<PAGE>
SECURITIES AND EXCHANGE
COMMISSION
Washington, DC 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 June 28, 1997
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-333-22155
THE WILLIAM CARTER COMPANY
(Exact name of registrant as specified in charter)
Massachusetts 04-1156680
(State or other jurisdiction of incorporation (IRS Employer Identification
or organization) No.)
1590 Adamson Parkway, Suite 400, Morrow, Georgia 30260
(Address of principal executive offices, including zip code)
(770) 961-8722
(Registrant's telephone number)
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
As of August 1, 1997, there were 1,000 shares of Common Stock outstanding.
<PAGE>
FORM 10-Q
THE WILLIAM CARTER COMPANY
INDEX
Page
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
June 28, 1997 (unaudited) and December 28, 1996 3
Unaudited Condensed Consolidated Statements of
Operations for the three-month periods ended
June 28, 1997 and June 29, 1996 4
Unaudited Condensed Consolidated Statements of
Operations for the six-month periods ended
June 28, 1997 and June 29, 1996 5
Unaudited Condensed Consolidated Statements of
Cash Flows for the six-month periods ended
June 28, 1997 and June 29, 1996 6
Notes to Condensed Consolidated Financial
Statements (unaudited) 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II. Other Information 14
2
<PAGE>
THE WILLIAM CARTER COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
Successor
----------------------
June 28, December 28,
1997 1996
---- ----
ASSETS
Current assets:
Cash and cash equivalents $ 2,777 $ 1,961
Accounts receivable, net 25,156 19,259
Inventories 95,467 76,540
Prepaid expenses and other current assets 2,779 6,378
Deferred income taxes 14,054 14,502
------ -------
Total current assets 140,233 118,640
Property, plant and equipment, net 49,260 48,221
Tradename, net 98,333 99,583
Cost in excess of fair value of net assets acquired, net 37,882 38,363
Deferred debt issuance costs, net 8,659 8,618
Other assets 4,609 5,284
------ -----
Total assets $ 338,976 $ 318,709
-------- ---------
-------- ---------
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term debt $ 900 $ 900
Accounts payable 22,212 14,593
Other current liabilities 29,819 32,355
------- -------
Total current liabilities 52,931 47,848
Long-term debt 165,100 144,100
Deferred income taxes 38,886 40,861
Other long-term liabilities 10,198 10,178
------- -------
Total liabilities 267,115 242,987
------- -------
Redeemable preferred stock, par value $.01 per share,
$4,000 per share liquidation and redemption value,
5,000 shares authorized, issued and outstanding 18,347 18,234
------- -------
Common stockholder's equity:
Common stock, par value $.01 per share, 1,000
shares authorized, issued and outstanding -- --
Additional paid-in capital 58,233 59,566
Accumulated deficit (4,719) (2,078)
------- --------
Total common stockholder's equity 53,514 57,488
------- --------
Total liabilities and stockholder's equity $338,976 $318,709
-------- --------
-------- --------
See accompanying notes to the condensed consolidated financial statements.
3
<PAGE>
THE WILLIAM CARTER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
(Unaudited)
Three-month periods ended
June 28, June 29,
1997 1996
-------- --------
(Successor) (Predecessor)
| |
Net sales $72,517 | | $64,590
| |
Costs of goods sold 44,513 | | 40,392
------- | | -------
Gross profit 28,004 | | 24,198
| |
Selling, general and administrative expenses 25,843 | | 22,137
------- | | -------
Operating income 2,161 | | 2,061
| |
Interest expense 4,324 | | 2,134
------- | | -------
Loss before benefit from income taxes (2,163) | | (73)
| |
Benefit from income taxes 1,061 | | 63
------- | | -------
Net loss (1,102) | | (10)
Dividend requirements and accretion on | |
redeemable preferred stock (675) | |
------- | | -------
Net loss applicable to common stockholders ($1,777) | | ($10)
------- | | -------
------- | | -------
See accompanying notes to the condensed consolidated financial statements.
