What changed in this filing

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Item 1. Financial Statements

2021-12-09 compared with 2021-09-08 · 127 added, 119 removed, 449 unchanged (35% of the section changed)

48 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Three Months Ended July 31,

Six Months Ended July 31,

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

Three Months Ended October 31,

Nine Months Ended October 31,

(In thousands, except per share amounts)

2 unchanged sentences

Depreciation and amortization

Asset impairments, net of gain on lease modifications

Operating profit (loss)

Other income (loss)

Asset impairments, net of loss (gain) on lease modifications

Operating profit

Interest and financing charges, net

Income (loss) before income taxes

Income tax expense (benefit)

Net income (loss)

Income before income taxes

Income tax expense

Loss attributable to noncontrolling interests

Net income (loss) attributable to G-III Apparel Group, Ltd.

NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO G-III APPAREL GROUP, LTD.:

Net income (loss) per common share

Net income attributable to G-III Apparel Group, Ltd.

NET INCOME PER COMMON SHARE ATTRIBUTABLE TO G-III APPAREL GROUP, LTD.:

Net income per common share

Weighted average number of shares outstanding

Net income (loss) per common share

Net income per common share

Weighted average number of shares outstanding

Net income (loss)

Other comprehensive income (loss):

1 unchanged sentence

Other comprehensive income (loss):

Comprehensive income (loss)

Comprehensive income attributable to noncontrolling interests:

Comprehensive income

Comprehensive loss attributable to noncontrolling interests:

Foreign currency translation adjustments

Comprehensive income (loss) attributable to noncontrolling interests

Comprehensive income (loss) attributable to G-III Apparel Group, Ltd.

Comprehensive loss attributable to noncontrolling interests

Comprehensive income attributable to G-III Apparel Group, Ltd.

The accompanying notes are an integral part of these statements.

4 unchanged sentences

(In thousands)

Balance as of April 30, 2021

Balance as of July 31, 2021

Equity awards exercised/vested, net

1 unchanged sentence

Taxes paid for net share settlements

Other comprehensive loss, net

Other comprehensive income, net

Net income attributable to G-III Apparel Group, Ltd.

Balance as of October 31, 2021

Balance as of July 31, 2020

Balance as of April 30, 2020

Equity awards exercised/vested, net

Share-based compensation expense

Taxes paid for net share settlements

Other comprehensive loss, net

Net loss attributable to G-III Apparel Group, Ltd.

Balance as of July 31, 2020

Net income attributable to G-III Apparel Group, Ltd.

Balance as of October 31, 2020

Balance as of January 31, 2021

5 unchanged sentences

Net income attributable to G-III Apparel Group, Ltd.

Balance as of July 31, 2021

Balance as of October 31, 2021

Balance as of January 31, 2020

2 unchanged sentences

Taxes paid for net share settlements

Other comprehensive income, net

Net loss attributable to G-III Apparel Group, Ltd.

Balance as of July 31, 2020

Other comprehensive loss, net

Net income attributable to G-III Apparel Group, Ltd.

Balance as of October 31, 2020

The accompanying notes are an integral part of these statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended July 31,

Nine Months Ended October 31,

(In thousands)

Cash flows from operating activities

Net income (loss) attributable to G-III Apparel Group, Ltd.

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income attributable to G-III Apparel Group, Ltd.

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

5 unchanged sentences

Equity (gain)/loss in unconsolidated affiliates

Change in fair value of equity investment

Share-based compensation

Deferred financing charges and debt discount amortization

Extinguishment of deferred financing costs

Deferred income taxes

7 unchanged sentences

Accounts payable, accrued expenses and other liabilities

Net cash provided by operating activities

Net cash used in operating activities

Cash flows from investing activities

2 unchanged sentences

Capital expenditures

Investment in brand acquisition

Net cash used in investing activities

2 unchanged sentences

Proceeds from borrowings - revolving facility

Repayment of borrowings - foreign facilities

Proceeds from borrowings - foreign facilities

Repayment of borrowings - unsecured term loan

Proceeds from borrowings - unsecured term loan

Proceeds from borrowings - senior secured notes

Payment of financing costs

Proceeds from exercise of equity awards

2 unchanged sentences

Foreign currency translation adjustments

Net increase in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

4 unchanged sentences

Income tax payments, net

Stock received from licensing agreement

The accompanying notes are an integral part of these statements .

