<PAGE> 1
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
Date of Report (Date of Earliest Event Reported): February 17, 1999
-----------------
FRUIT OF THE LOOM, INC.
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
DELAWARE 1-8941 36-3361804
- ---------------------------- ----------- ------------------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
5000 SEARS TOWER
233 SOUTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
----------------------------------------------------------
(Address of Principal Executive Offices, including Zip Code)
Registrant's telephone number, including area code (312) 876-1724
--------------
<PAGE> 2
FRUIT OF THE LOOM, INC.
ITEM 5. OTHER EVENTS
On February 17, 1999, the Registrant issued the news release attached as
Exhibit 99.1. The information contained in this news release is incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
--------
99.1 News Release of Registrant dated February 17, 1999.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FRUIT OF THE LOOM, INC.
By: /s/ G. William Newton
-----------------------------------
G. William Newton
Senior Vice President Finance
and Acting Chief Financial Officer
Dated: February 17, 1999
3
<PAGE> 4
EXHIBIT INDEX
Sequentially
Exhibit # Item Numbered Pages
- --------- ---- --------------
99.1 News Release 9
4
<PAGE> 1
FRUIT OF THE LOOM, INC.
5000 Sears Tower
Chicago, Illinois 60606 . 312/876-1724
News Release FOR IMMEDIATE RELEASE
Contact: G. William Newton
Senior Vice President - Finance
and Acting Chief Financial Officer
Fruit of the Loom, Inc.
Tel: 502/781-6400/Fax: 502/783-0351
Home Page: www.fruit.com
FRUIT OF THE LOOM, INC. REPORTS
OPERATING RESULTS FOR FOURTH QUARTER
Chicago, IL, February 17, 1999, --- Fruit of the Loom, Inc. (NYSE-FTL), one of
the world's leading marketers and manufacturers of basic family apparel, today
reported a 14.7% increase in fourth quarter sales compared to last year. Sales
were $491,400,000 for the fourth quarter ended January 2, 1999 as compared to
$428,500,000 for the fourth quarter of 1997. Net loss for the fourth quarter of
1998 was ($11,000,000) as compared to a net loss of ($404,900,000) for the
fourth quarter of 1997. The 1997 loss included restructuring and other special
charges of $372,200,000 after tax ($441,700,000 pre tax). Diluted earnings per
share was a loss of ($.15) for the fourth quarter of 1998 as compared to a loss
of ($5.57) for the same period of 1997.
For the twelve months ended January 2, 1999 the Company reported sales of
$2,170,300,000 as compared to $2,139,900,000 for the same period a year ago. Net
earnings for twelve months of 1998 were $135,900,000 as compared to a net loss
of ($487,600,000) for the same period last year. Diluted earnings per share were
$1.88 for twelve months of 1998 as compared with a loss of ($6.55) for the same
period of 1997.
William Farley, Chairman and Chief Executive Officer commented, "We have made
tremendous progress in 1998 focusing on cost reductions, completing the move of
manufacturing offshore, improving customer service, new product development and
inventory management. Inventory has been reduced from last year by $105,500,000,
and long-term debt declined by $93,900,000. We anticipate further reductions in
inventory and long-term debt in 1999."
Except for historical information contained herein, information set forth in
this news release may contain statements and information which describe or
reflect the Company's beliefs concerning future business conditions and the
outlook for the Company. These forward-looking statements are subject to risks,
uncertainties and other facts, which could cause the Company's actual results,
performance or achievement to differ materially from those expressed in, or
implied by, these statements. These risks, uncertainties and other factors
include, but are not limited to, the following: financial strength of the retail
industry, particularly the mass merchant channel, the level of consumer spending
for apparel, the amount of sales of the Company's activewear screenprint
products, the competitive pricing environment within the basic apparel segment
of the apparel industry, the Company's ability to develop new products, the
Company's effective income tax rate, the success of planned advertising,
marketing and promotional campaigns, international activities, and the
resolution of legal proceedings and other contingent liabilities. Please refer
to the Company's documents on file with the Securities and Exchange Commission
for other risks and uncertainties.
-MORE-
<PAGE> 2
Fruit of the Loom, Inc. is a marketing oriented, international basic apparel
company, emphasizing branded products for consumers ranging from infants to
senior citizens. The Company manufactures and markets men's and boys' underwear,
women's and girls' underwear, printable activewear, outerwear, casualwear,
sportswear and childrenswear. Fruit of the Loom employs 30,000 people in over 60
locations worldwide. Brand names include FRUIT OF THE LOOM(R), BVD(R),
GITANO(R), BEST(TM), CUMBERLAND BAY(TM) and SCREEN STARS(R). Licensed brands
include MUNSINGWEAR(R), and WILSON(R). Licensed apparel bearing the logos or
insignia of the major sports leagues and their teams and certain popular players
in the leagues, and the logos of most major colleges and universities, are
marketed under the PRO PLAYER(R) and FANS GEAR(R) brands.
