-----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, JulXzsublTcRQz/lWpZJ+6BA4OMFY7Xgjo2Vk9O+TiGpZxGO0tFUylzVAgY/wp+m ZsgdTn3YOdGAIIwcC+od4g== 0000950170-96-001057.txt : 19961121 0000950170-96-001057.hdr.sgml : 19961121 ACCESSION NUMBER: 0000950170-96-001057 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960906 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961120 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUPREME INTERNATIONAL CORP CENTRAL INDEX KEY: 0000900349 STANDARD INDUSTRIAL CLASSIFICATION: MEN'S & BOYS' FURNISHINGS, WORK CLOTHING, AND ALLIED GARMENTS [2320] IRS NUMBER: 591162998 STATE OF INCORPORATION: FL FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-21764 FILM NUMBER: 96669588 BUSINESS ADDRESS: STREET 1: 7495 NW 48TH ST CITY: MIAMI STATE: FL ZIP: 33166 BUSINESS PHONE: 3055922830 8-K/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): SEPTEMBER 6, 1996 SUPREME INTERNATIONAL CORPORATION (Exact name of registrant as specified in its charter) FLORIDA 0-21764 59-1162998 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 7495 N.W. 48th Street MIAMI, FLORIDA 33166 (Address of principal executive offices) Registrant's telephone number, including area code: (305) 592-2830 1 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of Business Acquired. Premiumwear, Inc. (Formerly Munsingwear, Inc.). Report of Independent Public Accountants. Statements of Assets Sold as of January 6, 1996 and January 7, 1995. Statements of Direct Revenues and Expenses for the Years Ended January 6, 1996, January 7, 1995 and January 1, 1994. Notes to Statements. (b) Pro Forma Financial Information. Pro Forma Condensed Balance Sheet as of July 31, 1996. Pro Forma Condensed Income Statement for the Six Months Ended July 31, 1996. Pro Forma Condensed Income Statement for the Year Ended January 31, 1996. Notes to Pro Forma Condensed Financial Statements. 2 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To PremiumWear, Inc.: We have audited the accompanying statements of assets sold of the retail, specialty, national and golf strategic business units of PremiumWear, Inc. (formerly Munsingwear, Inc.) as of January 6, 1996 and January 7, 1995, and the related statements of direct revenues and expenses for each of the three fiscal years in the period ended January 6, 1996. These statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan perform the audit to obtain reasonable assurance about whether the statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall statement presentation. We believe that our audits provide a reasonable basis for our opinion. The accompanying statements were prepared to present the assets sold of PremiumWear, Inc.'s retail, specialty, national and golf strategic business units pursuant to the purchase agreement described in Note 1 and direct revenues and expenses and are not intended to be a complete presentation of PremiumWear, Inc.'s retail, specialty, national and golf strategic business units' financial position, results of operations and cash flows. In our opinion, the statements referred to above present fairly, in all material respects, the assets sold of PremiumWear, Inc's retail, specialty, national and golf strategic business units, pursuant to the purchase agreement referred to in Note 1, as of January 6, 1996 and January 7, 1995, and the direct revenues and expenses for each of the three fiscal years in the period ended January 6, 1996, in conformity with generally accepted accounting principles. ARTHUR ANDERSEN LLP Minneapolis, Minnesota, November 18, 1996 3
PREMIUMWEAR, INC. RETAIL, SPECIALTY, NATIONAL AND GOLF STRATEGIC BUSINESS UNITS Statements of Assets Sold (Note1) (Dollars in Thousands) JANUARY 6, JANUARY 7, 1996 1995 ---------- ---------- TRADEMARKS, net of accumulated amortization of $1,274 and $1,010 $ 3,923 $ 4,187 INVENTORIES 8,405 11,284 EQUIPMENT, net of accumulated depreciation of $176 and $96 243 214 ------- -------- ASSETS SOLD $12,571 $ 15,685 ======= ========
The accompanying notes are an integral part of these statements. 4
