<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 SEPTEMBER 30, 2000
Commission file number: 1-5256
----------------------------
V. F. CORPORATION
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-1180120
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
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 October 28, 2000, there were 113,763,595 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 nine months ended September 30, 2000 and
October 2, 1999 ..................................................................... 3
Consolidated Balance Sheets - September 30, 2000,
January 1, 2000 and October 2, 1999 ................................................. 4
Consolidated Statements of Cash Flows -
Nine months ended September 30, 2000 and
October 2, 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>
<PAGE> 3
VF CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 OCTOBER 2 SEPTEMBER 30 OCTOBER 2
2000 1999 2000 1999
<S> <C> <C> <C> <C>
NET SALES $ 1,588,607 $ 1,464,856 $ 4,306,408 $ 4,187,930
COSTS AND OPERATING EXPENSES
Cost of products sold 1,049,803 961,943 2,834,687 2,755,612
Marketing, administrative
and general expenses 349,784 313,532 985,915 938,269
Other operating expense 5,482 3,038 12,789 9,044
----------- ----------- ----------- -----------
1,405,069 1,278,513 3,833,391 3,702,925
----------- ----------- ----------- -----------
OPERATING INCOME 183,538 186,343 473,017 485,005
OTHER INCOME (EXPENSE)
Interest income 1,859 1,299 4,371 4,526
Interest expense (24,440) (18,787) (62,451) (53,831)
Miscellaneous, net (408) 368 3,992 1,272
----------- ----------- ----------- -----------
(22,989) (17,120) (54,088) (48,033)
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 160,549 169,223 418,929 436,972
INCOME TAXES 60,187 65,327 157,186 167,928
----------- ----------- ----------- -----------
NET INCOME $ 100,362 $ 103,896 $ 261,743 $ 269,044
=========== =========== =========== ===========
EARNINGS PER COMMON SHARE
Basic $ 0.87 $ 0.87 $ 2.26 $ 2.22
Diluted 0.86 0.85 2.22 2.19
CASH DIVIDENDS PER COMMON SHARE $ 0.22 $ 0.21 $ 0.66 $ 0.63
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
VF CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30 JANUARY 1 OCTOBER 2
2000 2000 1999
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and equivalents $ 232,933 $ 79,861 $ 81,783
Accounts receivable, less allowances: 905,591 732,502 829,239
September 30 - $58,900; Jan 1 - $52,011;
October 2 - $54,498
Inventories:
Finished products 731,287 575,617 616,425
Work in process 221,356 171,275 198,479
Materials and supplies 203,099 217,148 190,359
----------- ----------- -----------
1,155,742 964,040 1,005,263
Other current assets 129,123 101,013 155,701
----------- ----------- -----------
Total current assets 2,423,389 1,877,416 2,071,986
PROPERTY, PLANT AND EQUIPMENT 1,862,405 1,814,062 1,789,059
Less accumulated depreciation 1,069,263 1,009,640 987,431
----------- ----------- -----------
793,142 804,422 801,628
INTANGIBLE ASSETS 1,122,075 992,463 998,020
OTHER ASSETS 382,418 352,213 310,702
----------- ----------- -----------
$ 4,721,024 $ 4,026,514 $ 4,182,336
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 358,809 $ 408,932 $ 462,083
Current portion of long-term debt 115,621 4,751 583
Accounts payable 353,598 332,666 333,998
Accrued liabilities 475,788 367,124 486,889
----------- ----------- -----------
Total current liabilities 1,303,816 1,113,473 1,283,553
LONG-TERM DEBT 905,827 517,834 523,057
OTHER LIABILITIES 219,849 194,113 186,069
REDEEMABLE PREFERRED STOCK 49,024 51,544 52,270
DEFERRED CONTRIBUTIONS TO EMPLOYEE
STOCK OWNERSHIP PLAN (9,491) (14,268) (15,780)
----------- ----------- -----------
39,533 37,276 36,490
COMMON SHAREHOLDERS' EQUITY
Common Stock, stated value $1; shares 113,598 116,205 117,918
authorized, 300,000,000; shares outstanding;
Sept 30 - 113,597,762; Jan 1 - 116,204,655;
Oct 2 - 117,917,567
Additional paid-in capital 832,389 831,054 830,665
Accumulated other comprehensive income (94,806) (64,756) (59,784)
Retained earnings 1,400,818 1,281,315 1,264,368
----------- ----------- -----------
Total common shareholders' equity 2,251,999 2,163,818 2,153,167
----------- ----------- -----------
$ 4,721,024 $ 4,026,514 $ 4,182,336
=========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
VF CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30 OCTOBER 2
2000 1999
<S> <C> <C>
OPERATIONS
Net income $ 261,743 $ 269,044
Adjustments to reconcile net income to
cash provided by operations:
Depreciation 102,365 100,540
Amortization of intangible assets 26,378 24,890
Other, net 8,164 (19,177)
Changes in current assets and liabilities:
Accounts receivable (151,009) (108,129)
Inventories (107,664) 18,579
Accounts payable (18,442) (22,954)
Other, net 95,440 (2,426)
--------- ---------
Cash provided by operations 216,975 260,367
INVESTMENTS
Capital expenditures (96,581) (126,425)
Business acquisitions (270,393) (156,197)
Other, net 1,973 (11,124)
--------- ---------
Cash invested (365,001) (293,746)
FINANCING