4
<PAGE>
THE WILLIAM CARTER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
(Unaudited)
Six-month periods ended
June 28, June 29,
1997 1996
-------- --------
(Successor) (Predecessor)
| |
Net sales $ 147,718 | | $ 134,882
| |
Costs of goods sold 92,322 | | 88,065
--------- | | ---------
| |
Gross profit 55,396 | | 46,817
| |
Selling, general and administrative expenses 52,225 | | 44,816
--------- | | ---------
Operating income 3,171 | | 2,001
| |
Interest expense 8,347 | | 4,284
--------- | | ---------
Loss before benefit from income taxes (5,176) | | (2,283)
| |
Benefit from income taxes 2,535 | | 868
--------- | | ---------
Net loss (2,641) | | (1,415)
| |
Dividend requirements and accretion on | |
redeemable preferred stock (1,333) | |
--------- | | ---------
Net loss applicable to common stockholders $ (3,974) | | $ (1,415)
--------- | | ---------
--------- | | ---------
See accompanying notes to the condensed consolidated financial statements.
5
<PAGE>
THE WILLIAM CARTER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Six-month periods ended
June 28, June 29,
1997 1996
-------- --------
(Successor) | | (Predecessor)
Cash flows from operating activities: | |
Net loss ($2,641) | | ($1,415)
Adjustments to reconcile net loss to net | |
cash used in operating activities: | |
Depreciation and amortization 7,412 | | 4,350
Deferred tax provision (1,527) | |
Effect of changes in operating assets | |
and liabilities: | |
(Increase) decrease in current assets: | |
Accounts receivable (5,897) | | (3,173)
Inventories (18,927) | | (9,550)
Prepaid expenses and other current assets 3,599 | | 2,919
(Decrease) increase in liabilities: | |
Accounts payable 7,619 | | 1,884
Other liabilities (2,516) | | 2,946
-------- | | -------
Net cash used in operating activities (12,878) | | (2,039)
-------- | | -------
Cash flows from investing activities: | |
Capital expenditures (5,449) | | (2,212)
Proceeds from sale of fixed assets 13 | | 17
-------- | | -------
Net cash used in investing activities (5,436) | | (2,195)
-------- | | -------
Cash flows from financing activities: | |
Proceeds from revolving line of credit 21,000 | |
Preferred stock dividend (1,220) | |
Payment of debt issuance costs (650) | |
Payment of Industrial Revenue Bond | | (217)
-------- | | -------
Net cash provided by (used in) | |
financing activities 19,130 | | (217)
-------- | | -------
Net increase (decrease) in cash | |
and cash equivalents 816 | | (4,451)
Cash and cash equivalents, beginning of period 1,961 | | 2,865
-------- | | -------
Cash and cash equivalents, end of period $ 2,777 | | ($1,586)
-------- | | -------
-------- | | -------
See accompanying notes to the condensed consolidated financial statements.
6
<PAGE>
THE WILLIAM CARTER COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1 - BASIS OF PREPARATION
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements of The William Carter Company (the
"Company") contain all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial position of the Company
as of June 28, 1997, the results of its operations for the three-month and
six-month periods ended June 28, 1997 and June 29, 1996, and cash flows for
the six-month periods ended June 28, 1997 and June 29, 1996. Operating
results for the three-month and six-month periods ended June 28, 1997 are not
necessarily indicative of the results that may be expected for the fiscal
year ending January 3, 1998.
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 the rules and
regulations of the Securities and Exchange Commission and the instructions to
Form 10-Q. The accounting policies followed by the Company are set forth in
its Annual Report on Form 10-K in the Notes to the Company's consolidated
financial statements for the fiscal year ended December 28, 1996.
2 - THE COMPANY
The Company is a United States based manufacturer and marketer of premier
branded childrenswear under the CARTER'S, CARTER'S CLASSICS and BABY DIOR
labels. The Company manufactures its products in plants located in the
southern United States, Costa Rica and the Dominican Republic. In 1997, the
Company commenced the start-up of a manufacturing operation in Mexico.
Products are manufactured for wholesale distribution to major domestic
retailers, and for the Company's 139 retail outlet stores that market its
brand name merchandise. The retail operations represented approximately 40.8%
and 38.3% of consolidated net sales in the second quarter and first half of
fiscal 1997, respectively (43.8% and 39.4% in the second quarter and first
half of fiscal 1996, respectively).
The Company is a wholly-owned subsidiary of Carter Holdings, Inc.