-MORE-
<PAGE> 3
FRUIT OF THE LOOM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
--------------------------- ----------------------------
JANUARY 2, DECEMBER 31, JANUARY 2, DECEMBER 31,
1999 1997 1999 1997
--------------------------- ----------------------------
<S> <C> <C> <C> <C>
Net sales $ 491,400 $ 428,500 $ 2,170,300 $ 2,139,900
Cost of sales 419,300 405,700 1,564,800 1,644,400
----------- ----------- ----------- -----------
Gross earnings 72,100 22,800 605,500 495,500
Selling, general and administrative expenses 62,900 444,100 344,000 751,800
Goodwill amortization 6,700 6,700 26,600 26,800
Impairment write down of goodwill -- 4,600 -- 4,600
----------- ----------- ----------- -----------
Operating earnings(loss) 2,500 (432,600) 234,900 (287,700)
Interest expense (22,700) (22,200) (97,300) (84,700)
Other income(expense) - net 8,500 (36,900) 5,400 (79,300)
----------- ----------- ----------- -----------
Earnings(loss) before income tax expense (11,700) (491,700) 143,000 (451,700)
Income tax provision (700) (87,800) 7,100 (66,300)
----------- ----------- ----------- -----------
Earnings(loss) from continuing operations (11,000) (403,900) 135,900 (385,400)
Discontinued operations - LMP litigation -- (1,000) -- (102,200)
----------- ----------- ----------- -----------
Net earnings(loss) $ (11,000) $ (404,900) $ 135,900 $ (487,600)
=========== =========== =========== ===========
Earnings(loss) per common share
Continuing operations (0.15) (5.56) 1.89 (5.18)
Discontinued operations - LMP litigation -- (0.01) -- (1.37)
----------- ----------- ----------- -----------
Net earnings(loss) $ (0.15) $ (5.57) $ 1.89 $ (6.55)
=========== =========== =========== ===========
Earnings(loss) per common share - assuming dilution
Continuing operations (0.15) (5.56) 1.88 (5.18)
Discontinued operations - LMP litigation -- (0.01) -- (1.37)
----------- ----------- ----------- -----------
Net earnings(loss) $ (0.15) $ (5.57) $ 1.88 $ (6.55)
=========== =========== =========== ===========
Average common shares 72,100 72,700 72,000 74,400
=========== =========== =========== ===========
Average common shares - assuming dilution 72,100 72,700 72,300 74,400
=========== =========== =========== ===========
</TABLE>
-MORE-
<PAGE> 4
FRUIT OF THE LOOM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands of dollars)
<TABLE>
<CAPTION>
JANUARY 2, DECEMBER 31,
1999 1997
---------- ------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents
(including restricted cash) $ 1,400 $ 16,100
Notes and accounts receivable
(less allowance for possible losses
of $12,000 and $11,900, respectively) 109,700 98,100
Inventories
Finished goods 500,700 570,400
Work in process 183,100 212,300
Materials and supplies 58,200 64,800
---------- ----------
742,000 847,500
Other 41,100 53,900
---------- ----------
Total current assets 894,200 1,015,600
---------- ----------
Property, Plant and Equipment 1,192,100 1,232,200
Less accumulated depreciation 758,200 717,800
---------- ----------
Net property, plant and equipment 433,900 514,400
---------- ----------
Other Assets
Goodwill(less accumulated amortization of
$336,200 and $309,600, respectively) 686,300 712,900
Deferred income taxes 36,700 30,300
Other 238,700 209,900
---------- ----------
Total other assets 961,700 953,100
---------- ----------
$2,289,800 $2,483,100
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current maturities of long-term debt $ 270,500 $ 28,200
Trade accounts payable 119,700 234,100
Other accounts payable and accrued expenses 226,700 262,900
---------- ----------
Total current liabilities 616,900 525,200
---------- ----------
Noncurrent Liabilities
Long-term debt 856,600 1,192,800
Other 267,400 343,000
---------- ----------
Total noncurrent liabilities 1,124,000 1,535,800
---------- ----------
Common Stockholders' Equity 548,900 422,100
---------- ----------
$2,289,800 $2,483,100
========== ==========
</TABLE>
-MORE-
<PAGE> 5
FRUIT OF THE LOOM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands of dollars)
<TABLE>
<CAPTION>
YEAR ENDED
----------------------------
JANUARY 2, DECEMBER 31,
1999 1997
----------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings(loss) $ 135,900 $ (487,600)
Adjustments to reconcile to net cash
used for operating activities:
Impairment write down of goodwill -- 4,600
Depreciation and amortization 111,300 154,200
Deferred income tax provision (6,100) (64,600)
(Increase)Decrease in working capital (9,800) 94,500
Special charges related to long-term items -- 261,300
Acme Boot charge -- 32,000
Other - net (99,400) (113,800)
----------- -----------
Net cash provided by
(used for) operating activities 131,900 (119,400)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (41,900) (55,400)
Proceeds from asset sales 86,400 4,300
Payment on Acme Boot debt guarantee (65,900) --
Other - net (28,000) (13,700)
----------- -----------
Net cash used for investing activities (49,400) (64,800)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt -- 97,800
Proceeds under line-of-credit agreements 874,000 1,245,800
Payments under line-of-credit agreements (836,200) (981,900)
Principal payments on long-term debt and capital leases (138,800) (17,600)
Common stock issued 6,800 11,100
Common stock repurchased (3,000) (173,600)
----------- -----------
Net cash provided by
(used for) financing activities (97,200) 181,600
----------- -----------
Net decrease in Cash and cash equivalents
(including restricted cash) (14,700) (2,600)
Cash and cash equivalents (including restricted cash)
at beginning of period 16,100 18,700
----------- -----------
Cash and cash equivalents (including restricted cash)
at end of period $ 1,400 $ 16,100
=========== ===========
</TABLE>
-END-
