SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission file number(s) 000-22385
---------------------------------
ITHACA INDUSTRIES, INC.
-----------------------
(Exact name of registrant as specified in its charter)
Delaware 56-1385842
-------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification number)
Highway 268 West, P.O. Box 620, Wilkesboro, NC 28697
----------------------------------------------------
(Address of principal executive office) (Zip Code)
(336) 667-5231
--------------
(Registrant's telephone, including area code)
-------------------------------------------------------
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all the reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve 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 ninety days.
YES [X] NO [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
YES [X] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the registrant's classes of common stock, as of the
latest practicable date. As of September 3, 1999, the registrant had 10,000,000
shares of common stock, par value $.01 per share outstanding.
<PAGE>
ITHACA INDUSTRIES, INC.
QUARTERLY REPORT
QUARTER ENDED JULY 31, 1999
INDEX
Part I. FINANCIAL INFORMATION Page
Item 1. Consolidated Balance Sheets - July 31, 1999 and January 30, 1999 3
Consolidated Statements of Operations - Thirteen Weeks Ended 4
July 31, 1999 and August 1, 1998
Consolidated Statements of Operations - Twenty-Six Weeks Ended 5
July 31, 1999 and August 1, 1998
Consolidated Statements of Cash Flows - Twenty-Six Weeks Ended 6
July 31, 1999 and August 1, 1998
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and 9
Results of Operations
Part II. OTHER INFORMATION
Item 1. Legal Proceedings *
Item 2. Changes in Securities *
Item 3. Defaults upon Senior Securities *
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 13
Signature 16
* No information provided due to inapplicability of item
Page 2
<PAGE>
ITHACA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands, except share data)
<TABLE>
<CAPTION>
July 31, 1999 January 30, 1999
------------------- --------------------
<S> <C> <C>
ASSETS
- ------
Current Assets:
Cash and Cash Equivalents $ 108 $ 66
Receivable from Sale of Discontinued Operations (Note 3) 1,891 -
Accounts Receivable - Net 17,610 19,836
Inventories (Note 2) 47,294 49,707
Prepaid Expenses and Other Current Assets 628 270
Assets Held for Disposition, Net 3,602 1,972
------------------- --------------------
Total Current Assets 71,133 71,851
Property, Plant and Equipment - Net 24,079 26,016
Investment in Discontinued Operations - 27,553
Receivable from Sale of Discontinued Operations (Note 3) 2,382 -
Other Assets 4,596 3,741
------------------- --------------------
Total Assets $ 102,190 $ 129,161
=================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Current Installments of Long-Term Debt $ 14 $ 14
Accounts Payable 8,379 10,723
Accrued Payroll and Related Expenses 5,093 6,168
Other Accrued Expenses 2,711 2,434
Current Deferred Tax Payable 1,498 1,498
Income Taxes Payable 3,328 5,450
------------------- --------------------
Total Current Liabilities 21,023 26,287
Long Term Debt - Related 34 43
Long Term Debt - Non Related 57,427 77,670
Deferred Income Taxes 10,792 10,788
Other Non-Current Liabilities 174 83
------------------- --------------------
Total Liabilities 89,450 114,871
Stockholders' Equity:
Common Stock of $.01 Par Value 100 104
Additional Paid-In Capital 22,780 23,276
Accumulated Deficit (10,140) (9,090)
------------------- --------------------
Total Stockholders' Equity 12,740 14,290
Total Liabilities and Stockholders' Equity $ 102,190 $ 129,161
=================== ===================
</TABLE>
See accompanying notes to consolidated financial statements
Page 3
<PAGE>
ITHACA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, except share data)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
----------------------------------------
July 31, 1999 August 1, 1998
------------------- --------------------
<S> <C> <C>
Net Sales $ 41,449 $ 48,680
Cost of Sales 35,189 40,215
------------------- --------------------
Gross Margin 6,260 8,465
Selling, General and Administrative Expenses 4,709 5,194
------------------- --------------------
Operating Income 1,551 3,271
Interest Expense, Related Parties - 13
Interest Expense, Non-Related Parties - Net 1,709 1,541
Other Income (Expense) - Net 131 90
------------------- --------------------
(Loss) Income Before Income Taxes, Continuing Operations (27) 1,807
