-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, fbhZcyy1xtK1pRsiysLf+KTeNk+vMpB28n27NTYRyCUhquH9f1bZoQTcLiIKQIdD uAIRDReiD6DVw06W9xuzvg== 0000086346-95-000010.txt : 19950517 0000086346-95-000010.hdr.sgml : 19950516 ACCESSION NUMBER: 0000086346-95-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950401 FILED AS OF DATE: 19950512 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SALANT CORP CENTRAL INDEX KEY: 0000086346 STANDARD INDUSTRIAL CLASSIFICATION: MEN'S & BOYS' FURNISHINGS, WORK CLOTHING, AND ALLIED GARMENTS [2320] IRS NUMBER: 133402444 STATE OF INCORPORATION: DE FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06666 FILM NUMBER: 95537888 BUSINESS ADDRESS: STREET 1: 1114 AVE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10036 BUSINESS PHONE: 2122217500 MAIL ADDRESS: STREET 1: 1058 CLAUSSEN RDSTE 101 CITY: AUGUSTA STATE: GA ZIP: 30907 10-Q 1 FIRST QUARTER 10-Q 1995 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 April 1, 1995. 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 0-2433 SALANT CORPORATION (Exact name of registrant as specified in its charter) Delaware 13-3402444 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1114 Avenue of the Americas, New York, New York 10036 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (212) 221-7500 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 whether the registrant has filed all documents and reports required to be filed by section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes X No As of May 11, 1995 there were outstanding 14,480,092 shares of the Common Stock of the registrant. TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Statements of Operations Condensed Consolidated Balance Sheets Condensed Consolidated Statements of Cash Flow Notes to Condensed Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K SIGNATURE Salant Corporation and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Amounts in thousands except per share data)
Three Months Ended April 1, April 2, 1995 1994 Net sales $ 103,801 $ 89,858 Cost of goods sold 81,334 67,752 Gross profit 22,467 22,106 Selling, general and administrative expenses (20,400) (18,981) Royalty income, net of related expenses 1,430 1,495 Goodwill amortization (641) (549) Other income 57 520 Income from continuing operations before interest and taxes 2,913 4,591 Interest expense, net 4,571 3,365 Income/(loss) from continuing operations before income taxes (1,658) 1,226 Income taxes 41 66 Income/(loss) from continuing operations (1,699) 1,160 Loss from discontinued operations - (76) Net income/(loss) $(1,699) $1,084 Earnings/(loss) per share: Income/(loss) per share from continuing operations $ (0.11) $ 0.08 Loss per share from discontinued operations - (0.01) Net income/(loss) per share $ (0.11) $ 0.07 Weighted average common stock and common stock equivalents outstanding 15,008 15,137
See Notes to Condensed Consolidated Financial Statements. Salant Corporation and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands) April 1, April 2, 1995 December 31, 1994 (Unaudited) 1994 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 1,907 $ 1,965 $ 4,383 Accounts receivable, net (Note 3) 31,032 36,583 23,419 Inventories (Note 4) 149,240 124,599 111,928 Prepaid expenses and other current assets 5,472 5,264 3,471 Net assets of discontinued operations - - 10,677 Total Current Assets 187,651 168,411 153,878 Property, Plant and Equipment, net 28,351 27,460 26,892 Other Assets 70,806 71,345 67,541 Total Assets $ 286,808 $ 267,216 $ 248,311 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Loans payable (Note 3) $ 44,664 23,906 $ - Accounts payable 34,459 28,593 24,680 Accrued liabiliies 14,003 18,848 13,431 Net liabilities of discontinued operations (Note 2) 339 816 - Current portion of long term debt (Note 5) - - 3,600 Reserve for business restructuring - - 1,155 Total Current Liabilities 93,465 72,163 42,866 Long Term Debt 109,908 109,908 108,251 Deferred Liabilities 13,475 13,479 16,762 Shareholders' Equity Common stock 15,242 15,242 15,212 Additional paid-in capital 107,017 107,017 106,976 Deficit (50,025) (48,326) (39,376) Excess of additional pension liability over unrecognized prior service cost (773) (773) (986) Accumulated foreign currency translation adjustment 113 120 220 Less - treasury stock, at cost (1,614) (1,614) (1,614) Total Shareholders' Equity 69,960 71,666 80,432 Total Liabilities and Shareholders' Equity $ 286,808 $ 267,216 $248,311
