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FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly period ended April 30, 2005 ------------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to --------------------- ---------------------- Commission File Number 0-18183 ---------------------------------------------------------- G-III APPAREL GROUP, LTD. (Exact name of registrant as specified in its charter) Delaware 41-1590959 - ------------------------------------ ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 512 Seventh Avenue, New York, New York 10018 ------------------------------------------------------------ (Address of Principal Executive Offices) (Zip Code) (212) 403-0500 ------------------------------------------------------------ (Registrant's telephone number, including area code) - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by checkmark if the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [ ] No [X] As of June 1, 2005, there were 7,289,198 common shares outstanding. <TABLE> Part I FINANCIAL INFORMATION Page No. Item 1. Financial Statements (Unaudited) Condensed Consolidated Balance Sheets - April 30, 2005, April 30, 2004 and January 31, 2005 ..............................3 Condensed Consolidated Statements of Operations - For the Three Months Ended April 30, 2005 and 2004................................4 Condensed Consolidated Statements of Cash Flows - For the Three Months Ended April 30, 2005 and 2004................................5 Notes to Condensed Consolidated Financial Statements......................................6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.............................................9 Item 3. Quantitative and Qualitative Disclosures About Market Risk.................................12 Item 4. Controls and Procedures....................................................................12 Part II OTHER INFORMATION Item 6. Exhibits...................................................................................13 </TABLE> 2 ITEM 1. FINANCIAL STATEMENTS G-III APPAREL GROUP, LTD. AND SUBSIDIARIES ------------------------------------------ CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) <TABLE> APRIL 30, APRIL 30, JANUARY 31, 2005 2004 2005 ---- ---- ---- (unaudited) (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $22,685 $ 15,731 $ 16,574 Accounts receivable, net of allowance for doubtful accounts and sales discounts of $3,943, $5,647 and $6,690, respectively 7,788 10,155 24,783 Inventories, net 22,625 26,588 24,108 Income taxes receivable 3,686 2,382 - Deferred income taxes 3,357 5,895 3,357 Prepaid expenses and other current assets 7,267 4,783 3,887 --------- -------- -------- Total current assets 67,408 65,534 72,709 PROPERTY, PLANT AND EQUIPMENT, NET 2,247 1,842 2,350 DEFERRED INCOME TAXES 2,050 1,940 2,050 OTHER ASSETS 3,161 4,059 3,486 --------- -------- -------- $74,866 $ 73,375 $ 80,595 ========= ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $770 $ 770 $ 770 Current maturities of obligations under capital leases 199 52 202 Income taxes payable - 104 Accounts payable 6,766 7,351 6,565 Accrued expenses 4,046 4,179 5,200 --------- -------- -------- Total current liabilities 11,781 12,352 12,841 --------- -------- -------- LONG-TERM LIABILITIES 774 247 824 --------- -------- -------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock, 1,000,000 shares authorized; no shares issued and outstanding in all periods Common stock - $.01 par value; 20,000,000 shares authorized; 7,532,115, 7,402,815 and 7,521,915 shares issued, respectively 75 74 75 Additional paid-in capital 28,314 27,651 28,275 Accumulated other comprehensive income 61 51 50 Retained earnings 34,831 33,970 39,500 --------- -------- -------- 63,281 61,746 67,900 Less common stock held in treasury - 244,817 shares at cost (970) (970) (970) --------- -------- -------- 62,311 60,776 66,930 --------- -------- -------- $74,866 $ 73,375 $ 80,595 ========= ======== ======== </TABLE> The accompanying notes are an integral part of these statements. 3 G-III APPAREL GROUP, LTD. AND SUBSIDIARIES ------------------------------------------ CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) <TABLE> THREE MONTHS ENDED APRIL 30, ---------------------------- (Unaudited) 2005 2004 ---- ---- Net sales $13,767 $ 16,498 Cost of goods sold 12,852 14,759 --------- --------- Gross profit 915 1,739 Selling, general and administrative expenses 9,103 10,134 --------- --------- Operating loss (8,188) (8,395) Interest and financing charges, net 3 73 --------- --------- Loss before income taxes (8,191) (8,468) Income tax benefit (3,522) (3,641) --------- --------- Net loss $(4,669) $ (4,827) ========= ========= LOSS PER COMMON SHARE: Basic and Diluted: Net loss per common share $ (0.64) $ (0.68) ========= ========= Weighted average number of shares outstanding 7,285,000 7,119,000 ========= ========= </TABLE> The accompanying notes are an integral part of these statements. 