<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JULY 1, 2000
Commission file number: 1-5256
----------------------------
V. F. CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
PENNSYLVANIA 23-1180120
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
</TABLE>
628 GREEN VALLEY ROAD, SUITE 500
GREENSBORO, NORTH CAROLINA 27408
(Address of principal executive offices)
(336) 547-6000
(Registrant's telephone number, including area code)
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 and (2) has been subject to such filing requirements for
the past 90 days. YES X NO
---
On July 29, 2000, there were 114,539,575 shares of the registrant's Common Stock
outstanding.
<PAGE> 2
VF CORPORATION
INDEX
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Statements of Income -
Three months and six months ended July 1, 2000 and
July 3, 1999 ............................................................ 3
Consolidated Balance Sheets - July 1, 2000,
January 1, 2000 and July 3, 1999 ........................................ 4
Consolidated Statements of Cash Flows -
Six months ended July 1, 2000 and
July 3, 1999 ............................................................ 5
Notes to Consolidated Financial Statements .............................. 6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations ..................................... 10
Item 3 - Quantitative and Qualitative Disclosures about Market Risk ............... 12
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings ........................................................ 12
Item 6 - Exhibits and Reports on Form 8-K ......................................... 12
</TABLE>
2
<PAGE> 3
VF CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------------- -------------------------------
JULY 1 JULY 3 JULY 1 JULY 3
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES $ 1,351,053 $ 1,364,830 $ 2,717,801 $ 2,723,074
COSTS AND OPERATING EXPENSES
Cost of products sold 880,100 902,895 1,784,884 1,793,669
Marketing, administrative
and general expenses 321,713 314,193 636,131 624,737
Other operating expense 3,745 3,032 7,307 6,006
----------- ----------- ----------- -----------
1,205,558 1,220,120 2,428,322 2,424,412
----------- ----------- ----------- -----------
OPERATING INCOME 145,495 144,710 289,479 298,662
OTHER INCOME (EXPENSE)
Interest income 1,210 1,214 2,512 3,227
Interest expense (20,485) (18,379) (38,011) (35,044)
Miscellaneous, net 3,030 1,073 4,400 904
----------- ----------- ----------- -----------
(16,245) (16,092) (31,099) (30,913)
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 129,250 128,618 258,380 267,749
INCOME TAXES 48,446 49,036 96,999 102,601
----------- ----------- ----------- -----------
NET INCOME $ 80,804 $ 79,582 $ 161,381 $ 165,148
=========== =========== =========== ===========
EARNINGS PER COMMON SHARE
Basic $ 0.70 $ 0.65 $ 1.39 $ 1.35
Diluted 0.69 0.64 1.37 1.33
CASH DIVIDENDS PER COMMON SHARE $ 0.22 $ 0.21 $ 0.44 $ 0.42
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
JULY 1 JANUARY 1 JULY 3
2000 2000 1999
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and equivalents $ 98,388 $ 79,861 $ 83,465
Accounts receivable, less allowances:
July 1 - $58,789; Jan 1 - $54,477;
July 3 - $52,721 879,232 732,502 835,939
Inventories
Finished products 729,170 575,617 623,667
Work in process 220,277 171,275 220,682
Material and supplies 204,214 217,148 187,227
----------- ----------- -----------
1,153,661 964,040 1,031,576
Other current assets 120,328 101,013 149,409
----------- ----------- -----------
Total current assets 2,251,609 1,877,416 2,100,389
PROPERTY, PLANT AND EQUIPMENT 1,832,643 1,814,062 1,773,145
Less accumulated depreciation 1,043,273 1,009,640 972,438
----------- ----------- -----------
789,370 804,422 800,707
INTANGIBLE ASSETS 1,125,307 992,463 967,182
OTHER ASSETS 360,977 352,213 318,686
----------- ----------- -----------
$ 4,527,263 $ 4,026,514 $ 4,186,964
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 745,691 $ 408,932 $ 562,040
Current portion of long-term debt 105,199 4,751 833
Accounts payable 365,335 332,666 314,597
Accrued liabilities 446,158 367,124 436,960
