<PAGE>
UNITED STATES 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 THIRD QUARTER ENDED AUGUST 2, 1997
Commission File Number 0-934
----------------------------
B. B. WALKER COMPANY
(Exact name of registrant as specified in its charter)
North Carolina 56-0581797
------------------------------- ----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
414 East Dixie Drive, Asheboro, NC 27203
- ----------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (910) 625-1380
--------------
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
--- ---
On September 12, 1997, 1,726,534 shares of the Registrant's voting common
stock with a par value of $1.00 per share were outstanding.
<PAGE>
B.B. WALKER COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
August 2, November 2,
Assets 1997 1996
-------- ----------- -----------
Cash $ 1 $ 1
Accounts receivable, less allowance for doubtful
accounts of $486 in 1997 and $742 in 1996 7,404 10,808
Inventories 9,530 12,511
Prepaid expenses 336 441
Income tax recovery receivable 229 1,042
Deferred income tax benefit, current - 150
----------- -----------
Total current assets 17,500 24,953
Property, plant and equipment, net of accumulated
depreciation and amortization of $6,150 in 1997
and $5,906 in 1996 1,856 2,208
Other assets 176 214
----------- -----------
$ 19,532 $ 27,375
=========== ===========
(Continued)
1
<PAGE>
B.B. WALKER COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS, Continued
(In Thousands)
(Unaudited)
August 2, November 2,
Liabilities and Shareholders' Equity 1997 1996
------------------------------------ ----------- -----------
Borrowings under finance agreement $ 6,443 $ 11,464
Current portion of long-term obligations 1,164 1,304
Accounts payable, trade 3,416 4,984
Accrued salaries, wages and bonuses 542 1,102
Other accounts payable and accrued liabilities 513 680
----------- -----------
Total current liabilities 12,078 19,534
----------- -----------
Long-term obligations, net of current portion 3,168 3,286
Minority interests in consolidated subsidiary 33 33
Shareholders' equity:
7% cumulative preferred stock, $100 par value,
1,150 shares authorized, 828 shares issued
and outstanding in 1997 and 1996 83 83
Common stock, $1 par value, 6,000,000 shares
authorized, 1,726,534 shares issued and
outstanding in 1997 and 1996 1,727 1,727
Capital in excess of par value 2,724 2,724
Retained earnings (171) 111
Shareholders' loans (110) (123)
----------- -----------
Total shareholders' equity 4,253 4,522
----------- -----------
$ 19,532 $ 27,375
=========== ===========
The accompanying notes to consolidated financial statements are an integral
part of these financial statements.
2
<PAGE>
B.B. WALKER COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
Third Quarter Ended Nine Months Ended
-------------------------- --------------------------
August 2, August 3, August 2, August 3,
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 6,902 $ 8,539 $ 23,290 $ 27,605
Interest and other income 7 11 54 38
----------- ----------- ----------- -----------
Total revenues 6,909 8,550 23,344 27,643
----------- ----------- ----------- -----------
Cost of products sold 5,062 6,502 17,244 21,120
Selling and administrative expenses 1,593 2,391 5,195 7,384
Depreciation and amortization 112 168 351 494
Interest expense 276 345 930 1,139
----------- ----------- ----------- -----------
Total costs and expenses 7,043 9,406 23,720 30,137
----------- ----------- ----------- -----------
Loss before benefit from income taxes and
minority interest (134) (856) (376) (2,494)
Benefit from income taxes (20) (283) (100) (837)
Minority interest 1 1 2 2
----------- ----------- ----------- -----------
Net loss (115) (574) (278) (1,659)
Retained earnings (deficit)at beginning of period (55) 3,070 111 4,158
Dividends on preferred stock (1) (1) (4) (4)
----------- ----------- ----------- -----------
Retained earnings (deficit) at end of period $ (171) $ 2,495 $ (171) $ 2,495
=========== =========== =========== ===========
Net loss per share:
Primary $ (.07) $ (.33) $ (.16) $ (.96)
=========== =========== =========== ===========
Fully diluted $ (.07) $ (.33) $ (.16) $ (.96)
=========== =========== =========== ===========
Weighted average common shares outstanding:
Primary 1,738 1,727 1,738 1,727
=========== =========== =========== ===========
Fully diluted 1,738 1,727 1,738 1,727
=========== =========== =========== ===========
</TABLE>
The accompanying notes to consolidated financial statements are an integral
part of these financial statements.
