<PAGE>
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 July 29, 2000.
[ ] 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 0-18640
-------
CHEROKEE INC.
-------------
(Exact name of registrant as specified in its charter)
------------------------------------------------------
Delaware 95-4182437
------------------------------- -----------------------------------
(State or other jurisdiction of (IRS employer identification number)
Incorporation or organization)
6835 Valjean Avenue, Van Nuys, CA 91406
---------------------------------------- -----------------------------------
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (818) 908-9868
--------------
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 ___
-
Indicate by check mark whether the registrant has filed all documents and
reports 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
the court. Yes X No ___
-
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at July 29, 2000
----- ----------------------------
Common Stock, $.02 par value per share 8,231,705
<PAGE>
CHEROKEE INC.
-------------
INDEX
<TABLE>
<CAPTION>
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
Consolidated Balance Sheets
July 29, 2000 and January 29, 2000 2
Consolidated Statements of Operations 3
Three and Six Month periods ended July 29, 2000 and
July 31, 1999
Consolidated Statements of Cash Flows 4
Six Month periods ended July 29, 2000 and
July 31, 1999
Notes to Consolidated Financial Statements 5
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
ITEM 3. Quantitative and Qualitative Disclosure
about Market Risk 10
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 11
ITEM 2. Changes in Securities 11
ITEM 3. Defaults Upon Senior Securities 11
ITEM 4. Submission of Matters to a Vote of Security Holders 11
ITEM 5. Other Information 11
ITEM 6. Exhibits and Reports on 8-K 12
</TABLE>
1
<PAGE>
Part 1. Financial Information
-----------------------------
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
CHEROKEE INC.
-------------
CONSOLIDATED BALANCE SHEETS
---------------------------
<TABLE>
<CAPTION>
July 29, 2000 January 29, 2000
-------------- ----------------
Unaudited
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 1,186,000 $ 2,253,000
Restricted cash 2,710,000 2,324,000
Receivables, net 7,101,000 4,841,000
Prepaid expenses and other current assets 49,000 28,000
Deferred tax asset 807,000 1,579,000
-------------- ----------------
Total current assets 11,853,000 11,025,000
Deferred tax asset 797,000 797,000
Securitization fees, net of accumulated amortization of
$531,000 and $429,000, respectively 709,000 812,000
Property and equipment, net of accumulated depreciation of
$170,000 and $156,000, respectively 248,000 203,000
Trademarks, net of accumulated amortization of
$698,000 and $503,000, respectively 5,642,000 4,666,000
Other assets 15,000 15,000
-------------- ----------------
Total assets $ 19,264,000 $ 17,518,000
-------------- ----------------
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $ 949,000 $ 600,000
Other accrued liabilities 2,050,000 2,286,000
Notes payable 10,500,000 10,125,000
-------------- ----------------
Total current liabilities 13,499,000 13,011,000
Other liabilities 250,000 250,000
Notes payable - long term 24,377,000 28,389,000
-------------- ----------------
Total liabilities 38,126,000 41,650,000
-------------- ----------------
Stockholders' Deficit:
Common stock, $.02 par value,20,000,000 shares authorized,
8,231,705 and 8,472,428 shares issued and outstanding at
July 29, 2000 and at January 29, 2000 165,000 170,000
Note receivable from stockholder - (365,000)
Accumulated deficit (19,027,000) (23,937,000)
-------------- ----------------
Stockholders' deficit (18,862,000) (24,132,000)
-------------- ----------------
Total liabilities and stockholders' deficit $ 19,264,000 $ 17,518,000
============== ================
</TABLE>
See the accompanying notes which are an integral part of these consolidated
financial statements.
2
<PAGE>
CHEROKEE INC.
-------------
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
Unaudited
---------
<TABLE>
<CAPTION>
Three months ended Six months ended
------------------ ----------------
July 29, 2000 July 31, 1999 July 29, 2000 July 31, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Royalty revenues $ 7,686,000 $ 6,382,000 $ 17,289,000 $ 13,300,000
Selling, general and administrative expenses 2,476,000 2,128,000 4,616,000 3,973,000
------------ ------------ ------------ ------------
Operating income 5,210,000 4,254,000 12,673,000 9,327,000
Other income (expenses) :
Interest expense (606,000) (724,000) (1,238,000) (1,474,000)
Investment and Interest income 124,000 100,000 223,000 183,000
------------ ------------ ------------ ------------
Total other income (expenses), net (482,000) (624,000) (1,015,000) (1,291,000)
Income before income taxes 4,728,000 3,630,000 11,658,000 8,036,000
Income tax provision 1,891,000 1,452,000 4,664,000 3,215,000
------------ ------------ ------------ ------------
Net income $ 2,837,000 $ 2,178,000 $ 6,994,000 $ 4,821,000
============ ============ ============ ============
Basic earnings per share $ 0.34 $ 0.25 $ 0.83 $ 0.55
------------ ------------ ------------ ------------
Diluted earnings per share $ 0.34 $ 0.25 $ 0.83 $ 0.55
------------ ------------ ------------ ------------
Weighted average shares outstanding
Basic 8,397,705 8,705,428 8,437,136 8,705,428
============ ============ ============ ============
Diluted 8,402,400 8,705,937 8,439,787 8,705,428
============ ============ ============ ============
</TABLE>
See the accompanying notes which are an integral part of these consolidated
financial statements.
