-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OhhMgWZoTPMfyWkBxIMGAq2J0IIqBIWZD8kHZeUozhn7GLuZD2dbVWtg3hNdm33g LjQAgt8cED4Kh0RE+GQGiQ== 0000893220-96-000718.txt : 19960513 0000893220-96-000718.hdr.sgml : 19960513 ACCESSION NUMBER: 0000893220-96-000718 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960330 FILED AS OF DATE: 19960510 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: V F CORP /PA/ CENTRAL INDEX KEY: 0000103379 STANDARD INDUSTRIAL CLASSIFICATION: MEN'S & BOYS' FURNISHINGS, WORK CLOTHING, AND ALLIED GARMENTS [2320] IRS NUMBER: 231180120 STATE OF INCORPORATION: PA FISCAL YEAR END: 0103 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05256 FILM NUMBER: 96559039 BUSINESS ADDRESS: STREET 1: 1047 N PARK RD CITY: WYOMISSING STATE: PA ZIP: 19610 BUSINESS PHONE: 2153781151 MAIL ADDRESS: STREET 2: P O BOX 1022 CITY: READING STATE: PA ZIP: 19603 FORMER COMPANY: FORMER CONFORMED NAME: VF CORPORATION DATE OF NAME CHANGE: 19900621 FORMER COMPANY: FORMER CONFORMED NAME: VANITY FAIR MILLS INC DATE OF NAME CHANGE: 19690520 10-Q 1 FORM 10-Q V.F. CORPORATION 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 30, 1996 Commission file number: 1-5256 --------------------------------------------- V. F. CORPORATION (Exact name of registrant as specified in its charter) PENNSYLVANIA 23-1180120 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 1047 NORTH PARK ROAD WYOMISSING, PA 19610 (Address of principal executive offices) (610) 378-1151 (Registrant's telephone number, including area code) 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 and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- On April 27, 1996, there were 63,801,869 shares of Common Stock outstanding. 2 VF CORPORATION INDEX
PAGE NO. PART I - FINANCIAL INFORMATION Item 1 - Financial Statements Consolidated Statements of Income - Three months ended March 30, 1996 and April 1, 1995 . . . . . . . . . . . . . . . . . . . . . 3 Consolidated Balance Sheets - March 30, 1996, December 30, 1995 and April 1, 1995 . . . . . . . . . . . . 4 Consolidated Statements of Cash Flows - Three months ended March 30, 1996 and April 1, 1995 . . . . . . . . . . . . . . . . . . . . . . . 5 Notes to Consolidated Financial Statements . . . . . . . . . 6 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . 7 PART II - OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security Holders . . . . . 9 Item 6 - Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 9
2 3 VF CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED ------------------------- MARCH 30 APRIL 1 1996 1995 ---------- ---------- NET SALES $1,158,123 $1,187,587 COSTS AND OPERATING EXPENSES Cost of products sold 777,606 799,148 Marketing, administrative and general expenses 269,789 273,194 Other operating (income) expense 579 1,300 ---------- ---------- 1,047,974 1,073,642 ---------- ---------- OPERATING INCOME 110,149 113,945 OTHER INCOME (EXPENSE) Interest income 2,060 2,211 Interest expense (17,867) (18,465) Miscellaneous, net (1,186) (1,200) ---------- ---------- (16,993) (17,454) ---------- ---------- INCOME BEFORE INCOME TAXES 93,156 96,491 INCOME TAXES 37,226 38,538 ---------- ---------- NET INCOME $ 55,930 $ 57,953 ========== ========== EARNINGS PER COMMON SHARE Primary $0.86 $0.89 Fully diluted 0.85 0.87 CASH DIVIDENDS PER COMMON SHARE $0.36 $0.34
See notes to consolidated financial statements. 3 4 VF CORPORATION CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
