-----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, UIA2rqR/ELgjQYEnjtXXI/xP7IIIt6qaP6Vjog9dLbddqQFjpw2+2hvUXztD9xQA 0dbGo21rPXZkLDiVWMK/Ew== 0000950123-96-003537.txt : 19960712 0000950123-96-003537.hdr.sgml : 19960712 ACCESSION NUMBER: 0000950123-96-003537 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960531 FILED AS OF DATE: 19960711 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NAUTICA ENTERPRISES INC CENTRAL INDEX KEY: 0000093736 STANDARD INDUSTRIAL CLASSIFICATION: MEN'S & BOYS' FURNISHINGS, WORK CLOTHING, AND ALLIED GARMENTS [2320] IRS NUMBER: 952431048 STATE OF INCORPORATION: DE FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06708 FILM NUMBER: 96593593 BUSINESS ADDRESS: STREET 1: 40 WEST 57TH STREET CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2125415990 MAIL ADDRESS: STREET 1: 40 W 57TH STREET CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: STATE O MAINE INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: PACIFIC COAST KNITTING MILLS INC DATE OF NAME CHANGE: 19751124 10-Q 1 FORM 10-Q FOR NAUTICA ENTERPRISES INC. 1 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 May 31, 1996 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 0-6708 ----------------------------- Nautica Enterprises, Inc. ------------------------------------------------------ (Exact Name of Registrant as Specified in Its Charter) Delaware 95-2431048 ------------------------------- ------------------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 40 West 57th Street, New York, N.Y. 10019 ---------------------------------------- ------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, including Area Code (212)541-5990 ------------------- - --------------------------------------------------------------------------- (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) 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 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS 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 No APPLICABLE ONLY TO CORPORATE ISSUERS The number of shares of Common Stock outstanding as of July 3, 1996 was 39,949,162. 2 NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES MAY 31, 1996 (Unaudited)
INDEX ----- Page No. -------- Part I - Financial Information: Item 1. Financial Statements (Unaudited): Condensed Consolidated Balance Sheets As at May 31, 1996 and February 29, 1996.......................................................... 2 Condensed Consolidated Statements of Earnings For the Three Month Periods Ended May 31, 1996 and 1995............................................................................ 3 Condensed Consolidated Statements of Cash Flows For the Three Month Periods Ended May 31, 1996 and 1995............................................................................ 4 Notes to Condensed Consolidated Financial Statements................................................ 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................................. 6 Part II - Other Information.................................................................................. 8
3 NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
ASSETS May 31, February 29, 1996 1996 ------------ ------------ Current assets: Cash and cash equivalents $ 65,843,003 $ 61,047,522 Accounts receivable - net 43,320,371 45,704,169 Inventories 65,520,529 54,235,489 Prepaid expenses and other current assets 4,110,561 5,290,473 Deferred tax benefit 3,636,137 3,636,137 ------------ ------------ Total current assets 182,430,601 169,913,790 Property, plant and equipment, net of accumulated depreciation and amortization 33,326,391 30,712,102 Other assets 8,838,523 8,713,957 ------------ ------------ $224,595,515 $209,339,849 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt $ 50,000 $ 50,000 Accounts payable - trade 22,812,761 15,440,362 Accrued expenses and other current liabilities 19,618,494 19,140,265 Income taxes payable 2,980,850 1,370,934 ------------ ------------ Total current liabilities 45,462,105 36,001,561 Long-term debt -net 150,000 200,000 Stockholders' equity: Preferred stock - par value $.01, authorized, 2,000,000 shares; no shares issued Common stock - par value $.10, authorized, 100,000,000 shares; issued 41,498,732 shares at May 31, 1996 and 41,354,806 shares at February 29, 1996 4,149,873 4,135,480 Additional paid-in capital 53,236,492 52,836,972 Retained earnings 122,147,605 116,716,396 ------------ ------------ 179,533,970 173,688,848 Less: Common stock in treasury - at cost; 1,570,070 shares at May 31, 1996 and February 29, 1996 550,560 550,560 ------------ ------------ Total stockholders' equity 178,983,410 173,138,288 ------------ ------------ $224,595,515 $209,339,849 ============ ============
The accompanying notes are an integral part of these statements - 2 - 4 NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
Three Months Ended May 31, -------------------------------- 1996 1995 -------------------------------- Net Sales $ 76,137,760 $ 61,448,458 Cost of goods sold 41,519,954 34,735,357 ------------ ------------ Gross profit 34,617,806 26,713,101 Selling, general and administrative expenses 27,042,547 21,517,097 Net royalty (income) (772,320) (412,450) ------------ ------------ Operating profit 8,347,579 5,608,454 Interest income, net 704,430 711,766 ------------ ------------ Earnings before provision for income taxes 9,052,009 6,320,220 Provision for income taxes 3,620,800 2,527,165 ------------ ------------ Net earnings $ 5,431,209 $ 3,793,055 ============ ============ Earnings per share of common stock $ 0.13 $ 0.09 ============ ============ Weighted average number of shares of common stock outstanding 42,955,635 41,700,728 ============ ============ Cash dividends per common share none none ============ ============