9 unchanged sentences

Fabco Holding B.V (“Fabco”) is a Dutch joint venture limited liability company that was 49 % owned by the Company through November 30, 2020 and was accounted for using the equity method of accounting.

Effective December 1, 2020, the Company increased its ownership interest in Fabco to 75 % and Fabco is treated as a consolidated majority-owned subsidiary.

Effective December 1, 2020, the Company increased its ownership interest in Fabco to 75 % and, as a result, Fabco is treated as a consolidated majority-owned subsidiary.

KL North America B.V.

6 unchanged sentences

Accordingly, the results of Vilebrequin, KLH, KLNA and Fabco are, and will be, included in the financial statements for the quarter ended or ending closest to the Company’s fiscal quarter end.

For example, with respect to the Company’s results for the six-month period ended July 31, 2021, the results of Vilebrequin, KLH, KLNA and Fabco are included for the six-month period ended June 30, 2021.

For example, with respect to the Company’s results for the nine-month period ended October 31, 2021, the results of Vilebrequin, KLH, KLNA and Fabco are included for the nine-month period ended September 30, 2021.

The Company’s retail operations segment reports on a 52/53-week fiscal year.

For fiscal 2022 and 2021, the three and six-month periods for the retail operations segment were each 13-week and 26-week periods, respectively, and ended on July 31, 2021 and August 1, 2020, respectively.

The results for the three and six months ended July 31, 2021 are not necessarily indicative of the results expected for the entire fiscal year, given the seasonal nature of the Company’s business and the effects of the COVID-19 pandemic on the Company’s business.

For fiscal 2022 and 2021, the three and nine-month periods for the retail operations segment were each 13-week and 39-week periods, respectively, and ended on October 30, 2021 and October 31, 2020, respectively.

The results for the three and nine months ended October 31, 2021 are not necessarily indicative of the results expected for the entire fiscal year, given the seasonal nature of the Company’s business and the effects of the COVID-19 pandemic on the Company’s business.

The accompanying financial statements included herein are unaudited.

11 unchanged sentences

As a result, the Company applied the change prospectively as of February 1, 2021.

The cumulative adjustment as of February 1, 2021 was a decrease in both inventories and retained earnings of $ 0.3 million.

The change in accounting principle did not have a material effect on the Company’s condensed consolidated financial statements as of and for the three and six-month periods ended July 31, 2021.

The cumulative adjustment as of February 1, 2021 was a decrease of $ 0.3 million in both inventories and retained earnings.

The change in accounting principle did not have a material effect on the Company’s condensed consolidated financial statements as of and for the three and nine-month periods ended October 31, 2021.

Note 2 – Retail Restructuring

2 unchanged sentences

Restructuring charges are recorded within selling, general and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive income.

As of July 31, 2021, the Company had a remaining restructuring accrual of $ 46,000 related to store closing costs.

The remaining store closing costs are expected to be paid during the third quarter of fiscal 2022.

During the three months ended October 31, 2021, the Company paid the final $ 46,000 related to store closing costs.

As a result, as of October 31, 2021, the Company has paid all remaining restructuring charges.

Note 3 – Allowance for Doubtful Accounts

4 unchanged sentences

Retail trade receivables primarily relate to amounts due from third-party credit card processors for the settlement of debit and credit card transactions and are typically collected within 3 to 5 days.

The Company’s accounts receivable and allowance for doubtful accounts as of July 31, 2021, July 31, 2020 and January 31, 2021 were:

July 31, 2021

The Company’s accounts receivable and allowance for doubtful accounts as of October 31, 2021, October 31, 2020 and January 31, 2021 were:

October 31, 2021

(In thousands)

2 unchanged sentences

Accounts receivable, net

July 31, 2020

October 31, 2020

(In thousands)

8 unchanged sentences

The allowance for doubtful accounts for wholesale trade receivables is estimated based on several factors.

