<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
--------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-16153
------------------------------------------
Coach, Inc.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 52-2242751
------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
516 West 34th Street, New York, NY 10001
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(Address of principal executive offices)
(Zip Code)
(212) 594-1850
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(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 (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 November 14, 2000, the Registrant had 43,513,333 outstanding shares of
common stock, which is the Registrant's only class of common stock.
The document contains 27 pages excluding exhibits.
Page 1
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COACH, INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page Number
-----------
ITEM 1. FINANCIAL STATEMENTS -
<S> <C>
Preface 3
Condensed Consolidated and Combined Balance Sheets -
For Pro Forma as Adjusted September 30, 2000,
and at September 30, 2000 and July 1, 2000 4
Condensed Consolidated and Combined Statements of Income -
For the thirteen weeks ended
September 30, 2000 and October 2, 1999 5
Consolidated and Combined Statements of Common
Stockholders' Equity -
For the period July 3, 1999 to September 30, 2000 6
Consolidated and Combined Statements of Cash Flows -
For the thirteen weeks ended
September 30, 2000 and October 2, 1999 7
Notes to Consolidated and Combined Financial Statements 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 15
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 23
PART II - OTHER INFORMATION AND SIGNATURES
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 24
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 25
SIGNATURE 27
EXHIBIT 2.4 Employee Matters Agreement
EXHIBIT 27 Financial Data Schedule
</TABLE>
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ITEM 1.
COACH, INC. AND SUBSIDIARIES
PREFACE
The consolidated financial statements for the thirteen weeks ended September 30,
2000 and October 2, 1999 and the balance sheet as of September 30, 2000 included
herein have not been audited by independent public accountants, but, in the
opinion of Coach, Inc. ("Company"), all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position at
September 30, 2000 and the results of operations and the cash flows for the
periods presented herein have been made. In the opinion of management, the
information furnished reflects all adjustments, all of which are of a normal
recurring nature, necessary for a fair presentation of the results for the
reported interim periods. The results of operations for the thirteen weeks ended
September 30, 2000 are not necessarily indicative of the operating results to be
expected for the full fiscal year ending June 30, 2001.
The consolidated financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Although the Company believes that the disclosures made are adequate to make the
information presented not misleading, 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 regulations. These consolidated financial statements should be
read in conjunction with the consolidated financial statements and notes thereto
included in the Company's Form S-1 for the fiscal year ended July 1, 2000.
Page 3
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COACH, INC.
CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS
At September 30, 2000 and July 1, 2000
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
AS ADJUSTED
SEPTEMBER 30, SEPTEMBER 30, JULY 1,
2000 2000 2000
----------------------- ----------------------- ----------------------
(unaudited) (unaudited)
<S> <C> <C> <C>
ASSETS
Cash $ 164 $ 164 $ 162
Receivables 24,855 24,855 15,567
Inventories 119,397 119,397 102,097
Other current assets 17,047 17,047 15,862
----------------------- ----------------------- ----------------------
Total current assets 161,463 161,463 133,688
Receivable from Sara Lee - - 63,783
Property, net 66,314 66,314 65,184
Trademarks and other assets 33,718 33,718 33,998
----------------------- ----------------------- ----------------------
Total assets $ 261,495 $ 261,495 $ 296,653
======================= ======================= ======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank overdrafts $ 5,408 $ 5,408 $ 4,940
Accounts payable 4,999 4,999 2,926
Accrued liabilities 82,948 78,662 71,693
Revolving credit facility 5,671 9,957 -
Long-term debt due within one year 40 40 40
----------------------- ----------------------- ----------------------
Total current liabilities 99,066 99,066 79,599
Long-term debt 71,735 3,735 3,735
Other liabilities 2,158 2,158 511
Common stockholders' equity 88,536 156,536 212,808
----------------------- ----------------------- ----------------------
Total liabilities and stockholders' equity $ 261,495 $ 261,495 $ 296,653
======================= ======================= ======================
</TABLE>
The accompanying Notes to Consolidated and Combined Financial Statements are an
integral part of these statements.
Page 4
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COACH, INC.
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF INCOME
FOR THE THIRTEEN WEEKS ENDED SEPTEMBER 30, 2000 AND OCTOBER 2,1999
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
-------------------------------------------------------
SEPTEMBER 30, OCTOBER 2,
2000 1999
------------------------ ----------------------
<S> <C> <C>
Net sales $ 134,552 $ 118,032
Cost of sales 49,564 54,727
------------------------ ----------------------
Gross profit 84,988 63,305
Selling, general and administrative expenses 68,246 60,256
Reorganization costs 4,950 -
------------------------ ----------------------
Operating income 11,792 3,049
Interest expense, net 113 97
------------------------ ----------------------
Income before income taxes 11,679 2,952
Provision for income taxes 4,088 903
------------------------ ----------------------
Net income $ 7,591 $ 2,049
======================== ======================
Pro forma as adjusted basic net income per share $ 0.17
========================
Shares used in computing pro forma as adjusted
basic net income per share 43,513
========================
Pro forma as adjusted diluted net income per share $ 0.17
========================
Shares used in computing pro forma as adjusted
diluted net income per share 43,670
========================
</TABLE>
The accompanying Notes to Consolidated and Combined Financial Statements are an
integral part of these statements.
Page 5
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COACH, INC.
