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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended April 30, 2011
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period fromto
 Commission File Number 0-18183
 G-III APPAREL GROUP, LTD.
  Delaware
    
    41-1590959(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 512 Seventh Avenue, New York, New York
    
    10018(Address of Principal Executive Offices)
    
    (Zip Code)
 (Registrants telephone number, including area code)
 
  þ o
  o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
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TABLE OF CONTENTS
 Page No.Part I FINANCIAL INFORMATIONItem 1. Financial Statements (Unaudited)Condensed Consolidated Balance Sheets -
April 30, 2011, April 30, 2010 and January 31, 2011
    
    
    3Condensed Consolidated Statements of Operations -
For the Three Months Ended April 30, 2011 and 2010
    
    
    4Condensed Consolidated Statements of Cash Flows -
For the Three Months Ended April 30, 2011 and 2010
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    9Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    15Item 4. Controls and Procedures
    
    
    15Part II OTHER INFORMATIONItem 1A. Risk Factors
    
    
    16Item 6. Exhibits
    
    
    16EX-31.1EX-31.2EX-32.1EX-32.2
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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 April 30,
    
    
    April 30,
    
    
    January 31,2011
    
    
    2010
    
    
    2011(Unaudited)
    
    
    (Unaudited)(In thousands, except share and per share amounts)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    12,701
    
    
    $
    17,869
    
    
    $
    10,045Accounts receivable, net of allowance for doubtful accounts
and sales discounts of $23,972, $28,184 and $32,174,
respectively
    
    
    128,218
    
    
    
    82,887
    
    
    
    138,341Inventories
    
    
    167,751
    
    
    
    100,006
    
    
    
    204,995Prepaid income taxes
    
    
    2,810
    
    
    
    
    
    
    
    Deferred income taxes
    
    
    12,016
    
    
    
    15,315
    
    
    
    12,016Prepaid expenses and other current assets
    
    
    17,037
    
    
    
    14,561
    
    
    
    13,390Total current assets
    
    
    340,533
    
    
    
    230,638
    
    
    
    378,787INVESTMENT IN JOINT VENTURE
    
    
    1,191
    
    
    
    
    
    
    
    40PROPERTY AND EQUIPMENT, NET
    
    
    24,323
    
    
    
    11,585
    
    
    
    22,556DEFERRED INCOME TAXES
    
    
    8,304
    
    
    
    10,672
    
    
    
    8,304OTHER ASSETS
    
    
    2,150
    
    
    
    1,893
    
    
    
    2,133INTANGIBLES, NET
    
    
    18,243
    
    
    
    19,482
    
    
    
    18,483GOODWILL
    
    
    26,100
    
    
    
    26,100
    
    
    
    26,100$
    420,844
    
    
    $
    300,370
    
    
    $
    456,403LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESNotes payable
    
    $
    35,000
    
    
    $
    17
    
    
    $
    Income taxes payable
    
    
    
    
    
    
    602
    
    
    
    41Accounts payable
    
    
    49,220
    
    
    
    37,502
    
    
    
    103,012Accrued expenses
    
    
    14,425
    
    
    
    17,172
    
    
    
    34,259Deferred income taxes
    
    
    1,981
    
    
    
    1,529
    
    
    
    1,981Total current liabilities
    
    
    100,626
    
    
    
    56,822
    
    
    
    139,293DEFERRED INCOME TAXES
    
    
    6,501
    
    
    
    6,495
    
    
    
    6,501OTHER NON-CURRENT LIABILITIES
    
    
    7,625
    
    
    
    1,877
    
    
    
    7,115TOTAL LIABILITIES
    
    
    114,752
    
    
    
    65,194
    
    
    
    152,909STOCKHOLDERS EQUITYPreferred stock; 1,000,000 shares authorized; No shares
issued and outstandingCommon stock  $.01 par value; 40,000,000 shares authorized;
20,188,889, 19,466,439 and 20,056,132 shares issued
    
    
    202
    
    
    
    195
    
    
    
    201Additional paid-in capital
    
    
    155,479
    
    
    
    142,104
    
    
    
    152,340Accumulated other comprehensive loss
    
    
    (41
    )
    
    
    (41
    )
    
    
    (19
    )Retained earnings
    
    
    151,422
    
    
    
    93,888
    
    
    
    151,942Common stock held in treasury  367,225 shares at cost
    
    
    (970
    )
    
