-----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, RUtj26Y9HGemRgCnw25mlLFkb/qTkFOgkDz73gCncmgTdknTzOqoNvU6tfp8iI7V KydaYv+DktjCNmIbBiAHjw== 0000950128-98-000647.txt : 19980323 0000950128-98-000647.hdr.sgml : 19980323 ACCESSION NUMBER: 0000950128-98-000647 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980320 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLAIR CORP CENTRAL INDEX KEY: 0000071525 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-CATALOG & MAIL-ORDER HOUSES [5961] IRS NUMBER: 250691670 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 001-00878 FILM NUMBER: 98570164 BUSINESS ADDRESS: STREET 1: 220 HICKORY ST CITY: WARREN STATE: PA ZIP: 16366 BUSINESS PHONE: 8147233600 FORMER COMPANY: FORMER CONFORMED NAME: NEW PROCESS CO DATE OF NAME CHANGE: 19890507 10-K405 1 BLAIR CORPORATION 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 Commission file number 1-878 BLAIR CORPORATION Incorporated in Delaware I.R.S. Employer Identification Number: 220 Hickory Street Warren, Pennsylvania 16366 25-0691670 (814) 723-3600 Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH REGISTERED ------------------- ------------------- Common Stock, without nominal or par value American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X ----- The aggregate market value of the voting stock held by nonaffiliates of the registrant as of February 27, 1998 was $150,961,002. There were 8,987,343 shares of common stock outstanding as of February 27, 1998, which amount represents the figure reported as outstanding by the Company's transfer agent as of the record date (9,007,366 shares) reduced by 20,023 shares repurchased by the Company prior to the record date but not reflected on the books of the transfer agent. DOCUMENTS INCORPORATED BY REFERENCE The Annual Report to Stockholders for the fiscal year ended December 31, 1997 (the "Annual Report") is incorporated by reference into Part II and Part IV of this Form 10-K. Portions of the Proxy Statement for the 1998 Annual Meeting of Stockholders (the "Proxy Statement") are incorporated by reference into Part III of this Form 10-K. ================================================================================ 2 PART I ITEM 1. BUSINESS (A) GENERAL. Blair Corporation (the "Company") was founded in 1910 by John L. Blair, Sr., and was incorporated in 1924 under the laws of the state of Delaware. The Company's business consists of the sale of fashion apparel for men and women, plus a wide range of home products, primarily through direct mail merchandising. The Company operates two retail stores, one in Pennsylvania and one in Delaware, and two outlet stores in Pennsylvania. The Company employs approximately 2,200 people. (B) INFORMATION REGARDING INDUSTRY SEGMENTS. The Company's business consists of only one industry segment, which is the retail and direct mail merchandising of men's and women's fashion apparel and home products. (C) DESCRIPTION OF BUSINESS. The Company markets a wide range of merchandise, manufactured by a number of independent suppliers, both domestic and foreign. Most of these suppliers have been associated with the Company for many years and manufacture products based upon the Company's specifications. Suppliers are selected in accordance with their ability to produce high quality products in a cost-effective manner. Historically, the Company has marketed its products by mailing letters and color folders depicting the current styles of womenswear (such as coordinates, dresses, tops, pants, skirts, lingerie, sportswear, suits, jackets, outerwear and shoes); menswear (such as suits, shirts, outerwear, active wear, slacks, shoes, and accessories); and home products (such as bedspread ensembles, draperies, furniture covers, area rugs, bath accessories, kitchenware, tools, exercise and personal care items) directly to existing and prospective customers. Sales of the menswear and womenswear products accounted for approximately 87% of the Company's total sales in 1997, and sales of home products accounted for the remaining 13% (approximately). Media and co-op prospect advertising programs continue to be used as components of the Company's customer acquisition strategy. In 1993, the Company tested a catalog format to market its home products and other non-apparel merchandise, which was well-received by its existing customer base. In 1995, the Company tested a catalog format to market its menswear and in early 1996, the Company tested a catalog format to market its womenswear. The success of the pilot catalog mailing programs prompted the Company to continually expand its catalog distribution since 1993, and the Company anticipates that catalog mailings will outnumber letter mailings in 1998. Orders for merchandise are processed at the Company's corporate offices in Warren, Pennsylvania. Letter mailings originate from the Company's Mailing Center, and orders are filled and mailed from the Company's Distribution Center, both in nearby Irvine, Pennsylvania. Catalog mailings are mailed from commercial printers engaged by the Company. The Company serves customers throughout the fifty states. The Company's outlet stores enable it to more efficiently promote and liquidate discontinued, overstocked and returned merchandise. The Delaware retail store is the only Company retail facility located outside of its home state of Pennsylvania. The Company considers its merchandise to be low/medium-priced and competes for sales with other direct mail businesses, retail department stores, specialty shops and discount store chains. The Company competes based on its sales expertise, customer service, pricing, customer credit privileges and diverse product mix. During 1997, the Company continued its efforts to broaden its customer information systems. The marketing and credit departments are continually updated in order to enhance the Company's ability to market to both customers and prospects. (D) FOREIGN OPERATIONS AND EXPORT SALES. The Company does not derive any revenue from sales of merchandise outside of the United States. 3 ITEM 2. PROPERTIES The Company owns the following properties: 1. Blair Headquarters (220 Hickory Street, Warren, Pennsylvania) -- a 284,000 square foot multi-story brick facility containing the Company's corporate offices and Accounting, Advertising, Information Services, Human Resources, Merchandise, Order Handling and Planning departments. 2. Blair Distribution Center (Route 62, Irvine, Pennsylvania) -- a 542,275 square foot cement block and sheet metal warehouse and distribution facility. 3. Blair Mailing Center (Route 62, Irvine, Pennsylvania) -- a 293,400 square foot cement block and sheet metal mailing facility. 4. Blair Warehouse Outlet (Route 62, Starbrick, Pennsylvania) -- a 53,250 square foot metal warehouse outlet facility. 5. Blair Warehouse Outlet (Millcreek Mall, Erie, Pennsylvania) -- a 38,660 square foot block and brick warehouse outlet facility. 6. Bell Warehouse Building (Liberty Street, Warren, Pennsylvania) -- a 9,000 square foot metal warehouse facility. 7. Starbrick Warehouse Building (Route 62, Starbrick, Pennsylvania) -- a 12,000 square foot metal warehouse facility. The Company leases the following properties: 1. Blair Retail Store (Wilmington, Delaware) -- a 11,765 square foot retail facility. 2. Warehouse Building (Route 62, Starbrick, Pennsylvania) -- a 30,000 square foot metal warehouse facility. 3. Telephone Call Center (Erie, Pennsylvania) -- a 21,870 square foot metal call center facility. 4. Telephone Call Center (Franklin, Pennsylvania) -- a 17,500 square foot cement block call center facility. In addition, the Company's wholly-owned subsidiary, Blair Holdings, Inc., leases approximately 600 square feet of office space in Newark, Delaware, which it uses as its principal office. Management believes that these properties are capable of meeting the Company's anticipated needs for the foreseeable future. ITEM 3. LEGAL PROCEEDINGS Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year covered by this report. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The information required by this item is incorporated by reference to page 14 of the Company's 1997 Annual Report to Stockholders. ITEM 6. SELECTED FINANCIAL DATA The information required by this item is incorporated by reference to page 14 of the Company's 1997 Annual Report to Stockholders. 4 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information required by this item is incorporated by reference to pages 15 through 18 of the Company's 1997 Annual Report to Stockholders. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this item is incorporated by reference to pages 7 through 14 of the Company's 1997 Annual Report to Stockholders. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY Information regarding directors and executive officers of the Company appearing under the caption "Election of Directors" in the Company's Proxy Statement for the 1998 Annual Meeting of Stockholders (the "1998 Proxy Statement") is hereby incorporated by reference. ITEM 11. EXECUTIVE COMPENSATION Information appearing under the caption "Executive Compensation" in the 1998 Proxy Statement is hereby incorporated by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information setting forth the security ownership of certain beneficial owners and management appearing under the captions "Security Ownership of Certain Beneficial Owners" and "Security Ownership of Management" in the 1998 Proxy Statement is hereby incorporated by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Not applicable. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (A) EXHIBITS AND FINANCIAL STATEMENTS AND SCHEDULES. (1) Financial Statements. The Company's consolidated financial statements to be included in Part II, Item 8 are incorporated herein by reference to the Company's 1997 Annual Report to Stockholders, a copy of which accompanies this report on Form 10-K. (2) Financial Statement Schedules. SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS is being filed as part of this report on Form 10-K, and should be read in conjunction with the consolidated financial statements of the Company described in Item 14(a)(1) above. 