大象传媒 Corporation Reports Third Quarter Earnings, Reaffirms Full Year Fiscal 2023 EPS Outlook and Revenue Within the Prior Range and Unveils Actions to Strengthen Financial Position
DENVER--(BUSINESS WIRE)-- 大象传媒 Corporation (NYSE: 大象传媒C) today announced financial results for its third quarter (Q3'FY23) ended December 31, 2022 and a series of actions to accelerate the path to its target leverage ratio and sharpen its focus, including declaring a quarterly per share dividend of $0.30, reflecting a 41% decrease over the previous quarter鈥檚 dividend.
Q3'FY23 Financial Highlights
- Revenue down 3% (up 3% in constant dollars) to $3.5 billion
- Earnings per share (EPS) down 1% to $1.31; Adjusted EPS down 17% to $1.12
Benno Dorer, Interim President and CEO, said: 鈥淲e are pleased to reaffirm the recently communicated full year 2023 EPS outlook with revenue growth at approximately 3%, after navigating an increasingly challenging fiscal Q3. Spending the last few weeks with 大象传媒's dedicated and talented teams around the world has reinforced my belief in the tremendous opportunity ahead for our company. We are committed to improving execution through a sharpened focus on the biggest consumer opportunities and enhanced operational performance. Consistent with this objective, we are shifting resource priorities across the Company, including by reducing the dividend, exploring the sale of non-core assets, cutting costs and eliminating non-strategic spend, while enhancing the focus on the consumer through targeted investments. We are confident these actions will enable a return to profitable and sustainable growth and, with that, strong shareholder value creation.鈥�
Q3鈥橣Y23 Operating Highlights
- EMEA region down 2% and up 10% in constant dollars, the seventh consecutive quarter of double-digit growth in constant dollars
- Asia Pacific region down 7% and up 4% in constant dollars, reflecting a sequential improvement across the region and in Greater China, where sales were down 11% and down 1% in constant dollars, and continued strong growth in the rest of Asia
- Standout performance in the outdoor brands, led by The North Face庐 up 7% and up 13% in constant dollars, with Timberland庐 flat and up 6% in constant dollars
- Vans庐 down 13% and down 9% in constant dollars, reflecting positive performances in Europe and Asia outside of Greater China, while the Americas remained negative
- Balanced performance across both Direct to Consumer and Wholesale channels
- Supply chain challenges remained persistent in the quarter and are being addressed, with actions in place to return to full customer service at a normalized cost
FY23 Outlook*
- Total 大象传媒 revenue up approximately 3% in constant dollars, within the previous outlook range
- Vans庐 revenue is expected to decline by high single digits % in constant dollars, compared to the previous outlook of down mid-single digits %
- The North Face庐 is expected to be up by at least 14% in constant dollars, compared to the previous outlook of up at least 12%
- Adjusted gross margin down approximately 200 basis points, compared to the previous outlook of down 100 to 150 basis points
- Adjusted operating margin approximately 9.5%, compared to the previous outlook of approximately 11.0%
- Adjusted EPS $2.05 to $2.15, within the previous outlook of $2.00 to $2.20
- Adjusted cash flow from operations** approximately $0.7 billion, compared to the previous outlook of at least $0.9 billion; Capital expenditures approximately $200 million versus the previous outlook of $230 million
- Inventory is expected to reduce by approximately $300 million during Q4'FY23
FY24 Expectations*
- Total 大象传媒 revenue up by at least low-single digit % in constant dollars
- Gross and operating margin expansion
- Operating earnings to grow by double-digits
- Operating cash flow to grow faster than earnings
Actions to Accelerate Path to Target Leverage Ratio and Sharpen the Company's Focus
The Company's capital deployment priorities in the near to medium term are focused on optimizing and driving the performance of the portfolio, reducing leverage and returning capital to shareholders. 大象传媒 is also evaluating and deploying a series of strategic actions to strengthen the Company's financial position and sharpen focus on its greatest value creation opportunities, including:
- Rightsizing the dividend payout to accelerate the return to the Company's target leverage ratio and provide additional financial flexibility, positioning 大象传媒 to navigate the current macro-economic challenges while continuing to make investments to advance its strategy. As a result, 大象传媒's next quarterly per share payment will reduce to $0.30 from $0.51 per share. The Company expects to grow future dividends in line with earnings
- Continuing to pursue the portfolio optimization agenda. The Company is commencing a review of strategic alternatives for its Global Packs business, consisting of the Kipling庐, Eastpak庐, and JanSport庐 brands. While these iconic and profitable businesses are strong contributors of value, 大象传媒 is committed to ensuring they are optimally positioned to achieve their full potential while enhancing management focus on the Company鈥檚 greatest strategic priorities
- Concluding a number of asset sales during H2'FY23, including the sale and leaseback of 大象传媒's European headquarters in Stabio, Switzerland
- Reducing working capital and aligning inventories to optimal levels, without compromising brand equity
- Increasing our efforts to reduce costs in order to point resources toward the Company's highest value creation opportunities, including completing the previously announced actions which will deliver approximately $225 million in annualized savings once complete in FY24
Matt Puckett, CFO, said: 鈥淎s we close FY23 and move into FY24, we have clear plans in place to address the ongoing challenging macro-economic environment in the near term. I am confident the actions we are taking will lead to improved operating performance and will strengthen the Company's financial position, enabling 大象传媒 to deliver long-term, sustainable and profitable growth.鈥�
* FY23 outlook and FY24 expectations assume no additional significant COVID-19 related lockdowns in any key commercial or production regions and no significant worsening in global inflation rates and consumer sentiment
** Excludes the impact of an $876 million payment 大象传媒 made on October 19, 2022 to the U.S. Treasury for the dispute regarding the timing of income inclusion associated with 大象传媒's acquisition of Timberland in 2011, as previously disclosed
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Summary Revenue Information |
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(Unaudited) |
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Three Months Ended December |
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Nine Months Ended December |
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(Dollars in millions) |
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2022 |
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2021 |
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% Change |
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% Change (constant currency) |
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2022 |
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2021 |
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% Change |
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% Change (constant currency) |
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Brand: |
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Vans庐 |
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$ |
926.9 |
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$ |
1,060.4 |
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(13 |
)% |
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(9 |
)% |
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$ |
2,825.9 |
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$ |
3,170.7 |
听 |
(11 |
)% |
听 |
(7 |
)% |
|
The North Face庐 |
听 |
听 |
1,321.2 |
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听 |
1,240.3 |
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7 |
% |
听 |
13 |
% |
听 |
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2,753.2 |
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2,490.2 |
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11 |
% |
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17 |
% |
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Timberland庐 |
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595.5 |
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593.4 |
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鈥� |
% |
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6 |
% |
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1,389.1 |
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1,388.2 |
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鈥� |
% |
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7 |
% |
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Dickies庐 |
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177.0 |
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211.5 |
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(16 |
)% |
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(13 |
)% |
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533.7 |
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640.7 |
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(17 |
)% |
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(14 |
)% |
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Other Brands |
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510.1 |
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518.8 |
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(2 |
)% |
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5 |
% |
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1,371.0 |
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1,327.4 |
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3 |
% |
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11 |
% |
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大象传媒 Revenue |
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$ |
3,530.7 |
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$ |
3,624.4 |
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(3 |
)% |
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3 |
% |
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$ |
8,872.9 |
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$ |
9,017.2 |
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(2 |
)% |
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4 |
% |
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Region: |
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Americas |
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$ |
2,093.9 |
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$ |
2,132.7 |
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(2 |
)% |
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(1 |
