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 check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The number of shares outstanding of the registrant’s common stock is ~~15,723,089~~15,567,000 (as of ~~December 2, 2015)~~May 31, 2016).


							April 30,			January 30,
	October 31, 2015			January 31, 2015			2016			2016
ASSETS

Current Assets:
Cash and cash equivalents	$	26,016		$	43,547		$	26,953		$	31,902
Accounts receivable, net		130,453			137,432			174,233			132,066
Inventories		145,301			183,734			153,673			182,750
Investments, at fair value		10,291			19,996			10,279			9,782
Deferred income taxes		694			725
Prepaid income taxes		2,743			6,384			—			1,818
Prepaid expenses and other current assets		7,892			7,124			7,707			8,461

Total current assets		323,390			398,942			372,845			366,779


Property and equipment, net		67,040			64,633			64,763			63,908
Other intangible assets, net		206,333			210,201			187,702			187,919
Goodwill		6,022			6,022
Deferred income tax								470			442
Other assets		3,879			5,191			2,848			2,927

TOTAL	$	606,664		$	684,989		$	628,628		$	621,975

LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	62,946		$	117,789		$	51,544		$	103,684
Accrued expenses and other liabilities		25,594			22,355			27,036			26,497
Accrued interest payable		536			4,045			601			1,521
Income taxes payable								2,651			—
Unearned revenues		4,143			4,856			4,292			4,213
Deferred pension obligation		8,514			8,930			12,189			12,107
Deferred income taxes		172			797

Total current liabilities		101,905			158,772			98,313			148,022


Senior subordinated notes payable, net		50,000			150,000			49,564			49,528
Senior credit facility		60,621			—			100,872			61,758
Real estate mortgages		21,517			22,109			21,112			21,318
Unearned revenues and other long-term liabilities		15,223			15,009			15,308			14,853
Deferred income taxes		40,290			37,082			35,449			35,015

Total long-term liabilities		187,651			224,200			222,305			182,472

Total liabilities		289,556			382,972			320,618			330,494


Commitment and contingencies

Equity:
Preferred stock $.01 par value; 5,000,000 shares authorized; no shares issued or outstanding		—			—			—			—
Common stock $.01 par value; 100,000,000 shares authorized; 15,789,519 shares issued and outstanding as of October 31, 2015 and 16,128,775 shares issued and outstanding as of January 31, 2015		158			161
Common stock $.01 par value; 100,000,000 shares authorized; 15,567,017 shares issued and outstanding as of April 30, 2016 and 15,409,310 shares issued and outstanding as of January 30, 2016								156			154
Additional paid-in-capital		149,418			161,336			144,477			144,025
Retained earnings		179,505			169,102			176,060			161,810
Accumulated other comprehensive loss		(11,973	)		(12,852	)		(12,683	)		(14,508	)

Total		317,108			317,747
Treasury stock at cost; no shares as of October 31, 2015 and 770,753 shares as of January 31, 2015		—			(15,730	)

Total equity		317,108			302,017			308,010			291,481

TOTAL	$	606,664		$	684,989		$	628,628		$	621,975


	Three Months Ended					Nine Months Ended					Three Months Ended
	October 31, 2015		November 1, 2014			October 31, 2015			November 1, 2014		April 30,		May 2,
											2016		2015
Revenues:
Net sales	$	196,447	$	203,267		$	659,342		$	649,193	$	250,875	$	258,257
Royalty income		8,992		8,173			25,810			23,093		10,419		8,157


Total revenues		205,439		211,440			685,152			672,286		261,294		266,414
Cost of sales		132,144		141,133			445,815			443,850		166,210		176,314

Gross profit		73,295		70,307			239,337			228,436		95,084		90,100

Operating expenses:
Selling, general and administrative expenses		64,869		64,477			202,731			201,045		69,934		69,608
Depreciation and amortization		3,383		3,008			10,151			8,976		3,467		3,322


Total operating expenses		68,252		67,485			212,882			210,021		73,401		72,930

(Loss) gain on sale of long-lived assets		—		—			(697	)		885
Loss on sale of long-lived assets												—		(697	)

Operating income		5,043		2,822			25,758			19,300		21,683		16,473
Costs of early extinguishment of debt		—		—			5,121			—

Interest expense		1,853		3,517			7,423			10,838		2,025		3,627

Net income (loss) before income taxes		3,190		(695	)		13,214			8,462
Income tax provision (benefit)		917		(258	)		2,811			2,740
Net income before income taxes												19,658		12,846
Income tax provision												5,408		3,435

Net income (loss)	$	2,273	$	(437	)	$	10,403		$	5,722
Net income											$	14,250	$	9,411


Net income (loss) per share:

Net income per share:
Basic	$	0.15	$	(0.03	)	$	0.70		$	0.38	$	0.96	$	0.64

Diluted	$	0.15	$	(0.03	)	$	0.68		$	0.38	$	0.95	$	0.62


Weighted average number of shares outstanding
Basic		15,148		14,954			14,948			14,881		14,810		14,649
Diluted		15,465		14,954			15,344			15,246		15,060		15,161


	Nine Months Ended						Three Months Ended
	October 31, 2015			November 1, 2014			April 30,			May 2,
							2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	10,403		$	5,722		$	14,250		$	9,411
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		10,632			9,541			3,565			3,482
Provision for bad debts		435			360			404			250
Amortization of debt issue cost		369			483			103			163
Amortization of premiums and discounts		124			320			14			54
Amortization of unrealized loss on pension liability		405			390
Costs on early extinguishment of debt		1,158			—
Amortization of unrealized (gain) loss on pension liability								155			135
Deferred income taxes		2,614			1,764			406			1,783
Loss (gain) on sale of long-lived assets		697			(885	)
Share-based compensation		3,641			4,424			1,336			1,049
Changes in operating assets and liabilities:
Loss on sale of long-lived assets								—			697
Changes in operating assets and liabilities, net of acquisitions
Accounts receivable, net		6,507			16,614			(41,451	)		(43,443	)
Inventories		38,380			50,420			30,226			30,553
Prepaid income taxes		3,606			44			1,878			908
Prepaid expenses and other current assets		(762	)		(538	)		1,194			773
Other assets		111			(313	)		16			92
Deferred pension obligation		(416	)		(2,221	)
Accounts payable and accrued expenses		(54,759	)		(50,297	)		(53,081	)		(42,726	)
Accrued interest payable		(3,509	)		(2,986	)		(920	)		(3,008	)
Income taxes payable								2,157			—
Unearned revenues and other liabilities		(998	)		991			667			104
Deferred pension obligation								81			55

Net cash provided by operating activities		18,638			33,833

Net cash used in operating activities								(39,000	)		(39,668	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(9,837	)		(12,525	)		(4,098	)		(3,319	)
Purchase of investments		(8,230	)		(27,331	)		(2,455	)		(2,640	)
Proceeds from investment maturities		17,845			19,844
Proceeds from investments maturities								1,965			8,580
Proceeds on sale of intangible assets		2,500			—			—			2,500
Proceeds from note receivable		250			250

Net cash provided by (used in) investing activities		2,528			(19,762	)

Net cash (used in) provided by investing activities								(4,588	)		5,121

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from senior credit facility		330,644			220,166			123,995			90,036
Payments on senior credit facility		(270,023	)		(228,328	)		(84,881	)		(80,366	)
Payments on senior subordinated notes		(100,000	)		—
Purchase of treasury stock		—			(2,222	)
Payments on real estate mortgages		(615	)		(593	)		(212	)		(206	)
Payments on capital leases		(137	)		(150	)		(64	)		(77	)
Deferred financing fees		(574	)		—			—			(569	)
Proceeds from exercise of stock options		1,408			360			—			114
Tax benefit from exercise of equity instruments		—			(134	)		—			396

Net cash used in financing activities		(39,297	)		(10,901	)

Net cash provided by financing activities								38,838			9,328

Effect of exchange rate changes on cash and cash equivalents		600			243			(199	)		408


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(17,531	)		3,413
NET DECREASE IN CASH AND CASH EQUIVALENTS								(4,949	)		(24,811	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		43,547			26,989			31,902			43,547

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	26,016		$	30,402		$	26,953		$	18,736


	Nine Months Ended				Three Months Ended
	October 31, 2015		November 1, 2014		April 30,		May 2,
					2016		2015
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest	$	10,439	$	13,021	$	2,828	$	6,418

Income taxes	$	507	$	616	$	150	$	57


NON-CASH FINANCING AND INVESTING ACTIVITIES:
Accrued purchases of property and equipment	$	1,684	$	17	$	39	$	—

Note receivable on sale of intangible asset	$	—	$	1,250

The accompanying unaudited condensed consolidated financial statements of Perry Ellis International, Inc. and subsidiaries (“Perry Ellis” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the requirements of the Securities and Exchange Commission on Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and changes in cash flows required by GAAP for annual financial statements. These condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended January ~~31, 2015,~~30, 2016, filed with the Securities and Exchange Commission on April 14, ~~2015.~~2016.

The information presented reflects all adjustments, which are in the opinion of management of a normal and recurring nature, necessary for a fair presentation of the interim periods. Results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the entire fiscal year.

In ~~April 2014, the FASB issued ASU No. 2014-08,~~~~“Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.”~~ ASU No. 2014-08 amends the definition of discontinued operations by limiting discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on an entity’s operations and financial results. The amendments require expanded disclosures for discontinued operations that would provide users of financial statements with more information about the assets, liabilities, revenues, and expenses of discontinued operations and disclosure of the pretax profit or loss of individually significant components of an entity that do not qualify for discontinued operations reporting. ASU No. 2014-08 is to be applied prospectively to all disposals (or classifications as held for sale) of components of an entity and all businesses or nonprofit activities that, on acquisition, are classified as held for sale that occur within fiscal years, and interim periods within those years, beginning after December 15, 2014. The adoption of ASU No. 2014-08 is not expected to have a material impact on the Company’s results of operations or the Company’s financial position.

In May 2014, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued ~~ASU~~Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers.” ASU No. 2014-09 clarifies the principles for recognizing revenue and develops a common revenue standard for GAAP and International Financial Reporting Standards (“IFRS”) that removes inconsistencies and weaknesses in revenue requirements, provides a more robust framework for addressing revenue issues, improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets, provides more useful information to users of financial statements through improved disclosure requirements and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. ASU No. 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Companies can choose to apply the ASU using either the full retrospective approach or a modified retrospective approach. The Company is currently evaluating both methods of adoption and the impact, if any, that the adoption of this ASU will have on the Company’s results of operations or the Company’s financial position.

In ~~June 2014, the FASB issued ASU No. 2014-12,~~“Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force).” ASU No. 2014-12 requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. ASU No. 2014-12 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. Earlier adoption is permitted. The amendments can be applied either prospectively to all awards granted or modified after the effective date or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards. The adoption of ASU No. 2014-12 is not expected to have a material impact on the Company’s results of operations or the Company’s financial position

~~In February 2015, the FASB issued ASU 2015-02, “~~~~Amendments to the Consolidation Analysis”~~, which change the guidance for evaluating whether to consolidate certain legal entities. Specifically, the amendments modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities. Additionally, the amendments eliminate the presumption that a general partner should consolidate a limited partnership, as well as affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. ASU 2015-02 is effective for periods beginning after December 15, 2015 and early adoption is permitted, including adoption during an interim period. Companies have an option of using either a full retrospective or modified retrospective adoption approach. The adoption of ASU No. 2015-02 is not expected to have a material impact on the Company’s results of operations or the Company’s financial position.

In March 2015, the FASB issued ASU 2015-03, “~~Interest -~~ Interest—Imputation of Interest (Subtopic 835-30)”, which is simplifying the Presentation of Debt Issuance Costs. The standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for interim periods beginning after December 15, 2015. The Company ~~expects~~adopted the ~~adoption of the~~accounting standard ~~will result~~ in the ~~presentation~~first quarter of fiscal 2017. Prior to the adoption, debt issuance costs ~~which are currently included in~~were classified as other ~~assets, in~~assets. This presentation change was applied retrospectively to the condensed consolidated balance ~~sheets,~~sheet and consequently, amounts related to debt issuance costs are presented as a direct deduction ~~from the carrying amount~~ of the ~~related~~corresponding debt ~~instrument.~~liability for all periods presented.

The effect on the condensed consolidating balance sheet as of January 30, 2016, as a result of this change in presentation, is a decrease of ($0.5) million in other assets, and a decrease of ($0.5) million in senior subordinated notes payable.

In July 2015, the FASB issued ASU 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory”, which requires inventory measured using any method other than last-in, first out (“LIFO”) or the retail inventory method to be subsequently measured at the lower of cost or net realizable value, rather than at the lower of cost or market. Under this ASU, subsequent measurement of inventory using the LIFO and retail inventory method is unchanged. ASU 2015-11 is effective prospectively for fiscal years, and for interim periods within those years, beginning after December 15, 2016. Early application is permitted. The adoption of ASU No. 2015-11 is not expected to have a material impact on the Company’s results of operations or the Company’s financial position.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”which requires an entity that is a lessee to recognize the assets and liabilities arising from leases on the balance sheet. This guidance also requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, using a modified retrospective approach, and early adoption is permitted. The Company is evaluating the effect that the adoption will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU No. 2016-07, “Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting,” which eliminates the requirement to retroactively adjust an investment that subsequently qualifies for equity method accounting (as a result of an increase in level of ownership interest or degree of influence) as if the equity method of accounting had been applied during all prior periods that the investment was held. The new standard requires that the investor add the cost of acquiring additional ownership interest in the investee to its current basis and prospectively adopt the equity method of accounting. Any unrealized gains or losses in an available-for-sale investment that subsequently qualifies as an equity method investment should be recognized in earnings at the date the investment qualifies as an equity method investment. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. This new guidance is not expected to have a material impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,” which is part of the FASB’s Simplification Initiative. The updated guidance simplifies the accounting for share-based payment transactions. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.

