United States
Securities and Exchange Commission
Washington, D.C. 20549
--------------------------------------------
Form 8-K
Current Report
Pursuant to SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
February 23, 1999
(Date of earliest event reported)
KELLWOOD COMPANY
(Exact Name of Registrant as Specified in Charter)
Delaware
(State of Other Jurisdiction of Incorporation)
001-07340 36-2472410
(Commission File Number) (IRS Employer Identification No.)
600 KELLWOOD PARKWAY
P.O. BOX 14374
CHESTERFIELD, MISSOURI 63017
(Address, including zip code, of
Registrant's Principal Executive Offices)
(314) 576-3100
(Registrant's Telephone Number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS
On February 23, 1999, Kellwood Company, a Delaware corporation
("Kellwood"), announced earnings and also announced the future possible write
off of good will. A copy of the press releases announcing the transaction are
attached as an Exhibit and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
(c) Exhibits
99 Press Release dated February 23, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form 8-K and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of St. Louis, State of Missouri on February 24, 1999.
KELLWOOD COMPANY
By: /s/ Thomas H. Pollihan
---------------------------------
Thomas H. Pollihan
Vice President, Secretary and
General Counsel
Financial Contact: James C. Jacobsen, (314) 576-3429, Fax: (314) 576-3439 OR
Roger D. Joseph, (314) 576-3437, Fax: (314) 576-3325
Media Contact: Donna B. Weaver, (212) 575-7467, Fax: (212) 302-3773
FOR IMMEDIATE RELEASE
KELLWOOD (NYSE) REPORTS THIRD QUARTER RESULTS--
SALES UP 4 PERCENT, EARNINGS UP 24 PERCENT;
NINE MONTHS RESULTS - SALES UP 4 PERCENT, EARNINGS UP 8 PERCENT;
POSSIBLE FOURTH QUARTER WRITE-OFF OF GOODWILL;
REGULAR QUARTERLY DIVIDEND DECLARED
ST. LOUIS, MISSOURI, February 23, 1999 - Kellwood Company reported
sales and earnings today for the third quarter ended January 31, 1999,
according to Hal J. Upbin, president and chief executive officer. Sales for
the quarter were $388,744,000, up 4 percent from $373,680,000 a year ago. Net
earnings for the quarter were $3,002,000, or $0.13 per share, up 24 percent,
versus $2,414,00, or $0.11 per share on a diluted basis reported last year.
Third quarter results include acquisition costs of approximately $0.02 per
share attendant with the recently announced acquisition of Koret, Inc. which
is awaiting review by the Securities and Exchange Commission.
The year-to-year growth in the third quarter came from our
Popular-To-Moderate Women's Branded Sportswear and Recreation Products
segments. Sales for the nine-month period grew 4 percent to $1,326,176,000,
compared to $1,277,136,000 a year earlier. Net earnings increased 8 percent to
$28,296,000, or $1.28 per share, compared to $26,143,000, or $1.19 per share
on a diluted basis last year.
Nine-month results include incremental cost of $0.06 per share for
Vision 2000 spending.
The 4 percent increase in sales for the first nine months of the year
was driven by our Popular-To-Moderate Women's Branded Sportswear and Smart
Shirts business segments.
"Net earnings are growing faster than sales in both the third quarter
and nine-month periods due to an improving gross margin resulting from
sourcing more production offshore, and cost savings attendant with our Vision
2000 program. We expect to see this trend continue into the fourth quarter,"
commented Upbin.
As part of its Vision 2000 program, Kellwood developed and began
implementing a plan to reorganize and restructure several operating units that
were experiencing operating losses or performing below expectation. Key
elements of the plan include the consolidation of similar types of operating
units, relocation and consolidation of distribution facilities in the
Northeast, Midwest and West Coast, and elimination of redundancies between
operating units. These activities are currently in process and will continue
through fiscal 2000.