CONSOLIDATED AND COMBINED STATEMENT OF COMMON STOCKHOLDERS' EQUITY
FOR THE PERIOD JULY 3, 1999 TO SEPTEMBER 30, 2000
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION> ACCUMULATED
SARA LEE OTHER
CORPORATION COMPREHENSIVE COMPREHENSIVE
TOTAL EQUITY INCOME (LOSS) INCOME (LOSS)
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balances at July 3, 1999 $ 203,162 $ 203,966 $ (804)
Net income 2,049 2,049 - $ 2,049
Translation adjustments 55 - 55 55
---------------
Comprehensive income $ 2,104
===============
----------- ----------- ----------
Balances at October 2, 1999 205,266 206,015 (749)
Net income 36,554 36,554 - 36,554
Equity distribution (29,466) (29,466) - -
Translation adjustments 97 - 97 97
Minimum pension liability 357 - 357 357
---------------
Comprehensive income $ 37,008
===============
----------- ----------- ----------
Balances at July 1, 2000 212,808 213,103 (295)
Net income 7,591 7,591 - 7,591
Capitalization of receivable from Sara Lee (63,783) (63,783) -
Translation adjustments (80) - (80) (80)
---------------
Comprehensive income $ 7,511
===============
----------- ----------- ----------
Balances at September 30, 2000 $ 156,536 $ 156,911 $ (375)
=========== =========== ==========
</TABLE>
The accompanying Notes to Consolidated and Combined Financial Statements are an
integral part of these statements.
Page 6
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COACH, INC.
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
FOR THE THIRTEEN WEEKS ENDED SEPTEMBER 30, 2000 AND OCTOBER 2,1999
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
--------------------------------------------------------
SEPTEMBER 30, OCTOBER 2,
2000 1999
------------------------ ----------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 7,591 $ 2,049
Adjustments for noncash charges included in net income:
Depreciation 5,397 5,059
Amortization of intangibles 221 324
Reorganization costs 4,950 -
(Increase) in deferred taxes (1,732) (2,085)
Other noncash credits, net 1,626 (82)
Changes in current assets and liabilities:
(Increase) in trade accounts receivable (9,288) (9,086)
(Increase) in inventories (17,300) (2,726)
Decrease in other current assets 547 531
Increase (decrease) in accounts payable 2,073 (4,342)
Increase in accrued liabilities 3,016 1,118
Decrease in receivable from Sara Lee 4,144 1,918
------------------------ ----------------------
Net cash from (used in) operating activities 1,245 (7,322)
------------------------ ----------------------
INVESTMENT ACTIVITIES
Purchases of property and equipment (7,573) (5,622)
Dispositions of property and equipment 49 1,362
------------------------ ----------------------
Net cash (used in) investment activities (7,524) (4,260)
------------------------ ----------------------
FINANCING ACTIVITIES
Borrowings from Sara Lee 139,363 127,124
Repayments to Sara Lee (133,550) (116,172)
Bank overdrafts 468 636
------------------------ ----------------------
Net cash from financing activities 6,281 11,588
------------------------ ----------------------
Increase in cash and equivalents 2 6
Cash and equivalents at beginning of period 162 148
------------------------ ----------------------
Cash and equivalents at end of period $ 164 $ 154
======================== ======================
</TABLE>
The accompanying Notes to Consolidated and Combined Financial Statements are an
integral part of these statements.
Page 7
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COACH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
THIRTEEN WEEKS ENDED SEPTEMBER 30, 2000 AND OCTOBER 2, 1999
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
1 BASIS OF PRESENTATION
Coach was formed in 1941 and was acquired by Sara Lee Corporation ("Sara
Lee") in July 1985 in a transaction accounted for as a purchase. Coach
has operated as a division in the United States and as subsidiaries in
foreign countries.
On May 30, 2000, Sara Lee announced its plan to create an independent
publicly traded company, Coach, Inc. ("Coach", "the Company") comprised
of Sara Lee's branded leathergoods and accessories business. On June 1,
2000, Coach was incorporated under the laws of the State of Maryland. On
October 2, 2000, Coach began to operate as a wholly owned subsidiary of
Sara Lee.
As described in Note 8 (Subsequent Events), during October 2000 Coach
completed an initial public offering of 8,487 shares of common stock.
This reduced Sara Lee's ownership to 80.5%.
The historical financial statements have been prepared using Sara Lee's
historical basis in the assets and liabilities and the results of Coach's
business.
2 INVENTORIES
Inventories are valued at the lower of cost (determined by the first-in,
first-out method) or market. Inventory cost includes material and
conversion costs.
Components of inventories are as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, JULY 1,
2000 2000
--------------------- ---------------
<S> <C> <C>
Finished Goods $ 113,800 $ 95,446
Work in process 1,230 677
Materials and supplies 4,367 5,974
---------------- -------------
$ 119,397 $ 102,097
================ =============
</TABLE>
Page 8
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COACH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
THIRTEEN WEEKS ENDED SEPTEMBER 30, 2000 AND OCTOBER 2, 1999
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
3 REVOLVING CREDIT FACILITY/LONG TERM DEBT
Coach participates in a cash concentration system that requires that cash
balances be deposited with Sara Lee which are netted against any
borrowings or billings that are provided by Sara Lee. On July 2, 2000,
Coach entered into a revolving credit facility with Sara Lee. The maximum
borrowing from Sara Lee permitted under this facility is $75,000 which
will accrue interest at US dollar LIBOR plus 30 basis points. Any
receivable balance from Sara Lee under this facility will accrue interest
at US dollar LIBOR minus 20 basis points. When Sara Lee owns less than
50% of Coach's outstanding capital stock, this facility will terminate
and become due. The credit facility contains certain covenants including
a requirement that Coach maintain an interest coverage ratio of at least
1.75, and restrictions on mergers, significant property disposals,
dividends, additional secured debt, sale and leaseback transactions or
lease obligations in excess of amounts approved by Sara Lee. As of
September 30, 2000 we are in compliance with all note covenants. We are
required to repay these borrowings from cash provided by operations as
reduced by capital expenditures.
As described in Note 8 (Subsequent Events), Coach has completed an equity
restructuring which resulted in the assumption of $190,000 of long-term
debt payable to a subsidiary of Sara Lee. The net proceeds of the initial
stock offering were used to partially repay this loan, resulting in a
remaining balance of $68,000.