5 All other schedules set forth in the applicable accounting regulations of the Securities and Exchange Commission either are not required under the related instructions or are not applicable and, therefore, have been omitted. (3) List of Exhibits. 3 (i) Certificate of Incorporation of the Company 3 (ii) Bylaws of the Company *10 Stock Accumulation and Deferred Compensation Plan for Directors *11 Computation of Earnings per Share (incorporated by reference to page 7 of the 1997 Annual Report to Stockholders) *13 1997 Annual Report to Stockholders 21 Subsidiaries of Registrant *23 Consents of Experts and Counsel *27 Financial Data Schedule (B) REPORTS ON FORM 8-K. The registrant has filed no Forms 8-K during the quarter ended December 31, 1997. (C) EXHIBITS. All exhibits listed above were previously filed with the Commission, except for those marked with an asterisk, which are being filed with this Form 10-K. 6 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BLAIR CORPORATION (Registrant) Date: March 20, 1998 By: /s/ KENT R. SIVILLO ----------------------------------- Kent R. Sivillo Vice President and Treasurer Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated. Date: March 20, 1998 By: /s/ MURRAY K. MCCOMAS ----------------------------------- Murray K. McComas President and Director (Principal Executive Officer) Date: March 20, 1998 By: /s/ BLAIR T. SMOULDER ----------------------------------- Blair T. Smoulder Executive Vice President and Director Date: March 20, 1998 By: /s/ MICHAEL J. SAMARGYA ----------------------------------- Michael J. Samargya Vice President, Information Services, and Director Date: March 20, 1998 By: /s/ STEVEN M. BLAIR ----------------------------------- Steven M. Blair Vice President, Order Handling, and Director Date: March 20, 1998 By: /s/ JOHN E. ZAWACKI ----------------------------------- John E. Zawacki Vice President, Womenswear, and Director Date: March 20, 1998 By: /s/ DAVID A. BLAIR ----------------------------------- David A. Blair Secretary and Director 7 Date: March 20, 1998 By: /s/ KENT R. SIVILLO ----------------------------------- Kent R. Sivillo Vice President, Treasurer and Director (Principal Financial and Accounting Officer) Date: March 20, 1998 By: /s/ ROBERT D. CROWLEY ----------------------------------- Robert D. Crowley Vice President, Menswear, and Director Date: March 20, 1998 By: /s/ THOMAS P. MCKEEVER ----------------------------------- Thomas P. McKeever Vice President, Corporate Affairs and Human Resources, and Director 8 Annual Report on Form 10-K Item 14(a) (1) and (2), and (d) List of Financial Statements and Financial Statement Schedules Blair Corporation and Subsidiary Warren, Pennsylvania Year ended December 31, 1997 9 Blair Corporation and Subsidiary List of Financial Statements and Financial Statement Schedules Form 10-K -- Item 14(a)(1) and (2), and (d) The following consolidated financial statements of Blair Corporation, included in the annual report of the registrant to its stockholders for the year ended December 31, 1997, are incorporated by reference in Item 8: -- Consolidated Balance Sheets -- December 31, 1997 and 1996 -- Consolidated Statements of Income -- Years ended December 31, 1997, 1996 and 1995 -- Consolidated Statements of Stockholders' Equity -- Years ended December 31, 1997, 1996 and 1995 -- Consolidated Statements of Cash Flows -- Years ended December 31, 1997, 1996 and 1995 -- Notes to Consolidated Financial Statements -- December 31, 1997 The following financial statement schedule of Blair Corporation is included in Item 14(d): -- Schedule II -- Valuation and Qualifying Accounts All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted. 10 Blair Corporation and Subsidiary Schedule II Valuation and Qualifying Accounts December 31, 1997
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E ------------------------------------------------------------------------------------------------------------------- ADDITIONS- BALANCE AT CHARGED TO BALANCE BEGINNING COSTS AND DEDUCTIONS- AT END DESCRIPTION OF PERIOD EXPENSES DESCRIBE OF PERIOD ----------- ---------- ----------- ------------ --------- Year ended December 31, 1997: Allowance deducted from asset accounts (customer accounts receivable): For doubtful accounts $37,272,572 $ 32,222,092(A) $ 37,509,776(B) $31,984,888 For estimated loss on returns 7,192,000 94,114,182 94,811,182(C) 6,495,000 ----------- ------------ ------------ ----------- Totals $44,464,572 $126,336,274 $132,320,958 $38,479,888 =========== ============ ============ =========== Year ended December 31, 1996: Allowance deducted from asset accounts (customer accounts receivable): For doubtful accounts $40,508,071 $ 47,550,310(A) $ 50,785,809(B) $37,272,572 For estimated loss on returns 6,676,000 100,976,722 100,460,722(C) 7,192,000 ----------- ------------ ------------ ----------- Totals $47,184,071 $148,527,032 $151,246,531 $44,464,572 =========== ============ ============ =========== Year ended December 31, 1995: Allowance deducted from asset accounts (customer accounts receivable): For doubtful accounts $32,256,161 $ 31,774,283(A) $ 23,522,373(B) $40,508,071 For estimated loss on returns 7,571,000 96,320,044 97,215,044(C) 6,676,000 ----------- ------------ ------------ ----------- Totals $39,827,161 $128,094,327 $120,737,417 $47,184,071 =========== ============ ============ ===========
- ---------- Note (A) -- Current year provision for doubtful accounts, charged against income. Note (B) -- Accounts charged off, net of recoveries. Note (C) -- Sales value of merchandise returned. EX-10 2 BLAIR CORPORATION 1 Exhibit 10 BLAIR STOCK ACCUMULATION AND DEFERRED COMPENSATION PLAN FOR DIRECTORS 1. PURPOSE OF THE PLAN The purpose of the Blair Stock Accumulation and Deferred Compensation Plan for Directors (the "Plan") is (1) to further the identity of interests of members of the Board of Directors of Blair Corporation (the "Company") with those of the Company's stockholders generally through the grant of common stock of the Company (the "Stock") and (2) to permit Directors to defer the payment of all or a specified part of their compensation, including any grant of Stock by the Company, for services performed as Directors. 2. ELIGIBILITY Members of the Board of Directors of the Company who are not employees of the Company or any of its subsidiaries or affiliates shall be eligible to receive grants of Stock under the Plan. Members of the Board of Directors of the Company who are not employees of the Company or any of its subsidiaries or affiliates shall be eligible under this Plan to defer compensation for services performed as Directors. 3. ADMINISTRATION AND AMENDMENT The Plan shall be administered by the Executive Payroll Compensation Committee of the Board of Directors or such other officers or Directors of the Company not eligible under Article 2 hereof for participation in the Plan who are selected by the Board of Directors (the "Committee"). The decision of the Committee with respect to any questions arising as to the administration, construction or interpretation of this Plan, including the severability of any and all of the provisions thereof, shall be final, conclusive and binding. The Board of Directors of the Company reserves the right to modify the Plan from time to time, or to repeal the Plan entirely, provided, however, that (1) no modification of the Plan shall operate to annul an election already in effect for the current calendar year or any preceding calendar year; and (2) to the extent required under Section 16 of the Securities Exchange Act of 1934 ("Exchange Act"), Plan provisions relating to the amount, price and timing of stock grants and options shall not be amended more than once every fiscal year, except that the foregoing shall not preclude any amendment necessary to conform to changes in the Internal Revenue Code or the Employee Retirement Income Security Act. The Committee is authorized, subject to the provisions of the Plan, from time to time to establish such rules and regulations as it deems appropriate for the proper administration of the Plan, and to make such determinations and take such steps in connection therewith as it deems necessary or advisable. 4. COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT/CHANGE IN LAW It is the Company's intent that the Plan comply in all respects with Rule 16b-3 of the Exchange Act, or its successor, and any regulations promulgated thereunder. If any provision of this Plan is found not to be in compliance with such rule and regulations, the provision shall be deemed null and void, and the remaining provisions of the Plan shall continue in full force and effect. All transactions under this Plan shall be executed in accordance with the requirements of Section 16 of the Exchange Act and regulations promulgated thereunder. The Board of Directors may, in its sole discretion, at any time modify the terms and conditions of this Plan in response to and consistent with any changes in applicable law, rule or regulation. 5. ANNUAL STOCK GRANT Effective with the 1998 Annual Meeting and annually thereafter, each Director eligible under Article 2 hereof shall be awarded an annual grant of not more than one thousand (1,000) shares of Stock following his/her election to the Board of Directors at the Annual Meeting of Stockholders, the number of shares to be established each year by the Board of Directors. A Director elected to the Board at a time other than at the Annual Meeting shall receive a grant of Stock on the date such person becomes an eligible Director equal to the number of shares determined by the Board of Directors as the annual grant for that year prorated for the number of whole or partial months of service during such year when such person serves as a Director. 