-----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, LU0Yt7ynlNi9szJjiDJXbgBNy0uoFU3psL7ctjxK2cWUwWn4YJ5baO8/nu/UTeWs s0veLmtdBVWEgEsn8wiBZA== 0000893220-03-001253.txt : 20030722 0000893220-03-001253.hdr.sgml : 20030722 20030722132250 ACCESSION NUMBER: 0000893220-03-001253 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030722 ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030722 FILER: COMPANY DATA: COMPANY CONFORMED NAME: V F CORP 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05256 FILM NUMBER: 03796062 BUSINESS ADDRESS: STREET 1: 628 GREEN VALLEY RD., STE. 500 CITY: GREENSBORO STATE: NC ZIP: 27408 BUSINESS PHONE: (336)547-6000 MAIL ADDRESS: STREET 2: PO BOX 21488 CITY: GREENSBORO STATE: NC ZIP: 27420 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 8-K 1 w88569e8vk.txt FORM 8-K VF CORPORATION SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: July 22, 2003 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 number)
105 CORPORATE CENTER BOULEVARD GREENSBORO, NORTH CAROLINA 27408 (Address of principal executive offices) (336) 424-6000 (Registrant's telephone number, including area code) 4 ITEM 9 - Regulation FD Disclosure The following information is furnished pursuant to Item 9, "Regulation FD Disclosure" and Item 12, "Disclosure of Results of Operations and Financial Condition." On July 22, 2003, VF Corporation issued a press release setting forth the second quarter 2003 earnings. A copy of the press release is attached hereto as Exhibit (99.1) and hereby incorporated by reference. 99.1 Press release issued by VF Corporation on July 22, 2003. 2 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 hereunto duly authorized. V.F. CORPORATION ---------------- (Registrant) By: /s/ Robert K. Shearer ----------------------------------------- Robert K. Shearer Vice President - Finance & Global Processes and Chief Financial Officer (Chief Financial Officer) Date: July 22, 2003 3 EXHIBIT INDEX EXHIBIT
NUMBER DESCRIPTION SEQUENTIAL PAGE NUMBER 99.1 Press release issued by 5 VF Corporation on July 22, 2003
4 EX-99.1 3 w88569exv99w1.txt PRESS RELEASE DATED JULY 22, 2003 (VF LOGO) Contact: Cindy Knoebel VP, Financial & Corporate Communications VF Services, Inc. (646) 472-2817/(336) 424-6189 VF ANNOUNCES SECOND QUARTER RESULTS AND DECLARES DIVIDEND VF's second quarter conference call will be held at 2:00 p.m. ET on July 22nd and can be accessed via the Company's web site www.vfc.com or www.companyboardroom.com. A replay will be available shortly after the end of the conference call through August 5th by dialing 800-642-1687, passcode:1670209. GREENSBORO, NORTH CAROLINA - JULY 22, 2003 - VF CORPORATION (NYSE: VFC), the world's largest apparel company, today announced results for the second quarter and first half of 2003. Second quarter earnings from continuing operations were $.68 per share, compared with $.79 per share in the second quarter of 2002. Prior year earnings per share included a net benefit of $.03 per share from unusual items (see page 7). Income from continuing operations was $74.9 million versus $88.5 million in the 2002 period. Excluding unusual items in the second quarter of 2002, income from continuing operations declined 13% in 2003 from $86.6 million in the prior year period. All per share amounts are presented on a diluted basis. Sales in the quarter fell 2% to $1,134.7 million versus $1,160.3 million in the prior year's quarter. For the first six months of 2003, earnings from continuing operations rose 4% to $1.51 per share from $1.45 per share. Prior year earnings per share included a net benefit of $.02 per share from unusual items. Sales rose slightly to $2,384.8 million compared with the $2,372.5 million reported in the 2002 period. Income from continuing operations was $167.0 million versus $165.5 million reported a year ago. Foreign currency translation favorably impacted both sales and earnings in the quarter. Excluding foreign currency effects, sales were down 5% from the prior year period. The benefit to earnings in the quarter was $.02 per share. Commented Mackey J. McDonald, chairman and chief executive officer, "Our sales and earnings performance in the quarter was better than we had anticipated, due in part to earlier than planned load-ins of new programs. We remain confident in the strength of our brands and businesses, despite a retail environment that continues to be less than robust." "We are very excited about our recently announced plans to acquire Nautica," continued Mr. McDonald. On July 7, the Company announced that it had signed a definitive merger agreement to acquire Nautica Enterprises, Inc. for a total consideration of approximately $585.6 million. "The transaction will add