See Notes to Condensed Consolidated Financial Statements. Salant Corporation and Subsidiaries CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (Amounts in thousands)
Three Months Ended April 1, April 2, 1995 1994 Cash Flows from Operating Activities: Income/(loss) from continuing operations $ (1,699) $ 1,084 Adjustments to reconcile income/(loss) from continuing operations to net cash used in operating activities: Depreciation 1,290 1,277 Amortization of intangibles 641 549 Change in operating assets and liabilities: Accounts receivable 5,551 1,199 Inventories (24,641) (8,343) Prepaid expenses and other current assets (208) 692 Other assets (103) 22 Accounts payable 5,866 2,956 Accrued liabilities and reserve for business restructuring (4,845) (9,279) Deferred liabilities (4) (4) Net cash used in operating activities (18,152) (9,847) Cash Flows from Investing Activities: Capital expenditures (2,206) (835) Proceeds from sale of assets 26 40 Net cash used in investing activities (2,180) (795) Cash Flows from Financing Activities: Net short-term borrowings 20,758 - Exercise of stock options (7) 446 Net cash provided by financing activities 20,751 446 Net cash provided by/(used in) continuing operations 419 (10,196) Cash used in discontinued operations (477) (177) Net decrease in cash and cash equivalents (58) (10,373) Cash and cash equivalents - beginning of year 1,965 14,756 Cash and cash equivalents - end of first quarter $1,907 $4,383 Supplemental disclosures of cash flow information: Cash paid during the year for: Interest $ 7,516 $ 6,436 Income taxes $ 106 $ 50
See Notes to Condensed Consolidated Financial Statements SALANT CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Thousands of Dollars) (Unaudited) Note 1. Basis of Presentation and Consolidation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Salant Corporation ("Salant") and subsidiaries. (As used herein, the "Company" includes Salant and its subsidiaries but excludes Salant's Vera Scarf Division.) In February 1995, Salant discontinued its Vera Scarf Division. As further described in Note 2, the Condensed Consolidated Financial Statements and the Notes thereto treat the Vera Scarf Division as a discontinued operation, and, consistent with the financial statements for 1994, the financial results of the Vera Scarf Division are not included in the presentation of income/(loss) from continuing operations. In addition, the net assets and/or net liabilities of the discontinued operations have been separately classified in the Condensed Consolidated Balance Sheets. The results of operations for the three months ended April 1, 1995 and April 2, 1994 are not necessarily indicative of a full year's operations. In the opinion of management, the accompanying financial statements include all adjustments which are necessary to present fairly such financial statements. Significant intercompany balances and transactions are eliminated in consolidation. Certain reclassifications were made to the 1994 unaudited Condensed Consolidated Financial Statements to conform with the 1995 presentation. Income/(loss) per share is based on the weighted average number of common shares (including shares to be issued pursuant to the Company's plan of reorganization) and common stock equivalents outstanding, if applicable. Loss per share for the three months ended April 1, 1995 did not include common stock equivalents, as their effect would have been anti-dilutive. Note 2. Discontinued Operations In February 1995, the Company discontinued the Vera Scarf Division, which imports and markets women's scarves. The loss from operations of the Division in the prior year (for the three months ended April 2, 1994) was $76. Net sales of the Division were $916 and $1,488 for the three months ended April 1, 1995 and April 2, 1994, respectively. The net assets and/or net liabilities of the discontinued operations have been reclassified on the balance sheets as net assets or net liabilities of discontinued operations and consist principally of accounts receivable, inventory and accrued losses for the phase-out period. Note 3. Loans Payable and Factor Advances The Company has entered into an agreement with a factor, whereby it sells, without recourse, an interest in a defined pool of eligible accounts receivable. The credit risk for such accounts is thereby transferred to the factor. The amounts due from factor have been offset against advances from the factor in the accompanying balance sheets. The amounts which have been offset amounted to $22,006 at April 1, 1995, $9,324 at December 31, 1994, and $24,326 at April 2, 1994.