3
<PAGE>
B.B. WALKER COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Nine Months Ended
--------------------------
August 2, August 3,
1997 1996
----------- -----------
Cash Flows From Operating Activities:
Net loss $ (278) $ (1,659)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 351 494
Gain on sale of property, plant and equipment (26) (6)
Deferred income taxes 150 -
(Increase) decrease in:
Accounts receivable, net 3,404 2,124
Inventories 2,981 2,798
Prepaid expenses 105 144
Other assets 38 84
Increase (decrease) in:
Accounts payable, trade (1,568) (263)
Accrued salaries, wages and bonuses (560) (280)
Other accounts payable and accrued liabilities (167) 779
Income taxes 813 (31)
----------- -----------
Net cash provided by operating activities 5,243 4,184
----------- -----------
Cash Flows From Investing Activities:
Capital expenditures - (21)
Proceeds from disposal of property, plant
and equipment 26 6
----------- -----------
Net cash provided by (used for)
investing activities 26 (15)
----------- -----------
Cash Flows From Financing Activities:
Net borrowing under finance agreement (5,021) (3,614)
Proceeds from issuance of long-term obligations 198 45
Payment on long-term obligations (455) (607)
Purchase of stock from minority interest - (1)
Loans to shareholders, net of repayments 13 12
Dividends paid on 7% cumulative preferred stock (4) (4)
----------- -----------
Net cash used for financing activities (5,269) (4,169)
----------- -----------
Net change in cash - -
Cash at beginning of year 1 1
----------- -----------
Cash at end of third quarter $ 1 $ 1
=========== ===========
The accompanying notes to consolidated financial statements are an integral
part of these financial statements.
4
<PAGE>
B.B. WALKER COMPANY AND SUBSIDIARY
Notes To Consolidated Financial Statements
NOTE 1
- ------
A summary of the Company's significant accounting policies is presented on
page 10 of its 1996 Annual Report to Shareholders. Users of financial
information presented for interim periods are encouraged to refer to the
footnotes contained in the Annual Report to Shareholders when reviewing
interim financial results.
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary for a fair presentation
of the financial results of B.B. Walker Company and Subsidiary (the "Company")
for the interim periods included. All such adjustments are of a normal
recurring nature. The results of operations for the interim periods shown in
this report are not necessarily indicative of the results to be expected for
the fiscal year.
The Company's operations are reported on a fifty-two, fifty-three week fiscal
year that ends on the Saturday closest to October 31. The fiscal year that
ends on November 1, 1997 will include fifty-two weeks of operations. The
fiscal year that ended on November 2, 1996 included fifty-three weeks of
operations. For fiscal 1996, the Company elected to include the one extra
week in the first accounting period of the fiscal year. Therefore, the
results for the nine months ended August 3, 1996 include forty weeks of
operations for the Company. The comparative nine month results for the period
ended August 2, 1997 reflect thirty-nine weeks of operations for the Company.
The results for the comparative third quarters of 1997 and 1996 each include
thirteen weeks of operations.
NOTE 2
- ------
Earnings per common share is computed by deducting preferred dividends from
net income to determine net income attributable to common shareholders. This
amount is divided by the weighted average number of common shares outstanding
during the quarter plus the common stock equivalents arising from stock
options. For primary earnings per share, the common stock equivalents are
calculated using the average of the high and low asked price for the period.
For fully diluted earnings per share, the common stock equivalents are
calculated using the asked price at the end of the period if greater than the
average asked price for the period.
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("FAS 128"), which replaces the presentation of primary and fully diluted
earnings per share ("EPS") with basic and diluted EPS, respectively. FAS 128
simplifies the standards for computing earnings per share and makes them
comparable to international EPS standards. It also requires dual presentation
of basic and diluted EPS on the face of the income statement for all entities
with complex capital structures and requires a reconciliation of the numerator
and denominator of the basic EPS computation to the numerator and denominator
of the diluted EPS computation
5
<PAGE>
B.B. WALKER COMPANY AND SUBSIDIARY
Notes To Consolidated Financial Statements, Continued
This Statement is effective for the Company in fiscal 1999. Pro forma basic
and diluted EPS were both $.07 and $.33 for the third quarters ended August 2,
1997 and August 3, 1996, respectively. For the nine months ended August 2,
1997 and August 3, 1996, pro forma basic and diluted EPS were $.16 and $.96,
respectively.