The accompanying notes are an integral part of these statements - 3 - 5 NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended May 31, --------------------------------- 1996 1995 --------------------------------- Cash flows from operating activities: Net earnings $ 5,431,209 $ 3,793,055 ------------ ------------ Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 1,374,493 1,097,937 Increase (decrease) in cash flows as a result of changes in asset and liability account balances: Accounts receivable, net 2,383,798 1,055,357 Inventories (11,285,040) (14,902,152) Prepaid expenses and other current assets 1,179,912 590,296 Other assets (136,996) (190,969) Accounts payable 7,372,399 9,297,838 Accrued expenses and other current liabilities 478,229 (1,729,235) Income taxes payable 1,609,916 1,281,026 ------------ ------------ Total adjustments 2,976,711 (3,499,902) ------------ ------------ Net cash provided by operating activities 8,407,920 293,153 ------------ ------------ Cash flows from investing activities: Purchase of property, plant and equipment (3,976,352) (1,498,196) ------------ ------------ Net Cash used in investing activities (3,976,352) (1,498,196) ------------ ------------ Cash flows from financing activities: Principal payments on long-term debt (50,000) (50,000) Proceeds from issuance of common stock 413,913 173,565 ------------ ------------ Net cash provided by financing activities 363,913 123,565 ------------ ------------ Increase (decrease) in cash and cash equivalents 4,795,481 (1,081,478) Cash and cash equivalents at beginning of period 61,047,522 49,153,556 ------------ ------------ Cash and cash equivalents at end of period $ 65,843,003 $ 48,072,078 ============ ============ Supplemental Information: Cash payments for the periods ended: Interest expense $ 20,998 $ 17,334 ============ ============ Income taxes $ 2,013,613 $ 1,916,299 ============ ============
The accompanying notes are an integral part of these statements - 4 - 6 NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MAY 31, 1996 (Unaudited) NOTE 1 - The accompanying financial statements have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. 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 such rules and regulations. These statements include all adjustments, consisting only of normal recurring accruals, considered necessary for a fair presentation of financial position and results of operations. The financial statements included herein should be read in conjunction with the financial statements and notes thereto included in the latest annual report on Form 10-K. NOTE 2 - The results of operations for the three month period ended May 31, 1996 are not necessarily indicative of the results to be expected for the full year. NOTE 3 - The Company utilized the last-in, first-out "Lifo" method for inventories as at May 31, 1996 and February 29, 1996 and for the three month periods ended May 31, 1996 and 1995. The "Lifo" inventory for the three month periods ended May 31, 1996 and 1995 are based upon end of year estimates. Inventories at May 31, 1996 and February 29, 1996 consist primarily of finished goods. NOTE 4 - On April 29, 1996 the Board of Directors declared a two-for-one stock split of the Company's common stock to be effected in the form of a stock dividend paid on May 28, 1996 to the stockholders of record on May 13, 1996. All share and per share data has been adjusted to reflect the stock split. - 5 - 7 NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS MAY 31, 1996 (Unaudited) RESULTS OF OPERATIONS For the Three Months Ended May 31, 1996: Consolidated net sales increased 23.9% to $76.1 million in the three months ended May 31, 1996 as compared to $61.4 million in the comparable prior year period. The increase is due primarily to increased sales of Nautica products through its wholesale and retail operations. Nautica's wholesale sales increased primarily due to the expansion of Nautica's in-store shop program, sales to new retail customers and to additional locations of existing customers. The increase in Nautica's wholesale sales is primarily due to increased unit volume rather than price increases. The increase in retail sales is attributable to the opening of new stores and to an increase in comparable store sales. Consolidated gross profit increased in the three months ended May 31, 1996 to 45.5% of net sales, as compared to 43.5% in the comparable prior year period. The net increase resulted primarily from a shift to the higher margin Nautica wholesale products and to an increase in retail operations. Selling, general and administrative expenses as a percentage of net sales increased to 35.5% in the three months ended May 31, 1996 as compared to 35.0% in the comparable prior year period. The net increase resulted from an increase in shipping expenses as a percentage of net sales, partially offset by decreases in selling, production and general and administrative expenses. The increase in shipping expenses as a percentage of net sales was primarily due to the expansion of the Company's warehouse and distribution facilities. The decreases in selling, production and general and administrative expenses as a percentage of net sales resulted from economies of scale achieved with sales growth. Net royalty income increased by $360,000 in the three months ended May 31, 1996 as compared to the comparable prior year period. The increase is a result of increased royalty revenue from new and existing licenses. Higher cash balances offset by a lower rate of return on investments resulted in comparable interest income during the period. The provision for income taxes remained constant at 40.0% of earnings before income taxes for the three month period ended May 31, 1996 as compared to the comparable prior year period. Net earnings increased 43.2% to $5.4 million in the three months ended May 31, 1996 from $3.8 million in the comparable prior year period as a result of the factors discussed above. - 6 - 8 LIQUIDITY AND CAPITAL RESOURCES During the three months ended May 31, 1996, the