Note 4. Inventories April 1, December 31, April 2, 1995 1994 1994 Finished goods $ 86,955 $ 70,882 $ 71,731 Work-in-process 33,557 28,298 24,667 Raw materials and supplies 28,728 25,419 15,530 $ 149,240 $ 124,599 $ 111,928
Note 5. Current Portion of Long Term Debt In May 1994, the Company purchased and retired $3,600 of its 10 1/2% Senior Secured Notes due December 31, 1998 (the "Secured Notes") in an open market transaction at a price below the principal amount thereof. Consequently, the purchased Secured Notes have been classified as the current portion of long term debt on the prior year's financial statements. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion and analysis of the consolidated results of operations and financial condition should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements and related Notes to provide additional information concerning the financial activities and condition of Salant Corporation ("Salant") and its subsidiary companies (collectively, the "Company"). Results of Operations The following discussion compares the operating results of the Company for the three months ended April 1, 1995 with the operating results for the three months ended April 2, 1994. In February 1995, the Company discontinued its Vera Scarf Division. The financial statements included in this report treat the Vera Scarf Division as a discontinued operation, the effect of which is to exclude the results of operations of the Vera Scarf Division from the Company's results from continuing operations for each fiscal period presented. See "Notes to the Condensed Consolidated Financial Statements --- Note 2."
(dollars in millions) Three months ended April 1, April 2, 1995 1994 Net sales $103.8 $89.9 Gross profit $22.5 $22.1 Gross margin percentage 21.6% 24.6% EBITDA (a) $4.8 $6.4
(a) Earnings before interest, taxes, depreciation and amortization. For the first quarter of 1995, net sales amounted to $103.8 million, a 15.5% increase over net sales of $89.9 million in the comparable 1994 quarter. The increase was due to significant sales increases in men's sportswear, jeans and slacks achieved by the Company's Perry Ellis, Texas Apparel and Thomson divisions as well as the JJ. Farmer Division which was acquired in June 1994. These increases were partially offset by a reduction in sales of women's junior denim products. Notwithstanding the popularity of casualwear, which contributed to a slight decrease in the overall dress shirt market in 1994, the Company's dress shirt sales increased in the first quarter of 1995, as compared to the first quarter of 1994. In June 1994, the Company signed a new license agreement for dress shirts to be produced and sold under the GANT label. Net sales by category and percent of total net sales for the first quarter of 1995 as compared to the first quarter of 1994 was:
(dollars in millions) Three months ended April 1, 1995 April 2, 1994 Dress Shirts and Accessories (a) $ 42.0 40.4% $ 40.3 44.8% Sportswear (b) 27.4 26.4% 18.0 20.1% Bottoms (c) 24.3 23.5% 19.7 21.9% Other (d) 10.1 9.7% 11.9 13.2% Total $103.8 100% $ 89.9 100%
(a) Includes the Fashion Shirt Group, the dress shirt portions of the Manhattan Apparel Group and Perry Ellis Division and the Salant Accessories Division. (b) Includes the Sportswear portions of the Perry Ellis Division and Manhattan Apparel Group and the JJ. Farmer Division. (c) Includes the Thomson and Texas Apparel Divisions. (d) Includes the Children's Apparel Group, Made in the Shade Division and the Retail Stores Division. Gross profit as a percentage of net sales decreased to 21.6% ($22.5 million) in the first quarter of 1995 from 24.6% of net sales ($22.1 million) in the comparable 1994 quarter. The reduction in gross profit as a percentage of net sales was incurred primarily in men's dress shirts, neckwear and slacks and in denim-based products. The cause of the reduction was (a) continuing pressure on selling prices, which is expected to continue, and (b) higher costs of manufacturing in our domestic dress shirt facilities and our recently closed jeans laundry in Texas. Based on recent improvements in our dress shirt facilities as well as a new laundry facility currently under construction in Mexico, we do not expect the higher manufacturing costs to continue. Selling, general and administrative expenses as a percentage of net sales decreased to 19.7% ($20.4 million), as compared to the first quarter of 1994, when such expenses amounted to 21.2% of net sales ($19.0 million). Other income for the first quarter of 1994 included a $500 thousand insurance reimbursement for legal fees and expenses incurred in prior years. For the first quarter of 1995, income from operations (before net interest expense of $4.6 million) was $2.9 million, or 2.8% of net sales. For the first quarter of 1994, income from operations (before net interest expense of $3.4 million) was $4.6 million, or 5.1% of net