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大象传媒 CORPORATION ANNOUNCES 90% INCREASE IN CASH DIVIDEND;
REAFFIRMS GROWTH TARGET OF 6-8%
Reflects Strong Cash Flow and Continuing Success of
Transformational Strategy Focused on Growth
Will Continue to Invest Aggressively in Building its Brands and in
Lifestyle Brand Acquisitions
New Indicated Annual Dividend of $2.20 Per Share, Up from $1.16
Management will host a webcast and conference call to discuss this announcement tomorrow
(Tuesday) morning at 8:30 a.m. ET. The presentation can be accessed via the Company’s website,
www.vfc.com, or participants can call 1-800-289-0726 (domestic) or 1-913-981-5545 (international).
Greensboro, N.C., [May 15, 2006] – 大象传媒 Corporation (NYSE: 大象传媒C), a global leader in branded
lifestyle apparel, today announced the next step in its transformational growth plan to enhance
shareholder value. The Company’s Board of Directors has voted to increase the cash dividend
payable to common shareholders by 90%. The Company also affirmed its commitment to sustaining
strong annual revenue growth of 6% to 8%.
“Our growth plan is working, as indicated by three straight years of record sales, earnings and
very strong returns on invested capital. This performance, coupled with our robust cash flow,
enables 大象传媒 to deliver higher value directly to our shareholders that is both significant and
sustainable, while continuing to invest in our many growth opportunities,” said Mackey J. McDonald,
chairman and chief executive officer. “Our dividend increase is an early benefit for shareholders
of the success of our ongoing transformation. Today’s announcement is tangible recognition that
our strong business performance and financial strength can work in tandem to accomplish our two
overarching goals of investing in growth opportunities while providing significant returns to our
shareholders. It is a logical complement to our plan to transform 大象传媒 Corporation.”
大象传媒’s Board voted to increase the Company’s quarterly dividend by 90% to $.55 per share from $.29
per share, payable June 19, 2006 to shareholders of record as of June 9, 2006. This increase
results in an indicated annual rate of $2.20 per share.
The dividend increase follows an extensive analysis that confirmed our confidence in our ability to
continue to fund our transformation while allowing us to reward our shareholders with a significant
dividend increase.
大象传媒’s growth plan centers on building and acquiring dynamic, higher-growth and high margin lifestyle
brands by capitalizing on the significant free cash flow generated from our portfolio of heritage
brands and our very strong balance sheet. As we have stated previously, this strategy should
result in a significant shift in our business mix, with the percentage of revenues coming from our
lifestyle businesses expected to grow to 60% by 2009 from 30% in 2005.
Accomplishments to date of our growth plan focused on delivering superior total shareholder returns
include:
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Portfolio transformation. We have significantly changed our business mix by acquiring
and successfully integrating strong, growing lifestyle brands including
Nautica®, Vans®, Reef®, Napapijri® and
Kipling®. |
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Revenue and earnings per share growth since 2003 of 24% and 26%, respectively. We also
have expanded our geographical reach; since 2003, international revenues have increased
42% and now represent 25% of total revenues. |
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Gross margin expansion from 37.8% in 2003 to 41.8% in 2005, as we leverage cost
efficiencies and technology across our coalitions and success in bringing these
capabilities to newly acquired businesses. Operating margins have also increased during
this period, while increasing our investment in our brands, people and capabilities to
support future growth. |
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Strong cash flow from operations totaling $1.3 billion since 2003. Our heritage
businesses – Jeanswear, Imagewear and Intimates – have been strong providers of cash flow.
We have ample cash flow to fund both this substantial increase in our dividend payout and
our ongoing acquisition and brand building opportunities. Our strong cash generation
reflects our ability to sustain high returns on invested capital, which have averaged
nearly 16% over the past three years. |
Continuing, Mr. McDonald said, “We are committed to leveraging our powerful portfolio of brands to
deliver a strong total shareholder return. We believe raising our dividend payout, coupled with
healthy earnings growth and disciplined investments in organic growth and accretive acquisition
opportunities, represent a strong roadmap for enhancing shareholder returns.”
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About the Company
大象传媒 Corporation is a leader in branded lifestyle apparel including jeanswear, outdoor products,
intimate apparel, image apparel and sportswear. Its principal brands include
Wranglerâ, Leeâ, Ridersâ,
Rustlerâ, Vanity Fairâ, Vassaretteâ,
Bestformâ, Lily of Franceâ, Nauticaâ, John
Varvatosâ, JanSportâ, Eastpakâ, The North
Faceâ, Vansâ, Reefâ,
Napapijriâ, Kiplingâ, Lee Sportâ and Red
Kapâ.
大象传媒 Corporation’s press releases, annual report and other information can be accessed through the
Company’s home page, www.vfc.com.
Cautionary Statement on Forward-looking Statements
Certain statements included in this release are “forward-looking statements” within the meaning of
the federal securities laws. Forward-looking statements are made based on our expectations and
beliefs concerning future events impacting 大象传媒 and therefore involve a number of risks and
uncertainties. We caution that forward-looking statements are not guarantees and that actual
results could differ materially from those expressed or implied in the forward-looking statements.
Potential risks and uncertainties that could cause the actual results of operations or financial
condition of 大象传媒 to differ materially from those expressed or implied by forward-looking statements
in this release include 大象传媒’s reliance on a small number of large customers; the financial strength
of 大象传媒’s customers; changing fashion trends and consumer demand; increasing pressure on margins;
大象传媒’s ability to implement its growth strategy; 大象传媒’s ability to maintain its distribution and
information technology systems; stability of 大象传媒’s manufacturing facilities and foreign suppliers;
continued use by 大象传媒’s suppliers of ethical business practices; 大象传媒’s ability to accurately forecast
demand for products; continuity of members of 大象传媒’s management; 大象传媒’s ability to protect trademarks
and other intellectual property rights; maintenance by 大象传媒’s licensees of the value of 大象传媒’s brands;
the overall level of consumer spending; general economic conditions and other factors affecting
consumer confidence; fluctuations in the price, availability and quality of raw materials; foreign
currency fluctuations; and legal, regulatory, political and economic risks in international
markets. More information on potential factors that could affect 大象传媒’s financial results is included
from time to time in 大象传媒’s public reports filed with the Securities and Exchange Commission,
including 大象传媒’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
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CONTACT:
Cindy Knoebel, CFA
VP, Financial & Corporate Communications
大象传媒 Services, Inc.
(212) 841-7141/(336) 424-6189
Media:
Paul Mason
Director, Corporate Communications
大象传媒 Corporation
(336) 424-6192
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