    
    (970
    )
    
    
    (970
    )306,092
    
    
    
    235,176
    
    
    
    303,494$
    420,844
    
    
    $
    300,370
    
    
    $
    456,403
 The accompanying notes are an integral part of these statements.
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G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months Ended April 30,2011
    
    
    2010(Unaudited)(In thousands, except per share amounts)Net sales
    
    $
    196,871
    
    
    $
    154,278Cost of goods sold
    
    
    137,416
    
    
    
    105,241Gross profit
    
    
    59,455
    
    
    
    49,037Selling, general and administrative expenses
    
    
    57,925
    
    
    
    49,682Depreciation and amortization
    
    
    1,524
    
    
    
    1,280Operating profit (loss)
    
    
    6
    
    
    
    (1,925
    )Equity in loss of joint venture
    
    
    99
    
    
    
    Interest and financing charges, net
    
    
    759
    
    
    
    362Loss before income taxes
    
    
    (852
    )
    
    
    (2,287
    )Income tax benefit
    
    
    (332
    )
    
    
    (915
    )Net loss
    
    $
    (520
    )
    
    $
    (1,372
    )NET LOSS PER COMMON SHARE:Basic and Diluted:Net loss per common share
    
    $
    (0.03
    )
    
    $
    (0.07
    )Weighted average number of shares outstanding
    
    
    19,719
    
    
    
    18,903
 The accompanying notes are an integral part of these statements.
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G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Three Months Ended April 30,2011
    
    
    2010(Unaudited)(In thousands)Cash flows from operating activitiesNet loss
    
    $
    (520
    )
    
    $
    (1,372
    )Adjustments to reconcile net loss to net cash used by
operating activities:Depreciation and amortization
    
    
    1,524
    
    
    
    1,280Equity based compensation
    
    
    923
    
    
    
    661Tax benefit from exercise/vesting of equity awards
    
    
    290
    
    
    
    434Deferred financing charges
    
    
    162
    
    
    
    104Equity in loss of joint venture
    
    
    99
    
    
    
    Changes in operating assets and liabilities:Accounts receivable, net
    
    
    10,123
    
    
    
    (9,431
    )Inventories
    
    
    37,244
    
    
    
    19,871Income taxes, net
    
    
    (2,810
    )
    
    
    (10,272
    )Prepaid expenses and other current assets
    
    
    (3,751
    )
    
    
    (3,867
    )Other assets, net
    
    
    25
    
    
    
    (274
    )Accounts payable, accrued expenses and other liabilities
    
    
    (73,116
    )
    
    
    (24,339
    )Income taxes payable
    
    
    (41
    )
    
    
    Net cash used in operating activities
    
    
    (29,848
    )
    
    
    (27,205
    )Cash flows from investing activitiesInvestment in equity of joint venture
    
    
    (1,350
    )
    
    
    Capital expenditures
    
    
    (3,051
    )
    
    
    (4,982
    )Net cash used in investing activities
    
    
    (4,401
    )
    
    
    (4,982
    )Cash flows from financing activitiesProceeds from notes payable, net
    
    
    35,000
    
    
    
    Proceeds from exercise of equity awards
    
    
    494
    
    
    
    1,113Excess tax benefit from exercise/vesting of equity awards
    
    
    1,433
    
    
    
    2,135Net cash provided by financing activities
    
    
    36,927
    
    
    
    3,248Effect of exchange rate changes
    
    
    (22
    )
    
    
    (5
    )Net increase (decrease) in cash and cash equivalents
    
    
    2,656
    
    
    
    (28,944
    )Cash and cash equivalents at beginning of period
    
    
    10,045
    
    
    
    46,813Cash and cash equivalents at end of period
    
    $
    12,701
    
    
    $
    17,869Supplemental disclosures of cash flow information:Cash paid during the period for:Interest
    
    $
    562
    
    
    $
    258Income taxes
    
    
    785
    
    
    
    6,788
 The accompanying notes are an integral part of these statements.
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G-III APPAREL GROUP, LTD. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Basis of Presentation
    Note 2  Inventories
  April 30,
    
    
    April 30,
    
    
    January 31,2011
    
    
    2010
    
    
    2011(In thousands)Finished goods
    
    $
    159,180
    
    
    $
    93,531
    
    
    $
    199,292Raw materials and work-in-process
    
    
    8,571
    
    
    
    6,475
    
    
    