sales. Income from operations as a percentage of net sales was lower in 1995 primarily as a result of continuing gross margin pressures as indicated above. Net interest expense for the first quarter of 1995 amounted to $4.6 million as compared to $3.4 million in the prior year's first quarter. The increase in interest expense was primarily due to a higher average outstanding loan balance and increases in the interest rate on the Company's working capital facility. As a result of the above, the net loss for the 1995 first quarter was $1.7 million, or $0.11 per share, compared with net income of $1.1 million, or $0.07 per share, for the first quarter of 1994. There were 15,007,632 weighted average common shares outstanding in the first quarter of 1995, compared to 15,137,328 weighted average common shares and common share equivalents outstanding in the first quarter of 1994. Liquidity and Capital Resources The Company is a party to a revolving credit, factoring and security agreement, as amended, (the "Credit Agreement") with The CIT Group/Commercial Services, Inc. ("CIT") to provide seasonal working capital financing in the form of direct borrowings and letters of credit, up to an aggregate of $135 million during certain periods of 1995 (subject to an asset based borrowing formula). Interest on direct borrowings is charged monthly at an annual rate of one percent in excess of the prime rate of Chemical Bank (the "Prime Rate") (which prime rate was 9.0% at April 1, 1995). As collateral for borrowings under the Credit Agreement, Salant has granted to CIT a security interest in substantially all of the assets of the Company. As of April 1, 1995, direct borrowings and letters of credit outstanding under the Agreement were $44.7 million and $37.9 million, respectively, and the Company had unused availability of $7.3 million. As of April 2, 1994, there were no direct borrowings, letters of credit outstanding under the Credit Agreement were $35.9 million, and the unused availability amounted to $26.9 million. The average interest rate on borrowings for the three months ended April 1, 1995 and April 2, 1994 was 9.4% and 6.3%, respectively. The Credit Agreement and the indenture governing the Secured Notes contain numerous financial and operating covenants, including restrictions on incurring indebtedness and liens, making investments in or purchasing the stock of all or a substantial part of the assets of another person, selling property, making capital expenditures, and paying cash dividends. In addition, under the Credit Agreement, the Company is required (i) during the year, to maintain minimum levels of working capital and stockholders' equity and to satisfy a maximum cumulative net loss test and (ii) at year end, to satisfy a ratio of total liabilities to stockholders' equity and a fixed charge coverage ratio. At April 1, 1995, the Company was in compliance with all financial covenants as indicated below:
Covenant April 1, 1995 Credit Agreement Covenants Level Actual Level Working Capital $ 85.0 million $ 94.2 million Stockholders' Equity $ 65.0 million $ 70.0 million Maximum Loss $ (10.0) million $ (1.6) million (a)
(a) In accordance with the Credit Agreement, maximum loss excludes any write-off of goodwill in the 1994 fiscal year. The Company is also required to reduce its indebtedness (excluding outstanding letters of credit) to $20 million or less for fifteen consecutive days during each twelve month period commencing February 1, 1994. The Company has complied with this covenant for the period February 1, 1994 through January 31, 1995. At the end of the first quarter of 1995, the Company's short term borrowings were $20.8 million higher than such borrowings at the end of 1994. The increase in borrowings was primarily the result of an increase in inventories of $24.6 million to provide for businesses entered into in 1994 and in anticipation of higher sales in the second quarter of 1995, including the initial shipments of the new Sears' Canyon River Blues program for men and boys. Capital expenditures in the first quarter of 1995 were $2.2 million, related primarily to the creation of Perry Ellis shops in department stores, additional showroom and office space in New York City and a new jeans laundry facility currently under construction in Mexico, as compared to $800 thousand in the first quarter of 1994. Capital expenditures for 1995 are anticipated to be approximately $6-7 million. Salant's principal sources of liquidity, both on a short-term and a long-term basis, are provided by operations and borrowings under the Credit Agreement. Based upon its analysis of its consolidated financial position, its cash flow during the past twelve months, and its cash flow anticipated from future operations, Salant believes that its future cash flow, together with the funds available under the Credit Agreement, will be adequate to meet its financing requirements for the remainder of 1995. There can be no assurance, however, that future developments and general economic trends will not adversely affect the Company's operations and, hence, its anticipated cash flow. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K Reports on Form 8-K During the first quarter of 1995, the Company filed one Form 8-K, dated March 2, 1995, reporting an amendment to the Revolving Credit, Factoring and Security Agreement, dated September 20, 1993, between The CIT Group/Commerical Services, Inc. and Salant Corporation. Exhibits Number Description 10.27 Fourth Amendment to Credit Agreement, dated as of March 1, 1995, to the Revolving Credit, Factoring and Security Agreement, dated as of September 20, 1993, as amended, between Salant Corporation and The CIT Group/Commercial Services, Inc. 10.28 Letter Agreement, dated April 12, 1995, amending the Employment Agreement, dated June 1, 1993, between Todd Kahn and Salant Corporation. 27 Financial Data Schedule 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 thereunto duly authorized. SALANT CORPORATION Date: May 12, 1995 /s/ Richard P. Randall Richard P. Randall Senior Vice President and Chief Financial Officer (Principal Financial Officer) EX-1 2 FOURTH AMENDMENT TO CREDIT AGREEMENT FOURTH AMENDMENT TO CREDIT AGREEMENT, dated as of March 1, 1995 (this "Amendment"), to the Revolving Credit, Factoring and Security Agreement, dated as of September 20, 1993, as amended by letter agreement Re: Amendment to Credit Agreement with respect to the Mississippi Property, dated June 14, 1994 (the "First Amendment") and by letter agreement Re: Amendment to Credit Agreement with respect to Additional Guarantors, dated August 24, 1994 (the "Second Amendment") and by the Third Amendment to Credit Agreement, dated as of February 25, 1995 (the "Third Amendment") (as so amended, and as further amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), between THE CIT GROUP/COMMERCIAL SERVICES, INC. ("Lender") and SALANT CORPORATION ("Borrower"). W I T N E S S E T H : WHEREAS, Lender and Borrower are parties to the Credit Agreement; WHEREAS, Lender and Borrower entered into the Third Amendment; WHEREAS, Lender and Borrower have agreed that the Effective Date, as defined below, with respect to certain modifications to the Credit Agreement as set forth in the Third Amendment shall be delayed; NOW, THEREFORE, in consideration of the premises, the parties hereto hereby agree, effective as of the Effective Date, as defined below, as follows: 1. Defined Terms. Initially capitalized terms used and not otherwise defined herein shall have their respective meanings as defined in the Credit Agreement. 2. Amendment of Sections 1.8, 1.58, 3.1(a)(i), 3.6(d) and 3.6(i). Notwithstanding anything to the contrary contained in paragraph 21 of the Third Amendment, the Effective Date solely with respect to paragraphs 2, 5, 7, 11 and 12 (the "Factoring Sections") shall be delayed until April 3, 1995, at which time the Factoring Sections shall become effective. 3. Continuing Effect of Credit Agreement. This Amendment shall not constitute a waiver or amendment of any provision of the Credit Agreement not expressly referred to herein and shall not be construed as a consent to any further or future action on the part of Borrower that would require consent of Lender. Except as expressly amended, the provisions of the Credit Agreement and the Third Amendment are and shall remain in full force and effect. 4. Counterparts. This Amendment may be executed in counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. 5. Governing Law. This Amendment shall be governed by, and construed and interpreted in accordance with, the laws of the state of New York. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered in New York, New York by their proper and duly authorized officers as of the day and year first above written. THE CIT GROUP/COMMERCIAL SERVICES, INC. By: Title: SALANT CORPORATION By: Title: CONSENT OF GUARANTORS Each of the undersigned, CLANTEXPORT, INC., DENTON MILLS, FROST BROS. ENTERPRISES, INC., SLT SOURCING, INC., VERA LICENSING, INC., SALANT CANADA INC. and J.J. FARMER CLOTHING INC., each a Guarantor under its respective Guarantee, each dated as of September 20, 1993 (individually, its "Guarantee"), made in favor of The CIT Group/Commercial Services, Inc. ("Lender") pursuant to the Credit Agreement as defined in the Fourth Amendment to Credit Agreement, dated as of March 1, 1995 between Lender and Salant Corporation (the "Amendment"), to which this Consent is attached, hereby consents to the Amendment and the matters contemplated thereby, and hereby confirms and agrees that its Guarantee is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects except that, on or after the effective date of the Amendment, each reference in its Guarantee to "the Credit Agreement", "thereunder", "thereof" or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as