4 G-III APPAREL GROUP, LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) <TABLE> THREE MONTHS ENDED APRIL 30, ---------------------------- (Unaudited) ----------- 2005 2004 -------- -------- Cash flows from operating activities Net loss $ (4,669) $ (4,827) Adjustments to reconcile net loss to net cash provided by (used in) operating activities Depreciation and amortization 300 312 Changes in operating assets and liabilities: Accounts receivable 16,995 9,149 Inventories, net 1,483 1,773 Income taxes, net (3,790) (4,041) Prepaid expenses and other current assets (3,380) (1,855) Other assets 325 47 Accounts payable and accrued expenses (953) (1,131) -------- -------- Net cash provided by (used in) operating activities 6,311 (573) -------- -------- Cash flows from investing activities Capital expenditures (197) (64) -------- -------- Net cash used in investing activities (197) (64) -------- -------- Cash flows from financing activities Payments for capital lease obligations (53) (35) Proceeds from exercise of stock options 39 327 -------- -------- Net cash provided by (used in) financing activities (14) 292 -------- -------- Effect of exchange rate changes on cash and cash equivalents 11 4 -------- -------- Net increase (decrease) in cash and cash equivalents 6,111 (341) Cash and cash equivalents at beginning of period 16,574 16,072 -------- -------- Cash and cash equivalents at end of period $ 22,685 $ 15,731 ======== ======== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 101 $ 179 Income taxes $ 278 $ 385 </TABLE> The accompanying notes are an integral part of these statements. 5 G-III APPAREL GROUP, LTD. AND SUBSIDIARIES ------------------------------------------ NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1 - General Discussion - --------------------------- As used in these financial statements, the term "Company" refers to G-III Apparel Group, Ltd. and its majority-owned subsidiaries. The results for the three month period ended April 30, 2005 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. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented have been reflected. Certain amounts in the Condensed Consolidated Statements of Operations for April 30, 2004 have been reclassified to conform to the current period presentation. The Company consolidates the accounts of all its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated. The accompanying financial statements should be read in conjunction with the financial statements and notes included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended January 31, 2005. Note 2 - Effects of Recently Issued Accounting Pronouncements - ------------------------------------------------------------- In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS No. 123 (Revised 2004), "Share-based Payment" that will require the Company to expense costs related to share-based payment transactions with employees. With limited exceptions, SFAS No. 123(R) requires that the fair value of share-based payments to employees be expensed over the period service is received. The Company is currently evaluating the requirements and impact of SFAS No. 123 (R) on the Company's Consolidated financial statements. We believe the pro forma disclosures in Note 5 - Stock-Based Compensation provide an appropriate short-term indicator as to the level of expense that will be recognized in accordance with SFAS No. 123(R). SFAS No. 123(R) becomes effective for the Company on February 1, 2006. In November 2004, the FASB issued SFAS No. 151, "Inventory Costs, an amendment of ARB No. 43, Chapter 4." SFAS No. 151 requires certain abnormal expenditures to be recognized as expenses in the current period. It also requires that the amount of fixed production overhead allocated to inventory be based on the normal capacity of the production facility. The standard is effective for fiscal years beginning on or after January 1, 2006. We do not expect SFAS No. 151 to have a material effect on the Company's Consolidated Financial Statements. 