a solid lifestyle brand to our growing portfolio, give us new capabilities in Page 2 of 7 July 22, 2003 sportswear and boost our presence in the jeanswear category. We also see opportunities to improve profitability and to capture additional growth." BUSINESS REVIEW International jeans sales rose 5% reflecting the positive effects of foreign currency translation. Sales in the Company's Outdoor coalition, which includes The North Face, JanSport and Eastpak brands, rose 12% in the quarter, driven by double-digit sales increases of The North Face brand products. Domestic jeans sales and global intimate apparel sales declined by 4% and 3%, respectively, reflecting continued efforts by retailers to reduce inventories and a number of store closings by customers. Imagewear sales declined 8%, reflecting continued weakness in the manufacturing and transportation sectors and reduced discretionary spending by corporations. Our licensed sports business, however, continued its positive momentum. The Company is continuing to review alternatives for its Playwear business. Gross margins were 37.1% compared with 37.5% reported in the second quarter of 2002; excluding the impact of unusual items in 2002, gross margins in the prior year period were 37.2%. As anticipated, operating expenses as a percent of sales increased to 26.5% in the quarter versus 24.9% in the prior year period. Accordingly, operating margins declined to 11.1% in the quarter from 13.1% in the same quarter a year ago; excluding the impact of unusual items, operating margins in the 2002 period were 12.8%. Inventories rose in the quarter as anticipated. The Company continues to expect that inventories at year-end will be flat to up slightly over prior year levels. The Company's balance sheet remains exceptionally strong. Debt as a percent of total capital was 27.5%; net of cash, the ratio was 20.8%. OUTLOOK With regard to the full year, we expect that earnings per share could increase by 3-5% from the $3.24 per share from continuing operations reported in 2002. Compared with 2002 earnings per share of $3.38 from continuing operations (which excludes net restructuring charges of $.14 per share), earnings per share in 2003 are expected to be about flat. Sales are expected to decline slightly. Gross margins could rise by approximately 100 basis points from the 36.0% level reported in 2002, with operating margins flat with those reported in the prior year. Cash flow from operations is expected to range between $350-$400 million. In terms of the third quarter, we expect sales to be down approximately 2%. Earnings per share in the third quarter could be down 15-20%, primarily due to 1) expenses related to the Company's proactive stance toward managing inventories, capacity and costs and 2) the estimated loss that the Company may incur if the Playwear business is sold. These expenses could total approximately $25 million, or $.15 per share. "This year may fall short of our original expectations, but we are pleased that we will maintain our earnings at prior year levels, demonstrating our ability to successfully manage our way through these extraordinary times, " said Mr. McDonald. The Company is on plan to complete its merger agreement to acquire Nautica Enterprises, Inc. early in the fourth quarter of 2003. The Company expects that even with additional borrowings its Page 3 of 7 July 22, 2003 debt to total capital ratio at year-end will range between 30-35%, remaining well below the Company's long-term target of 40%. DIVIDEND DECLARED The Board of Directors declared a regular quarterly cash dividend of $.25 per share, payable on September 19, 2003 to shareholders of record as of the close of business on September 9, 2003. CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS Certain statements included in this release are "forward-looking statements" within the meaning of the federal securities laws. Management cautions that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Important risk factors that could cause the actual results of operations or financial condition of the Company to differ include, but are not necessarily limited to, the overall level of consumer spending for apparel; changes in trends in the segments of the market in which the Company competes; competitive conditions in and financial strength of our customers and of our suppliers; actions of competitors, customers, suppliers and service providers that may impact the Company's business; the Company's ability to integrate new acquisitions successfully; the Company's ability to achieve anticipated cost savings from the recent restructuring initiatives; additional terrorist actions; and the impact of economic and political factors in