In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing”, which amends certain aspects of the FASB’s new revenue standard, ASU 2014-09, “Revenue from Contracts with Customers”,specifically the standard’s guidance on identifying performance obligations and the implementation guidance on licensing. The amendments clarify when promised goods or services are separately identifiable (i.e., distinct within the context of a contract), an important step in determining whether goods and services should be accounted for as separate performance obligations. In addition, the amendments allow entities to disregard goods or services that are immaterial in the context of a contract and provide an accounting policy election for accounting for certain shipping and handling activities. The amendments also clarify how an entity should evaluate the nature of its promise in granting a license of intellectual property (IP), which will determine whether the entity recognizes revenue over time or at a point in time. The amendments revise the guidance to address how entities should apply the exception for sales- and usage-based royalties to licenses of IP, recognize revenue for licenses that are not separate performance obligations and evaluate different types of license restrictions (e.g., time-based, geography-based). The new guidance’s effective date and transition provisions are aligned with the requirements in the new revenue standard, which is not yet effective. The Company is currently evaluating the impact, if any, that the adoption of this ASU will have on the Company’s results of operations or the Company’s financial position.


							April 30,			January 30,
	October 31, 2015			January 31, 2015			2016			2016
	(in thousands)						(in thousands)
Trade accounts	$	144,670		$	150,515		$	192,668		$	144,708
Royalties		7,331			6,662			3,986			5,892
Other receivables		1,054			1,034			1,841			1,769

Total		153,055			158,211			198,495			152,369
Less: allowances		(22,602	)		(20,779	)		(24,262	)		(20,303	)

Total	$	130,453		$	137,432		$	174,233		$	132,066

Inventories are stated at the lower of cost (weighted moving average cost) or market. Cost principally consists of the purchase price, customs, duties, freight, and commissions to buying agents.


	April 30,		January 30,
	2016		2016
	(in thousands)
Finished goods	$	153,581	$	182,414
Raw materials and in process		92		336

Total	$	153,673	$	182,750

The Company’s investments include ~~marketable securities and~~ certificates of deposit at ~~October 31, 2015~~April 30, 2016 and January ~~31, 2015. Marketable securities are classified as available-for-sale and consist of corporate bonds with maturity dates less than two years.~~30, 2016. Certificates of deposit are classified as available-for-sale with ~~$7.3~~$10.3 million with maturity dates within one ~~year. Investments are stated at fair value.~~year or less. The estimated fair value of the marketable securities is based on quoted prices in an active market (Level 1 fair value measures).

Investments consisted of the following as of ~~October 31, 2015:~~April 30, 2016:


	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value				Gross		Gross			Estimated
	(in thousands)									Cost		Unrealized Gains		Unrealized Losses			Fair Value
										(in thousands)
Marketable securities	$	3,030	$	1	$	—		$	3,031
Certificates of deposit		7,262		1		(3	)		7,260		10,281		0		(2	)		10,279

Total investments	$	10,292	$	2	$	(3	)	$	10,291	$	10,281	$	0	$	(2	)	$	10,279


	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value				Gross		Gross			Estimated
	(in thousands)									Cost		Unrealized Gains		Unrealized Losses			Fair Value
										(in thousands)
Marketable securities	$	12,247	$	9	$	—		$	12,256
Certificates of deposit		7,742		1		(3	)		7,740		9,791		0		(9	)		9,782

Total investments	$	19,989	$	10	$	(3	)	$	19,996	$	9,791	$	0	$	(9	)	$	9,782


	April 30,			January 30,
	2016			2016
	(in thousands)
Furniture, fixtures and equipment	$	86,384		$	84,634
Buildings and building improvements		19,916			19,462
Vehicles		556			523
Leasehold improvements		47,717			46,882
Land		9,430			9,430

Total		164,003			160,931
Less: accumulated depreciation and amortization		(99,240	)		(97,023	)

Total	$	64,763		$	63,908

The above table of property and equipment includes assets held under capital leases as of:


							April 30,			January 30,
	October 31, 2015			January 31, 2015			2016			2016
	(in thousands)						(in thousands)
Furniture, fixtures and equipment	$	810		$	888		$	810		$	810
Less: accumulated depreciation and amortization		(114	)		(791	)		(249	)		(182	)

Total	$	696		$	97		$	561		$	628

For the three months ended ~~October 31,~~April 30, 2016 and May 2, 2015, ~~and November 1, 2014,~~ depreciation and amortization expense relating to property and equipment amounted to ~~$3.4~~$3.3 million ~~and $3.1 million, respectively. For~~for each of the ~~nine months ended October 31, 2015 and November 1, 2014, depreciation and amortization expense relating to property and equipment amounted to $10.0 million and $8.9 million, respectively.~~periods. These amounts include amortization expense for leased property under capital leases.

Trademarks included in other intangible assets, net, are considered indefinite-lived assets and totaled ~~$202.3 million and $205.5~~$184.1 million at ~~October 31, 2015~~April 30, 2016 and January ~~31, 2015.~~30, 2016.

On March 19, 2015, the Company entered into an agreement to sell the intellectual property of its C&C California brand to a third party. The sales price was $2.5 million, which was collected during the first quarter of fiscal 2016. In connection with this transaction, the Company recorded a loss of ($0.7) million in the licensing segment.

On August 1, 2014, the Company entered into a sales agreement, in the amount of $1.3 million, for the sale of Australian, Fiji and New Zealand trademark rights with respect to Jantzen. Payments on the purchase price are due in five installments of $250,000 over a five year period. Interest on the purchase price that remains unpaid will accrue at a rate of 3.5% per annum calculated on an annual basis. The first payment was due within four days of the completion date and has been paid. The second payment has also been received. The remaining three payments are to be paid annually commencing on August 1, 2016 with the final payment to be made on August 1, 2018. As a result of this transaction, the Company recorded a gain of $0.9 million in the licensing segment.


							April 30,			January 30,
	October 31, 2015			January 31, 2015			2016			2016
	(in thousands)						(in thousands)
Customer lists	$	8,450		$	8,450		$	8,450		$	8,450
Less: accumulated amortization		(4,453	)		(3,782	)		(4,894	)		(4,677	)

Total	$	3,997		$	4,668		$	3,556		$	3,773

For the three months ended ~~October 31,~~April 30, 2016 and May 2, 2015, ~~and November 1, 2014,~~ amortization expense relating to customer lists amounted to ~~$0.3 million and~~approximately $0.2 million ~~respectively,~~ for each ~~period. For~~of the ~~nine months ended October 31, 2015 and November 1, 2014, amortization expense relating to customer lists amounted to $0.7 million, respectively, for each period.~~periods. Other intangible assets are amortized over their estimated useful lives of 10 years. Assuming no impairment, the table sets forth the estimated amortization expense for future periods based on recorded amounts as of October 31, 2015, will be approximately $0.9 million a year from fiscal 2016 through fiscal 2017, approximately $0.8 million a year from fiscal 2018 through fiscal 2019, approximately $0.7 million for fiscal 2020 and approximately $0.5 million for fiscal 2021.

Borrowings and availability under letter of credit facilities consisted of the following as of:

~~During the first quarter of fiscal 2016, a $15 million line of credit expired and was not renewed.~~

The Company’s accounting policy relating to advertising and related costs is to expense these costs in the period incurred. Advertising and related costs were approximately ~~$4.1~~$4.3 million and ~~$4.4~~$3.8 million for the three months ended ~~October 31,~~April 30, 2016 and May 2, 2015, ~~and November 1, 2014, respectively, and $11.1 million and $12.2 million for the nine months ended October 31, 2015 and November 1, 2014,~~ respectively, and are included in selling, general and administrative ~~expenses in the accompanying condensed consolidated statements of operations.~~expenses.

Basic net income ~~(loss)~~ per share is computed by dividing net income ~~(loss)~~ by the weighted average shares of outstanding common stock. The calculation of diluted net income ~~(loss)~~ per share is similar to basic earnings per share except that the denominator includes potentially dilutive common stock. The potentially dilutive common stock included in the Company’s computation of diluted net income ~~(loss)~~ per share includes the effects of stock options, stock appreciation rights (“SARS”), and unvested restricted shares as determined using the treasury stock method.

The following table sets forth the computation of basic and diluted income ~~(loss)~~ per share:


										Three Months Ended
	Three Months Ended					Nine Months Ended				April 30,		May 2,
	October 31, 2015		November 1, 2014			October 31, 2015		November 1, 2014		2016		2015
	(in thousands, except per share data)									(in thousands, except per share data)
Numerator:
Net income (loss)	$	2,273	$	(437	)	$	10,403	$	5,722

Net income										$	14,250	$	9,411
Denominator:
Basic-weighted average shares		15,148		14,954			14,948		14,881		14,810		14,649
Dilutive effect: equity awards		317		—			396		365		250		512

Diluted-weighted average shares		15,465		14,954			15,344		15,246		15,060		15,161

Basic income per share										$	0.96	$	0.64

Basic income (loss) per share	$	0.15	$	(0.03	)	$	0.70	$	0.38

Diluted income (loss) per share	$	0.15	$	(0.03	)	$	0.68	$	0.38

Diluted income per share										$	0.95	$	0.62

Antidilutive effect:⁽¹⁾		530		1,778			693		886		804		479

During the second quarter of fiscal 2016, the Company retired 770,753 shares of treasury stock recorded at a cost of approximately $15.7 million. Accordingly, during the second quarter of fiscal 2016, the Company reduced common stock and additional paid in capital by $7,000 and $15.7 million, respectively.

~~During the three months ended November 1, 2014, the Company repurchased shares of its common stock at a cost of $2.2 million.~~


	Unrealized			Foreign			Unrealized
	(Loss) Gain on			Currency Translation			(Loss) Gain on
	Pension Liability			Adjustments, Net			Investments			Total
	(in thousands)
Balance, January 31, 2015	$	(8,085	)	$	(4,774	)	$	7		$	(12,852	)
Other comprehensive income before reclassifications		—			938			(7	)		931
Amounts reclassified from accumulated other comprehensive income		135			—			—			135

Balance, May 2, 2015	$	(7,950	)	$	(3,836	)	$	—		$	(11,786	)

A summary of the impact on the condensed consolidated ~~statements~~statement of ~~operations~~income line items is as follows:


	Three Months Ended						Three Months Ended
	October 31, 2015		November 1, 2014				April 30, 2016		May 2, 2015
	(in thousands)						(in thousands)
Amortization of defined benefit pension items
Actuarial gains	$	135	$	130		Selling, general and administrative expenses	$	155	$	135	Selling, general and administrative expenses
Tax provision		—		(50	)	Income tax provision		—		—

Total, net of tax	$	135	$	80			$	155	$	135


	Nine Months Ended
	October 31, 2015		November 1, 2014
	(in thousands)
Amortization of defined benefit pension items
Actuarial gains	$	405	$	390		Selling, general and administrative expenses
Tax provision		—		(151	)	Income tax provision

Total, net of tax	$	405	$	239

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The Company’s U.S. federal income tax returns for fiscal 2011 through fiscal ~~2015~~2016 are open tax years. The Company’s state and foreign tax filings are subject to varying statutes of limitations. The Company’s unrecognized state tax benefits are related to open tax years from fiscal 2005 through fiscal ~~2016,~~2017, depending on each state’s particular statute of limitation. As of ~~October 31, 2015,~~April 30, 2016, the fiscal 2011, 2012 and 2013 U.S. federal income tax returns are under examination as well as various state, local, and foreign income tax returns, by various taxing authorities.

The Company has a ~~$1.0~~$1.1 million liability recorded for unrecognized tax benefits as of January ~~31, 2015,~~30, 2016, which includes interest and penalties of $0.2 million. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in income tax expense. All of the unrecognized tax benefits, if recognized, would affect the Company’s effective tax rate. During the three months ~~and nine months~~ ended ~~October 31, 2015,~~April 30, 2016, the total amount of unrecognized tax benefits ~~decreased~~increased by approximately ~~$81,000 and increased by $29,000, respectively.~~$50,000. The change to the total amount of the unrecognized tax ~~benefits~~benefit for the three ~~and nine~~ months ended ~~October 31, 2015~~April 30, 2016 included ~~a decrease~~an increase in interest and penalties of approximately ~~$29,000 and $2,000, respectively.~~$26,000.

The Company finalized amounts due to New York City as a corollary to the recently resolved New York State examination during the three months ended October 31, 2015. Within the next twelve months the accepted look back period associated with various state and local tax jurisdictions will close. This event could result in a reduction of the unrecognized tax benefit of up to approximately $47,000. The Company does not currently anticipate a resolution within the next twelve months for any of the ~~other~~ remaining unrecognized tax benefits as of ~~October 31, 2015.~~April 30, 2016. The statute of limitations related to the Company’s fiscal 2011, 2012 and 2013 U.S. federal tax years has been extended as part of the examination and ~~will~~is not be expected to lapse within the next twelve months.

