) 12.5
Income taxes payable/prepaid taxes 4.8 18.6
Acquisition consideration payable (20.5) (4.6)
Other assets and liabilities, net (32.8) 17.8
----- ----
Total adjustments (119.9) (12.1)
------ -----
Net cash (used
in) provided by
operating
activities (92.5) 13.1
----- ----
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital
expenditures (45.2) (57.1)
Notes receivable
issued (7.1) -
Acquisition of
additional
equity interest
in GRI (14.7) -
Contingent
consideration
paid related to
investment in
GRI Group
Limited - (3.5)
Acquisition of
Brian Atwood,
net of cash
acquired (0.5) (4.4)
Other 0.1 4.9
--- ---
Net cash used in
investing
activities (67.4) (60.1)
----- -----
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in
short-term
borrowings 78.0 -
Issuance of
6.875% Senior
Notes due 2019 - 103.5
Debt issuance
costs - (2.3)
Costs related to
secured
revolving credit
agreement (0.3) (0.3)
Dividends paid (11.6) (11.7)
Payments of
acquisition
consideration
payable (9.4) (14.6)
Repurchase of
common shares (14.5) (34.0)
Other (2.3) 0.2
---- ---
Net cash provided
by financing
activities 39.9 40.8
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EFFECT OF EXCHANGE RATES ON CASH (1.8) 1.5
---- ---
NET DECREASE IN CASH AND CASH EQUIVALENTS (121.8) (4.7)
CASH AND CASH EQUIVALENTS, BEGINNING 149.6 238.8
----- -----
CASH AND CASH EQUIVALENTS, ENDING $27.8 $234.1
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SOURCE The Jones Group Inc.
