10-Q 1 q102nd01.txt OSHKOSH B'GOSH, INC 2ND QUARTER 10Q ENDING 6-30-01 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 0-13365 OshKosh B'Gosh, Inc. A Delaware Corporation 39-0519915 (I.R.S. ID) 112 Otter Avenue Oshkosh, Wisconsin 54901 Telephone number: (920) 231-8800 (Registrant's telephone number) 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 [ ] As of July 16, 2001, there were outstanding 10,101,232 shares of Class A Common Stock and 2,216,313 shares of Class B Common Stock. FORM 10-Q OSHKOSH B'GOSH, INC. AND SUBSIDIARIES INDEX Page Part I. Financial Information 3 Item 1. Financial Statements 3 Condensed Consolidated Balance Sheets-June 30, 2001 and December 30, 2000 3 Unaudited Condensed Consolidated Statements of Income-Three Month and Six Month Periods Ended June 30, 2001 and July 1, 2000 4 Unaudited Condensed Consolidated Statements of Cash Flows-Six Month Periods Ended June 30, 2001 and July 1, 2000 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk 13 Part II. Other Information 14 Item 4. Submission of Matters to a Vote of Security Holders 14 Item 6. Exhibits and Reports on Form 8-K 15 Signatures 16 Part I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS OSHKOSH B'GOSH, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands) June 30, December 30, 2001 2000* (unaudited) Assets Current assets Cash and cash equivalents $ 2,577 $ 19,839 Investments -- 511 Accounts receivable 24,670 30,166 Inventories 74,283 53,185 Prepaid expenses and other current assets 1,952 1,882 Deferred income taxes 11,900 13,800 Total current assets 115,382 119,383 Property, plant and equipment 69,551 68,295 Less accumulated depreciation and amortization 38,630 36,010 Net property, plant and equipment 30,921 32,285 Non-current deferred income taxes 4,900 4,950 Other assets 2,259 1,638 Total assets $ 153,462 $ 158,256 Liabilities and shareholders' equity Current liabilities Current portion of long-term debt $ 3,000 $ 10,000 Accounts payable 10,553 14,840 Accrued liabilities 38,179 39,942 Total current liabilities 51,732 64,782 Long-term debt 34,000 34,000 Employee benefit plan liabilities 14,748 15,001 Shareholders' equity Preferred stock -- -- Common stock: Class A 101 99 Class B 22 22 Additional paid-in capital 2,487 -- Retained earnings 50,837 45,054 Unearned compensation under restricted stock plan (465) (702) Total shareholders' equity 52,982 44,473 Total liabilities and shareholders' equity $ 153,462 $ 158,256 *Condensed from audited financial statements. See notes to condensed consolidated financial statements. OSHKOSH B'GOSH, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (In thousands, except per share amounts) (Unaudited) Three Month Six Month Period Ended Period Ended June 30, July 1, June 30, July 1, 2001 2000 2001 2000 Net sales $90,945 $87,500 $190,390 $182,551 Cost of products sold 52,707 50,063 111,159 104,527 Gross profit 38,238 37,437 79,231 78,024 Selling, general and administrative expenses 35,496 34,249 71,206 68,246 Royalty income, net (1,719) (1,599) (4,183) (3,676) Operating income 4,461 4,787 12,208 13,454 Other income (expense): Interest expense (663) (1,218) (1,394) (2,405) Interest income 256 262 472 423 Miscellaneous 3 6 34 55 Other income (expense) -- net (404) (950) (888) (1,927) Income before income taxes 4,057 3,837 11,320 11,527 Income taxes 1,558 1,496 4,347 4,495 Net income $ 2,499 $ 2,341 $ 6,973 $ 7,032 Net income per common share Basic $ 0.20 $ 0.19 $ 0.57 $ 0.56 Diluted $ 0.20 $ 0.19 $ 0.55 $ 0.56 Weighted average common shares outstanding Basic 12,268 12,326 12,226 12,469 Diluted (including share equivalents) 12,711 12,496 12,574 12,636 Cash dividends per common share Class A $0.0500 $0.0500 $ 0.1000 $ 0.1000 Class B $0.0425 $0.0425 $ 0.0850 $ 0.0850 See notes to condensed consolidated financial statements.
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Six Month Period Ended June 30, July 1, 2001 2000 Cash flows from operating activities Net income for the period $ 6,973 $ 7,032 Depreciation and amortization 4,008 3,941 Deferred income taxes 1,950 500 Income tax benefit from stock option exercises 827 321 Items in net income not affecting cash and cash equivalents (3) 516 Changes in current assets (15,672) (22,283) Changes in current liabilities (6,050) 216 Net cash used in operating activities (7,967) (9,757) Cash flows from investing activities Additions to property, plant and equipment (2,368) (3,303) Proceeds from disposal of assets 49 262 Sale of short-term investments 511 -- Changes in other assets (959) 22 Net cash used in investing activities (2,767) (3,019) Cash flows from financing