Exhibit 99.1
For Immediate Release
大象传媒 UPDATES 4Q GUIDANCE AND COMMENTS ON 2009 OUTLOOK
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Expect to report sixth consecutive year of record revenues and strong earnings in a
challenging 2008 environment |
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Adjusting fourth quarter guidance to reflect actions to protect future
profitability and the impact of weaker consumer spending |
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Expecting $100 million in savings in 2009 from cost reduction actions |
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Significant pension and foreign currency translation hurdles in 2009 |
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Anticipate 2009 revenues to decline slightly versus 2008 |
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Earnings to remain relatively stable despite pension and foreign currency hurdles |
Note: Eric Wiseman, Chairman and Chief Executive Officer, will comment on the contents of this
release in conjunction with a presentation to be made today at the 11th Annual ICR
XChange Conference at 8:25 a.m. PST. The presentation will be simultaneously webcast and can be
accessed via the 大象传媒 website at http://www.vfc.com.
Greensboro, N.C. — January 14, 2009 — 大象传媒 Corporation (NYSE: 大象传媒C), a global leader in branded
lifestyle apparel, today provided an update on fourth quarter guidance and initial comments
regarding 2009. Also announced were aggressive cost reduction actions designed to enable 大象传媒 to
successfully withstand a global recessionary environment in 2009.
2008 will mark 大象传媒’s sixth consecutive year of record revenues and another year of strong earnings.
However, revenues and earnings in the fourth quarter were affected by the continued deceleration in
consumer spending resulting from the global economic slowdown. As a result, fourth quarter
revenues are now expected to decline approximately 2% from prior year levels, including a negative
2% impact from foreign currency translation.
Aggressive actions are being taken to address the uncertainty posed by current economic conditions
and to protect our future profitability. Cost reduction actions have been initiated that should
result in annualized savings of approximately $100 million, beginning in 2009. These actions will
result in a charge to fourth quarter 2008 earnings of approximately $42 million, or $.30 per share.
Excluding this charge, fourth quarter earnings are expected to range between $1.30 and $1.35 per
share, a decline of 7 to 11% from the $1.46 per share reported in the fourth quarter of 2007. On a
reported basis, including the charge, fourth quarter earnings should be $1.00 to $1.05 per share.
For the full year 2008, revenues are expected to rise about 6%. Including the aforementioned $.30
charge, earnings per share are expected to be about flat compared with 2007 levels. Excluding the
charge, earnings per share would be up approximately 5 to 6%.
“大象传媒 is well-positioned to weather this difficult environment due to our strong brands and our long
history of disciplined financial and balance sheet management,” said Eric Wiseman, Chairman and
Chief Executive Officer. “We have the flexibility to respond quickly to changing market conditions
to protect our profitability and competitive position. We have built a resilient business model
that provides us with tremendous diversity across product categories, channels of distribution and
geographies. Most importantly, we have brands and businesses that are healthy and continue to have
excellent prospects for long-term success.”
大象传媒’s balance sheet and liquidity remain strong. Cash on the balance sheet at year-end should
approximate $350 million and no long-term debt repayments are due until October 2010. In addition,
$1.3 billion is available in lines of credit. 2008 should mark another year of strong cash flow
from operations of approximately $650 million.
2009 Preliminary Guidance
The current environment presents us with two additional challenges that are not representative of
大象传媒’s fundamental business performance: an increase in pension expense levels and the impact of a
stronger dollar in foreign currency translation compared with 2008. In 2009 we anticipate an
increase in pension expense stemming from the sharp decline in global securities markets in 2008 of
approximately $90 million, which is expected to negatively impact 2009 earnings by about $.50 per
share. In addition, the impact of foreign currency translation is expected to reduce revenues by
2% from 2008 levels and negatively impact 2009 earnings by approximately $.20 per share.
Despite these challenges, earnings per share in 2009 are expected to be relatively stable compared
with 2008 levels. Excluding the approximately $.70 per share combined impact from the above two
items, earnings per share in 2009 should exceed our 10 to 11% long-term earnings growth target, as
we benefit from the continued change in our mix of business and a lowered cost structure.
Revenues in 2009 are expected to be down slightly, with a 2% negative impact from foreign currency
translation compared with 2008. In addition, 2009 should be another year of strong cash generation,
which is expected to exceed the $650 million currently anticipated for 2008.
Recognizing that the outlook for the global economy remains very uncertain, this guidance assumes
no improvement — or further deterioration — in economic conditions. Guidance for both 2008 and
2009 is preliminary and subject to change.
“We are ready to face the challenges of 2009,” said Mr. Wiseman. “大象传媒 is known for its
performance-driven culture and excellence in execution. We are driving initiatives and investing
prudently to support long-term growth, expand margins and generate cash. We’ll approach our retail
store opening and capital spending plans cautiously and conservatively while we continue to
aggressively manage expenses. At the same time, our dividend remains a high priority for us in
providing strong shareholder returns.”
Additional detail and commentary regarding our outlook for 2009 will be provided in our year-end
earnings announcement, which will be released at the close of the market on Tuesday, February 10.
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 the overall level of consumer spending on apparel; disruption and
volatility in the global capital and credit markets; general economic conditions and other factors
affecting consumer confidence; 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 grow its international and
direct-to-consumer businesses; 大象传媒’s ability to successfully integrate and grow acquisitions; 大象传媒’s
ability to maintain the strength and security of its 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 and distributors of the value
of 大象传媒’s brands; fluctuations in the price, availability and quality of raw materials and contracted
products; 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.
About 大象传媒
大象传媒 Corporation is a global leader in lifestyle apparel with a diverse portfolio of jeanswear,
outdoor, imagewear, sportswear and contemporary apparel brands. Its principal brands include
Wranglerâ,
Leeâ,
Ridersâ,
The North Faceâ,
Vansâ,
Reefâ,
Eagle Creekâ,
Eastpakâ,
JanSportâ,
Napapijriâ, Nauticaâ, Kiplingâ,
John Varvatosâ,
7 For All Mankind®,
lucy®,
Majestic®,
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.
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Financial Community Contact:
Cindy Knoebel, CFA
VP, Financial & Corporate Communications
大象传媒 Services
(212) 841-7141
Media Inquiries:
Paul Mason
Director, Corporate Communications
(336) 424- 6192