2 6. ELECTION TO DEFER On or before December 31 of any year, commencing with 1997, a Director may irrevocably elect to defer, until a specified year or the cessation of his service as a Director of the Company, the receipt of all Stock granted under Article 5 hereof and/or the payment of all or a specified part of all annual retainer and committee and meeting fees payable to the Director for services as a Director during the calendar year following the election and succeeding calendar years , provided, however, that Stock may only be deferred in full (and not in part) with respect to any annual grant of Stock pursuant to Article 5 hereof. When such an election is filed, the Director shall designate in his election as to the particular year or years the amount of fees and/or Stock to be deferred and to be credited pursuant to Article 7 hereof. Any person who shall become a Director during any calendar year, and who was not a Director of the Company on the preceding December 31, may elect, within thirty days after election to the Board, to defer in the same manner the receipt of all Stock granted under Article 5 of this Plan and/or the payment of all or a specified part of fees not yet earned for the remainder of that calendar year and for succeeding calendar years. Elections shall be made by written notice delivered to the Secretary of the Company. 7. DIRECTORS' ACCOUNTS Fees deferred in the form of cash shall be held in the general funds of the Company and shall be credited to an account in the name of each eligible participating Director. On the first business day of each quarter, interest shall be credited to each account calculated on the basis of the cash balance in each account on the last business day of the preceding quarter at the rate of interest in effect on the immediately preceding March 31 with respect to the Company's Profit Sharing and Saving Plan's Interest Income Fund (or at such other rate as may be specified by the Committee from time to time). Stock granted under Article 5 to be deferred in the form of stock units shall be allocated to each Director's account based on the closing price of the Company's common stock as reported on the Composite Tape of the American Stock Exchange ("Stock Price") on the effective date of the Stock grant. The Company shall not be required to reserve or otherwise set aside shares of its authorized and unissued or treasury common stock for the payment of its obligations hereunder, but shall make available as and when required a sufficient number of shares of common stock to meet the needs of the Plan. Unless otherwise determined by the Board of Directors, the Plan shall be unfunded and shall not create (or be construed to create) a trust or a separate fund or funds. The Plan shall not establish any fiduciary relationship between the Company or any participant or other individual. To the extent any individual holds any rights by virtue of a grant awarded under the Plan, such rights (unless otherwise determined by the Board) shall be no greater than the rights of an unsecured general creditor of the Company. An amount equal to any cash dividends (or the fair market value of dividends paid in property other than dividends payable in common stock of the Company) payable on the number of shares represented by the number of stock units in each Director's account will be allocated to each Director's account, in cash, on the dividend payment date. Any stock dividends payable on such number of shares will be allocated in the form of stock units. If adjustments are made to outstanding shares of common stock as a result of split-ups, recapitalizations, mergers, consolidations and the like, an appropriate adjustment will also be made in the number of stock units in a Director's account. Stock units shall not entitle any person to rights of a stockholder unless and until shares of Company common stock have been issued to that person with respect to stock units as provided in Article 8. 8. PAYMENT FROM DIRECTORS' ACCOUNTS The aggregate amount of Stock granted under Article 5 which has been deferred and deferred fees, together with interest and dividend equivalents accrued thereon, shall be paid in the year specified by the Director or, unless otherwise specified, in the year after a Director ceases to be a Director of the Company. Amounts deferred shall be paid in a lump sum or, if the Director elects, in substantially equal annual installments over a period not to exceed five (5) years as specified by the Director. The delivery election must be made by written notice delivered to the Secretary of the Company prior to the deferral date specified by the Director or the date he ceases to be a Director, as the case may be, and the first installment (or lump sum payment ) shall be paid promptly at the beginning of the following calendar year. Subsequent installments shall be paid promptly at the beginning of each succeeding calendar year until the entire amount credited to the Director's account shall have been paid. In the event that installments are designated in the delivery election, the cash amount remaining in the Director's account shall continue to bear interest in accordance with the provisions of Article 7 hereof. Amounts credited to a Director's account in cash shall be paid in cash and amounts credited in stock units shall be paid in one share of common stock of the Company for each stock unit, except that a cash payment will be made with any final installment for any fraction of a stock unit remaining in the Director's account. Such fractional share will be valued at the closing Stock Price on the date of settlement. 3 9. PAYMENT IN EVENT OF DEATH A Director may file with the Secretary of the Company a written designation of a beneficiary for his or her account under the Plan on such form as may be prescribed by the Committee, and may, from time to time, amend or revoke such designation. If a Director should die before all deferred amounts credited to the Director's account have been distributed, the balance of any deferred Stock and fees and interest and dividend equivalents then in the Director's account shall be paid promptly to the Director's designated beneficiary. If the Director did not designate a beneficiary, or in the event that the beneficiary designated by the Director shall have predeceased the Director, the balance in the Director's account shall be paid promptly to the Director's estate. 10. TERMINATION OF ELECTION A Director may terminate his/her election to defer payment of fees in cash or stock units by written notice delivered to the Secretary of the Company. Termination shall become effective as of the end of the calendar year in which notice of termination is given with respect to fees payable for services as a Director during subsequent calendar years. Amounts credited to the account of a Director prior to the effective date of termination shall not be affected thereby and shall be paid only in accordance with Articles 7 and 8 hereof. 11. NONASSIGNABILITY During the Director's lifetime, the right to any deferred Stock or fees including interest and dividend equivalents thereon shall not be transferable or assignable. 12. SUCCESSORS AND ASSIGNS The Plan shall be binding on all successors and assigns of a participant, including, without limitation, the estate of such participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the participant's creditors. 13. GOVERNING LAW The validity and construction of the Plan shall be governed by the laws of the State of Delaware. 14. EFFECTIVE DATE This Plan shall become effective as of December 17, 1997, provided it is approved by stockholders at the Company's 1998 Annual Meeting, and shall continue in full force and effect until terminated by the Board of Directors. EX-13 3 BLAIR CORPORATION 1 EXHIBIT 13 CONSOLIDATED STATEMENTS OF INCOME ================================================================================
YEAR ENDED DECEMBER 31 1997 1996 1995 - ----------------------------------------------------------------------------------------------------------- Net sales $486,581,737 $544,129,005 $560,889,612 Other income-- Note 5 39,931,577 44,291,914 31,927,853 ------------ ------------ ------------ 526,513,314 588,420,919 592,817,465 Costs and expenses: Cost of goods sold 242,828,539 268,757,869 277,278,340 Advertising 128,117,432 141,035,288 138,001,203 General and administrative 98,352,175 102,209,670 99,773,037 Provision for doubtful accounts 32,222,092 47,550,310 31,774,283 Interest 4,102,148 5,524,561 3,743,692 ------------ ------------ ------------ 505,622,386 565,077,698 550,570,555 ------------ ------------ ------------ INCOME BEFORE INCOME TAXES 20,890,928 23,343,221 42,246,910 Income taxes-- Note 6 7,637,000 8,617,000 16,979,000 ------------ ------------ ------------ NET INCOME $ 13,253,928 $ 14,726,221 $ 25,267,910 ============ ============ ============ Basic and diluted earnings per share based on weighted average shares outstanding $1.45 $1.58 $2.72 ===== ===== =====
See accompanying notes. REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS ================================================================================ BOARD OF DIRECTORS AND STOCKHOLDERS BLAIR CORPORATION AND SUBSIDIARY We have audited the accompanying consolidated balance sheets of Blair Corporation and Subsidiary as of December 31, 1997 and 1996, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1997. These financial statements are the responsibility of Blair Corporation management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Blair Corporation and Subsidiary at December 31, 1997 and 1996, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1997 in conformity with generally accepted accounting principles. /s/ ERNST & YOUNG LLP Buffalo, New York January 30, 1998 7 2