This long-term debt has a maturity date of September 30, 2002 and will
accrue interest at U.S. dollar LIBOR plus 30 basis points while Sara Lee
owns greater than a majority of Coach's common stock, and U.S. dollar
LIBOR plus 250 basis points when Sara Lee owns less than 80% of Coach's
capital stock. Coach intends to repay this note using cash generated from
future operations. The note contains certain covenants, including a
requirement that Coach maintain an interest coverage ratio of at least
1.75, and restrictions on mergers, significant property disposals,
dividends, additional secured debt, sale and leaseback transactions or
lease obligations in excess of amounts approved by Sara Lee. Primarily
all cash flows from operations less capital expenditures after debt
service payments under the cash concentration system are required as
payments under this note.
Page 9
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COACH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
THIRTEEN WEEKS ENDED SEPTEMBER 30, 2000 AND OCTOBER 2, 1999
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
4 REORGANIZATION COSTS
In the first quarter of fiscal year 2001, management of Coach committed
to and announced a plan to cease production at the Medley, Florida
manufacturing facility in October 2000. This reorganization involves the
termination of 362 manufacturing, warehousing and management employees at
the Medley, Florida facility. These actions are intended to reduce costs
by the resulting transfer of production to lower cost third-party
manufacturers.
Coach has recognized a reorganization cost of $4,950 in the first quarter
of fiscal year 2001. This reorganization cost includes $3,168 for worker
separation costs, $785 for lease termination costs, and $997 for the
write down of long-lived assets to their estimated net realizable values.
The composition of the reorganization reserves is set forth in the table
below. We expect that these reorganization actions will be completed by
the end of this fiscal year.
<TABLE>
<CAPTION>
WRITE-DOWN OF
ORIGINAL LONG-LIVED ASSETS REORGANIZATION
REORGANIZATION TO NET REALIZABLE CASH RESERVES AS OF
RESERVES VALUE PAYMENTS SEPTEMBER 30, 2000
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Worker's separation costs $ 3,168 - $ (24) $ 3,144
Lease termination costs 785 - (6) 779
Anticipated losses on
disposal of fixed assets 997 $ (997) - -
------------ ------------ --------- -------------
Total reorganization reserve $ 4,950 $ (997) $ (30) $ 3,923
============ ============ ========= =============
</TABLE>
During 1999, Coach closed the Carlstadt, New Jersey warehouse and
distribution center and the Italian manufacturing operation and
reorganized the Medley, Florida manufacturing facility. As contemplated
in the original plan, a portion of the Carlstadt facility remains in use
for product development. Related to these facility closures and the
reorganization activities, 737 employees were terminated. At July 1,
2000, these reorganization actions were complete and certain worker's
separation costs remained to be paid subject to the separation agreements
with each employee. During the quarter, workers' separation costs of $63
were paid. The remaining balance of $79 will be paid by December 2000.
Page 10
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COACH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
THIRTEEN WEEKS ENDED SEPTEMBER 30, 2000 AND OCTOBER 2, 1999
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
5 EARNINGS PER SHARE
Prior to October 2, 2000, Coach operated as a division of Sara Lee and
did not have any shares outstanding. Therefore, earnings per share for
the thirteen weeks ended September 30, 2000 are calculated on a pro forma
as adjusted basis. Pro forma as adjusted basic net income per share is
computed by dividing net income by the assumed number of shares
outstanding. This share amount is calculated on a pro forma as adjusted
basis assuming that the 35,025.333 to 1.0 common stock dividend had
occurred and that 8,487 shares were sold in the initial public offering
in October 2000. Pro forma as adjusted diluted net income per share
reflects the potential dilution that would occur if options or other
contracts to issue common stock were exercised or converted into common
stock. The following is a reconciliation of the assumed shares
outstanding for purposes of calculating pro forma as adjusted basic and
diluted net income per share.
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
SEPTEMBER 30,
2000
--------------------
<S> <C>
Net income $ 7,591
============
Shares used in computing pro forma
as adjusted basic net income per share 43,513
Dilutive effect of stock award plans based
on the initial offering price 157
------------
Shares used in computing pro forma as
adjusted diluted net income per share 43,670
============
Pro forma as adjusted basic net income
per share $ 0.17
============
Pro forma as adjusted diluted net income
per share $ 0.17
============
</TABLE>
Page 11
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COACH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
THIRTEEN WEEKS ENDED SEPTEMBER 30, 2000 AND OCTOBER 2, 1999
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
As described in Note 8 (Subsequent Events), Coach issued options
representing 3,171 shares of common stock at the offering price and our
employees converted Sara Lee options into Coach options representing
1,204 shares of common stock. Both the newly granted stock options and
the converted Sara Lee stock options are non-dilutive in the pro forma as
adjusted disclosures based upon the initial public offering price.
6 SEGMENT INFORMATION
The Company operates its business in two reportable segments: Direct to
Consumer and Wholesale. The Company's reportable segments represent
channels of distribution that offer similar merchandise, service and
marketing strategies. Sales of Coach products through Company owned
retail and factory stores, the Coach catalog and the Internet constitute
the Direct to Consumer segment. Wholesale refers to sales of Coach
products to other retailers. In deciding how to allocate resources and
assess performance, Coach's executive officers regularly evaluate the
sales and operating income of these segments. Operating income is the
gross margin of the segment at standard cost less direct expenses of the
segment. Unallocated corporate expenses include manufacturing variances,
general marketing, administration and information systems, distribution
and customer service expenses.