MARCH 30 DECEMBER 30 APRIL 1 1996 1995 1995 ---------- ---------- ---------- (UNAUDITED) (UNAUDITED) ASSETS CURRENT ASSETS Cash and equivalents $ 85,435 $ 84,075 $ 72,260 Accounts receivable, less allowances: Mar. 30 - $36,864; Dec. 30 - $34,621; April 1 - $34,936 677,061 629,506 702,938 Inventories: Finished products 525,809 514,688 579,462 Work in process 142,872 139,721 163,832 Materials and supplies 163,863 187,498 191,166 ---------- ---------- ---------- 832,544 841,907 934,460 Other current assets 113,875 112,149 89,524 ---------- ---------- ---------- Total current assets 1,708,915 1,667,637 1,799,182 PROPERTY, PLANT AND EQUIPMENT 1,496,615 1,490,384 1,429,554 Less accumulated depreciation 758,686 740,504 670,799 ---------- ---------- ---------- 737,929 749,880 758,755 INTANGIBLE ASSETS 875,264 887,606 915,759 OTHER ASSETS 144,902 141,948 120,060 ---------- ---------- ---------- $ 3,467,010 $ 3,447,071 $ 3,593,756 ========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Short-term borrowings $ 148,643 $ 229,945 $ 437,553 Current portion of long-term debt 2,155 2,715 2,705 Accounts payable 273,120 276,598 317,892 Accrued liabilities 419,959 359,062 374,960 ---------- ---------- ---------- Total current liabilities 843,877 868,320 1,133,110 LONG-TERM DEBT 613,276 614,217 516,890 OTHER LIABILITIES 175,990 169,392 168,327 REDEEMABLE PREFERRED STOCK 59,746 60,667 61,737 DEFERRED CONTRIBUTIONS TO EMPLOYEE STOCK OWNERSHIP PLAN (35,557) (37,031) (41,103) ---------- ---------- ---------- 24,189 23,636 20,634 COMMON SHAREHOLDERS' EQUITY Common Stock 63,764 63,439 63,452 Additional paid-in capital 608,232 593,976 558,852 Foreign currency translation 12,422 20,483 27,384 Retained earnings 1,125,260 1,093,608 1,105,107 ---------- ---------- ---------- 1,809,678 1,771,506 1,754,795 ---------- ---------- ---------- $ 3,467,010 $ 3,447,071 $ 3,593,756 ========== ========== ==========
See notes to consolidated financial statements. 4 5 VF CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS)
THREE MONTHS ENDED -------------------------- MARCH 30 APRIL 1 1996 1995 ---------- ---------- OPERATIONS Net income $ 55,930 $ 57,953 Adjustments to reconcile net income to cash provided (used) by operations: Depreciation 33,169 34,306 Amortization of intangible assets 7,156 8,230 Other, net 6,199 2,087 Changes in current assets and liabilities: Accounts receivable (55,785) (72,991) Inventories 5,102 (123,131) Accounts payable (1,554) 22,281 Other, net 67,284 63,888 ---------- ---------- Cash provided (used) by operations 117,501 (7,377) INVESTMENTS Capital expenditures (36,993) (27,288) Business acquisitions - (12,004) Other, net 13,728 5,706 ---------- ---------- Cash invested (23,265) (33,586) FINANCING Increase (decrease) in short-term borrowings (80,185) 114,489 Payment of long-term debt (1,350) (403) Purchase of Common Stock - (43,419) Cash dividends paid (23,926) (22,788) Other, net 12,585 5,602 ---------- ---------- Cash provided (used) by financing (92,876) 53,481 ---------- ---------- NET CHANGE IN CASH AND EQUIVALENTS 1,360 12,518 CASH AND EQUIVALENTS - BEGINNING OF YEAR 84,075 59,742 ---------- ---------- CASH AND EQUIVALENTS - END OF PERIOD $ 85,435 $ 72,260 ========== ==========
See notes to consolidated financial statements. 5 6 VF CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE A - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 30, 1996 are not necessarily indicative of results that may be expected for the year ending January 4, 1997. For further information, refer to the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 30, 1995. NOTE B - EARNINGS PER COMMON SHARE Primary earnings per share are computed by dividing net income, after deducting preferred dividends, by the weighted average number of common shares outstanding. Fully diluted earnings per share assume the conversion of Preferred Stock and the exercise of stock options that have a dilutive effect. NOTE C - CAPITAL There are 150,000,000 authorized shares of Common Stock, no par value - stated capital $1 a share. At March 30, 1996, there were 63,763,865 shares outstanding, excluding 1,381,332 treasury shares. At December 30, 1995 and April 1, 1995, there were 63,438,933 and 63,451,955 shares outstanding, excluding 1,376,976 and 3,228,337 treasury shares, respectively. During the second quarter of 1995, 2,700,000 treasury shares were retired. There are 25,000,000 authorized shares of Preferred Stock, $1 par value. Of these shares, 2,000,000 were designated as Series A, of which none have been issued, and 2,105,263 shares were designated and issued as 6.75% Series B Preferred Stock, of which 1,935,082 shares were outstanding at March 30, 1996, 1,964,942 at December 30, 1995 and 1,999,567 at April 1, 1995. 