Increase (decrease) in short-term borrowings (47,034) 203,409
Proceeds from long-term debt 495,185 1,032
Payment of long-term debt (1,273) (1,979)
Purchase of Common Stock (64,236) (97,478)
Cash dividends paid (78,107) (77,745)
Proceeds from issuance of stock
708 24,963
Other, net 3,226 3,329
--------- ---------
Cash provided by financing 308,469 55,531
EFFECT OF FOREIGN CURRENCY RATE CHANGES ON CASH (7,371) (3,577)
--------- ---------
NET CHANGE IN CASH AND EQUIVALENTS 153,072 18,575
CASH AND EQUIVALENTS - BEGINNING OF YEAR 79,861 63,208
--------- ---------
CASH AND EQUIVALENTS - END OF PERIOD $ 232,933 $ 81,783
========= =========
</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 nine months ended September 30, 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. 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 on May 26. During the third 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. The purchase prices totaled $269.5
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 $152.2 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 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>
Third Quarter Nine Months
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Net sales $ 1,588,607 $ 1,572,708 $ 4,418,278 $ 4,497,891
Net income 100,362 92,427 230,891 241,584
Earnings per common share:
Basic $ 0.87 $ 0.77 $ 1.99 $ 1.99
Diluted 0.86 0.76 1.96 1.96
</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):
<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
Additions 6,282 1,189 911 8,382
Cash payments (5,179) (555) (6,432) (12,166)
------- ------- -------- --------
Estimated remaining costs $ 4,802 $ 2,048 $ 10,209 $ 17,059
======= ======= ======== ========
</TABLE>
Subsequent to the end of the third quarter, the Company acquired approximately
84% of the outstanding shares of H.I.S. Sportswear AG, which owns the H.I.S.
trademarks in Europe and markets H.I.S. products in Europe.
NOTE C - BUSINESS SEGMENT INFORMATION
Financial information for the Company's reportable segments is as follows:
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------------------------ ---------------------------------
(In thousands) 2000 1999 2000 1999
------------ ------------ ------------- --------------
<S> <C> <C> <C> <C>
Net sales:
Consumer Apparel $ 1,120,669 $ 1,107,285 $ 3,198,326 $ 3,252,169
Occupational Apparel 156,163 162,682 488,857 460,892
All Other 311,775 194,889 619,225 474,869
------------ ------------ ------------- --------------
Consolidated net sales $ 1,588,607 $ 1,464,856 $ 4,306,408 $ 4,187,930
============ ============ ============= ==============
Segment profit:
Consumer Apparel $ 185,543 $ 166,902 $ 511,812 $ 472,628
Occupational Apparel 696 19,737 25,553 60,342
All Other 32,834 24,129 49,487 48,431
------------ ------------ ------------- --------------
Total segment profit 219,073 210,768 586,852 581,401
Interest, net (22,581) (17,488) (58,080) (49,305)
Amortization of intangible assets (8,890) (8,209) (26,378) (24,890)
Corporate and other expenses (27,053) (15,848) (83,465) (70,234)
------------ ------------ ------------- --------------
Consolidated income before income taxes $ 160,549 $ 169,223 $ 418,929 $ 436,972
============ ============ ============= ==============
</TABLE>
<PAGE> 8
NOTE D - EARNINGS PER SHARE
Earnings per share are computed as follows (in thousands, except per share
amounts):
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------------------------ --------------------------------
2000 1999 2000 1999
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Basic earnings per share:
Net income $ 100,362 $ 103,896 $ 261,743 $ 269,044
Less Preferred Stock dividends and
redemption premium 950 1,536 3,149 5,218
------------ ------------ ------------- -------------
Net income available for Common Stock $ 99,412 $ 102,360 $ 258,594 $ 263,826
============ ============ ============= =============
Weighted average Common
Stock outstanding 114,013 118,229 114,500 119,013
============ ============ ============= =============
Basic earnings per share $0.87 $0.87 $2.26 $2.22
============ ============ ============= =============
Diluted earnings per share:
Net income $ 100,362 $ 103,896 $ 261,743 $ 269,044
Increased ESOP expense if Preferred Stock
were converted to Common Stock 236 265 711 795
------------ ------------ ------------- -------------
Net income available for Common Stock
and dilutive securities $ 100,126 $ 103,631 $ 261,032 $ 268,249
============ ============ ============= =============
Weighted average Common Stock outstanding 114,013 118,229 114,500 119,013
Additional Common Stock resulting from
dilutive securities:
Preferred Stock 2,541 2,709 2,577 2,742
Stock options and other 434 769 448 970
------------ ------------ ------------- -------------
Weighted average Common Stock and
dilutive securities outstanding 116,988 121,707 117,525 122,725
============ ============ ============= =============
Diluted earnings per share $0.86 $0.85 $2.22 $2.19
============ ============ ============= =============
