What changed in this filing

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Item 1. Financial Statements

2024-09-06 compared with 2024-06-06 · 155 added, 103 removed, 407 unchanged (39% of the section changed)

48 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE (LOSS) INCOME

Three Months Ended April 30,

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

Three Months Ended July 31,

Six Months Ended July 31,

(In thousands, except per share amounts)

14 unchanged sentences

Weighted average number of shares outstanding

Other comprehensive loss:

Other comprehensive (loss) income:

Foreign currency translation adjustments

Other comprehensive (loss) income

Comprehensive (loss) income

Comprehensive income

Comprehensive loss attributable to noncontrolling interests:

Foreign currency translation adjustments

Comprehensive loss attributable to noncontrolling interests

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

Comprehensive income (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, 2024

Equity awards vested, net

Share-based compensation expense

Other comprehensive loss, net

Repurchases of common stock

Excise tax on stock repurchases

Reduction of noncontrolling interest

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

Balance as of July 31, 2024

Balance as of April 30, 2023

Equity awards vested, net

Share-based compensation expense

Taxes paid for net share settlements

Other comprehensive income, net

Repurchases of common stock

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

Balance as of July 31, 2023

Balance as of January 31, 2024

4 unchanged sentences

Repurchases of common stock

Excise tax on stock repurchases

Reduction of noncontrolling interest

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

Balance as of April 30, 2024

Balance as of July 31, 2024

Balance as of January 31, 2023

5 unchanged sentences

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

Balance as of April 30, 2023

Balance as of July 31, 2023

The accompanying notes are an integral part of these statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended April 30,

Six Months Ended July 31,

(Unaudited, in thousands)

21 unchanged sentences

Operating lease assets initial direct costs

Proceeds from sale of assets

Investment in equity interest of private company

4 unchanged sentences

Proceeds from borrowings - revolving facility

Repayment of borrowings - LVMH Note

Repayment of borrowings - foreign facilities

Proceeds from borrowings - foreign facilities

Payment of financing costs

Purchase of treasury shares

2 unchanged sentences

Foreign currency translation adjustments

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

4 unchanged sentences

Income tax payments, net

Excise tax liability related to stock repurchases

The accompanying notes are an integral part of these statements .

15 unchanged sentences

Accordingly, the results of KLH, Vilebrequin, Sonia Rykiel and Fabco are 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 three-month period ended April 30, 2024, the results of KLH, Vilebrequin, Sonia Rykiel and Fabco are included for the three-month period ended March 31, 2024.

For example, with respect to the Company’s results for the six-month period ended July 31, 2024, the results of KLH, Vilebrequin, Sonia Rykiel and Fabco are included for the six-month period ended June 30, 2024.

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

For fiscal 2025 and 2024, the three-month periods for the retail operations segment were each 13-week periods and ended on May 4, 2024 and April 29, 2023, respectively.

The results for the three months ended April 30, 2024 are not necessarily indicative of the results expected for the entire fiscal year, given the seasonal nature of the Company’s business.

For fiscal 2025 and 2024, the three and six-month periods for the retail operations segment were each 13-week and 26-week periods, respectively, and ended on August 3, 2024 and July 29, 2023, respectively.

The results for the three and six months ended July 31, 2024 are not necessarily indicative of the results expected for the entire fiscal year, given the seasonal nature of the Company’s business.

The accompanying financial statements included herein are unaudited.

9 unchanged sentences

wholesale and retail trade receivables.

Wholesale trade receivables result from credit the Company has extended to its wholesale customers based on pre-defined criteria and are generally due within 30 to 60 days.

Wholesale trade receivables result from credit the Company has extended to its wholesale customers based on pre-defined criteria and are generally due within 60 days.