~~During~~At the ~~fourth quarter~~end of fiscal ~~2015,~~2016, the Company ~~recognized~~maintained a $46.2 million valuation allowance ~~of $42.4 million~~ against ~~the~~its remaining domestic deferred tax ~~assets,~~asset; including, but not limited to, the federal net operating loss carryforward and the U.S. state net operating loss carryforwards, whose utilization is not restricted by factors beyond the Company’s control. The establishment of valuation allowances and development of projected annual effective tax rates requires significant judgment and is impacted by various estimates. Both positive and negative evidence, as well as the objectivity and verifiability of that evidence, is considered in determining the appropriateness of recording a valuation allowance on deferred tax assets. ~~While~~An accumulation of recent pretax losses is considered strong negative evidence in that evaluation. Although the Company recognized pretax earnings ~~through~~in the ~~nine months ended October 31, 2015,~~first quarter of fiscal 2017, by itself that does not represent sufficient positive evidence ofthat the deferred tax asset ~~realizability~~will be realized to warrant removing the valuation allowances established against the U.S. deferred tax assets. Deferred tax assets without valuation allowances remain in certain foreign tax jurisdictions, where supported by the evidence.

In 2002, the Company adopted the 2002 Stock Option Plan (the “2002 Plan”). The 2002 Plan was amended in 2003 to increase the number of shares reserved for issuance thereunder, among other changes. As amended, the 2002 Plan allowed the Company to grant Options to purchase up to an aggregate of 1,500,000 shares of the Company’s common stock. In 2005, the Company adopted the 2005 Long-Term Incentive Compensation Plan (the “2005 Plan”). The 2005 Plan allowed the Company to grant Options and other awards to purchase or receive up to an aggregate of 2,250,000 shares of the Company’s common stock, reduced by any awards outstanding under the 2002 Plan. On March 13, 2008, the Board of Directors unanimously adopted an amendment and restatement of the 2005 Plan that increased the number of shares available for grants by an additional 2,250,000 shares to an aggregate of 4,750,000 shares of common stock. On March 17, 2011, the Board of Directors unanimously adopted the second amendment and restatement of the 2005 Plan, which increased the number of shares available for grants by an additional 500,000 shares to an aggregate of 5,250,000 shares of common stock. On May 20, 2015, the Board of Directors unanimously adopted, subject to shareholder approval at the annual meeting, the Perry Ellis International, Inc. 2015 Long Term Incentive Compensation Plan, which is an amendment and restatement of the 2005 Plan (the “2015 Plan, and collectively with the 2002 and 2005 Plans, as amended, the “Stock Plan”). The amendment was approved by the shareholders at the Company’s 2015 annual meeting.

The 2015 Plan extends the existing term until July 17, 2025 as well as increases the number of shares of common stock reserved for issuance by an additional 1,000,000 shares to an aggregate of 6,250,000 shares.

The Stock Plan is designed to serve as an incentive for attracting and retaining qualified and competent employees, officers, directors, consultants, and other persons who provide services to the Company.

The 2015 Plan provides for the grants of Incentive Stock Options and Nonstatutory Stock Options. An Incentive Stock Option is an option to purchase common stock, which meets the requirements set forth under Section 422 of the Internal Revenue Code of 1986, as amended (“Section 422”). A Nonstatutory Stock Option is an option to purchase common stock, which meets the requirements of the 2015 Plan, but does not meet the definition of an “incentive stock option” under Section 422.

The 2015 Plan is administered by the Compensation Committee of the Board of Directors (the “Committee”), which is comprised of two or more non-employee directors. Subject to the terms of the 2015 Plan, the Committee determines the participants, the allotment of shares to participants, and the term of the options. The Committee also determines the exercise price and certain other terms of the options; provided, however that the per share exercise price of options granted under the 2015 Plan may not be less than the fair market value of the common stock on the date of grant, and in the case of an Incentive Stock Option granted to a 10% shareholder, the per share exercise price will not be less than 110% of the fair market value of the common stock on the date of grant.

Under the 2015 Plan, restricted stock awards are granted subject to restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose, or as otherwise provided in the 2015 Plan, covering a period of time specified by the Committee. The terms of any restricted stock awards granted under the 2015 Plan are set forth in a written award agreement, which contains provisions determined by the Committee that are not inconsistent with the 2015 Plan. The restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise, as the Committee may determine at the date of grant or thereafter. Except to the extent restricted under the terms of the 2015 Plan and any award agreement relating to a restricted stock award, a participant granted restricted stock shall have all of the rights of a shareholder, including the right to vote the restricted stock and the right to receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed by the Committee). During the ~~Restriction Period (as defined in the 2015 Plan), the restricted stock may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered by the participant.~~

~~During the second quarter of fiscal~~three months ended April 30, 2016, the Company granted an aggregate of ~~8,130 SARs, to be settled in~~86,173 shares of ~~common~~restricted stock to ~~two new directors. The SARs have an exercise price of $23.38 and generally~~certain key employees, which vest primarily over a three-year period, ~~and have a seven-year term,~~ at an estimated value ~~based on theBlack-Scholes~~ ~~Option Pricing Model,~~ of ~~approximately $0.1~~$1.6 million. This value is being recorded as compensation expense on a straight-line basis over the vesting period of the restricted stock.

During the ~~first and second quarters of fiscal~~three months ended April 30, 2016, the Company granted ~~an aggregate of 73,489 and 141,613 shares of~~performance based restricted stock to certain key ~~employees, which vest primarily over a three-year period,~~employees. Such stock generally vests 100% in April 2019, provided that each employee is still an employee of the Company on such date, and the Company has met certain performance criteria. A total of 184,044 shares of performance-based restricted stock were issued at an estimated value of ~~$1.8 million and $3.5 million, respectively. This value is being recorded as compensation expense on a straight-line basis over~~$1.9 million.

~~Also, during the second quarter of fiscal~~three months ended April 30, 2016, the Company awarded to five directors an aggregate of 12,840 shares of restricted stock. The restricted stock awarded vests primarily over a three-year period, at an estimated value of $0.3 million. This value is being recorded as compensation expense on a straight-line basis over the vesting period of the restricted stock.

~~In April 2015,~~ a total of ~~91,083~~159,862 shares of restricted stock vested, of which ~~27,325~~46,000 shares were withheld to cover the employees’ statutory income tax requirements. The estimated value of the withheld shares was ~~$0.7~~$0.9 million.

The Company has four reportable segments: Men’s Sportswear and Swim, Women’s Sportswear, Direct-to-Consumer and Licensing. The Men’s Sportswear and Swim and Women’s Sportswear segments derive revenues from the design, import and distribution of apparel to department stores and other retail outlets, principally throughout the United States. The Direct-to-Consumer segment derives its revenues from the sale of the Company’s branded and licensed products through ~~its~~the Company’s retail stores and e-commerce ~~platform.~~platforms. The Licensing segment derives its revenues from royalties associated ~~with~~from the use of the Company’s brand names, principally Perry Ellis, Original Penguin, Laundry, ~~by Shelly Segal,~~Gotcha, Pro Player, Farah, Ben Hogan, ~~Jantzen,~~ John Henry, ~~Gotcha, Farah, Pro Player~~Jantzen, and ~~Manhattan.~~Savane.

The Company allocates certain corporate selling, general and administrative expenses based primarily on the revenues generated by ~~each segment.~~the segments.


	Three Months Ended						Nine Months Ended						Three Months Ended
	October 31,			November 1,			October 31,			November 1,			April 30,			May 2,
	2015			2014			2015			2014			2016			2015
	(in thousands)												(in thousands)
Revenues:
Men’s Sportswear and Swim	$	141,512		$	145,732		$	490,453		$	487,906		$	197,925		$	198,453
Women’s Sportswear		33,421			36,721			102,126			97,448			32,489			38,823
Direct-to-Consumer		21,514			20,814			66,763			63,839			20,461			20,981
Licensing		8,992			8,173			25,810			23,093			10,419			8,157

Total revenues	$	205,439		$	211,440		$	685,152		$	672,286		$	261,294		$	266,414


Depreciation and amortization:
Men’s Sportswear and Swim	$	1,771		$	1,606		$	5,509		$	4,804		$	1,897		$	1,875
Women’s Sportswear		589			487			1,655			1,444			614			500
Direct-to-Consumer		976			880			2,851			2,615			896			904
Licensing		47			35			136			113			60			43

Total depreciation and amortization	$	3,383		$	3,008		$	10,151		$	8,976		$	3,467		$	3,322


Operating income:
Operating income (loss):
Men’s Sportswear and Swim	$	2,392		$	(2,091	)	$	14,544		$	7,163		$	16,942		$	11,330
Women’s Sportswear		(109	)		1,324			222			(249	)		(351	)		1,382
Direct-to-Consumer		(4,038	)		(2,937	)		(8,051	)		(5,915	)		(3,372	)		(1,866	)
Licensing⁽¹⁾		6,798			6,526			19,043			18,301			8,464			5,627

Total operating income	$	5,043		$	2,822		$	25,758		$	19,300		$	21,683		$	16,473
Costs on early extinguishment of debt		—			—			5,121			—
Total interest expense		1,853			3,517			7,423			10,838			2,025			3,627

Total net income (loss) before income taxes	$	3,190		$	(695	)	$	13,214		$	8,462
Total net income before income taxes													$	19,658		$	12,846

The Company sponsors a qualified pension plan. The following table provides the components of net benefit cost for the plan during the ~~three~~first quarter of fiscal 2017 and ~~nine months ended fiscal 2016 and 2015:~~2016:


	Three Months Ended						Nine Months Ended
	October 31,			November 1,			October 31,			November 1,			Three Months Ended
	2015			2014			2015			2014			April 30,			May 2,
	(in thousands)												2016			2015
													(in thousands)
Service cost	$	63		$	63		$	189		$	189		$	63		$	63
Interest cost		337			433			1,011			1,299			124			337
Expected return on plan assets		(658	)		(508	)		(1,974	)		(1,524	)		(87	)		(658	)
Amortization of net loss		135			130			405			390
Amortization of net gain														155			135

Net periodic benefit cost	$	(123	)	$	118		$	(369	)	$	354
Net periodic benefit cost (income)													$	255		$	(123	)

In March 2011, the Company issued $150 million 7 ⁷/ ₈% senior subordinated notes, due April 1, 2019. The proceeds of this offering were used to retire the $150 million 8 ⁷/ ₈% senior subordinated notes due September 15, 2013 and to repay a portion of the outstanding balance on the senior credit facility. The proceeds to the Company were $146.5 million yielding an effective interest rate of 8.0%.

On April 6, 2015, the Company elected to call for the partial redemption of $100 million of its $150 million 7 ⁷/ ₈% senior subordinated notes due 2019 and a notice of redemption was sent to all registered holders of the senior subordinated notes. The redemption terms provided for the payment of a redemption premium of 103.938% of the principal amount redeemed. On May 6, 2015, the Company completed the redemption of the $100 million of its senior subordinated notes. The Company incurred debt extinguishment costs of approximately $5.1 million in connection with the redemption, including the redemption premium as well as the write-off of note issuance costs. At April 30, 2016, the balance of the 7 ⁷/ ₈% senior subordinated notes totaled $49.6 million, net of debt issuance cost in the amount of $0.4 million. At January 30, 2016, the balance of the 7 ⁷/ ₈% senior subordinated notes totaled $49.5 million, net of debt issuance cost in the amount of $0.5 million.

Certain Covenants.The indenture governing the senior subordinated notes contains certain covenants which restrict the Company’s ability and the ability of its subsidiaries to, among other things, incur additional indebtedness in certain circumstances, pay dividends or make other distributions on, redeem or repurchase capital stock, make investments or other restricted payments, create liens on assets to secure debt, engage in transactions with affiliates, and effect a consolidation or merger. The Company is not aware of any non-compliance with any of its covenants in this indenture. The Company could be materially harmed if it violates any covenants because the indenture’s trustee could declare the outstanding notes, together with accrued interest, to be immediately due and payable, which it may not be able to satisfy. In addition, a violation could also constitute a cross-default under the senior credit facility, the letter of credit facilities and the real estate mortgages resulting in all of its debt obligations becoming immediately due and payable, which the Company may not be able to satisfy.

On April 22, 2015, the Company amended and restated its existing senior credit facility (the “Credit Facility”), with Wells Fargo Bank, National Association, as agent for the lenders, and Bank of America, N.A., as syndication agent. The Credit Facility provides a revolving credit facility of up to an aggregate amount of $200 million. The Credit Facility has been extended through April 30, 2020 (“Maturity Date”). In connection with this amendment and restatement, the Company paid fees in the amount of $0.6 million. These fees will be amortized over the term of the credit facility as interest expense. At ~~October 31, 2015, The~~April 30, 2016, the Company had outstanding borrowings of ~~$60.6~~$100.9 million under the Credit Facility. At January ~~31, 2015,~~30, 2016, the Company had no outstanding borrowings of $61.8 million, under the Credit Facility.