("Holdings"). On October 30, 1996, Holdings, a company organized on behalf
of affiliates of INVESTCORP S.A. ("Investcorp"), management and certain other
investors, acquired 100% of the previously outstanding common and preferred
stock of the Company from MBL Life Assurance Corporation, CHC Charitable
Irrevocable Trust and certain management stockholders (the "Acquisition").
Financing for the Acquisition totaled $226.1 million and was provided by (i)
$56.1 million of borrowings under a $100.0 million senior credit facility; (ii)
$90.0 million of borrowings under a subordinated loan facility; (iii) $70.9
million of capital invested by affiliates of Investcorp and certain other
investors in Holdings, which included a $20.0 million investment by Holdings
in the Company's newly issued redeemable preferred stock; and (iv) issuance
of non-voting stock of Holdings valued at $9.1 million to certain members of
management.
7
<PAGE>
THE WILLIAM CARTER COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
In addition to purchasing or exchanging and retiring the previously issued
capital stock of the Company, the proceeds of the Acquisition and financing
were used to make certain contractual payments to management ($11.3 million),
pay for costs of the transaction ($20.9 million), and to retire all of the
Company's previously outstanding long-term debt along with accrued interest
thereon ($69.1 million). In November 1996, the Company offered and sold in a
private placement $100.0 million of Senior Subordinated Notes, the net
proceeds of which were used to retire $90.0 million of subordinated loan
facility borrowings and $5.0 million of borrowings under the Senior Credit
Facility. Holdings has no assets or investments other than the shares of
stock of The William Carter Company.
In February 1997, the Company filed a registration statement on Form S-4 with
the Securities and Exchange Commission related to an Exchange Offer for $100.0
million of 10-3/8% Senior Subordinated Notes for a like amount of the 10-3/8%
Senior Subordinated Notes issued in the November 1996 private placement. This
registration statement became effective on April 7, 1997.
For purposes of identification and description, the Company is referred to as
the "Predecessor" for the period prior to the Acquisition, the "Successor"
for the period subsequent to the Acquisition, and the "Company" for both
periods.
The Acquisition was accounted for by the purchase method. Accordingly, the
assets and liabilities of the Predecessor were adjusted at the Acquisition date
to reflect the allocation of the purchase price based on estimated fair
values.
The following unaudited pro forma operating data present the results of
operations for the six-month period ended June 29, 1996 as though the
controlling ownership of the Predecessor had been acquired on December 31,
1995, with financing obtained as described above and assumes that there were
no other changes in the operations of the Predecessor. The pro forma results
are not necessarily indicative of the financial results that might have
occurred had the transaction included in the pro forma statement actually
taken place on December 31, 1995, or of future results of operations ($000):
Acquisition
Historical Adjustments Pro Forma
---------- ----------- ---------
Net sales $134,882 -- $134,882
Gross profit 46,817 ($170) 46,647
Operating income (loss) 2,001 (2,366) (365)
Interest expense 4,284 4,410 8,694
Net loss ($1,415) ($4,447) ($5,862)
3 - INVENTORIES
Successor
-------------------------
June 28, December 28,
1997 1996
-------- ------------
(dollars in thousands)
Finished goods $ 63,520 $ 51,700
Work in process 20,977 15,884
Raw materials 10,970 8,956
-------- --------
Total $ 95,467 $ 76,540
-------- --------
-------- --------
8
<PAGE>
FORM 10-Q
THE WILLIAM CARTER COMPANY
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE FOLLOWING MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE
RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY
FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS. THE COMPANY
UNDERTAKES NO OBLIGATION TO RELEASE PUBLICLY ANY REVISIONS TO THESE
FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE
HEREOF OR TO REFLECT THE OCCURRENCE OF ANTICIPATED OR UNANTICIPATED EVENTS.
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 28, 1997 COMPARED WITH SIX MONTHS ENDED JUNE 29, 1996
Consolidated net sales for the second quarter of 1997 were $72.5 million, an
increase of $7.9 million (12.3%) compared with the second quarter of 1996.
Consolidated net sales for the first half of 1997 were $147.7 million, an
increase of $12.8 million (9.5%) compared with the first half of 1996.