)% |
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$ |
5,233.1 |
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$ |
5,241.7 |
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鈥� |
% |
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鈥� |
% |
|
EMEA |
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983.3 |
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1,003.3 |
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(2 |
)% |
听 |
10 |
% |
听 |
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2,510.4 |
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听 |
2,515.9 |
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鈥� |
% |
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14 |
% |
|
APAC |
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听 |
453.4 |
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488.3 |
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(7 |
)% |
听 |
4 |
% |
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1,129.3 |
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1,259.6 |
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(10 |
)% |
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(2 |
)% |
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大象传媒 Revenue |
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$ |
3,530.7 |
听 |
$ |
3,624.4 |
听 |
(3 |
)% |
听 |
3 |
% |
听 |
$ |
8,872.9 |
听 |
$ |
9,017.2 |
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(2 |
)% |
听 |
4 |
% |
|
International |
听 |
$ |
1,629.3 |
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$ |
1,676.5 |
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(3 |
)% |
听 |
8 |
% |
听 |
$ |
4,132.7 |
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$ |
4,257.5 |
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(3 |
)% |
听 |
8 |
% |
|
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Channel: |
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DTC |
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$ |
1,937.4 |
听 |
$ |
1,981.5 |
听 |
(2 |
)% |
听 |
3 |
% |
听 |
$ |
4,082.6 |
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$ |
4,247.3 |
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(4 |
)% |
听 |
1 |
% |
|
Wholesale (a) |
听 |
听 |
1,593.3 |
听 |
听 |
1,642.9 |
听 |
(3 |
)% |
听 |
2 |
% |
听 |
听 |
4,790.3 |
听 |
听 |
4,769.9 |
听 |
鈥� |
% |
听 |
6 |
% |
|
大象传媒 Revenue |
听 |
$ |
3,530.7 |
听 |
$ |
3,624.4 |
听 |
(3 |
)% |
听 |
3 |
% |
听 |
$ |
8,872.9 |
听 |
$ |
9,017.2 |
听 |
(2 |
)% |
听 |
4 |
% |
|
All references to periods ended December 2022 relate to the 13-week and 39-week fiscal periods ended December 31, 2022 and all references to periods ended December 2021 relate to the 13-week and 39-week fiscal periods ended January 1, 2022. |
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Note: Amounts may not sum due to rounding |
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(a) Royalty revenues are included in the wholesale channel for all periods. |
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Q3'FY23 Income Statement Review
- Revenue $3.5 billion, down 3% (up 3% in constant dollars) with the big four brands down 3% (up 2% in constant dollars) and the balance of the portfolio down 2% (up 5% in constant dollars)
- The North Face庐 revenue $1.3 billion, up 7% (up 13% in constant dollars)
- Vans庐 revenue $0.9 billion, down 13% (down 9% in constant dollars)
- Gross margin 54.9%, down 120 basis points; Adjusted gross margin 54.9%, down 140 basis points due primarily to increased promotions
- Operating margin 14.6%, down 410 basis points; Adjusted operating margin 14.9%, down 280 basis points
- Earnings per share (EPS) $1.31, down 1%; Adjusted EPS $1.12, down 17%
Q3'FY23 Balance Sheet Review
- Inventories declined by $158 million during Q3鈥橣Y23 and increased by 101% relative to last year; excluding the increase of in-transit inventory of approximately $415 million, the increase was approximately 75% relative to last year, primarily driven by core and excess replenishment inventory
- 大象传媒 modified terms with the majority of its suppliers in the first quarter of fiscal 2023 to take ownership of inventory near point of shipment rather than destination
- Accounts payable increased 62%, which was largely driven by the modified terms with the majority of suppliers
Q3鈥橣Y23 Shareholder Returns
- Return of $198 million to shareholders through cash dividends
- 大象传媒鈥檚 Board of Directors declared a quarterly dividend of $0.30 per share, reflecting a 41% decrease from the previous quarter鈥檚 dividend. This dividend will be payable on March 21, 2023, to shareholders of record at the close of business on March 10, 2023. Subject to approval by its Board of Directors, 大象传媒 intends to continue to pay quarterly dividends
COVID-19 Update
To help mitigate the spread of COVID-19 and in response to public health advisories and governmental actions and regulations, 大象传媒 has modified its business practices in certain locations, including the temporary closing of offices and retail stores, instituting travel bans and restrictions and implementing health and safety measures including social distancing and quarantines.
大象传媒's supply chain is currently fully operational. Suppliers are complying with local public health advisories and governmental restrictions. Most final product manufacturing and assembly suppliers are back to normal operating levels, though manufacturing and freight lead times remain elevated. 大象传媒 is working with its suppliers to minimize disruption and is employing expedited freight strategically as needed. 大象传媒's distribution centers are operational in accordance with local government guidelines.
In North America, no stores were closed during the third quarter. Currently, all stores are open.
In the EMEA region, no stores were closed during the third quarter due to COVID-19. Currently, all stores are open.
In the APAC region, including Mainland China, 4% of stores were closed at the beginning of the third quarter with a peak of 27% of stores (including partner doors) closed and an average of 11% of stores closed throughout the quarter. At the end of the third quarter, 3% of stores were closed and, as of today, no stores are closed.
大象传媒 is continuing to monitor the evolution of COVID-19 globally and will comply with guidance from government entities and public health authorities to prioritize the health and well-being of its employees, customers, trade partners and consumers.
Webcast Information
大象传媒 will host its third quarter fiscal 2023 conference call beginning at 4:30 p.m. Eastern Time today. The conference call will be broadcast live via the Internet, accessible at . For those unable to listen to the live broadcast, an archived version will be available at the same location.
Presentation
A presentation on third quarter fiscal 2023 results will be available at today before the conference call and will be archived at the same location.
About 大象传媒
Founded in 1899, 大象传媒 Corporation is one of the world鈥檚 largest apparel, footwear and accessories companies connecting people to the lifestyles, activities and experiences they cherish most through a family of iconic outdoor, active and workwear brands including Vans庐, The North Face庐, Timberland庐 and Dickies庐. Our purpose is to power movements of sustainable and active lifestyles for the betterment of people and our planet. We connect this purpose with a relentless drive to succeed to create value for all stakeholders and use our company as a force for good. For more information, please visit .
Financial Presentation Disclosure
All per share amounts are presented on a diluted basis. This release refers to 鈥渞eported鈥� and 鈥渃onstant dollar鈥� amounts, terms that are described under the heading below 鈥淐onstant Currency - Excluding the Impact of Foreign Currency.鈥� Unless otherwise noted, 鈥渞eported鈥� and 鈥渃onstant dollar鈥� amounts are the same. This release also refers to 鈥渃ontinuing鈥� and 鈥渄iscontinued鈥� operations amounts, which are concepts described under the heading below 鈥淒iscontinued Operations - Occupational Workwear Business.鈥� Unless otherwise noted, results presented are based on continuing operations. This release also refers to 鈥渁djusted鈥� amounts, a term that is described under the heading below 鈥淎djusted Amounts - Excluding Transaction and Deal Related Activities, Costs Related to Specified Strategic Business Decisions, Noncash Impairment Charges, Pension Settlement Charge and a Tax Item.鈥� Unless otherwise noted, 鈥渞eported鈥� and 鈥渁djusted鈥� amounts are the same.
Constant Currency - Excluding the Impact of Foreign Currency
This release refers to 鈥渞eported鈥� amounts in accordance with U.S. generally accepted accounting principles (鈥淕AAP鈥�), which include translation and transactional impacts from foreign currency exchange rates. This release also refers to 鈥渃onstant dollar鈥� amounts, which exclude the impact of translating foreign currencies into U.S. dollars. Reconciliations of GAAP measures to constant currency amounts are presented in the supplemental financial information included with this release, which identifies and quantifies all excluded items, and provides management鈥檚 view of why this information is useful to investors.
Discontinued Operations - Occupational Workwear Business
On June 28, 2021, 大象传媒 completed the sale of its Occupational Workwear business. The Occupational Workwear business was comprised primarily of the following brands and businesses: Red Kap庐, 大象传媒 Solutions庐, Bulwark庐, Workrite庐, Walls庐, Terra庐, Kodiak庐, Work Authority庐 and Horace Small庐. The business also included a license for certain Dickies庐 occupational workwear products that were historically sold through the business-to-business channel. Accordingly, the company has reported the operating results and cash flows of the business in discontinued operations for all periods through the date of sale.
Adjusted Amounts - Excluding Transaction and Deal Related Activities, Costs Related to Specified Strategic Business Decisions, Noncash Impairment Charges, Pension Settlement Charge and a Tax Item
The adjusted amounts in this release exclude transaction and deal related activities associated with the acquisition of the Supreme庐 brand. Total transaction and deal related activities include integration costs of approximately $0.3 million in the first nine months of fiscal 2023.
The adjusted amounts in this release exclude costs related to 大象传媒's business model transformation primarily driven by Corporate actions and resulting restructuring costs, and a transformation initiative for our Asia-Pacific regional operations. Total costs were approximately $11 million in the third quarter of fiscal 2023 and $72 million in the first nine months of fiscal 2023.
The adjusted amounts in this release exclude noncash impairment charges related to the Supreme庐 reporting unit goodwill and indefinite-lived trademark intangible asset of approximately $422 million in the first nine months of fiscal 2023. The impairment charges were driven by non-operating factors including higher interest rates and foreign currency fluctuations.