NOTE 3
- ------
Long-term obligations consist of the following amounts (in thousands):
(Unaudited)
August 2, November 2,
1997 1996
----------- -----------
Notes payable to banks $ 2,540 2,690
Notes payable to governmental authorities 621 654
Promissory notes payable to shareholders 1,151 1,162
Capital lease obligations 20 84
----------- -----------
4,332 4,590
Less portion payable within one year 1,164 1,304
----------- -----------
$ 3,168 3,286
=========== ===========
NOTE 4
- ------
Inventories are composed of the following amounts (in thousands):
(Unaudited)
August 2, November 2,
1997 1996
----------- -----------
Finished goods $ 5,757 6,943
Work in process 641 692
Raw materials and supplies 3,132 4,876
----------- -----------
$ 9,530 12,511
=========== ===========
6
<PAGE>
B.B. WALKER COMPANY AND SUBSIDIARY
Management's Discussion and Analysis of
Results of Operations and Financial Condition
RESULTS OF OPERATIONS
- ---------------------
The following summarizes the results of operations for the Company for the
third quarters and nine months ended August 2, 1997 and August 3, 1996:
Third Nine
Quarter Ended Months Ended
------------------- -------------------
August 2, August 3, August 2, August 3,
1997 1996 1997 1996
--------- --------- --------- ---------
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of products sold 73.3% 76.1% 74.0% 76.5%
------ ------ ------ ------
Gross margin 26.7% 23.9% 26.0% 23.5%
Selling and administrative
expenses 23.1% 28.0% 22.3% 26.7%
Depreciation and amortization 1.6% 2.0% 1.5% 1.8%
Interest expense 4.0% 4.0% 4.0% 4.1%
Interest and other income (.1%) (.1%) (.2%) (.1%)
------ ------ ------ ------
Loss before income taxes
and minority interest (1.9%) (10.0%) (1.6%) (9.0%)
Benefit from income taxes (.3%) (3.3%) (.4%) (3.0%)
Minority interest - - - -
------ ------ ------ ------
Net loss (1.6%) (6.7%) (1.2%) (6.0%)
====== ====== ====== ======
MATERIAL CHANGES IN OPERATIONS
- ------------------------------
During the first nine months of fiscal 1997, the Company implemented a wide
range of operational changes directed at reducing expenses and making the
Company more competitive in the markets it serves. Among these changes was
the consolidation of the separate western and work/outdoor sales forces into a
single unit capable of marketing the entire line of branded product offerings.
In addition, the branded line of styles, particularly work and outdoor styles,
has been pared significantly. The line remaining after these adjustments is
leaner and requires less of an investment in both finished goods and raw
materials.
The Company has also implemented other operational changes to support the
repositioning of the product lines. Control and reduction of manufacturing,
marketing and administrative expenses remains a priority for management. In
order to achieve further cost savings, the Company is evaluating several key
internal functions and redesigning their structure to provide for a more
efficient operation.
7
<PAGE>
B.B. WALKER COMPANY AND SUBSIDIARY
Management's Discussion and Analysis of
Results of Operations and Financial Condition, Continued
The assumptions underlying management's plans are contingent on the Company
achieving sales and operating income goals. Management is continually
evaluating the progress of the improvements to operations in achieving
profitability and cash flow projections. If market conditions remain soft
and progress towards corporate goals is not satisfactory, further material
changes and reductions will be required.
NET SALES
- ---------
Net sales in the third quarter ended August 2, 1997 were $6,902,000 which was
$1,637,000 (19.2%) lower than net sales of $8,539,000 in the third quarter
ended August 3, 1996. For the nine months ended August 2, 1997, net sales
were $23,290,000, or $4,315,000 (11.6%) lower, as compared to $27,605,000 for
the same period in 1996.
Branded footwear sales were down $1,181,000 (21.5%) in the third quarter of
1997 when compared to the same period for the prior year. Year-to-date,
branded sales are $4,116,000 (22.3%) lower than prior year sales. For the
third quarter, pairs shipped are down 22.5% while the price per pair rose
slightly. For the nine month period, pairs shipped were down 25.0% and the
price per pair was up marginally over the prior year.
Sales in the third quarter and the first nine months of 1997 were impacted by
several factors. First, a significant change involved the merger of the two
separate sales forces for work/outdoor boots and western boots, respectively,
into a single sales force. The merged sales force is marketing both
work/outdoor boots and western boots to customers within their territory.
During the first quarter, territorial boundaries for the merged sales force
were established and the salesmen received extensive training on marketing
both lines of footwear. As a result of this transition, salesmen had to
develop relationships with customers that they may not have previously served
and orders for footwear were impacted as the plan was implemented.
Second, the Company has repositioned its product lines to direct its limited
resources towards promoting styles that will generate acceptable returns for
the Company. Part of this process involved eliminating various styles from
the branded line. A significant number of the styles closed out of the line
were work/outdoor styles. These styles generated sales volume in the prior
year but did not provide adequate margins to support their inclusion in the
product line.
Finally, branded sales have also been impacted by a weak retail sector,
particularly in western markets. Demand at the retail level for western boots
remains soft and orders have been lower than the prior year.
Private label sales for the third quarter and nine month period are down
$514,000 (27.3%) and $323,000 (5.5%), respectively. Pairs shipped were down
29.0% and 7.6% in the third quarter and nine months, respectively. The
results of this division reflect the activity of several large accounts and is
determined by the timing of shipments. Year-to-date results reflect an
overall slowdown in pairs shipped which is a result of a soft retail sector.
8
<PAGE>
B.B. WALKER COMPANY AND SUBSIDIARY
Management's Discussion and Analysis of
Results of Operations and Financial Condition, Continued
Other sales, which consists primarily of sales from the Company's retail
outlets and sales to institutional customers, increased 3.8% in the first nine
months of 1997 over the same period in 1996. For the comparable third
quarters, 1997 sales were 5.1% higher than 1996 sales. The Company reported
lower sales in its retail division due to the closing of its retail outlet in
Myrtle Beach, SC at the end of the first quarter. However, the impact of the
closed retail outlet has been partially offset by stronger sales in the
Company's two remaining retail stores. Sales to institutional customers
increased significantly from 1996 levels as the Company accepted more of this
business to provide production volume for its plants.
GROSS MARGIN
- ------------
For the first nine months of 1997, the Company's gross margin was 26.0%, an
increase of 2.5% over the gross margin of 23.5% for the comparable period in
1996. For the third quarter of 1997 compared to 1996, the gross margin
increased to 26.7% from 23.9%. The increase can be attributed to higher
margins generated by a better product mix and cost reduction efforts. In the
repositioning of the Company's product lines, many styles that were not
generating acceptable turns were closed out of the line. In addition, a lower
rate of returned goods in relation to gross sales as well as better
productivity from manufacturing personnel and reduction in manufacturing costs
has contributed to the improvement. However, the Company's gross margin
continues to be impacted by the necessity to use discounting programs and
aggressive dating terms in order to induce orders and maintain market share.
SELLING AND ADMINISTRATIVE EXPENSES
- -----------------------------------
Selling and administrative expenses were $1,593,000 for the third quarter of
1997 as compared to $2,391,000 for the third quarter of 1996, a decrease of
$798,000 (33.4%). For the nine months ended August 2, 1997 and August 3,
1996, selling and administrative expenses were $5,195,000 and $7,384,000,
respectively, or $2,189,000 (29.6%) lower in 1997. Expenses in most areas
were lower in 1997 than in 1996. Adjustments to operations, including the
consolidation of the separate work/outdoor and western sales forces, have
generated most of the decrease. In addition, management has lowered the
general and administrative headcount and realigned significant
responsibilities in the administrative functions. Due to these changes,
salary and benefits expense for the nine months was $1,243,000 lower in 1997
when compared to 1996. For the third quarter, the decrease was $396,000.
Similarly, with a smaller sales force, travel and showroom expenses have been
cut in 1997 when compared to 1996. For the nine month period, travel and
showroom expenses were $150,000 lower and in the third quarter, these expenses
were $33,000 lower. Advertising expenses have been reduced from the prior
year by $442,000 for the nine month period and $145,000 in the third quarter.
In response to the lower sales volume, the Company has reduced expenditures in
this area.
9
<PAGE>
B.B. WALKER COMPANY AND SUBSIDIARY
Management's Discussion and Analysis of
Results of Operations and Financial Condition, Continued
INTEREST EXPENSE
- ----------------
Interest expense for the nine months and the third quarter were down
significantly from the prior year. Interest expense for the nine months ended
August 2, 1997 was $930,000, or $209,000 (18.3%) lower than interest expense
of $1,139,000 for the nine months ended August 3, 1996. For the third
quarter, 1997 expense was $276,000, or $69,000 (20.0%) lower than 1996 expense
of $345,000. The decrease for the nine month period and in the third quarter
can be attributed to the lower average balances on outstanding debt, mainly
the revolving credit line. Average outstanding advances in 1997 under the
revolving credit line were approximately $3,200,000 lower in the nine month
period and $3,400,000 lower in the third quarter than in 1996. Interest rates
for this agreement ranged from 10% to 10.25% in 1997 and from 8.75% to 9.25%
in 1996.
DEPRECIATION AND AMORTIZATION
- -----------------------------
For the first nine months of 1997, depreciation and amortization fell $143,000
to $351,000 from $494,000 in 1996. For the third quarter, depreciation and
amortization expense was $112,000 in 1997 and $168,000 in 1996, a decrease of
$56,000. Depreciation and amortization expense has remained fairly level as
the Company is investing in capital assets only as necessary to maintain its
current level of operations. With minimal amounts invested in fixed assets in
recent years, depreciation charges on fixed assets that are becoming fully
depreciated are not being replaced, resulting in lower depreciation expense.
BENEFIT FROM INCOME TAXES
- -------------------------
For the nine months and third quarter ended August 2, 1997, the Company
recorded a benefit from income taxes of $100,000 and $20,000, respectively.
For the comparable periods of 1996, the Company had a benefit from income
taxes of $837,000 and $283,000, respectively. With losses accumulated in
1997, the Company has fully utilized its carryback to prior periods. Income
tax rates applied have been consistent between 1997 and 1996.
NET LOSS
- --------
The Company reported a net loss of $115,000 for the third quarter and a net
loss of $278,000 for the nine months ended August 2, 1997. For the comparable
periods of 1996, the Company had a net loss of $574,000 for the third quarter
and a net loss of $1,659,000 for the nine months. Better gross margins and
reduced selling, general and administrative expenses combined to improve
operating results for the Company. In addition, reductions in outstanding
debt have lowered interest costs.
10
<PAGE>
B.B. WALKER COMPANY AND SUBSIDIARY
Management's Discussion and Analysis of
Results of Operations and Financial Condition, Continued
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Historically, the Company has funded substantially all of its working capital
and capital expenditure requirements through borrowings under its finance
agreement and other indebtedness. The revolving finance agreement provides
flexibility to the Company as the availability of funds fluctuates with the
seasonal needs of the Company. Generally, the Company's working capital needs
are highest in the fourth fiscal quarter and lowest in the first fiscal
quarter. The Company continues to rely on the revolving finance agreement to
provide working capital for its day-to-day operations. With its revolving
finance agreement, the Company finances its accounts receivable and
inventories, paying interest at a variable rate (prime plus 1.75%, or 10.25%,
at August 2, 1997).
By agreement of the Company's bank, certain restrictive covenants under the
revolving finance agreement were amended for the period ended November 2, 1996
and thereafter. The Company and its bank entered into a fourth amendment to
its finance agreement on March 14, 1997. Under the terms of the amendment,
which addresses the Company's projections and plans for fiscal 1997, the
amount committed under the revolving credit agreement was reduced from
$13,000,000 to $8,000,000 as of the date of the agreement. In addition, the
inventory sublimit was reduced to $4,000,000 and the advance rate against
eligible accounts receivable was dropped to 80% from 85%.
As a condition to providing the financing, the bank requires that the Company
meet various restrictive covenants. These covenants include, among other
things, maintenance of certain financial ratios, limits on capital
expenditures, minimum net worth and net income requirements and restrictions
on the amount of borrowings from stockholders.
Borrowings under the agreement are secured by all accounts receivable,
inventories, machinery and equipment of the Company. In addition, the bank
has a first lien on the Asheboro land and facilities and a subordinated lien
on the Somerset facilities.
The Company had approximately $177,000 of unused availability under the
agreement at August 2, 1997. The Company believes that its revolving finance
agreement, as amended, will provide the necessary liquidity to fund its
current level of operations.
The Company has not made any outlays for capital equipment during the first
nine months of 1997. Capital expenditures for the first nine months of 1996
were $21,000. The Company is making capital expenditures only to maintain
current levels of operations.
11
<PAGE>
B.B. WALKER COMPANY AND SUBSIDIARY
Management's Discussion and Analysis of
Results of Operations and Financial Condition, Continued
FINANCIAL CONDITION
ACCOUNTS RECEIVABLE
- -------------------
Accounts receivable were $7,404,000 at August 2, 1997 compared to $10,808,000
at November 2, 1996, a decrease of $3,404,000. Trade receivables have
historically been at their highest point at the end of the fourth quarter
because of the heavy sales volume related to Christmas buying by retailers.
Second, lower sales volume and increased collection efforts have contributed
to the decrease.
INVENTORIES
- -----------
Inventories were $9,530,000 at August 2, 1997, a decrease of $2,981,000 from
the inventories held at November 2, 1996 of $12,511,000. Of the decrease,
approximately $1,186,000 is finished goods, $51,000 is work in process, and
$1,744,000 is raw materials. The lower balance is a result of the Company
focusing on managing inventory turns, both finished goods and raw materials,
in order to reduce the investment in inventories. In addition, the investment
in inventory has been decreased as fewer styles are now being carried in
finished goods and emphasis has been placed on selling closeouts. Finally,
with fewer styles in the product lines as discussed above, raw material
inventories include fewer varieties of components.
BORROWINGS UNDER FINANCE AGREEMENT
- ----------------------------------
The balance outstanding under the finance agreement was $6,443,000 at August
2, 1997 compared to $11,464,000 at November 2, 1996. Negotiated decreases in
the revolving line of credit combined with planned reductions in accounts
receivable and inventories contributed to the reduction in the outstanding
balance.
NEW ACCOUNTING STANDARDS
- ------------------------
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income". This Statement requires that changes in the amounts of comprehensive
income items, which are currently reported as separate components of equity,
be shown in a financial statement, displayed as prominently as other financial
statements. The common components of other comprehensive income would include
foreign currency translation adjustments, minimum pension liability
adjustments and/or unrealized gains or losses on available-for-sale
securities. The Statement does not require a specific format for the
financial statement in which comprehensive income is reported, but does
require that an amount representing total comprehensive income be reported in
that statement.
12
<PAGE>
B.B. WALKER COMPANY AND SUBSIDIARY
Management's Discussion and Analysis of
Results of Operations and Financial Condition, Continued
This Statement is effective for the Company in fiscal 1999; however,
management has not yet completed its assessment of the manner in which
comprehensive income might be displayed.
In June 1997, the FASB issued FAS 131, "Disclosures About Segments of an
Enterprise and Related Information". This Statement will change the way the
Company reports information about segments of their business in their annual
financial statements and require the Company to report selected segment
information in their quarterly reports issued to shareholders. It also
requires entity-wide disclosures about the products and services an entity
provides, the material countries in which it holds assets and reports
revenues, and its major customers. The Statement requires the Company
disclose segment data based on how management makes decisions about allocating
resources to segments and measuring their performance.
This Statement is effective for the Company in fiscal 1999; however,
management has not yet completed its assessment of how this Statement impacts
existing segment disclosure.
FORWARD-LOOKING STATEMENTS
- --------------------------
The foregoing discussion contains some forward-looking statements about the
Company's financial condition and results of operations, which are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those reflected in the forward-looking statements. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which reflect management's judgment only as of the date hereof. The Company
undertakes no obligation to publicly revise these forward-looking statements
to reflect events and circumstances that arise after the date hereof.
Factors that might cause actual results to differ materially from these
forward-looking statements include (1) the effects of general economic
conditions, (2) the impact of competitive products and pricing in the footwear
industry, (3) failure to achieve anticipated sales results, (4) management's
ability to accurately predict the effect of cost reductions, and (5)
management's ability to accurately predict the adequacy of the Company's
financing arrangement to meet its working capital and capital expenditure
requirements.
13
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------ --------------------------------
(a) Exhibits Filed:
(27) Financial Data Schedule for the Third Quarter ended August 2, 1997
(b) Reports on Form 8-K:
NONE
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.
B.B. Walker Company
Date September 16, 1997 /s/KENT T. ANDERSON
------------------ -------------------
Kent T. Anderson
Chairman of the Board, Chief
Executive Officer and President
Date September 16, 1997 /s/ JOHN R. WHITENER
------------------ --------------------
John R. Whitener
Controller
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from B.B.
Walker's Form 10-Q for the third quarter ended and nine months ended August 2,
1997 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000104218
<NAME> B.B. WALKER COMPANY
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> NOV-01-1997
<PERIOD-END> AUG-02-1997
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0
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