CONSOLIDATED BALANCE SHEETS ============================================================================================ DECEMBER 31 1997 1996 - -------------------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash $ 3,468,483 $ 4,115,533 Customer accounts receivable, less allowances for doubtful accounts and returns of $38,479,888 in 1997 and $44,464,572 in 1996 157,636,096 193,772,056 Inventories: Merchandise 68,143,275 74,537,691 Advertising and shipping supplies 10,584,134 13,310,907 ------------- ------------ 78,727,409 87,848,598 Deferred income taxes-- Note 6 9,910,000 17,022,000 Prepaid federal and state taxes 6,499,412 10,142,009 Prepaid expenses 391,532 655,915 ------------- ------------ TOTAL CURRENT ASSETS 256,632,932 313,556,111 PROPERTY, PLANT AND EQUIPMENT Land 1,142,144 1,130,454 Buildings 63,263,399 62,788,129 Equipment 38,859,725 36,540,127 ------------- ------------ 103,265,268 100,458,710 Less allowances for depreciation 51,322,255 46,251,580 ------------- ------------ 51,943,013 54,207,130 TRADEMARKS 921,623 993,867 ------------- ------------ TOTAL ASSETS $309,497,568 $368,757,108 ============= ============
8 3
====================================================================================================== DECEMBER 31 1997 1996 - ------------------------------------------------------------------------------------------------------ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable-- Note 2 $ 38,600,000 $ 27,000,000 Trade accounts payable 46,358,297 40,497,362 Advance payments from customers 1,393,814 1,145,382 Accrued expenses-- Note 3 9,033,411 9,536,481 ------------- ------------- TOTAL CURRENT LIABILITIES 95,385,522 78,179,225 DEFERRED INCOME TAXES-- Note 6 1,683,000 1,979,000 LONG-TERM DEBT -- Note 2 -0- 80,000,000 STOCKHOLDERS' EQUITY -- Note 4 Common Stock without par value: Authorized 12,000,000 shares; issued 10,075,440 shares (including shares held in treasury)--stated value 419,810 419,810 Additional paid-in capital 13,230,251 12,928,260 Retained earnings 223,868,940 216,068,537 ------------- ------------- 237,519,001 229,416,607 Less 1,067,724 shares in 1997 and 840,908 shares in 1996 of Common Stock in treasury-- at cost 23,161,169 19,013,814 Less receivable from Employee Stock Purchase Plan 1,928,786 1,803,910 ------------- ------------- 212,429,046 208,598,883 ------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $309,497,568 $368,757,108 ============= =============
See accompanying notes. 9 4
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY ================================================================================================================ YEAR ENDED DECEMBER 31 1997 1996 1995 - ---------------------------------------------------------------------------------------------------------------- COMMON STOCK $ 419,810 $ 419,810 $ 419,810 ADDITIONAL PAID-IN CAPITAL: Balance at beginning of year 12,928,260 12,372,697 11,017,130 Issuance (net of forfeitures) of Common Stock under Employee Stock Purchase Plan-- Note 4 288,303 555,563 1,355,567 Issuance of Common Stock to non-employee directors 13,688 -0- -0- ------------- ------------- ------------- Balance at end of year 13,230,251 12,928,260 12,372,697 RETAINED EARNINGS: Balance at beginning of year 216,068,537 211,588,111 207,683,352 Net income 13,253,928 14,726,221 25,267,910 Cash dividends declared per share -- $0.60 in 1997; $1.10 in 1996; $2.30 in 1995 (5,453,525) (10,245,795) (21,363,151) ------------- ------------- ------------- Balance at end of year 223,868,940 216,068,537 211,588,111 TREASURY STOCK: Balance at beginning of year (19,013,814) (16,927,008) (17,238,660) Purchase of 276,866 shares in 1997; 120,300 shares in 1996; and -0- shares in 1995 of Common Stock for treasury (4,551,438) (2,267,655) -0- Issuance (net of forfeitures) of Common Stock under Employee Stock Purchase Plan-- Note 4 395,646 180,849 311,652 Issuance of 1,500 shares of Common Stock to non-employee directors 8,437 -0- -0- ------------- ------------- ------------- Balance at end of year (23,161,169) (19,013,814) (16,927,008) RECEIVABLE FROM EMPLOYEE STOCK PURCHASE PLAN: Balance at beginning of year (1,803,910) (1,887,595) (1,864,952) Issuance (net of forfeitures) of Common Stock under Employee Stock Purchase Plan-- Note 4 (362,765) (177,635) (530,468) Repayments 237,889 261,320 507,825 ------------- ------------- ------------- Balance at end of year (1,928,786) (1,803,910) (1,887,595) ------------- ------------- ------------- TOTAL STOCKHOLDERS' EQUITY $ 212,429,046 $ 208,598,883 $ 205,566,015 ============= ============= =============
See accompanying notes. 10 5
CONSOLIDATED STATEMENTS OF CASH FLOWS ================================================================================================================== YEAR ENDED DECEMBER 31 1997 1996 1995 - ------------------------------------------------------------------------------------------------------------------ OPERATING ACTIVITIES Net income $ 13,253,928 $ 14,726,221 $ 25,267,910 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 5,369,394 5,418,237 4,821,652 Provision for doubtful accounts 32,222,092 47,550,310 31,774,283 Provision for deferred income taxes 6,816,000 1,599,000 (195,000) Compensation expense for stock awards 375,525 559,538 1,148,881 Changes in operating assets and liabilities providing (using) cash: Customer accounts receivable 3,913,868 (49,922,884) (92,656,626) Inventories 9,121,189 (7,455,793) 3,564,657 Prepaid expenses 264,383 (127,624) 30,079 Trade accounts payable 5,860,935 (7,725,784) 13,390,955 Advance payments from customers 248,432 (9,777) (264,423) Accrued expenses (503,070) (1,859,605) (1,329,436) Federal and state taxes 3,642,597 (9,501,748) (4,067,087) ------------ ------------- ------------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 80,585,273 (6,749,909) (18,514,155) INVESTING ACTIVITIES Purchases of property, plant and equipment (3,033,033) (3,249,030) (8,058,340) Purchase of trademarks -0- -0- (1,075,822) ------------ ------------- ------------- NET CASH USED IN INVESTING ACTIVITIES (3,033,033) (3,249,030) (9,134,162) FINANCING ACTIVITIES Net (repayments) proceeds from bank borrowings (68,400,000) 22,700,000 50,000,000 Dividends paid (5,453,525) (10,245,795) (21,363,151) Purchase of Common Stock for treasury (4,551,438) (2,267,655) -0- Decrease in notes receivable from Employee Stock Purchase Plan 205,673 260,559 495,695 ------------ ------------- ------------- NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (78,199,290) 10,447,109 29,132,544 ------------ ------------- ------------- NET (DECREASE) INCREASE IN CASH (647,050) 448,170 1,484,227 Cash at beginning of year 4,115,533 3,667,363 2,183,136 ------------ ------------- ------------- CASH AT END OF YEAR $ 3,468,483 $ 4,115,533 $ 3,667,363 ============ ============= =============
See accompanying notes. 11 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ================================================================================ 1. SIGNIFICANT ACCOUNTING POLICIES - -------------------------------------------------------------------------------- ORGANIZATION: The consolidated financial statements include the accounts of Blair Corporation and its wholly-owned subsidiary, Blair Holdings, Inc., a Delaware Corporation (Company). All significant intercompany accounts are eliminated upon consolidation. REVENUE RECOGNITION: Sales, cash or credit, are recorded when the merchandise is shipped to the customer. Credit sales are made under Easy Payment Plan and Seven Day Credit sales arrangements. Monthly, a provision for potentially doubtful accounts is charged against income based on management's estimate of realization. Any recoveries of bad debts previously written-off are credited back against the allowance for doubtful accounts in the period received. As reported in the balance sheet, the carrying amount, net of allowances for doubtful accounts and returns for customer accounts receivable on credit sales, approximates fair value. Finance charges on time payment accounts are recognized on an accrual basis of accounting. USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. RETURNS: A provision for anticipated returns is recorded monthly as a percentage of gross sales based upon historical experience. This provision is charged directly against gross sales to arrive at net sales as reported in the consolidated statements of income. Actual returns are charged against the allowance for returns, which is netted against accounts receivable in the balance sheet. The provision for returns charged against income in 1997, 1996 and 1995 amounted to $94,114,182, $100,976,722 and $96,320,044, respectively. ALLOWANCES FOR DOUBTFUL ACCOUNTS: A provision for doubtful accounts is recorded monthly as a percentage of gross sales based upon experience of delinquencies and charge-offs and current credit market conditions. Management believes these provisions are adequate based upon the relevant information presently available. However, it is reasonably possible that the Company's provisions may change in the near term. INVENTORIES: Inventories are valued at the lower of cost or market. Cost of merchandise inventories is determined principally on the last-in, first-out (LIFO) method. Cost of advertising and shipping supplies is determined on the first-in, first-out (FIFO) method. Advertising and shipping supplies include printed advertising material and related mailing supplies for promotional mailings which are generally scheduled to occur within two months. These costs are expensed when mailed. If the FIFO method had been used, inventories would have increased by approximately $8,538,000 and $8,833,000 at December 31, 1997 and 1996, respectively. PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment is stated on the basis of cost. Depreciation has been provided principally by the straight-line method using rates which are estimated to be sufficient to amortize the cost of the assets over their period of usefulness. TRADEMARKS: Trademarks are stated on the basis of cost. All trademarks are being amortized by the straight-line method for a period of 15 years. Amortization expense amounted to $72,244, $71,852 and $17,930 in 1997, 1996 and 1995, respectively. EMPLOYEE BENEFITS: The Company's employee benefits include a profit sharing and