The adjusted amounts in this release exclude a noncash pension settlement charge. The pension settlement charge resulted from the purchase of a group annuity contract, which was an action taken to streamline administration, manage financial risk associated with pension plans, and to transfer a portion of the liability associated with 大象传媒's U.S. pension plan to an insurance company. Total expense was approximately $92 million in the first nine months of fiscal 2023.
The adjusted amounts in this release exclude a discrete tax benefit of approximately $95 million in the third quarter and first nine months of fiscal 2023 related to a favorable adjustment to 大象传媒's transition tax liability pursuant to the Tax Cuts and Jobs Act based on examinations by the IRS.
Combined, the above items positively impacted earnings per share by $0.19 during the third quarter of fiscal 2023 and negatively impacted earnings per share by $1.07 during the first nine months of fiscal 2023. All adjusted amounts referenced herein exclude the effects of these amounts.
Reconciliations of measures calculated in accordance with GAAP to adjusted amounts are presented in the supplemental financial information included with this release, which identifies and quantifies all excluded items, and provides management鈥檚 view of why this information is useful to investors. The company also provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results. Additionally, the impact of the payment of taxes and interest related to the dispute with the IRS regarding the Timberland acquisition in 2011 has been excluded from fiscal 2023 adjusted cash flow from operations.
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 several risks and uncertainties. You can identify these statements by the fact that they use words such as 鈥渨ill,鈥� 鈥渁nticipate,鈥� 鈥渆stimate,鈥� 鈥渆xpect,鈥� 鈥渟hould,鈥� and 鈥渕ay鈥� and other words and terms of similar meaning or use of future dates, however, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements regarding 大象传媒鈥檚 plans, objectives, projections and expectations relating to 大象传媒鈥檚 operations or financial performance, and assumptions related thereto are forward-looking statements. 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. 大象传媒 undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. 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 include, but are not limited to: risks arising from the widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the coronavirus (COVID-19) global pandemic; the level of consumer demand for apparel, footwear and accessories; disruption to 大象传媒鈥檚 distribution system; changes in global economic conditions and the financial strength of 大象传媒鈥檚 customers, including as a result of current inflationary pressures; fluctuations in the price, availability and quality of raw materials and contracted products; disruption and volatility in the global capital and credit markets; 大象传媒鈥檚 response to changing fashion trends, evolving consumer preferences and changing patterns of consumer behavior; intense competition from online retailers and other direct-to-consumer business risks; third-party manufacturing and product innovation; increasing pressure on margins; 大象传媒鈥檚 ability to implement its business strategy; 大象传媒鈥檚 ability to grow its international, direct-to-consumer and digital businesses; 大象传媒鈥檚 ability to transform its model to be more consumer-minded, retail-centric and hyper-digital; retail industry changes and challenges; 大象传媒鈥檚 ability to create and maintain an agile and efficient operating model and organizational structure; 大象传媒鈥檚 and its vendors鈥� ability to maintain the strength and security of information technology systems; the risk that 大象传媒鈥檚 facilities and systems and those of our third-party service providers may be vulnerable to and unable to anticipate or detect data or information security breaches and data or financial loss; 大象传媒鈥檚 ability to properly collect, use, manage and secure business, consumer and employee data and comply with privacy and security regulations; foreign currency fluctuations; stability of 大象传媒鈥檚 vendors鈥� manufacturing facilities and 大象传媒鈥檚 ability to establish and maintain effective supply chain capabilities; continued use by 大象传媒鈥檚 suppliers of ethical business practices; 大象传媒鈥檚 ability to accurately forecast demand for products; continuity of members of 大象传媒鈥檚 management; 大象传媒鈥檚 ability to recruit, develop or retain qualified employees; 大象传媒鈥檚 ability to protect trademarks and other intellectual property rights; possible goodwill and other asset impairment such as the recent impairment charges related to the Supreme庐 reporting unit goodwill and indefinite-lived trademark intangible asset; maintenance by 大象传媒鈥檚 licensees and distributors of the value of 大象传媒鈥檚 brands; 大象传媒鈥檚 ability to execute acquisitions and dispositions and integrate acquisitions; business resiliency in response to natural or man-made economic, political or environmental disruptions; changes in tax laws and additional tax liabilities, including for the timing of income inclusion associated with our acquisition of the Timberland庐 brand in 2011; legal, regulatory, political, economic, and geopolitical risks, including those related to the current conflict in Ukraine; changes to laws and regulations; adverse or unexpected weather conditions; 大象传媒's indebtedness and its ability to obtain financing on favorable terms, if needed, could prevent 大象传媒 from fulfilling its financial obligations; 大象传媒's ability to pay and declare dividends or repurchase its stock in the future; climate change and increased focus on environmental, social and governance issues; and tax risks associated with the spin-off of our Jeanswear business completed in 2019. More information on potential factors that could affect 大象传媒鈥檚 financial results is included from time to time in 大象传媒鈥檚 public reports filed with the SEC, including 大象传媒鈥檚 Annual Report on Form 10-K, and Quarterly Reports on Form 10-Q, and Forms 8-K filed or furnished with the SEC.
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大象传媒 CORPORATION |
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Condensed Consolidated Statements of Operations |
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(Unaudited) |
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(In thousands, except per share amounts) |
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Three Months Ended December |
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Nine Months Ended December |
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|
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2022 |
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2021 |
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2022 |
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2021 |
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|
Net revenues |
听 |
$ |
3,530,667 |
听 |
听 |
$ |
3,624,384 |
听 |
听 |
$ |
8,872,862 |
听 |
听 |
$ |
9,017,176 |
听 |
|
Costs and operating expenses |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
||||||||
|
Cost of goods sold |
听 |
听 |
1,593,048 |
听 |
听 |
听 |
1,592,604 |
听 |
听 |
听 |
4,134,207 |
听 |
听 |
听 |
4,027,601 |
听 |
|
Selling, general and administrative expenses |
听 |
听 |
1,421,586 |
听 |
听 |
听 |
1,353,338 |
听 |
听 |
听 |
3,828,157 |
听 |
听 |
听 |
3,549,763 |
听 |
|
Impairment of goodwill and intangible assets |
听 |
听 |
鈥� |
听 |
听 |
听 |
鈥� |
听 |
听 |
听 |
421,922 |
听 |
听 |
听 |
鈥� |
听 |
|
Total costs and operating expenses |
听 |
听 |
3,014,634 |
听 |
听 |
听 |
2,945,942 |
听 |
听 |
听 |
8,384,286 |
听 |
听 |
听 |
7,577,364 |
听 |
|
Operating income |
听 |
听 |
516,033 |
听 |
听 |
听 |
678,442 |
听 |
听 |
听 |
488,576 |
听 |
听 |
听 |
1,439,812 |
听 |
|
Interest expense, net |
听 |
听 |
(50,230 |
) |
听 |
听 |
(33,388 |
) |
听 |
听 |
(115,395 |
) |
听 |
听 |
(100,533 |
) |
|
Loss on debt extinguishment |
听 |
听 |
鈥� |
听 |
听 |
听 |
(3,645 |
) |
听 |
听 |
鈥� |
听 |
听 |
听 |
(3,645 |
) |
|
Other income (expense), net |
听 |
听 |
(9,901 |
) |
听 |
听 |
(95 |
) |
听 |
听 |
(113,895 |
) |
听 |
听 |
16,495 |
听 |
|
Income from continuing operations before income taxes |
听 |
听 |
455,902 |
听 |
听 |
听 |
641,314 |
听 |
听 |
听 |
259,286 |
听 |
听 |
听 |
1,352,129 |
听 |
|
Income tax expense (benefit) |
听 |
听 |
(51,966 |
) |
听 |
听 |
123,513 |
听 |
听 |
听 |
(74,190 |
) |
听 |
听 |
216,303 |
听 |
|
Income from continuing operations |
听 |
听 |
507,868 |
听 |
听 |
听 |
517,801 |
听 |
听 |
听 |
333,476 |
听 |
听 |
听 |
1,135,826 |
听 |
|
Income from discontinued operations, net of tax |
听 |
听 |
鈥� |
听 |
听 |
听 |
鈥� |
听 |
听 |
听 |
鈥� |
听 |
听 |
听 |
170,273 |
听 |
|
Net income |
听 |
$ |
507,868 |
听 |
听 |
$ |
517,801 |
听 |
听 |
$ |
333,476 |
听 |
听 |
$ |
1,306,099 |
听 |
|
Earnings per common share - basic (a) |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
||||||||
|
Continuing operations |
听 |
$ |
1.31 |
听 |
听 |
$ |
1.33 |
听 |
听 |
$ |
0.86 |
听 |
听 |
$ |
2.90 |
听 |
|
Discontinued operations |
听 |
听 |
鈥� |
听 |
听 |
听 |
鈥� |
听 |
听 |
听 |
鈥� |
听 |
听 |
听 |
0.44 |
听 |
|
Total earnings per common share - basic |
听 |
$ |
1.31 |
听 |
听 |
$ |
1.33 |
听 |
听 |
$ |
0.86 |
听 |
听 |
$ |
3.34 |
听 |
|
Earnings per common share - diluted (a) |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
