WRNC Warnaco Grp. (The) (MM)

The Warnaco Group, Inc. (NASDAQ: WRNC) today reported results for the second quarter ended June 30, 2007. Net revenues rose 4.4% over the prior year quarter Gross margin increased 320 basis points to 38.5% of net revenues Operating margin increased 100 basis points to 4.8% of net revenues Net income per diluted share increased by $0.23 to $0.30 �The results reported today reflect continued positive momentum in our business,� stated Joe Gromek, Warnaco�s President and Chief Executive Officer. �Our worldwide Calvin Klein revenues were up more than 15% over the prior year, driving the improved results at both our Sportswear and Intimate Apparel Groups and more than offsetting the Swimwear Group�s declines. International revenues for the quarter represented 42% of our total business and our direct-to-consumer revenues were 17%, and were the key drivers of the 320�basis point increase in gross margin along with improvements in Chaps. We are pleased with these results, which led to a 33% improvement in operating income and a significant improvement in diluted earnings per share.� Mr. Gromek concluded, �We remain focused on developing our global platform and growing our business worldwide. We believe this approach will continue to differentiate Warnaco within the apparel industry and provide increased value for all Warnaco stakeholders. As we enter the second half of the year, we continue to see organic revenue opportunities and believe fiscal 2007 is shaping up to be a year of substantial growth for our Company.� Second Quarter Highlights Total Company Net revenues rose 4.4% to $465.1 million compared to $445.6 million in the prior year period and gross profit margin increased to 38.5% compared to 35.3% in the prior year quarter. Selling, general and administrative expenses, as a percentage of net revenues, rose to 33.1% from 30.7% in the prior year quarter, driven by the mix in business (favoring international and direct to consumer), as well as increased marketing and other investments. Operating income rose 32.7% to $22.2 million, or 4.8% of net revenues, from $16.7 million, or 3.8% of net revenues, in the second quarter of fiscal 2006. Income from continuing operations was $13.7 million, or $0.29 per diluted share, compared to $5.5 million, or $0.12 per diluted share, in the prior year quarter and net income increased to $13.8 million, or $0.30 per diluted share, from $3.4 million, or $0.07 per diluted share, in the prior year quarter. The quarter benefited from $6.3 million, or approximately $0.10 per diluted share (after-tax), of other income related primarily to net gains on the current portion of intercompany loans denominated in currency other than that of the foreign subsidiaries� functional currency. In addition, this quarter�s results include approximately $3.3 million, or $0.05 per diluted share (after-tax), of restructuring charges related primarily to the previously announced initiatives undertaken in the Company�s Swimwear Group. The tax rate for the second quarter was 31.0%, due in part to the correction of errors in prior period income tax provisions in the amount of $1.6 million associated with the Company�s foreign subsidiaries. These errors were not material to any prior period. The Company continues to anticipate an effective tax rate for 2007 of approximately 29.0%. The translation of foreign currencies, primarily as a result of a stronger euro and Canadian dollar, increased second quarter 2007 net revenues, gross profit and operating income by approximately $8.8 million, $4.3�million and $0.6 million, respectively, compared to the second quarter of fiscal 2006. Sportswear Revenues for the Sportswear Group increased 15.1% to $192.9 million and operating income increased to $19.0 million, or 9.8% of Sportswear Group net revenues. The Calvin Klein jeans businesses exceeded the Company�s expectations at retail and wholesale and the Chaps business, reversing a $4.6 million operating loss in the prior year quarter, reported operating profit of $2.8 million. For the acquired Calvin Klein jeans businesses, net revenues grew 23.2% and operating profit was $3.1 million, or 3.9% of net revenues, up from a loss in last year�s second