PREMIUMWEAR, INC. RETAIL, SPECIALTY, NATIONAL AND GOLF STRATEGIC BUSINESS UNITS Statements of Direct Revenues and Expenses (Note 2) For the Years Ended January 6, 1996, January 7, 1995 and January 1, 1994 (Dollars in Thousands) 1996 1995 1994 ------- ------- ------- REVENUES: Net sales $35,184 $35,804 $36,992 Royalties 4,273 4,172 3,243 ------- ------- ------- 39,457 39,976 40,235 COST OF GOODS SOLD 29,592 28,258 27,680 ------- ------- ------- Gross Profit 9,865 11,718 12,555 DIRECT OPERATING EXPENSES 5,529 5,195 5,400 ------- ------- ------- Excess of direct revenues over expenses $ 4,336 $ 6,523 $ 7,155 ======= ======= =======
The accompanying notes are an integral part of these statements. 5 PREMIUMWEAR, INC. RETAIL, SPECIALTY, NATIONAL AND GOLF STRATEGIC BUSINESS UNITS Notes to Statements January 6, 1996 and January 7, 1995 (Dollars in Thousands) 1. BACKGROUND AND BASIS OF PRESENTATION: The accompanying statements have been prepared for the purpose of presenting the assets sold of the retail, specialty, national and golf strategic business units (collectively, SBUs) of PremiumWear, Inc. (PremiumWear or the Seller - formerly Munsingwear, Inc.), pursuant to the Asset Purchase and Management Agreements (the Agreements) dated as of May 22, 1996 between PremiumWear and Supreme International Corporation (the Buyer) and its related direct revenues and expenses for each of the three fiscal years in the period ended January 6, 1996. Consummation of the transaction occurred on September 6, 1996. Pursuant to the Agreements, PremiumWear sold to the Buyer the intangible rights which include certain license agreements and certain inventories and fixed assets directly related to the SBUs in exchange for consideration totaling approximately $18 million. In addition, as part of the Agreements, PremiumWear changed its name from Munsingwear, Inc. The Seller retained certain inventories and all accounts receivable and liabilities related to the SBUs. The SBUs' products are sold and distributed principally in the United States. These products are also sold and distributed in North America, Europe and Asia. The accompanying statements are derived from the historical accounting records of PremiumWear, and present the assets sold of PremiumWear's SBUs in accordance with the Agreements, as of January 6, 1996 and January 7, 1995, and direct revenues and expenses for each of the three fiscal years in the period ended January 6, 1996, and are not intended to be a complete presentation of the SBUs' financial position, results of operations and cash flows. These results may not be indicative of the results after the acquisition by the Buyer. PremiumWear historically has not maintained the SBUs as a separate business unit and has not allocated indirect operating cost information. The statements of direct revenues and expenses include revenues and expenses directly attributable to the SBUs. Direct operating expenses consist principally of marketing, sales commissions, advertising, warehouse expenses and amortization of intangible expenses. The statements do not include indirect selling, general and administrative, research and development, interest and income tax expenses. 6 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: REVENUE Sales are recorded as revenues, net of a provision for estimated returns, when goods are shipped to the customer. Royalties are recognized as earned. Sales to one customer in 1995 and 1994 were 17% and 21%, respectively, of net sales. In 1996, no single customer represented more than 10% of the SBUs' net sales. INVENTORIES Inventories are stated at the lower of cost (first-in, first-out) or market. Inventoriable costs include raw materials, labor and related manufacturing overhead expenses. Inventories consisted of (in thousands): JANUARY 6, JANUARY 7, ---------- ---------- 1996 1995 ------ ------- Raw materials $ 680 $ 1,591 Work in progress 320 1,121 Finished goods 7,405 8,572 ------ ------- $8,405 $11,284 ====== ======= The amounts presented in the accompanying statements related to