In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations (such as in the case of bankruptcy filings (including potential bankruptcy filings), extensive delay in payment or substantial downgrading by credit rating agencies), a specific reserve for bad debts is recorded against amounts due from that customer to reduce the net recognized receivable to the amount reasonably expected to be collected.

For all other wholesale customers, an allowance for doubtful accounts is determined through analysis of the aging of accounts receivable at the end of the reporting period for financial statements, assessments of collectability based on historical trends and an evaluation of the impact of economic conditions.

In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations (such as in the case of bankruptcy filings (including potential bankruptcy filings), extensive delay in payment or substantial downgrading by credit rating agencies), a specific reserve for bad debt is recorded against amounts due from that customer to reduce the net recognized receivable to the amount reasonably expected to be collected.

impact of economic conditions.

The Company considers both current and forecasted future economic conditions in determining the adequacy of its allowance for doubtful accounts.

6 unchanged sentences

Accounts written off as uncollectible

Balance as of July 31, 2021

Balance as of October 31, 2021

Balance as of January 31, 2020

1 unchanged sentence

Accounts written off as uncollectible

Balance as of July 31, 2020

Balance as of October 31, 2020

Balance as of January 31, 2020

9 unchanged sentences

Substantially all of the Company’s inventories consist of finished goods.

The inventory return asset, which consists of the amount of goods that are anticipated to be returned by customers, represented $ 11.2 million, $ 15.1 million and $ 22.5 million as of July 31, 2021, July 31, 2020 and January 31, 2021, respectively.

The inventory return asset, which consists of the amount of goods that are anticipated to be returned by customers, represented $ 13.9 million, $ 20.6 million and $ 22.5 million as of October 31, 2021, October 31, 2020 and January 31, 2021, respectively.

The inventory return asset is recorded within prepaid expenses and other current assets on the condensed consolidated balance sheets.

Inventory held on consignment by the Company’s customers totaled $ 4.7 million, $ 6.3 million and $ 3.5 million at July 31, 2021, July 31, 2020 and January 31, 2021, respectively.

Inventory held on consignment by the Company’s customers totaled $ 5.6 million, $ 4.8 million and $ 3.5 million at October 31, 2021, October 31, 2020 and January 31, 2021, respectively.

Consignment inventory is stored at the facilities of the Company’s customers.

3 unchanged sentences

The determination of the applicable level within the hierarchy for a particular asset or liability depends on the inputs used in its valuation as of the measurement date, notably the extent to which the inputs are market-based (observable) or internally-derived (unobservable).

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

A financial instrument’s categorization within the valuation hierarchy

is based upon the lowest level of input that is significant to the fair value measurement.

The three levels are defined as follows:

22 unchanged sentences

The Company reviews these assets for impairment whenever events or changes in circumstances indicate that their carrying value may not be fully recoverable.

For impaired assets, an impairment loss is recognized equal to the difference between the carrying amount of the asset or asset group and its estimated fair value.

For assets that are not recoverable, an impairment loss is recognized equal to the difference between the carrying amount of the asset or asset group and its estimated fair value.

For operating lease assets, the Company determines the fair value of the assets by discounting the estimated market rental rates over the remaining term of the lease.

9 unchanged sentences

Several of the Company’s retail store leases include an option to terminate the lease based on failure to achieve a specified sales volume.

The exercise of lease renewal options is generally at the

Company’s sole discretion.

The exercise of lease renewal options is generally at the Company’s sole discretion.

The exercise of lease termination options is generally by mutual agreement between the Company and the lessor.

1 unchanged sentence

The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.

The Company’s lease assets and liabilities as of July 31, 2021, July 31, 2020 and January 31, 2021 consist of the following:

The Company’s lease assets and liabilities as of October 31, 2021, October 31, 2020 and January 31, 2021 consist of the following:

Classification

July 31, 2021

July 31, 2020

October 31, 2021

October 31, 2020

January 31, 2021

10 unchanged sentences

Bass and Calvin Klein Performance stores during fiscal 2021.

The Company recorded lease costs of $ 13.5 million and $ 27.1 million during the three and six months ended July 31, 2021, respectively.

The Company recorded lease costs of $ 36.0 million and $ 58.4 million during the three and six months ended July 31, 2020, respectively.