----------- ----------- -----------
Total current liabilities 1,662,383 1,113,473 1,314,430
LONG-TERM DEBT 417,521 517,834 520,220
OTHER LIABILITIES 203,672 194,113 191,851
REDEEMABLE PREFERRED STOCK 49,783 51,544 52,886
DEFERRED CONTRIBUTIONS TO EMPLOYEE
STOCK OWNERSHIP PLAN (11,039) (14,268) (17,283)
----------- ----------- -----------
38,744 37,276 35,603
COMMON SHAREHOLDERS' EQUITY
Common Stock, stated value $1; shares 114,195 116,205 119,196
authorized, 300,000,000; shares outstanding;
July 1 - 114,194,967; Jan 1 - 116,204,655;
July 3 - 119,195,507
Additional paid-in capital 832,248 831,054 829,256
Accumulated other comprehensive income (82,232) (64,756) (61,039)
Retained earnings 1,340,732 1,281,315 1,237,447
----------- ----------- -----------
Total common shareholders' equity 2,204,943 2,163,818 2,124,860
----------- ----------- -----------
$ 4,527,263 $ 4,026,514 $ 4,186,964
=========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
VF CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
---------------------------
JULY 1 JULY 3
2000 1999
--------- ---------
<S> <C> <C>
OPERATIONS
Net income $ 161,381 $ 165,148
Adjustments to reconcile net income to
cash provided by operations:
Depreciation 67,281 65,931
Amortization of intangible assets 17,488 16,681
Other, net 6,711 (15,215)
Changes in current assets and liabilities:
Accounts receivable (112,407) (118,672)
Inventories (108,114) (19,679)
Accounts payable (12,913) (36,657)
Other, net 54,830 (43,374)
--------- ---------
Cash provided by operations 74,257 14,163
INVESTMENTS
Capital expenditures (55,353) (90,051)
Business acquisitions (241,879) (117,133)
Other, net 9,016 (11,826)
--------- ---------
Cash invested (288,216) (219,010)
FINANCING
Increase in short-term borrowings 336,829 303,885
Payment of long-term debt (843) (1,085)
Purchase of Common Stock (50,285) (45,571)
Cash dividends paid (52,123) (52,052)
Proceeds from issuance of stock 593 23,479
Other, net 1,988 1,139
--------- ---------
Cash provided by financing 236,159 229,795
EFFECT OF FOREIGN CURRENCY RATE CHANGES ON CASH (3,673) (4,691)
--------- ---------
NET CHANGE IN CASH AND EQUIVALENTS 18,527 20,257
CASH AND EQUIVALENTS - BEGINNING OF YEAR 79,861 63,208
--------- ---------
CASH AND EQUIVALENTS - END OF PERIOD $ 98,388 $ 83,465
========= =========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
VF CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and do not include all of the
information and notes required by generally accepted accounting principles for
complete financial statements. Similarly, the 1999 year-end consolidated balance
sheet was derived from audited financial statements but does not include all
disclosures required by generally accepted accounting principles. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the six months ended July 1, 2000 are not necessarily indicative of
results that may be expected for the year ending December 30, 2000. For further
information, refer to the consolidated financial statements and notes included
in the Company's Annual Report on Form 10-K for the year ended January 1, 2000.
NOTE B - ACQUISITIONS
During the second quarter of 2000, the Company acquired the trademark rights to
the CHIC(R) brand name, and the rights to the H.I.S(R) brand name outside of
Europe, from Durango Apparel Inc. ("Durango"). The Company also acquired
approximately 81% of the common stock of The North Face, Inc. ("The North Face")
on May 24 and the Eastpak backpack and daypack business from Sunbeam Corporation
on May 26. The purchase prices totaled $254.3 million, including the repayment
of $107.7 million of indebtedness. These acquisitions have been accounted for as
purchases, and accordingly, operating results have been included in the
financial statements from the dates of acquisition. The net assets of these
companies are included in the Company's financial presentation based on
preliminary allocations of the purchase prices, with approximately $145 million
representing intangible assets to be amortized over 40 years. Final asset and
liability valuations are not expected to have a material effect on the financial
statements.