3
<PAGE>
CHEROKEE INC.
-------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
Unaudited
---------
<TABLE>
<CAPTION>
Six months ended
----------------
July 29, 2000 July 31, 1999
------------------------------
<S> <C> <C>
Operating activities
--------------------
Net income $ 6,994,000 $ 4,821,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 14,000 30,000
Amortization of goodwill and trademarks 181,000 121,000
Amortization of securitization fees 103,000 103,000
Amortization of debt discount 1,238,000 1,474,000
Decrease in deferred taxes 772,000 2,864,000
Interest income on note receivable from stockholder - (61,000)
Changes in current assets and liabilities:
Increase in accounts receivable (2,260,000) (2,599,000)
Decrease (increase) in prepaid expenses and other current assets (21,000) (698,000)
Decrease in accounts payable and accrued liabilities 113,000 (280,000)
----------- -----------
Net cash provided by operating activities 7,134,000 5,775,000
----------- -----------
Investing activities
--------------------
Purchase of trademarks (1,164,000) (636,000)
Purchase of property and equipment (60,000) (30,000)
Decrease in other assets - 91,000
Repayment on note receivable from stockholder 373,000 -
----------- -----------
Net cash used in investing activities (851,000) (575,000)
----------- -----------
Financing activities
--------------------
Cash distributions - (4,352,000)
(Increase) decrease in restricted cash (386,000) 2,212,000
Repurchase of common stock (2,101,000) -
Proceeds from exercise of warrants 12,000 -
Payment on notes (4,875,000) (4,500,000)
----------- -----------
Net cash used in financing activities (7,350,000) (6,640,000)
----------- -----------
Decrease in cash and cash equivalents (1,067,000) (1,440,000)
Cash and cash equivalents at beginning of period 2,253,000 2,847,000
----------- -----------
Cash and cash equivalents at end of period $ 1,186,000 $ 1,407,000
=========== ===========
Total paid during period:
-------------------------
Income taxes $ 2,578,000 $ 905,000
Interest $ 711,000 $ 380,000
</TABLE>
See the accompanying notes which are an integral part of these consolidated
financial statements.
4
<PAGE>
CHEROKEE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
---------------------
The accompanying condensed consolidated financial statements as of July 29, 2000
and for the three and six month periods ended July 29, 2000 and July 31, 1999
have been prepared in accordance with U.S. generally accepted accounting
principles ("GAAP"). These consolidated financial statements have not been
audited by independent accountants but include all adjustments, consisting of
normal recurring accruals, which in the opinion of management of Cherokee Inc.
("Cherokee" or the "Company") are necessary for a fair statement of the
financial position and the results of operations for the periods presented. The
accompanying consolidated balance sheet as of January 29, 2000 has been derived
from audited consolidated financial statements, but does not include all
disclosures required by GAAP. The results of operations for the three and six
month periods ended July 29, 2000 and July 31, 1999 are not necessarily
indicative of the results to be expected for the fiscal year ended February 3,
2001. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report on Form 10-K for
the fiscal year ended January 29, 2000.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of sales and
expenses during the reporting period. Actual results could differ from those
estimates.
(2) Summary of Significant Accounting Policies
------------------------------------------
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary, SPELL C. LLC, a Delaware limited liability
corporation ("Spell C"). All significant intercompany accounts and transactions
have been eliminated in consolidation.
Earnings Per Share Computation
The following table provides a reconciliation of the numerator and denominator
of the basic and diluted per-share computations for the three and six month
periods ended July 29, 2000 and July 31, 1999:
<TABLE>
<CAPTION>
2000 1999
3 Months 6 Months 3 Months 6 Months
----------------------- ----------------------
<S> <C> <C> <C> <C>
Numerator:
Net income-numerator for
net income per common share
and net income per common
share assuming dilution $ 2,837,000 $6,994,000 $2,178,000 $4,821,000
=========== ========== ========== ==========
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Denominator:
Denominator for net income
Per common share-weighted
average shares 8,397,705 8,437,136 8,705,428 8,705,428
Effect of dilutive securities:
Stock options 4,695 2,651 509 -
----------- ---------- ---------- ----------
Denominator for net income
per common share, assuming
dilution: Adjusted weighted
average shares and assumed
exercises 8,402,400 8,439,787 8,705,937 8,705,428
=========== ========== ========== ==========
</TABLE>
Common shares issuable upon exercise of stock options that are antidilutive
amounted to 588,703 and 484,536 for the six month periods ended July 29, 2000
and July 31, 1999, respectively.