Certain Covenants. The Credit Facility contains certain financial and other covenants, which, among other things, require the Company to maintain a minimum fixed charge coverage ratio if availability falls below certain thresholds. The Company is not aware of any non-compliance with any of its covenants in this Credit Facility. These covenants may restrict its ability and the ability of its subsidiaries to, among other things, incur additional indebtedness and liens in certain circumstances, redeem or repurchase capital stock, make certain investments or sell assets. The Company may pay cash dividends subject to certain restrictions set forth in the covenants including, but not limited to, meeting a minimum excess availability threshold and no occurrence of a default. The Company could be materially harmed if it violates any covenants, as the lenders under the Credit Facility could declare all amounts outstanding, together with accrued interest, to be immediately due and payable. If the Company is unable to repay those amounts, the lenders could proceed against its assets and the assets of its subsidiaries that are borrowers or guarantors. In addition, a covenant violation that is not cured or waived by the lenders could also constitute a cross-default under certain of its other outstanding indebtedness, such as the indenture relating to its 7⁷⁄/ ₈% senior subordinated notes due April 1, 2019, its letter of credit facilities, or its real estate mortgage loans. ~~Such a~~A cross-default could result in all of its debt obligations becoming immediately due and payable, which it may not be able to satisfy. Additionally, the Credit Facility includes a subjective acceleration clause if a “material adverse change” in the Company’s business occurs. The Company believes that the likelihood of the lender exercising this right is remote.

Borrowing ~~Base~~Base.. Borrowings under the Credit Facility are limited to a borrowing base calculation, which generally restricts the outstanding balance to the sum of (a) 87.5% of eligible receivables plus (b) 87.5% of eligible foreign accounts up to $1.5 million plus (c) the lesser of (i) the inventory loan limit, which equals 80% of the maximum credit under the Credit Facility at the time, (ii) a maximum of 70.0% of eligible finished goods inventory with an inventory limit not to exceed $125 million, or 90.0% of the net recovery percentage (as defined in the Credit Facility) of eligible inventory.

Interest. Interest on the outstanding principal balance drawn under the Credit Facility accrues at the prime rate and at the rate quoted by the agent for Eurodollar loans. The margin adjusts quarterly, in a range of 0.50% to 1.00% for prime rate loans and 1.50% to 2.00% for Eurodollar loans, based on the previous quarterly average of excess availability plus excess cash on the last day of the previous quarter.

Security. As security for the indebtedness under the Credit Facility, the Company granted to the lenders a first priority security interest (subject to liens permitted under the Credit Facility to be senior thereto) in substantially all of its existing and future assets, including, without limitation, accounts receivable, inventory, deposit accounts, general intangibles, equipment and capital stock or membership interests, as the case may be, of certain subsidiaries, and real estate, but excluding its non-U.S. subsidiaries and all of its trademark portfolio.

~~In March 2011, the Company issued $150 million 7~~⁷⁄₈~~% senior subordinated notes, due April 1, 2019. The proceeds of this offering were used to retire the $150 million 8~~⁷⁄₈% senior subordinated notes due September 15, 2013 and to repay a portion of the outstanding balance on the senior credit facility. The proceeds to the Company were $146.5 million yielding an effective interest rate of 8.0%.

~~On April 6, 2015, the Company elected to call for the partial redemption of $100 million of its $150 million 7~~⁷⁄₈% senior subordinated notes due 2019 and a notice of redemption was sent to all registered holders of the senior subordinated notes. The redemption terms provided for the payment of a redemption premium of 103.938% of the principal amount redeemed. On May 6, 2015, the Company completed the redemption of the $100 million of its senior subordinated notes. The Company incurred debt extinguishment costs of approximately $5.1 million in connection with the redemption, including the redemption premium as well as the write-off of note issuance costs.

~~Certain Covenants.~~ The indenture governing the senior subordinated notes contains certain covenants which restrict the Company’s ability and the ability of its subsidiaries to, among other things, incur additional indebtedness in certain circumstances, pay dividends or make other distributions on, redeem or repurchase capital stock, make investments or other restricted payments, create liens on assets to secure debt, engage in transactions with affiliates, and effect a consolidation or merger. The Company is not aware of any non-compliance with any of its covenants in this indenture. The Company could be materially harmed if it violated any covenants because the indenture’s trustee could declare the outstanding notes, together with accrued interest, to be immediately due and payable, which the Company may not be able to satisfy. In addition, a violation could also constitute a cross-default under the senior credit facility, the letter of credit facilities and the real estate mortgages resulting in all of the Company’s debt obligations becoming immediately due and payable, which it may not be able to satisfy.

Accounts receivable, accounts payable, accrued interest payable and accrued expenses. The carrying amounts reported in the consolidated balance sheets approximate fair value due to theshort-term nature of these instruments.

Investments. (classified within Level 1 of the valuation hierarchy)—The carrying amounts of the available-for-sale investments are measured at fair value on a recurring basis in the consolidated balance sheets.

Real estate mortgages. (classified within Level 2 of the valuation hierarchy) - —The carrying amounts of the real estate mortgages were approximately ~~$23.0~~$21.9 and $22.0 million at ~~October 31, 2015~~April 30, 2016 and January ~~31, 2015,~~30, 2016, respectively. The carrying values of the real estate mortgages at ~~October 31, 2015~~April 30, 2016 and January ~~31, 2015,~~30, 2016, approximate their fair values since the interest rates approximate market.

Senior credit facility. ~~(classified within Level 2 of the valuation hierarchy) -~~ The carrying amount of the senior credit facility approximates fair value due to the frequent resets of its floating interest rate.

Senior subordinated notes payable. (classified within Level 1 of the valuation hierarchy) - —The carrying amounts of the 7⁷⁄_{/ 8}% senior subordinated notes payable were approximately ~~$50.0~~$49.6 million and ~~$150.0~~$49.5 million at ~~October 31, 2015~~April 30, 2016 and January ~~31, 2015, respectively.~~30, 2016. The fair value of the 7⁷⁄_{/ 8}% senior subordinated notes payable was approximately ~~$51.7~~$52.0 million and ~~$157.0~~$49.0 million as of ~~October 31, 2015~~April 30, 2016 and January ~~31, 2015,~~30, 2016, respectively, based on quoted market prices.

These estimated fair value amounts have been determined using available market information and appropriate valuation methods.

On April 20, 2016, the Company entered into an employment agreement with George Feldenkreis, the Company’s Executive Chairman. The term of the employment agreement shall continue until the death, or termination of the employment agreement by the Company or Mr. Feldenkreis. He will be paid a base salary of not less than $750,000 per year during the term of employment and, among other things, a lump sum payment of $1.0 million upon the termination of his employment in most circumstances. Additionally, he is ~~a defendant~~entitled to participate in ~~Joseph T. Cook v. Perry Ellis International, Inc. and~~the Company’s incentive compensation plans.

On April 20, 2016, the Company entered into an employment agreement with Oscar Feldenkreis, ~~Case No. 15-cv-08290 (U.S. District Court, Southern District~~the Company’s Vice Chairman of ~~New York), involving claims~~the Board of ~~unlawful~~Directors, Chief Executive Officer and President. The term of the employment ~~practices, including unlawful discrimination and retaliation, which was filed~~agreement ends on ~~October 21, 2015 by an employee~~February 2, 2019. Pursuant to the employment agreement he will be paid a base salary of not less than $1,350,000 per year during the term of his employment with the Company. Additionally, he is entitled to participate in the ~~New York offices. The plaintiff seeks an unspecified amount of damages. The Company believes that the allegations are without merit and intends to vigorously defend against them.~~Company’s incentive compensation plans.

The Company and several of its subsidiaries (the “Guarantors”) have fully and unconditionally guaranteed the senior subordinated notes payable on a joint and several basis. These guarantees are subject to release in limited circumstances (only upon the occurrence of certain customary conditions). The following are condensed consolidating financial statements, which present, in separate columns: Perry Ellis International, Inc., (Parent Only), the Guarantors on a combined, or where appropriate, consolidated basis, and the Non-Guarantors on a combined, or where appropriate, consolidated basis. Additional columns present eliminating adjustments and consolidated totals as of ~~October 31, 2015~~April 30, 2016 and January ~~31, 2015~~30, 2016 and for the three ~~and nine~~ months ended ~~October 31, 2015~~April 30, 2016 and ~~November 1, 2014.~~May 2, 2015. The combined Guarantors are 100% owned subsidiaries of Perry Ellis International, Inc., and have fully and unconditionally guaranteed the senior subordinated notes payable on a joint and several basis.


	Parent Only		Guarantors		Non- Guarantors		Eliminations			Consolidated		Parent Only		Guarantors		Non-Guarantors		Eliminations			Consolidated
ASSETS

Current Assets:
Cash and cash equivalents	$	—	$	2,532	$	23,484	$	—		$	26,016	$	—	$	3,399	$	23,554	$	—		$	26,953
Accounts receivable, net		—		104,425		26,028		—			130,453		—		146,714		27,519		—			174,233
Intercompany receivable, net		79,334		—		—		(79,334	)		—		82,603		—		—		(82,603	)		—
Inventories		—		123,145		22,156		—			145,301		—		129,936		23,737		—			153,673
Investment, at fair value		—		—		10,291		—			10,291		—		—		10,279		—			10,279
Deferred income taxes		—		—		694		—			694
Prepaid income taxes		2,726		—		—		17			2,743
Prepaid expenses and other current assets		—		6,766		1,126		—			7,892		—		6,977		730		—			7,707

Total current assets		82,060		236,868		83,779		(79,317	)		323,390		82,603		287,026		85,819		(82,603	)		372,845

Property and equipment, net		—		62,750		4,290		—			67,040		—		61,980		2,783		—			64,763
Other intangible assets, net		—		172,695		33,638		—			206,333		—		155,370		32,332		—			187,702
Goodwill		—		6,022		—		—			6,022
Deferred income taxes													—		—		470		—			470
Investment in subsidiaries		285,117		—		—		(285,117	)		—		278,966		—		—		(278,966	)		—
Other assets		467		2,281		1,131		—			3,879		—		2,043		805		—			2,848


TOTAL	$	367,644	$	480,616	$	122,838	$	(364,434	)	$	606,664	$	361,569	$	506,419	$	122,209	$	(361,569	)	$	628,628


LIABILITIES AND EQUITY

Current Liabilities:
Accounts payable	$	—	$	56,192	$	6,754	$	—		$	62,946	$	—	$	46,847	$	4,697	$	—		$	51,544
Accrued expenses and other liabilities		—		20,865		4,729		—			25,594		—		22,275		4,761		—			27,036
Accrued interest payable		536		—		—		—			536		601		—		—		—			601
Income taxes payable		—		451		1,228		(1,679	)		—		3,394		190		763		(1,696	)		2,651
Unearned revenues		—		2,725		1,418		—			4,143		—		3,141		1,151		—			4,292
Deferred pension obligation		—		8,433		81		—			8,514		—		12,124		65		—			12,189
Deferred income taxes		—		172		—		—			172
Intercompany payable, net		—		62,709		21,528		(84,237	)		—		—		68,566		20,116		(88,682	)		—

Total current liabilities		536		151,547		35,738		(85,916	)		101,905		3,995		153,143		31,553		(90,378	)		98,313


Senior subordinated notes payable, net		50,000		—		—		—			50,000		49,564		—		—		—			49,564
Senior credit facility		—		60,621		—		—			60,621		—		100,872		—		—			100,872
Real estate mortgages		—		21,517		—		—			21,517		—		21,112		—		—			21,112
Unearned revenues and other long-term liabilities		—		14,749		474		—			15,223		—		15,073		235		—			15,308
Deferred income taxes		—		38,591		3		1,696			40,290		—		33,753		—		1,696			35,449

Total long-term liabilities		50,000		135,478		477		1,696			187,651		49,564		170,810		235		1,696			222,305


Total liabilities		50,536		287,025		36,215		(84,220	)		289,556		53,559		323,953		31,788		(88,682	)		320,618


Total equity		317,108		193,591		86,623		(280,214	)		317,108		308,010		182,466		90,421		(272,887	)		308,010


TOTAL	$	367,644	$	480,616	$	122,838	$	(364,434	)	$	606,664	$	361,569	$	506,419	$	122,209	$	(361,569	)	$	628,628


	Parent Only			Guarantors		Non- Guarantors		Eliminations			Consolidated		Parent Only		Guarantors		Non-Guarantors		Eliminations			Consolidated
ASSETS

Current Assets:
Cash and cash equivalents	$	—		$	30,055	$	13,492	$	—		$	43,547	$	—	$	775	$	31,127	$	—		$	31,902
Accounts receivable, net		—			114,325		23,107		—			137,432		—		106,018		26,048		—			132,066
Intercompany receivable, net		174,264			—		—		(174,264	)		—		74,091		—		—		(74,091	)		—
Inventories		—			156,107		27,627		—			183,734		—		155,703		27,047		—			182,750
Investments, at fair value		—			—		19,996		—			19,996
Investment, at fair value														—		—		9,782		—			9,782
Deferred income taxes		—			—		725		—			725		—		—		—		—			—
Prepaid income taxes		5,275			—		314		795			6,384		1,017		—		—		801			1,818
Prepaid expenses and other current assets		—			6,159		965		—			7,124		—		7,426		1,035		—			8,461

Total current assets		179,539			306,646		86,226		(173,469	)		398,942		75,108		269,922		95,039		(73,290	)		366,779

Property and equipment, net		—			60,216		4,417		—			64,633		—		61,260		2,648		—			63,908
Other intangible assets, net		—			176,563		33,638		—			210,201		—		155,587		32,332		—			187,919
Goodwill		—			6,022		—		—			6,022
Investment in subsidiaries		274,714			—		—		(274,714	)		—		267,422		—		—		(267,422	)		—
Deferred income taxes														—		—		442		—			442
Other assets		1,809	��		1,926		1,456		—			5,191		—		2,150		777		—			2,927