The following unaudited pro forma results of operations assume that acquisitions
during the last two years had occurred at the beginning of 1999 (in thousands,
except per share amounts):
<TABLE>
<CAPTION>
Second Quarter Six Months
------------------------- --------------------------
2000 1999 2000 1999
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Net sales $ 1,390,279 $ 1,451,307 $ 2,829,671 $ 2,925,183
Net income 64,650 73,354 130,529 149,157
Earnings per common share:
Basic $0.56 $0.60 $1.12 $1.22
Diluted 0.55 0.59 1.10 1.20
</TABLE>
The Company accrued various restructuring charges in connection with the
acquired businesses. The charges relate to severance, closure of manufacturing
and distribution facilities, and lease and contract termination costs. Cash
payments related to these actions will be completed by early 2002. The charges
are summarized as follows (in thousands):
6
<PAGE> 7
<TABLE>
<CAPTION>
Facilities Lease and
Exit Contract
Severance Costs Termination Total
--------- ---------- ----------- -----
<S> <C> <C> <C> <C>
Accrual at beginning of 2000 $ 3,699 $ 1,414 $ 15,730 $ 20,843
Acquisitions 5,766 1,188 284 7,238
Cash payments (3,816) (546) (6,325) (10,687)
-------- -------- -------- --------
Estimated remaining costs $ 5,649 $ 2,056 $ 9,689 $ 17,394
======== ======== ======== ========
</TABLE>
Subsequent to the end of the second quarter, the Company entered into a stock
purchase agreement with Durango to acquire its majority interest in H.I.S.
Sportswear AG (which markets H.I.S. products in Europe), subject to the
successful completion of a tender offer that would result in the Company owning
more than 75% of the shares of H.I.S. Sportswear AG. The acquisition is expected
to be completed during the fourth quarter of 2000.
In addition, after the end of the second quarter of 2000, the Company acquired
the trademarks and inventory of the Gitano(R) brand and the remaining 19% of the
common stock of The North Face.
NOTE C - BUSINESS SEGMENT INFORMATION
Financial information for the Company's reportable segments is as follows:
<TABLE>
<CAPTION>
Second Quarter Six Months
------------------------------- -------------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
(In thousands)
Net sales:
Consumer Apparel $ 995,436 $ 1,033,043 $ 2,077,657 $ 2,144,884
Occupational Apparel 163,540 171,338 332,694 298,210
All Other 192,077 160,449 307,450 279,980
----------- ----------- ----------- -----------
Consolidated net sales $ 1,351,053 $ 1,364,830 $ 2,717,801 $ 2,723,074
=========== =========== =========== ===========
Segment profit:
Consumer Apparel $ 157,281 $ 138,145 $ 326,269 $ 305,726
Occupational Apparel 9,236 21,490 24,857 40,605
All Other 16,035 21,414 16,653 24,302
----------- ----------- ----------- -----------
Total segment profit 182,552 181,049 367,779 370,633
Interest, net (19,275) (17,165) (35,499) (31,817)
Amortization of intangible assets (8,875) (8,429) (17,488) (16,681)
Corporate and other expenses (25,152) (26,837) (56,412) (54,386)
----------- ----------- ----------- -----------
Consolidated income before income taxes $ 129,250 $ 128,618 $ 258,380 $ 267,749
=========== =========== =========== ===========
</TABLE>
7
<PAGE> 8
NOTE D - EARNINGS PER SHARE
Earnings per share are computed as follows (in thousands, except per share
amounts):
<TABLE>
<CAPTION>
Second Quarter Six Months
-------------------------- --------------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Basic earnings per share:
Net income $ 80,804 $ 79,582 $ 161,381 $ 165,148
Less Preferred Stock dividends and
redemption premium 1,013 1,802 2,199 3,682
--------- --------- --------- ---------
Net income available for Common Stock $ 79,791 $ 77,780 $ 159,182 $ 161,466
========= ========= ========= =========
Weighted average Common
Stock outstanding 114,125 119,447 114,743 119,418
========= ========= ========= =========
Basic earnings per share $ 0.70 $ 0.65 $ 1.39 $ 1.35
========= ========= ========= =========
Diluted earnings per share:
Net income $ 80,804 $ 79,582 $ 161,381 $ 165,148
Increased ESOP expense if Preferred
Stock were converted to Common Stock 238 264 475 530