||||||||
|
Continuing operations |
听 |
$ |
1.31 |
听 |
听 |
$ |
1.32 |
听 |
听 |
$ |
0.86 |
听 |
听 |
$ |
2.89 |
听 |
|
Discontinued operations |
听 |
听 |
鈥� |
听 |
听 |
听 |
鈥� |
听 |
听 |
听 |
鈥� |
听 |
听 |
听 |
0.43 |
听 |
|
Total earnings per common share - diluted |
听 |
$ |
1.31 |
听 |
听 |
$ |
1.32 |
听 |
听 |
$ |
0.86 |
听 |
听 |
$ |
3.32 |
听 |
|
Weighted average shares outstanding |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
||||||||
|
Basic |
听 |
听 |
387,739 |
听 |
听 |
听 |
390,430 |
听 |
听 |
听 |
387,663 |
听 |
听 |
听 |
391,187 |
听 |
|
Diluted |
听 |
听 |
388,192 |
听 |
听 |
听 |
392,495 |
听 |
听 |
听 |
388,357 |
听 |
听 |
听 |
393,547 |
听 |
|
Cash dividends per common share |
听 |
$ |
0.51 |
听 |
听 |
$ |
0.50 |
听 |
听 |
$ |
1.51 |
听 |
听 |
$ |
1.48 |
听 |
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
||||||||
|
Basis of presentation of condensed consolidated financial statements: 大象传媒 operates and reports using a 52/53 week fiscal year ending on the Saturday closest to March 31 of each year. For presentation purposes herein, all references to periods ended December 2022 relate to the 13-week and 39-week fiscal periods ended December 31, 2022 and all references to periods ended December 2021 relate to the 13-week and 39-week fiscal periods ended January 1, 2022. References to March 2022 relate to information as of April 2, 2022. |
||||||||||||||||
|
(a) Amounts have been calculated using unrounded numbers. |
||||||||||||||||
| 大象传媒 CORPORATION | |||||||||
|
Condensed Consolidated Balance Sheets |
|||||||||
|
(Unaudited) |
|||||||||
|
(In thousands) |
|||||||||
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
|||
|
听 |
听 |
December |
听 |
March |
听 |
December |
|||
|
听 |
听 |
2022 |
听 |
2022 |
听 |
2021 |
|||
|
ASSETS |
听 |
听 |
听 |
听 |
听 |
听 |
|||
|
Current assets |
听 |
听 |
听 |
听 |
听 |
听 |
|||
|
Cash and equivalents |
听 |
$ |
571,347 |
听 |
$ |
1,275,943 |
听 |
$ |
1,333,839 |
|
Accounts receivable, net |
听 |
听 |
1,564,957 |
听 |
听 |
1,467,842 |
听 |
听 |
1,495,859 |
|
Inventories |
听 |
听 |
2,591,915 |
听 |
听 |
1,418,673 |
听 |
听 |
1,287,210 |
|
Other current assets |
听 |
听 |
515,763 |
听 |
听 |
425,622 |
听 |
听 |
483,738 |
|
Total current assets |
听 |
听 |
5,243,982 |
听 |
听 |
4,588,080 |
听 |
听 |
4,600,646 |
|
Property, plant and equipment, net |
听 |
听 |
932,663 |
听 |
听 |
1,041,777 |
听 |
听 |
1,049,691 |
|
Goodwill and intangible assets, net |
听 |
听 |
4,932,913 |
听 |
听 |
5,394,158 |
听 |
听 |
5,419,777 |
|
Operating lease right-of-use assets |
听 |
听 |
1,293,041 |
听 |
听 |
1,247,056 |
听 |
听 |
1,302,545 |
|
Other assets |
听 |
听 |
1,910,698 |
听 |
听 |
1,071,137 |
听 |
听 |
1,163,663 |
|
Total assets |
听 |
$ |
14,313,297 |
听 |
$ |
13,342,208 |
听 |
$ |
13,536,322 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
听 |
听 |
听 |
听 |
听 |
听 |
|||
|
Current liabilities |
听 |
听 |
听 |
听 |
听 |
听 |
|||
|
Short-term borrowings |
听 |
$ |
901,668 |
听 |
$ |
335,462 |
听 |
$ |
106,010 |
|
Current portion of long-term debt |
听 |
听 |
910,616 |
听 |
听 |
501,051 |
听 |
听 |
500,915 |
|
Accounts payable |
听 |
听 |
906,340 |
听 |
听 |
562,992 |
听 |
听 |
559,716 |
|
Accrued liabilities |
听 |
听 |
1,827,610 |
听 |
听 |
1,915,892 |
听 |
听 |
2,057,237 |
|
Total current liabilities |
听 |
听 |
4,546,234 |
听 |
听 |
3,315,397 |
听 |
听 |
3,223,878 |
|
Long-term debt |
听 |
听 |
4,617,441 |
听 |
听 |
4,584,261 |
听 |
听 |
4,646,379 |
|
Operating lease liabilities |
听 |
听 |
1,068,744 |
听 |
听 |
1,023,759 |
听 |
听 |
1,093,013 |
|
Other liabilities |
听 |
听 |
761,246 |
听 |
听 |
888,436 |
听 |
听 |
919,652 |
|
Total liabilities |
听 |
听 |
10,993,665 |
听 |
听 |
9,811,853 |
听 |
听 |
9,882,922 |
|
Stockholders' equity |
听 |
听 |
3,319,632 |
听 |
听 |
3,530,355 |
听 |
听 |
3,653,400 |
|
Total liabilities and stockholders' equity |
听 |
$ |
14,313,297 |
听 |
$ |
13,342,208 |
听 |
$ |
13,536,322 |
|
听 |
|||||||||
| 大象传媒 CORPORATION | ||||||||
|
Condensed Consolidated Statements of Cash Flows |
||||||||
|
(Unaudited) |
||||||||
|
(In thousands) |
||||||||
|
听 |
听 |
听 |
||||||
|
听 |
听 |
Nine Months Ended December |
||||||
|
听 |
听 |
2022 |
听 |
2021 |
||||
|
Operating activities |
听 |
听 |
听 |
听 |
||||
|
Net income |
听 |
$ |
333,476 |
听 |
听 |
$ |
1,306,099 |
听 |
|
Income from discontinued operations, net of tax |
听 |
听 |
鈥� |
听 |
听 |
听 |
170,273 |
听 |
|
Income from continuing operations, net of tax |
听 |
听 |
333,476 |
听 |
听 |
听 |
1,135,826 |
听 |
|
Impairment of goodwill and intangible assets |
听 |
听 |
421,922 |
听 |
听 |
听 |
鈥� |
听 |
|
Depreciation and amortization |
听 |
听 |
192,174 |
听 |
听 |
听 |
199,652 |
听 |
|
Reduction in the carrying amount of right-of-use assets |
听 |
听 |
280,845 |
听 |
听 |
听 |
309,588 |
听 |
|
Other adjustments |
听 |
听 |
(2,061,889 |
) |
听 |
听 |
(853,776 |
) |
|
Cash provided (used) by operating activities - continuing operations |
听 |
听 |
(833,472 |
) |
听 |
听 |
791,290 |
听 |
|
Cash provided by operating activities - discontinued operations |
听 |
听 |
鈥� |
听 |
听 |
听 |
6,090 |
听 |
|
Cash provided (used) by operating activities |
听 |
听 |
(833,472 |
) |
听 |
听 |
797,380 |
听 |
|
Investing activities |
听 |
听 |
听 |
听 |
||||
|
Business acquisitions, net of cash received |
听 |
听 |
鈥� |
听 |
听 |
听 |
3,760 |
听 |
|
Proceeds from sale of businesses, net of cash sold |
听 |
听 |
鈥� |
听 |
听 |
听 |
616,529 |
听 |
|
Proceeds from sale of short-term investments |
听 |
听 |
鈥� |
听 |
听 |
听 |
598,806 |
听 |
|
Capital expenditures |
听 |
听 |
(130,214 |
) |
听 |
听 |
(214,220 |
) |
|
Software purchases |
听 |
听 |
(75,460 |
) |
听 |
听 |
(63,758 |
) |
|
Other, net |
听 |
听 |
(1,159 |
) |
听 |
听 |
12,819 |
听 |
|
Cash provided (used) by investing activities - continuing operations |
听 |
听 |
(206,833 |
) |
听 |
听 |
953,936 |
听 |
|
Cash used by investing activities - discontinued operations |
听 |
听 |
鈥� |
听 |
听 |
听 |
(525 |
) |
|
Cash provided (used) by investing activities |
听 |
听 |
(206,833 |
) |
听 |
听 |
953,411 |
听 |
|
Financing activities |
听 |
听 |
听 |
听 |
||||
|
Contingent consideration payment |
听 |
听 |
(56,976 |
) |
听 |
听 |
鈥� |
听 |
|
Net increase (decrease) from short-term borrowings and long-term debt |
听 |
听 |
1,064,601 |
听 |
听 |
听 |
(411,400 |
) |
|
Share repurchases |
听 |
听 |
鈥� |
听 |
听 |
听 |
(299,999 |
) |
|
Cash dividends paid |
听 |
听 |
(586,335 |
) |
听 |
听 |
(579,194 |
) |
|
Proceeds from issuance of Common Stock, net of (payments) for tax withholdings |
听 |
听 |
(2,571 |
) |
听 |
听 |
32,929 |
听 |
|
Cash provided (used) by financing activities |
听 |
听 |
418,719 |
听 |
听 |
听 |
(1,257,664 |
) |
|
Effect of foreign currency rate changes on cash, cash equivalents and restricted cash |
听 |
听 |
(82,512 |
) |
听 |
听 |
(9,339 |
) |
|
Net change in cash, cash equivalents and restricted cash |
听 |
听 |
(704,098 |
) |
听 |
听 |
483,788 |
听 |
|
Cash, cash equivalents and restricted cash 鈥� beginning of year |
听 |
听 |
1,277,082 |
听 |
听 |
听 |
851,205 |
听 |
|
Cash, cash equivalents and restricted cash 鈥� end of period |
听 |
$ |
572,984 |
听 |
听 |
$ |
1,334,993 |
听 |
| 大象传媒 CORPORATION | ||||||||||||||
|
Supplemental Financial Information |
||||||||||||||
|
Reportable Segment Information |
||||||||||||||
|
(Unaudited) |
||||||||||||||
|
(In thousands) |
||||||||||||||
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
||||||||
|
听 |
听 |
Three Months Ended December |
听 |
% Change |
听 |
% Change Constant Currency (a) |
||||||||
|
听 |
听 |
2022 |
听 |
2021 |
听 |
听 |
||||||||
|
Segment revenues |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
||||||
|
Outdoor |
听 |
$ |
2,003,045 |
听 |
听 |
$ |
1,928,427 |
听 |
听 |
4 |
% |
听 |
10 |
% |
|
Active |
听 |
听 |
1,258,682 |
听 |
听 |
听 |
1,410,577 |
听 |
听 |
(11 |
)% |
听 |
(6 |
)% |
|
Work |
听 |
听 |
268,940 |
听 |
听 |
听 |
285,101 |
听 |
听 |
(6 |
)% |
听 |
(3 |
)% |
|
Other (b) |
听 |
听 |
鈥� |
听 |
听 |
听 |
279 |
听 |
听 |
* |
听 |
* |
||
|
Total segment revenues |
听 |
$ |
3,530,667 |
听 |
听 |
$ |
3,624,384 |
听 |
听 |
(3 |
)% |
听 |
3 |
% |
|
Segment profit (loss) |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
||||||
|
Outdoor |
听 |
$ |
457,027 |
听 |
听 |
$ |
450,432 |
听 |
听 |
听 |
听 |
听 |
||
|
Active |
听 |
听 |
146,885 |
听 |
听 |
听 |
254,497 |
听 |
听 |
听 |
听 |
听 |
||
|
Work |
听 |
听 |
18,487 |
听 |
听 |
听 |
47,672 |
听 |
听 |
听 |
听 |
听 |
||
|
Other (b) |
听 |
听 |
(134 |
) |
听 |
听 |
(44 |
) |
听 |
听 |
听 |
听 |
||
|
Total segment profit |
听 |
听 |
622,265 |
听 |
听 |
听 |
752,557 |
听 |
听 |
听 |
听 |
听 |
||
|
Corporate and other expenses |
听 |
听 |
(116,133 |
) |
听 |
听 |
(74,210 |
) |
听 |
听 |
听 |
听 |
||
|
Interest expense, net |
听 |
听 |
(50,230 |
) |
听 |
听 |
(33,388 |
) |
听 |
听 |
听 |
听 |
||
|
Loss on debt extinguishment |
听 |
听 |
鈥� |
听 |
听 |
听 |
(3,645 |
) |
听 |
听 |
听 |
听 |
||
|
Income from continuing operations before income taxes |
听 |
$ |
455,902 |
听 |
听 |
$ |
641,314 |
听 |
听 |
听 |
听 |
听 |
||
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
||||||
|
(a) Refer to constant currency definition on the following pages. |
||||||||||||||
|
(b) Other is included for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Other primarily includes sourcing activities related to transition services. |
||||||||||||||
|
* Calculation not meaningful |
||||||||||||||
| 大象传媒 CORPORATION | ||||||||||||||
|
Supplemental Financial Information |
||||||||||||||
|
Reportable Segment Information |
||||||||||||||
|
(Unaudited) |