    5,703$
    167,751
    
    
    $
    100,006
    
    
    $
    204,995
 Note 3  Net Loss per Common Share
  Note 4  Notes Payable
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Note 5  Segments
  Three Months Ended April 30,2011
    
    
    2010Wholesale
    
    
    
    
    
    
    
    
    
    
    WholesaleWholesale
    
    
    Non-
    
    
    
    
    
    
    Wholesale
    
    
    Non-Licensed
    
    
    Licensed
    
    
    Retail
    
    
    Licensed
    
    
    Licensed
    
    
    RetailNet sales (1)
    
    $
    127,735
    
    
    $
    46,779
    
    
    $
    32,561
    
    
    $
    92,432
    
    
    $
    41,228
    
    
    $
    29,043Cost of goods sold (1)
    
    
    94,772
    
    
    
    34,904
    
    
    
    17,944
    
    
    
    68,271
    
    
    
    29,470
    
    
    
    15,925Gross profit
    
    
    32,963
    
    
    
    11,875
    
    
    
    14,617
    
    
    
    24,161
    
    
    
    11,758
    
    
    
    13,118Selling, general and
administrative
    
    
    32,688
    
    
    
    9,312
    
    
    
    15,925
    
    
    
    26,666
    
    
    
    9,078
    
    
    
    13,938Depreciation and amortization
    
    
    167
    
    
    
    943
    
    
    
    414
    
    
    
    154
    
    
    
    815
    
    
    
    311Operating profit (loss)
    
    $
    108
    
    
    $
    1,620
    
    
    $
    (1,722
    )
    
    $
    (2,659
    )
    
    $
    1,865
    
    
    $
    (1,131
    )
 
 (1)
    
    Net sales and cost of goods sold for the wholesale licensed and wholesale
non-licensed segments include an aggregate of $10.2 million and $8.4 million of
intersegment sales to the Companys retail operations for the three months ended April 30,
2011 and 2010, respectively.  Note 6  Fair Value Measurements
  Level 1:
    
    Observable inputs such as quoted prices in active markets;
 Level 2:
    
    Inputs, other than the quoted prices in active markets, that are
observable either directly or indirectly; and
 Level 3:
    
    Unobservable inputs in which there is little or no market data
and require the reporting entity to develop its own assumptions.
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Note 7  Equity Investment
  Note 8  Subsequent Events
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
   
    
    our dependence on licensed product;
    
    costs and uncertainties with respect to expansion of our product offerings;
    
    customer concentration;
    
    the impact of the current economic and credit environment on our customers, suppliers and vendors;
    
    the impact of the downturn in the global economy on consumer purchases of products that we offer for
sale;
    
    the performance of our products within the prevailing retail environment;
    
    customer acceptance of new products;
    
    our ability to make strategic acquisitions;
    
    possible disruption from acquisitions;
    
    consolidation of our retail customers;
    
    price, availability and quality of materials used in our products;
    
    highly seasonal nature of our business;
    
    dependence on existing management;
    
    the effects of competition in the markets in which we operate;
    
    risks of operating a retail business;
    
    need for additional financing;
    
    our ability to import products in a timely and cost effective manner;
    
    our reliance on foreign manufacturers;
    
    our intention to introduce new products or enter into new alliances;
    
    fluctuations in the price of our common stock; and
    
    potential effect on the price of our common stock if actual results are worse than financial forecasts.
  Overview
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www.andrewmarc.com
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Results of Operations
 Three months ended April 30, 2011 compared to three months ended April 30, 2010
        12




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Liquidity and Capital Resources
    Financing Agreement
   Cash from Operating Activities
   Cash from Investing Activities
  Cash from Financing Activities
  13




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Financing Needs
  Critical Accounting Policies
  14




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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  
 Item 4. Controls and Procedures.
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PART II  OTHER INFORMATION
 
 Item 1A. Risk Factors.
  
 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, 2011.31.2
    
    Certification by Neal S. Nackman, 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, 2011.32.1
    
    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,
2011.32.2
    
    Certification by Neal S. Nackman, 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,
2011.
 
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SIGNATURES
  G-III APPAREL GROUP, LTD.
(Registrant)Date: June 9, 2011
    By:
    /s/ Morris GoldfarbMorris GoldfarbChief Executive OfficerDate: June 9, 2011
    By:
    /s/ Neal S. NackmanNeal S. NackmanChief Financial Officer 17