-----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, U2R/o13JCh7FylJ9WztwgAZbhuTY4Q2Qgp54JpbCS2VufCQUyzYOi5PYvKvSsD68 AIpiQ6jOXohWug4ddGDSBg== 0000927016-97-001107.txt : 19970421 0000927016-97-001107.hdr.sgml : 19970421 ACCESSION NUMBER: 0000927016-97-001107 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970417 ITEM INFORMATION: Other events FILED AS OF DATE: 19970418 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONVERSE INC CENTRAL INDEX KEY: 0000716934 STANDARD INDUSTRIAL CLASSIFICATION: RUBBER & PLASTICS FOOTWEAR [3021] IRS NUMBER: 041419731 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13430 FILM NUMBER: 97583159 BUSINESS ADDRESS: STREET 1: ONE FORDHAM RD CITY: NORTH READING STATE: MA ZIP: 01864 BUSINESS PHONE: 5086641100 MAIL ADDRESS: STREET 1: ONE FORDHAM ROAD CITY: NORTH READING STATE: MA ZIP: 01864 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): APRIL 17, 1997 CONVERSE INC. (Exact name of registrant as specified in its charter) DELAWARE 1-13430 43-1419731 (State or other jurisdiction (Commission File (I.R.S. Employer incorporation or organization) Number) Identification No.) ONE FORDHAM ROAD NORTH READING, MASSACHUSETTS 01864 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (508) 664-1100 ITEM 5. OTHER EVENTS ------------ The Registrant issued the following press release on April 17, 1997: North Reading, Mass., April 18, 1997 -- Converse Inc. (NYSE:CVE) today announced significant improvement in financial results for the first quarter ended March 29, 1997. Net sales for the first quarter were $136.0 million compared to $86.6 million in the first quarter of 1996, an increase of 57%. Earnings from operations were $12.3 million compared to $0.2 million in the first quarter of 1996. Net income for the first quarter of 1997, excluding a one-time gain, was $4.7 million or $0.26 per share, compared to a net loss of $3.3 million, or a $0.20 loss per share, in the first quarter of 1996. During the first quarter of 1997, the Company concluded substantially all of its outstanding litigation relating to Apex One, Inc. resulting in a one-time pretax gain of $13.0 million and a net after-tax gain of $8.0 million. Net income for the quarter including this one- time gain was $12.7 million or $0.71 per share. United States net sales increased 105% and international net sales increased 8% in the first quarter of 1997 compared to the first quarter of 1996. The Company recorded substantial sales increases in each of its four product categories of basketball, athleisure, children's and cross training during the period of approximately 105%, 26%, 66% and 61%, respectively. The Company's first quarter 1997 gross profit margin increased to $42.2 million or 31% of net sales compared to $21.6 million or 25% of net sales in the first quarter of 1996. Selling, general and administrative expenses increased by $10.5 million in the first quarter of 1997 compared to the 1996 period, but decreased as a percentage of net sales to 27% versus 30% in the first quarter of 1996. Royalty income for the first quarter of 1997 increased by 31% to $6.4 million compared to $4.9 million in the first quarter of 1996. Converse's global backlog increased to $220.1 million at March 29, 1997 from $149.3 million at March 30, 1996, a 47% increase. The backlog increases were approximately 32%, 83%, 40% and 14%, respectively, in the Company's categories of basketball, athleisure, children's and cross training. Glenn Rupp, Converse's Chairman and Chief Executive Officer, commented, "We are pleased with the Company's first quarter operating results, particularly with the substantial increases in sales in all four product categories, the improvement of our gross profit margin percentage, and improved operating profitability. We are also encouraged by the continued momentum of the Converse brand as reflected by the strong backlog at the end of the quarter." Converse Inc. is a leading global designer, manufacturer and marketer of high quality athletic footwear for men, women and children. The Company is also a global licensor of sports apparel, accessories and selected footwear. The Company's products are distributed worldwide in over 90 countries through specialty athletic, sporting goods, department and shoe stores. Any statements set forth above which are not historical facts are forward looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements. Potential risks and uncertainties include such factors as the financial strength of the Company, the competitive pricing environment of the footwear and apparel industries, product demand, market acceptance of the Company's products, and the success of planned advertising, marketing and promotional campaigns and other risks identified in documents filed by the Company with the Securities and Exchange Commission. CONVERSE INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
THREE MONTHS ENDED ----------------------------------- MARCH 30, 1996 MARCH 29, 1997 -------------- -------------- Net Sales $ 86,551 $ 135,969 Cost of sales 64,934 93,809 -------- --------- Gross profit 21,617 42,160 Selling, general and administrative expenses 26,306 36,764 Royalty income 4,928 6,377 Restructuring expense (credit) --- (563) -------- --------- Earnings from operations 239 12,336 (Credit) loss on investment in unconsolidated subsidiary --- (13,051) Interest expense, net 3,837 2,679 Other (income) expense, net 877 2,090 -------- --------- Earnings (loss) before income taxes (4,475) 20,618 Income tax expense (benefit) (1,215) 7,938 -------- --------- Net earnings (loss) $( 3,260) $ 12,680 * ======== ========= Net earnings (loss) per share $ (0.20) $ 0.71 * ======== ========= Weighted average number of common shares 16,692 17,862 ======== =========
* Net earnings for the first quarter of 1997 included a gain of $8.0 million, net of taxes, pertaining to the settlement of outstanding litigation relating to Apex One, Inc. Earnings per share for the first quarter of 1997 of $0.71 includes $0.45 pertaining to these litigation settlements. CONVERSE INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
DECEMBER 28, 1996 MARCH 29, 1997 ----------------- -------------- ASSETS Current assets: Cash and cash equivalents $ 5,908 $ 3,913 Restricted cash 1,354 --- Receivables, less allowances of $1,994 and $ 2,357 respectively 61,546 114,419 Inventories 86,799 78,290 Refundable income taxes 582 582 Prepaid expenses and other current assets 20,383 13,529 -------- -------- Total current assets 176,572 210,733 Net property, plant and equipment 17,849 17,746 Other assets 28,182 27,355 -------- -------- $222,603 $255,834 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) Current liabilities: Short-term debt $ 13,421 $ 16,366 Current maturities of long-term debt 117,765 154,777 Accounts payable 49,503 52,758 Accrued expenses 25,124 15,319 Income taxes payable 3,407 3,836 -------- -------- Total current liabilities 209,220 243,056 Long-term debt 9,644 --- Current assets in excess of re-organization value 32,376 31,857 Deferred post-retirement benefits other than pensions 10,231 10,207 Stockholders' equity (deficiency) Common stock, $1.00 stated value, 50,000,000 shares authorized, 17,213,157 and 17,250,056 shares issued and outstanding at December 28, 1996 and March 29, 1997 respectively 17,213 17,250 Preferred stock, no par value, 10,000,000 shares authorized, none issued and outstanding --- --- Additional paid-in capital 5,392 2,049 Retained earnings (deficit) (60,265) (47,585) Foreign currency translation adjustment (1,208) (1,000) -------- -------- Total stockholders' equity (deficiency) (38,868) (29,286) -------- -------- $222,603 $255,834 ======== ========
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, in North Reading, Massachusetts on April 17, 1997. CONVERSE INC. By: /s/ Donald J. Camacho --------------------- Donald J. Camacho Senior Vice President and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----