||||||||||||||
|
(In thousands) |
||||||||||||||
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
||||||||
|
听 |
听 |
Nine Months Ended December |
听 |
% Change |
听 |
% Change Constant Currency (a) |
||||||||
|
听 |
听 |
2022 |
听 |
2021 |
听 |
听 |
||||||||
|
Segment revenues |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
||||||
|
Outdoor |
听 |
$ |
4,326,997 |
听 |
听 |
$ |
4,052,802 |
听 |
听 |
7 |
% |
听 |
13 |
% |
|
Active |
听 |
听 |
3,772,737 |
听 |
听 |
听 |
4,104,818 |
听 |
听 |
(8 |
)% |
听 |
(3 |
)% |
|
Work |
听 |
听 |
772,980 |
听 |
听 |
听 |
858,999 |
听 |
听 |
(10 |
)% |
听 |
(8 |
)% |
|
Other (b) |
听 |
听 |
148 |
听 |
听 |
听 |
557 |
听 |
听 |
* |
听 |
* |
||
|
Total segment revenues |
听 |
$ |
8,872,862 |
听 |
听 |
$ |
9,017,176 |
听 |
听 |
(2 |
)% |
听 |
4 |
% |
|
Segment profit (loss) |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
||||||
|
Outdoor |
听 |
$ |
670,615 |
听 |
听 |
$ |
662,761 |
听 |
听 |
听 |
听 |
听 |
||
|
Active |
听 |
听 |
541,171 |
听 |
听 |
听 |
809,708 |
听 |
听 |
听 |
听 |
听 |
||
|
Work |
听 |
听 |
92,989 |
听 |
听 |
听 |
150,649 |
听 |
听 |
听 |
听 |
听 |
||
|
Other (b) |
听 |
听 |
(516 |
) |
听 |
听 |
(696 |
) |
听 |
听 |
听 |
听 |
||
|
Total segment profit |
听 |
听 |
1,304,259 |
听 |
听 |
听 |
1,622,422 |
听 |
听 |
听 |
听 |
听 |
||
|
Impairment of goodwill and intangible assets |
听 |
听 |
(421,922 |
) |
听 |
听 |
鈥� |
听 |
听 |
听 |
听 |
听 |
||
|
Corporate and other expenses |
听 |
听 |
(507,656 |
) |
听 |
听 |
(166,115 |
) |
听 |
听 |
听 |
听 |
||
|
Interest expense, net |
听 |
听 |
(115,395 |
) |
听 |
听 |
(100,533 |
) |
听 |
听 |
听 |
听 |
||
|
Loss on debt extinguishment |
听 |
听 |
鈥� |
听 |
听 |
听 |
(3,645 |
) |
听 |
听 |
听 |
听 |
||
|
Income from continuing operations before income taxes |
听 |
$ |
259,286 |
听 |
听 |
$ |
1,352,129 |
听 |
听 |
听 |
听 |
听 |
||
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
||||||
|
(a) Refer to constant currency definition on the following pages. |
||||||||||||||
|
(b) Other is included for purposes of reconciliation of revenues and profit, but it is not considered a reportable segment. Other primarily includes sourcing activities related to transition services. |
||||||||||||||
|
* Calculation not meaningful |
||||||||||||||
| 大象传媒 CORPORATION | ||||||||||||
|
Supplemental Financial Information |
||||||||||||
|
Reportable Segment Information 鈥� Constant Currency Basis |
||||||||||||
|
(Unaudited) |
||||||||||||
|
(In thousands) |
||||||||||||
| 听 | ||||||||||||
|
听 |
听 |
Three Months Ended December 2022 |
||||||||||
|
听 |
听 |
As Reported |
听 |
Adjust for Foreign |
听 |
听 |
||||||
|
听 |
听 |
under GAAP |
听 |
Currency Exchange |
听 |
Constant Currency |
||||||
|
Segment revenues |
听 |
听 |
听 |
听 |
听 |
听 |
||||||
|
Outdoor |
听 |
$ |
2,003,045 |
听 |
听 |
$ |
115,791 |
听 |
听 |
$ |
2,118,836 |
听 |
|
Active |
听 |
听 |
1,258,682 |
听 |
听 |
听 |
63,161 |
听 |
听 |
听 |
1,321,843 |
听 |
|
Work |
听 |
听 |
268,940 |
听 |
听 |
听 |
8,293 |
听 |
听 |
听 |
277,233 |
听 |
|
Other |
听 |
听 |
鈥� |
听 |
听 |
听 |
鈥� |
听 |
听 |
听 |
鈥� |
听 |
|
Total segment revenues |
听 |
$ |
3,530,667 |
听 |
听 |
$ |
187,245 |
听 |
听 |
$ |
3,717,912 |
听 |
|
Segment profit (loss) |
听 |
听 |
听 |
听 |
听 |
听 |
||||||
|
Outdoor |
听 |
$ |
457,027 |
听 |
听 |
$ |
32,608 |
听 |
听 |
$ |
489,635 |
听 |
|
Active |
听 |
听 |
146,885 |
听 |
听 |
听 |
14,149 |
听 |
听 |
听 |
161,034 |
听 |
|
Work |
听 |
听 |
18,487 |
听 |
听 |
听 |
676 |
听 |
听 |
听 |
19,163 |
听 |
|
Other |
听 |
听 |
(134 |
) |
听 |
听 |
(72 |
) |
听 |
听 |
(206 |
) |
|
Total segment profit |
听 |
听 |
622,265 |
听 |
听 |
听 |
47,361 |
听 |
听 |
听 |
669,626 |
听 |
|
Corporate and other expenses |
听 |
听 |
(116,133 |
) |
听 |
听 |
(1,468 |
) |
听 |
听 |
(117,601 |
) |
|
Interest expense, net |
听 |
听 |
(50,230 |
) |
听 |
听 |
鈥� |
听 |
听 |
听 |
(50,230 |
) |
|
Income from continuing operations before income taxes |
听 |
$ |
455,902 |
听 |
听 |
$ |
45,893 |
听 |
听 |
$ |
501,795 |
听 |
|
Diluted earnings per share growth |
听 |
听 |
(1 |
)% |
听 |
听 |
8 |
% |
听 |
听 |
7 |
% |
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
||||||
|
Constant Currency Financial Information |
||||||||||||
|
大象传媒 is a global company that reports financial information in U.S. dollars in accordance with GAAP. Foreign currency exchange rate fluctuations affect the amounts reported by 大象传媒 from translating its foreign revenues and expenses into U.S. dollars. These rate fluctuations can have a significant effect on reported operating results. As a supplement to our reported operating results, we present constant currency financial information, which is a non-GAAP financial measure that excludes the impact of translating foreign currencies into U.S. dollars. We use constant currency information to provide a framework to assess how our business performed excluding the effects of changes in the rates used to calculate foreign currency translation. Management believes this information is useful to investors to facilitate comparison of operating results and better identify trends in our businesses. |
||||||||||||
|
To calculate foreign currency translation on a constant currency basis, operating results for the current year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period). |
||||||||||||
|
These constant currency performance measures should be viewed in addition to, and not in lieu of or superior to, our operating performance measures calculated in accordance with GAAP. The constant currency information presented may not be comparable to similarly titled measures reported by other companies. |
||||||||||||
| 大象传媒 CORPORATION | ||||||||||||
|
Supplemental Financial Information |
||||||||||||
|
Reportable Segment Information |
||||||||||||
|
(Unaudited) |
||||||||||||
|
(In thousands) |
||||||||||||
| 听 | ||||||||||||
|
听 |
听 |
Nine Months Ended December 2022 |
||||||||||
|
听 |
听 |
As Reported |
听 |
Adjust for Foreign |
听 |
听 |
||||||
|
听 |
听 |
under GAAP |
听 |
Currency Exchange |
听 |
Constant Currency |
||||||
|
Segment revenues |
听 |
听 |
听 |
听 |
听 |
听 |
||||||
|
Outdoor |
听 |
$ |
4,326,997 |
听 |
听 |
$ |
261,555 |
听 |
听 |
$ |
4,588,552 |
听 |
|
Active |
听 |
听 |
3,772,737 |
听 |
听 |
听 |
195,178 |
听 |
听 |
听 |
3,967,915 |
听 |
|
Work |
听 |
听 |
772,980 |
听 |
听 |
听 |
21,231 |
听 |
听 |
听 |
794,211 |
听 |
|
Other |
听 |
听 |
148 |
听 |
听 |
听 |
鈥� |
听 |
听 |
听 |
148 |
听 |
|
Total segment revenues |
听 |
$ |
8,872,862 |
听 |
听 |
$ |
477,964 |
听 |
听 |
$ |
9,350,826 |
听 |
|
Segment profit (loss) |
听 |
听 |
听 |
听 |
听 |
听 |
||||||
|
Outdoor |
听 |
$ |
670,615 |
听 |
听 |
$ |
51,644 |
听 |
听 |
$ |
722,259 |
听 |
|
Active |
听 |
听 |
541,171 |
听 |
听 |
听 |
44,528 |
听 |
听 |
听 |
585,699 |
听 |
|
Work |
听 |
听 |
92,989 |
听 |
听 |
听 |
2,412 |
听 |
听 |
听 |
95,401 |
听 |
|
Other |
听 |
听 |
(516 |
) |
听 |
听 |
(98 |
) |
听 |
听 |
(614 |
) |
|
Total segment profit |
听 |
听 |
1,304,259 |
听 |
听 |
听 |
98,486 |
听 |
听 |
听 |
1,402,745 |
听 |
|
Impairment of goodwill and intangible assets |
听 |
听 |
(421,922 |
) |
听 |
听 |
鈥� |
听 |
听 |
听 |
(421,922 |
) |
|
Corporate and other expenses |
听 |
听 |
(507,656 |
) |
听 |
听 |
(3,789 |
) |
听 |
听 |
(511,445 |
) |
|
Interest expense, net |
听 |
听 |
(115,395 |
) |
听 |
听 |
鈥� |
听 |
听 |
听 |
(115,395 |
) |
|
Income from continuing operations before income taxes |
听 |
$ |
259,286 |
听 |
听 |
$ |
94,697 |
听 |
听 |
$ |
353,983 |
听 |
|
Diluted earnings per share growth |
听 |
听 |
(70 |
)% |
听 |
听 |
7 |
% |
听 |
听 |
(63 |
)% |
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
||||||
|
Constant Currency Financial Information |
||||||||||||
|
大象传媒 is a global company that reports financial information in U.S. dollars in accordance with GAAP. Foreign currency exchange rate fluctuations affect the amounts reported by 大象传媒 from translating its foreign revenues and expenses into U.S. dollars. These rate fluctuations can have a significant effect on reported operating results. As a supplement to our reported operating results, we present constant currency financial information, which is a non-GAAP financial measure that excludes the impact of translating foreign currencies into U.S. dollars. We use constant currency information to provide a framework to assess how our business performed excluding the effects of changes in the rates used to calculate foreign currency translation. Management believes this information is useful to investors to facilitate comparison of operating results and better identify trends in our businesses. |
||||||||||||
|
To calculate foreign currency translation on a constant currency basis, operating results for the current year period for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average exchange rates in effect during the comparable period of the prior year (rather than the actual exchange rates in effect during the current year period). |
||||||||||||
|
These constant currency performance measures should be viewed in addition to, and not in lieu of or superior to, our operating performance measures calculated in accordance with GAAP. The constant currency information presented may not be comparable to similarly titled measures reported by other companies. |
||||||||||||
| 大象传媒 CORPORATION | |||||||||||||||||||||
|
Supplemental Financial Information |
|||||||||||||||||||||
|
Reconciliation of Select GAAP Measures to Non-GAAP Measures - Three and Nine Months Ended December 2022 |
|||||||||||||||||||||
|