quarter. At Chaps, product improvement and lower dilution resulted in stronger gross profit margins, which drove the improvement in profitability. Intimate Apparel The Intimate Apparel Group�s revenues rose 6.1% to $160.5 million and operating income increased to $21.8 million, or 13.6% of Intimate Apparel Group net revenues. Global growth in the Company�s Calvin Klein Underwear business and continued momentum in Warner�s� drove the gains in both revenues and operating profit, offsetting declines at the Company�s other domestic intimate apparel brands and Lejaby�. Swimwear Swimwear Group revenues were $111.8 million, a decline of 11.8% from the prior year quarter, with an operating loss of $5.5 million. The Swimwear Group�s operating loss included $3.2 million of restructuring expenses related to the previously announced initiatives to improve profitability. Speedo�s core competitive and accessories businesses continued to perform well; however, softness in the mid-tier and mass channels negatively affected revenues and profitability. Within its designer swim division, the Company continues to evaluate opportunities to improve productivity and profitability, including an ongoing review of its manufacturing operations. Balance Sheet Cash and cash equivalents at June 30, 2007 were $163.1 million compared to $138.4 million at July 1, 2006. During the quarter, the Company used $30.5 million to repurchase 911,548 shares of the Company�s common stock. Inventories were $357.1 million at June 30, 2007, up from $311.0 million at July�1,�2006. The 14.8% increase is primarily related to the launch of Steel (the new Calvin Klein Underwear offering) as well as additional inventories to ensure appropriate service levels for the Company�s customers. Fiscal 2007 Outlook In light of the Company�s continued strong performance, for fiscal 2007, the Company now expects net revenues to grow 7% - 9% over fiscal 2006 levels and diluted earnings per share in the range of $1.90 - $2.00 (assuming minimal pension expense). Conference Call Information Stockholders and other persons are invited to listen to the second quarter earnings conference call scheduled for today, Tuesday, August 7, 2007, at 9:00 a.m. EDT. To participate in Warnaco�s conference call, dial (877) 692-2592 approximately five to ten minutes prior to the 9:00 a.m. start time. The call will also be broadcast live over the Internet at www.warnaco.com. An online archive will be available following the call. This press release was furnished to the SEC (www.sec.gov) and may also be accessed through the Company�s internet website: www.warnaco.com. ABOUT WARNACO The Warnaco Group, Inc., headquartered in New York, is a leading apparel company engaged in the business of designing, marketing and selling intimate apparel, menswear, jeanswear, swimwear, men's and women's sportswear and accessories under such owned and licensed brands as Warner's�, Olga�, Lejaby�, Body Nancy Ganz�, Speedo�, Anne Cole�, Cole of California� and Catalina� as well as Chaps� sportswear and denim, Ocean Pacific� swimwear, Nautica� swimwear, Michael Kors� swimwear and Calvin Klein� men's and women's underwear, men�s and women�s bridge apparel and accessories, men's and women's jeans and jeans accessories, junior women's and children's jeans and men�s and women's swimwear. FORWARD-LOOKING STATEMENTS The Warnaco Group, Inc. notes that this press release, the conference call scheduled for August 7, 2007, and certain other written, electronic and oral disclosure made by the Company from time to time, may contain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties and reflect, when made, the Company's estimates, objectives, projections, forecasts, plans, strategies, beliefs, intentions, opportunities and expectations. Actual results may differ materially from anticipated results or expectations and investors are cautioned not to place undue reliance on any forward-looking statements. Statements other than statements of historical fact are forward-looking statements. These forward-looking statements may be identified by, among other things, the use of forward-looking language, such as the words "believe," "anticipate," "estimate," \"expect," "intend," "may," "project," "scheduled