retirement feature available to all eligible employees. Contributions are dependent on net income of the Company and recognized on an accrual basis of accounting. The contributions to the plan charged against income in 1997, 1996 and 1995 amounted to $1,407,745, $1,568,137 and $2,799,706, respectively. As part of the same benefit plan, the Company has a contributory savings feature whereby all eligible employees may contribute up to 10% of their annual base salaries. The Company's matching contribution to the plan is based upon a percentage formula as set forth in the plan agreement. The Company's matching contributions to the plan charged against income in 1997, 1996 and 1995 amounted to $1,852,557, $1,925,675 and $1,787,053, respectively. INCOME TAXES: The liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. FINANCIAL INSTRUMENTS: The carrying amounts of cash, customer accounts receivable, accounts payable and accrued liabilities approximate fair value due to the short-term maturities of these assets and liabilities. The interest rates on the Company's revolving credit facility are adjusted regularly to reflect current market rates. Accordingly, the carrying amounts of the Company's borrowings also approximate fair value. NEW ACCOUNTING PRONOUNCEMENTS Earnings Per Share In February 1997, Statement of Financial Accounting Standards No. 128 (SFAS 128), "Earnings Per Share," was issued. SFAS 128 establishes standards for computing and presenting earnings per share (EPS) and simplifies the existing standards. This statement replaces the presentation of primary EPS with a presentation of basic and diluted EPS. SFAS 128 was adopted in the financial statements for the year ended December 31, 1997. The adoption of this standard had no impact on the Company's earnings per share amounts. Comprehensive Income In June 1997, Statement of Financial Accounting Standards No. 130 (SFAS 130), "Comprehensive Income," was issued. SFAS130 establishes standards for reporting and display of comprehensive income and its components in a full set of general purpose financial statements. SFAS 130 is effective for fiscal years beginning after December 15, 1997, and requires restatement of earlier periods presented. Management does not believe the adoption of this standard will have an impact on the financial statements of the Company. Disclosures About Segments of an Enterprise and Related Information In June 1997, Statement of Financial Accounting Standards No. 131 (SFAS 131), "Disclosures about Segments of an Enterprise and Related Information," was issued. SFAS131 establishes standards for the way that a public enterprise reports information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports issued to shareholders. SFAS 131 is effective for fiscal years beginning after December 15, 1997, and requires restatement of earlier periods presented. Management does not believe the adoption of this standard will have a significant impact on the financial statements of the Company. RECLASSIFICATIONS: Certain amounts in the prior year financial statements have been reclassified to conform with the current year presentation. CONTINGENCIES: The Company is involved in certain items of litigation, arising in the normal course of business. While it cannot be predicted with certainty, management believes that the outcome will not have a material effect on the Company's financial condition or results of operations. 12 7 ================================================================================ 2. FINANCING ARRANGEMENTS - -------------------------------------------------------------------------------- In 1995, the Company entered into a $125,000,000 Revolving Credit Facility, which expires on November 17, 1998. The interest rate is, at the Company's option, based on a base rate option, federal funds rate option or Euro-rate option as defined in the agreement. The Revolving Credit Facility is unsecured and requires the Company to meet certain covenants as outlined in the agreement. These covenants specifically relate to tangible net worth, maintaining a defined leverage ratio and fixed charge coverage ratio, and complying with certain indebtedness restrictions. As of December 31, 1997 and 1996, the Company was in compliance with all the agreement's covenants. At December 31, 1997 and 1996, the Company had borrowed $38,600,000 and $107,000,000 of which -0- and $80,000,000 were classified as long-term. Interest paid during 1997, 1996 and 1995 amounted to $4,186,967, $5,506,851 and $3,630,505, respectively. The weighted average interest rate on average debt outstanding was 5.96%, 5.89% and 6.53% for the years ended December 31, 1997, 1996 and 1995, respectively. The Company has outstanding letters of credit amounting to approximately $11,525,000 at December 31, 1997 related to inventory purchases. 3. ACCRUED EXPENSES - -------------------------------------------------------------------------------- Accrued expenses consist of: 1997 1996 ---- ---- Employee compensation $5,674,054 $6,089,723 Contribution to Profit Sharing and Retirement Plan 1,407,745 1,568,137 Taxes, other than taxes on income 297,457 322,053 Other accrued items 1,654,155 1,556,568 ---------- ---------- $9,033,411 $9,536,481 ========== ========== 4. EMPLOYEE STOCK PURCHASE PLAN - -------------------------------------------------------------------------------- The Company has an Employee Stock Purchase Plan (Plan) (amended in 1992) which provides for 400,000 shares of the Company's treasury stock to be reserved for sale and issuance to employees at a price to be established by the Stock Purchase Plan Committee. At December 31, 1997 and 1996, 146,700 and 195,250 shares, respectively, were available to be issued under the Plan. The Company follows APB Opinion No. 25, "Accounting for Stock Issued to Employees" and related interpretations in accounting for its Employee Stock Purchase Plan. Compensation expense equals the difference between the exercise price and the market price of the shares at the date of grant. Compensation expense related to these awards amounted to $353,400, $559,538 and $1,148,881 for the years ended December 31, 1997, 1996 and 1995, respectively. A summary of the activity under the Plan is as follows: 1997 1996 1995 ---- ---- ---- Shares granted and issued 49,600 34,700 49,150 Grant and issue price per share $7.50 $7.50 $11.00 Market value per share at date of issue $14.625 $23.625 $34.375 Shares cancelled and forfeited 1,050 2,000 500 Original price per share $7.50 to $13.00 to $13.00 to $16.00 $15.00 $16.00 Weighted average price per share $11.75 $14.00 $14.50 Statement of Financial Accounting Standard No. 123, "Accounting for Stock-Based Compensation" (SFAS No. 123) requires the use of option valuation models to determine the fair value of employee stock options. The Company's net income and earnings per share amounts as reported are the same as what would be required under SFAS No. 123. 5. OTHER INCOME - -------------------------------------------------------------------------------- Other income consists of: 1997 1996 1995 ---- ---- ---- Finance charges on time payment accounts $36,416,174 $42,503,052 $30,339,372 Miscellaneous 3,515,403 1,788,862 1,588,481 ----------- ----------- ----------- $39,931,577 $44,291,914 $31,927,853 =========== =========== =========== 6. INCOME TAXES - -------------------------------------------------------------------------------- The components of income tax expense are as follows: 1997 1996 1995 ---- ---- ---- Currently payable: Federal $ 2,012,000 $6,682,000 $15,366,000 State (1,191,000) 336,000 1,808,000 ------------ ---------- ----------- 821,000 7,018,000 17,174,000 Deferred (credit) 6,816,000 1,599,000 (195,000) ------------ ---------- ----------- $ 7,637,000 $8,617,000 $16,979,000 ============ ========== =========== The differences between total tax expense and the amount computed by applying the statutory federal income tax rate of 35% to income before income taxes are as follows: 1997 1996 1995 ---- ---- ---- Statutory rate applied to pretax income $7,311,825 $8,170,127 $14,786,419 State income taxes, net of federal benefit 256,100 365,950 1,833,000 Other items 69,075 80,923 359,581 ---------- ---------- ----------- $7,637,000 $8,617,000 $16,979,000 ========== ========== =========== Components of the deferred tax asset and liability under the liability method as of December 31, 1997 and 1996 are as follows: 1997 1996 ---- ---- Current net deferred tax asset: Doubtful accounts $ 6,960,000 $14,441,000 Returns allowance 2,013,000 1,853,000 Inventory obsolescence 1,937,000 1,937,000 Inventory costs 778,000 876,000 Vacation pay 1,321,000 1,257,000 Advertising costs (4,113,000) (4,150,000) Other items 1,014,000 808,000 ----------- ----------- $ 9,910,000 $17,022,000 =========== =========== Long-term deferred tax liability: Property, plant and equipment $ 1,683,000 $ 1,979,000 =========== =========== Income taxes (refunded) paid during 1997, 1996 and 1995 amounted to ($2,224,794), $15,553,202 and $21,241,087, respectively. 7. CONCENTRATION OF BUSINESS RISK - -------------------------------------------------------------------------------- The Company is primarily in the business of selling men's and women's fashion wearing apparel and accessories and home product items to individuals throughout the United States, comprising a customer base that is diverse in both geographic and demographic terms. Selling is done mainly by means of direct mail letters and catalogs with individual order forms which offer the Company's items. Sales of the men's and women's fashion wearing apparel and accessories merchandise lines accounted for 87%, 83% and 85% of total 1997, 1996 and 1995 sales, respectively. The home products merchandise line accounted for the remaining sales volume. 13 8 QUARTERLY RESULTS OF OPERATIONS ================================================================================ The following is a summary of unaudited quarterly results of operations for the years ended December 31, 1997 and 1996.