<TABLE>
<CAPTION>
DIRECT TO CORPORATE
THIRTEEN WEEKS ENDED SEPT. 30, 2000 CONSUMER WHOLESALE UNALLOCATED TOTAL
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Sales $80,508 $54,044 - $ 134,552
Operating income 20,052 22,126 $(30,386) 11,792
Interest income - - 29 29
Interest expense - - 142 142
Income before taxes 20,052 22,126 (30,499) 11,679
Depreciation and amortization 3,067 394 2,157 5,618
Total assets 139,412 68,765 53,318 261,495
Additions to long-lived assets 6,238 899 436 7,573
</TABLE>
<TABLE>
<CAPTION>
DIRECT TO CORPORATE
THIRTEEN WEEKS ENDED OCT. 2, 1999 CONSUMER WHOLESALE UNALLOCATED TOTAL
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 70,361 $47,671 - $118,032
Operating income 14,755 16,474 $(28,180) 3,049
Interest income - - 8 8
Interest expense - - 105 105
Income before taxes 14,755 16,474 (28,277) 2,952
Depreciation and amortization 2,513 377 2,493 5,383
Total assets 120,428 59,995 101,179 281,602
Additions to long-lived assets 2,889 355 2,378 5,622
</TABLE>
Page 12
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COACH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
THIRTEEN WEEKS ENDED SEPTEMBER 30, 2000 AND OCTOBER 2, 1999
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
The following is a summary of the common costs not allocated in the
determination of segment performance.
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
--------------------
SEPT. 30, 2000 OCT. 2, 1999
-------------- ------------
<S> <C> <C>
Manufacturing variances $(383) $(6,989)
Advertising, marketing and design (8,928) (7,780)
Administration and information systems (10,276) (7,595)
Distribution and customer service (5,849) (5,816)
Reorganization costs (4,950) -
------------ ------------
Total corporate unallocated $(30,386) $(28,180)
============ ============
</TABLE>
7 RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, June 1999 and June 2000, the Financial Accounting Standards
Board issued SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," SFAS No. 137, "Accounting for Derivative Instruments
and Hedging Activities - Deferral of the Effective Date of FASB Statement
No. 133," and SFAS No. 138, "Accounting for Derivative Instruments and
Hedging Activities - an amendment of SFAS No. 133." These statements
outline the accounting treatment for derivative and hedging activities.
Coach adopted SFAS No. 133, as amended, as of July 2, 2000. Coach does
not hold or use derivative instruments, hence this adoption had no effect
on Coach's operating income or financial position.
8 SUBSEQUENT EVENTS
In October 2000, Coach completed an initial public offering of common
stock. In conjunction with this offering, the following transactions
occurred:
On July 2, 2000, the receivable from Sara Lee was capitalized into
stockholders' net investment. No cash was paid or collected by
either party.
On October 2, 2000, Coach assumed $190,000 of indebtedness to a
subsidiary of Sara Lee resulting in a reduction in equity.
Coach declared and paid a 35,025.333 to 1.0 common stock dividend.
Page 13
<PAGE> 14
COACH, INC.
NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)
THIRTEEN WEEKS ENDED SEPTEMBER 30, 2000 AND OCTOBER 2, 1999
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Coach sold 8,487 shares of common stock in an initial public
offering at a price of $16.00 per share. After deducting the
underwriting discount and estimated offering expenses, net
proceeds of $122,000 were received.
The net offering proceeds were used to repay a portion of the
indebtedness to a subsidiary of Sara Lee resulting in a remaining
obligation of $68,000.
Coach issued options to purchase 3,171 shares of our common stock
at the offering price.
Coach employees elected to convert previously held Sara Lee
options into options to purchase 1,204 shares of our common stock.
Coach employees elected to convert previously held Sara Lee
service-based restricted stock units into 34 Coach service-based
restricted stock units.
Coach employees elected to convert previously held Sara Lee
restricted stock under deferred compensation agreements, into 123
shares of Coach restricted stock.
9 PRO FORMA BALANCE SHEET INFORMATION
Pro forma amounts give effect to the following actions as though these
actions had been taken as of September 30, 2000:
On October 2, 2000, Coach assumed $190,000 of indebtedness to a
subsidiary of Sara Lee resulting in a reduction in equity.
Coach declared and paid a 35,025.333 to 1.0 common stock dividend.
Coach sold 8,487 shares of common stock in an initial public
offering at a price of $16.00 per share. After deducting the
underwriting discount and estimated offering expenses, net
proceeds of $122,000 were received.
The net offering proceeds were used to repay a portion of the
indebtedness to a subsidiary of Sara Lee resulting in a remaining
obligation of $68,000.
Estimated costs and expenses of the common stock offering of
$4,286 have been accrued. The offsetting amount has been applied
to the revolving credit facility, pending cash payment of these
expenditures.
Page 14
<PAGE> 15
ITEM 2.
COACH, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
OVERVIEW
Coach was founded in 1941 and was acquired by Sara Lee Corporation in
1985. Coach is a designer, producer and marketer of quality, modern, American
classic accessories and gifts. Our primary product offerings include handbags,
women's and men's accessories, business cases, luggage and travel accessories,
personal planning products, leather outerwear, gloves and scarves.
On May 30, 2000, Sara Lee announced a plan to narrow its focus on a
smaller number of global branded consumer packaged goods businesses by, among
other things, initiating plans to dispose of some of its non-core businesses.
The plan included the initial public offering of up to 19.5% of our common stock
to be followed by a later distribution of our remaining common stock by Sara
Lee. As of September 30, 2000, we were a wholly owned subsidiary of Sara Lee. On
October 5, 2000, the Company was listed on the New York Stock Exchange and sold
7.4 million shares of stock in an initial public offering, representing 17.4% of
the outstanding shares. On October 17, 2000, the underwriters exercised their
over-allotment option and purchased an additional 1.1 million shares of our
stock. In total we sold 8.5 million shares of our common stock, representing
19.5% of the outstanding shares. The net proceeds of these transactions were
used to repay 64.2% of the indebtedness owed to a subsidiary of Sara Lee
Corporation.
This management's discussion and analysis should be read in conjunction
with Coach's Consolidated and Combined Financial Statements and accompanying
footnotes thereto along with the cautionary statement of risk factors at the end
of this section.
Page 15
<PAGE> 16
FIRST QUARTER FISCAL 2001 COMPARED TO FIRST QUARTER FISCAL 2000
The following is a discussion of the results of operations for the first
quarter of fiscal 2001 compared to the first quarter of fiscal 2000 and a
discussion of the changes in financial condition during the first quarter of
fiscal 2001.