to," "seek," "should," "will be," "will continue," "will likely result," or the negative of those terms, or other similar words and phrases or by discussions of intentions or strategies. The following factors, among others and in addition to those described in the Company's reports filed with the SEC (including, without limitation, those described under the headings "Risk Factors" and "Statement Regarding Forward-Looking Disclosure," as such disclosure may be modified or supplemented from time to time), could cause the Company's actual results to differ materially from those expressed in any forward-looking statements made by it: economic conditions that affect the apparel industry; the Company's failure to anticipate, identify or promptly react to changing trends, styles, or brand preferences; further declines in prices in the apparel industry; declining sales resulting from increased competition in the Company�s markets; increases in the prices of raw materials; events which result in difficulty in procuring or producing the Company's products on a cost-effective basis; the effect of laws and regulations, including those relating to labor, workplace and the environment; changing international trade regulation, including as it relates to the imposition or elimination of quotas on imports of textiles and apparel; the Company�s ability to protect its intellectual property or the costs incurred by the Company related thereto; the Company�s dependence on a limited number of customers; the effects of consolidation in the retail sector; the Company�s dependence on license agreements with third parties; the Company�s dependence on the reputation of its brand names, including, in particular, Calvin Klein; the Company�s exposure to conditions in overseas markets in connection with the Company�s foreign operations and the sourcing of products from foreign third-party vendors; the Company's foreign currency exposure; the Company�s history of insufficient disclosure controls and procedures and internal controls and restated financial statements; unanticipated future internal control deficiencies or weaknesses or ineffective disclosure controls and procedures; the effects of fluctuations in the value of investments of the Company�s pension plan; the sufficiency of cash to fund operations, including capital expenditures; the Company's ability to service its indebtedness, the effect of changes in interest rates on the Company's indebtedness that is subject to floating interest rates and the limitations imposed on the Company's operating and financial flexibility by the agreements governing the Company's indebtedness; the Company�s dependence on its senior management team and other key personnel; disruptions in the Company's operations caused by difficulties with the new systems infrastructure; the limitations on purchases under the Company's share repurchase program contained in the Company's debt instruments, the number of shares that the Company purchases under such program and the prices paid for such shares; the Company�s inability to achieve its strategic objectives, including gross margin, SG&A and operating profit goals, as a result of one or more of the factors described above or otherwise; the failure of acquired businesses to generate expected levels of revenues; the failure of the Company to successfully integrate such businesses with its existing businesses (and as a result, not achieving all or a substantial portion of the anticipated benefits of such acquisitions); and such acquired businesses being adversely affected, including by one or more of the factors described above and thereby failing to achieve anticipated revenues and earnings growth. Schedule 1 THE WARNACO GROUP, INC. � CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands, excluding per share amounts) � Second Quarter Second Quarter of Fiscal 2007 of Fiscal 2006 (Unaudited) (Unaudited) � � � Net revenues $ 465,118 $ 445,562 Cost of goods sold � 285,953 � � 288,385 � Gross profit 179,165 157,177 Selling, general and administrative expenses 153,727 136,572 Amortization of intangible assets 3,617 3,825 Pension expense (income) � (407 ) � 33 � Operating income (a) 22,228 16,747 Other income (6,323 ) (771 ) Interest expense 9,542 10,501 Interest income � (778 ) � (1,084 ) Income from continuing operations before provision for income taxes 19,787 8,101 Provision for income taxes � 6,129 � � 2,599 � Income from continuing operations 13,658 5,502 Income (loss) from discontinued operations, net of taxes � 119 � � (2,079 ) Net income $ 13,777 � $ 3,423 � � � � Basic income per common share: Income from continuing operations $ 0.30 $ 0.12 Income (loss) from discontinued operations � 0.01 � � (0.05 ) Net income $ 0.31 � $ 0.07 � � � Diluted income per common share: Income from continuing operations $ 0.29 $ 0.12 Income (loss) from discontinued operations � 0.01 � � (0.05 ) Net income $ 0.30 � $ 0.07 � � Weighted average number of shares outstanding used in computing income per common share: Basic � 45,146,246 � � 46,082,333 � � Diluted � 46,534,530 � � 46,935,529 � � (a) Includes restructuring charges of $3,319 for the Second Quarter of Fiscal 2007 primarily related to the closure of a goggle manufacturing facility located in Canada and the rationalization of the Company's swimwear workforce in Mexico and California. Schedule 2 THE WARNACO GROUP, INC. � CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands, excluding per share amounts) � Six Months Ended Six Months Ended June 30, 2007 July 1, 2006 (Unaudited) (Unaudited) � � � Net revenues (a) $ 1,012,315 $ 898,744 Cost of goods sold � 608,539 � � 569,284 � Gross profit 403,776 329,460 Selling, general and administrative expenses 311,759 268,762 Amortization of intangible assets 7,051 7,043 Pension expense (income) � (493 ) � 5 � Operating income (b), (c) 85,459 53,650 Other expense (income) (6,926 ) 1,079 Interest expense 18,897 18,882 Interest income � (1,075 ) � (1,521 ) Income from continuing operations before provision for income taxes 74,563 35,210 Provision for income taxes � 22,817 � � 11,516 � Income from continuing operations 51,746 23,694 Income (loss) from discontinued operations, net of taxes � 6 � � (6,389 ) Net income $ 51,752 � $ 17,305 � � � � Basic income per common share: Income from continuing operations $ 1.15 $ 0.51 Loss from discontinued operations � - � � (0.13 ) Net income $ 1.15 � $ 0.38 � � � Diluted income per common share: Income from continuing operations $ 1.11 $ 0.50 Loss from discontinued operations � - � � (0.13 ) Net income $ 1.11 � $ 0.37 � � Weighted average number of shares outstanding used in computing income per common share: Basic � 45,058,976 � � 46,114,751 � � Diluted � 46,482,664 � � 46,999,123 � � (a) � For the Six Months Ended June 30, 2007 and the Six Months Ended July 1, 2006, includes $201,796 (inclusive of $34,411 for January 2007) and $124,125, respectively, related to the international Calvin Klein jeans ("CKJEA") business which was acquired on January 31, 2006. (b) � For the Six Months Ended June 30, 2007 and the Six Months Ended July 1, 2006, includes $18,583 (inclusive of $4,145 for January 2007) and $5,039, respectively, related to the CKJEA business which was acquired on January 31, 2006. (c) � Includes restructuring charges of $4,161 for the Six Months Ended June 30, 2007 primarily related to the closure of a goggle manufacturing facility located in Canada and the rationalization of the Company's swimwear workforce in Mexico and California. Schedule 3 THE WARNACO GROUP, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in thousands) � � June 30, 2007 December 30, 2006 July 1, 2006 (Unaudited) (Unaudited) (Unaudited) � ASSETS Current assets: Cash and cash equivalents $ 163,054 $ 166,990 $ 138,372 Accounts receivable, net 278,570 294,993 278,748 Inventories 357,073 407,617 310,956 Assets of discontinued operations 4,532 5,657 - Other current assets � 57,830 � 72,943 � 75,763 Total current assets 861,059 948,200 803,839 � Property, plant and equipment, net 118,317 122,628 131,389 Intangible and other assets 604,058 610,147 609,543 � � � TOTAL ASSETS $ 1,583,434 $ 1,680,975 $ 1,544,771 � LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt $ 45,360 $ 108,739 $ 43,554 Accounts payable and accrued liabilities 275,279 336,883 253,765 Liabilities of discontinued operations 1,678 7,527 - Accrued income taxes payable � 15,892 � 41,174 � 43,863 Total current