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 April 30, 2024, April 30, 2023 and January 31, 2024 were:

April 30, 2024

The Company’s accounts receivable and allowance for doubtful accounts as of July 31, 2024, July 31, 2023 and January 31, 2024 were:

July 31, 2024

(In thousands)

2 unchanged sentences

Accounts receivable, net

April 30, 2023

July 31, 2023

(In thousands)

18 unchanged sentences

Accounts written off as uncollectible

Balance as of April 30, 2024

Balance as of July 31, 2024

Balance as of January 31, 2023

1 unchanged sentence

Accounts written off as uncollectible

Balance as of April 30, 2023

Balance as of July 31, 2023

Balance as of January 31, 2023

6 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, was $ 11.3 million, $ 12.9 million and $ 16.5 million as of April 30, 2024, April 30, 2023 and January 31, 2024, respectively.

The inventory return asset, which consists of the amount of goods that are anticipated to be returned by customers, was $ 6.5 million, $ 8.5 million and $ 16.5 million as of July 31, 2024, July 31, 2023 and January 31, 2024, 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 $ 10.3 million, $ 7.6 million and $ 6.6 million at April 30, 2024, April 30, 2023 and January 31, 2024, respectively.

Inventory held on consignment by the Company’s customers totaled $ 4.7 million, $ 7.9 million and $ 6.6 million at July 31, 2024, July 31, 2023 and January 31, 2024, respectively.

The Company reflects this inventory on its condensed consolidated balance sheets.

19 unchanged sentences

The Company’s debt instruments are recorded at their carrying values in its condensed consolidated balance sheets, which may differ from their respective fair values.

The fair value of the Company’s secured notes is based on their current market price as of April 30, 2024.

The fair value of the Company’s secured notes is based on their current market price as of July 31, 2024.

The carrying amount of the Company’s variable rate debt approximates the fair value, as interest rates change with market rates.

23 unchanged sentences

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

The Company’s operating lease assets and liabilities as of April 30, 2024, April 30, 2023 and January 31, 2024 consist of the following:

The Company’s operating lease assets and liabilities as of July 31, 2024, July 31, 2023 and January 31, 2024 consist of the following:

Classification

April 30, 2024

April 30, 2023

July 31, 2024

July 31, 2023

January 31, 2024

6 unchanged sentences

Total lease liabilities

The Company recorded lease costs of $ 18.2 million and $ 18.6 million during the three months ended April 30, 2024 and 2023, respectively.

The Company recorded lease costs of $ 18.0 million and $ 36.2 million during the three and six months ended July 31, 2024.

The Company recorded lease costs of $ 18.3 million and $ 36.9 million during the three and six months ended July 31, 2023.

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 $ 5.3 million and $ 5.9 million for the three months ended April 30, 2024 and 2023, respectively.

The Company recorded variable lease costs and short-term lease costs of $ 5.8 million and $ 11.1 million for the three and six months ended July 31, 2024.

The Company recorded variable lease costs and short-term lease costs of $ 5.5 million and $ 11.5 million for the three and six months ended July 31, 2023.

Short-term lease costs are immaterial.

As of April 30, 2024, the Company’s maturity of operating lease liabilities in the years ending up to January 31, 2029 and thereafter are as follows:

As of July 31, 2024, the Company’s maturity of operating lease liabilities in the years ending up to January 31, 2029 and thereafter are as follows:

Year Ending January 31,

2 unchanged sentences

Present value of lease liabilities

As of April 30, 2024, there are no material leases that are legally binding but have not yet commenced.

As of April 30, 2024, the weighted average remaining lease term related to operating leases is 4.9 years.

As of July 31, 2024, there are no material leases that are legally binding but have not yet commenced.

As of July 31, 2024, the weighted average remaining lease term related to operating leases is 4.9 years.

The weighted average discount rate related to operating leases is 6.5 %.

Cash paid for amounts included in the measurement of operating lease liabilities was $ 19.4 million and $ 21.2 million during the three months ended April 30, 2024 and 2023, respectively.

Right-of-use assets obtained in exchange for lease obligations were $ 6.8 million and $ 10.5 million during the three months ended April 30, 2024 and 2023, respectively.

Cash paid for amounts included in the measurement of operating lease liabilities was $ 38.0 million and $ 39.3 million during the six months ended July 31, 2024 and 2023, respectively.