</TABLE>
Outstanding options to purchase 8.1 million shares and 7.0 million shares of
Common Stock have been excluded from the computation of diluted earnings per
share for the third quarter and the nine 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):
<PAGE> 9
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------------------------- -------------------------------
2000 1999 2000 1999
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Net income as reported $ 100,362 $ 103,896 $ 261,743 $ 269,044
Other comprehensive income:
Foreign currency translation adjustments,
net of income taxes (12,574) 1,255 (30,050) (34,145)
------------- ------------ ------------- ------------
Comprehensive income $ 87,788 $ 105,151 $ 231,693 $ 234,899
============= ============ ============= ============
</TABLE>
The impact of foreign currency translation adjustments in the third quarter and
nine months of 2000, as well as the nine months of 1999, 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 - 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 these credit agreements. The Company does not intend to renew
the $100.0 million credit agreement when it expires in December.
On September 29, 2000, the Company completed the sale of $300.0 million of 8.1%,
five-year notes and $200.0 million of 8.5%, ten-year notes.
NOTE G - CAPITAL
Common shares outstanding are net of shares held in treasury, and in substance
retired, of 23,709,897 at September 30, 2000, 21,136,952 at January 1, 2000 and
19,426,952 at October 2, 1999. In addition, 375,833, 306,698 and 289,969 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 1,587,812 shares were outstanding at September 30,
2000, 1,669,444 at January 1, 2000 and 1,692,956 at October 2, 1999.
NOTE H - RECENT ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board has issued FASB Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities, and FASB Statement
No. 138, Accounting for Certain Derivative Instruments and Certain 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 Statements will not have a significant effect on the Company. Management
is also evaluating the SEC's Staff Accounting Bulletin No. 101, Revenue
Recognition in Financial Statements, and does not expect that its adoption will
have a significant effect on the Company.
<PAGE> 10
VF CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Consolidated sales increased 8% for the third quarter and 3% for the nine months
ended September 30, 2000, compared with 1999. In translating foreign currencies
to the U.S. dollar, a stronger U.S. dollar reduced sales comparisons by $19
million in the third quarter of 2000 (EPS by $.02) and by $50 million in the
nine months ended September 2000 (EPS by $.04).
Gross margins were 33.9% of sales in the third quarter of 2000 compared with
34.3% in the prior year quarter. Gross margins were 34.2% in both nine month
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 offset by declines in occupational apparel
resulting from complexities created by the integration of recent acquisitions.
Marketing, administrative and general expenses were 22.0% of sales during the
quarter and 22.9% in the nine months of 2000, compared with 21.4% and 22.4% in
the 1999 periods. The higher expense ratios in 2000 resulted from recently
acquired companies, which sell to upper tier distribution channels that
traditionally require higher levels of marketing expenditures.
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 2000.
Net interest expense increased 29% in the third quarter and 18% in the nine
months of 2000, compared with the same periods in 1999. The increase is due to
higher average short-term borrowings to support acquisitions, as well as higher
short-term borrowing rates in 2000.
The effective income tax rate for the nine months of 2000 was 37.5%, based on
the expected rate for the year, compared with 38.4% 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 decreased 3% during both the third quarter and nine months of 2000.
Basic earnings per share were the same for the third quarter and increased 2% in
the nine months, including the benefit of the Company's share repurchase
program. The 2000 acquisitions are expected to have a dilutive impact for the
year 2000 of $.10 to $.15 per share, with the majority of this in the fourth
quarter.
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
increased 1% for the third quarter of 2000 and decreased 1% for the nine months,
compared with the same periods of 1999. Domestic jeans sales increased 9% in the
third quarter and 4% for the nine months, led by increases in the Company's
domestic Western and Mass Market businesses in both periods. Sales also
increased in the third quarter at Lee. International jeanswear sales declined 4%
in the third quarter and 6% in the nine months primarily due to the effects of
foreign currency. Excluding the effects of currency translation, European
jeanswear sales increased 2% in the quarter and declined 3% in the nine months.
Sales in Asia, however, declined for both the quarter and the nine months as a
result of a declining premium jeans market in Japan and difficult overall
economic conditions within the country. Domestic intimate apparel sales declined
7% in the quarter and 9% in the nine months, with increases in the Vanity Fair
and Lily of France brands offset by lower private label and
<PAGE> 11
Vassarette brand sales. Playwear sales were flat for the quarter, but
increased in the nine months of 2000 due to increased sales in NIKE branded
product. Segment profit increased 11% for the quarter and 8% for the nine months
of 2000, due to increases in domestic jeanswear sales and profitability in both
periods. International jeanswear profit increased significantly in the quarter
but was down slightly in the nine months. While European jeanwear profit
increased in both the quarter and nine months, profits in Asia declined in both
periods.
The Occupational Apparel segment includes the Company's industrial, career and
safety apparel businesses. Sales increased during the nine months of 2000 due to
acquisitions made during 1999. This segment's profit decreased in the third
quarter and nine 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 third quarter and nine months due to the
acquisitions of Eastpak and The North Face. Segment profit increased in the
quarter due to the 2000 acquisitions.
Management will continue to address profitability issues within its
underperforming units. Any actions resulting from this evaluation could have an
impact on operating results.
FINANCIAL CONDITION AND LIQUIDITY
The financial condition of the Company is reflected in the following:
<TABLE>
<CAPTION>
September 30 January 1 October 2
2000 2000 1999
---- ---- --------
(Dollars in millions)
<S> <C> <C> <C>
Working capital $ 1,119.6 $ 763.9 $ 788.4
Current ratio 1.9 to 1 1.7 to 1 1.6 to 1
Debt to total capital 38.0% 30.1% 31.4%
</TABLE>
Accounts receivable at the end of the third quarter of 2000 are higher than at
the same period in 1999 due to higher sales. The number of days sales
outstanding in accounts receivable at the end of the third quarter periods are
flat. Receivables are higher than at the end of 1999 due to higher sales in the
third quarter of 2000 and seasonal sales patterns.
Inventories at the end of the third quarter of 2000 are 15% higher than at the
comparable date in 1999 due to higher inventories in occupational apparel
resulting from operating inefficiencies related to integration of the businesses
acquired in 1998 and 1999, higher days of inventory in recently acquired
companies and expected increases in sales. Excluding the 2000 acquisitions,
inventory balances would have been 6% higher. Inventories are higher than at the
end of 1999 due to seasonal sales patterns and the impact of acquisitions
completed during 2000.
Accrued liabilities at the end of the quarter are higher than year-end due to
seasonal patterns.
On September 29, 2000, the Company issued $500.0 million of long-term notes. As
of October 27, 2000, substantially all of the net proceeds of $495.2 million had
been used to reduce short-term borrowings.
During the first nine months of 2000, the Company repurchased 2.6 million shares
of its Common Stock in open market transactions for a total cost of $64.2
million. Under its current authorization from the Board of Directors, the
Company may repurchase up to an additional 5.4 million common shares.
For information regarding the Company's exposure to certain market risks, see
Item 7A, Quantitative and
<PAGE> 12
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. In addition, 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), Markus, et al. v. The North Face,
Inc., Civil Action No. 99-Z-473 (United States District Court for the District
of Colorado), 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 a motion to dismiss on behalf of all defendants in the ENG action and has
reached agreements to settle both the Markus and the Polacheck actions. 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) Exhibits:
4.1 - Indenture between the Company and United States Trust
Company of New York, as Trustee, dated as of September 29,
2000.
4.2 - Form of 8.10% Note due 2005 (included in Exhibit 4.1)
4.3 - Form of 8.50% Note due 2010 (included in Exhibit 4.1)
27 - Financial data schedule as of September 30, 2000
(b) Reports on Form 8-K - There were no reports on Form 8-K filed for the three
months ended September 30, 2000.
<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: November 6, 2000
By: /s/ Peter E. Keene
--------------------
Peter E. Keene
Vice President - Controller
(Chief Accounting Officer)
<PAGE> 14
VF CORPORATION
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Number Description
------ -----------
<S> <C>
4.1 Indenture between the Company and United States Trust Company of New York,
as Trustee, dated as of September 29, 2000
4.2 Form of 8.10% Note due 2005 (included in Exhibit 4.1)
4.3 Form of 8.50% Note due 2010 (included in Exhibit 4.1)
27 Financial data schedule
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