Income Tax (Benefit) Expense (10) 668
------------------- --------------------
Income (Loss) From Continuing Operations (17) 1,139
Income (Loss) From Discontinued Operations (427) (356)
------------------- --------------------
Net Income (Loss) $ (444) $ 783
=================== ====================
Basic and Dilutive Income (Loss) From Continuing Operations
per Common Share $ 0.00 $ (0.11)
Basic and Dilutive Income (Loss) From Discontinued Operations
per Common Share (0.04) 0.03
------------------- --------------------
Basic and Dilutive Net Income (Loss) per Common Share $ (0.04) $ (0.08)
=================== ====================
Weighted Average Common Shares Outstanding 10,000,000 10,400,000
=================== ====================
</TABLE>
See accompanying notes to consolidated financial statements
Page 4
<PAGE>
ITHACA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, except share data)
<TABLE>
<CAPTION>
Twenty-Six Weeks Ended
----------------------------------------
July 31, 1999 August 1, 1998
------------------- --------------------
<S> <C> <C>
Net Sales $ 83,862 $ 93,199
Cost of Sales 71,537 78,515
------------------- --------------------
Gross Margin 12,325 14,684
Selling, General and Administrative Expenses 9,295 10,323
Provision for Restructuring (Note 4) 1,070 -
------------------- --------------------
Operating Income 1,960 4,361
Interest Expense, Related Parties 18 222
Interest Expense, Non-Related Parties - Net 3,126 2,522
Other Income (Expense) - Net 196 122
------------------- --------------------
(Loss) Income Before Income Taxes, Continuing Operations (988) 1,739
Income Tax (Benefit) Expense (366) 643
------------------- --------------------
Income (Loss) From Continuing Operations (622) 1,096
Income (Loss) From Discontinued Operations (427) (917)
------------------- --------------------
Net Income (Loss) $ (1,049) $ 179
=================== ====================
Basic and Dilutive Income (Loss) From Continuing Operations
per Common Share $ (0.06) $ 0.11
Basic and Dilutive Loss From Discontinued Operations
per Common Share (0.04) (0.09)
------------------- --------------------
Basic and Dilutive Net Income (Loss) From Continuing Operations
per Common Share $ (0.10) $ 0.02
=================== ====================
Weighted Average Common Shares Outstanding 10,197,802 10,288,520
=================== ====================
</TABLE>
See accompanying notes to consolidated financial statements
Page 5
<PAGE>
ITHACA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
July 31, 1999 August 1, 1998
------------------- --------------------
<S> <C> <C>
Cash Provided By Operating Activities:
Net Loss $ (1,049) $ 174
Adjustments to Reconcile Net Loss to Net Cash Provided by Operations
Depreciation and Amortization of Property and Equipment 2,455 3,010
Deferred Taxes - 187
(Gain) Loss on Sale of Property, Plant and Equipment (50) (66)
Changes in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable 2,225 (5,823)
(Increase) Decrease in Inventories 2,413 (4,086)
(Increase) Decrease in Assets Held for Disposition (34) (100)
(Increase) Decrease in Prepaid Expenses (1,565) (464)
Increase (Decrease) in Accounts Payable (2,344) 2,239
Increase (Decrease) in Accrued Expenses and Other Liabilities (707) 20
(Decrease) in Asset Writedown and Restructuring Reserve - (1,245)
(Decrease) in Income Taxes Payable (2,122) (263)
Increase (Decrease) Deferred Income Tax 4 -
------------------- --------------------
Net Cash From Operations (774) (6,417)
Cash Flows From Investing Activities:
Sale of Hosiery Division Assets 23,280 (6,911)
Proceeds from the Sale of Property, Plant and Equipment 608 545
Additions to Property, Plant and Equipment (2,320) (2,752)
------------------- --------------------
Net Cash From Investing Activities 21,568 (9,118)
Cash Flows From Financing Activities:
Increase (Decrease) in Long-Term Debt (7,352) 2,895
Increase (Decrease) in Revolver (12,900) 14,934
Stock Repurchase (500) -
Cash Paid for Refinancing - (2,744)
------------------- --------------------
Net Cash From Financing Activities (20,752) 15,085
Net Increase (Decrease) in Cash and Cash Equivalents 42 (450)
Cash and Cash Equivalents at Beginning of Period 66 680
------------------- --------------------
Cash and Cash Equivalents at End of Period $ 108 $ 230
=================== ====================
Supplemental Disclosure of Cash Paid (Received) during the Period for:
Income Taxes $ 61 $ 47
=================== ====================
Interest $ 4,081 $ 2,923
=================== ====================