amended by the Amendment. IN WITNESS WHEREOF, each of the undersigned has caused this Consent of Guarantors to be duly executed and delivered by its authorized officer as of the 1st day of March, 1995. CLANTEXPORT, INC. FROST BROS. ENTERPRISES, INC. By: By: Title: Title: DENTON MILLS, INC. SLT SOURCING, INC. By: By: Title: Title: VERA LICENSING, INC. SALANT CANADA, INC. By: By: Title: Title: J.J. FARMER CLOTHING, INC. By: Title: EX-2 3 April 12, 1995 Todd Kahn 444 East 86 Street New York, New York 10028 Dear Todd: Reference is hereby made to the Employment Agreement, dated as of June 1, 1993, between yourself as the Employee and Salant Corporation. We have mutually agreed to amend the Employment Agreement, effective April 14, 1995, as follows: 1. Section 3 of the Employment Agreement is hereby deleted in its entirety and substituted with the following therefore: "Section 3. Term of Employment. For purposes of this Agreement, the term "Employment Period" shall mean the period commencing April 14, 1995 and ending December 31, 1997. The Corporation agrees that if it intends to renew or extend the term of the Employment Period beyond December 31, 1997, it will so notify the Employee in writing on or before July 1, 1997 and will provide the Employee with the terms upon which the Corporation proposes such employment continuation." 2. Paragraph (a) of Section 4 is hereby deleted in its entirety an d substituted with the following therefore: "(a) Salary. As annual salary for the services to be rendered by the Employee a salary at the rate of $165,000 per annum from April 14, 1995 to November 30, 1995; $200,000 per annum from December 1, 1995 to November 30, 1996; and $225,000 per annum from December 1, 1996 through December 31, 1997, payable in bi-weekly installments during the Employment Period." 3. The first sentence of Section 5 is hereby deleted in its entirety and substituted with the following therefore: "In addition to the nonqualified stock options to purchase 20,000 shares of common stock, par value $1.00 per share (the "Common Stock"), of the Corporation granted to the Employee prior to April 13, 1995, the Corporation shall grant to the Employee nonqualified stock options to purchase 15,000 shares of Common Stock of the Corporation pursuant to the Corporation's 1987 Stock Plan, 1988 Stock Plan and/or 1993 Stock Plan at such time as shares of Common Stock become available." 4. Exhibit 1 of the Employment Agreement is hereby deleted in its entirety and substituted with the following therefore: "If the Corporation's operating income (before amortization of intangibles), as shown on its audited financial statements for any Fiscal Year during the Employment Period ("Actual Annual Operating Income"), is equal to or greater than 90% and less than 100% of the amount of operating income (before amortization of intangibles and after the reserve for contingencies) provided for in Salant's annual business plan for that Fiscal Year ("Planned Annual Operating Income"), the Employee shall receive a cash bonus equal to 40% of his Salary at the end of the applicable Fiscal Year ("Annual Salary"). If the Corporation's Actual Annual Operating Income is equal to 100% of Planned Annual Operating Income, the Employee shall receive a cash bonus equal to 50% of his Annual Salary. For example if the Corporation's Actual Annual Operating Income is equal to 100% of its Planned Annual Operating Income for the 1995 Fiscal Year, the Employee shall receive a cash bonus equal to $100,000. For each full five percentage points (after rounding to the nearest 1/100th of a percent) by which the Corporation's Actual Annual Operating Income exceeds 100% of Planned Annual Operating Income, the Employee shall receive an additional cash bonus equal to 5% of his Annual Salary. Actual Annual Operating Income shall be calculated without giving effect to unusual or nonrecurring items of income or expense." . Except as specifically set forth herein, the Employment Agreement remains in full force and effect and is hereby ratified, confirmed and approved. The Employment Agreement, as modified by this letter, is the only agreement that governs the terms of your employment All other letters, agreements and memorandum are hereby null and void. If the foregoing correctly sets forth our mutual agreement, please sign and return to me the three attached copies of this letter. Very truly yours, SALANT CORPORATION By: ______________________________ Nicholas P. DiPaolo Chairman of the Board, President and CEO Accepted and Agreed To: By: _______________________________ Todd Kahn Date: _____________________________ EX-27 4
5 1000 3-MOS DEC-30-1995 APR-01-1995 1,907 0 42,267 (11,235) 149,240 187,651 67,040 (38,689) 286,808 93,465 0 15,242 0 0 54,718 286,808 103,801 105,231 81,334 101,734 584 0 4,571 (1,658) 41 (1,699) 0 0 0 (1,699) (.11) 0
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