liabilities 338,209 494,323 341,182 Long-term debt 331,402 332,458 382,750 Other long-term liabilities 189,977 171,280 161,196 Total stockholders' equity � 723,846 � 682,914 � 659,643 � TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,583,434 $ 1,680,975 $ 1,544,771 Schedule 4 � THE WARNACO GROUP, INC. NET REVENUES AND OPERATING INCOME BY BUSINESS GROUP (Dollars in thousands) (Unaudited) � � � Net revenues: Second Quarter Second Quarter Increase / % of Fiscal 2007 of Fiscal 2006 (Decrease) Change Sportswear Group $ 192,890 $ 167,622 $ 25,268 15.1 % Intimate Apparel Group 160,475 151,262 9,213 6.1 % Swimwear Group � 111,753 � � 126,678 � � (14,925 ) -11.8 % Net revenues $ 465,118 � $ 445,562 � $ 19,556 � 4.4 % � � Second Quarter % of Group Second Quarter % of Group of Fiscal 2007 Net Revenues of Fiscal 2006 Net Revenues Operating income (loss): Sportswear Group (a), (b) $ 18,981 9.8 % $ 2,498 1.5 % Intimate Apparel Group (a), (b) 21,796 13.6 % 18,723 12.4 % Swimwear Group (a), (b) (5,506 ) -4.9 % 3,811 3.0 % Unallocated corporate expenses � (13,043 ) na � (8,285 ) na Operating income $ 22,228 � na $ 16,747 � na � Operating income as a percentage of total net revenues total net revenues � 4.8 % � 3.8 % � (a) Includes an allocation of shared services expenses as follows: � Second Quarter Second Quarter of Fiscal 2007 of Fiscal 2006 Sportswear Group $ 4,942 $ 5,194 Intimate Apparel Group $ 3,807 $ 3,335 Swimwear Group $ 6,432 $ 4,739 � (b) Includes restructuring charges as follows: � Second Quarter Second Quarter of Fiscal 2007 of Fiscal 2006 Sportswear Group $ 21 $ - Intimate Apparel Group 19 - Swimwear Group � 3,279 � � - � $ 3,319 � $ - � Schedule 5 � THE WARNACO GROUP, INC. NET REVENUES AND OPERATING INCOME BY BUSINESS GROUP (Dollars in thousands) (Unaudited) � � � Net revenues: Six Months Ended Six Months Ended Increase / % June 30, 2007 July 1, 2006 (Decrease) Change Sportswear Group (a) $ 428,321 $ 335,494 $ 92,827 27.7 % Intimate Apparel Group 335,451 302,221 33,230 11.0 % Swimwear Group � 248,543 � � 261,029 � � (12,486 ) -4.8 % Net revenues $ 1,012,315 � $ 898,744 � $ 113,571 � 12.6 % � (a) For the Six Months Ended June 30, 2007 and the Six Months Ended July 1, 2006, includes $201,796 (inclusive of $34,411 for January 2007) and $124,125, respectively, related to the CKJEA business which was acquired on January 31, 2006. � Six Months Ended % of Group Six Months Ended % of Group June 30, 2007 Net Revenues July 1, 2006 Net Revenues Operating income (loss): Sportswear Group (a), (b), (c) $ 46,595 10.9 % $ 10,440 3.1 % Intimate Apparel Group (a), (c) 51,271 15.3 % 35,166 11.6 % Swimwear Group (a), (c) 13,447 5.4 % 22,977 8.8 % Unallocated corporate expenses � (25,854 ) na � (14,933 ) na Operating income $ 85,459 � na $ 53,650 � na � Operating income as a percentage of total net revenues � 8.4 % � 6.0 % � (a) Includes an allocation of shared services expenses as follows: � Six Months Ended Six Months Ended June 30, 2007 July 1, 2006 Sportswear Group $ 9,881 $ 10,353 Intimate Apparel Group $ 7,617 $ 6,646 Swimwear Group $ 12,864 $ 9,357 � (b) For the Six Months Ended June 30, 2007 and the Six Months Ended July 1, 2006, includes $18,583 (inclusive of $4,145 for January 2007) and $5,039, respectively, related to the CKJEA business which was acquired on January 31, 2006. � (c) Includes restructuring charges as follows: � Six Months Ended Six Months Ended June 30, 2007 July 1, 2006 Sportswear Group $ 119 $ - Intimate Apparel Group 120 - Swimwear Group 3,945 - Unallocated corporate expenses � (23 ) � - � $ 4,161 � $ - � � Schedule 6 � THE WARNACO GROUP, INC. NET REVENUES AND OPERATING INCOME BY REGION & CHANNEL (Dollars in thousands) (Unaudited) � By Region: Net Revenues Second Quarter of Fiscal 2007 Second Quarter of Fiscal 2006 Increase / (Decrease) % Change United States $ 271,161 $ 270,199 $ 962 0.4 % Europe 100,587 89,585 11,002 12.3 % Asia 50,764 43,301 7,463 17.2 % Canada 27,312 26,103 1,209 4.6 % Central and South America � 15,294 � � 16,374 � � (1,080 ) -6.6 % Total $ 465,118 � $ 445,562 � $ 19,556 � 4.4 % � � Operating Income Second Quarter of Fiscal 2007 Second Quarter of Fiscal 2006 Increase / (Decrease) % Change United States $ 16,497 $ 8,738 $ 7,759 