The increase in consolidated net sales was attributable principally to
increases in sales to the Company's wholesale customers. Wholesale sales in
the second quarter of 1997 were $41.7 million, an increase of $6.2 million
(17.5%) compared with the second quarter of 1996. Wholesale sales in the
second quarter of 1997 reflect a $6.8 million (21.9%) increase in regular-price
sales and a $.6 million (15.1%) decrease in off-price sales compared with the
9
<PAGE>
FORM 10-Q
THE WILLIAM CARTER COMPANY
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
second quarter of 1996. Second quarter wholesale sales reflect the initial
shipments of the Company's new Just One Year ("JOY") program, a total nursery
concept focused on a child's first year of life. The increase in
regular-price wholesale sales also reflects higher levels of shipments of
Fall 1997 product compared with Fall 1996 sales in the second quarter of 1996.
Wholesale sales in the first half of 1997 were $87.8 million, an increase of
$6.9 million (8.5%) compared with the first half of 1996. Regular-price and
off-price wholesale sales increased $6.7 million (9.3%) and $.2 million
(1.9%), respectively, compared with the first half of 1996. The increase in
regular-price wholesale sales reflects sales of the new JOY program which
commenced in the second quarter of 1997 and higher levels of Fall 1997
product sales.
The Company's retail outlet store sales in the second quarter of 1997 were
$30.0 million, an increase of $1.3 million (4.5%) compared with the second
quarter of 1996. Comparable store sales decreased 6% in the second quarter of
1997 compared with the second quarter of 1996. The Company opened 4 stores and
closed 1 store in the second quarter of 1997. In the first six months of
1997, the Company opened 5 stores and closed 1 store. There were 139 stores
in operation at June 28, 1997 compared with 126 stores at June 29, 1996.
Retail sales in the first half of 1997 were $56.6 million, an increase of
$3.5 million (6.6%) compared with the first half of 1996. Comparable store
sales decreased 4% in the first half of 1997. The decrease in comparable
store performance is due primarily to a less aggressive markdown plan in
1997, and the reduction of certain higher-priced, but lower margin, product
lines including outerwear and girls playwear in sizes 7-14X.
In May 1997, Joseph Shannon joined Carter's as President of the retail
division. Mr. Shannon brings to Carter's over 20 years of retail experience
and joins a team of other senior retail managers engaged within the last six
months to improve the performance of the Company's retail division.
In the latter part of the second quarter of 1997, management of Carter's
retail division initiated a new marketing and promotional program designed to
significantly improve the communication of value to the outlet store
consumer. This initiative and improvements in product presentation,
assortment and replenishment are expected to improve comparable store results.
10
<PAGE>
FORM 10-Q
THE WILLIAM CARTER COMPANY
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
The Company's gross profit increased $3.8 million (15.7%) to $28.0 million in
the second quarter of 1997 compared with the second quarter of 1996. In the
second quarter of 1997, gross profit as a percentage of net sales increased
to 38.6% of net sales compared with 37.5% in the second quarter of 1996.
In the first half of 1997, gross profit increased $8.6 million (18.3%) to
$55.4 million compared with the first half of 1996. Gross profit as a
percentage of net sales in the first half of 1997 increased to 37.5% compared
to 34.7% in the first half of 1996. The improvement is attributed to the
growth in the Company's "baby" product category, including the new JOY
program; improvement in margins from off-price sales; the maturing effect of
the Company's three off-shore sewing plants and higher levels of efficiency
in the Company's manufacturing operations.
Selling, general and administrative expenses for the second quarter of 1997
increased $3.7 million (16.7%) to $25.8 million compared with the second
quarter of 1996. Selling, general and administrative expenses as a percentage
of net sales increased to 35.6% compared to 34.3% in the second quarter of
1996. Selling, general and administrative expenses for the first half of 1997
increased $7.4 million (16.5%) to $52.2 million compared with the first half of
1996. The increase in selling, general and administrative expenses is
attributed to the costs of amortization of intangible assets and prepaid
management fees recorded in connection with the Acquisition; comparable store
sales declines experienced by the Company's retail outlet stores; expenses of
13 additional stores opened since the end of the second quarter of 1996 and
expenses associated with engaging a more experienced retail
management team.
