-----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, VOAKvmCcJSQNoRJ7xnctG96f1vfdw68U5PYEKfIgcpOaEQSl02dpkmsWltoyPZCR wbjgy3QXXkf+RY0XhTYZQg== 0000950172-03-001843.txt : 20030602 0000950172-03-001843.hdr.sgml : 20030602 20030602080117 ACCESSION NUMBER: 0000950172-03-001843 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030602 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030602 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WARNACO GROUP INC /DE/ CENTRAL INDEX KEY: 0000801351 STANDARD INDUSTRIAL CLASSIFICATION: WOMEN'S, MISSES', CHILDREN'S & INFANTS' UNDERGARMENTS [2340] IRS NUMBER: 954032739 STATE OF INCORPORATION: DE FISCAL YEAR END: 0103 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10857 FILM NUMBER: 03727128 BUSINESS ADDRESS: STREET 1: 90 PARK AVE STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 2126611300 MAIL ADDRESS: STREET 1: 90 PARK AVENUE STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10016 FORMER COMPANY: FORMER CONFORMED NAME: W ACQUISITION CORP /DE/ DATE OF NAME CHANGE: 19861117 8-K 1 s488782a.txt FORM 8-K 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): June 2, 2003 (June 2, 2003) The Warnaco Group, Inc. ----------------------- (Exact name of Registrant as specified in its charter) Delaware 001-10857 95-4032739 - -------------------------------------------------------------------------------- (State or other jurisdiction of (Commission File Number) (IRS Employer incorporation) Identification No.) ---------- 90 Park Avenue, New York, New York 10016 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 661-1300 ----------------------------- N/A - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits.
Exhibit No. Description ----------- ----------- 99.1 Unaudited pro forma consolidated condensed financial information and other financial information
Item 9/Item 12. REGULATION FD DISCLOSURE/RESULTS OF OPERATIONS & FINANCIAL CONDITION. In connection with a proposed financing undertaken by The Warnaco Group, Inc. (the "company"), the company is providing certain financial and other information to potential financing sources. The company is furnishing such information herewith as Exhibit 99.1 to this Form 8-K. Such information is incorporated herein by reference. In accordance with general instruction B.2 and B.6 of Form 8-K, the information in this report, including the exhibit, is furnished pursuant to Item 9 and Item 12 and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise be subject to the liability of that section. SIGNATURE 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. THE WARNACO GROUP, INC. Date: June 2, 2003 By: /s/ Jay A. Galluzzo -------------------------------- Name: Jay A. Galluzzo Title: Vice President and General Counsel EXHIBIT INDEX
EXHIBIT NO. DOCUMENT - ----------- -------- 99.1 Unaudited pro forma consolidated condensed financial information and other financial information
EX-99 3 warnaexh.txt EXH. 99.1 Exhibit 99.1 UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION The company emerged from bankruptcy on February 4, 2003 and, pursuant to American Institute of Certified Public Accountants Statement of Position 90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code ("SOP 90-7"), adopted fresh start accounting. Fresh start accounting principles provide, among other things, that the company make a determination of its reorganization value and allocate such reorganization value to the fair value of its assets in accordance with the provisions of Statement of Financial Accounting Standards No. 141, Business Combinations, ("SFAS 141"). The company engaged an independent third party appraisal firm to assist it in determining its reorganization value. The reorganization value of the company as approved by the bankruptcy court was $750.0 million. Using the work of valuation specialists the company allocated the reorganization value to the fair value of its tangible assets, finite lived intangible assets and indefinite lived intangible assets in accordance with the provisions of SFAS 141. The company's historical financial information is taken from information previously filed with the SEC. The historical information in the following tables is adjusted to reflect the following as if each had been completed at the beginning of the fiscal year ended January 4, 2003 ("Fiscal 2002"): (a) the implementation of the company's plan of reorganization and its emergence from bankruptcy, including adjustments to: (i) reflect fresh start accounting; (ii) eliminate reorganization items related to the bankruptcy; (iii) reflect the elimination of interest expense related to certain foreign debt subject to standstill agreements which principal was repaid as part of the company's reorganization; and (iv) record income taxes at normalized post-emergence rates; and (b) new debt in an aggregate principal amount of $210 million and the application of the proceeds thereof to repay outstanding principal of $200.9 million of the company's Second Lien Notes due February 4, 2008. The pro forma financial information does not purport to be indicative of the company's operating results. The information in this report should be read in conjunction with the company's historical information appearing in its previous filings with the SEC. THE WARNACO