</TABLE>
See accompanying notes to consolidated financial statements
Page 6
<PAGE>
ITHACA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE TWENTY-SIX WEEKS ENDED
JULY 31, 1999 AND AUGUST 1, 1998
(Unaudited)
1. FINANCIAL STATEMENTS
The consolidated balance sheet as of July 31, 1999 and the consolidated
statements of operations for the thirteen and twenty-six weeks ended July 31,
1999 and August 1, 1998, respectively, and the consolidated statements of cash
flows for the twenty-six weeks ended July 31, 1999 and August 1, 1998 have been
prepared by Ithaca Industries, Inc. the ("Company"). In the opinion of
management, all adjustments (consisting of only normal recurring accruals)
necessary for a fair presentation of the financial position of the Company at
July 31, 1999 and the results of operations for the thirteen and twenty-six
weeks ended July 31, 1999 and August 1, 1998, respectively, and the statements
of cash flows for the twenty-six weeks ended July 31, 1999 andAugust 1, 1998
have been made on a consistent basis.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these financial
statements be read in conjunction with the audited financial statements and
notes thereto for the year ended January 30, 1999 and January 31, 1998 included
in the Company's Annual Report on Form 10-K as filed with the Securities and
Exchange Commission on May 14, 1999.
Certain amounts in the prior year financial statements have been
reclassified to conform to the fiscal 2000 presentation.
The results of operations for the periods presented are not necessarily
indicative of the operating results for the full year.
2. INVENTORIES
Inventories consist of the following:
Unaudited
July 31, 1999 January 30, 1999
----------------- -------------------
Raw Materials $ 9,271 $ 12,615
Work in Process 8,110 13,262
Finished Goods 29,913 23,830
----------------- -------------------
$ 47,294 $ 49,707
================= ===================
Page 7
<PAGE>
3. DISCONTINUED OPERATIONS
On April 30, 1999, the Company sold substantially all the assets of its
hosiery division. The Company recorded a net loss on disposal in the fourth
quarter of fiscal 1999 of $2.4 million. The transaction was subject to a final
purchase price adjustment that was determined in the Company's second quarter of
fiscal 2000. Pursuant to the audited statement of net assets purchased by
Glendale Group, Ltd., the Company has recorded a final adjustment reflecting an
additional net operating loss from discontinued operations of $427 thousand for
the second quarter of fiscal 2000.
The Company received total proceeds of $24.1 million on April 30, 1999
and pursuant to the final audit is owed an additional $4.0 million. The Company
has recorded, as a current asset, a receivable of $1.9 million. This represents
a cash payment of $1.3 million received subsequent to July 31, 1999 and
offsetting cash on-hand from receivable proceeds of $600 thousand. The remaining
balance of $2.4 million is currently due but is reported as a long-term asset
reflecting on-going negotiations with Glendale Group, Ltd. regarding payment of
amounts not yet received by the Company. The net proceeds from the sale of its
hosiery division reduced the Company's bank borrowings.
In connection with the sale, the Company is contingently liable for
operating leases assumed by the buyer with aggregate rentals of $1,036,047
through 2004.
4. PROVISION FOR RESTRUCTURING
During the first quarter of fiscal 2000 the Company has recorded a
provision for restructuring costs for the termination of approximately 700
production-related employees of its underwear division at its Cairo, Georgia and
Swainsboro, Georgia facilities. Additionally, certain assets related to the
closure of Cairo and Swainsboro facilities have been classified as "Assets held
for Disposition - Net" on the balance sheet. Actual charges against the reserve
were $481 thousand through July 31, 1999 consisting principally of severance.
Page 8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Thirteen Weeks Ended July 31, 1999 Compared
With Thirteen Weeks Ended August 1, 1998
The Company completed the sale of its hosiery division on April 30,
1999. The purchase price was subject to adjustments based on a final audit to be
performed by the purchaser. The final audit was performed during the second
quarter of fiscal 2000. The adjustments required based on the final audit and
the results of discontinued operations for the thirteen weeks ended August 1,
1998 are reflected as discontinued operations.