the markets where the Company competes, such as recession or changes in interest rates, currency exchange rates, price levels, capital market valuations and other external economic and political factors over which the Company has no control. Investors are also directed to consider the risks and uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission. ABOUT THE COMPANY VF Corporation is the world's largest apparel company and a leader in jeanswear, intimate apparel, playwear, workwear and daypacks. Its principal brands include Lee(R), Wrangler(R), Riders(R), Rustler(R), Vanity Fair(R), Vassarette(R), Bestform(R), Lily of France(R), Lee Sport(R), Healthtex(R), JanSport(R), Eastpak(R), Red Kap(R) and The North Face(R). VF Corporation's press releases, annual report and other information can be accessed through the Company's home page, http://www.vfc.com. Page 4 of 7 July 22, 2003 VF CORPORATION CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED SIX MONTHS ENDED ----------------------------- ----------------------------- JULY 5 JUNE 29 JULY 5 JUNE 29 2003 2002 * 2003 2002 * ----------- ----------- ----------- ----------- NET SALES $ 1,134,742 $ 1,160,256 $ 2,384,797 $ 2,372,518 COSTS AND OPERATING EXPENSES Cost of products sold 714,011 725,076 1,495,303 1,509,444 Marketing, administrative and general expenses 301,157 288,578 623,491 583,695 Other operating income (6,039) (5,324) (12,369) (9,821) ----------- ----------- ----------- ----------- 1,009,129 1,008,330 2,106,425 2,083,318 ----------- ----------- ----------- ----------- OPERATING INCOME 125,613 151,926 278,372 289,200 OTHER INCOME (EXPENSE) Interest, net (13,090) (14,727) (25,158) (32,114) Miscellaneous, net 2,207 392 2,938 1,526 ----------- ----------- ----------- ----------- (10,883) (14,335) (22,220) (30,588) ----------- ----------- ----------- ----------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 114,730 137,591 256,152 258,612 INCOME TAXES 39,785 49,111 89,141 93,085 ----------- ----------- ----------- ----------- INCOME FROM CONTINUING OPERATIONS 74,945 88,480 167,011 165,527 DISCONTINUED OPERATIONS -- 386 -- 2,335 CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING POLICY FOR GOODWILL -- -- -- (527,254) ----------- ----------- ----------- ----------- NET INCOME (LOSS) $ 74,945 $ 88,866 $ 167,011 $ (359,392) =========== =========== =========== =========== EARNINGS (LOSS) PER COMMON SHARE - BASIC Income from continuing operations $ 0.69 $ 0.79 $ 1.54 $ 1.45 Discontinued operations -- -- -- 0.02 Cumulative effect of change in accounting policy -- -- -- (4.80) Net income (loss) 0.69 0.79 1.54 (3.33) EARNINGS (LOSS) PER COMMON SHARE - DILUTED Income from continuing operations $ 0.68 $ 0.79 $ 1.51 $ 1.45 Discontinued operations -- -- -- 0.02 Cumulative effect of change in accounting policy -- -- -- (4.66) Net income (loss) 0.68 0.79 1.51 (3.18) WEIGHTED AVERAGE SHARES OUTSTANDING Basic 107,412 109,626 107,884 109,793 Diluted 110,088 112,982 110,500 113,185 CASH DIVIDENDS PER COMMON SHARE $ 0.25 $ 0.24 $ 0.50 $ 0.48
* Reclassified to present the Private Label knitwear and the Jantzen swimwear businesses as discontinued operations. ...Continued Page 5 of 7 July 22, 2003 VF CORPORATION CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
JULY 5 JANUARY 4 JUNE 29 2003 2003 2002 * ----------- ----------- ----------- ASSETS CURRENT ASSETS Cash and equivalents $ 204,977 $ 496,367 $ 272,199 Accounts receivable, net 695,499 587,859 640,857 Inventories 1,030,931 830,518 892,620 Other current assets 143,839 154,513 154,073 Current assets of discontinued operations 2,809 5,283 20,464 ----------- ----------- ----------- Total current assets 2,078,055 2,074,540 1,980,213 PROPERTY, PLANT AND EQUIPMENT 1,561,367 1,539,269 1,556,865 Less accumulated depreciation 1,003,460 972,723 964,100 ----------- ----------- ----------- 557,907 566,546 592,765 GOODWILL 481,174 473,355 471,534 OTHER ASSETS 399,973 386,204 416,360 NONCURRENT ASSETS OF DISCONTINUED OPERATIONS -- 2,506 11,461 ----------- ----------- ----------- $ 3,517,109 $ 3,503,151 $ 3,472,333 =========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Short-term borrowings $ 60,540 $ 60,918 $ 65,302 Current portion of long-term debt 639 778 640 Accounts payable 262,930 298,456 264,924 Accrued liabilities 435,595 502,057 478,882 Current liabilities of discontinued operations 6,930 12,635 26,869 ----------- ----------- ----------- Total current liabilities 766,634 874,844 836,617 LONG-TERM DEBT 602,155 602,287 702,777 OTHER LIABILITIES 366,744 331,270 246,400 REDEEMABLE PREFERRED STOCK 32,909 36,902 41,700 COMMON SHAREHOLDERS' EQUITY Common Stock 107,162 108,525 109,181 Additional paid-in capital 933,395 930,132 924,159 Accumulated other comprehensive income (loss) (181,537) (214,141) (108,871) Retained earnings 889,647 833,332 720,370 ----------- ----------- ----------- Total common shareholders' equity 1,748,667 1,657,848 1,644,839 ----------- ----------- ----------- $ 3,517,109 $ 3,503,151 $ 3,472,333 =========== =========== ===========