6 Note 3 - Inventories - -------------------- Inventories consist of: <TABLE> APRIL 30, April 30, January 31, 2005 2004 2005 --------- --------- --------- (in thousands) Finished goods $ 18,358 $ 18,995 $ 20,761 Work-in-process 638 618 83 Raw materials 3,629 6,975 3,264 --------- --------- --------- $ 22,625 $ 26,588 $ 24,108 ========= ========= ========= </TABLE> Note 4 - Net Loss per Common Share - ---------------------------------- Basic net loss per share has been computed using the weighted average number of common shares outstanding during each period. When applicable, diluted income per share amounts are computed using the weighted average number of common shares and potential dilutive common shares, consisting of stock options, outstanding during the period. Note 5 - Stock-Based Compensation - --------------------------------- The Company has granted stock options for a fixed number of shares to employees and directors with an exercise price equal to or greater than the market price of the shares at the date of grant. The Company has adopted the disclosure-only provision of Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation," which permits the Company to account for stock option grants in accordance with Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees." Accordingly, the Company recognizes no compensation expense for the stock option grants. Pro forma disclosures, as required by SFAS No. 148, "Accounting for Stock Based Compensation - Transition and Disclosure," are computed as if the Company recorded compensation expense based on the fair value for stock-based awards at grant date. The following pro forma information includes the effects of these options: <TABLE> Three Months ended April 30, 2005 2004 ------- ------- (in thousands, except per share amounts) Net loss - as reported $(4,669) $(4,827) Deduct: Stock-based employee compensation expense determined under fair value method, net of related tax effects 74 86 ------- ------- Pro forma net loss $(4,743) $(4,913) ======= ======= Loss per share: Basic and diluted - as reported $ (0.64) $ (0.68) Basic and diluted - adjusted $ (0.65) $ (0.69) </TABLE> 7 Note 6 - Notes Payable - ---------------------- The Company's domestic loan agreement, which expires on May 31, 2008, is a collateralized working capital line of credit with six banks that provides for an aggregate maximum line of credit in amounts that range from $35 million to $110 million at specific times during the year. The line of credit provides for maximum direct borrowings ranging from $25 million to $75 million during the year. The unused balance may be used for letters of credit. Amounts available for borrowing are subject to borrowing base formulas and over advances as specified in the agreement. The line of credit includes a requirement that the Company have no loans and acceptances outstanding for 45 consecutive days each year of the lending agreement. The Company met this requirement. There was no balance outstanding at April 30, 2005, January 31, 2005 or April 30, 2004 under this agreement. Notes payable also includes a foreign note payable by PT Balihides, the Company's inactive Indonesian subsidiary. Note 7 - Closing of Manufacturing Facility - ------------------------------------------ The unpaid portion of the non-recurring charge associated with the closing of our Indonesian manufacturing facility in December 2002 are included in "Accrued expenses" in the accompanying Consolidated Balance Sheets. The balance in the reserve at April 30, 2005 and January 31, 2005 is $405,000 and $411,000, respectively, and represent accrued expenses, severance and other miscellaneous costs. Based on current estimates, management believes that existing accruals are adequate. Note 8 - Segments - ----------------- The Company's reportable segments are business units that offer different products and are managed separately. The Company operates in two segments, licensed and non-licensed apparel. The following information is presented for the three-month periods indicated below: <TABLE> THREE MONTHS ENDED APRIL 30, ---------------------------- 2005 2004 ---- ---- NON- Non- LICENSED LICENSED Licensed Licensed -------- -------- -------- -------- Net sales $ 11,512 $ 2,255 $ 14,261 $ 2,237 Cost of goods sold 10,075 2,777 11,965 2,794 -------- -------- -------- -------- Gross profit 1,437 (522) 2,296 (557) Selling, general and administrative 6,293 2,810 7,402 2,732 -------- -------- -------- -------- Operating loss (4,856) (3,332) (5,106) (3,289) Interest expense, net 2 1 43 30 -------- -------- -------- -------- Loss before income taxes $ (4,858) $ (3,333) $ (5,149) $ (3,319) ======== ======== ======== ======== </TABLE> 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Unless the context otherwise requires, "G-III", "us", "we" and "our" refer to G-III Apparel Group, Ltd. and its subsidiaries. References to fiscal years refer to the year ended or ending on January 31 of that year. Statements in this Quarterly Report on Form 10-Q concerning our business outlook or future economic performance; anticipated revenues, expenses or other financial items; product introductions and plans and objectives related thereto; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matter, are "forward-looking statements" as that term is defined under the