TOTAL	$	456,062		$	551,373	$	125,737	$	(448,183	)	$	684,989	$	342,530	$	488,919	$	131,238	$	(340,712	)	$	621,975


LIABILITIES AND EQUITY

Current Liabilities:
Accounts payable	$	—		$	105,046	$	12,743	$	—		$	117,789	$	—	$	89,961	$	13,723	$	—		$	103,684
Accrued expenses and other liabilities		—			17,945		4,410		—			22,355		—		21,524		4,973		—			26,497
Accrued interest payable		4,045			—		—		—			4,045		1,521		—		—		—			1,521
Income taxes payable		—			901		—		(901	)		—		—		623		272		(895	)		—
Unearned revenues		—			3,023		1,833		—			4,856		—		2,952		1,261		—			4,213
Deferred pension obligation		—			8,878		52		—			8,930		—		12,025		82		—			12,107
Deferred income taxes		—			797		—		—			797
Intercompany payable, net		—			156,438		23,211		(179,649	)		—		—		60,384		21,449		(81,833	)		—

Total current liabilities		4,045			293,028		42,249		(180,550	)		158,772		1,521		187,469		41,760		(82,728	)		148,022


Senior subordinated notes payable, net		150,000			—		—		—			150,000		49,528		—		—		—			49,528
Senior credit facility														—		61,758		—		—			61,758
Real estate mortgages		—			22,109		—		—			22,109		—		21,318		—		—			21,318
Unearned revenues and other long-term liabilities		—			13,620		1,389		—			15,009		—		14,608		245		—			14,853
Deferred income taxes		—			35,383		3		1,696			37,082		—		33,319		—		1,696			35,015

Total long-term liabilities		150,000			71,112		1,392		1,696			224,200		49,528		131,003		245		1,696			182,472


Total liabilities		154,045			364,140		43,641		(178,854	)		382,972		51,049		318,472		42,005		(81,032	)		330,494

Total equity		302,017			187,233		82,096		(269,329	)		302,017		291,481		170,447		89,233		(259,680	)		291,481

TOTAL	$	456,062		$	551,373	$	125,737	$	(448,183	)	$	684,989	$	342,530	$	488,919	$	131,238	$	(340,712	)	$	621,975

~~CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME (UNAUDITED)~~


					Non-
	Parent Only		Guarantors		Guarantors			Eliminations			Consolidated
Revenues:
Net sales	$	—	$	224,905	$	25,970		$	—		$	250,875
Royalty income		—		7,214		3,205			—			10,419

Total revenues		—		232,119		29,175			—			261,294
Cost of sales		—		148,976		17,234			—			166,210

Gross profit		—		83,143		11,941			—			95,084
Operating expenses:
Selling, general and administrative expenses		—		61,433		8,501			—			69,934
Depreciation and amortization		—		3,191		276			—			3,467

Total operating expenses		—		64,624		8,777			—			73,401

Operating income		—		18,519		3,164			—			21,683
Interest expense		—		2,034		(9	)		—			2,025

Net income before income taxes		—		16,485		3,173			—			19,658
Income tax provision		—		4,466		942			—			5,408

Equity in earnings of subsidiaries, net		14,250		—		—			(14,250	)		—

Net income		14,250		12,019		2,231			(14,250	)		14,250

Other comprehensive income		1,825		155		1,670			(1,825	)		1,825

Comprehensive income	$	16,075	$	12,174	$	3,901		$	(16,075	)	$	16,075


	Parent Only			Guarantors		Non- Guarantors			Eliminations			Consolidated								Non-
															Parent Only		Guarantors			Guarantors		Eliminations			Consolidated
Revenues:
Net sales	$	—		$	581,632	$	67,561		$	—		$	649,193		$	—	$	232,279		$	25,978	$	—		$	258,257
Royalty income		—			14,085		9,008			—			23,093			—		4,912			3,245		—			8,157

Total revenues		—			595,717		76,569			—			672,286			—		237,191			29,223		—			266,414
Cost of sales		—			400,997		42,853			—			443,850			—		160,251			16,063		—			176,314

Gross profit		—			194,720		33,716			—			228,436			—		76,940			13,160		—			90,100
Operating expenses:
Selling, general and administrative expenses		—			173,069		27,976			—			201,045			—		59,845			9,763		—			69,608
Depreciation and amortization		—			8,256		720			—			8,976			—		3,024			298		—			3,322

Total operating expenses		—			181,325		28,696			—			210,021			—		62,869			10,061		—			72,930

Gain on sale of long-lived assets		—			—		885			—			885
Loss on sale of long-lived assets																—		(697	)		—		—			(697	)

Operating income		—			13,395		5,905			—			19,300			—		13,374			3,099		—			16,473
Interest expense		—			10,831		7			—			10,838			—		3,567			60		—			3,627

Net income before income taxes		—			2,564		5,898			—			8,462			—		9,807			3,039		—			12,846
Income tax provision		—			1,281		1,459			—			2,740			—		3,081			354		—			3,435

Equity in earnings of subsidiaries, net		5,722			—		—			(5,722	)		—			9,411		—			—		(9,411	)		—

Net income		5,722			1,283		4,439			(5,722	)		5,722			9,411		6,726			2,685		(9,411	)		9,411

Other comprehensive (loss) income		(323	)		239		(562	)		323			(323	)
Other comprehensive income																1,066		135			931		(1,066	)		1,066

Comprehensive income	$	5,399		$	1,522	$	3,877		$	(5,399	)	$	5,399		$	10,477	$	6,861		$	3,616	$	(10,477	)	$	10,477


	Parent Only			Guarantors			Non- Guarantors			Eliminations			Consolidated										Non-
NET CASH PROVIDED BY OPERATING ACTIVITIES:	$	382		$	15,691		$	2,565		$	—		$	18,638
																Parent Only			Guarantors				Guarantors			Eliminations			Consolidated
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:																$	6,192		$	(40,153	)		$	(7,745	)	$	2,706		$	(39,000	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		—			(8,913	)		(924	)		—			(9,837	)		—			(3,742	)			(356	)		—			(4,098	)
Purchase of investments		—			—			(8,230	)		—			(8,230	)		—			—				(2,455	)		—			(2,455	)
Proceeds from investment maturities		—			—			17,845			—			17,845
Proceeds on sale of intangible assets		—			2,500			—			—			2,500
Proceeds from note receivable		—			—			250			—			250
Proceeds from investments maturities																	—			—				1,965			—			1,965
Intercompany transactions		97,610			—			—			(97,610	)		—			(5,993	)		—				—			5,993			—

Net cash provided by (used in) investing activities		97,610			(6,413	)		8,941			(97,610	)		2,528

Net cash used in investing activities																	(5,993	)		(3,742	)			(846	)		5,993			(4,588	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on senior subordinated notes		(100,000	)		—			—			—			(100,000	)
Borrowings from senior credit facility		—			330,644			—			—			330,644			—			123,995				—			—			123,995
Payments on senior credit facility		—			(270,023	)		—			—			(270,023	)		—			(84,881	)			—			—			(84,881	)
Payments on real estate mortgages		—			(615	)		—			—			(615	)		—			(212	)			—			—			(212	)
Payments on capital leases		—			(137	)		—			—			(137	)		—			(64	)			—			—			(64	)
Deferred financing fees		—			(574	)		—			—			(574	)
Proceeds from exercise of stock options		1,408			—			—			—			1,408
Dividends paid to stockholder																	—			—				2,706			(2,706	)		—
Intercompany transactions		—			(96,096	)		(2,114	)		98,210			—			—			7,681		��		(1,489	)		(6,192	)		—

Net cash used in financing activities		(98,592	)		(36,801	)		(2,114	)		98,210			(39,297	)
Net cash provided by financing activities																	—			46,519				1,217			(8,898	)		38,838
Effect of exchange rate changes on cash and cash equivalents		600			—			600			(600	)		600			(199	)		—				(199	)		199			(199	)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		—			(27,523	)		9,992			—			(17,531	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS																	—			2,624				(7,573	)		—			(4,949	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		—			30,055			13,492			—			43,547			—			775				31,127			—			31,902

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	—		$	2,532		$	23,484			—		$	26,016		$	—		$	3,399			$	23,554		$	—		$	26,953

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context otherwise requires, all references to “Perry Ellis,” the “Company,” “we,” “us” or “our” include Perry Ellis International, Inc. and its subsidiaries. This management’s discussion and analysis should be read in conjunction with our Annual Report on Form 10-K for the year ended January ~~31, 2015,~~30, 2016, filed with the Securities and Exchange Commission on April 14, ~~2015.~~2016.

We caution readers that this report includes “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations rather than historical facts and they are indicated by words or phrases such as “anticipate,” “believe,” “budget,” “contemplate,” “continue,” “could,” “envision,” “estimate,” “expect,” “guidance,” “indicate,” “intend,” “may,” “might,” “plan,” “possibly,” “potential,” “predict,” “probably,” “pro-forma,” “project,” “seek,” “should,” “target,” or “will” or the negative thereof or other variations thereon and similar words or phrases or comparable terminology. Such forward-looking statements include, but are not limited to, statements regarding Perry Ellis’ strategic operating review, growth initiatives and internal operating improvements intended to drive revenues and enhance profitability, the implementation of Perry Ellis’ profitability improvement plan and Perry Ellis’ plans to exit underperforming, low growth brands and businesses. We have based such forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, many of which are beyond our control. These and other important factors may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Some of the factors that could affect our financial performance, cause actual results to differ from our estimates, or underlie such forward-looking statements, are as set forth below and in various places in this report. These factors include, but are not limited to:

You are cautioned that all forward-looking statements involve risks and uncertainties detailed in our filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which are valid only as of the date they were made. We undertake no obligation to update or revise any forward-looking statements to reflect new information or the occurrence of unanticipated events or otherwise.

Included in the footnotes to the consolidated financial statements in our Annual Report on Form 10-K for the year ended January ~~31, 2015~~30, 2016 is a summary of all significant accounting policies used in the preparation of our consolidated financial statements. We follow the accounting methods and practices as required by accounting principles generally accepted in the United States of America (“GAAP”). In particular, our critical accounting policies and areas in which we use judgment are in the areas of revenue recognition, the estimated collectability of accounts receivable, the recoverability of obsolete or overstocked inventory, the impairment of long-lived assets that are our trademarks, ~~and goodwill,~~ the recoverability of deferred tax assets and the measurement of retirement related benefits. We believe that there have been no significant changes to our critical accounting policies during the three ~~and nine~~ months ended ~~October 31, 2015~~April 30, 2016 as compared to those we disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended January ~~31, 2015.~~30, 2016.

The following table sets forth, for the periods indicated, selected financial data expressed by segments and includes a reconciliation of EBITDA to operating income by segment, the most directly comparable GAAP financial measure:


													Three Months Ended
	Three Months Ended						Nine Months Ended						April 30,			May 2,
	October 31, 2015			November 1, 2014			October 31, 2015			November 1, 2014			2016			2015
	(in thousands)												(in thousands)
Revenues by segment:
Men’s Sportswear and Swim	$	141,512		$	145,732		$	490,453		$	487,906		$	197,925		$	198,453
Women’s Sportswear		33,421			36,721			102,126			97,448			32,489			38,823
Direct-to-Consumer		21,514			20,814			66,763			63,839			20,461			20,981
Licensing		8,992			8,173			25,810			23,093			10,419			8,157

Total revenues	$	205,439		$	211,440		$	685,152		$	672,286		$	261,294		$	266,414


	Three Months Ended						Nine Months Ended						Three Months Ended
	October 31, 2015			November 1, 2014			October 31, 2015			November 1, 2014			April 30, 2016			May 2, 2015
	(in thousands)												(in thousands)
Reconciliation of operating income to EBITDA
Operating (loss) income by segment:
Operating income (loss) by segment:
Men’s Sportswear and Swim	$	2,392		$	(2,091	)	$	14,544		$	7,163		$	16,942		$	11,330
Women’s Sportswear		(109	)		1,324			222			(249	)		(351	)		1,382
Direct-to-Consumer		(4,038	)		(2,937	)		(8,051	)		(5,915	)		(3,372	)		(1,866	)
Licensing		6,798			6,526			19,043			18,301			8,464			5,627

Total operating income	$	5,043		$	2,822		$	25,758		$	19,300		$	21,683		$	16,473

Add:
Depreciation and amortization
Men’s Sportswear and Swim	$	1,771		$	1,606		$	5,509		$	4,804		$	1,897		$	1,875
Women’s Sportswear		589			487			1,655			1,444			614			500
Direct-to-Consumer		976			880			2,851			2,615			896			904
Licensing		47			35			136			113			60			43

Total depreciation and amortization	$	3,383		$	3,008		$	10,151		$	8,976		$	3,467		$	3,322

EBITDA by segment:
Men’s Sportswear and Swim	$	4,163		$	(485	)	$	20,053		$	11,967		$	18,839		$	13,205
Women’s Sportswear		480			1,811			1,877			1,195			263			1,882
Direct-to-Consumer		(3,062	)		(2,057	)		(5,200	)		(3,300	)		(2,476	)		(962	)
Licensing		6,845			6,561			19,179			18,414			8,524			5,670

Total EBITDA	$	8,426		$	5,830		$	35,909		$	28,276		$	25,150		$	19,795


EBITDA margin by segment
Men’s Sportswear and Swim		2.9	%		(0.3	%)		4.1	%		2.5	%		9.5	%		6.7	%
Women’s Sportswear		1.4	%		4.9	%		1.8	%		1.2	%		0.8	%		4.8	%
Direct-to-Consumer		(14.2	%)		(9.9	%)		(7.8	%)		(5.2	%)		(12.1	%)		(4.6	%)
Licensing		76.1	%		80.3	%		74.3	%		79.7	%		81.8	%		69.5	%
Total EBITDA margin		4.1	%		2.8	%		5.2	%		4.2	%		9.6	%		7.4	%

EBITDA consists of earnings before interest, depreciation and amortization, ~~costs on early extinguishment of debt~~ and income taxes. EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States of America, and does not represent cash flow from operations. The most directly comparable GAAP financial measure, presented above, is operating income. EBITDA and EBITDA margin are presented solely as a supplemental disclosure because management believes that they are a common measure of operating performance in the apparel industry.