Right-of-use assets obtained in exchange for lease obligations were $ 16.1 million and $ 18.1 million during the six months ended July 31, 2024 and 2023, respectively.

NOTE 6 – NET INCOME PER COMMON SHARE

1 unchanged sentence

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 outstanding during the period.

Approximately 9,500 and 302,200 shares of common stock have been excluded from the diluted net income per share calculation for the three months ended April 30, 2024 and 2023, 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.

A nominal amount of shares of common stock have been excluded from the diluted net income per share

calculation for the three and six months ended July 31, 2024.

Approximately 106,000 and 312,500 shares of common stock have been excluded from the diluted net income per share calculation for the three and six months ended July 31, 2023.

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 per share:

Three Months Ended April 30,

Three Months Ended July 31,

Six Months Ended July 31,

(In thousands, except share and per share amounts)

10 unchanged sentences

Long-term debt consists of the following:

April 30, 2024

April 30, 2023

July 31, 2024

July 31, 2023

January 31, 2024

7 unchanged sentences

Current portion of long-term debt

(1) Does not include debt issuance costs, net of amortization, totaling $ 2.0 million, $ 3.6 million and $ 2.4 million as of April 30, 2024, April 30, 2023 and January 31, 2024, respectively, related to the revolving credit facility.

(1) Does not include debt issuance costs, net of amortization, totaling $ 5.4 million, $ 3.2 million and $ 2.4 million as of July 31, 2024, July 31, 2023 and January 31, 2024, 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.

5 unchanged sentences

The Notes bear interest at a rate of 7.875 % per year payable semi-annually in arrears on February 15 and August 15 of each year.

(the “ABL Facility”) pursuant to the ABL Credit Agreement, or certain future capital markets indebtedness of the Company or the guarantors.

The Notes are unconditionally guaranteed on a senior-priority secured basis by the Company’s current and future wholly-owned domestic subsidiaries that guarantee any of the Company’s credit facilities, including the Company’s ABL facility (the “ABL Facility”) pursuant to the ABL Credit Agreement, or certain future capital markets indebtedness of the Company or the guarantors.

The Notes and the related guarantees are secured by (i) first priority liens on the Company’s Cash Flow Priority Collateral (as defined in the Indenture), and (ii) a second-priority lien on the Company’s ABL Priority Collateral (as defined in the Indenture), in each case subject to permitted liens described in the Indenture.

8 unchanged sentences

In accordance with ASC 835, the debt issuance costs have been deferred and are presented as a contra-liability, offsetting the outstanding balance of the Notes, and are amortized over the remaining life of the Notes.

Second Amended and Restated ABL Credit Agreement

In August 2020, the Company’s subsidiaries, G-III Leather Fashions, Inc., Riviera Sun, Inc., CK Outerwear, LLC, AM Retail Group, Inc.

and The Donna Karan Company Store LLC (collectively, the “Borrowers”), entered into the second amended and restated credit agreement (the “Second ABL Credit Agreement”) with the Lenders named therein and with JPMorgan Chase Bank, N.A., as Administrative Agent.

The Second ABL Credit Agreement is a five year senior secured credit facility subject to a springing maturity date if, subject to certain conditions, the Notes are not refinanced or repaid prior to the date that is 91 days prior to the date of any relevant payment thereunder.

The Second ABL Credit Agreement provides for borrowings in the aggregate principal amount of up to $ 650 million.

The Company and certain of its subsidiaries (the “Guarantors”), are Loan Guarantors under the Second ABL Credit Agreement.

The Second ABL Credit Agreement refinanced, amended and restated the Amended Credit Agreement, dated as of December 1, 2016 (as amended, supplemented or otherwise modified from time to time prior to August 7, 2020, the “Prior Credit Agreement”).

The Prior Credit Agreement provided for borrowings of up to $ 650 million and was due to expire in December 2021.

The Second ABL Credit Agreement extended the maturity date to August 2025, subject to a springing maturity date if, subject to certain conditions, the Notes are not refinanced or repaid prior to the date that is 91 days prior to the date of any relevant payment thereunder.