The Company recorded lease costs of $ 14.0 million and $ 41.1 million during the three and nine months ended October 31, 2021.

The Company recorded lease costs of $ 18.7 million and $ 77.1 million during the three and nine months ended October 31, 2020, respectively.

Lease costs are recorded within selling, general and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive income.

The Company recorded variable lease costs and short-term lease costs of $ 1.9 million and $ 3.3 million for the three and six months ended July 31, 2021, respectively.

The Company recorded negative variable lease costs and short-term lease costs of ($ 4.3 ) million and ($ 0.9 ) million for the three and six months ended July 31, 2020, respectively.

The Company recorded variable lease costs and short-term lease costs of $ 2.8 million and $ 6.2 million for the three and nine months ended October 31, 2021, respectively.

The Company recorded variable lease costs and short-term lease costs of $ 6.2 million and $ 5.3 million for the three and nine months ended October 31, 2020, respectively.

Short-term lease costs are immaterial.

As of July 31, 2021, the Company has $ 1.0 million of deferred lease payments recorded within accounts payable on its condensed consolidated balance sheets.

As of July 31, 2021, the Company’s maturity of operating lease liabilities in the years ending up to January 31, 2026 and thereafter are as follows:

As of October 31, 2021, the Company’s maturity of operating lease liabilities in the years ending up to January 31, 2026 and thereafter are as follows:

Year Ending January 31,

2 unchanged sentences

Present value of lease liabilities

As of July 31, 2021, there are no material leases that are legally binding but have not yet commenced.

As of July 31, 2021, the weighted average remaining lease term related to operating leases is 5.5 years.

As of October 31, 2021, there are no material leases that are legally binding but have not yet commenced.

As of October 31, 2021, the weighted average remaining lease term related to operating leases is 5.3 years.

The weighted average discount rate related to operating leases is 8.4 %.

Cash paid for amounts included in the measurement of operating lease liabilities is $ 29.4 million and $ 51.0 million during the six months ended July 31, 2021 and July 31, 2020, respectively.

Right-of-use assets obtained in exchange for lease obligations were $ 8.6 million and $ 10.8 million during the six months ended July 31, 2021 and July 31, 2020, respectively.

Note 7 – Net Income (Loss) per Common Share

Basic net income (loss) per common share has been computed using the weighted average number of common shares outstanding during each period.

Cash paid for amounts included in the measurement of operating lease liabilities is $ 44.5 million and $ 79.7 million during the nine months ended October 31, 2021 and October 31, 2020, respectively.

Right-of-use assets obtained in exchange for lease obligations were $ 24.6 million and $ 41.3 million during the nine months ended October 31, 2021 and October 31, 2020, respectively.

Note 7 – Net Income per Common Share

Basic net income per common share has been computed using the weighted average number of common shares outstanding during each period.

Diluted net income per share, when applicable, is computed using the weighted average number of common shares and potential dilutive common shares, consisting of unvested restricted stock unit awards and stock options outstanding during the period.

Approximately 15,100 and 8,200 shares of common stock have been excluded from the diluted net income per share calculation for the three and six months ended July 31, 2021, respectively.

All unvested restricted stock unit awards and stock options have been excluded from the diluted net income per share calculation for the three and six months ended July 31, 2020 as a result of the Company recording a net loss during each of those periods.

Approximately 68,800 and 18,300 shares of common stock have been excluded from the diluted net income per share calculation for the three and nine months ended October 31, 2021, respectively.

Approximately 262,100 and 215,600 shares of common stock have been excluded from the diluted net income per share calculation for the three and nine months ended October 31, 2020, respectively.

All share-based payments outstanding that vest based on the achievement of performance conditions, and for which the respective performance conditions have not been achieved, have been excluded from the diluted per share calculation.

The following table reconciles the numerators and denominators used in the calculation of basic and diluted net income (loss) per share:

Three Months Ended July 31,

Six Months Ended July 31,

The following table reconciles the numerators and denominators used in the calculation of basic and diluted net income per share:

Three Months Ended October 31,

Nine Months Ended October 31,

(In thousands, except share and per share amounts)

Net income (loss) attributable to G-III Apparel Group, Ltd.