Company generated cash from operating activities of approximately $8.4 million principally from net earnings. Increases in inventories of $11.3 million, resulting from increased sales levels, were financed by cash generated from net earnings, increases in accounts payable-trade and decreases in accounts receivable. During the three months ended May 31, 1995, the Company generated cash from its operating activities of $293,000. Net earnings of $3.8 million plus increases in accounts payable and income taxes payable were offset by an increase in inventories of $14.9 million. The increase in inventory was primarily the result of stocking more basic inventory to fill EDI orders resulting from increased demand for the Anchor group of Nautica products and to fill orders for shipments to be made in the future. During the three months ended May 31, 1996, the Company's principal investing activities related to the expansion of the Company's warehouse and distribution facilities and the continued expansion of in-store shops. The expected cost of the warehouse expansion is approximately $14.0 million. The Company will utilize its existing cash during construction and will consider financing alternatives for the project following its completion. At May 31, 1996 there were no other material commitments for capital expenditures. The Company has $80.0 million in lines of credit with two commercial banks available for short-term borrowings and letters of credit. These lines are collateralized by wholesale inventory and accounts receivable. At May 31, 1996 and February 29, 1996, respectively, letters of credit outstanding under the lines were $48.3 million and $32.5 million and there were no short-term borrowings outstanding. Historically, the Company has experienced its lowest level of sale's in the first quarter and its highest level in the third quarter. This pattern has resulted primarily from the timing of shipments to retail customers for spring and fall seasons. In the future, the timing of seasonal shipments may vary by quarter. INFLATION AND CURRENCY FLUCTUATIONS The Company believes that inflation and the effect of fluctuations of the dollar against foreign currencies has not had a material effect on the cost of imports or the Company's results of operations. - 7 - 9 PART II OTHER INFORMATION Items I through 9. - All items are inapplicable except: Item 6. Exhibits and Reports on Form 8-K (a) Exhibit 3. Certificate of Amendment of the Certificate of Incorporation of the Company Exhibit 27. Financial Data Schedule (b) Reports on Form 8-K. None - 8 - 10 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 thereunto duly authorized. NAUTICA ENTERPRISES, INC. By: Harvey Sanders -------------------------------- Harvey Sanders Chairman of the Board and President Date: July 11, 1996 ------------------------ By: Neal S. Nackman -------------------------------- Neal S. Nackman V.P. Finance and Chief Accounting Officer Date: July 11, 1996 ------------------------ - 9 - 11 EXHIBIT INDEX Exhibit No. Description 3 Certificate of Amendment of the Certificate of Incorporation of Nautica Enterprises, Inc. 27 Financial Data Schedule -10- EX-3 2 AMENDMENT TO CERTIFICATE OF INCORPORATION 1 CERTIFICATE OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION OF NAUTICA ENTERPRISES, INC. Nautica Enterprises, Inc. (the "Corporation"), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That the Board of Directors of the Corporation, in the manner prescribed by Section 141 of the General Corporation Law of Delaware, duly adopted resolutions proposing and declaring advisable the following amendment to the Certificate of Incorporation: RESOLVED, that the text of Article Fifth, Section 1(a) of the Corporation's Certificate of Incorporation be amended to read in its entirety as follows: "Section 1. (a) The corporation is authorized to issue two classes of shares to be designated, respectively, "common stock" and "preferred stock". The total number of such shares which the corporation shall have the authority to issue shall be One Hundred Two Million (102,000,000). The total number of shares of common stock authorized to be issued shall be One Hundred Million (100,000,000), $.10 par value per share, and the total number of shares of preferred stock authorized to be issued shall be Two Million (2,000,000), $.01 par value per share." SECOND: That said amendment was duly adopted by the stockholders of the Corporation in accordance with the 2 provisions of Section 242 of the General Corporation Law of Delaware. IN WITNESS WHEREOF, NAUTICA ENTERPRISES, INC. has caused this certificate to be signed by its President and attested to its Assistant Secretary, this 2nd day of July, 1996. NAUTICA ENTERPRISES, INC. By: /s/ Harvey Sanders --------------------------- Harvey Sanders President Attest: By: /s/ Neal Nackman ------------------------------- Neal Nackman Assistant Secretary 3 STATE OF NEW YORK ) )ss.: COUNTY OF NASSAU ) BE IT REMEMBERED that, on July 2, 1996, before me, a Notary Public duly authorized by law to take acknowledgment of deeds, personally came Harvey Sanders, President of Nautica Enterprises, Inc., who duly signed the foregoing instrument before me and acknowledged that such signing is his act and deed, and that such instrument as executed is the act and deed of said corporation, and that the facts stated therein are true. GIVEN under my hand on July 2, 1996. /s/ -------------------------- Notary Public EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED STATEMENTS OF THE COMPANY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS FEB-28-1997 MAR-01-1996 MAY-31-1996 65,843,003 0 44,440,371 (1,120,000) 65,520,529 182,430,601 45,699,207 (12,372,816) 224,595,515 45,462,105 150,000 0 0 4,149,873 174,833,537 224,595,515 76,137,760 77,621,799 41,519,954 41,519,954 0 0 0 9,052,009 3,620,800 5,431,209 0 0 0 5,431,209 0.13 0.13
-----END PRIVACY-ENHANCED MESSAGE-----