activities Borrowings under revolving credit agreement -- 14,500 Payment on long-term debt (7,000) -- Dividends paid (1,190) (1,216) Net proceeds from issuance of common shares 2,176 570 Repurchase of common shares (514) (9,864) Net cash provided by (used in) financing activities (6,528) 3,990 Net decrease in cash and cash equivalents (17,262) (8,786) Cash and cash equivalents at beginning of period 19,839 9,093 Cash and cash equivalents at end of period $ 2,577 $ 307 See notes to condensed consolidated financial statements. OSHKOSH B'GOSH, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (In thousands) (Unaudited) Note 1. Basis of Preparation The condensed financial statements included herein have been prepared by the Company without audit. However, the foregoing statements contain all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of Company management, necessary to present fairly the financial position as of June 30, 2001, the results of operations for the three-month and six-month periods ended June 30, 2001 and July 1, 2000, and cash flows for the six-month periods ended June 30, 2001 and July 1, 2000. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's 2000 Annual Report. Note 2. Inventories A summary of inventories follows: June 30, 2001 December 30, 2000 Finished goods $ 62,095 $ 37,398 Work in process 10,494 12,595 Raw materials 1,694 3,192 Total $ 74,283 $ 53,185 The replacement cost of inventory exceeds the above LIFO costs by $11,983 at June 30, 2001 and December 30, 2000. Note 3. Segment Reporting The Company designs, sources, and markets apparel products using primarily the OshKosh B'Gosh brand. The apparel products are primarily marketed in two distinct distribution channels: domestic wholesale and through Company owned retail stores. The Company designs and sources product to meet the needs of these distribution channels through a single procurement business unit. Certain operations are classified as segments as defined by SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." The Company manages its business operations by periodic analysis of business unit operating results. For this purpose, domestic wholesale, retail, and procurement are separately identified for management reporting and are considered segments as defined by SFAS No. 131. Management evaluates the operating performance of each of its business units based on income from operations as well as return on net assets. For this purpose, product is transferred from procurement to the domestic wholesale and retail business units at cost. However, procurement receives a markup on product sold by the Company's wholesale and retail business units. Accounting policies used for segment reporting are consistent with the Company's overall accounting policies, except that inventories are valued on a FIFO basis. In addition, interest income, interest expense, certain corporate office expenses, and the effects of the LIFO inventory valuation method are not allocated to individual business units, and are included in the All Other/Corporate column below. Segment assets include all assets used in the operation of each business unit, including accounts receivable, inventories, and property, plant and equipment. Certain other corporate assets that cannot be specifically identified with the operation of a business unit are not allocated. Financial information for the Company's reportable segments follows: All Domestic Other/ Wholesale Retail Procurement Corporate Total For the three months ended June 30, 2001 Net sales $ 38,228 $ 52,051 $ -- $ 666 $90,945 Income before income taxes 935 2,757 198 167 4,057 Assets 69,995 47,838 22,234 13,395 153,462 Depreciation expense 426 925 271 218 1,840 For the three months ended July 1, 2000 Net sales $ 37,930 $ 47,735 $ -- $ 1,835 $ 87,500 Income before income taxes 670 2,885 (291) 573 3,837 Assets 56,392 38,291 30,745 16,278 141,706 Depreciation expense 401 758 355 227 1,741 For the six months ended June 30, 2001 Net sales $ 92,993 $94,905 $ -- $ 2,492 $ 190,390 Income before income taxes 6,277 3,542 124 1,377 11,320 Assets 69,995 47,838 22,234 13,395 153,462 Depreciation expense 853 1,826 561 430 3,670 For the six months ended July 1, 2000 Net sales $ 86,184 $ 92,075 $ -- $ 4,292 $ 182,551 Income before income taxes 6,038 4,367 (175) 1,297 11,527 Assets 56,392 38,291 30,745 16,278 141,706 Depreciation expense 796 1,481 732 472 3,481 For the year ended December 30, 2000 Net sales $ 215,982 $230,774 $ -- $ 6,306 $ 453,062 Income before income taxes 22,794 25,505 824 3,670 52,793 Assets 62,140 36,216 25,160 34,740 158,256 Depreciation expense 1,612 3,319 1,357 866 7,154
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, selected Company income statement data expressed as a percentage of net sales. As a Percentage of Net Sales for the Three Month Six Month Period Ended Period Ended June 30, July 1, June 30, July 1, 2001 2000 2001 2000 Net sales 100.0% 100.0% 100.0% 100.0% Cost of products sold 58.0% 57.2% 58.4% 57.3% Gross profit 42.0% 42.8% 41.6% 42.7% Selling, general and administrative 39.0% 39.1% 37.4% 37.4% expenses Royalty income, net (1.9%) (1.8%) (2.2%) (2.0%) Operating income 4.9% 5.5% 6.4% 7.3% Other income (expense), net (0.5%) (1.1%) (0.4%) (1.1%) Income before income taxes 4.4% 4.4% 6.0% 6.2% Income taxes 1.7% 1.7% 2.3% 2.4% Net income 2.7% 2.7% 3.7% 3.8% Net Sales Consolidated net sales for the three month period ended June 30, 2001 were $90.9 million, a $3.4 million increase (3.9%) over 2000 second quarter net sales of $87.5 million. Consolidated net sales for the six month period ended June 30, 2001 were $190.4 million, a $7.8 million increase (4.3%) from net sales of $182.6 million for the first six months of 2000. The Company's net sales for the three month and six month periods ended June 30, 2001 and July 1, 2000 are summarized as follows: Net Sales (in millions) Domestic Wholesale Retail Other Total Three month period ended: June 30, 2001 $ 38.2 $ 52.0 $ 0.7 $ 90.9 July 1, 2000 37.9 47.8 1.8 87.5 Increase (decrease) $ 0.3 $ 4.2 $ (1.1) $ 3.4 Percent increase (decrease) .8% 8.8% (61.1%) 3.9% Six month period ended: June 30, 2001 $ 93.0 $ 94.9 $ 2.5 $ 190.4 July 1, 2000 86.2 92.1 4.3 182.6 Increase (decrease) $ 6.8 $ 2.8 $ (1.8) $ 7.8 Percent increase (decrease) 7.9% 3.0% (41.9%) 4.3%
The Company's domestic wholesale unit shipments for the three month period ended June 30, 2001 decreased approximately .9% as compared to the corresponding three month period of 2000. The decrease in unit shipments resulted primarily from a reduction in shipments of close-out merchandise. The Company's domestic wholesale unit shipments for the six month period ending June 30, 2001 increased approximately 12.4% as compared to 2000. The six month increase in unit shipments resulted from a combination of higher booked orders and an increase in the number of "close-out" units sold. Net sales dollars for the first six months in 2001 were impacted by higher customer sales allowances, and the higher level of "close-out" sales. The Company currently anticipates wholesale net sales from continuing businesses (footwear and outerwear were licensed effective May 1, 2001) to be flat for the second half of 2001 as compared to 2000. The Company's second quarter 2001 retail sales increase resulted from a comparable store sales increase of 5.4% and from sales volume from stores opened subsequent to July 1, 2000. The second quarter 2001 comparable store sales increase was favorably impacted by more aggressive promotional pricing, which had an adverse impact on gross profit margins. The Company's increase in retail sales for the first six months of 2001 resulted from sales volume from newly opened stores offset in part by a comparable store sales decline of 1.7%. Company management believes that the year to date comparable store sales decrease is attributable to lower customer store traffic during the first quarter, due in part to adverse weather conditions, along with a generally negative economic environment throughout the first half of 2001. For the remainder of 2001, the Company currently anticipates comparable store sales gains in the low single digit range. At June 30, 2001 the Company operated 135 domestic OshKosh retail stores, including 128 outlet stores, two showcase stores, and five strip mall stores. During the second quarter of 2001, the Company closed one showcase store. At July 1, 2000 the Company operated a total of 131 domestic OshKosh retail stores. Current Company plans for the remainder of 2001 call for the addition of approximately six outlet stores. The Company is also currently planning to close an additional outlet store. Gross Profit The Company's gross profit margin as a percent of net sales was 42.0% in the second quarter of 2001, compared to 42.8% in the second quarter of 2000. For the six month period ended June 30, 2001 gross profit margin as a percent of net sales was 41.6%, compared to 42.7% for the first six months of 2000. The decrease in gross margin percentage for the six month period was due to a higher level of "close-out" unit sales, increased wholesale customer sales allowances and a more aggressive promotional pricing strategy at the Company's retail stores. The Company currently anticipates a modest improvement in its gross profit margin in the second half of 2001 as compared to 2000 which should result from a higher proportion of the Company's net sales in its retail business unit. The Company is currently on target with its 2001 sourcing plan which calls for approximately 90% of units to be produced in off-shore venues as compared to approximately 75% in 2000. Selling, General, and Administrative Expenses (S,G&A) S,G&A expenses for the three month and six month periods ended June 30, 2001 increased $1.2 million and $3.0 million over the three and six month periods ended July 1, 2000, respectively. As a percentage of net sales, S,G,&A expenses were 39.0% and 37.4% for the three month and six month periods ended June 30, 2001 as compared to 39.1% and 37.4% in the comparable periods of 2000. The increase in S,G,&A expenses in dollars relates primarily to continued expansion of the Company's retail operations. Royalty Income The Company licenses the use of its trade name to selected licensees in the U.S. and in foreign countries. Royalty income for the three month period ended June 30, 2001 was $1.7 million compared to $1.6 million in the second quarter of 2000. Royalty income for the six month period ended June 30, 2001 was $4.2 million compared with $3.7 million in the second quarter of 2000. The increase is attributable primarily to increased business levels by the Company's Japanese licensees for the six month period ending June 30, 2001. Royalty income for the remainder of 2001 is expected to increase due to the Company's decision to license its outerwear and footwear businesses. These license agreements will begin to generate royalty income in the second half of 2001. Operating Income As a result of the factors described above, the Company's operating income for the three month and six month periods ended June 30, 2001 amounted to $4.5 million and $12.2 million as compared to $4.8 million and $13.5 million for the comparable periods in 2000. Other Income (Expense) - Net The Company's second quarter 2001 net other income (expense) was a $.4 million expense compared to $1.0 million in 2000. Interest expense was lower for the second quarter and six month period ending June 30, 2001 compared to 2000 due to lower interest rates and prepayment of $7 million of the Company's long-term debt in the first quarter. Income Taxes The Company's effective tax rate for the three month and six month periods ended June 30, 2001, was approximately 38.4% compared to 39.0% in 2000. The Company currently anticipates an effective income tax rate of approximately 38.4% for the remainder of 2001. Net Income Net income for the three months ended June 30, 2001 of $2.5 was a $.2 million increase compared to net income for the three months ended July 1, 2000 of $2.3 million. Net income for the six months ended June 30, 2001 of $7.0 million was comparable with net income for the six months ended July 1, 2000. Diluted earnings per share for the quarter ended June 30, 2001 were $.20, a $.01 (5.3%) increase over the comparable period in 2000. SEASONALITY OF BUSINESS The Company's business is seasonal, with highest sales and income in the third quarter, which is the Company's peak wholesale shipping period and a major retail selling season at its retail outlet stores. The Company's second quarter sales and income are the lowest, both because of relatively low domestic wholesale unit shipments and relatively modest retail store sales during this period. The Company anticipates this seasonality trend to continue to impact 2001 quarterly sales and income. Second quarter 2001 operating results are not necessarily indicative of anticipated quarterly results throughout the balance of the year. FINANCIAL POSITION, CAPITAL RESOURCES AND LIQUIDITY At June 30, 2001, the Company's cash, cash equivalents and short- term investments were $2.6 million, compared to $20.4 million at the end of 2000 and $.8 million at July 1, 2000. The reduction in cash from the end of 2000 is primarily attributable to seasonal working capital needs related to timely production of inventory to support the Fall back-to-school seasonal product offering. Net working capital at June 30, 2001 was $63.7 million compared to $54.6 million at December 30, 2000, and $40.1 million at July 1, 2000. Cash used in operations amounted to approximately $8.0 million in the first six months of 2001, compared to $9.8 million in the first six months of 2000. Accounts receivable at June 30, 2001 were $24.7 million compared to $30.2 million at December 30, 2000, and $22.4 million at July 1, 2000. Inventories at June 30, 2001, were $74.3 million, compared to $53.2 million at December 30, 2000, and $61.5 million at July 1, 2000. Management believes that June 30, 2001, inventory levels are generally appropriate for anticipated ongoing 2001 business activities. Investing activities used $2.8 million in the first six months of 2001, compared to $3.0 million in 2000. Capital expenditures were $2.4 million in the first six months of 2001, compared with $3.3 million in 2000 and are currently budgeted at $9.0 million for all of 2001. Capital expenditures in both years relate primarily to expansions and upgrades of the Company's retail stores. Depreciation and amortization are currently budgeted at $8.0 million for 2001. Cash used in financing activities totaled $6.5 million in the first six months of 2001, compared to cash provided of $4.0 million in the first six months of 2000. In 2000, the Company borrowed $14.5 million for seasonal working capital needs. In 2001, cash generated by the Company was sufficient to finance all working capital needs and to prepay $7.0 million of the Company's long-term debt. On December 6, 1999, the Company's Board of Directors authorized a 1.5 million share repurchase program of the Company's Class A common stock. During the first six months of 2001, the Company repurchased 25,000 shares of its Class A common stock under this program for approximately $.5 million. The Company has repurchased a total of 864,100 shares of its Class A common stock under its current repurchase programs for approximately $15.5 million. The Company's unsecured credit agreement, as amended, with a number of banks provided for borrowings for the repurchase of shares of its common stock through March 31, 2001, and provides a $75 million revolving credit facility available for general corporate purposes, including cash borrowings and issuances of letters of credit that expire November 3, 2002. The Company had $37 million of outstanding long-term debt at June 30, 2001 and $44 million at December 30, 2000 and April 1, 2000 under the share repurchase component of the credit agreement. The term loan is due in annual installments of $10.0 million and cannot be reborrowed. The Company believes that these credit facilities, along with cash generated from operations, will be sufficient to finance the Company's seasonal working capital needs as well as its capital expenditures, required payments on long-term debt, and business development needs. FORWARD-LOOKING STATEMENTS This report contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding future sales, gross profit expectations, planned store expansions and store closings, future comparable store net sales, future product sourcing plans, inventory levels and valuation implications, future growth in royalty income, future effective income tax rate, planned capital expenditures and depreciation and amortization expenses, and future cash needs. In addition, from time to time, the Company may issue press releases and other written communications, and representatives of the Company may make oral statements which contain forward-looking information. Except for historical information, matters discussed in such oral and written communications, including this report, are forward-looking statements. Such forward-looking statements are based on current assumptions and expectations that involve risks and uncertainties. Actual results may differ materially. The Company's future results of operations and financial position can be influenced by such factors as the level of consumer spending for apparel, particularly in the children's wear segment, overall consumer acceptance of the Company's product styling, the financial strength of the retail industry, including, but not limited to, business conditions and the general economy, natural disasters, competitive factors, risk of non-payment of accounts receivable, the unanticipated loss of a major customer, failure of Company suppliers to timely deliver needed raw materials, as well as risk associated with foreign operations. In addition, the inability to ship Company products within agreed timeframes due to unanticipated manufacturing and/or distribution system delays or the failure of Company contractors to deliver products within scheduled timeframes are risk factors in ongoing business. As a part of the Company's product sourcing strategy, it routinely contracts for apparel products produced by contractors in Asia, Mexico, and Central America. If financial, political, or other related difficulties were to adversely impact the Company's contractors in these regions, it could disrupt the supply of products contracted for by the Company. The forward-looking statements included herein are only made as of the date of this report. The Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk The credit agreement entered into by the Company in November, 1999, as amended, provided for $44 million to finance repurchases of the Company's common stock (of which $37 million is outstanding) and a $75 million revolving credit facility available for general corporate purposes. Borrowings under this agreement bear interest at a variable rate, based on the London Interbank Offered Rates. Accordingly, the Company is affected by interest rate changes on its long-term debt. Management monitors this risk by carefully analyzing the short-term rates on its long- term debt portfolio and comparable long-term interest rates. The Company does not presently hedge its interest rate risk. With respect to this debt, a 1% change in interest rates would not have a material impact on the Company's interest expense for fiscal 2001. Foreign Currency Risk The Company contracts for the manufacture of apparel with contractors in Asia, Central America, and Mexico. While these contracts are stated in terms of U.S. dollars, there can be no assurance that the cost for the production of the Company's products will not be affected by exchange fluctuations between the United States and the local currencies of these contractors. Due to the number of currencies involved, the Company cannot quantify the potential impact of future currency fluctuations on net income in future years. The Company does not hedge its exchange rate risk. Inflation Risk The Company manages its inflation risks by ongoing review of product selling prices and production costs. Management does not believe that inflation risks are material to the Company's business, its consolidated financial position, results of operations, or cash flows. Investment Risk The Company does not believe it has material exposure to market risk with respect to any of its investments as the Company does not utilize market rate sensitive instruments for trading or other purposes. Part II. OTHER INFORMATION Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. The registrant's annual meeting of stockholders was held on May 4, 2001 (the "2001 Annual Meeting"). A majority of the shares of each class of the registrant's Common Stock, represented in person or by proxy, was required to constitute a quorum for action to be taken by such class. A total of 8,951,763 shares of Class A Common Stock and 1,924,370 shares of Class B Common Stock were represented, in person or by proxy, at the 2001 Annual Meeting, constituting a quorum of each class. With respect to the election of Class A Directors, the following votes were cast in favor of and withheld with respect to the following management nominees: Nominee Votes in Votes Broker favor withheld non-votes Shirley A. Dawe 8,710,245 241,518 0 Jerry M. Hiegel 8,708,665 243,098 0 With respect to the election of Class B Directors, the following votes were cast in favor of and withheld with respect to the following management nominees: Nominee Votes in Votes Broker favor withheld non-votes Douglas W. Hyde 1,916,925 7,445 0 Michael D. Wachtel 1,924,325 45 0 David L. Omachinski 1,924,325 45 0 Steve R. Duback 1,924,325 45 0 Robert C. Siegel 1,923,775 595 0 William F. Wyman 1,917,325 7,045 0 Stig A. Kry 1,924,325 45 0 Directors are elected by a plurality of the votes of the shares of the class entitled to elect such directors, present in person or represented by proxy at the meeting. "Plurality" means that the individuals who receive the largest number of votes are elected as directors up to the maximum number of directors to be chosen at the meeting. There were no nominees for director other than management's nominees identified above. Accordingly, each such nominee received a plurality of the votes cast by shares of the class indicated and, therefore, was elected. With respect to the proposal to amend the 1995 Outside Directors' Stock Option Plan, the following votes were cast: Votes in Votes Abstentions Broker favor against non-votes Class B Common Stock 1,914,283 4,895 5,192 0 Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits None (b) Reports on Form 8-K None SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OSHKOSH B'GOSH, INC. Date: 7/25/01 /S/DOUGLAS W. HYDE Chairman of the Board, President Chief Executive Officer and Director Date: 7/25/01 /S/DAVID L. OMACHINSKI Vice President-Finance, Treasurer Chief Financial Officer and Director