Basic net income (loss) per share:

Net income attributable to G-III Apparel Group, Ltd.

Basic net income per share:

Basic common shares

Basic net income (loss) per share

Diluted net income (loss) per share:

Basic net income per share

Diluted net income per share:

Basic common shares

1 unchanged sentence

Diluted common shares

Diluted net income (loss) per share

Diluted net income per share

Note 8 – Notes Payable

Long-term debt consists of the following:

July 31, 2021

July 31, 2020

October 31, 2021

October 31, 2020

January 31, 2021

7 unchanged sentences

Current portion of long-term debt

(1) Does not include debt issuance costs, net of amortization, totaling $ 6.4 million, $ 3.3 million and $ 7.2 million as of July 31, 2021, July 31, 2020 and January 31, 2021, respectively, related to the revolving credit facility.

(1) Does not include debt issuance costs, net of amortization, totaling $ 6.0 million, $ 7.3 million and $ 7.2 million as of October 31, 2021, October 31, 2020 and January 31, 2021, respectively, related to the revolving credit facility.

These debt issuance costs have been deferred and are classified in assets in the accompanying condensed consolidated balance sheets in accordance with ASC 835.

47 unchanged sentences

In certain circumstances, the revolving credit facility also requires the Company to maintain a fixed charge coverage ratio, as defined in the agreement, not less than 1.00 to 1.00 for each period of twelve consecutive fiscal months of the Company.

As of July 31, 2021, the Company was in compliance with these covenants.

As of July 31, 2021, the Company had no borrowings outstanding under the ABL Credit Agreement.

As of October 31, 2021, the Company was in compliance with these covenants.

As of October 31, 2021, the Company had no borrowings outstanding under the ABL Credit Agreement.

The ABL credit agreement also includes amounts available for letters of credit.

As of July 31, 2021, there were outstanding trade and standby letters of credit amounting to $ 9.2 million and $ 4.0 million, respectively.

As of October 31, 2021, there were outstanding trade and standby letters of credit amounting to $ 13.1 million and $ 4.0 million, respectively.

At the date of the refinancing of the Prior Credit Agreement, the Company had $ 3.3 million of unamortized debt issuance costs remaining from the Prior Credit Agreement.

1 unchanged sentence

The Company has a total of $ 8.0 million debt issuance costs related to the ABL Credit Agreement.

As permitted under ASC 835, the debt issuance costs have been deferred and are presented as an asset which is to be subsequently amortized ratably over the term of the ABL Credit Agreement.

As permitted under ASC 835, the debt issuance costs have been deferred and are presented as an asset which is amortized ratably over the term of the ABL Credit Agreement.

As a portion of the consideration for the acquisition of DKI, the Company issued to LVMH a junior lien secured promissory note in the principal amount of $ 125.0 million that bears interest at the rate of 2 % per year.

8 unchanged sentences

Interest on the outstanding principal amount of the unsecured loans accrues at a fixed rate equal to 0 % to 2.0 % per annum, payable on either a quarterly or monthly basis.

As of July 31, 2021, TRB had an aggregate outstanding balance of € 7.5 million under these unsecured loans.

As of October 31, 2021, TRB had an aggregate outstanding balance of € 7.3 million ($8.4 million) under these unsecured loans.

Overdraft Facilities

4 unchanged sentences

As part of a COVID-19 relief program, TRB and its subsidiaries have also entered into several state backed overdraft facilities with UBS Bank in Switzerland for an aggregate of CHF 4.7 million at varying interest rates of 0 % to 0.5 %.

As of July 31, 2021, TRB had an aggregate of € 3.8 million drawn under these facilities.

As of October 31, 2021, TRB had an aggregate of € 2.5 million ($2.8 million) drawn under these facilities.

Note 9 – Sonia Rykiel Acquisition

In October 2021, the Company purchased European luxury fashion brand Sonia Rykiel.

The total purchase price was not material.

Sonia Rykiel was one of the leading figures of Parisian fashion who created the iconic brand.

Sonia Rykiel is a wholly-owned operating subsidiary that reports results on a calendar year basis rather than the January 31 fiscal year basis used by the Company.