GROUP, INC. UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Historical Pro Forma Three Months Pro Forma Three Months Ended July 6, 2002 Adjustments Ended July 6, 2002 ------------------ ----------- ------------------ (in millions of dollars) Net revenues $ 381.8 $ -- $ 381.8 Cost of goods sold 265.9 (3.8)(a) 262.1 ------------------ ----------- ------------------ Gross profit 115.9 3.8 119.7 Selling, general and administrative expenses 100.6 (10.6)(b) 90.0 Reorganization items 42.6 (42.6)(c) -- Amortization of sales order backlog -- -- (d) -- ------------------ ----------- ------------------ Operating income (loss) (27.3) 57.0 29.7 Interest expense 3.1 3.1 (e) 6.2 ------------------ ----------- ------------------ Income (loss) before provision for income taxes (30.4) 53.9 23.5 Provision for income taxes 1.6 7.8 (f) 9.4 ------------------ ----------- ------------------ Net income (loss) $ (32.0) $ 46.1 $ 14.1 ================== =========== ==================
(a) Upon the adoption of fresh start accounting, the company changed its inventory accounting policies to expense certain design, receiving and other product related costs as incurred. As a result of this change, the pro forma adjustment eliminates $4.2 million of design and other product related costs previously capitalized that were reflected in cost of goods sold for the three months ended July 6, 2002 ("Second Quarter of Fiscal 2002"), offset by $0.4 million of inventory costs that would have been expensed in the Second Quarter of Fiscal 2002. (b) Eliminates historical depreciation and amortization expense of $15.2 million, records depreciation and amortization expense of $8.7 million based on the fair value of the company's assets and eliminates lease expense of $4.1 million related to certain leases settled as part of the company's bankruptcy in accordance with fresh start accounting. (c) Eliminates reorganization items of $42.6 million. (d) The company valued its sales order backlog as part of its determination of the fair value of its assets in connection with its adoption of fresh start accounting. The amortization of sales order backlog is a non-recurring charge and is not expected to have a continuing effect on the company's results of operations after it is fully amortized in the fiscal year ending January 3, 2004 ("Fiscal 2003") and, as a result has been excluded from the pro forma statement of operations. The amortization of this backlog will be $12.6 million for Fiscal 2003. (e) Reflects interest expense of $4.5 million on new debt in an aggregate principal amount of $210 million, offset by the elimination of interest expense of $1.6 million on certain foreign debt agreements subject to standstill agreements that was paid as part of the company's plan of reorganization and reflects interest expense of $0.2 million on certain leases settled in connection with the company's bankruptcy. Although the company's average borrowings in the three months ending July 5, 2003 are expected to be substantially lower than its average borrowings in the Second Quarter of Fiscal 2002, no adjustment has been made to interest expense for the lower level of borrowings. (f) Adjusts income tax provision to reflect an estimated income tax rate of 40%. THE WARNACO GROUP, INC. UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Historical Pro Forma Three Months Three Months Ended October 5, Pro Forma Ended October 5, 2002 Adjustments 2002 ---------------- ----------- ---------------- (in millions of dollars) Net revenues $ 345.5 $ -- $ 345.5 Cost of goods sold 246.2 (1.0)(a) 245.2 ---------------- ----------- ---------------- Gross profit 99.3 1.0 100.3 Selling, general and administrative expenses 87.0 (4.7)(b) 82.3 Reorganization items 21.1 (21.1)(c) -- Amortization of sales order backlog -- -- (d) -- ---------------- ----------- ---------------- Operating income (loss) (8.8) 26.8 18.0 Interest expense 4.3 2.9 (e) 7.2 ---------------- ----------- ---------------- Income (loss) before provision for income taxes (13.1) 23.9 10.8 Provision for income taxes 2.5 1.8 (f) 4.3 ---------------- ----------- ---------------- Net income (loss) $ (15.6) $ 22.1 $ 6.5 ================ =========== ================
(a) Upon the adoption of fresh start accounting, the company changed its inventory accounting policies to expense certain design, receiving and other product related costs as incurred. As a result of this change, the pro forma adjustment eliminates $1.1 million of design and other product related costs previously capitalized that were reflected in cost of goods sold for the three months ended October 5, 2002 ("Third Quarter of Fiscal 2002"), offset by $0.1 million of inventory costs that would have been expensed in the Third Quarter of Fiscal 2002. (b) Eliminates historical depreciation and amortization expense of $13.5 million, records depreciation and amortization expense of $8.8 million based on the fair value of the company's assets. (c) Eliminates reorganization items of $21.1 million. (d) The company valued its sales order backlog as part of its determination of the fair value of its assets in connection with its adoption of fresh start accounting. The amortization of sales order backlog is a non-recurring charge and is not expected to have a continuing effect on the company's results of operations after it is fully amortized in