88.8 % Europe 5,822 1,397 4,425 316.8 % Asia 6,749 5,961 788 13.2 % Canada 4,180 6,045 (1,865 ) -30.9 % Central and South America 2,023 2,891 (868 ) -30.0 % Unallocated corporate expenses � (13,043 ) � (8,285 ) � (4,758 ) 57.4 % Total $ 22,228 � $ 16,747 � $ 5,481 � 32.7 % � � � By Channel: Net Revenues Second Quarter of Fiscal 2007 Second Quarter of Fiscal 2006 Increase % Change Wholesale $ 385,227 $ 382,396 $ 2,831 0.7 % Retail � 79,891 � � 63,166 � � 16,725 � 26.5 % Total $ 465,118 � $ 445,562 � $ 19,556 � 4.4 % � � Operating Income Second Quarter of Fiscal 2007 Second Quarter of Fiscal 2006 Increase / (Decrease) % Change Wholesale $ 20,134 $ 15,957 $ 4,177 26.2 % Retail 15,137 9,075 6,062 66.8 % Unallocated corporate expenses � (13,043 ) � (8,285 ) � (4,758 ) 57.4 % Total $ 22,228 � $ 16,747 � $ 5,481 � 32.7 % Schedule 7 � THE WARNACO GROUP, INC. NET REVENUES AND OPERATING INCOME BY REGION & CHANNEL (Dollars in thousands) (Unaudited) � By Region: Net Revenues Six Months Ended June 30, 2007 Six Months Ended July 1, 2006 Increase % Change � United States $ 554,104 $ 545,133 $ 8,971 1.6 % Europe (a) 259,853 188,056 71,797 38.2 % Asia (b) 113,502 84,422 29,080 34.4 % Canada 52,063 50,054 2,009 4.0 % Central and South America � 32,793 � � 31,079 � � 1,714 � 5.5 % Total $ 1,012,315 � $ 898,744 � $ 113,571 � 12.6 % � (a) Includes $106,463 (inclusive of $18,011 for January 2007) and $58,044 for the Six Months Ended June 30, 2007 and Six Months Ended July 1, 2006, respectively, related to the CKJEA business which was acquired on January 31, 2006. (b) Includes $95,333 (inclusive of $16,400 for January 2007) and $66,081 for the Six Months Ended June 30, 2007 and Six Months Ended July 1, 2006, respectively, related to the CKJEA business which was acquired on January 31, 2006. � Operating Income Six Months Ended June 30, 2007 Six Months Ended July 1, 2006 Increase / (Decrease) � % Change � United States $ 46,956 $ 26,396 $ 20,560 77.9 % Europe (a) 33,308 12,357 20,951 169.5 % Asia (b) 16,550 13,447 3,103 23.1 % Canada 9,093 11,612 (2,519 ) -21.7 % Central and South America 5,406 4,771 635 13.3 % Unallocated corporate expenses � (25,854 ) � (14,933 ) � (10,921 ) 73.1 % Total $ 85,459 � $ 53,650 � $ 31,809 � 59.3 % � (a) Includes income of $8,602 (inclusive of $1,358 for January 2007) and a loss of $3,086 for the Six Months Ended June 30, 2007 and Six Months Ended July 1, 2006, respectively, related to the CKJEA business which was acquired on January 31, 2006. (b) Includes $9,981 (inclusive of $2,787 for January 2007) and $8,125 for the Six Months Ended June 30, 2007 and Six Months Ended July 1, 2006, respectively, related to the CKJEA business which was acquired on January 31, 2006. � By Channel: Net Revenues Six Months Ended June 30, 2007 Six Months Ended July 1, 2006 Increase % Change � Wholesale (a) $ 854,162 $ 788,254 $ 65,908 8.4 % Retail (b) � 158,153 � � 110,490 � � 47,663 � 43.1 % Total $ 1,012,315 � $ 898,744 � $ 113,571 � 12.6 % � (a) Includes $106,877 (inclusive of $19,560 for January 2007) and $61,538 for the Six Months Ended June 30, 2007 and Six Months Ended July 1, 2006, respectively, related to the CKJEA business which was acquired on January 31, 2006. (b) Includes $94,919 (inclusive of $14,851 for January 2007) and $62,587 for the Six Months Ended June 30, 2007 and Six Months Ended July 1, 2006, respectively, related to the CKJEA business which was acquired on January 31, 2006. � Operating Income Six Months Ended June 30, 2007 Six Months Ended July 1, 2006 Increase / (Decrease) � % Change � Wholesale (a) $ 85,403 $ 53,195 $ 32,208 60.5 % Retail (b) 25,910 15,388 10,522 68.4 % Unallocated corporate expenses � (25,854 ) � (14,933 ) � (10,921 ) 73.1 % Total $ 85,459 � $ 53,650 � $ 31,809 � 59.3 % � (a) Includes income of $7,290 (inclusive of $2,057 for January 2007) and a loss of $1,208 for the Six Months Ended June 30, 2007 and Six Months Ended July 1, 2006, respectively, related to the CKJEA business which was acquired on January 31, 2006. (b) Includes $11,293 (inclusive of $2,088 for January 2007) and $6,247 for the Six Months Ended June 30, 2007 and Six Months Ended July 1, 2006, respectively, related to the CKJEA business which was acquired on January 31, 2006.