Accordingly, the results of Sonia Rykiel will be included in the Company’s consolidated financial statements beginning in the fourth quarter of fiscal 2022.

The acquisition was accounted for under the acquisition method of accounting.

Accordingly, the acquired assets have been recorded at their estimated fair values as of October 31, 2021.

The Company is currently evaluating the fair value of the acquired trademarks and other assets and liabilities, including contingent consideration, and has preliminarily recorded the acquisition to trademarks and goodwill.

Note 10 – Revenue Recognition

10 unchanged sentences

Wholesale revenues also include revenues from license agreements related to the DKNY, Donna Karan, G.H.

Bass, Andrew Marc and Vilebrequin

trademarks owned by the Company.

As of July 31, 2021, revenues from license agreements represented an insignificant portion of wholesale revenues.

Bass, Andrew Marc and Vilebrequin trademarks owned by the Company.

As of October 31, 2021, revenues from license agreements represented an insignificant portion of wholesale revenues.

Retail Operations Segment.

4 unchanged sentences

The Company’s Wilsons Leather, G.H.

Bass and Calvin Klein Performance stores were closed in fiscal 2021 as a result of the restructuring.

Bass and Calvin Klein Performance stores were closed in fiscal 2021 as a result of the retail restructuring.

Retail operations segment revenues are recognized at the point of sale when the customer takes possession of the goods and tenders payment.

5 unchanged sentences

In some of its retail concepts, the Company also offers a limited loyalty program where customers accumulate points redeemable for cash discount certificates that expire 90 days after issuance.

Total contract liabilities were $ 4.3 million, $ 5.1 million and $ 5.9 million at July 31, 2021, July 31, 2020 and January 31, 2021, respectively.

The Company recognized $ 2.9 million in revenue for the three months ended July 31, 2021 related to contract liabilities that existed at April 30, 2021.

The Company recognized $ 3.8 million in revenue for the six months ended July 31, 2021 related to contract liabilities that existed at January 31, 2021.

There were no contract assets recorded as of July 31, 2021, July 31, 2020 and January 31, 2021.

Substantially all of the advance payments from licensees as of July 31, 2021 are expected to be recognized as revenue within the next twelve months.

Total contract liabilities were $ 3.8 million, $ 4.1 million and $ 5.9 million at October 31, 2021, October 31, 2020 and January 31, 2021, respectively.

The Company recognized $ 3.2 million in revenue for the three months ended October 31, 2021 related to contract liabilities that existed at July 31, 2021.

The Company recognized $ 4.4 million in revenue for the nine months ended October 31, 2021 related to contract liabilities that existed at January 31, 2021.

There were no contract assets recorded as of October 31, 2021, October 31, 2020 and January 31, 2021.

Substantially all of the advance payments from licensees as of October 31, 2021 are expected to be recognized as revenue within the next twelve months.

Note 11 – Segments

13 unchanged sentences

The following segment information is presented for the three-month periods indicated below:

Three Months Ended July 31, 2021

Three Months Ended October 31, 2021

Elimination (1)

4 unchanged sentences

Operating profit (loss)

Three Months Ended July 31, 2020

Three Months Ended October 31, 2020

Elimination (1)

3 unchanged sentences

Depreciation and amortization

(Gain) loss on lease modifications

Operating loss

Six Months Ended July 31, 2021

Gain on lease modifications

Operating profit (loss)

Nine Months Ended October 31, 2021

Elimination (1)

3 unchanged sentences

Depreciation and amortization

Asset impairments, net of gain on lease modifications

Operating profit (loss)

Six Months Ended July 31, 2020

Nine Months Ended October 31, 2020

Elimination (1)

7 unchanged sentences

Note 12 – Stockholders’ Equity

For the three months ended July 31, 2021, the Company issued no shares of common stock and utilized 189,313 shares of treasury stock in connection with the vesting of equity awards.

For the three months ended July 31, 2020, the Company issued no shares of common stock and utilized 307,147 shares of treasury stock in connection with the vesting of equity awards.

For the six months ended July 31, 2021, the Company issued no shares of common stock and utilized 189,471 shares of treasury stoc k in connection with the vesting of equity awards.