6 7 VF CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS During the first quarter of 1996, net sales decreased 2% and earnings per share decreased 3% compared with 1995. The declines in sales and earnings resulted from a decline in unit sales related to the general slowdown in retail sales in the United States that began in the second half of 1995. Sales and operating income by business group are summarized as follows:
FIRST QUARTER ------------------------------------------- PERCENT 1996 1995 CHANGE --------- --------- ---------- NET SALES (In thousands) Jeanswear $ 632,666 $ 638,496 (1)% Decorated Knitwear 116,811 104,132 12 Intimate Apparel 156,259 181,855 (14) Playwear 86,234 82,986 4 Specialty Apparel 166,153 180,118 (8) --------- --------- ------- $1,158,123 $1,187,587 (2)% ========= ========= ------- OPERATING INCOME Jeanswear $ 88,901 $ 90,000 (1)% Decorated Knitwear 1,221 (8,204) 100+ Intimate Apparel 5,772 16,367 (65) Playwear 2,121 5,918 (64) Specialty Apparel 22,257 21,603 3 --------- --------- ------- 120,272 125,684 (4)% ======= OTHER OPERATING INCOME (EXPENSE) (579) (1,300) CORPORATE EXPENSES (9,544) (10,439) --------- --------- OPERATING INCOME $ 110,149 $ 113,945 ========= =========
The Jeanswear business group includes the Lee, Wrangler, Rustler, Riders and Girbaud brands in the United States and the Lee and Wrangler brands in international markets, primarily in Europe. Unit sales and operating margins were comparable during the 1996 and 1995 quarters. Within this category, cost reductions helped offset the impact of additional advertising spending both domestically and abroad. 7 8 Increased volume in undecorated fleece products and T-shirts were the primary factors contributing to the sales increase in the Decorated Knitwear business group. The manufacturing benefits related to additional volume, as well as improvements in operating margins within the sports apparel businesses, resulted in better profitability within this category. The Intimate Apparel business group includes the Vanity Fair and Vassarette brands, as well as a private label business domestically. The Company also operates intimate apparel operations in Europe, primarily in France and Spain. The sales and profit decline resulted primarily from reductions in domestic sales volume in the Vanity Fair brand and private label businesses. The Playwear business group consists of Healthtex, the playwear and sleepwear operations of Cutler and the preschool sizes of Lee and Wrangler. Operating margins declined in the quarter at Healthtex due to continued pricing pressures at retail in this product category. The Specialty Apparel business group includes Red Kap occupational apparel, Jantzen swim and casual apparel and JanSport brand equipment. Sales declined in this business group, in part due to closing the Jantzen men's division, but operating margins improved due to cost reductions achieved. Marketing, administrative and general expenses were 23.3% of sales during the quarter, compared with 23.0% in the 1995 period. Marketing expenses increased as a percent of sales due to higher advertising, but administrative and general expenses declined in amount and as a percent of sales. Marketing, administrative and general expenses as a percent of sales in the first quarter are historically at higher levels than annual amounts and are not necessarily representative of the level expected for the year. Net interest expense declined slightly in 1996 due to a reduced borrowing level. FINANCIAL CONDITION AND LIQUIDITY The financial condition of the Company is reflected in the following:
MARCH 30 DECEMBER 30 APRIL 1 1996 1995 1995 --------- ----------- --------- (Dollars in millions) Working capital $865.0 $799.3 $666.1 Current ratio 2.0 to 1 1.9 to 1 1.6 to 1 Debt to total capital 29.7% 32.3% 35.3%
8 9 Days sales outstanding in accounts receivable are consistent with the level at the end of 1995 and slightly improved from the level at the end of the 1995 first quarter. Inventories declined slightly from the end of 1995 and declined significantly from the 1995 first quarter due to our continuing emphasis to reduce inventory levels. Short-term borrowings declined during the first quarter of 1996 due to strong cash flow from operations related primarily to control over inventory levels. PART II - OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security Holders At the Annual Meeting of Shareholders of the Company held on April 16, 1996, shares representing a total of 65,559,995 votes were outstanding and entitled to vote for the election of Directors. The Directors elected at the meeting for a term of three years were Ursula F. Fairbairn, Barbara S. Feigin, Mackey J. McDonald and Lawrence R. Pugh. Item 6 - Exhibits and Reports on Form 8-K (a) Exhibit 11 - Computation of earnings per share for the three months ended March 30, 1996 and April 1, 1995. Exhibit 27 - Financial data schedule as of March 30, 1996. (b) Reports on Form 8-K - There were no reports on Form 8-K filed for the three months ended March 30, 1996. 9 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. V.F. CORPORATION ---------------- (Registrant) By: /s/ Gerard G. Johnson -------------------------- Gerard G. Johnson Vice President - Finance (Chief Financial Officer) Date: May 9, 1996 By: /s/ Robert K. Shearer -------------------------- Robert K. Shearer Vice President - Controller (Chief Accounting Officer) 10 EX-11 2 COMPUTATION OF EARNINGS PER SHARE 1 Exhibit 11 VF CORPORATION COMPUTATION OF EARNINGS PER SHARE (IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED ----------------------- MARCH 30 APRIL 1 1996 1995 --------- --------- PRIMARY EARNINGS PER SHARE - -------------------------- Net income $ 55,930 $ 57,953 Less preferred stock dividends and redemption premium 1,124 910 --------- --------- Net income available to common stockholders $ 54,806 $ 57,043 ========= ========= Average number of common shares outstanding 63,564 64,022 ========= ========= Primary earnings per share $ 0.86 $ 0.89 ========= ========= FULLY DILUTED EARNINGS PER SHARE - -------------------------------- Net income $ 55,930 $ 57,953 Increased ESOP contribution required if preferred stock were converted to common 336 363 --------- --------- Fully diluted earnings $ 55,594 $ 57,590 ========= ========= Average number of common shares outstanding 63,564 64,022 Additional common equivalent shares resulting from: Conversion of preferred stock 1,548 1,600 Dilutive effect of stock options and restricted shares 345 458 --------- --------- Average number of common and common equivalent shares 65,457 66,080 ========= ========= Fully diluted earnings per share $ 0.85 $ 0.87 ========= =========
EX-27 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from financial statements included in Form 10-Q for March 30, 1996 and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS JAN-4-1997 MAR-30-1996 85,435 0 713,925 36,864 832,544 1,708,915 1,496,615 758,686 3,467,010 843,877 613,276 24,189 0 63,764 1,745,914 3,467,010 1,158,123 1,158,123 777,606 777,606 270,368 0 17,867 93,156 37,226 55,930 0 0 0 55,930 .86 .85
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