COLE KENNETH PRODUCTIONS INC

CIK:0000921691|SEC Filings

(Loss)/Earnings Per Share

6 Months Ended

Jun. 30, 2012

4. (Loss)/Earnings Per Share

Basic (loss)/earnings per share is calculated by dividing net (loss)/income by weighted-average common shares outstanding. Diluted (loss)/earnings per share is calculated similarly, except that it includes the dilutive effect of the assumed exercise of equity based awards under the Company's stock incentive plans. Dilutive securities, which include stock options and restricted stock, are determined under the treasury stock method by calculating the assumed proceeds available to repurchase stock using the weighted-average shares outstanding for the period. All stock options and restricted stock outstanding for the six months ended June 30, 2012 have been excluded from the diluted per share calculation as the impact would be antidilutive. Stock options and restricted stock outstanding as of June 30, 2011 in an aggregate amount of 2,194,000 have been excluded from the diluted per share calculation as the impact would be antidilutive. The shares used to calculate basic and diluted (loss)/earnings per common share consists of the following:

	Three Months Ended				Six Months Ended
	June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Weighted-average common shares outstanding - basic		18,364,000		18,296,000		18,285,000		18,268,000
Effect of dilutive securities:
Restricted stock and employee stock purchase plan		--		85,000		--		--
Stock options		--		200,000		--		--
Weighted-average common shares outstanding and common share equivalents - diluted		18,364,000		18,581,000		18,285,000		18,268,000

Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows used in operating activities
Net loss	$ (5,575)	$ (16,623)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	4,487	4,930
(Benefit from)/provision for doubtful accounts	(5)	131
Provision for deferred taxes	68
Unrealized (gain)/loss from investments	(24)	8
Writedown of investments	32	376
Stock-based compensation expense	1,944	1,900
Tax benefit from stock option exercises and restricted stock vested	(485)	(609)
Changes in operating assets and liabilities:
Decrease/(increase) in accounts receivable	11,866	(1,350)
Increase in inventories	(7,487)	(4,177)
(Increase)/decrease in prepaid expenses and other current assets	(15,770)	202
Decrease/(increase) in other assets	15,624	(8,707)
(Decrease)/increase in accounts payable and accrued expenses	(11,761)	3,296
Increase/(decrease) in deferred income and other current liabilities	12,569	(806)
Decrease in other long-term liabilities	(15,556)	(3,064)
Net cash used in operating activities	(10,073)	(24,493)
Cash flows used in investing activities
Acquisition of property and equipment	(1,487)	(1,517)
Deposit in restricted cash account		(15,000)
Proceeds from sale of investments		600
Purchase of intangible assets		(130)
Net cash used in investing activities	(1,487)	(16,047)
Cash flows provided by/(used in) financing activities
Shares surrendered by employees to pay taxes on restricted stock	(237)	(575)
Proceeds from exercise of stock options	2,788	571
Proceeds from employee stock purchase plan	36	50
Payments of financing costs	(75)
Payments of capital lease obligations	(40)
Acquisition of treasury shares		(1,664)
Dividends associated with vesting of restricted stock		(12)
Net cash provided by/(used in) financing activities	2,472	(1,630)
Effect of exchange rate changes on cash	14	6
Net decrease in cash	(9,074)	(42,164)
Cash and cash equivalents, beginning of period	58,043	83,395
Cash and cash equivalents, end of period	48,969	41,231
Cash paid during the period for:
Interest	8	21
Income taxes paid, net	$ 102	$ 387

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 48,969	$ 58,043
Accounts receivable, net	33,703	45,564
Inventories	49,736	42,249
Deferred compensation plans’ assets	15,087
Prepaid expenses and other current assets	4,165	3,518
Total current assets	151,660	149,374
Property and equipment, at cost, less accumulated depreciation and amortization	39,719	42,041
Other assets:
Intangible assets, net	9,250	9,493
Goodwill	4,576	4,576
Investments and other	4,249	4,686
Deferred compensation plans' assets	24,602	39,648
Total other assets	42,677	58,403
Total Assets	234,056	249,818
Current liabilities:
Accounts payable and accrued expenses	34,674	46,435
Deferred compensation plans’ liabilities	15,363
Other current liabilities	6,057	10,599
Deferred income	1,817	38
Total current liabilities	57,911	57,072
Accrued rent and other long-term liabilities	9,821	10,368
Deferred compensation plans' liabilities	23,503	38,512
Commitments and contingencies
Shareholders' Equity:
Series A Convertible Preferred Stock, par value $1.00, 1,000,000 shares authorized, none outstanding
Additional paid-in capital	119,474	114,946
Accumulated other comprehensive loss	(639)	(638)
Retained earnings	152,659	158,234
Stockholder Equity Excluding Treasury Stock	271,740	272,785
Class A Common Stock in treasury, at cost, 6,209,477 and 6,209,477 shares as of June 30, 2012 and December 31, 2011, respectively	(128,919)	(128,919)
Total shareholders' equity	142,821	143,866
Total Liabilities and Shareholders' Equity	234,056	249,818
Class Common Stock
Shareholders' Equity:
Common Stock,Value, Outstanding	166	163
Total shareholders' equity	166	163
Class B Convertible Common Stock
Shareholders' Equity:
Common Stock,Value, Outstanding	80	80
Total shareholders' equity	$ 80	$ 80