(Unaudited) |
|||||||||||||||||||||
|
(In thousands, except per share amounts) |
|||||||||||||||||||||
| 听 | |||||||||||||||||||||
|
Three Months Ended December 2022 |
听 |
As Reported under GAAP |
听 |
Transaction and Deal Related Activities(a) |
听 |
Specified Strategic Business Decisions(b) |
听 |
Impairment and Pension Settlement Charge(c) |
听 |
Tax Item(d) |
听 |
Adjusted |
|||||||||
|
Revenues |
听 |
$ |
3,530,667 |
听 |
听 |
$ |
鈥� |
听 |
$ |
鈥� |
听 |
$ |
鈥� |
听 |
$ |
鈥� |
听 |
听 |
$ |
3,530,667 |
听 |
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
|||||||||
|
Gross profit |
听 |
听 |
1,937,619 |
听 |
听 |
听 |
鈥� |
听 |
听 |
1,582 |
听 |
听 |
鈥� |
听 |
听 |
鈥� |
听 |
听 |
听 |
1,939,201 |
听 |
|
Percent |
听 |
听 |
54.9 |
% |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
54.9 |
% |
|||||
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
|||||||||
|
Operating income |
听 |
听 |
516,033 |
听 |
听 |
听 |
鈥� |
听 |
听 |
10,609 |
听 |
听 |
鈥� |
听 |
听 |
鈥� |
听 |
听 |
听 |
526,642 |
听 |
|
Percent |
听 |
听 |
14.6 |
% |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
14.9 |
% |
|||||
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
|||||||||
|
Diluted earnings per share from continuing operations (e) |
听 |
听 |
1.31 |
听 |
听 |
听 |
鈥� |
听 |
听 |
0.02 |
听 |
听 |
0.03 |
听 |
听 |
(0.24 |
) |
听 |
听 |
1.12 |
听 |
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
|||||||||
|
Nine Months Ended December 2022 |
听 |
As Reported under GAAP |
听 |
Transaction and Deal Related Activities(a) |
听 |
Specified Strategic Business Decisions(b) |
听 |
Impairment and Pension Settlement Charge(c) |
听 |
Tax Item(d) |
听 |
Adjusted |
|||||||||
|
Revenues |
听 |
$ |
8,872,862 |
听 |
听 |
$ |
鈥� |
听 |
$ |
鈥� |
听 |
$ |
鈥� |
听 |
$ |
鈥� |
听 |
听 |
$ |
8,872,862 |
听 |
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
|||||||||
|
Gross profit |
听 |
听 |
4,738,655 |
听 |
听 |
听 |
鈥� |
听 |
听 |
9,946 |
听 |
听 |
鈥� |
听 |
听 |
鈥� |
听 |
听 |
听 |
4,748,601 |
听 |
|
Percent |
听 |
听 |
53.4 |
% |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
53.5 |
% |
|||||
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
|||||||||
|
Operating income |
听 |
听 |
488,576 |
听 |
听 |
听 |
331 |
听 |
听 |
72,031 |
听 |
听 |
421,922 |
听 |
听 |
鈥� |
听 |
听 |
听 |
982,860 |
听 |
|
Percent |
听 |
听 |
5.5 |
% |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
11.1 |
% |
|||||
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
|||||||||
|
Diluted earnings per share from continuing operations (e) |
听 |
听 |
0.86 |
听 |
听 |
听 |
鈥� |
听 |
听 |
0.15 |
听 |
听 |
1.17 |
听 |
听 |
(0.24 |
) |
听 |
听 |
1.93 |
听 |
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
|||||||||
|
(a) Transaction and deal related activities reflect activities associated with the acquisition of Supreme Holdings, Inc. and include integration costs of $0.3 million for the nine months ended December 2022. The transaction and deal related activities resulted in a net tax benefit of $0.1 million in the nine months ended December 2022. |
|||||||||||||||||||||
|
(b) Specified strategic business decisions include costs related to 大象传媒's business model transformation of $8.3 million and $59.5 million during the three and nine months ended December 2022, respectively, related primarily to Corporate actions and resulting restructuring costs. Specified strategic business decisions also include costs related to a transformation initiative for our Asia-Pacific regional operations of $2.3 million and $12.5 million in the three and nine months ended December 2022, respectively. The specified strategic business decisions resulted in a net tax benefit of $2.7 million and $15.0 million in the three and nine months ended December 2022, respectively. |
|||||||||||||||||||||
|
(c) 大象传媒 recognized noncash impairment charges related to the Supreme reporting unit goodwill and indefinite-lived trademark intangible asset of $421.9 million during the nine months ended December 2022. The impairment charges were driven by non-operating factors including higher interest rates and foreign currency fluctuations. A noncash pension settlement charge of $91.8 million was recorded in the Other income (expense), net line item during the nine months ended December 2022. The pension settlement charge resulted from the purchase of a group annuity contract, which was an action taken to streamline administration, manage financial risk associated with pension plans, and to transfer a portion of the liability associated with 大象传媒's U.S. pension plan to an insurance company. The impairment and pension settlement charges resulted in a net tax expense of $12.2 million and net tax benefit of $60.2 million in the three and nine months ended December 2022, respectively. |
|||||||||||||||||||||
|
(d) Tax item includes a $94.9 million discrete tax benefit recognized during the three and nine months ended December 2022 related to the Internal Revenue Service examinations for tax year 2017 and short-tax year 2018 resulting in a favorable adjustment to 大象传媒's transition tax liability under the Tax Cuts and Jobs Act. |
|||||||||||||||||||||
|
(e) Amounts shown in the table have been calculated using unrounded numbers. The diluted earnings per share was calculated using 388,192,000 and 388,357,000 weighted average common shares for the three and nine months ended December 2022, respectively. |
|||||||||||||||||||||
|
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
听 |
|||||||||
|
Non-GAAP Financial Information |
|||||||||||||||||||||
|
The financial information above has been presented on a GAAP basis and on an adjusted basis, which excludes the impact of transaction and deal related activities, activity related to specified strategic business decisions, impairment, a pension settlement charge and a tax item. The adjusted presentation provides non-GAAP measures. Management believes these measures provide investors with useful supplemental information regarding 大象传媒's underlying business trends and the performance of 大象传媒's ongoing operations and are useful for period-over-period comparisons of such operations. |
|||||||||||||||||||||
|
Management uses the above financial measures internally in its budgeting and review process and, in some cases, as a factor in determining compensation. While management believes that these non-GAAP financial measures are useful in evaluating the business, this information should be considered as supplemental in nature and should be viewed in addition to, and not in lieu of or superior to, 大象传媒's operating performance measures calculated in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures presented by other companies. |
|||||||||||||||||||||
|
大象传媒 CORPORATION Supplemental Financial Information |
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Reconciliation of Select GAAP Measures to Non-GAAP Measures - Three and Nine Months Ended December 2021 |
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(Unaudited) |
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(In thousands, except per share amounts) |
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Three Months Ended December 2021 |
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As Reported under GAAP |
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Transaction and Deal Related Activities(a) |
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Specified Strategic Business Decisions(b) |
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Tax Items(c) |
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Adjusted |
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Revenues |
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$ |
3,624,384 |
听 |
听 |
$ |
鈥� |
听 |
听 |
$ |
鈥� |
听 |
$ |
鈥� |
听 |
$ |
3,624,384 |
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|
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听 |
听 |
听 |
听 |
听 |
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|
Gross profit |
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2,031,780 |
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听 |
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鈥� |
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9,875 |
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听 |
鈥� |
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2,041,655 |
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|
Percent |
听 |
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56.1 |
% |
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听 |
听 |
听 |
听 |
听 |
听 |
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56.3 |
% |
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|
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听 |
听 |
听 |
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Operating income |
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678,442 |
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(49,398 |
) |
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听 |
13,809 |
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鈥� |
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642,853 |
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|
Percent |
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听 |
18.7 |
% |