Kellwood is presently evaluating the effect these changes and changing
market conditions have had, or will have, on the respective operations and
will review and analyze the financial plans which will be submitted by the
operating units in the fourth quarter of fiscal 1999. For each operating unit,
Kellwood plans to review expected future cash flows and assess the ability to
realize the carrying value of intangible assets, including goodwill. The
combined carrying value of goodwill for these particular operating units
approximates $50 million. It is possible this assessment, which is expected to
be completed in the fourth quarter of fiscal 1999, will identify an impairment
of goodwill and other intangible assets or result in a change in the remaining
useful lives of these assets.
The Board of Directors declared a regular quarterly dividend of $0.16
per common share, payable March 19, 1999, to shareholders of record March 5,
1999.
The statements in this press release with respect to future results and
future expectations and the possible write-off may be regarded as
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, and actual results may differ materially from
those currently expected. They are subject to various risks, such as the
ability of the Company to meet business sales goals, and the slowing of the
overall economy, as well as other risks discussed in the Company's filings
with the Securities and Exchange Commission, including its Annual Reports on
Form 10-K for the year ended April 30, 1998, under management's discussion and
analysis, and subsequent filings on Form 10-Q. The Company makes no commitment
to disclose any revisions to forward-looking statements, or any facts, events
or circumstances after the date hereof that may bear upon forward-looking
statements.
Kellwood Company (NYSE: KWD) is an international marketer,
merchandiser, and manufacturer of apparel and recreational camping products.
For more about Kellwood, visit the Company's web site at www.kellwood.com.
<PAGE>
<TABLE>
KELLWOOD COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (unaudited)
(Amounts in thousands)
<CAPTION>
January 31
---------------------------
ASSETS 1999 1998
- ------ ---- ----
<S> <C> <C>
CURRENT ASSETS
Cash time deposits: $ 53,420 $ 29,449
Receivables, net 284,149 243,009
Inventories 357,976 365,456
Prepaid taxes and expenses 31,866 34,997
------ ------
TOTAL CURRENT ASSETS 727,411 672,911
PROPERTY, PLANT AND EQUIPMENT, NET 93,919 61,541
INTANGIBLE ASSETS, NET 95,710 105,016
OTHER ASSETS 90,983 84,167
------ ------
$1,008,023 $923,635
========== ========
LIABILITIES AND SHAREOWNERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 15,762 $ 15,336
Notes payable 135,459 94,145
Accounts payable 89,874 94,869
Accrued expenses 64,841 58,702
------ ------
TOTAL CURRENT LIABILITIES 305,936 263,052
LONG-TERM DEBT 227,679 243,455
DEFERRED INCOME TAXES AND OTHER 46,883 46,586
------ ------
SHAREOWNER'S EQUITY $1,008,023 $923,635
========== ========
</TABLE>
<PAGE>
<TABLE>
KELLWOOD COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS (unaudited)
(Amounts in thousands except per share data)
<CAPTION>
Three Months Ended Nine Months Ended
January 31 January 31,
--------------------- --------------------------
1999 1998 1999 1998
-------- --------- ------- --------
<S> <C> <C> <C> <C>
NET SALES $388,744 $373,680 $1,326,176 $1,277,136
COSTS AND EXPENSES:
Cost of products sold 313,520 304,195 1,066,022 1,028,679
Selling, general and
Administrative expenses 59,518 54,975 178,818 172,152
Amortization of intangible assets 3,673 3,842 11,015 11,601
Interest expense 6,935 6,944 22,459 20,934
Interest income and other, net (4) (390) (1,234) (1,373)
-------------- ---------- ----------- -------
EARNINGS BEFORE INCOME TAXES 5,102 4,114 49,096 45,143
INCOME TAXES 2,100 1,700 20,800 19,000
----- ----- ------ ------
NET EARNINGS $3,002 $2,414 $28,296 $26,143
====== ====== ======= =======
WEIGHTED AVERAGE SHARES
OUTSTANDING
Basic 22,104 21,466 21,767 21,380
====== ====== ====== ======
Diluted 22,478 22,033 22,205 21,944
====== ====== ====== ======
EARNINGS PER SHARE:
Basic $ 0.14 $ 0.11 $ 1.30 $ 1.22
========= ========= ========= =========
Diluted $ 0.13 $ 0.11 $ 1.28 $ 1.19
========= ========= ========= =========
</TABLE>