Net sales by business segment in the first quarter of fiscal 2001
compared to the first quarter of fiscal 2000 are as follows:
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
----------------------------------------------------------------------------------------
NET SALES PERCENTAGE OF TOTAL NET SALES
--------------------------------------------------- ------------------------------
(UNAUDITED)
SEPT. 30, OCT. 2, SEPT. 30, OCT. 2,
2000 1999 RATE OF INCREASE 2000 1999
---- ---- ----------------- ---- ----
(DOLLARS IN MILLIONS*)
<S> <C> <C> <C> <C> <C>
Direct to Consumer $80.5 $70.4 14.4% 59.8% 59.6%
Wholesale 54.0 47.7 13.4% 40.2 40.4
------ ------ ------ ------
Total Net Sales $134.6 $118.0 14.0% 100.0% 100.0%
====== ====== ====== ======
</TABLE>
*Components do not add to total due to rounding.
Combined statements of income for the first quarter of fiscal 2001
compared to the first quarter of fiscal 2000 are as follows:
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
-----------------------------------------------------------------
(DOLLARS IN MILLIONS, EXCEPT FOR EARNINGS PER SHARE)
SEPT. 30, 2000 OCT. 2, 1999
-------------- ------------
(UNAUDITED) (UNAUDITED)
$ % TO NET SALES $ % TO NET SALES
- -------------- - --------------
<S> <C> <C> <C> <C>
Net sales $134.0 99.6% $117.6 99.7%
Licensing revenue 0.6 0.4 0.4 0.3
-------- ------ -------- -------
Total net sales 134.6 100.0 118.0 100.0
-------- ------ -------- -------
Gross profit 85.0 63.2 63.3 53.6
Selling, general and administrative expenses 68.2 50.7 60.3 51.1
-------- ------ -------- -------
Operating income before reorganization costs 16.8 12.5 3.0 2.5
Reorganization costs 5.0 3.7 - -
-------- ------ -------- -------
Operating income 11.8 8.8 3.0 2.5
Net interest expense 0.1 0.1 0.1 -
-------- ------ -------- -------
Income before taxes 11.7 8.7 2.9 2.5
Income taxes 4.1 3.1 0.9 0.8
-------- ------ -------- -------
Net income $7.6 5.6% $2.0 1.7%
======== ======== ======== =======
Pro forma as adjusted net income per share:
Basic $0.17
Diluted $0.17
Pro forma as adjusted weighted average number of common shares:
Basic 43,513
Diluted 43,670
</TABLE>
Page 16
<PAGE> 17
FIRST QUARTER FISCAL 2001 COMPARED TO FIRST QUARTER FISCAL 2000
NET SALES
Net sales increased by 14.0% to $134.6 million in the first quarter of
fiscal 2001 from $118.0 million during the first quarter of fiscal 2000. These
results reflect increased volume in both the direct to consumer and wholesale
channels.
Direct to Consumer. Net sales increased 14.4% to $80.5 million during the
first quarter of fiscal 2001 from $70.4 million during the comparable period for
fiscal 2000. This sales increase was primarily due to new store openings, store
renovations and expansions and comparable stores sales growth. Since the end of
the first quarter of fiscal 2000, Coach has opened eight new retail stores and
two new factory stores. In addition, 22 retail stores and one factory store were
remodeled while five retail stores and three factory stores were expanded.
Comparable store sales growth for the first quarter of fiscal 2001 for the
entire U.S. store base was 5.5%. Comparable store sales growth for the first
quarter of fiscal 2001 for retail stores and factory stores open for one full
year was 3.8% and 6.7%, respectively. Coach also closed three retail stores and
one factory store since the end of the first quarter of fiscal 2000.
Wholesale. Net sales attributable to domestic and international wholesale
shipments increased 13.4% to $54.0 million in the first quarter of fiscal 2001
from $47.7 million during the comparable quarter of fiscal 2000. This increase
was driven by increased demand for new products in our U.S. and international
wholesale channels. Licensing revenue increased 35.5% to $0.6 million in the
first quarter of fiscal 2001 from $0.4 million during the first quarter of
fiscal 2000 caused primarily by expanded distribution of licensed footwear
product.
GROSS PROFIT
Gross profit increased 34.3% to $85.0 million in the first quarter of
fiscal 2001 from $63.3 million in the first quarter of fiscal 2000. Gross margin
increased 953 basis points to 63.2% in the first quarter of fiscal 2001 from
53.6% in the first quarter of fiscal 2000. These increases were primarily due to
the continuing impact of manufacturing and sourcing cost reductions realized
during fiscal 2001 from the reorganization that commenced in 1999, as well as
from increased shipments to international distributors. Gross profit also
increased due to the reduction of low margin disposition shipments as compared
to the comparable quarter in fiscal 2000.
The following chart illustrates the gross margin performance which the
Company has experienced over the last five quarters.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JULY 1, 2000 FISCAL YEAR ENDING JUNE 30, 2001
------------------------------ --------------------------------
Q1 Q2 Q3 Q4 Q1
-- -- -- -- --
(UNAUDITED) (UNAUDITED)
------------------------------ --------------------------------
<S> <C> <C> <C> <C> <C>
Gross Margin 53.6% 62.1% 61.0% 61.5% 63.2%
</TABLE>
Page 17
<PAGE> 18
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
SG&A expenses increased 13.3% to $68.2 million in the first quarter of
fiscal 2001 from $60.3 million in the first quarter of fiscal 2000. As a
percentage of net sales, SG&A expenses during the first quarter of fiscal 2001
were 50.7% compared to 51.1% during the first quarter of fiscal 2000.
Selling expenses increased by 12.5% to $41.5 million in the first quarter
of fiscal 2001 from $36.9 million during the comparable quarter in fiscal 2000.