Federal securities laws. Forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those stated in such statements. Such risks, uncertainties and factors include, but are not limited to, reliance on foreign manufacturers, risks of doing business abroad, the nature of the apparel industry, including changing consumer demand and tastes, reliance on licensed product, seasonality, customer acceptance of new products, the impact of competitive products and pricing, dependence on existing management, general economic conditions, as well as other risks detailed in the Company's filings with the Securities and Exchange Commission, including this Quarterly Report on Form 10-Q. OVERVIEW G-III designs, manufactures, imports and markets an extensive range of outerwear and sportswear including coats, jackets, pants, skirts, handbags and other sportswear items under licensed labels, our own proprietary labels and private retail labels. Our products are distributed through a broad mix of retail partners at a variety of price points. We sell to approximately 3,000 retail customers in the United States, including most major department stores, mass merchants and specialty retail stores. We operate our business in two segments, licensed apparel and non-licensed apparel. The licensed apparel segment includes sales of apparel brands licensed by us from third parties. The non-licensed apparel segment includes sales of apparel under our own brands and private label brands, as well as commission fee income received on sales that are financed by and shipped directly to our customers. The sale of licensed product has been a key element of our business strategy for many years. As part of this strategy, we are continually adding new fashion and sports apparel licenses and are continuously seeking new licensing opportunities. We believe that consumers prefer to buy brands they know and we have sought licenses that would increase the portfolio of name brands we can offer through different tiers of retail distribution and at a variety of price points. In March 2005, we entered into a license agreement through January 31, 2009 to manufacture a young, contemporary women's outerwear line for House of Dereon, a brand by the entertainer, Beyonce Knowles. In April 2005, we entered into a license agreement through January 31, 2009 with Trump Marks, LLC, a brand by Donald Trump, to manufacture outerwear, activewear and headwear. 9 RESULTS OF OPERATIONS Historically, we have our lowest net sales during our first fiscal quarter. Net sales for the three months ended April 30, 2005 decreased to $13.8 million from $16.5 million in the same period last year. Net sales of licensed apparel decreased $2.8 million to $11.5 million from $14.3 compared to the same quarter last year, primarily as a result of decreased sales of fashion sports apparel ($4.2 million) partially offset by increased sales in our core sports products ($1.4 million). Net sales of our non-licensed apparel were approximately the same for both periods. Gross profit decreased to $915,000, or 6.6% of net sales, for the three month period ended April 30, 2005 from $1.7 million, or 10.5% of net sales, in the same period last year. Gross profit as a percentage of net sales decreased primarily due to fewer regular priced shipments as a result of the decrease in sales of our fashion sports apparel and the impact of spreading comparable fixed costs over lower sales volume. The decrease in the gross profit percentage for sales of licensed apparel from 16.1% in the prior period to 12.5% in the current period was also primarily the result of the impact of spreading comparable fixed costs over lower sales volume. The gross profit amounts and percentages in our non-licensed segment were comparable for both periods. Selling, general and administrative expenses decreased to $9.1 million in the three-month period ended April 30, 2005 from $10.1 million in the same period last year. The decrease is primarily the result of decreased advertising and promotional expenses ($400,000), a reduction in our third party warehousing costs ($200,000) and a reduction in our bad debt expense ($200,000). Advertising and promotional expenses decreased primarily due to lower trade show expenses and a decrease in advertising purchased by us. Third party warehousing expense decreased due to shipping less units. Bad debt expense was favorably impacted by the improvement in our accounts receivable as a result of our continued focus on collecting slower paying accounts. Interest and finance charges, net for the three-month period ended April 30, 2005 were $3,000 compared to $73,000 for the comparable period last year. Interest expense decreased primarily due to interest income increasing in the three months ended April 30, 2005 over the prior comparable period due to higher average cash balances during the quarter and slightly higher investment returns. Income tax benefit for the three months ended April 30, 2005 was $3.5 million compared to $3.6 million in the comparable period last year. Both periods reflect an estimated effective tax rate of approximately 43.0%. LIQUIDITY AND CAPITAL RESOURCES Our primary cash requirements are to fund our seasonal build up in inventories and accounts receivable, primarily during the second and third fiscal quarters each year. Due to the seasonality of our business, we generally reach our maximum borrowing under our asset-based credit facility during our third fiscal quarter. 