The following is a discussion of the results of operations for the three ~~and nine~~ month ~~periods ended October 31, 2015~~period in the first quarter of the fiscal year ending January ~~30, 2016~~28, 2017 (“fiscal ~~2016”~~2017”) compared with the three ~~and nine~~ month ~~periods ended November 1, 2014~~period in the first quarter of the fiscal year ended January ~~31, 2015~~30, 2016 (“fiscal ~~2015”~~2016”).

Results of ~~Operations -~~ Operations—three ~~and nine~~ months ended ~~October 31, 2015~~April 30, 2016 compared to the three ~~and nine~~ months ended ~~November 1, 2014.~~May 2, 2015.

Net sales. Men’s Sportswear and Swim net sales for the three months ended ~~October 31, 2015~~April 30, 2016 were ~~$141.5~~$197.9 million, a decrease of ~~$4.2~~$0.6 million, or ~~2.9%~~0.3%, from ~~$145.7~~$198.5 million for the three months ended ~~November 1, 2014.~~May 2, 2015. The net sales decrease was attributed primarily to a 3% decrease due to exited brands coupled with the ~~exit of private and retailer exclusive branded products,~~negative impact in our special markets programs, partially offset by ~~strength in Perry Ellis, Original Penguin and golf lifestyle apparel.~~

Men’s Sportswear and Swim net sales for the nine months ended October 31, 2015 were $490.5 million, an increase of $2.6 million, or 0.5%, from $487.9 million for the nine months ended November 1, 2014. The net sales increase was attributed primarily to increases in ~~the~~our core Perry Ellis and Original Penguin collections, and golf lifestyle apparel ~~partially offset by decreases in our mid-tier sportswear as we reduced penetration of our exclusive branded products.~~business.

Women’s Sportswear net sales for the three months ended ~~October 31, 2015~~April 30, 2016 were ~~$33.4~~$32.5 million, a decrease of ~~$3.3~~$6.3 million, or ~~9.0%~~16.2%, from ~~$36.7~~$38.8 million for the three months ended ~~November 1, 2014.~~May 2, 2015. The net sales decrease was ~~attributed to the sale of C&C California, which occurred during the first quarter of fiscal 2016. The decrease was partially offset by increased sales in Rafaella.~~

Women’s Sportswear net sales for the nine months ended November 1, 2014 were $102.1 million, an increase of $4.7 million, or 4.8%, from $97.4 million for the nine months ended November 1, 2014. The net sales increase was primarily due to ~~increases in our contemporary Laundry by Shelli Segal dresses and Rafaella sportswear, driven by strong performance at retail. These increases were partially offset by~~ the sale of C&C California in the ~~first quarter.~~prior year and our planned decrease in special markets programs.

Direct-to-Consumer net sales for the three months ended ~~October 31, 2015~~April 30, 2016 were ~~$21.5~~$20.5 million, ~~an increase~~a decrease of ~~$0.7~~$0.5 million, or ~~3.4%~~2.4%, from ~~$20.8~~$21.0 million for the three months ended ~~November 1, 2014.~~May 2, 2015. The ~~net sales increase~~decrease was attributed to a 28.1% increases in e-commerce comparable sales over the same period last year, as well as a comparable store sales increase of 1% in Perry Ellis retail stores. This increase was partially offsetdriven by a ~~decrease~~retail stores sales decline of 1.3% in comparable same store sales ~~of 13.1% in Original Penguin retail stores.~~

~~Direct-to-Consumer net sales~~ for the ~~nine months ended November 1, 2014 were $66.8 million, an increase of $3.0 million, or 4.7%, from $63.8 million for~~direct to consumer business, coupled with two net fewer stores as compared to the ~~nine months ended November 1, 2014. The increase was driven by e-commerce, which posted a 34.6% increase in comparable sales, while retail store sales were slightly down.~~prior period.

Royalty income. Royalty income for the three months ended ~~October 31, 2015~~April 30, 2016 was ~~$9.0~~$10.4 million, an increase of ~~$0.8~~$2.2 million, or ~~9.8%~~26.8%, from $8.2 million for the three months ended November 1, 2014. The net sales increase was attributed to new licenses signed during fiscal 2015 and through the first part of fiscal 2016 as well as strong performance in existing licenses for our core brands.

~~Royalty income for the nine months ended October 31, 2015 was $25.8 million, an increase of $2.7 million, or 11.7%, from $23.1 million for the nine months ended November 1, 2014.~~May 2, 2015. Royalty income increases were attributed to increases in our Perry Ellis and Original Penguin ~~and Laundry businesses~~brands as well as the new licenses signed ~~during fiscal 2015~~last year, and ~~through~~from our continuing initiatives to upgrade our licensing partners. For the ~~first part~~remainder of ~~fiscal 2016.~~the year, we anticipate even royalty income, compared to the prior quarter periods.

Gross profit.Gross profit was ~~$73.3~~$95.1 million for the three months ended ~~October 31, 2015,~~April 30, 2016, an increase of ~~$3.0~~$5.0 million, or ~~4.3%~~5.5%, from ~~$70.3~~$90.1 million for the three months ended November 1, 2014. During the three months ended October 31, 2015, we continued to focus and emphasize higher margin channels and geographies. This expansion was realized across our core domestic collections principally in Perry Ellis, Original Penguin and golf lifestyle, as well as through our growth of higher margin licensing and direct to consumer revenues.

~~Gross profit was $239.3 million for the nine months ended October 31, 2015, an increase of $10.9 million, or 4.8%, from $228.4 million for the nine months ended November 1, 2014.~~May 2, 2015. This increase is attributed to the sales mix composition described above and the factors described within the gross profit margin section below.

Gross profit margin. As a percentage of total revenue, gross profit margins were ~~35.7%~~36.4% for the three months ended ~~October 31, 2015,~~April 30, 2016, as compared to ~~33.3%~~33.8% for the three months ended ~~November 1, 2014 which represents~~May 2, 2015, an ~~expansion~~increase of ~~240~~260 basis points. The increase ~~was primarily~~is attributed to ~~the factors described above~~stronger product margins and reduced markdowns in our men’s collection, golf apparel and Nike businesses as well as ~~cost savings associated with~~an increase in royalty income and consolidation in our foreign ~~sourcing offices.~~

For the nine months ended October 31, 2015, gross profit margins were 34.9% as a percentage of total revenue as compared to 34.0% for the nine months ended November 1, 2014, an increase of 90 basis points. This increase was primarily associated with expansion across our licensingbuying offices and core domestic collections; partially offset by the exit of the Elite component of our Nike licensed business, the inventory liquidation of divested C&C California, as well as the consolidation of our foreign sourcing offices.freight services.

Selling, general and administrative ~~expenses~~expenses.. Selling, general and administrative expenses for the three months ended ~~October 31, 2015~~April 30, 2016 were ~~$64.9~~$69.9 million, an increase of ~~$0.4~~$0.3 million, or ~~0.6%~~0.4%, from ~~$64.5~~$69.6 million for the three months ended ~~November 1, 2014.~~May 2, 2015. The increase ~~reflects our continued investment in our growth strategies related~~is attributed to ~~international, licensing and direct-to-consumer. These increases were~~slightly higher incentive compensation accruals, partially offset by ~~$400,000 in cost savings this quarter as a result of the initiatives implemented during fiscal 2015.~~

~~Selling, general and administrative expenses for the nine months ended October 31, 2015 were $202.7 million, an increase of $1.7 million, or 0.8%,~~reduced costs resulting from $201.0 million for the nine months ended November 1, 2014. The increase reflects costs primarily related to the activist campaign as well as restructuring costs related to exited businesses and exit costs associated with the consolidation of our ~~N.Y. corporate office space. We benefitted favorably from reduced headcount and tighter expense control across our infrastructure.~~infrastructure review.

EBITDA. Men’s Sportswear and Swim EBITDA margin for the three months ended ~~October 31, 2015~~April 30, 2016 increased ~~320~~by 280 basis points to ~~2.9%,~~9.5% from ~~(0.3)%~~6.7% for the three months ended ~~November 1, 2014.~~May 2, 2015. The EBITDA margin ~~increase~~ was ~~driven principally by the expansion in gross margin in our Perry Ellis and Original Penguin collection businesses. Additionally during fiscal 2015, EBITDA margin was negatively~~favorably impacted by the ~~reduced leverage due to the decrease in net sales during the period.~~

~~Men’s Sportswear and Swim EBITDA margin for the nine months ended October 31, 2015 increased 160 basis points to 4.1%, from 2.5% for the nine months ended November 1, 2014. The EBITDA margin~~ increase ~~was driven principally by the expansion~~ in gross ~~margin~~profit and margins in our ~~Perry Ellis~~men’s collection, golf apparel and ~~Original Penguin collection~~Nike businesses. ~~We also realized~~Because of this increase, we were able to realize a favorable leverage in selling, general and administrative expenses, most notably in employee related expenses, which was partially offset by the planned increased infrastructure expenditures in this segment, as well as exit costs associated with the Elite component of our licensed Nike business.more specifically on payroll and advertising expenses.

Women’s Sportswear EBITDA margin for the three months ended ~~October 31, 2015~~April 30, 2016 decreased ~~350 basis points~~ to ~~1.4%~~0.8%, from ~~4.9%~~4.8% for the three months ended ~~November 1, 2014. Women’s Sportswear EBITDA margin for the nine months ended October 31, 2015 increased 60 basis points to 1.8% from 1.2% for the nine months ended November 1, 2014.~~May 2, 2015. The EBITDA margin ~~for the nine months ended October 31, 2015~~ was ~~favorably~~unfavorably impacted by the ~~expansion~~decrease in ~~the Rafaella collection business coupled with~~net sales described above. Because of this decrease in revenue, we were not able to realize favorable leverage in selling, general and administrative ~~expenses, most notably in employee expenses and other overhead. This was partially offset by exit costs associated with C&C California.~~expenses.

Direct-to-Consumer EBITDA margin for the three months ended ~~October 31, 2015~~April 30, 2016 decreased ~~430~~750 basis points to ~~(14.2%~~(12.1%), from ~~(9.9%~~(4.6%) for the three months ended ~~November 1, 2014. Direct-to-Consumer EBITDA margin for the nine months ended October 31, 2015 decreased 260 basis points to (7.8%), from (5.2%) for the nine months ended November 1, 2014.~~May 2, 2015. The decrease was ~~primarily due to an increase in occupancy costs~~ attributable to ~~renewal contracts coupled with additional costs associated with freight~~the decrease of revenue from our stores, as described above. Additionally, selling, general and ~~professional fees.~~administrative expenses were unfavorably impacted by increases in rent as we renewed some of our leases at higher rates.

Licensing EBITDA margin for the three months ended ~~October 31, 2015 decreased 420 basis points~~April 30, 2016 increased to ~~76.1%~~81.8%, from ~~80.3%~~69.5% for the three months ended ~~November 1, 2014.~~May 2, 2015. The ~~decrease is primarily due to the unfavorable leverage attributed to increased employee costs. Licensing~~ EBITDA margin ~~for~~was favorably impacted by the ~~nine~~increase in royalty income described above. Also, as described below, during the three months ended ~~October 31, 2015 decreased to 74.3%, from 79.7% for the nine months ended November 1, 2014. During the nine months ended October 31,~~May 2, 2015, we ~~realized~~had a loss on the sale of the C&C California brand, ~~while~~which was the primary reason for the lower EBITDA margin in the ~~prior year we realized a gain in the nine months ended November 1, 2014 from the sale~~first quarter of ~~the Jantzen rights described below.~~fiscal 2016.

Depreciation and amortization. Depreciation and amortization for the three months ended ~~October 31, 2015,~~April 30, 2016, was ~~$3.4~~$3.5 million, an increase of ~~$0.4~~$0.2 million, or ~~13.3%~~6.1%, from ~~$3.0~~$3.3 million for the three months ended November 1, 2014. Depreciation and amortization for the nine months ended October 31, 2015, was $10.2 million, an increase of $1.2 million, or 13.3%, from $9.0 million for the nine months ended November 1, 2014.May 2, 2015. The increase is attributed to depreciation related to our capital expenditures, ~~and leaseholds,~~ primarily in the ~~men’s sportswear~~direct-to-consumer segment, and ~~swim segment, as well as the direct-to-consumer segment.~~

~~(Loss) gain~~Loss on sale of long-lived assets.During the first quarter of fiscal 2016, we entered into an agreement to sell the intellectual property of our C&C California brand to a third party. As a result of this transaction, we recorded a loss of ($0.7) million in the licensing segment. During the second quarter of fiscal 2015, we entered into a sales agreement, in the amount of $1.3 million, for the sale of the Australian, Fiji and New Zealand trademark rights with respect to Jantzen. As a result of this transaction, we recorded a gain of $0.9 million in the licensing segment.

