Perry Ellis International, Inc. announced that Moody's Investors Service updated its ratings outlook on the Company to Positive and concurrently affirmed its B2 Corporate Family and Probability of Default Ratings, as well as the B3 rating on its subordinated notes.
In its report dated June 24, 2010, Moody's stated that: "The positive outlook reflected its expectation for sustained improvement in Perry Ellis' operating performance, which is supported by the resumption of profitable growth through incremental business with existing and new customers and margin improvement through cost containment and better inventory management." Moody's also noted that Perry Ellis has also significantly improved its liquidity and credit metrics over the last nine months, aided by strong free cash flow and debt reduction.
George Feldenkreis, Chairman and CEO, stated: "We are pleased that Moody's recognized the significant improvement in our operating performance, profitability and cash flow by revising upward its outlook on our debt to a positive rating. Our strategies, which focus on maximizing the performance of our growth platforms while repositioning or exiting lower margin and slower growth businesses, has positioned our Company for consistent and sustained growth in the current fiscal year and beyond. During the first quarter of fiscal 2011, this led to a 420 basis point increase in gross profit margin to 35.7%; a more than doubling in first quarter earnings per share and a reduction in total net debt to capitalization to 30% at quarter end from 44% at the end of the first quarter last year. We remain committed to our strategies, which we expect to lead to increased value for all Perry Ellis stakeholders."
Separately, the Company also noted that on June 24th, it renewed its existing shelf registration statement which was to expire at the end of July by filing a universal shelf registration statement with the Securities and Exchange Commission. The shelf registration statement may be utilized to offer debt securities, preferred and common stock and other securities in order to provide the Company with flexibility to respond to future financing opportunities. No offering is currently contemplated by the Company.
Perry Ellis International Inc
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