As a percentage of sales, selling costs were 30.8% in the first quarter of
fiscal 2001 versus 31.2% in the first quarter of fiscal 2000. The selling
expense increase was primarily due to $2.2 million of operating costs associated
with stores that were not open during the first quarter of fiscal 2000. Eight
new retail stores and two new factory stores that were operating during the
first quarter of fiscal 2001 were not open in the first quarter of fiscal 2000.
Two stores were temporarily closed during the first quarter of fiscal 2000,
reducing our expenses for that period. Additionally, four stores were
permanently closed since the end of the first quarter of fiscal 2000. The
remaining selling expense increase was caused by volume related costs in our
wholesale segment.
Advertising, marketing, and design costs increased by 9.2% to $10.0
million in the first quarter of fiscal 2001, from $9.2 million during the same
period in fiscal 2000. As a percentage of sales, advertising, marketing and
design costs were 7.5% in the first quarter of fiscal 2001, versus 7.8% in the
comparable quarter of fiscal 2000. The dollar increase in expenses was primarily
due to the timing of advertising media and production expenses along with
increased design costs.
Distribution and customer service costs declined by $0.2 million to $6.4
million, in the first quarter of fiscal 2001, compared to $6.6 million in the
first quarter of fiscal 2000. As a percentage of sales, distribution and
customer service costs represented 4.8% in the first quarter of fiscal 2001
versus 5.6% in the first quarter of fiscal 2000. The decrease in distribution
and customer service expenses reflected continued efficiency gains associated
with the consolidation of warehouse and customer service activities into our
Jacksonville, Florida facility.
Administrative expenses increased by 35.3% to $10.3 million in the first
quarter of fiscal 2001 from $7.6 million during the same period in fiscal 2000
as a result of increased occupancy, corporate governance and staffing costs. As
a percentage of sales, administrative expenses were 7.6% in the first quarter of
fiscal 2001, versus 6.4% during the comparable period in fiscal 2000. Higher
occupancy costs were associated with the lease renewal of our New York City
corporate headquarters location and incremental expenses were incurred to
support new corporate governance activities relating to the Company becoming
publicly owned.
REORGANIZATION COSTS
In the first fiscal quarter of 2001, management of Coach committed to and
announced a plan to cease production at the Medley, Florida manufacturing
facility in October 2000. This reorganization involves the termination of 362
manufacturing, warehousing and management employees at the Medley, Florida
facility. These actions are intended to reduce costs by the resulting transfer
of production to lower cost third-party manufacturers. Coach has recorded a
reorganization cost of approximately $5.0 million in the first quarter of fiscal
year 2001. This reorganization cost includes $3.2 million for worker separation
costs, $0.8 million for lease termination costs and $1.0 million for the write
down of long-lived assets to estimated net realizable value.
Page 18
<PAGE> 19
OPERATING INCOME
Operating Income increased 287% to $11.8 million in the first quarter of
fiscal 2001 from $3.0 million in the first quarter of fiscal 2000. Before the
impact of reorganization costs in the first quarter of fiscal 2001, operating
income increased 449% to $16.7 million from $3.0 million during the same period
in fiscal 2000. This increase resulted from higher sales and improved gross
margins, partially offset by an increase in SG&A expenses.
INCOME TAXES
The effective tax rate increased to 35.0% in the first quarter of fiscal
2001 from 30.6% in the first quarter of fiscal 2000. This increase was caused by
a lower percentage of income in fiscal 2001 attributable to company-owned
offshore manufacturing, which is taxed at lower rates.
NET INCOME
Net income increased 270% to $7.6 million in the first quarter of fiscal
2001 from $2.0 million in the first quarter of fiscal 2000. Before the impact of
reorganization costs in the first quarter of fiscal 2001, net income increased
428% to $10.8 million from $2.0 million during the same period in fiscal 2000.
This increase was the result of increased operating income partially offset by a
higher provision for taxes.
FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES
Sara Lee manages cash on a centralized basis for Coach and its other
businesses. Cash receipts associated with our business have been transferred
directly to Sara Lee on a daily basis and Sara Lee has provided funds to cover
our disbursements. In accordance with the Separation Agreement, Sara Lee
transferred to Coach an intercompany note payable of $190 million to a Sara Lee
subsidiary on October 2, 2000. Net proceeds from the stock offering of $122
million were used to partially repay this note, resulting in a remaining balance
of $68 million.
Cash provided by operating activities, defined as net income plus
depreciation and amortization and the change in working capital, was $1.2
million for the first quarter of fiscal 2001. Cash used by operating activities
was $7.3 million in the same period of fiscal 2000. The $8.6 million
year-to-year increase in cash provided from operating activities was the result
of higher first quarter earnings partially offset by increased working capital
requirements.
Capital expenditures amounted to $7.6 million in the first quarter of
fiscal 2001, compared to $5.6 million in the first quarter of fiscal 2000 and
related primarily to new and renovated retail stores. Our future capital
expenditures will depend on the timing and rate of expansion of our businesses,
new store openings, store renovations and international expansion opportunities.
Page 19
<PAGE> 20
On July 2, 2000, we entered into a revolving credit facility with Sara
Lee under which we may borrow up to $75 million. At September 30, 2000 we had
accessed $10.0 million of this credit facility. The revolving credit facility is
available to fund general corporate purposes and terminates when Sara Lee no
longer holds 50% of our outstanding capital stock. We anticipate that at or
prior to such time we will enter into a revolving credit facility with a banking
institution.
At the time of the IPO, we assumed $190 million of indebtedness in the
form of a term note which matures on September 30, 2002, which was partially
repaid with the net proceeds of the IPO amounting to $122 million. Each of the
revolving credit facility and the term note covenants require us to maintain an
interest coverage ratio of at least 1.75 to 1.0, and contains restrictions on
liens, mergers and consolidations, significant property disposals, payment of
dividends, transactions with affiliates (other than Sara Lee), sale and
leaseback transactions and lease obligations in excess of amounts approved by
Sara Lee. As of September 30, 2000 we are in compliance with all note covenants.
We are required to repay these borrowings from cash provided by operations as
reduced by capital expenditures.