10 Our loan agreement, which was extended to May 31, 2008 during the quarter ended April 30, 2005, is a collateralized working capital line of credit with six banks that provides for a maximum line of credit in amounts that range from $35 million to $110 million at specific times during the year. The line of credit provides for maximum direct borrowings ranging from $25 million to $75 million during the year. The unused balance may be used for letters of credit. Amounts available for borrowing are subject to borrowing base formulas and over-advances as specified in the agreement. Direct borrowings under the line of credit bear interest at our option at either the prevailing prime rate (6.0% as of June 1, 2005) or LIBOR plus 225 basis points (5.6% at June 1, 2005). Our assets collateralize all borrowings. The loan agreement requires us, among other covenants, to maintain specified earnings and tangible net worth levels, and limits payments for cash dividends and stock buybacks to an aggregate of $1.7 million over the term of the agreement without the consent of our lenders. The amount borrowed under the line of credit varies based on our seasonal requirements. As of April 30, 2005 and 2004, there were no direct borrowings and no banker's acceptances outstanding. Our contingent liability under open letters of credit was approximately $14.1 million at April 30, 2005 compared to approximately $13.4 million as of April 30, 2004. PT Balihides, our Indonesian subsidiary, had a separate credit facility with an Indonesian bank. In December 2002, we closed the manufacturing facility operated by this subsidiary. The notes payable under this facility represent borrowings as of April 30, 2005 of approximately $770,000. The loan is collateralized by the property, plant, and equipment of this subsidiary. No other G-III entity has guaranteed this loan. We continue to be in discussions with the bank regarding settlement of this debt. For the period ended April 30, 2005, we incurred no direct borrowings. We had cash and cash equivalents of $22.7 million as of April 30, 2005. During the quarter, we generated $6.3 million of cash from operating activities, resulting primarily from a decrease in our accounts receivable of $17.0 million, offset in part by our net loss of $4.7 million, an increase in our income tax receivable of $3.8 million and an increase in our prepaid expenses of $3.4 million. The decrease in accounts receivable in the quarter resulted primarily from the collection of accounts receivable in excess of additional sales, which is consistent with our seasonal pattern in prior years. The increase in prepaid expenses is primarily a result of prepaid royalties and our prepaid sample activity for the upcoming fall season. Cash flows from investing and financing activities were not significant. CRITICAL ACCOUNTING POLICIES Our discussion of results of operations and financial condition relies on our consolidated financial statements that are prepared based on certain critical accounting policies that require management to make judgments and estimates that are subject to varying degrees of uncertainty. We believe that investors need to be aware of these policies and how they impact our financial statements as a whole, as well as our related discussion and analysis presented herein. While we believe that these accounting policies are based on sound measurement criteria, actual future events can and often do result in outcomes that can be materially different from these estimates or forecasts. The accounting policies and related risks described in our Annual Report on Form 10-K for the year ended January 31, 2005 are those that depend most heavily on these judgments and estimates. As of April 30, 2005, there have been no material changes to any of these critical accounting policies. 