Fiscal 2003 and, as a result has been excluded from the pro forma statement of operations. The amortization of this backlog will be $12.6 million for Fiscal 2003. (e) Reflects interest expense of $4.4 million on new debt in an aggregate principal amount of $210 million, offset by the elimination of interest expense of $1.7 million on certain foreign debt agreements subject to standstill agreements that was paid as part of the company's plan of reorganization and reflects interest expense of $0.2 million on certain leases settled in connection with the company's bankruptcy. (f) Adjusts income tax provision to reflect an estimated income tax rate of 40%. THE WARNACO GROUP, INC. UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Historical Pro Forma Three Months Three Months Ended January 4, Pro Forma Ended January 4, 2003 Adjustments 2003 ---------------- ----------- ---------------- (in millions of dollars) Net revenues $ 355.7 $ -- $ 355.7 Cost of goods sold 249.0 (13.9)(a) 235.1 ---------------- ----------- ---------------- Gross profit 106.7 13.9 120.6 Selling, general and administrative expenses 121.3 (6.1)(b) 115.2 Reorganization items 37.5 (37.5)(c) -- Amortization of sales order backlog 0.0 -- (d) -- ---------------- ----------- ---------------- Operating income (loss) (52.1) 57.5 5.4 Investment income, net 0.1 0.1 Interest expense 7.7 (0.3)(e) 7.4 ---------------- ----------- ---------------- Loss before provision (benefit) for income taxes (59.7) 57.8 (1.9) Provision (benefit) for income taxes (0.2) (0.6)(f) (0.8) ---------------- ----------- ---------------- Net loss $ (59.5) $ 58.4 $ (1.1) ================ =========== ================
(a) Upon the adoption of fresh start accounting, the company changed its inventory accounting policies to expense certain design, receiving and other product related costs as incurred. As a result of this change, the pro forma adjustment eliminates $14.5 million of design and other product related costs previously capitalized that were reflected in cost of goods sold for the three months ended January 4, 2003 ("Fourth Quarter of Fiscal 2002"), offset by $0.6 million of inventory costs that would have been expensed in the Fourth Quarter of Fiscal 2002. (b) Eliminates historical depreciation and amortization expense of $15.0 million, records depreciation and amortization expense of $8.9 million based on the fair value of the company's assets. (c) Eliminates reorganization items of $37.5 million. (d) The company valued its sales order backlog as part of its determination of the fair value of its assets in connection with its adoption of fresh start accounting. The amortization of sales order backlog is a non-recurring charge and is not expected to have a continuing effect on the company's results of operations after it is fully amortized in Fiscal 2003 and, as a result has been excluded from the pro forma statement of operations. The amortization of this backlog will be $12.6 million for Fiscal 2003. (e) Reflects interest expense of $4.5 million on new debt in an aggregate principal amount of $210 million, offset by the elimination of interest expense of $4.9 million on certain foreign debt agreements subject to standstill agreements that was paid as part of the company's plan of reorganization and reflects interest expense of $0.1 million on certain leases settled in connection with the company's bankruptcy. (f) Adjusts income tax provision to reflect an estimated income tax rate of 40%. EBITDA EBITDA is defined as net income before interest expense, income taxes, depreciation and amortization. The company's pro forma statement of operations data and the other data set forth below, including EBITDA, give effect to the implementation of the company's plan of reorganization, its emergence from bankruptcy and new debt in an aggregate principal amount of $210 million, and the application of the proceeds to repay outstanding principal of $200.9 million of the company's Second Lien Notes due February 4, 2008 as if each had occurred at the beginning of Fiscal 2002. The company's senior secured revolving credit facility includes provisions that use EBITDA as a component of certain covenants. The company believes that information regarding EBITDA is useful to investors in evaluating the company's performance. EBITDA is a non-GAAP financial measure and you should not construe EBITDA as an alternative to net income (loss), as an indicator of the company's operating performance, or as an alternative to cash flows from operating activities as a measure of the company's liquidity. The company may calculate EBITDA differently than other companies. A reconciliation of pro forma net income to Pro Forma EBITDA is set forth below: THE WARNACO GROUP, INC. UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months Three Months Three Months Ended October 5, Ended January 4, Ended July 6, 2002 2002 2003 ------------------ ---------------- ---------------- (in millions of dollars) Pro forma net income (loss) $ 14.1 $ 6.5 $ (1.1) Provision for income taxes 9.4 4.3 (0.8) Interest expense 6.2 7.2 7.4 Depreciation and amortization 8.7 8.8 8.9 ------------------ ---------------- ---------------- Pro forma EBITDA $ 38.4 $ 26.8 $ 14.4 ================== ================ ================
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