For the six months ended July 31, 2020, the Company issued no shares of common stock and utilized 349,342 shares of treasury stock in connection with the vesting of equity awards.

For the three months ended October 31, 2021, the Company issued no shares of common stock and utilized 2,366 shares of treasury stock in connection with the vesting of equity awards.

For the three months ended October 31, 2020, the Company issued no shares of common stock and utilized no shares of treasury stock in connection with the vesting of equity awards.

For the nine months ended October 31, 2021, the Company issued no shares of common stock and utilized 191,837 shares of treasury stoc k in connection with the vesting of equity awards.

For the nine months ended

October 31, 2020, the Company issued no shares of common stock and utilized 349,342 shares of treasury stock in connection with the vesting of equity awards.

Note 13 – Income Taxes

For the three months ended July 31, 2021 and July 31, 2020, the Company recorded a $ 9.2 million income tax expense and a $ 3.7 million income tax benefit, respectively.

For the six months ended July 31, 2021 and July 31, 2020, the Company recorded a $ 19.5 million income tax expense and a $ 20.1 million income tax benefit, respectively.

Historically, the Company calculated its provision for income taxes during interim reporting periods by applying the estimated annual effective tax rate for the full fiscal year to pre-tax income or loss, excluding discrete items, for the reporting period.

Due to the uncertainty related to the impact of the COVID-19 pandemic on the Company’s operations, the Company used a discrete effective tax rate method to calculate taxes for the six-month period ended July 31, 2020.

For the six-month period ended July 31, 2021, the Company returned to the historical practice of applying an estimated annual effective tax rate based on full fiscal year income to pre-tax income for the reporting period.

For the three months ended October 31, 2021 and October 31, 2020, the Company recorded a $ 40.2 million income tax expense and a $ 28.4 million income tax expense, respectively.

For the nine months ended October 31, 2021 and October 31, 2020, the Company recorded a $ 59.7 million income tax expense and an $ 8.4 million income tax expense, respectively.

Historically, the Company has calculated its provision for income taxes during interim reporting periods by applying the estimated annual effective tax rate for the full fiscal year to pre-tax income or loss, excluding discrete items, for the reporting period.

Note 14 – Canadian Customs Duty Examination

9 unchanged sentences

Beginning February 1, 2018, the Company began paying duties based on the new valuation method.

There were no amounts paid and deferred for the three and six months ended July 31, 2021, related to the higher dutiable values, however, the Company paid interest in the amount of CAD$ 1.0 million (US$ 0.8 million) on the additional duties for the period January 15, 2018 through November 25, 2020, the date of the CBSA’s final decision as discussed below.

Cumulative amounts paid and deferred through July 31, 2021, related to the higher dutiable values, were CAD$ 14.4 million (US$ 11.6 million).

There were no amounts paid and deferred for the three and nine months ended October 31, 2021, related to the higher dutiable values, however, the Company paid interest in the amount of CAD$ 1.0 million (US$ 0.8 million) on the additional duties for the period January 15, 2018 through November 25, 2020, the date of the CBSA’s final decision as discussed below.

Cumulative amounts paid and deferred through October 31, 2021, related to the higher dutiable values, were CAD$ 14.4 million (US$ 11.6 million).

Effective June 1, 2019, G-III commenced paying based on the dutiable value of G-III Canada’s imports based on the pre-audit levels.

5 unchanged sentences

The CBSA filed its brief on June 14, 2021.

The hearing date, originally scheduled for August 10, 2021, was rescheduled for September 1, 2021 but has been postponed by the Tribunal.

A new hearing date has not yet been set.

A hearing on the appeal was held on December 7, 2021.

G-III Canada, based on the advice of counsel, believes it has positions that support its valuations for duty as declared and therefore its ability to receive a refund of amounts claimed to be owed to the CBSA on appeal and intends to vigorously contest the findings of the CBSA.

1 unchanged sentence

Recently Adopted Accounting Guidance

There was no accounting guidance adopted during the three months ended July 31, 2021.

There was no accounting guidance adopted during the three months ended October 31, 2021.

Issued Accounting Guidance Being Evaluated for Adoption

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements