-----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, A8najeP7+GhurNu3kTrl7xgSuP2mYN+gISCQU5TFYyrvm3ivdNuYIuuxANt5VSE1 rIDvGj0Q6tkZvm9SdVp8og== 0000799288-99-000003.txt : 19990222 0000799288-99-000003.hdr.sgml : 19990222 ACCESSION NUMBER: 0000799288-99-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990113 ITEM INFORMATION: FILED AS OF DATE: 19990219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LANDS END INC CENTRAL INDEX KEY: 0000799288 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-CATALOG & MAIL-ORDER HOUSES [5961] IRS NUMBER: 362512786 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09769 FILM NUMBER: 99545556 BUSINESS ADDRESS: STREET 1: ONE LANDS END LN CITY: DODGEVILLE STATE: WI ZIP: 53595 BUSINESS PHONE: 6089359341 MAIL ADDRESS: STREET 1: ONE LANDS END LANE STREET 2: ONE LANDS END LANE CITY: DODGEVILLE STATE: WI ZIP: 53595 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) January 12, 1999 LANDS' END, INC. (exact name of registrant as specified in its charter) DELAWARE 1-9769 36-2512786 (State or other (Commission (I.R.S. Employer jurisdiction File Number) Identification Number) of incorporation) Lands' End Lane, Dodgeville, Wisconsin 53595 (Address of principal executive offices) (Zip Code) Registrant's telephone number 608-935-9341 including area code INFORMATION INCLUDED IN THIS REPORT Item 5. Other Events. Attached as Exhibit 99.1 and Exhibit 99.2 to this report are two news releases issued by Lands' End, Inc., discussing a non- recurring charge of $11.1 million taken in the fourth quarter of fiscal 1999, and the anticipated future annual savings expected from these events. 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, its duly authorized officer and chief financial officer. LANDS' END, INC. Date February 19, 1999 By: /s/ STEPHEN A. ORUM Stephen A. Orum Executive Vice President & Chief Financial Officer EXHIBIT 99.1 FOR IMMEDIATE RELEASE LANDS' END ANNOUNCES RESTRUCTURING DODGEVILLE, WIS. ... January 12, 1999 ...At a meeting with company employees today, Lands' End, Inc. (LE) president and chief executive officer David F. Dyer announced a restructuring plan that will result in the elimination of 94 of the 888 salaried positions within the company. The positions being eliminated are in all major divisions and at all levels, including 9 at the officer level. Some of these positions have or will be eliminated through attrition -- individuals who have resigned for various reasons since November and will not be replaced -- and a few positions that will cease to exist in the near future. Hourly operations staff in the company's distribution and customer sales and service centers will not be affected. The company also announced that it plans to liquidate its Willis & Geiger division, as a suitable buyer has not been found. Willis & Geiger has 12 employees housed in Madison, Wisconsin. In addition, the company plans to close 3 of its 19 outlet stores in March of this year as it becomes more effective to liquidate overstocks through print media and through the Internet. Those salaried positions affected by these actions are included in the total number of positions eliminated. With the exception of those positions being eliminated through attrition, all employees leaving the company, about 60, will receive an enhanced severance package that includes educational assistance and outplacement services. Most of the eliminated positions are at the Dodgeville headquarters. In talking with employees, Dyer explained that while sales have increased 35 percent over the past 4 years, the total number of professional staff in the United States rose 58 percent. "By organizing our core business into individual business units, there has been duplication of tasks and responsibilities that have not been supported by our sales growth. By restructuring our organization into functional areas, not only will we be more efficient, we will also be much more effective. This is by far the toughest business decision I've had to make, and I know it will be hard on everyone. But I know we can not continue to support this large a staff, nor can we operate as cohesively as we need to, without restructuring our company along more traditional lines," said Dyer. "These changes will also help us in our efforts to return to the profit levels we have experienced in the past, which is an important goal for Lands' End. In these efforts, however, we will do nothing that will jeopardize those service functions for which we are so well known. The quality of our merchandise will not change, unless for the better. The quality of our customer service will not change, unless for the better. We will focus attention on inventory management to assure that we have product on hand when the customer wants it and to quickly eliminate product that is not selling," he said. "And while we certainly will be careful in our hiring practices, we will be adding about 5 senior level managers to make sure we have the talent and skills we need." The costs associated with these changes will be included in a restructuring charge that will be taken in the fourth quarter of fiscal 1999, which ends on January 29. Additional details will be included in the January 14th report on the company's holiday results. Lands' End is a leading direct merchant of traditionally styled, classically inspired clothing, offered to customers throughout the world through regular mailings of its monthly and specialty catalogs and the Internet. -0- Contact Charlotte LaComb: 608-935-4835 EXHIBIT 99.2 FOR IMMEDIATE RELEASE LANDS' END REPORTS HOLIDAY RESULTS DODGEVILLE, WIS. ... January 14, 1999 ... Lands' End, Inc. (LE), the direct merchant of classic casualwear, today reported that net sales for the eight weeks ended December 25, 1998, totaled $412 million, up 8.5 percent from sales of $380 million during the eight weeks ended December 26, 1997. Net income for the eight-week period just ended was $25.1 million, down 36 percent from the $39.0 million earned in the similar holiday period in 1997. Diluted earnings per share for the eight-week period just ended were $0.83, compared with $1.24 in the prior year. This year's holiday period includes a non- recurring charge of $11.1 million. Excluding that charge, net income for the eight-week period just ended was $32.1 million, or $1.06 per share. The diluted weighted average number of common shares outstanding for the period just ended was 30.4 million, compared with 31.4 million in the prior year. The increase in sales during the holiday period was mainly due to additional catalogs and pages mailed and price reductions. The growth in sales came primarily from the specialty businesses, as well as from foreign-based operations. Sales from the core business, represented by the regular monthly and prospecting catalogs were flat. During the eight weeks just ended, the number of pages mailed in the U.S. was higher than in the prior year's holiday period, which lowered productivity, or sales per page. Higher inventory levels throughout the holiday period resulted in fewer lost sales and backorders, which had a positive impact on overall net sales. Gross profit in the eight-week period just ended was $183.3 million, or 44.5 percent of net sales, compared with $183.9 million, or 48.4 percent of net sales in the prior year's holiday period. The decrease in gross profit margin was primarily due to steeper markdowns on a greater amount of liquidation sales and lower initial markups. During the past two months, the company instituted price rollbacks, price reductions and some promotional pricing on selected products. This helped increase sales but also had a negative effect on gross profit margin. Inventory was $243 million as of December 25, 1998, compared with $248 million a year ago. During the eight-week period just ended, liquidations of excess inventory were 7 percent of net sales, compared with 4 percent in the same period last year. Selling, general and administrative expenses rose 9 percent to $131.5 million in the eight-week period just ended, compared with $120.5 million in last year's holiday period. SG&A as a percentage of sales was 31.9 percent, compared with 31.7 percent in the prior year. Relative costs were slightly higher, primarily due to increased mailings of catalogs and pages, but this was mostly offset by lower bonus and profit sharing expenses, due to decreased earnings. As announced, the company has taken a non-recurring charge of $11.1 million in the fourth quarter of fiscal 1999, which ends on January 29. This charge includes costs associated with severance payments due to organizational restructuring, liquidation of the Willis & Geiger division, closing of 3 outlet stores, and discontinuance of the MontBell business. The company anticipates future annual savings of about $10-$12 million from these actions. Next year, the company anticipates additional net savings of about $6 million as a result of lower paper prices and diminished use of return envelopes in the catalogs, partially offset by increased postage rates. Forty-seven week results For the first 47 weeks of fiscal 1999, net sales were $1.242 billion, an increase of 7 percent from sales of $1.163 billion during the similar period of the prior year. Net income in the 47 weeks just ended was $30.6 million, or $0.99 per share, compared with $61.9 million, or $1.92 per share in the prior year. Without the non-recurring charge, net income for the 47-week period just ended was $38.6 million or $1.25 per share. Last year's net income includes an after-tax gain of $4.7 million, or $0.15 per share, from the sale of the company's majority interest in The Territory Ahead. Excluding this non- recurring gain, net income in the first 47 weeks of the