Amounts available under the Second ABL Credit Agreement are subject to borrowing base formulas and overadvances as specified in the Second ABL Credit Agreement.

Borrowings originally bore interest, at the Borrowers’ option, at LIBOR plus a margin of 1.75 % to 2.25 % or an alternate base rate margin of 0.75 % to 1.25 % (defined as the greatest of (i) the “prime rate” of JPMorgan Chase Bank, N.A.

from time to time, (ii) the federal funds rate plus 0.5 % and (iii) the LIBOR rate for a borrowing with an interest period of one month) plus 1.00 %, with the applicable margin determined based on Borrowers’ availability under the Second ABL Credit Agreement.

In April 2023, the Company amended the Second ABL Credit Agreement to replace LIBOR with the Adjusted Term Secured Overnight Financing Rate (“SOFR”) as a successor rate.

All other material terms and conditions of the Second ABL Credit Agreement were unchanged.

Borrowings under the Second ABL Credit Agreement now bear interest, at the Borrower’s option, at the alternate base rate (defined as, for a given day, the greatest of (i) the “prime rate” in effect on such day, (ii) the NYFRB Rate (as defined in the amendment) in effect on such day plus 0.5 % and (iii) the SOFR (defined as an interest rate per annum equal to SOFR for such interest period plus 0.10 %) for a one-month interest period as published two business days prior to such day plus 1 %) plus an applicable spread or SOFR plus an applicable spread.

The Company applied certain provisions and practical expedients of ASC 848 – Reference Rate Reform related to the transition from LIBOR to SOFR.

The Second ABL Credit Agreement is secured by specified assets of the Borrowers and the Guarantors.

In addition to paying interest on any outstanding borrowings under the Second ABL Credit Agreement, the Company is required to pay a commitment fee to the lenders under the credit agreement with respect to the unutilized commitments.

Third Amended and Restated ABL Credit Agreement

On June 4, 2024, the Company’s subsidiaries, G-III Leather Fashions, Inc., Riviera Sun, Inc., AM Retail Group, Inc.

and The Donna Karan Company Store LLC (collectively, the “Borrowers”), entered into the third amended and restated credit agreement (the “Third ABL Credit Agreement”) with the lenders named therein and with JPMorgan Chase Bank, N.A., as administrative agent.

The Third ABL Credit Agreement is a five-year senior secured asset-based revolving credit facility providing for borrowings in an aggregate principal amount of up to $ 700 million.

The Company and certain of its wholly-owned domestic subsidiaries, as well as G-III Apparel Canada ULC (collectively, the “Guarantors”), are guarantors under the Third ABL Credit Agreement.

The Third ABL Credit Agreement amends and restates the Second Amended Credit Agreement, dated as of August 7, 2020 (as amended, supplemented or otherwise modified from time to time prior to June 4, 2024, the “Second Credit Agreement”), by and among the Borrowers and the Guarantors, the lenders from time-to-time party thereto, and JPMorgan Chase Bank, N.A., in its capacity as the administrative agent thereunder.

The Second Credit Agreement provided for borrowings of up to $ 650 million and was due to expire on August 7, 2025 .

The Third ABL Credit Agreement extends the maturity date to June 2029, subject to a springing maturity date as defined within the credit agreement.

Amounts available under the Third ABL Credit Agreement are subject to borrowing base formulas and overadvances as specified in the Third ABL Credit Agreement.

Borrowings bear interest, at the Borrowers’ option, at Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus a margin of 1.50 % to 2.00 %, or the alternate base rate plus a margin of 0.50 % to 1.00 % (defined as the greatest of (i) the “prime rate” of JPMorgan Chase Bank, N.A.

from time to time, (ii) the federal funds rate plus 0.5 % and (iii) SOFR for a borrowing with an interest period of one month plus 1.00 %), with the applicable margin determined based on the Borrowers’ average daily availability under the Third ABL Credit Agreement.

The Third ABL Credit Agreement is secured by specified assets of the Borrowers and the Guarantors.

In addition to paying interest on any outstanding borrowings under the Third ABL Credit Agreement, the Company is required to pay a commitment fee to the lenders under the credit agreement with respect to the unutilized commitments.

The commitment fee accrues at a tiered rate equal to 0.375 % per annum on the average daily amount of the available commitments when the average usage is less than 50% of the total available commitments and decreases to 0.25 % per annum on the average daily amount of the available commitments when the average usage is greater than or equal to 50% of the total available commitments.

The Second ABL Credit Agreement contains covenants that, among other things, restrict the Company’s ability to, subject to specified exceptions, incur additional debt;

The Third ABL Credit Agreement contains covenants that, among other things, restrict the Company’s ability to, subject to specified exceptions, incur additional debt;

sell or dispose of certain assets;

5 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 April 30, 2024, the Company was in compliance with these covenants.

As of April 30, 2024, the Company had no borrowings outstanding under the Second ABL Credit Agreement.

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

As of April 30, 2024, there were outstanding trade and standby letters of credit amounting to $ 4.8 million and $ 2.9 million, respectively.

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

In June 2024, the Company entered into the third amended and restated credit agreement that provides for borrowings in the aggregate principal amount of up to $ 700 million and extends the maturity date to June 2029, subject to certain conditions.

See Note 12 – Subsequent Events for more information.

As of July 31, 2024, the Company was in compliance with these covenants.

As of July 31, 2024, the Company had no borrowings outstanding under the Third ABL Credit Agreement.

The Third ABL Credit Agreement also includes amounts available for letters of credit.

As of July 31, 2024, there were outstanding trade and standby letters of credit amounting to $ 6.3 million and $ 2.9 million, respectively.

At the date of the refinancing of the Second ABL Credit Agreement, the Company had $ 1.9 million of unamortized debt issuance costs remaining from the Second ABL Credit Agreement.

There was no extinguishment of any amount of the unamortized debt issuance costs remaining from the Second ABL Credit Agreement.

The Company incurred new debt issuance costs totaling $ 3.8 million related to the Third ABL Credit Agreement.

The Company has a total of $ 5.6 million debt issuance costs related to its Third 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 Third ABL Credit Agreement.

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

7 unchanged sentences

Interest on the outstanding principal amount of the unsecured loans accrues at a fixed rate equal to 0 % to 5.0 % per annum, payable on either a quarterly or monthly basis.

As of April 30, 2024, the Company had an aggregate outstanding balance of € 7.9 million ($ 8.5 million) under these unsecured loans.

As of July 31, 2024, the Company had an aggregate outstanding balance of € 7.2 million ($ 7.8 million) under these unsecured loans.

Overdraft Facilities

4 unchanged sentences

As part of a COVID-19 relief program, certain of the Company’s foreign entities 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 April 30, 2024, the Company had an aggregate of € 6.4 million ($ 6.9 million) drawn under these various facilities.

As of July 31, 2024, the Company had an aggregate of € 7.4 million ($ 7.9 million) drawn under these various facilities.

Foreign Credit Facility

2 unchanged sentences

Borrowings bear interest at the Euro Interbank Offered Rate plus a margin of 1.7 %.

As of April 30, 2024, KLH had € 12.1 million ($ 13.0 million) of borrowings outstanding under this credit facility.

As of July 31, 2024, KLH had no borrowings outstanding under this credit facility.

NOTE 8 – REVENUE RECOGNITION

22 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 $ 4.8 million, $ 4.1 million and $ 5.2 million at April 30, 2024, April 30, 2023 and January 31, 2024, respectively.

The Company recognized $ 3.6 million in revenue for the three months ended April 30, 2024 related to contract liabilities that existed at January 31, 2024.

The Company recognized $ 3.6 million in revenue for the three months ended April 30, 2023 related to contract liabilities that existed at January 31, 2023.

There were no contract assets recorded as of April 30, 2024, April 30, 2023 and January 31, 2024.

Substantially all of the advance payments from licensees as of April 30, 2024 are expected to be recognized as revenue within the next twelve months.

Total contract liabilities were $ 5.1 million, $ 4.6 million and $ 5.2 million at July 31, 2024, July 31, 2023 and January 31, 2024, respectively.

The Company recognized $ 3.4 million in revenue for the three months ended July 31, 2024 related to contract liabilities that existed at April 30, 2024.

The Company recognized $ 4.0 million in revenue for the six months ended July 31, 2024 related to contract liabilities that existed at

January 31, 2024.

There were no contract assets recorded as of July 31, 2024, July 31, 2023 and January 31, 2024.

Substantially all of the advance payments from licensees as of July 31, 2024 are expected to be recognized as revenue within the next twelve months.

NOTE 9 – SEGMENTS

8 unchanged sentences

Substantially all DKNY and Karl Lagerfeld Paris stores are operated as outlet stores.

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

Three Months Ended April 30, 2024

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

Three Months Ended July 31, 2024

Elimination (1)

4 unchanged sentences

Operating profit (loss)

Three Months Ended April 30, 2023

Three Months Ended July 31, 2023

Elimination (1)

4 unchanged sentences

Operating profit (loss)

Six Months Ended July 31, 2024

Elimination (1)

(In thousands)

Cost of goods sold

Selling, general and administrative expenses

Depreciation and amortization

Operating profit (loss)

Six Months Ended July 31, 2023

Elimination (1)

(In thousands)

Cost of goods sold

Selling, general and administrative expenses

Depreciation and amortization

Operating profit (loss)

(1) Represents intersegment sales to the Company’s retail operations segment.

1 unchanged sentence

Three Months Ended

April 30, 2024

April 30, 2023

Six Months Ended

July 31, 2024

July 31, 2023

July 31, 2024

July 31, 2023

(In thousands)

6 unchanged sentences

NOTE 10 – STOCKHOLDERS’ EQUITY

For the three months ended April 30, 2024, the Company issued no shares of common stock and utilized 267,129 shares of treasury stock in connection with the vesting of equity awards.

For the three months ended April 30, 2023, the Company issued no shares of common stock and utilized 2,001 shares of treasury stock in connection with the vesting of equity awards.

For the three months ended July 31, 2024, the Company issued no shares of common stock and utilized 99,585 shares of treasury stock in connection with the vesting of equity awards.

For the three months ended July 31, 2023, the Company issued no shares of common stock and utilized 601,907 shares of treasury stock in connection with the vesting of equity awards.

For the six months ended July 31, 2024, the Company issued no shares of common stock and utilized 366,714 shares of treasury stock in connection with the vesting of equity awards.

For the six months ended July 31, 2023, the Company issued no shares of common stock and utilized 603,971 shares of treasury stock in connection with the vesting of equity awards.

NOTE 11 – FABCO

On April 17, 2024, the Company acquired from Amlon Capital B.V.

(“Amlon”) the remaining 25 % interest in Fabco that it did not previously own for $ 0.2 million.

Additionally, at the date of the transaction, there were $ 1.2 million of payables due from Fabco to Amlon.

As settlement of a portion of the outstanding payables, the Company issued a non-interest bearing promissory note to Amlon in the principal amount of $ 0.6 million of which $ 0.4 million of the principal amount is due and payable on April 17, 2025 and $ 0.2 million of the principal amount is due and payable on April 17, 2026.

The promissory note is classified in notes payable in the Company’s condensed consolidated balance sheet as of July 31, 2024.

The remaining $ 0.6 million of payables due to Amlon was forgiven, resulting in the Company recognizing a gain of $ 0.6 million within other (loss) income in the Company’s condensed consolidated statements of income and comprehensive income.

Since the Company controlled Fabco prior to this transaction and continues to control Fabco after the transaction, the Company accounted for the change in its ownership interest in Fabco as an equity transaction, which was reflected as a reduction of the noncontrolling interest with a corresponding decrease to additional paid in capital as a result of losses incurred by Fabco.

No gain or loss was recognized in the Company’s condensed consolidated statements of income and comprehensive income as a result of this transaction.