~~Cost on early extinguishment of debt.~~~~On April 6, 2015, we called for partial redemption $100 million of our $150 million outstanding 7~~⁷⁄₈% Senior Subordinated Notes. The redemption terms provided for the payment of a redemption premium of 103.938% of the principal amount redeemed. On May 6, 2015, we completed the redemption of $100 million of our senior subordinated notes. We incurred debt extinguishment costs of approximately $5.1 million in connection with the redemption premium and the write-off of note issuance costs.

Interest expense. Interest expense for the three months ended ~~October 31, 2015,~~April 30, 2016, was ~~$1.9~~$2.0 million, a decrease of $1.6 million, or ~~45.7%~~44.4%, from ~~$3.5~~$3.6 million for the three months ended ~~November 1, 2014. Interest expense for the nine months ended October 31, 2015 was $7.4 million, a decrease of $3.4 million, or 31.5%, from $10.8 million for the nine months ended November 1, 2014.~~May 2, 2015. The decrease was primarily attributable to a decrease in interest resulting from the partial redemption of $100 million of our senior subordinated ~~notes.~~notes during the second quarter of fiscal 2016. This decrease was partially offset by a higher average amount borrowed on our credit facility as compared to the ~~comparable period of the~~ prior ~~year.~~year period. The increase in the credit facility was due to its use for the redemption of the notes as discussed above.

Income taxes. The income tax expense for the three months ended ~~October 31, 2015,~~April 30, 2016, was ~~$0.9~~$5.4 million, an increase of ~~$1.2~~$2.0 million, as compared to ~~a benefit of $0.3~~$3.4 million for the three months ended ~~November 1, 2014.~~May 2, 2015. For the three months ended ~~October 31, 2015,~~April 30, 2016, our effective tax rate was ~~28.7%~~27.5% as compared to ~~37.1%~~26.7% for the three months ended November 1, 2014. The income tax expense for the nine months ended October 31, 2015, was $2.8 million, an increase of $0.1 million, as compared to $2.7 million for the nine months ended November 1, 2014. For the nine months ended October 31, 2015, our effective tax rate was 21.3% as compared to 32.4% for the nine months ended November 1, 2014.May 2, 2015. The overall change in the effective tax rate is attributed to the current year impact of the valuation allowance on domestic taxes and a change in the ratio of income between domestic and foreign operations, of which the domestic operations are taxed at higher statutory tax rates.

Net ~~(loss)~~ income.Net income ~~(loss)~~ for the three months ended ~~October 31, 2015~~April 30, 2016 was ~~$2.3~~$14.3 million, an ~~improvement~~increase of ~~$2.7~~$4.9 million, or 52.1%, as compared to ~~($0.4)~~$9.4 million for the three months ended November 1, 2014. Net income for the nine months ended October 31, 2015 was $10.4 million, an increase of $4.7 million, or 82.5%, as compared to $5.7 million for the nine months ended November 1, 2014.May 2, 2015. The changes in operating results were due to the items described above.

We rely principally on cash flow from operations and borrowings under our senior credit facility to finance our operations, pension funding requirements, acquisitions, and capital expenditures. We believe that our working capital requirements will increase for ~~next~~this year as we continue to expand internationally. As of ~~October 31, 2015,~~April 30, 2016, our total working capital was ~~$221.5~~$274.5 million as compared to ~~$240.2~~$218.8 million as of January ~~31, 2015~~30, 2016 and ~~$277.2~~$265.5 million as of ~~November 1, 2014.~~May 2, 2015. We believe that our cash flows from operations and availability under our senior credit facility and remaining letter of credit facilities are sufficient to meet our working capital needs and capital expenditure needs over the next year. We also believe that our real estate assets, which had a net book value of $25.0 million at October 31, 2015, have a higher market value. These real estate assets may provide us with additional capital resources. Additional borrowings against these real estate assets, however, would be subject to certain loan to value criteria established by lending institutions. As of October 31, 2015, we had mortgage loans on these properties totaling $22.3 million.

We consider the undistributed earnings of our foreign subsidiaries as of ~~October 31, 2015,~~April 30, 2016, to be indefinitely reinvested and, accordingly, no United States income taxes have been provided thereon. As of

~~October 31, 2015,~~ April 30, 2016, the amount of cash associated with indefinitely reinvested foreign earnings was approximately ~~$23.5~~$23.6 million. We have not, nor do we anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business, including liquidity needs associated with our domestic debt service requirements.

Net cash ~~provided by~~used in operating activities was ~~$18.6~~$39.0 million for the ~~nine~~three months ended ~~October 31, 2015,~~April 30, 2016, as compared to cash ~~provided by~~used in operating activities of ~~$33.8~~$39.7 million for the ~~nine~~three months ended ~~November 1, 2014.~~May 2, 2015.

The cash ~~provided by~~used in operating activities for ~~the nine~~three months ended ~~October 31, 2015,~~April 30, 2016, is primarily attributable to ~~a decrease~~an increase in accounts receivable of ~~$6.5~~$41.5 million ~~a decreased inventory of $38.4 million due to improved inventory management, as well as a reduction in prepaid taxes of 3.6 million. This was partially offset by~~and a decrease in accounts payable and accrued expenses of ~~$54.8~~$53.1 million; which was partially offset by a decrease in inventory of $30.2 million associated with strong inventory management, an increase in income taxes payable of $2.2 million, a decrease in prepaid expenses and other current assets of $1.2 million, and a decrease in prepaid income taxes of $1.9 million. Our inventory turnover ratio remained constant at 3.6 as ~~well as decreased~~compared to the prior period because of our continued tight inventory management.

The cash used in operating activities for three months ended May 2, 2015, is primarily attributable to an increase in accounts receivable of $43.4 million, an increase in accounts payable and accrued expenses of $42.7 million and an increase in accrued interest payable of ~~$3.5 million. For~~$3.0 million; which was partially offset by a decrease in inventory of $30.6 million associated with strong inventory management. As a result of the ~~nine months ended October 31, 2015,~~increase in sales for the first quarter of fiscal 2016 as compared to prior quarter, our inventory turnover ratio increased to ~~3.7~~3.6 as compared to 3.3 for the comparable ~~period~~quarter in fiscal 2015.

~~The~~Net cash ~~provided by operating~~used in investing activities was $4.6 million for the ~~nine~~three months ended November 1, 2014, is primarily attributable to a decrease in accounts receivable of $16.6 million and a decrease in inventory of $50.4 million associated with improved inventory management. This was partially offset by decreases in accounts payable and accrued expenses of $50.3 million deferred pension of $2.2 million and accrued interest payable of $3.0 million. For the nine months ended November 1, 2014, our inventory turnover ratio decreased slightly to 3.3April 30, 2016, as compared to ~~3.7 for the comparable period in fiscal 2014. While the turnover decreased, inventory levels declined as noted above resulting from tighter inventory management.~~

~~Net~~ cash provided by investing activities ~~was $2.5~~of $5.1 million for the ~~nine~~three months ended ~~October 31, 2015, as compared to~~May 2, 2015. The net cash used in investing activities during the first three months of ~~$19.8~~fiscal 2017 primarily reflects the purchase of property and equipment of $4.1 million primarily for leaseholds and the ~~nine months ended November 1, 2014.~~ purchase of investments of $2.5 million; partially offset by the proceeds from the maturities of investments in the amount of $2.0 million. We anticipate capital expenditures during the remainder of fiscal 2017 of $8.0 million to $9.0 million in new leasehold improvements, technology, systems, retail stores, and other expenditures.

The net cash provided by investing activities during the ~~first nine~~three months ~~of fiscal 2016~~ended May 2, 2015 primarily reflects the proceeds from the maturities of investments in the amount of ~~$17.8~~$8.6 million ~~the~~and proceeds on ~~the~~ sale of the C&C California brand in the amount of $2.5 ~~million and the proceeds from notes receivable associated with the sale of the Australian, Fiji and New Zealand Jantzen trademark rights in the amount of $0.3~~ million; ~~partially~~ offset by ~~the purchase of investments of $8.2 million and~~ the purchase of property and equipment of ~~$9.8~~$3.3 million primarily for ~~leasehold improvements~~leaseholds and store fixtures. We anticipate capital expenditures during fiscal 2016 of $14.0 million to $16.0 million in technology, retail stores and other expenditures. The net cash used during the first nine months of fiscal 2015 primarily reflects the purchase of investments of ~~$27.3~~$2.6 million.

Net cash provided by financing activities was $38.8 million ~~and~~for the ~~purchase~~three months ended April 30, 2016, as compared to net cash provided by financing activities of ~~property and equipment~~$9.3 million for the three months ended May 2, 2015. The net cash provided during the first three months of ~~$12.5 million,~~fiscal 2017 primarily ~~for leasehold improvements and store fixtures;~~reflects net borrowings on our senior credit facility of $39.1 million; which was partially offset by ~~proceeds from maturities of investments~~$0.2 million in ~~the amount of $19.8 million and the proceeds from notes receivable associated with the sale of the Australian, Fiji and New Zealand Jantzen trademark rights in the amount of $0.3 million.~~payments on our mortgage loans.

~~Net cash used in financing activities was $39.3 million for the nine months ended October 31, 2015, as compared to $10.9 million for the nine months ended November 1, 2014.~~ The net cash ~~used~~provided during the first ~~nine~~three months of fiscal 2016 primarily reflects ~~payments for the partial redemption~~net borrowings on our senior ~~subordinated notes~~credit facility of ~~$100~~$9.7 million, proceeds from the exercise of stock options of $0.1 million and a tax benefit from exercise of equity instruments of $0.4 million; which was partially offset by payments of $0.6 million ~~on our mortgage loans, payments of~~in deferred financing fees on the senior credit facility ~~of $0.6~~and $0.2 million and payments on capital leases of $0.1 million; partially offset by net borrowings on our senior credit facility of $60.6 million and the proceeds from exercises of stock options of $1.4 million. We financed the redemption of the subordinated notes through our senior credit facility. The net cash used during the first nine months of fiscal 2015 primarily reflects netin payments on our senior credit facility of $8.2 million, purchases of treasury stock of $2.2 million, payments on real estate mortgages of $0.6 million and payments on capital leases of $0.2 million; partially offset by proceeds from exercises of stock options of $0.4 million.mortgage loans.

Our Board of Directors has authorized us to purchase, from time to time and as market and business conditions warrant, up to $70 million of our common stock for cash in the open market or in privately negotiated transactions through October 31, 2016. Although our Board of Directors allocated a maximum of $70 million to carry out the program, we are not obligated to purchase any specific number of outstanding shares and will reevaluate the program on an ongoing basis.

During the second quarter of fiscal 2016, we retired 770,753 shares of treasury stock recorded at a cost of approximately $15.7 million. Accordingly, during the second quarter of fiscal 2016, we reduced common stock and additional paid in capital by $7,000 and $15.7 million, respectively.

~~During fiscal 2015, we repurchased shares of our common stock at a cost of $8.8 million.~~ There have been no open market purchases during ~~the first nine months of~~ fiscal ~~2016.~~2017. Total purchases under the plan ~~through October 31, 2015, were~~to date amount to approximately ~~$51.7 million. As of October 31, 2015, there were no treasury shares outstanding and as of January 31, 2015, there were 770,753 shares of treasury stock outstanding at a cost of approximately $15.7~~$58.6 million.

In March 2011, we issued $150 million 7⁷⁄/ ₈% senior subordinated notes, due April 1, 2019. The proceeds of this offering were used to retire the $150 million 8⁷⁄/ ₈% senior subordinated notes due September 15, 2013 and to repay a portion of the outstanding balance on ~~our~~the senior credit facility. The proceeds to us were $146.5 million yielding an effective interest rate of 8.0%.

On April 6, 2015, we elected to call for the partial redemption of $100 million of our $150 million ~~outstanding~~ 7⁷⁄/ ₈% ~~Senior Subordinated Notes~~senior subordinated notes due ~~April 1,~~ 2019 and a notice of redemption was sent to all registered holders of the senior subordinated notes. The redemption terms provided for the payment of a redemption premium of 103.938% of the principal amount redeemed. On May 6, 2015, we completed the redemption of the $100 million of our senior subordinated notes. We incurred debt extinguishment costs of approximately $5.1 million in connection with the redemption, including the redemption premium ~~and~~as well as the write-off of note issuance costs. At April 30, 2016, the balance of the 7 ⁷/ ₈% senior subordinated notes totaled $49.6 million, net of debt issuance costs in the amount of $0.4 million. At January 30, 2016, the balance of the 7 ⁷/ ₈% senior subordinated notes totaled $49.5 million, net of debt issuance costs in the amount of $0.5 million.

Certain Covenants.The indenture governing the senior subordinated notes contains certain covenants which restrict our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness in certain circumstances, pay dividends or make other distributions on, redeem or repurchase capital stock, make investments or other restricted payments, create liens on assets to secure debt, engage in transactions with affiliates, and effect a consolidation or merger. We are not aware of any non-compliance with any of our covenants in this indenture. We could be materially harmed if we violate any covenants because the indenture’s trustee could declare the outstanding notes, together with accrued interest, to be immediately due and payable, which we may not be able to satisfy. In addition, a violation could also constitute a cross-default under the senior credit facility, the letter of credit facilities and the real estate mortgages resulting in all of our debt obligations becoming immediately due and payable, which we may not be able to satisfy.