--------- --------- --------- ---------
Net income available for Common Stock
and dilutive securities $ 80,566 $ 79,318 $ 160,906 $ 164,618
========= ========= ========= =========
Weighted average Common Stock 114,125 119,447 114,743 119,418
outstanding
Additional Common Stock resulting from
dilutive securities:
Preferred Stock 2,579 2,741 2,595 2,758
Stock options and other 579 1,294 527 1,267
--------- --------- --------- ---------
Weighted average Common Stock and
dilutive securities outstanding 117,283 123,482 117,865 123,443
========= ========= ========= =========
Diluted earnings per share $ 0.69 $ 0.64 $ 1.37 $ 1.33
========= ========= ========= =========
</TABLE>
Outstanding options to purchase 5.1 million shares and 6.5 million shares of
Common Stock have been excluded from the computation of diluted earnings per
share for the second quarter and the six months of 2000, respectively, because
the option exercise prices were greater than the average market price of the
Common Stock.
NOTE E - COMPREHENSIVE INCOME
Comprehensive income consists of net income from operations, plus certain
changes in assets and liabilities that are not included in net income but are
instead reported within a separate component of shareholders' equity under
generally accepted accounting principles. The Company's comprehensive income was
as follows (in thousands):
8
<PAGE> 9
<TABLE>
<CAPTION>
Second Quarter Six Months
--------------------------- ---------------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net income as reported $ 80,804 $ 79,582 $ 161,381 $ 165,148
Other comprehensive income:
Foreign currency translation
adjustments,
net of income taxes (15,524) (15,787) (17,476) (35,400)
--------- --------- --------- ---------
Comprehensive income $ 65,280 $ 63,795 $ 143,905 $ 129,748
========= ========= ========= =========
</TABLE>
The impact in foreign currency translation adjustments in both years was due to
the strengthening of the U.S. dollar in relation to the currencies of most
European countries where the Company has operations.
NOTE F - SHORT-TERM BORROWINGS
The Company maintains an unsecured revolving credit agreement with a group of
banks for $750.0 million that supports commercial paper borrowings and is
otherwise available for general corporate purposes. In addition, in June 2000,
the Company entered into a $100.0 million unsecured revolving credit agreement
that terminates in December 2000. Terms for this facility are similar to the
terms of the $750.0 million credit agreement. There are no borrowings
outstanding under the $100.0 million credit agreement.
NOTE G - CAPITAL
Common shares outstanding are net of shares held in treasury, and in substance
retired, of 23,139,897 at July 1, 2000, 21,136,952 at January 1, 2000 and
18,385,851 at July 3, 1999. In addition, 344,608, 306,698 and 248,899 shares of
VF Common Stock held in trust for deferred compensation plans are treated for
financial accounting purposes as treasury stock at each of the respective dates.
There are 25,000,000 authorized shares of Preferred Stock, $1 par value. Of
these shares, 2,000,000 were designated as Series A, of which none have been
issued, and 2,105,263 shares were designated and issued as 6.75% Series B
Preferred Stock, of which 1,612,398 shares were outstanding at July 1, 2000,
1,669,444 at January 1, 2000 and 1,712,895 at July 3, 1999.
NOTE H - RECENT ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board has issued FASB Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities, which will be
effective for the Company in 2001. Management anticipates that, due to its
limited use of derivative instruments, the adoption of the Statement will not
have a significant effect on the Company.
9
<PAGE> 10
VF CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Consolidated sales decreased 1% for the second quarter and decreased less than
1% for the six months ended July 1, 2000, compared with 1999. In translating
foreign currencies to the U.S. dollar, a stronger U.S. dollar reduced sales
comparisons by $12 million in the second quarter of 2000 and by $31 million in
the first half.