NOTE 12 – AWWG INVESTMENT

In May 2024, the Company acquired a 12.1 % minority interest in AWWG Investments B.V.

(“AWWG”) for € 50 million ($ 53.6 million).

AWWG is a global fashion group and premier platform for international brands.

AWWG owns a portfolio of brands including Hackett, Pepe Jeans and Façonnable.

The Company intends to leverage AWWG’s expertise with AWWG becoming the agent for Karl Lagerfeld, DKNY and Donna Karan in Spain and Portugal.

This investment is intended to accelerate several of the Company’s priorities including expanding its international business and identifying opportunities for growth of its owned brands.

As of July 31, 2024, the Company accounts for its investment in AWWG using the cost method.

Investments recorded using the cost method will be assessed for any decrease in value that has occurred that is other than temporary and the other than temporary decrease shall be recognized.

The Company will continue to evaluate its ability to significantly influence operational and financial policy to establish a basis for converting the investment accounted for using the cost method to the equity method of valuation in accordance with ASC 323.

The investment is classified in other assets, net in the Company’s condensed consolidated balance sheet as of July 31, 2024.

In July 2024, the Company acquired an additional 6.6 % minority interest in AWWG for € 27.1 million ($ 29.1 million), increasing its total ownership interest to 18.7 %.

The investment in AWWG is owned by G-III Foreign Holdings B.V., a wholly-owned subsidiary of the Company.

G-III Foreign Holdings B.V.

reports results on a calendar year basis rather than on the January 31 fiscal year basis used by the Company.

Accordingly, the AWWG investment will be accounted for under the equity method of accounting in the Company’s fiscal quarter ending October 31, 2024.

The additional investment is classified in other assets, net in the Company’s condensed consolidated balance sheet as of July 31, 2024.

NOTE 13 – RECENT ADOPTED AND ISSUED ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Guidance

There was no accounting guidance adopted during the three months ended April 30, 2024.

There was no accounting guidance adopted during the three months ended July 31, 2024.

Issued Accounting Guidance Being Evaluated for Adoption

15 unchanged sentences

NOTE 14 – SUBSEQUENT EVENTS

Investment in AWWG

In May 2024, the Company acquired a 12 % minority interest in AWWG Investments B.V.

(“AWWG”) for € 50 million ($ 53.6 million).

AWWG is a global fashion group and premier platform for international brands.

AWWG owns a portfolio of brands including Hackett, Pepe Jeans and Façonnable and manages the Iberian business for PVH Corp.

The Company intends to leverage AWWG’s expertise with AWWG becoming the agent for Karl Lagerfeld, DKNY and Donna Karan in Spain and Portugal.

This investment is intended to accelerate several of the Company’s priorities, including expanding its international business and identifying opportunities for growth of our owned brands.

Third Amended and Restated ABL Credit Agreement

On June 4, 2024, the Company’s subsidiaries, G-III Leather Fashions, Inc., Riviera Sun, Inc., AM Retail Group, Inc.

The Third ABL Credit Agreement is a five-year senior secured asset-based revolving credit facility providing for borrowings in an aggregate principal amount of up to $ 700 million.

The Company and certain of its wholly-owned domestic subsidiaries, as well as G-III Apparel Canada ULC (collectively, the “Guarantors”), are guarantors under the Third ABL Credit Agreement.

The Second Credit Agreement provided for borrowings of up to $ 650 million and was due to expire on August 7, 2025 .

The Third ABL Credit Agreement extends the maturity date to June 2029, subject to a springing maturity date as defined within the credit agreement.

Amounts available under the Third ABL Credit Agreement are subject to borrowing base formulas and overadvances as specified in the Third ABL Credit Agreement.

The Third ABL Credit Agreement is secured by specified assets of the Borrowers and the Guarantors.

Senior Secured Notes Redemption

In August 2024, the Company used cash on hand and borrowings from its revolving credit facility to make a $ 400.7 million voluntary payment to redeem the entire $ 400 million principal amount of its Senior Secured Notes due August 2025 at a redemption price equal to 100 % of the principal amount of the Notes plus accrued interest.

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