We plan to open at least 15 new retail stores in fiscal year 2001, of
which one was opened at the end of the first quarter. We also expect to continue
our store renovations program in fiscal 2001. We expect that fiscal 2001 capital
expenditures for new retail stores will be approximately $10 million to $12
million and that capital expenditures for store renovations will be
approximately $11 million. We intend to finance these investments from
internally generated cash flow or by using funds from our revolving credit
facility. Historically, new store opening costs are expensed as incurred and
have not been significant to our results.
We experience significant seasonal variations in our working capital
requirements. During the first fiscal quarter we build inventory for the holiday
selling season, open new retail stores and increase trade receivables. In the
second fiscal quarter our working capital requirements are reduced substantially
as we generate consumer sales and collect wholesale accounts receivable. In the
first quarter of fiscal 2001, we purchased approximately $70 million of
inventory which was funded by operating cash flow and by borrowings under our
revolving credit facility. As of September 30, 2000, our borrowings under the
revolving credit facility were $10.0 million. We expect to repay the borrowing
under the revolving credit facility in the second fiscal quarter. We believe
that our operating cash flow, together with our revolving credit facility, will
provide sufficient capital to fund our operations for the foreseeable future.
Until Sara Lee effects a distribution of its Coach stock, we have agreed
not to cause Sara Lee's ownership of our outstanding capital stock to fall below
80%. As a result, we may be required to purchase shares of our common stock on
the open market as options are exercised and use the repurchased shares to
satisfy options exercised and the vesting of restricted stock units. We believe
that our operating cash flow, together with our revolving credit facility, will
provide sufficient funds for any required share repurchases.
Page 20
<PAGE> 21
Currently, Sara Lee is a guarantor or a party to many of our store
leases. We have agreed to make efforts to remove Sara Lee from all of our
existing leases and Sara Lee will not guarantee or be a party to any new or
renewed leases that we enter into after our separation from Sara Lee, which
occurred on October 2, 2000. We have agreed to obtain a letter of credit for the
benefit of Sara Lee in an amount approximately equal to the annual minimum
rental payments under leases transferred to us by Sara Lee but for which Sara
Lee retains contingent liability. We are required to obtain this letter of
credit as of the date Sara Lee no longer is allowed to consolidate our results
of operations and financial position, and to maintain the letter of credit until
the annual minimum rental payments under the relevant leases are less than $2.0
million. We currently expect the initial letter of credit to have a maximum
amount of approximately $25.6 million and that we will be required to maintain
the letter of credit for at least 10 years.
SUBSEQUENT EVENTS
During October 2000 we entered into several transactions relating to the
public offering of our common stock:
- We assumed $190 million of indebtedness to a subsidiary of Sara Lee.
- We declared a stock dividend on the common stock held by Sara Lee resulting
in 35,026,333 shares outstanding.
- In October 2000, we sold 8,487,000 shares of common stock in an initial
public offering at a price of $16.00 per share. After deducting the
underwriting discount and estimated offering expenses, net proceeds of $122
million were received.
- We used the net offering proceeds of $122 million from the IPO to make a
partial paydown of the assumed indebtedness, resulting in a remaining
indebtedness of $68 million.
SEASONALITY
Because our products are frequently given as gifts, we have historically
realized, and expect to continue to realize, higher sales and operating income
in the second quarter of our fiscal year which includes the holiday months of
November and December. We have sometimes experienced, and may continue to
experience, reduced income or net losses in any or all of our first, third or
fourth quarters. The higher sales in the second quarter typically result in
higher operating profits and margins. This is due to higher gross profits, with
no substantial corresponding increase in fixed costs related to operating retail
stores and other administrative and selling costs, which remain fairly constant
throughout the year. During the holiday season, these fixed costs are spread
over higher sales, resulting in greater operating income expressed in both
dollars and as a percentage of sales in the second quarter compared to the other
three quarters. We anticipate that our sales and operating profit will continue
to be seasonal in nature.
Page 21
<PAGE> 22
RISK FACTORS
This Form 10-Q contains certain "forward-looking statements", based on
current expectations, that involve risks and uncertainties that could cause our
actual results to differ materially from management's current expectations.
These forward-looking statements can be identified by the use of forward-looking
terminology such as "may," "will", "should," "expect," "intend", "estimate", or
"continue", or the negative thereof or comparable terminology. Future results
will vary from historical results and historical growth is not indicative of
future trends which will depend upon a number of factors, including but not
limited to: (i) the successful implementation of our growth strategies and
initiatives, including our store expansion and renovation program; (ii) the
effect of existing and new competition in the marketplace; (iii) our ability to
successfully anticipate consumer preferences for accessories and fashion trends;
(iv) our ability to control costs; (v) the effect of seasonal and quarterly
fluctuations in our sales on our operating results; (vi) our exposure to
international risks, including currency fluctuations; (vii) changes in economic
or political conditions in the markets where we sell or source our products;
(viii) our ability to protect against infringement of our trademarks and other
proprietary rights; and such other factors as set forth in the Company's Form
S-1 which was declared effective on October 4, 2000. Coach, Inc. assumes no
obligation to update or revise any such forward-looking statements, which speak
only as of their date, even if experience or future events or changes make it
clear that any projected financial or operating results will not be realized.
Page 22
<PAGE> 23
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
FOREIGN EXCHANGE
As of September 30, 2000, we are projecting that approximately 75% of our
fiscal year 2001 non-licensed product needs will be purchased from independent
manufacturers in other countries such as China, Costa Rica, Mexico, India, the
Dominican Republic, Italy, Spain, Hungary and Turkey. Additionally, sales are
made through international channels to third-party distributors. Substantially
all purchases and sales involving international parties are denominated in U.S.
dollars and therefore are not hedged using any derivative instruments. We have
not used foreign exchange instruments in the past nor do we expect to use them
in the future.