inventories reflect estimates, which management believes were reasonable and appropriate in the circumstances, of the portion of such balances that were associated with the sold SBUs. Management does not believe that such estimates would have differed materially from actual amounts had it been practicable to specifically identify such actual amounts. OTHER ESTIMATES The preparation of statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the statements and the reported amounts of revenues and expenses during the reporting period. The ultimate results could differ from those estimates. ADVERTISING AND PROMOTIONAL EXPENSES Advertising and promotional expenses are charged to direct operating expenses during the periods in which they are incurred. Total direct advertising and promotional expense was approximately $1,176, $560 and $821 for the fiscal years ended January 6, 1996, January 7, 1995 and January 1, 1994, respectively. 7 PRO FORMA FINANCIAL INFORMATION On September 6, 1996, Supreme International Corporation (the "Company") completed the Munsingwear acquisition, which was accounted for using the purchase method of accounting. The following unaudited pro forma condensed consolidated income statements and other operating data for the six months ended July 31, 1996 and the year ended January 31, 1996 assume that the Munsingwear acquisition was consummated as of the beginning of each of the periods presented and include certain adjustments to the historical consolidated income statements of the Company to give effect to the acquisition of trademarks, other intangible assets and other acquired assets, the payment of the purchase price in such acquisition, the related issuances of additional indebtedness by the Company, and increased amortization of intangible assets. The following unaudited pro forma condensed consolidated balance sheet as of July 31, 1996, reflects the Munsingwear acquisition, the payment of the purchase price in such acquisition and the related issuances of additional indebtedness by the Company, as if such transaction had occurred on July 31, 1996. The unaudited pro forma financial data should be read in conjunction with the notes thereto and the historical Consolidated Financial Statements of the Company (including the notes thereto) and the other historical financial information included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1996. The pro forma adjustments are based upon available information and certain assumptions that the management of the Company believes are reasonable. The pro forma results of operations for the six months ended July 31, 1996 and the year ended January 31, 1996 are not necessarily indicative of the results of operations that would have been achieved had the transactions reflected therein been consummated prior to the periods in which they were completed, or that might be attained in the future. 8
PRO FORMA CONDENSED BALANCE SHEET JULY 31, 1996 (UNAUDITED) HISTORICAL ADJUSTMENTS (1) PRO FORMA ------------ --------------- ------------- Cash $ 375,345 $ -- $ 375,345 Accounts receivable, net 21,838,215 -- 21,838,215 Inventories 27,192,496 373,952 27,566,448 Deferred income taxes 828,313 -- 828,313 Other current assets 2,020,484 -- 2,020,484 Property and equipment, net 2,135,567 10,000 2,145,567 Intangible assets, net 1,090,856 18,274,405 19,365,261 Other 641,057 -- 641,057 ----------- ----------- ----------- Total assets $56,122,333 $18,658,357 $74,780,690 =========== =========== =========== Accounts Payable $ 2,312,588 $ -- $ 2,312,588 Accrued expenses 979,126 -- 979,126 Other current liabilities 111,628 -- 111,628 Long-term debt 8,483,595 18,658,357 27,141,952 Preferred stock -- -- -- Common stock 43,490 -- 43,490 Additional paid-in capital 27,419,474 -- 27,419,474 Retained earnings 16,772,432 -- 16,772,432 ----------- ----------- ----------- Total liabilities and stockholders' equity $56,122,333 $18,658,357 $74,780,690 =========== =========== ===========
SEE NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS 9