11 EFFECTS OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS No. 123 (Revised 2004), "Share-based Payment" that will require us to expense costs related to share-based payment transactions with employees. With limited exceptions, SFAS No. 123(R) requires that the fair value of share-based payments to employees be expensed over the period service is received. SFAS No. 123(R) becomes effective for us on February 1, 2006. We believe the pro forma disclosures in Note 5 - Stock-Based Compensation to the accompanying financial statements provide an appropriate short-term indicator as to the level of expense that will be recognized in accordance with SFAS No. 123(R). In November 2004, the FASB issued SFAS No. 151, "Inventory Costs, an amendment of ARB No. 43, Chapter 4." SFAS No. 151 requires certain abnormal expenditures to be recognized as expenses in the current period. It also requires that the amount of fixed production overhead allocated to inventory be based on the normal capacity of the production facility. The standard is effective for fiscal years beginning on or after January 1, 2006. We do not expect SFAS No. 151 to have a material effect on the Company's Consolidated Financial Statements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There are no material changes to the disclosure made with respect to these matters in our Annual Report on Form 10-K for the year ended January 31, 2005. ITEM 4. CONTROLS AND PROCEDURES As of the end of the period covered by this report, our management, including the Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in alerting them to material information, on a timely basis, required to be included in our periodic SEC filings. During our last fiscal quarter, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 12 ITEM 6. EXHIBITS 31.1 Certification by Morris Goldfarb, Chief Executive Officer of G-III Apparel Group, Ltd., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, in connection with G-III Apparel Group, Ltd.'s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2005. 31.2 Certification by Wayne S. Miller, Chief Financial Officer of G-III Apparel Group, Ltd., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, in connection with G-III Apparel Group, Ltd.'s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2005. 32.1 Certification by Morris Goldfarb, Chief Executive Officer of G-III Apparel Group, Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with G-III Apparel Group, Ltd.'s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2005. 32.2 Certification by Wayne S. Miller, Chief Financial Officer of G-III Apparel Group, Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with G-III Apparel Group, Ltd.'s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2005. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. G-III APPAREL GROUP, LTD. (Registrant) Date: June 8, 2005 By: /s/ Morris Goldfarb ---------------------------------- Morris Goldfarb Chief Executive Officer Date: June 8, 2005 By: /s/ Wayne S. Miller --------------------------------- Wayne S. Miller Chief Financial Officer 14
EXHIBIT 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Morris Goldfarb, certify that: 1. I have reviewed this quarterly report on Form 10-Q of G-III Apparel Group, Ltd.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors: a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: June 8, 2005 /s/ Morris Goldfarb ------------------- Morris Goldfarb Chief Executive Officer
EXHIBIT 31.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Wayne S. Miller, certify that: 1. I have reviewed this quarterly report on Form 10-Q of G-III Apparel Group, Ltd.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared. b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting, and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant`s auditors and the audit committee of the registrant's board of directors: a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: June 8, 2005 /s/ Wayne S. Miller ------------------- Wayne S. Miller Chief Financial Officer
EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of G-III Apparel Group, Ltd. (the "Company") on Form 10-Q for the quarterly period ended April 30, 2005, as filed with the Securities and Exchange Commission (the "Report"), I, Morris Goldfarb, Chief Executive Officer of the Company, hereby certify that, to my knowledge, (a) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Morris Goldfarb ------------------- Morris Goldfarb Chief Executive Officer Date: June 8, 2005 A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of G-III Apparel Group, Ltd. (the "Company") on Form 10-Q for the quarterly period ended April 30, 2005, as filed with the Securities and Exchange Commission (the "Report"), I, Wayne Miller, Chief Financial Officer of the Company, hereby certify that, to my knowledge, (a) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Wayne S. Miller ------------------- Wayne S. Miller Chief Financial Officer Date: June 8, 2005 A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.