On April 22, 2015, we amended and restated our existing senior credit facility (the “Credit Facility”), with Wells Fargo Bank, National Association, as agent for the lenders, and Bank of America, N.A., as syndication agent. The Credit Facility provides a revolving credit facility of up to an aggregate amount of $200 million. The Credit Facility has been extended through April 30, 2020 (“Maturity Date”). In connection with this amendment and restatement, we paid fees in the amount of $0.6 million. These fees will be amortized over the term of the credit facility as interest expense. At ~~October 31, 2015,~~April 30, 2016, we had outstanding borrowings of ~~$60.6~~$100.9 million, under the Credit Facility. At January ~~31, 2015,~~30, 2016, we had no outstanding borrowings of $61.8 million, under the Credit Facility.

Certain Covenants. The Credit Facility contains certain financial and other covenants, which, among other things, require usthe Company to maintain a minimum fixed charge coverage ratio if availability falls below certain thresholds. We are not aware of any non-compliance with any of our covenants in this Credit Facility. These covenants may restrict our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness and liens in certain circumstances, redeem or repurchase capital stock, make certain investments or sell assets. We may pay cash dividends subject to certain restrictions set forth in the covenants including, but not limited to, meeting a minimum excess availability threshold and no occurrence of a default. We could be materially harmed if we violate any covenants, as the lenders under the Credit Facility could declare all amounts outstanding, together with accrued

interest, to be immediately due and payable. If we are unable to repay those amounts, the lenders could proceed against our assets and the assets of our subsidiaries that are borrowers or guarantors. In addition, a covenant violation that is not cured or waived by the lenders could also constitute a cross-default under certain of our other outstanding indebtedness, such as the indenture relating to our 7⁷⁄/ ₈% senior subordinated notes due April 1, 2019, our letter of credit facilities, or our real estate mortgage loans. ~~Such a~~A cross-default could result in all of our debt obligations becoming immediately due and payable, which we may not be able to satisfy. Additionally, our Credit Facility includes a subjective acceleration clause if a “material adverse change” in our business occurs. We believe that the likelihood of the lender exercising this right is remote.

Borrowing Base. Borrowings under the Credit Facility are limited to a borrowing base calculation, which generally restricts the outstanding balance to the sum of (a) 87.5% of eligible receivables plus (b) 87.5% of eligible foreign accounts up to $1.5 million plus (c) the lesser of (i) the inventory loan limit, which equals 80% of the maximum credit under the Credit Facility at the time, (ii) a maximum of 70.0% of eligible finished goods inventory with an inventory limit not to exceed $125 million, or 90.0% of the net recovery percentage (as defined in the Credit Facility) of eligible inventory.

Security. As security for the indebtedness under the Credit Facility, we granted to the lenders a first priority security interest (subject to liens permitted under the Credit Facility to be senior thereto) in substantially all of our existing and future assets, including, without limitation, accounts receivable, inventory, deposit accounts, general intangibles, equipment and capital stock or membership interests, as the case may be, of certain subsidiaries, and real estate, but excluding our non-U.S. subsidiaries and all of our trademark portfolio.

As of ~~October 31, 2015,~~April 30, 2016, we maintained one U.S. dollar letter of credit facility totaling $30.0 million and one letter of credit facility totaling $0.3 million utilized by our United Kingdom subsidiary. Each documentary letter of credit is secured primarily by the consignment of merchandise in transit under that letter of credit and certain subordinated liens on our assets.

During the first quarter of fiscal 2016, a $15 million line of credit expired and was not renewed. During fiscal ~~2014,~~2016, we decreased the letter of credit sublimit in our Senior Credit Facility to $30.0 million. At ~~October 31, 2015~~April 30, 2016 and January ~~31, 2015,~~30, 2016, there was $18.9 million, ~~and $33.7 million, respectively,~~ available under the existing letter of credit facilities.

In July 2010, we paid off our then existing real estate mortgage loan and refinanced our main administrative office, warehouse and distribution facility in Miami with a $13.0 million mortgage loan. The loan is due on August 1, 2020. The interest rate has been modified since the refinancing date. The interest rate was 4.25% per annum and monthly payments of principal and interest of $71,000 were due, based on a 25-year amortization with the outstanding principal due at maturity. In July 2013, we amended the mortgage loan agreement to modify the interest rate. The interest rate was reduced to 3.9% per annum and the terms were restated to reflect new monthly payments of principal and interest of $69,000, based on a 25-year amortization with the outstanding principal due at maturity. At ~~October 31, 2015,~~April 30, 2016, the balance of the real estate mortgage loan totaled ~~$11.1~~$11.0 million, net of discount, of which ~~$354,000~~$361,000 is due within one year.

In June 2006, we entered into a mortgage loan for $15 million secured by our Tampa facility. The loan is due on January 23, 2019. The mortgage loan has been refinanced and the interest rate has been modified since such date. The interest rate was 4.00% per annum and quarterly payments of principal and interest of approximately $248,000 were due, based on a 20-year amortization with the outstanding principal due at maturity. In January 2014, we again amended the mortgage loan to modify the interest rate. The interest rate was reduced to 3.25% per annum and the terms were restated to reflect new monthly payments of principal and interest of approximately $68,000, based on a 20-year amortization with the outstanding principal due at maturity. At ~~October 31, 2015,~~April 30, 2016, the balance of the real estate mortgage loan totaled ~~$11.2~~$11.0 million, net of discount, of which approximately ~~$456,000~~$464,000 is due within one year.

The real estate mortgage loans contain certain covenants. We are not aware of any non-compliance with any of the covenants. If we violate any covenants, the lender under the real estate mortgage loan could declare all amounts outstanding thereunder to be immediately due and payable, which we may not be able to satisfy. A covenant violation could constitute a cross-default under our senior credit facility, the letter of credit facilities and the indenture relating to our senior subordinated notes resulting in all of our debt obligations becoming immediately due and payable, which we may not be able to satisfy.

We are not a party to any “off-balance sheet arrangements,” as defined by applicable GAAP and SEC rules.

We do not believe that inflation or foreign currency fluctuations significantly affected our financial position and results of operations as of and for the three ~~and nine~~ months ended ~~October 31, 2015.~~April 30, 2016.

The market risk inherent in our financial statements represents the potential changes in the fair value, earnings or cash flows arising from changes in interest rates. We manage this exposure through regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. Our policy allows the use of derivative financial instruments for identifiable market risk exposure, including interest rate. We currently do not have any derivative financial instruments for identifiable market risk.

We are exposed to market risks for the pricing of cotton and other fibers, which may impact fabric prices. Fabric is a portion of the overall product cost, which includes various components. We manage our fabric prices by using a combination of different strategies including the utilization of sophisticated logistics and supply chain management systems, which allow us to maintain maximum flexibility in our global sourcing of products. This provides us with the ability to re-direct our sourcing of products to the most cost-effective jurisdictions. In addition, we may modify our product offerings to our customers based on the availability of new fibers, yield enhancement techniques and other technological advances that allow us to utilize more cost effective fibers. Finally, we also have the ability to adjust our price points of such products, to the extent market conditions allow. These factors, along with our foreign-based sourcing offices, allow us to procure product from lower cost countries or capitalize on certain tariff-free arrangements, which help mitigate any commodity price increases that may occur. We have not historically managed, and do not currently intend to manage, commodity price exposures by using derivative instruments.

Our current exposure to foreign exchange risk is not significant and accordingly, we have not entered into any transactions to hedge against those risks.

We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) of the Securities Exchange Act. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of ~~October 31, 2015~~April 30, 2016 in ensuring that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting ~~as defined in Rules 13a-15(f) and 15d-15(f),~~ during the quarter ended ~~October 31, 2015~~April 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We were a defendant in Humberto Ordaz v. Perry Ellis International, Inc., Case No. BC490485 (Cal. Sup. Ct. 2012), involving claims for unpaid wages, missed breaks and related claims, which was originally filed on August 17, 2012 by a former employee in our California administrative offices. The plaintiff sought an unspecified amount of damages. The lawsuit was pleaded but not certified as a class action. The parties reached a settlement on August 12, 2015. The settlement amount was provided for in the Company’s results of operations for fiscal 2015.

We are a defendant in Joseph T. Cook v. Perry Ellis International, Inc. and Oscar Feldenkreis, Case No. 15-cv-08290 (U.S. District Court, Southern District of New York), involving claims of unlawful employment practices, including unlawful discrimination and retaliation, which was filed on October 21, 2015 by an employee in our New York offices. The plaintiff seeks an unspecified amount of damages. We believe that the allegations are without merit and intend to vigorously defend against them.

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.


Florida		59-1162998
(State or other jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		~~(I.R.S. Employer~~ Identification No.)


3000 N.W. 107 Avenue
Miami, Florida		33172
(Address of Principal Executive Offices)		(Zip Code)


	PAGE
PART I: FINANCIAL INFORMATION

Item 1:

Condensed Consolidated Balance Sheets (Unaudited) as of ~~October 31, 2015~~April 30, 2016 and January ~~31, 2015~~30, 2016		1

Condensed Consolidated Statements of ~~Operations~~Income (Unaudited) for the three ~~and nine~~ months ended ~~October 31,~~April 30, 2016 and May 2, 2015 ~~and November 1, 2014~~		2

Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ (Unaudited) for the three ~~and nine~~ months ended ~~October 31,~~April 30, 2016 and May 2, 2015 ~~and November 1, 2014~~		3

Condensed Consolidated Statements of Cash Flows (Unaudited) for the ~~nine~~three months ended ~~October 31,~~April 30, 2016 and May 2, 2015 ~~and November 1, 2014~~		4

Notes to Unaudited Condensed Consolidated Financial Statements		6

Item 2:

Management’s Discussion and Analysis of Financial Condition and Results of Operations		2522

Item 3:

Quantitative and Qualitative Disclosures About Market Risk		3429

Item 4:

Controls and Procedures		3430

PART II: OTHER INFORMATION		3531

Item 1:6:

~~Legal Proceedings~~Exhibits		35

~~Item 6:~~

~~Exhibits~~		3631


	October 31, 2015			January 31, 2015
	(in thousands)

Total letter of credit facilities	$	30,307		$	45,301
Outstanding letters of credit		(11,395	)		(11,595	)

Total credit available	$	18,912		$	33,706


	Changes in Equity
	(in thousands)
Equity at January 31, 2015	$	302,017

Comprehensive income		11,282
Share transactions under employee equity compensation plans		3,809

Equity at October 31, 2015	$	317,108


Equity at February 1, 2014	$	347,533

Comprehensive income		5,399
Share transactions under employee equity compensation plans		4,362
Purchase of treasury stock		(2,222	)

Equity at November 1, 2014	$	355,072


	Changes in Equity
	(in thousands)
Equity at January 30, 2016	$	291,481
Comprehensive income		16,075
Share transactions under employee equity compensation plans		454

Equity at April 30, 2016	$	308,010

Equity at January 31, 2015	$	302,017
Comprehensive income		10,477
Share transactions under employee equity compensation plans		895

Equity at May 2, 2015	$	313,389


	Unrealized (Loss) Gain on Pension Liability			Foreign Currency Translation Adjustments, Net			Unrealized (Loss) Gain on Investments			Total
	(in thousands)
Balance, January 31, 2015	$	(8,085	)	$	(4,774	)	$	7		$	(12,852	)
Other comprehensive loss (income) before reclassifications		—			482			(8	)		474
Amounts reclassified from accumulated other comprehensive loss		405			—			—			405

Balance, October 31, 2015	$	(7,680	)	$	(4,292	)	$	(1	)	$	(11,973	)


Exhibit Number	Exhibit Description	Where Filed

10.74	Employment Agreement dated April 20, 2016, by and between Perry Ellis International, Inc. and George Feldenkreis (1)		Filed herewith.

10.75	Employment Agreement dated April 20, 2016, by and between Perry Ellis International, Inc. and Oscar Feldenkreis (1)		Filed herewith.

31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)		Filed herewith.

31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)		Filed herewith.

32.1	Certification of Principal Executive Officer pursuant to Section 1350		Filed herewith.

32.2	Certification of Principal Financial Officer pursuant to Section 1350		Filed herewith.

101.INS	XBRL Instance Document		Filed herewith.

101.SCH	XBRL Taxonomy Extension Schema		Filed herewith.

101.CAL	XBRL Taxonomy Extension Calculation Linkbase		Filed herewith.

101.DEF	XBRL Taxonomy Extension Definition Linkbase		Filed herewith.

101.LAB	XBRL Taxonomy Extension Label Linkbase		Filed herewith.

101.PRE	XBRL Taxonomy Extension Presentation Linkbase		Filed herewith.


~~Exhibit~~ ~~Number~~		~~Exhibit Description~~

~~31.1~~		~~Certification of Principal Executive Officer pursuant to Rule13a-14(a)/15d-14(a)~~

~~31.2~~		~~Certification of Principal Financial Officer pursuant to Rule13a-14(a)/15d-14(a)~~

~~32.1~~		~~Certification of Principal Executive Officer pursuant to Section 1350~~

~~32.2~~		~~Certification of Principal Financial Officer pursuant to Section 1350~~

~~101.INS~~		~~XBRL Instance Document~~

~~101.SCH~~		~~XBRL Taxonomy Extension Schema~~

~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase~~

~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase~~


		4		Continued


	(in thousands)
2017	$	868
2018		835
2019		793
2020		734
2021		543

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company