1997 1996 QUARTER ENDED Quarter Ended March June September December March June September December 31 30 30 31 31 30 30 31 ----------------------------------------------- --------------------------------------------------- (Thousands of dollars, except per share data) Net sales $110,882 $127,546 $102,810 $145,344 $140,727 $138,931 $112,095 $152,376 Cost of goods sold 55,117 63,639 52,630 71,443 69,824 67,309 55,224 76,402 Net income 1,965 3,620 2,256 5,413 6,423 6,761 1,481 62 Basic and diluted earnings per share .21 .40 .25 .59 .69 .72 .16 .01
Quarter ended December 31,1997 includes an additional provision for doubtful accounts of $3.1 million (pretax), $.20 net income per share and quarter ended December 31, 1996 includes an additional provision for doubtful accounts of $9.5 million (pretax), $.59 net income per share, due to actual bad debt experience exceeding prior estimates. COMMON STOCK MARKET PRICES AND DIVIDENDS DECLARED PER SHARE ================================================================================ The Company's Common Stock is traded on the American Stock Exchange (symbol BL). The number of record holders of the Company's Common Stock at December 31, 1997 was 2,761.
1997 1996 SALES PRICE DIVIDENDS Sales Price Dividends HIGH LOW DECLARED High Low Declared First Quarter 20-3/4 $15-3/4 $.15 $35 $24-5/8 $.35 Second Quarter 17-3/4 13-5/16 .15 27 22 .25 Third Quarter 18-1/4 15-1/16 .15 24 20-3/4 .25 Fourth Quarter 20-1/4 16-5/8 .15 21-3/8 16-3/8 .25
The payment of dividends is not subject to any restrictions. The payment of dividends is dependent on future earnings, capital requirements and financial condition. The Company expects to continue its policy of paying regular cash dividends. SELECTED FINANCIAL DATA ================================================================================
Year Ended December 31 1997 1996 1995 1994 1993 Net sales $486,581,737 $544,129,005 $560,889,612 $535,792,222 $519,174,324 Net income 13,253,928 14,726,221 25,267,910 37,678,710 30,853,053 Total assets 309,497,568 368,757,108 353,333,548 288,881,909 245,605,064 Long-term debt -0- 80,000,000 80,000,000 -0- -0- Per share: Basic and diluted earnings 1.45 1.58 2.72 4.07 3.34 Cash dividends declared .60 1.10 2.30 2.05 2.60
14 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ================================================================================ RESULTS OF OPERATIONS COMPARISON OF 1997 AND 1996 Net income for 1997 decreased 10.0% as compared to 1996. The year 1997 was negatively impacted by lower net sales and deteriorating bad debt experience. Net sales for 1997 were 10.6% lower than 1996 net sales. Sales declined in 1997 due to a reduction in the volume of advertising mail, tightened credit management and elimination of high-dollar, high-credit-risk electronics items in the Home Products line. Advertising mail volume was reduced as a result of the elimination of pre-approved credit offers to prospects and, to a lesser extent, the early stage implementation of mail stream optimization and segmentation. Response rates were mixed -- reduced by tighter credit management, improved by mail stream optimization and segmentation -- but remained about the same overall. Gross sales revenue generated per advertising dollar decreased 1.7%. In 1997, the average order size ($60) remained approximately the same, but the total number of orders shipped dropped (reduction in advertising) as compared to 1996. Returns as a percentage of adjusted gross sales increased to 16.4% in 1997 from 15.7% in 1996. Returns are higher on Blair Credit (Easy Payment Plan) and credit card sales, and these sales (combined) grew to 71% of gross mail order sales in 1997 from 68% in 1996. Returns are also higher on Womenswear sales, and Womenswear sales grew to 65% of gross mail order sales in 1997 from 59% in 1996. Other income decreased 9.8% in 1997 as compared to 1996 due to a 14.3% drop in finance charges assessed on Easy Payment Plan accounts receivable. Average Easy Payment Plan accounts receivable decreased 15.2%, approximately $37,000,000. Cost of goods sold as a percentage of net sales increased to 49.9% in 1997 from 49.4% in 1996. Increased returns and liquidation of the electronics items in the Home Products line were primarily responsible for the higher cost of goods in 1997. Advertising expense in 1997 decreased 9.2% from 1996. Increased catalog mailings were more than offset by reductions in circular letter mailings, co-op and media volume and paper costs. The total number of catalog mailings released in 1997 was 67% higher than in 1996 (100.7 million vs. 60.3 million). The catalog has been the primary advertising format for Home Products for over three years. The Company released initial test mailings of Menswear catalogs in July 1995 and began full mailings to prospects and customers in September 1996. The Company released initial test mailings of Womenswear catalogs in January 1996 and began full mailings in the first quarter of 1997. The increased catalog volume and lower paper prices resulted in a net catalog mailing cost increase of $18,523,000 over 1996. Catalog mailings from all three product lines, including combined line offerings, are continually tested as to mailing frequency, page density, product mix, number of pages and size. The total number of circular mailings released in 1997 was 35% less than in 1996 (114.0 million vs. 176.0 million). The decreased circular volume and lower paper prices resulted in a circular mailing cost decrease of $28,247,000 from 1996. Circular mailings have decreased primarily due to the expansion of the catalog advertising program. Total volume of the co-op and media advertising programs decreased 20% in 1997 as compared to 1996 (1.47 billion vs. 1.83 billion). The decreased co-op and media volume and lower paper prices resulted in a co-op and media cost decrease of $3,155,000 from 1996. The co-op and media advertising volume has declined because the unproductive advertising placements have been eliminated. General and administrative expense decreased 3.8% in 1997 as compared to 1996. The lower general and administrative expense was primarily the result of declines in wages and benefits and in professional service fees. Wages and benefits were down due to a 4.9% drop in the average number of employees in 1997 as compared to 1996. The Company's study of its existing marketing programs, in support of the strategic plan to target the "over 40, low-to-moderate income" market, is coming to a conclusion, and thus professional service fees have declined. The provision for doubtful accounts as a percentage of credit sales was 1.9% lower in 1997 as compared to 1996. A reduction in the provision due to lower credit sales and finance charges was nearly offset by an additional provision due to actual bad debt experience exceeding prior estimates. Credit sales decreased 27% and finance charges decreased 14% in comparison to 1996. The estimated provision for doubtful accounts is based on current expectations, sales mix (prospect/customer) and prior years' experience. Due to increases in the delinquency and charge-off rates experienced in 1997 on prior receivables, 1997 included an additional provision for doubtful accounts of $8.3 million (pretax), $.52 net income per share. Due to increases in the delinquency and charge-off rates experienced in 1996 on prior receivables, 1996 included an additional provision for doubtful accounts of $11.5 million (pretax), $.71 net income per share. The 1997 provision for doubtful accounts increased the allowance for doubtful accounts to a higher percentage of delinquencies at year-end 1997 than at year-end 1996. Recoveries of bad debts previously charged off, which more than doubled in 1997 over 1996, have been credited back against the allowance for doubtful accounts. The Company, having previously completed a study of its credit policies, continues to implement improved credit policies. Revised credit granting and collection policies already implemented have resulted in turning down more bad credit risks and in shortening and strengthening the collection cycle. After some delay, credit granting models addressing prospects (first-time buyers) were implemented in mid-September and early-October 1997. Plans for the first quarter of 1998 include the implementation of behavior and collection models to further strengthen credit procedures. The full impact of the credit policies is not likely to be realized until later in 1998. Interest expense decreased 25.7% in 1997 as compared to 1996. Interest expense has resulted primarily from the Company's borrowings necessary to finance customer accounts receivable. Average borrowings outstanding have decreased to $66,543,000 during 1997 from $92,806,000 during 1996. The reduction in Blair Credit (Easy Payment Plan) sales, the increase in credit card sales and improved credit policies are greatly responsible for lowering the levels of customer accounts receivable and borrowings. The weighted average interest rate on average debt outstanding was 5.96% for 1997 and 5.89% for 1996. 15 10 ================================================================================ Income taxes as a percentage of income before income taxes were 36.6% in 1997 and 36.9% in 1996. The federal income tax rate was 35% in both years. The difference in the total income tax rate was caused by a reduction in the Company's effective state income tax rate. COMPARISON OF 1996 AND 1995 Net sales for 1996 declined for the first time in nineteen years. Net income for 1996 decreased 41.7% from 1995. Lower net sales and increases in the provision for doubtful accounts, interest expense, professional service fees and call center operating costs were primarily responsible for the reduction in earnings. Net sales for 1996 were 3.0% lower than 1995 net sales. Sales declined due to the stoppage of pre-approved credit offers to prospects and an 8.5% increase in the number of orders turned down (tightened credit granting policies in the third quarter of 1996). The overall response rate was similar in both years (.5% fewer orders received). Gross revenue generated per advertising dollar decreased 3.5%. In 1996, the total number of orders shipped decreased 2.7% and the average order size increased 1.3% as compared to 1995. Returns as a percentage of adjusted gross sales increased to 15.7% in 1996 from 14.8% in 1995. A higher rate of return is experienced on Blair Credit (Easy Payment Plan) and credit card sales, and these sales (combined) grew to 68% of gross mail order sales in 1996 from 57% in 1995. Other income increased 38.7% in 1996 as compared to 1995. The increase was primarily due to finance charges assessed on increased Easy Payment Plan accounts receivable. Finance charges increased 40.1%, and average Easy Payment Plan accounts receivable increased 29.7%, approximately $56,000,000. Cost of goods sold as a percentage of net sales was approximately the same in 1996, 49.39%, and 1995, 49.44%. The slight decrease in cost of goods resulted from the impact of incentive pricing (reduced price offers on excess inventory and promotional offers of free shipping and handling) and higher returns in 1996 being more than offset by the impact of larger than usual inventory writedowns in 1995. The inventory writedowns were primarily attributable to the special sale of excess inventory held in Wilmington, Delaware during September 1995. Advertising expense in 1996 increased 2.2% from 1995. Increased catalog volume was the prime cause of the higher advertising costs. 1996 paper prices fell below 1995 prices during the third quarter and ended the year slightly above year-end 1994 prices. The total number of circular mailings released in 1996 was 12.3% less than in 1995 (176.0 million in 1996, 200.8 million in 1995). An 8.9% decrease in multi-product customer mailings (138.2 million in 1996, 151.7 million in 1995), a 26.0% decrease in multi-product prospect mailings (30.9 million in 1996, 41.7 million in 1995) and a 6.5% decrease in single-product mailings (6.9 million in 1996, 7.4 million in 1995) resulted in a circular mailings cost decrease of $9,882,000 from 1995. Circular mailings have decreased primarily due to the expansion of the catalog advertising program. Total volume of the co-op and media advertising programs decreased 8.5% in 1996 as compared to 1995 (1.83 billion in 1996, 2.00 billion in 1995). A 25.8% decrease in co-op advertising and .8% decrease in media advertising resulted in a co-op and media cost decrease of $2,425,000 from 1995. The total number of catalog mailings released in 1996 was 52.6% more than in 1995 (60.3 million in 1996, 39.5 million in 1995). The catalog has been the primary advertising format for Home Products for over two years. The Company started test mailing Menswear catalogs in July 1995 and started full mailings to prospects and the customer file in September 1996. The Company started test mailing Womenswear catalogs in January 1996 -- full mailings are starting in the first quarter of 1997. A 53.5% increase in customer catalogs (30.5 million in 1996, 19.9 million in 1995) and a 51.7% increase in prospect catalogs (29.8 million in 1996, 19.6 million in 1995) resulted in a catalog mailings cost increase of $15,356,000 over 1995. In 1996, 37.2 million Home Products (22.8 million customer, 14.4 million prospect), 14.6 million Menswear (4.3 million customer, 10.3 million prospect) and 8.5 million Womenswear (3.4 million customer, 5.1 million prospect) catalogs were mailed. In 1995, 35.9 million Home Products (19.0 million customer, 16.9 million prospect) and 3.6 million Menswear (.9 million customer, 2.7 million prospect) catalogs were mailed. Catalog mailings in all three product lines will be continually tested as to mailing frequency, page density, product mix and number of pages. General and administrative expense increased 2.4% in 1996 as compared to 1995. The increased expense was primarily the result of a $1,637,000 increase in professional service fees. The Company's strategic plan to target the "over 50, low-to-moderate income" market has required a study of its existing marketing programs. The multi-faceted study was at its height during the second half of 1996. Conclusions and a plan of action will be forthcoming. The Company's expansion of its 800-number capabilities, again supporting the strategic plan, has also added to operating costs. Since September 1, 1995, all catalog mailings have been offering toll-free telephone ordering. The Company opened a second call center, located in Erie, Pennsylvania, in August 1995. Due to the increasing telephone order volume from the expanding catalog mailing programs, the Company added 75% more capacity to the Erie Call Center in September 1996 and opened a third call center in Franklin, Pennsylvania, in January 1997. The Company now offers toll-free telephone ordering in all advertising mailings (circular letter and catalog). The provision for doubtful accounts as a percentage of credit sales increased 55.6% in 1996 as compared to 1995. Total credit sales decreased 4.8% and total finance charges increased 40.1%. Prospect credit sales decreased 13.5% and prospect finance charges increased 81.0%. Prospect (first-time buyer) credit sales and finance charges carry a higher credit risk. The estimated bad debt rate used in providing for doubtful accounts is based on current expectations, sales mix (prospect/customer) and prior years' experience. Due to increasing delinquency and charge-off rates experienced in 1996, the rate used in providing for bad debts in 1996 was increased. 1996 includes an additional provision for doubtful accounts of $11.5 million (pretax), $.71 per share, due to deterioration of bad debt experience. $9.5 million (pretax), $.59 per share, of the $11.5 million was provided in the fourth quarter of 1996. Recoveries of bad debts previously charged off have been credited back against the allowance for doubtful accounts. The Company recently 16 11 ================================================================================ completed a study of its credit policies and is currently implementing improved policies. Revised credit granting and collection policies already implemented have resulted in turning down more bad credit risks and in shortening and strengthening the collection cycle. It is anticipated that the full impact of the improved credit policies will not be realized until late 1997. Interest expense increased 47.6% in 1996 as compared to 1995. Interest expense has resulted primarily from the Company's borrowings necessary to finance customer accounts receivable. Borrowings outstanding averaged approximately $92,806,000 in 1996 as compared to $57,202,000 in 1995. The weighted average interest rate on average debt outstanding was 5.89% for 1996 and 6.53% for 1995. Income taxes as a percentage of income before income taxes were 36.9% in 1996 and 40.2% in 1995. The federal income tax rate was 35% in both years. The change in the total income tax rate was caused by a reduction in the Company's effective state income tax rate. LIQUIDITY AND SOURCES OF CAPITAL - -------------------------------------------------------------------------------- All working capital and cash requirements were met. In November 1995, the Company entered into a $125,000,000 Revolving Credit Facility, which expires on November 17, 1998. The unsecured Revolving Credit Facility requires the Company to meet certain covenants, and as of December 31, 1997, the Company was in compliance with all the covenants. Borrowings outstanding at December 31, 1997 were $38,600,000, all classified as current. Borrowings outstanding at December 31, 1996 were $107,000,000, of which $80,000,000 was classified as long-term. The Company intends to renew the existing or a similar type credit facility in 1998. The ratio of current assets to current liabilities was 2.69 at December 31, 1997, 4.01 at December 31, 1996 and 4.50 at December 31, 1995. Working capital decreased $74,129,476 in 1997 due to the reduction in long-term debt. Working capital increased $5,154,075 in 1996 due to reductions in dividends paid and purchases of property, plant and equipment. The 1997 decrease was primarily reflected in decreased customer accounts receivable, inventories, deferred income taxes and prepaid federal and state taxes and increased notes payable (current) and trade accounts payable. The 1996 increase was primarily reflected in increased inventories and prepaid federal and state taxes and decreased trade accounts payable more than offsetting increased notes payable. Merchandise inventory turnover was 2.6 in 1997, 2.9 in 1996 and 3.0 in 1995. Merchandise inventory as of December 31, 1997 decreased 8.6% from December 31, 1996 and increased 5.5% from December 31, 1995. Inventory levels have been impacted by the continuing effort to increase order fulfillment rates; by the transition to a larger catalog operation; by the elimination of high-dollar, high- credit-risk electronics items in the Home Products line in 1997 and by lower than anticipated response and higher turndowns in the second half of 1996. The Company is currently installing a new catalog inventory management system that is expected to come on line in early 1998. Regarding the Company's three product lines, Home Products net sales as a percentage of total net sales were 13.4% ($65.3 million) in 1997, 17.3% ($94.1 million) in 1996 and 16.1% ($90.5 million) in 1995. Menswear net sales were 23.2% ($112.7 million) in 1997, 25.1% ($136.5 million) in 1996 and 24.0% ($134.6 million) in 1995. Womenswear net sales were 63.4% ($308.5 million) in 1997, 57.6% ($313.5 million) in 1996 and 59.9% ($335.8 million) in 1995. Home Products inventory totaled $6.8 million at December 31, 1997, $18.5 million at December 31, 1996 and $10.0 million at December 31, 1995. Menswear inventory was $17.6 million at December 31, 1997, $21.6 million at December 31, 1996 and $18.4 million at December 31, 1995. Womenswear inventory was $43.7 million at December 31, 1997, $34.4 million at December 31, 1996 and $36.2 million at December 31, 1995. The Company has added new facilities, modernized its existing facilities and acquired new cost saving equipment during the last several years. Capital expenditures for property, plant and equipment totaled $3,033,033, $3,249,030 and $8,058,340 during 1997, 1996 and 1995, respectively. Capital expenditures for 1998, 1999 and 2000 are projected to be approximately $7,000,000 a year in order to support the new marketing strategy. The increased capital expenditures will result primarily from expanding the Company's database capabilities in target marketing, credit management and mail stream optimization. In 1995, the Company completed the total renovation of its headquarters facility in Warren, Pennsylvania. Total cost of the renovation, expended over more than 3 years, was $13.6 million. In August 1995, the Company's second call center was opened in Erie, Pennsylvania. A 75% expansion of the Erie Call Center was completed in September 1996. A third call center, located in Franklin, Pennsylvania, was added in January 1997. Further expansion and refinement of all three call centers -- Warren, Erie and Franklin -- was completed by September 1997. See "Future Considerations." The Company recently declared a quarterly dividend of $.15 per share payable on March 15, 1998. It is the Company's intent to continue paying dividends; however, the Company will evaluate its dividend practice on an on-going basis. See "Future Considerations." The Company bought back 120,300 shares of its common stock at a total price of $2,267,655 ($18.85 per share) in 1996. The Company bought back 276,866 shares at a total price of $4,551,438 ($16.44 per share) in 1997. The Company intends to continue buying back stock; however, the Company will assess future buy-back opportunities on an on-going basis. Future cash needs will be financed by cash flow from operations, the current borrowing arrangement and, if needed, other financing arrangements that may be available to the Company. The Company's current projection of future cash requirements, however, may be affected in the future by numerous factors, including changes in customer payments on accounts receivable, consumer credit industry trends, sales volume, operating cost fluctuations and unplanned capital spending. IMPACT OF INFLATION AND CHANGING PRICES - -------------------------------------------------------------------------------- Although inflation has moderated in our economy, the Company is continually seeking ways to cope with its impact. To the extent permitted by competition, increased costs are passed on to customers by selectively increasing selling prices over a period of time. During the past several years, 17 12 ================================================================================ selling prices have been raised sufficiently to offset increased merchandise costs, thereby, realizing profit margins that continue to build fiscal strength. Profit margins have been pressured by paper cost and postal rate increases. Paper prices have been on a roller coaster ride since 1994 -- reached their high point at 1995 year-end, retreated below 1995 levels during the third quarter of 1996, reached their low point during the first quarter of 1997, increased quarterly throughout the rest of 1997 and will again increase in the first quarter of 1998. Overall, paper prices were lower in 1997 than in 1996 and, as they presently stand, will be higher in 1998 than they were in 1997. Postal rates increased in 1995, increased again in 1996 (slight increase due to the USPS Classification Reform) and are expected to increase again sometime in 1998. The Company principally uses the LIFO method of accounting for its merchandise inventories. Under this method, the cost of products sold reported in the financial statements approximates current costs and thus reduces distortion in reported income due to increasing costs. The charges to operations for depreciation represent the allocation of historical costs incurred over past years and are significantly less than if they were based on the current cost of productive capacity being used. Property, plant and equipment are continuously being expanded and updated. Recent major projects are discussed under Liquidity and Sources of Capital. Assets acquired in prior years will, of course, be replaced at higher costs, but this will take place over many years. New assets, when acquired, will result in higher depreciation charges, but in many cases, due to technological improvements, savings in operating costs should result. The Company considers these matters in setting pricing policies. ACCOUNTING PRONOUNCEMENTS - -------------------------------------------------------------------------------- In 1997, the Financial Accounting Standards Board issued three new statements that the Company needed to consider. In February, Statement of Financial Accounting Standards No. 128, "Earnings Per Share," was issued. Statement No. 128 establishes standards for computing and presenting earnings per share and simplifies the existing standards. Statement No. 128 replaces the presentation of primary earnings per share with a presentation of basic and diluted earnings per share. The Company adopted Statement No. 128 in the December 31, 1997 financial statements, and the adoption had no impact on the Company's earnings per share amounts. In June, Statement of Financial Accounting Standards No. 130, "Comprehensive Income," was issued. Statement No. 130 establishes standards for reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Statement No. 130 is effective for fiscal years beginning after December 15, 1997. The Company believes that the adoption of Statement 130 will not have an impact on its financial statements. In June, Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information," was issued. Statement No. 131 establishes standards for the way that a public enterprise reports information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports issued to stockholders. Statement No. 131 is effective for fiscal years beginning after December 15, 1997. The Company believes that it operates as one segment, which includes three product lines (Home Products, Menswear and Womenswear) and that adoption of Statement No. 131 will not have a significant impact on its financial statements. FUTURE CONSIDERATIONS - -------------------------------------------------------------------------------- The Company is faced with the ever-present challenge of keeping the customer file alive and growing. This involves the acquisition of new customers (prospects), the conversion of new customers to established customers (active repeat buyers) and the retention of established customers. These steps are vital in growing the business but are being impacted by increased operating costs, increased competition in the retail sector and record levels of consumer debt. The Company underwent a strategic planning study in 1995 in which our marketing programs, operating systems and competitive position were assessed and looked at with future application and effectiveness in mind. The continuing strategic planning process has resulted in a new marketing strategy whose development will require utilizing our existing strengths, changing business processes and organizational structure and improving information systems. The prime aspect of the new marketing strategy involves targeting customers in the "over 40, low-to-moderate income" market. This redefinition of our target customer from "over 50" to "over 40" has been made possible by the ability of our catalog advertising to reach younger buyers within our traditional list sources. This market, though younger in age than our traditional customer file, is the fastest growing segment of the population. Success of the new marketing strategy will require investment in database management, operating systems, prospecting programs, catalog marketing, telephone call centers and, possibly, a second distribution center. Management believes that these investments should improve Blair Corporation's position in new and existing markets and provide opportunities for future earnings growth. The Company is faced with the task of becoming Year 2000 compliant. The Company's plan to become Year 2000 compliant is well underway with completion expected in the first quarter of 1999 at an estimated cost of $400,000 ($300,000 in 1998, $100,000 in 1999). SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 - -------------------------------------------------------------------------------- Forward-looking statements in this report, including without limitation, statements relating to the Company's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including without limitation, the following:(i) the Company's plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the Company; (ii) the Company's plans and results of operations will be affected by the Company's ability to manage its growth, accounts receivable and inventory; and (iii) other risks and uncertainties as indicated from time to time in the Company's filings with the Securities and Exchange Commission. 18 EX-23 4 BLAIR CORPORATION 1 Exhibit 23 CONSENT OF INDEPENDENT AUDITORS Board of Directors and Stockholders Blair Corporation We consent to the incorporation by reference in this Form 10-K of Blair Corporation and Subsidiary of our report dated January 30, 1998, included in the 1997 Annual Report to Stockholders of Blair Corporation. Our audits also included the financial statement schedule of Blair Corporation and Subsidiary listed in Item 14(a). This schedule is the responsibility of Blair Corporation's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. We also consent to the incorporation by reference in the Registration Statement on Form S-8 dated July 17, 1997, pertaining to the Blair Corporation Employee Stock Purchase Plan, of our report dated January 30, 1998, with respect to the consolidated financial statements incorporated herein by reference, and our report included in the preceding paragraph with respect to the financial statement schedule included in this Form 10-K of Blair Corporation. /s/ ERNST & YOUNG LLP Buffalo, New York March 19, 1998 EX-27 5 BLAIR CORPORATION
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BLAIR CORPORATION'S 12/31/97 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH YEAR END, 1997 10-K FILING FOR BLAIR CORPORATION. 0000071525 BLAIR CORPORATION 12-MOS DEC-31-1997 JAN-01-1997 DEC-31-1997 3,468,483 0 157,636,096 38,479,888 78,727,409 256,632,932 103,265,268 51,322,255 309,497,568 95,385,522 0 0 0 419,810 212,009,236 309,497,568 486,581,737 526,513,314 242,828,539 505,622,386 0 32,222,092 4,102,148 20,890,928 7,637,000 13,253,928 0 0 0 13,253,928 1.45 1.45 AMOUNT REPRESENTS NET ACCOUNTS RECEIVABLE. AMOUNT INCLUDES ADDITIONAL PAID-IN-CAPITAL, RETAINED EARNINGS, TREASURY STOCK, AND THE EMPLOYEE STOCK PURCHASE PLAN RECEIVABLE.
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