Gross margins were 34.9% of sales in the quarter and 34.3% in the six
months, compared with 33.8% and 34.1% in the same 1999 periods. Gross margins
improved in most businesses due to the continuing shift to lower cost sourcing,
lower raw material costs and improved operating efficiencies. These
improvements were partially offset by declines in workwear principally due to
costs related to the integration of recent acquisitions. In addition, the
second quarter of 1999 included costs related to closing the Jantzen women's
sportswear business.
Marketing, administrative and general expenses were 23.8% of sales during the
quarter and 23.4% in the six months of 2000, compared with 23.0% and 22.9% in
the 1999 periods. Expenses were higher in 2000 due primarily to higher expense
ratios in the recently acquired companies.
Other operating expense, which includes amortization of intangible assets and
net royalty income, increased in 2000 due to amortization of intangible assets
related to the businesses acquired in the second quarter.
Net interest expense increased 12% in both the second quarter and first half of
2000, compared with the same periods in 1999. The increase is due to
higher short-term borrowing rates in 2000 as well as higher average short-term
borrowings to support acquisitions.
The effective income tax rate for the six months of 2000 was 37.5%, based on the
expected rate for the year, compared with 38.3% in the prior year. The lower tax
rate for 2000 is due to an expected reduction in foreign operating losses with
no benefit, reduction in state income taxes and an increase in
employment-related tax credits.
Net income increased 2% during the second quarter and declined 2% in the six
months of 2000. Earnings per share increased 8% during the quarter and 3% in the
six months, including the benefit of the Company's share repurchase program. The
recent acquisitions had a $.02 dilutive effect on earnings per share in the
second quarter. The dilutive impact of acquisitions on an annual basis is
expected to be $.10 to $.15 per share.
INFORMATION BY BUSINESS SEGMENT
The Consumer Apparel segment consists of jeanswear, women's intimate
apparel, swimwear and the children's apparel businesses. Overall, this
segment's sales decreased 4% for the second quarter of 2000 and 3% for the six
months, compared with the same periods of 1999. Domestic jeans sales declined
slightly in the second quarter of 2000 and increased 1% for the six months.
Sales increased in the Company's Western business in both periods and in the
Mass Market business in the six months. Although sales declined at Lee in both
periods, first quality sales increased in the second quarter over prior year,
improving profitability. International jeans sales were lower by 7% in the
second quarter and 8% in the six months due to jeanswearmarket declines in our
primary markets of the United Kingdom, Italy, Germany and Japan, as well as
foreign currency translation effects. Domestic intimate apparel sales declined
9% in the quarter and 10% in the six months, with increases in the Vanity Fair,
Lily of France and Bestform branded business offset primarily by lower Private
Label sales. Playwear achieved record results with sales up significantly in
the quarter and six months, due primarily to increases in the NIKE brand.
Segment profit increased 14% for the quarter and 7% for the six months of 2000,
due in part to increases in domestic jeanswear profitability in both periods.
While European
10
<PAGE> 11
jeanswear profit increased in the second quarter, total international jeanswear
profit declined in the quarter and six months of 2000 primarily due to operating
losses in Asia. Additionally, last year's second quarter results included
provisions for inventory losses and other costs of approximately $12 million
related to exiting the Jantzen women's sportswear business.
The Occupational Apparel segment includes the Company's industrial, career and
safety apparel businesses. Sales increased during the six months of 2000 due to
acquisitions made during 1999. Segment profit decreased in the second quarter
and six months due to manufacturing and distribution inefficiencies related to
integration of the four businesses acquired in late 1998 and early 1999.
The All Other segment includes the Company's knitwear, daypack and outdoor
businesses. Sales increased in the second quarter and six months due to the
acquisitions of Eastpak and The North Face. The decline in this segment's profit
during the quarter and six months resulted from a loss at The North Face from
the acquisition date to the end of the quarter and lower profits at knitwear due
to changes in their business cycle.