Net sales decreased from $48.7 million for the thirteen weeks ended
August 1, 1998 to $41.4 million for the thirteen weeks ended July 31, 1999. The
decrease reflects lower sales to the Company's major customers. The primary
causes for lower sales are product line changes, lowering of in-store inventory
levels, and weakness in certain distribution channels serviced by the Company.
The gross profit margin for the second quarter of fiscal 2000 decreased
to 15.1% from 17.4% in the comparable period last year. The decrease is
attributed primarily to the effect lower sales volume has on fixed cost
absorption in the Company's owned manufacturing facilities.
Selling, general and administrative expenses for the second quarter of
fiscal 2000 decreased to $4.7 million from $5.2 million last year. The decrease
is due to lower shipping and selling costs associated with the lower sales
volume. As a percent of sales, this year's expense remained constant at 11.0%.
Operating income decreased to $1.6 million (3.7% of net sales) for the
second quarter of fiscal 2000 from $3.3 million (6.7% of net sales) for the
comparable period last year. The decrease is attributed to the lower gross
profit margin for the second quarter of fiscal 2000 partially offset by lower
shipping and selling costs.
Interest expense for the thirteen weeks ended July 31, 1999 increased
to $1.7 million from $1.6 million for the same period last year. This increase
reflects a higher average borrowing rate on the outstanding debt attributable to
the underwear division.
Twenty-Six Weeks Ended July 31, 1999 Compared
With Twenty-Six Weeks Ended August 1, 1998
The Company completed the sale of its hosiery division on April 30,
1999. The purchase price was subject to adjustments based on a final audit to be
performed by the purchaser. The final audit was performed during the second
quarter of fiscal 2000. The adjustments required based on the final audit and
the results of discontinued operations for the twenty-six weeks ended August 1,
1998 are reflected as discontinued operations.
Net sales decreased from $93.2 million for the twenty-six weeks ended
August 1, 1998 to $83.9 million for the twenty-six weeks ended July 31, 1999.
The decrease reflects lower sales to the Company's major customers due to an
overall weakness in the market.
The gross profit margin decreased for the first half of fiscal 2000 to
14.7% from 15.8% for the comparable period last year. The decrease is attributed
primarily to the effect lower sales volume has on fixed cost absorption in the
Company's owned manufacturing facilities.
Page 9
<PAGE>
Selling, general and administrative expenses for the first half of
fiscal 2000 decreased to $9.3 million from $10.3 million last year. The decrease
is due to lower shipping and selling costs associated with the lower sales
volume. As a percent of sales, this year's expense remained constant at 11.0%.
Operating income decreased to $2.0 million for the first half of fiscal
2000 from $4.4 million for the comparable period last year. The decrease is
attributable to lower gross profit margin during the first half and a
non-recurring cost for plant closing of $1.1 million expensed during the first
quarter of fiscal 2000.
Interest expense for the twenty-six weeks ended July 31, 1999 increased
to $3.1 million from $2.7 million in the first half last year. This increase
reflects a higher average borrowing rate on the outstanding debt attributable to
the underwear division.
LIQUIDITY AND CAPITAL RESOURCES
On April 30, 1999, the Company, in conjunction with the sale of its
hosiery operations, amended its existing credit agreements. The amended
facilities total $85.4 million and consist of a term loan ("Term Loan") of $15.4
million, a revolving loan facility of up to $55.0 million and a separate term
loan facility for an additional $15.0 million term loan (together with the Term
Loan, the "Term Loans"). The revolving loan facility includes a sub-limit of
$15.0 million for the issuance of letters of credit. As of September 7, 1999,
the Company had $29.9 million of Term Loans outstanding, $24.4 million of
borrowings under the revolving loan facility, and $4.3 million of outstanding
letters of credit. The Company at September 7, 1999 had $8.1 million
availability under its revolving loan facility. Working capital reflected in the
accompanying balance sheet excludes borrowings under the revolving credit
facility, which are classified as long-term.
The Company used cash in operating activities of $.8 million for the
first six months of fiscal 2000 compared to cash used of $6.4 million in the
comparable prior period. These amounts include the hosiery operations sold
effective April 30, 1999. Cash received from the sale of the hosiery business of
$23.3 million was used principally to fund debt reduction of $20.3 million.