PRO FORMA CONDENSED INCOME STATEMENT (UNAUDITED) HISTORICAL SIX MONTHS ENDED ------------------------------ PREMIUMWEAR, COMPANY INC.(1) ----------- ------------ JULY 31, JULY 6, 1996 1996 COMBINED ADJUSTMENTS PRO FORMA ----- ---- -------- ----------- --------- Net revenues $68,366,693 $22,266,000 $90,632,693 $ -- $90,632,693 Cost of goods sold 53,568,705 16,723,000 70,291,705 -- 70,291,705 ----------- ----------- ----------- ----------- ----------- Gross profit 14,797,988 5,543,000 20,340,988 -- 20,340,988 Selling, general and administrative expenses 10,621,052 2,253,000 12,874,052 268,663 (2) 13,142,715 ----------- ----------- ----------- ----------- ----------- Operating income 4,176,936 3,290,000 7,466,936 (268,663) 7,198,273 Interest expense 452,994 -- 452,994 769,657 (3) 1,222,651 ----------- ----------- ----------- ----------- ----------- Income before income 3,723,942 3,290,000 7,013,942 (1,038,320) 5,975,622 taxes Provision for 1,420,000 -- 1,420,000 850,736 (4) 2,270,736 income taxes ----------- ----------- ----------- ----------- ----------- Net income $ 2,303,942 $ 3,290,000 $ 5,593,942 $ (1,889,056) $ 3,704,886 =========== =========== =========== ============ =========== Net income per share (5) $0.52 $0.84 =========== ===========
SEE NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS 10
PRO FORMA CONDENSED INCOME STATEMENT (UNAUDITED) HISTORICAL YEARS ENDED ---------------------- PREMIUMWEAR, COMPANY INC. (1) ------------ ----------- JANUARY 31, JANUARY 6, 1996 1996 COMBINED ADJUSTMENTS PRO FORMA ------------ ----------- ------------ ----------- ------------ Net revenues $121,079,823 $39,457,000 $160,536,823 $ -- $160,536,823 Cost of goods sold 92,144,575 29,592,000 121,736,575 -- 121,736,575 ------------ ----------- ------------ ----------- ------------ Gross profit 28,935,248 9,865,000 38,800,248 -- 38,800,248 Selling, general and administrative expenses 19,602,165 5,529,000 25,131,165 571,445 (2) 25,702,610 ------------ ----------- ------------ ----------- ------------ Operating income 9,333,083 4,336,000 13,669,083 (571,445) 13,097,638 Interest expense 2,223,869 -- 2,223,869 1,539,314 (3) 3,763,183 ------------ ----------- ------------ ----------- ------------ Income before income taxes 7,109,214 4,336,000 11,445,214 (2,110,759) 9,334,455 Provision for income taxes 2,685,663 -- 2,685,663 861,430 (4) 3,547,093 ------------ ----------- ------------ ----------- ------------ Net income $ 4,423,551 $ 4,336,000 $ 8,759,551 $(2,972,189) $ 5,787,362 ============ =========== ============ =========== ============ Net income per share (5) $1.13 $1.48 ============ ============
SEE NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS 11 NOTES TO PRO FORMA CONDENSED FINANCIAL STATEMENTS (1) To record the fair value of assets acquired in the Munsingwear acquisition . The purchase price of approximately $18 million was financed through borrowings. (2) To adjust amortization for the trademarks and other intellectual property acquired in the Munsingwear acquisiton ($456,860 semiannually and $913,720 annually) over their estimated useful lives of twenty years. In addition, to adjust depreciation for the equipment acquired ($1,000 semiannually and $2,000 annually) over their estimated useful lives of five years. (3) To record interest expense on the debt incurred in the Munsingwear acquisition. (See Note 1 above). (4) To record the aggregate tax effect of the Munsingwear acquisition at an assumed rate of 38%. (5) Per share amounts were computed by dividing net income by the weighted average number of shares of common stock and common stock equivalents outstanding during each period (4,391,942 for the six months ended July 31, 1996 and 3,912,774 for the year ended January 31,1996) as if the Munsingwear acquisition was consummated as of the beginning of each period. 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SUPREME INTERNATIONAL CORPORATION Date: November 18, 1996 /S/ RICHARD L. DUNN ------------------- Richard L. Dunn Vice President, Finance and Chief Financial Officer 13 -----END PRIVACY-ENHANCED MESSAGE-----