prior year (fiscal 1998) was $57.2 million, or $1.79 per share. Lands' End is a leading direct merchant of traditionally styled, classically inspired clothing offered to customers throughout the world through regular mailings of its monthly and specialty catalogs and the Internet. STATEMENT REGARDING FORWARD-LOOKING INFORMATION Statements in this release that are not historical, including, without limitation, statements regarding anticipated savings, are considered forward-looking and speak only as of today's date. As such, these statements are subject to a number of risks and uncertainties. Future results expressed or implied by these statements may be materially different from those anticipated, due to various factors that may occur. Such factors include, but are not limited to the following: general economic or business conditions, both domestic and foreign; customer response to product offerings and initiatives; costs associated with printing and mailing catalogs; dependence on consumer seasonal buying patterns; and fluctuations in foreign currency exchange rates. -0- Contact Charlotte LaComb: 608-935-4835 PRELIMINARY AND UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS Lands' End, Inc. & Subsidiaries (Amounts in thousands, except per share data) 8 weeks 8 weeks 47 weeks 47 weeks ended ended ended ended Dec. 25 Dec. 26, Dec. 25, Dec. 26, 1998 1997 1998 1997 Net sales $412,195 $379,889 $1,242,398 $1,163,100 Cost of sales 228,909 196,022 673,632 617,219 Gross profit 183,286 183,867 568,766 545,881 Selling, general and administrative expenses 131,479 120,535 497,072 449,249 Non-recurring charge 11,100 - 12,600 - Income from operations 40,707 63,332 59,094 96,632 Other income (expense): Interest expense (1,358) (567) (7,626) (1,866) Interest income 5 54 13 1,565 Other 541 (211) (2,866) (3,367) Total other income (expense), net (812) (724) (10,479) (3,668) Income before income taxes and non-recurring gain 39,895 62,608 48,615 92,964 Income tax provision 14,762 23,621 17,988 35,764 Net income before non-recurring gain 25,133 38,987 30,627 57,200 Non-recurring gain (net of income taxes) - - - 4,683 Net income $ 25,133 $ 38,987 $ 30,627 $ 61,883 Basic earnings per share before non-recurring gain $ 0.83 $ 1.25 $ 1.00 $ 1.79 Basic earnings per share from non-recurring gain $ - $ - $ - $ 0.15 Basic earnings per share $ 0.83 $ 1.25 $ 1.00 $ 1.94 Diluted earnings per share $ 0.83 $ 1.24 $ 0.99 $ 1.92 Basic weighted average shares outstanding 30,239 31,108 30,502 31,935 Diluted weighted average shares outstanding 30,392 31,438 30,787 32,191 PRELIMINARY AND UNAUDITED CONSOLIDATED BALANCE SHEETS Lands' End, Inc. & Subsidiaries Dec. 25, Dec. 26, (Amounts in thousands) 1998 1997 Assets Current assets: Cash and cash equivalents $ 5,271 $ 43,397 Receivables 29,772 21,606 Inventory 242,823 247,694 Prepaid advertising 14,483 10,489 Other prepaid expenses 6,786 6,010 Deferred income tax benefit 9,550 9,511 Total current assets 308,685 338,707 Property, plant and equipment, at cost: Land and buildings 101,598 80,877 Fixtures and equipment 151,547 117,741 Leasehold improvements 5,448 4,295 Construction in progress - 10,374 Total property, plant and equipment 258,593 213,287 Less - accumulated depreciation and amortization 100,432 86,294 Property, plant and equipment, net 158,161 126,993 Intangibles, net 1,047 890 Total assets $467,893 $466,590 Liabilities and shareholders' investment Current liabilities: Lines of credit $ 28,313 $ 29,442 Accounts payable 93,059 107,149 Reserve for returns 13,381 10,172 Accrued liabilities 59,639 37,316 Accrued profit sharing 2,246 3,608 Income taxes payable 12,294 28,591 Total current liabilities 208,932 216,278 Deferred income taxes 7,291 8,122 Shareholders' investment: Common stock, 40,221 shares issued 402 402 Donated capital 8,400 8,400 Additional paid-in capital 26,676 26,359 Deferred compensation (800) (1,083) Currency translation adjustments 2,213 968 Retained earnings 405,838 372,944 Treasury stock, 9,981 and 9,236 shares at cost, respectively (191,059) (165,800) Total shareholders' investment 251,670 242,190 Total liabilities and shareholders' investment $467,893 $466,590 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED STATEMENTS OF OPERATIONS AND THE CONSOLIDATED BALANCE SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 11-MOS 11-MOS JAN-29-1999 JAN-30-1998 DEC-25-1998 DEC-26-1997 5271 43397 0 0 29772 21606 0 0 242823 247694 308685 338707 258593 213287 100432 86294 467893 466590 208932 216278 0 0 0 0 0 0 402 402 251268 241788 467893 466590 1242398 1163100 1242398 1163100 673632 617219 673632 617219 3227 3944 0 0 7626 1866 48615 97647 17988 35764 30627 61883 0 0 0 0 0 0 30627 61883 1.00 1.79 0.99 1.92 PerSFAS 128 the EPS is Basic Expenses included in Other Income and Expense on Consolidated Statement of Operations
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