The Company's cash on hand as of July 31, 1999 was $108 thousand
compared to $66 thousand at January 30, 1999. The Company manages cash to
minimize outstanding bank borrowings.
YEAR 2000 ("Y2K") COMPLIANCE
Some of the Company's computer programs were written using two digits
rather than four to define the applicable year. As a result, those computer
programs may recognize a date using "00" as the year 1900 rather than the year
2000. This could cause a system failure or miscalculations causing disruptions
of operations, including, among other things, a temporary inability to process
transactions, send invoices, or engage similar normal business activities.
To improve the Company's overall financial and operational information,
a system was selected and is in the process of being installed. This new ERP
system, which is Y2K compliant, will replace the Company's legacy systems. The
ERP project is supervised and supported by senior management. The implementation
of the ERP system is a joint effort of the Company's internal staff and outside
consultants.
The Company's Y2K compliance project was begun in July 1996 and has
five phases. Phase one, which involved the assessment of all systems and
equipment affected by the Y2K issue, has been completed. Phase two, which
involved the defining of strategies to correct those systems and
Page 10
<PAGE>
equipment which were found to pose Y2K problems, has also been completed. Phase
three involved the remediation or replacement of the systems and equipment which
were found to be defective and were not going to be resolved by the installation
of the new ERP system mentioned above. The Company had a definitive plan in
place to make the necessary corrections and, as of July 31, 1999, has completed
the required changes for 100% of the identified problems. Phase four involved
assessing the potential impact on the Company of the Y2K compliance efforts of
its customers and suppliers. Formal communications with all major customers and
suppliers by the Company were begun in March 1998. Responses have been received
by all major customers and suppliers and the Company is finalizing the analysis
of the responses received and, based on that analysis, will determine what
corrective actions need to be taken to minimize the impact of its customers' and
suppliers' failure to address their Y2K problems on the Company. There is no
guarantee that the systems of other companies on which the Company's systems
rely will be timely converted and will not have an adverse effect on the
Company's systems. Phase five involves the formal testing to insure Y2K
compliance. This testing began in July 1997 and is planned to continue up
through December 31, 1999.
Since the actions being taken by the Company to correct the Y2K problem
are extensive and on going, the Company's worst case scenario is unknown at this
time. The Company believes it is prudent to have contingency plans in place to
minimize the impact of internal or third party failures to correct Y2K problems.
The Company is currently identifying the areas where contingency plans are
required based on the best information that it has available at this time.
The incremental cost of becoming Y2K compliant is not material. The
date on which the Company believes it will complete the Y2K modifications is
based on management's best estimates, which were derived utilizing numerous
assumptions of future events, including the continued availability of certain
resources and other factors. However, there can be no guarantee that these
estimates will be achieved and actual results could differ materially from those
anticipated. Specific factors that might cause such material differences
include, but are not limited to, the availability and costs of personnel trained
in this area, the ability to locate and correct all relevant computer codes, and
similar uncertainties.
The Company believes that the successful, timely completion of its Y2K
compliance project will result in the Company not suffering any material adverse
effect on its results of operations, financial position or cash flows. However,
if all Y2K issues are not properly identified, assessed, remediated, replaced or
tested, there can be no assurance that the Y2K issue will not have a material
adverse effect on its results of operations, financial position, or cash flows
or adversely affect the Company's relationship with suppliers, customers or
other third parties. Additionally, there can be no assurance that the Y2K issues
of other entities will not adversely effect the Company. (See "Special Note
Regarding Forward-Looking Statements")
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this report including information set forth under
"Management's Discussion and Analysis of Financial condition and Results of
Operations," constitute "Forward- Looking Statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Ithaca
Industries, Inc., a Delaware corporation (the "Company" or "Ithaca"), desires to
take advantage of certain "safe harbor" provisions of the Reform Act and is
including this special note to enable the Company to do so. Forward-looking
statements included in this report, involve known and unknown risks,
uncertainties, and other factors which could cause the Company's actual results,
performance (financial or operating) or achievements to differ materially from
the future results, performance (financial or operating) or achievements
expressed or implied by such forward-looking statements. These risks include
business risks such as changes in the price of raw materials, concentration of
Ithaca's principal customers, availability of labor and competitive factors;
industry risks such as changes in the retailing industry and shifts in consumer
preferences; financial risks such
Page 11
<PAGE>
as liquidity and access to capital; and other risks as set forth from time to
time in the company's filings with the Securities and Exchange Commission.