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听 |
听 |
听 |
听 |
听 |
听 |
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17.7 |
% |
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|
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听 |
听 |
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Diluted earnings per share from continuing operations (d) |
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1.32 |
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(0.13 |
) |
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0.03 |
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0.13 |
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1.35 |
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|
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Nine Months Ended December 2021 |
听 |
As Reported under GAAP |
听 |
Transaction and Deal Related Activities(a) |
听 |
Specified Strategic Business Decisions(b) |
听 |
Tax Items(c) |
听 |
Adjusted |
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Revenues |
听 |
$ |
9,017,176 |
听 |
听 |
$ |
鈥� |
听 |
听 |
$ |
鈥� |
听 |
$ |
鈥� |
听 |
$ |
9,017,176 |
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|
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听 |
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听 |
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Gross profit |
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4,989,575 |
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听 |
听 |
鈥� |
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21,944 |
听 |
听 |
鈥� |
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5,011,519 |
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|
Percent |
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55.3 |
% |
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听 |
听 |
听 |
听 |
听 |
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55.6 |
% |
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|
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Operating income |
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1,439,812 |
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听 |
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(151,880 |
) |
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37,671 |
听 |
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鈥� |
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1,325,603 |
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|
Percent |
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16.0 |
% |
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听 |
听 |
听 |
听 |
听 |
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14.7 |
% |
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|
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Diluted earnings per share from continuing operations (d) |
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2.89 |
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(0.37 |
) |
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0.08 |
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0.13 |
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2.72 |
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|
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听 |
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(a) Transaction and deal related activities include activities associated with the acquisition of Supreme Holdings, Inc. ("Supreme") for the three and nine months ended December 2021. Transaction and deal related activities include a decrease in the estimated fair value of the contingent consideration liability of $50.0 million and $158.0 million for the three and nine months ended December 2021, respectively, and integration costs of $0.6 million and $6.1 million for the three and nine months ended December 2021, respectively. The transaction and deal related activities resulted in a net tax benefit of $3.2 million and net tax expense of $5.1 million in the three and nine months ended December 2021, respectively, primarily related to the impact of the decreases in the estimated fair value of the contingent consideration liability on the interim tax rate calculations. |
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(b) Specified strategic business decisions for the three and nine months ended December 2021 include costs related to 大象传媒's business model transformation of $0.5 million and $2.2 million in the three and nine months ended December 2021, respectively, related primarily to restructuring and other costs. Specified strategic business decisions also include costs related to a transformation initiative for our Asia-Pacific regional operations of $13.7 million and $35.5 million in the three and nine months ended December 2021, respectively. Specified strategic business decisions also include cost optimization charges and other activities, including the sale of certain assets, indirectly related to the divestiture of the Occupational Workwear business, which totaled income of $0.4 million during the three months ended December 2021. The specified strategic business decisions also include non-operating expense of $0.2 million and income of $1.5 million during the three and nine months ended December 2021, respectively, associated with 大象传媒's transformation initiatives. The specified strategic business decisions resulted in a net tax benefit of $2.0 million and $5.2 million in the three and nine months ended December 2021, respectively. |
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(c) Tax items include $51.9 million net tax expense associated with certain discrete tax activities recognized during the three and nine months ended December 2021. This is comprised of $87.1 million tax expense for unrecognized tax benefits resulting from updated estimates related to intellectual property transfers completed in a prior period, and $35.2 million tax benefit related to the reorganization of certain foreign operations. |
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(d) Amounts shown in the table have been calculated using unrounded numbers. The diluted earnings per share impacts were calculated using 392,495,000 and 393,547,000 weighted average common shares for the three and nine months ended December 2021, respectively. |
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Non-GAAP Financial Information |
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The financial information above has been presented on a GAAP basis and on an adjusted basis, which excludes the impact of transaction and deal related activities, activity related to specified strategic business decisions and certain tax items. The adjusted presentation provides non-GAAP measures. Management believes these measures provide investors with useful supplemental information regarding 大象传媒's underlying business trends and the performance of 大象传媒's ongoing operations and are useful for period-over-period comparisons of such operations. |
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Management uses the above financial measures internally in its budgeting and review process and, in some cases, as a factor in determining compensation. While management believes that these non-GAAP financial measures are useful in evaluating the business, this information should be considered as supplemental in nature and should be viewed in addition to, and not in lieu of or superior to, 大象传媒's operating performance measures calculated in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures presented by other companies. |
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| 大象传媒 CORPORATION | ||||||||||||||||||||||||
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Supplemental Financial Information |
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Top 4 Brand Revenue Information |
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(Unaudited) |
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Three Months Ended December 2022 |
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Nine Months Ended December 2022 |
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Top 4 Brand Revenue Growth |
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Americas |
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EMEA |
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APAC |
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Global |
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Americas |
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EMEA |
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APAC |
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Global |
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Vans庐 |
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% change |
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(13 |
)% |
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(5 |
)% |
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(22 |
)% |
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(13 |
)% |
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(7 |
)% |
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(9 |
)% |