* Reclassified to present the Private Label knitwear and the Jantzen swimwear businesses as discontinued operations. ...Continued Page 6 of 7 July 22, 2003 VF CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
SIX MONTHS ENDED ------------------------- JULY 5 JUNE 29 2003 2002 * --------- --------- OPERATIONS Net income (loss) $ 167,011 $(359,392) Adjustments to reconcile net income (loss) to cash provided (used) by operating activities of continuing operations: Discontinued operations -- (2,335) Cumulative effect of change in accounting policy -- 527,254 Restructuring costs -- 4,011 Depreciation 51,698 52,461 Other, net 37,413 (2,277) Changes in current assets and liabilities: Accounts receivable (98,778) (55,204) Inventories (182,189) (24,899) Accounts payable (41,745) 23,452 Other, net (65,133) 61,338 --------- --------- Cash provided (used) by operating activities of continuing operations (131,723) 224,409 INVESTMENTS Capital expenditures (45,400) (22,026) Business acquisitions (3,100) -- Other, net (7,710) (4,301) --------- --------- Cash used by investing activities of continuing operations (56,210) (26,327) FINANCING Decrease in short-term borrowings (2,957) (11,826) Payment of long-term debt (222) (200,956) Purchase of Common Stock (61,400) (84,850) Cash dividends paid (55,165) (54,190) Proceeds from issuance of Common Stock 3,840 34,530 Other, net (338) (5,623) --------- --------- Cash used by financing activities of continuing operations (116,242) (322,915) NET CASH PROVIDED (USED) BY DISCONTINUED OPERATIONS (1,879) 61,721 EFFECT OF FOREIGN CURRENCY RATE CHANGES ON CASH 14,664 3,262 --------- --------- NET CHANGE IN CASH AND EQUIVALENTS (291,390) (59,850) CASH AND EQUIVALENTS - BEGINNING OF YEAR 496,367 332,049 --------- --------- CASH AND EQUIVALENTS - END OF PERIOD $ 204,977 $ 272,199 ========= =========
* Reclassified to present the Private Label knitwear and the Jantzen swimwear businesses as discontinued operations. ...Continued Page 7 of 7 July 22, 2003 VF CORPORATION SUPPLEMENTAL FINANCIAL INFORMATION CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
SECOND QUARTER 2002 SIX MONTHS 2002 FULL YEAR 2002 -------------------------- -------------------------- -------------------------- AS AS AS REPORTED PRO FORMA * REPORTED PRO FORMA * REPORTED PRO FORMA * ----------- ----------- ----------- ----------- ----------- ----------- NET SALES $ 1,160,256 $ 1,160,256 $ 2,372,518 $ 2,372,518 $ 5,083,523 $ 5,083,523 ----------- ----------- ----------- ----------- ----------- ----------- COSTS AND OPERATING EXPENSES Cost of products sold 725,076 728,185 1,509,444 1,508,415 3,254,008 3,236,160 Marketing, administrative and general expenses 288,578 288,634 583,695 582,510 1,229,902 1,221,408 Other operating (income) expense, net (5,324) (5,324) (9,821) (9,821) (22,311) (22,311) ----------- ----------- ----------- ----------- ----------- ----------- 1,008,330 1,011,495 2,083,318 2,081,104 4,461,599 4,435,257 ----------- ----------- ----------- ----------- ----------- ----------- OPERATING INCOME 151,926 148,761 289,200 291,414 621,924 648,266 OTHER INCOME (EXPENSE) Interest, net (14,727) (14,727) (32,114) (32,114) (63,928) (63,928) Miscellaneous, net 392 392 1,526 1,526 3,732 3,732 ----------- ----------- ----------- ----------- ----------- ----------- (14,335) (14,335) (30,588) (30,588) (60,196) (60,196) ----------- ----------- ----------- ----------- ----------- ----------- INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 137,591 134,426 258,612 260,826 561,728 588,070 INCOME TAXES 49,111 47,865 93,085 93,792 197,300 207,194 ----------- ----------- ----------- ----------- ----------- ----------- INCOME FROM CONTINUING OPERATIONS $ 88,480 $ 86,561 $ 165,527 $ 167,034 $ 364,428 $ 380,876 =========== =========== =========== =========== =========== =========== EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS Basic $ 0.79 $ 0.77 $ 1.45 $ 1.47 $ 3.26 $ 3.41 Diluted 0.79 0.76 1.45 1.47 3.24 3.38
* The pro forma Consolidated Statements of Income exclude the effects of the 2001 / 2002 Strategic Repositioning Program, as follows: Costs and Operating Expenses Costs of products sold $ (3,109) $ 1,029 $ 17,848 Marketing, administrative and general expenses (56) 1,185 8,494 ----------- ----------- ----------- $ (3,165) $ 2,214 $ 26,342 =========== =========== ===========
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