Many of the foregoing factors have been discussed in the Company's
prior filings with the Securities and Exchange Commission (the "Commission") and
other publicly available documents. Had the Reform Act been effective at an
earlier time, this special note would have been included in earlier Commission
filings. The foregoing review of significant factors should not be construed as
exhaustive or as an admission regarding the adequacy of disclosures previously
made by the Company prior to the effective date of the Reform Act.
Page 12
<PAGE>
Part II. OTHER INFORMATION
Item 1 Legal Proceedings None
Item 2 Changes in Securities None
Item 3 Defaults upon Senior Securities None
Item 4 Submission of Matter to a Vote of Security Holders 14
Item 5 Other Information 15
Item 6 Exhibits and Reports on Form 8-K:
(a) Exhibits
Ex. 27 -- Financial Data Schedule
(b) Reports on Form 8-K None
Page 13
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its annual meeting of stockholders on June 14, 1999
(the "Annual Meeting"). At the Annual Meeting, Walter J. Branson, Marvin B.
Crow, Francis Goldwyn, Morton Handel, Jim D. Waller, David N. Weinstein and
James A. Williams were elected by the stockholders as Directors of the Company.
Also at the Annual Meeting, the stockholders ratified the appointment
of PricewaterhouseCoopers LLP as the Company's independent public accountants
for the fiscal year 2000.
Following are the vote results for the election of directors and for
the ratification of PricewaterhouseCoopers LLP:
<TABLE>
<CAPTION>
For Against Abstaining
--- ------- ----------
<S> <C> <C> <C>
Election of Seven Directors of the Company
- ------------------------------------------
Walter J. Branson 6,972,163 1,085,100 0
Marvin B. Crow 6,972,163 1,085,100 0
Francis Goldwyn 6,972,163 1,085,100 0
Morton Handel 6,972,163 1,085,100 0
Jim D. Waller 6,972,163 1,085,100 0
David N. Weinstein 6,972,163 1,085,100 0
James A. Williams 6,972,163 1,085,100 0
Ratification of 8,051,363 3,200 2,700
PricewaterhouseCoopers
LLP as the Company's
Independent Public
Accountants for Fiscal Year
2000
</TABLE>
Page 14
<PAGE>
Item 5. Other Information
James A. Williams resigned as a Director of the Company effective
August 17, 1999.
Page 15
<PAGE>
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 thereunto duly authorized.
ITHACA INDUSTRIES, INC.
-----------------------
(Registrant)
By: /s/ Richard P. Thrush
---------------------
RICHARD P. THRUSH
Senior Vice President Finance and Administration
Principal Financial and Chief Accounting Officer
Dated: September 14, 1999
------------------
Page 16
<PAGE>
Exhibit Index
- -------------
Exhibit No. Description of Exhibits
- ----------- -----------------------
27 Financial Data Schedule for the twenty-six week period ended
July 31, 1999
Page 17
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-30-2000
<PERIOD-START> JAN-31-1999
<PERIOD-END> JUL-31-1999
<CASH> 108
<SECURITIES> 0
<RECEIVABLES> 21,403
<ALLOWANCES> 480
<INVENTORY> 47,294
<CURRENT-ASSETS> 73,515
<PP&E> 24,079
<DEPRECIATION> 12,368
<TOTAL-ASSETS> 102,190
<CURRENT-LIABILITIES> 21,023
<BONDS> 0
<COMMON> 100
0
0
<OTHER-SE> 12,640
<TOTAL-LIABILITY-AND-EQUITY> 102,190
<SALES> 83,862
<TOTAL-REVENUES> 83,862
<CGS> 71,537
<TOTAL-COSTS> 71,537
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,948
<INCOME-PRETAX> (988)
<INCOME-TAX> (366)
<INCOME-CONTINUING> (622)
<DISCONTINUED> (427)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,049)
<EPS-BASIC> (.10)
<EPS-DILUTED> (.10)
</TABLE>