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(27 |
)% |
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(11 |
)% |
|
% change constant currency* |
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(13 |
)% |
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7 |
% |
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(14 |
)% |
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(9 |
)% |
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(7 |
)% |
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3 |
% |
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(22 |
)% |
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(7 |
)% |
|
The North Face庐 |
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% change |
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8 |
% |
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1 |
% |
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17 |
% |
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7 |
% |
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13 |
% |
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3 |
% |
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21 |
% |
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11 |
% |
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% change constant currency* |
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9 |
% |
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13 |
% |
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29 |
% |
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13 |
% |
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14 |
% |
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17 |
% |
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30 |
% |
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17 |
% |
|
Timberland庐 |
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% change |
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9 |
% |
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(5 |
)% |
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(17 |
)% |
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0 |
% |
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0 |
% |
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3 |
% |
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(9 |
)% |
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0 |
% |
|
% change constant currency* |
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9 |
% |
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7 |
% |
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(7 |
)% |
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6 |
% |
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1 |
% |
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18 |
% |
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(1 |
)% |
听 |
7 |
% |
|
Dickies庐 |
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% change |
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(19 |
)% |
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44 |
% |
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(34 |
)% |
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(16 |
)% |
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(18 |
)% |
听 |
17 |
% |
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(29 |
)% |
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(17 |
)% |
|
% change constant currency* |
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(19 |
)% |
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63 |
% |
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(25 |
)% |
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(13 |
)% |
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(18 |
)% |
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34 |
% |
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(22 |
)% |
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(14 |
)% |
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*Refer to constant currency definition on previous pages. |
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| 大象传媒 CORPORATION | ||||
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Supplemental Financial Information |
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Geographic and Channel Revenue Information |
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(Unaudited) |
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Three Months Ended December 2022 |
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% Change |
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% Change Constant Currency* |
|
Geographic Revenue Growth |
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|
Americas |
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(2)% |
听 |
(1)% |
|
EMEA |
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(2)% |
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10% |
|
APAC |
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(7)% |
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4% |
|
Greater China |
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(11)% |
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(1)% |
|
International |
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(3)% |
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8% |
|
Global |
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(3)% |
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3% |
|
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|
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Nine Months Ended December 2022 |
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|
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% Change |
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% Change Constant Currency* |
|
Geographic Revenue Growth |
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|
Americas |
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0% |
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0% |
|
EMEA |
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0% |
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14% |
|
APAC |
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(10)% |
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(2)% |
|
Greater China |
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(18)% |
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(12)% |
|
International |
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(3)% |
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8% |
|
Global |
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(2)% |
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4% |
|
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|
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Three Months Ended December 2022 |
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% Change |
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% Change Constant Currency* |
|
Channel Revenue Growth |
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|
Wholesale (a) |
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(3)% |
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2% |
|
Direct-to-consumer |
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(2)% |
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3% |
|
Digital |
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0% |
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6% |
|
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|
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Nine Months Ended December 2022 |
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|
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% Change |
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% Change Constant Currency* |
|
Channel Revenue Growth |
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|
Wholesale (a) |
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0% |
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6% |
|
Direct-to-consumer |
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(4)% |
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1% |
|
Digital |
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(6)% |
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(1)% |
|
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|
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As of December |
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2022 |
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2021 |
|
DTC Store Count |
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|
Total |
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1,282 |
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1,354 |
|
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*Refer to constant currency definition on previous pages. |
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(a) Royalty revenues are included in the wholesale channel for all periods. |
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View source version on businesswire.com:
Investor Contact:
Allegra Perry
ir@vfc.com
Media Contact:
Colin Wheeler
corporate_communications@vfc.com
Source: 大象传媒 Corporation