FINANCIAL CONDITION AND LIQUIDITY
The financial condition of the Company is reflected in the following:
<TABLE>
<CAPTION>
July 1 January 1 July 3
2000 2000 1999
---- ---- --------
(Dollars in millions)
<S> <C> <C> <C>
Working capital $589.2 $763.9 $786.0
Current ratio 1.4 to 1 1.7 to 1 1.6 to 1
Debt to total capital 36.5% 30.1% 33.7%
</TABLE>
Accounts receivable at the end of the second quarter of 2000 are higher than in
1999 due to businesses acquired during the second quarter of 2000 without their
related sales. Receivables are higher than at the end of 1999 due to seasonal
sales patterns and the impact of acquisitions completed during 2000.
Inventories at the end of the second quarter of 2000 are 12% higher than at the
comparable date in 1999 due to higher levels of inventory existing in the
recently acquired companies. Excluding these acquisitions, inventory balances
would have been 3% higher. Inventories are higher than at the end of 1999 due to
seasonal sales patterns and the impact of acquisitions completed during 2000.
Accounts payable balances at the end of the second quarter increased over
year-end levels due to the recently acquired companies and higher inventory
levels.
Accrued liabilities at the end of the quarter are higher than year-end due to
seasonal sales patterns.
The increase in short-term borrowings since the end of 1999 relates to business
acquisitions completed during 2000 and to higher seasonal working capital
requirements.
During the first six months of 2000, the Company repurchased 2.0 million shares
of its Common Stock in open market transactions for a total cost of $50.3
million. Under its current authorization from the Board of Directors, the
Company may repurchase up to an additional 6.0 million common shares.
11
<PAGE> 12
For information regarding the Company's exposure to certain market risks, see
Item 7A, Quantitative and Qualitative Disclosures about Market Risk, in the
annual report on Form 10-K for fiscal 1999. There have been no significant
changes in the Company's market risk exposures since year-end.
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
From time to time, the Company and its representatives may make oral or written
statements, including statements in this quarterly report, that constitute
"forward-looking statements" within the meaning of the federal securities laws.
This includes statements concerning plans and objectives of management relating
to the Company's operations or economic performance, and assumptions related
thereto.
Forward-looking statements are made based on management's expectations and
beliefs concerning future events impacting the Company and therefore involve a
number of risks and uncertainties. Management cautions that forward-looking
statements are not guarantees and actual results could differ materially from
those expressed or implied in the forward-looking statements.
Important factors that could cause the actual results of operations or financial
condition of the Company to differ include, but are not necessarily limited to,
the overall level of consumer spending for apparel; changes in trends in the
segments of the market in which the Company competes; the financial strength of
the retail industry; actions of competitors that may impact the Company's
business; and the impact of unforeseen economic changes in the markets where the
Company competes, such as changes in interest rates, currency exchange rates,
inflation rates, recession, and other external economic and political factors
over which the Company has no control.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
The Company is a party to litigation arising in the ordinary course of its
business. The Company, its subsidiary, The North Face, Inc., and certain of The
North Face's former and current officers and directors have been named parties
in various purported shareholder actions in California, Colorado and Delaware,
including ENG v. Cason, et al., Civil Action No. 810726-0 (California Superior
Court, Alameda County) and Polacheck v. VF Corporation, et al. (Court of
Chancery, Delaware). The actions allege, among other things, self-dealing,
breach of fiduciary duties and violations of federal and state laws. The North
Face has filed motions to dismiss in each of the cases, except for Polacheck
with respect to which the parties on July 26, 2000 entered into a memorandum of
understanding to settle. In management's opinion, there are no pending claims or
litigation, the outcome of which would have a material adverse effect on the
Company's consolidated financial position, results of operations or cash flows.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial data schedule as of July 1, 2000
(b) Reports on Form 8-K - There were no reports on Form 8-K filed for the
three months ended July 1, 2000.
12
<PAGE> 13
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.
V.F. CORPORATION
----------------
(Registrant)
By: /s/ Robert K. Shearer
------------------------
Robert K. Shearer
Vice President - Finance
(Chief Financial Officer)
Date: August 14, 2000
By: /s/ Peter E. Keene
--------------------
Peter E. Keene
Vice President - Controller
(Chief Accounting Officer)
13