INTEREST RATE
We have fixed rate long-term debt related to the Jacksonville
distribution center and use the sensitivity analysis technique to evaluate the
change in fair value of this debt instrument. At September 30, 2000, the effect
of a 10% change in market interest rates would be approximately $0.2 million per
annum. We do not expect our operating results or cash flows to be affected to
any significant degree by the effect of a sudden change in market interest
rates.
COMMODITY
We buy tanned leather from various suppliers based upon fixed price
purchase contracts that extend for periods up to six months. These purchases are
not hedged with any derivative instrument. Due to the purchase contracts that
are in place, we do not expect that a sudden short-term change in leather prices
will have a significant effect on our operating results or cash flows. However,
we use the sensitivity analysis technique to evaluate the change in fair value
of the leather purchases based upon longer-term price trends. At September 30,
2000, we estimate that a 10% change in the underlying price of tanned leather
would have a $1.6 million effect on the cost of sales for the fiscal year ending
June 30, 2001.
Page 23
<PAGE> 24
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
On June 29, 2000, Sara Lee Corporation, then our sole stockholder adopted
a resolution in lieu of holding a special meeting approving: (i) 2000 Stock
Incentive Plan, (ii) Performance-Based Annual Incentive Plan, (iii) Executive
Deferred Compensation Plan, (iv) 2000 Non-Employee Director Stock Plan, (v)
Non-Qualified Deferred Compensation Plan for Outside Directors, (vi) Severance
Plan, and (vii) Severance Plan for A & B Players.
Page 24
<PAGE> 25
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
EXHIBIT NO. DESCRIPTION
2.1 Master Separation Agreement between Sara Lee and Coach,
which is incorporated herein by reference from Exhibit 2.1
to Coach's Registration Statement on Form S-1 (Registration
No. 333-39502).
2.2 Tax Sharing Agreement between Sara Lee and Coach, which is
incorporated herein by reference from Exhibit 2.2 to
Coach's Registration Statement on Form S-1 (Registration
No. 333-39502).
2.3 General Assignment and Assumption Agreement between Sara
Lee and Coach, which is incorporated herein by reference
from Exhibit 2.3 to Coach's Registration Statement on Form
S-1 (Registration No. 333-39502).
2.4 Employee Matters Agreement between Sara Lee and
Coach filed herewith.
2.5 Real Estate Matters Agreement between Sara Lee and Coach,
which is incorporated herein by reference from Exhibit 2.5
to Coach's Registration Statement on Form S-1 (Registration
No. 333-39502).
2.6 Master Transitional Services Agreement between Sara Lee and
Coach, which is incorporated herein by reference from
Exhibit 2.6 to Coach's Registration Statement on Form S-1
(Registration No. 333-39502).
2.7 Indemnification and Insurance Matters Agreement between
Sara Lee and Coach, which is incorporated herein by
reference from Exhibit 2.7 to Coach's Registration
Statement on Form S-1 (Registration No. 333-39502).
2.8 Revolving Note, which is incorporated herein by reference
from Exhibit 2.8 to Coach's Registration Statement on Form
S-1 (Registration No. 333-39502).
2.9 Form of Substitute Note, which is incorporated herein by
reference from Exhibit 2.9 to Coach's Registration
Statement on Form S-1 (Registration No. 333-39502).
2.10 Lease Indemnification and Reimbursement Agreement between
Sara Lee and Coach, which is incorporated herein by
reference from Exhibit 2.10 to Coach's Registration
Statement on Form S-1 (Registration No. 333-39502).
3.1 Articles of Incorporation of Coach, which is incorporated
herein by reference from Exhibit 3.1 to Coach's
Registration Statement on Form S-1 (Registration No.
333-39502).
3.2 Bylaws of Coach, which is incorporated herein by reference
from Exhibit 3.2 to Coach's Registration Statement on Form
S-1 (Registration No. 333-39502).
4.1 Specimen Certificate for Common Stock, which is
incorporated herein by reference from Exhibit 4.1 to
Coach's Registration Statement on Form S-1 (Registration
No. 333-39502).
Page 25
<PAGE> 26
10.1 Coach, Inc. 2000 Stock Incentive Plan, which is
incorporated herein by reference from Exhibit 10.1 to
Coach's Registration Statement on Form S-1 (Registration
No. 333-39502).
10.2 Coach, Inc. Executive Deferred Compensation Plan, which is
incorporated herein by reference from Exhibit 10.2 to
Coach's Registration Statement on Form S-1 (Registration
No. 333-39502).
10.3 Coach, Inc. Performance-Based Annual Incentive Plan, which
is incorporated by reference from Exhibit 10.3 to Coach's
Registration Statement on Form S-1 (Registration No.
333-39502).
10.4 Coach, Inc. 2000 Non-Employee Director Stock Plan, which is
incorporated by reference from Exhibit 10.4 to Coach's
Registration Statement on Form S-1 (Registration Statement
on Form S-1 (Registration No. 333-39502).
10.5 Coach, Inc. Non-Employee Directors' Deferred Compensation
Plan, which is incorporated by reference from Exhibit 10.5
to Coach's Registration Statement on Form S-1 (Registration
Statement on Form S-1 (Registration No. 333-39502).
10.6 Jacksonville, FL lease agreements, which is incorporated
herein by reference from Exhibit 10.6 to Coach's
Registration Statement on Form S-1 (Registration No.
333-39502).
10.7 New York, NY lease agreements, which is incorporated herein
by reference from Exhibit 10.7 to Coach's Registration
Statement on Form S-1 (Registration No. 333-39502).
24.1 Power of Attorney, which is incorporated herein by
reference from Exhibit 24.1 to Coach's Registration
Statement on Form S-1 (Registration No. 333-39502).
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
None
Page 26
<PAGE> 27
SIGNATURE
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.
COACH, INC.
(Registrant)
By: /s/ Richard P. Randall
------------------------------------
Name: Richard P. Randall
Title: Senior Vice President and
Chief Financial Officer
Dated: November 14, 2000
Page 27