Operating income for the second quarter of 1997 was $2.2 million compared with
$2.1 million in the second quarter of 1996. Operating income in the first
half of 1997 increased $1.2 (58.5%) to $3.2 million compared with the first
half of 1996. Operating income for the second quarter and first half of 1997
reflects $1.2 million and $2.4 million, respectively, of expenses associated
with the amortization of intangible assets and prepaid management fees
recorded at Acquisition.
Interest expense for the second quarter of 1997 increased to $4.3 million
compared with $2.1 million in the second quarter of 1996. In the first half
of 1997, interest expense was $8.3 million compared with $4.3 million in the
first half of 1996. The increase in interest expense is attributed to
additional indebtedness resulting from the Acquisition. Average revolver
borrowings during the second quarter of 1997 were $10.0 million compared with
$16.5 million in the second quarter of 1996. Average revolver borrowings
during the first half of 1997 were $6.5 million compared with $17.0 million
in the first half of 1996. At June 28, 1997, total debt outstanding was
$166.0 million.
11
<PAGE>
FORM 10-Q
THE WILLIAM CARTER COMPANY
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)
The Company recorded an income tax benefit of $1.1 million in the second
quarter of 1997 compared with an income tax benefit of $63,000 in the second
quarter of 1996. The first half 1997 tax benefit was $2.5 million compared
with $.9 million in the first half of 1996. The increase in the 1997 tax
benefit is due to higher pretax losses in 1997 resulting principally from
higher interest costs on additional indebtedness recorded in connection with
the Acquisition. The effective tax rate for the first half of 1997 was 49.0%
compared with 38.0% for the first half of 1996. The Company's 1997 tax rate
is impacted by goodwill recorded in connection with the Acquisition, which is
not deductible for tax purposes.
As a result of the factors described above, the Company reported a net loss
of $1.1 million in the second quarter of 1997 compared to a net loss of
$10,000 in the second quarter of 1996. The net loss for the first half of
1997 was $2.6 million compared to a loss of $1.4 million in the first half of
1996.
FINANCIAL CONDITION, CAPITAL RESOURCES AND LIQUIDITY
The Company has financed its working capital, capital expenditures and debt
service requirements primarily through internally generated cash flow, in
addition to funds borrowed under the Company's revolving credit facility.
Net accounts receivable at June 28, 1997 were $25.2 million compared with
$17.9 million at June 29, 1996. This increase reflects the higher levels of
wholesale revenues in the second quarter of 1997. In particular, the net
increase of $6.2 million in wholesale sales in the second quarter of 1997
includes a $7.6 million increase in June 1997 wholesale sales compared with
June 1996 wholesale sales. Due to the seasonal nature of the Company's
operations, the net accounts receivable balance at June 28, 1997 is not
comparable with the net accounts receivable balance at December 28, 1996.
Inventories at June 28, 1997 were $95.5 million compared with $104.0 million
at June 29, 1996. This decrease reflects management's continuing efforts to
control inventory. The Company has achieved a net reduction in inventory
despite higher levels of inventory required to support increases in its sales
plans. Due to the seasonal nature of the Company's operations, inventories at
June 28, 1997 are not comparable with inventories at December 28, 1996.
12
<PAGE>
FORM 10-Q
THE WILLIAM CARTER COMPANY
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
The Company invested $5.4 million and $2.2 million in capital expenditures
during the first half of 1997 and 1996, respectively.
The Company incurred additional indebtedness in connection with the
Acquisition. At June 28, 1997, the Company had $166.0 million of debt
outstanding, consisting of $100.0 million of 10 3/8% Series A Senior
Subordinated Notes, $45.0 million in term loan borrowings and $21.0 million
in revolving borrowings. At June 28, 1997, the Company has approximately $24.8
million of seasonal financing available under the revolving credit portion of
the Senior Credit Facility, including approximately $4.2 million of
outstanding letters of credit.
The Company believes that cash generated from operations, together with
availability under the revolving portion of the Senior Credit Facility, will
be adequate to meet its debt service requirements, capital expenditures and
working capital needs for the foreseeable future, although no assurance can
be given in this regard.
On April 23, 1997, the Company's Board of Directors declared a semiannual
dividend of 12% on $20.0 million of redeemable preferred stock which was
paid on May 1, 1997. The Company intends to pay a similar dividend on
November 1, 1997.
EFFECTS OF INFLATION
The Company is affected by inflation primarily through the purchase of raw
material, increased operating costs and expenses, and higher interest rates.
The effects of inflation on the Company's operations have not been material
in recent years.
SEASONALITY
The Company experiences seasonal fluctuations in its sales and profitability,
with generally lower sales and gross profit in the first and second quarters
of its fiscal year. The Company believes that seasonality of sales and
profitability is a factor that affects the baby and children's apparel
industry generally and is primarily due to retailers' emphasis on fall and
holiday sales, including back to school promotions, which results in higher
sales and profitability in the third and fourth quarters.
Accordingly, the results of operations for the three-month and six-month
periods ended June 28, 1997 are not indicative of the results to be expected
for the full year.
13
<PAGE>
FORM 10-Q
THE WILLIAM CARTER COMPANY
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a party to various routine legal proceedings arising out of
the ordinary course of its business. Management believes that none of these
actions, individually or in the aggregate, will have a material adverse
effect on the results of operations or financial condition of the Company.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description of Exhibits
- ------- -----------------------
2. Agreement of Merger dated September 18, 1996 between TWCC
Acquisition Corp. and the Company, incorporated herein by reference to
Exhibit 2 to the Company's Registration Statement on Form S-4 as
declared effective by the Commission on April 7, 1997.
3.1 Amended and Restated Articles of Organization of the Company,
incorporated herein by reference to Exhibit 3.1 to the Company's
Registration Statement on Form S-4 as declared effective by the
Commission on April 7, 1997.
3.2 Articles of Merger of the Company, incorporated herein by
reference to Exhibit 3.2 to the Company's Registration Statement on
Form S-4 as declared effective by the Commission on April 7, 1997.
3.3 By-laws of the Company, incorporated herein by reference to Exhibit
3.3 to the Company's Registration Statement on Form S-4 as declared
effective by the Commission on April 7, 1997.
3.4 Certificate of Designation relating to the Preferred Stock of the
Company dated October 30, 1996 (included in Exhibit 3.2).
4.1 Indenture dated as of November 25, 1996 between the Company and State
Street Bank and Trust Company, as Trustee, incorporated herein by
reference to Exhibit 4.1 to the Company's Registration Statement on
Form S-4 as declared effective by the Commission on April 7, 1997.
4.2 Exchange and Registration Rights Agreement dated November 25, 1996
between the Company and BT Securities Corporation, Bankers Trust
International plc, Chase Securities Inc. and Goldman, Sachs & Co.,
incorporated herein by reference to Exhibit 4.2 to the Company's
Registration Statement on Form S-4 as declared effective by the
Commission on April 7, 1997.
*27 Financial Data Schedule
(b) Reports on Form 8K
No report was filed by the Registrant during the quarter ended June
28, 1997
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE WILLIAM CARTER COMPANY
Date: /s/ FREDERICK J. ROWAN, II
Frederick J. Rowan, II
Chairman of the Board, President,
Chief Executive Officer and Director
Date: /s/ JAY A. BERMAN
Jay A. Berman
Senior Vice President, Treasurer, Chief
Financial Officer and Director
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 3-MOS
<FISCAL-YEAR-END> JAN-03-1998 JAN-03-1998
<PERIOD-START> JUN-28-1997 MAR-30-1997
<PERIOD-END> JUN-28-1997 JUN-28-1997
<CASH> 2,777 0
<SECURITIES> 0 0
<RECEIVABLES> 27,951 0
<ALLOWANCES> 2,795 0
<INVENTORY> 95,467 0
<CURRENT-ASSETS> 140,233 0
<PP&E> 110,167 0
<DEPRECIATION> 60,907 0
<TOTAL-ASSETS> 338,976 0
<CURRENT-LIABILITIES> 52,931 0
<BONDS> 165,100 0
18,347 0
0 0
<COMMON> 0 0
<OTHER-SE> 53,514 0
<TOTAL-LIABILITY-AND-EQUITY> 388,976 0
<SALES> 147,718 72,517
<TOTAL-REVENUES> 147,718 72,517
<CGS> 92,322 44,513
<TOTAL-COSTS> 92,322 44,513
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 8,347 4,324
<INCOME-PRETAX> (5,176) (2,163)
<INCOME-TAX> (2,535) (1,061)
<INCOME-CONTINUING> (2,641) (1,102)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (2,641) (1,102)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