(3) Long Term Debt
Long term debt is comprised of Zero-Coupon Secured Notes ("Secured Notes")
yielding 7% interest per annum and maturing on February 20, 2004. The Secured
Notes amortize quarterly from May 20, 1998 through February 20, 2004. The
following table summarizes the maturity of the long-term debt:
For the year ending: Face Value
July 29, 2001 ............................................ $ 10,500,000
July 29, 2002 ............................................ 10,500,000
July 29, 2003 ............................................ 10,500,000
July 29, 2004............................................. 7,875,000
-----------
Total ............................................ 39,375,000
Less unamortized Note Discount......................... 4,498,000
-----------
34,877,000
Less current portion of long term debt ............ 10,500,000
------------
Long term obligation .............................. $ 24,377,000
============
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Cherokee Inc. (the "Company" or "Cherokee") is in the business of marketing
and licensing the Cherokee and Sideout brands and related trademarks and other
brands it owns. The Company is one of the leading licensors of brand names and
trademarks for apparel, footwear and accessories in the United States. The
Company and its wholly-owned subsidiary, SPELL C. LLC ("Spell C"), hold several
trademarks including Cherokee, Sideout, Sideout Sport, King of the Beach and
others. The Cherokee brand, which began as a footwear brand in 1973, has been
positioned to connote quality, comfort, fit and a "Casual American" lifestyle
with traditional wholesome values. The Sideout brand and related trademarks,
which represent a beach-oriented, active, "Ca1ifornia" lifestyle, were acquired
by the Company in November 1997.
The Company's operating strategy emphasizes domestic and international,
retail direct and wholesale licensing whereby the Company grants retailers and
wholesalers the license to use the trademarks held by the Company on certain
categories of merchandise, and the licensees are responsible for designing and
manufacturing the merchandise. The Company's license agreements generally
provide the Company with final approval of pre-agreed upon quality standards,
packaging and marketing of licensed products and also grant the Company the
right to conduct periodic quality control inspections to ensure that the image
and quality of licensed products remain consistent. As of July 29, 2000, the
Company had 29 continuing license agreements for the Company's various
trademarks, covering both domestic and international markets. The Company will
continue to solicit new licensees and may, from time to time, retain the
services of outside consultants to assist the Company in this regard.
In November 1997, the Company reaffirmed its relationship with Target
Stores, a division of Target Corporation ("Target"), by entering into an amended
licensing agreement (the "Amended Target Agreement") which grants Target the
exclusive right in the United States to use the Cherokee trademarks on certain
specified categories of merchandise. Under the Amended Target Agreement, Target
is obligated to pay a royalty based upon a percentage of its net sales of
Cherokee brand products, with a minimum guaranteed royalty of $60.0 million over
the six-year initial term of the agreement.
During the three months ended July 29, 2000 (the "Second Quarter"), sales
of merchandise bearing the Cherokee brand continued to increase, with total
retail sales exceeding $401.7 million versus $319.0 million in total retail
sales for the second quarter of last year. Zellers sales of merchandise bearing
the Cherokee brand were in excess of $33.5 million during the Second Quarter
compared to $30.4 million for the second quarter of last year.
During the Second Quarter, the Company's Sideout licensing partners
continued to achieve positive results from sales of merchandise bearing the
Sideout brand. Sales of Mervyn's young men's, junior's and children's apparel
and accessories bearing the Sideout brand were approximately $21.6 million
during the Second Quarter in comparison to $12.3 million for the second quarter
of last year.
7
<PAGE>
In addition to licensing its own brands, the Company is seeking to
represent and manage, as an exclusive agent, other brands with respect to
domestic and international marketing, licensing and distribution. Generally, as
an exclusive agent, the Company will perform a range of services including
marketing of brands, solicitation of licensees, contract negotiations and
administration and maintenance of license or distribution agreements. In return
for its services the Company will normally charge a certain percentage of the
net royalties generated by the brands it represents and manages. In March 2000,
the Company entered into an agreement to act as the exclusive agent for Mossimo
Inc. With the assistance of the Company, Mossimo entered into a multi-year
licensing agreement with Target. Pursuant to a finder's agreement with Mossimo,
the Company is entitled to 15% of all royalties paid to Mossimo by Target. The
Company does not expect to derive any revenues from this arrangement until June
2001 at the earliest. Additionally, in April 2000, the Company entered into an
exclusive agreement to represent Maui and Sons Inc. in the United States and
Canada, and in May 2000 it entered into an exclusive agreement with Aspen
Licensing International Inc. to represent its Aspen brand both domestically and
internationally.
Pursuant to the Company's Board of Directors' authorization of a stock
repurchase program, the Company repurchased and retired 249,000 shares of its
common stock during the Second Quarter. Continued repurchases of the Company's
stock, if any, will be made from time to time in the open market at prevailing
market prices or in privately negotiated transactions.
In December 1997, the Company completed a series of transactions whereby it
sold its rights to the Cherokee brand and related trademarks in the United
States to Spell C, its wholly-owned subsidiary, and also assigned to Spell C its
rights in the Amended Target Agreement. In return the Company received the
gross proceeds resulting from the sale by Spell C, for an aggregate of $47.9
million, of privately placed Zero Coupon Secured Notes (the "Secured Notes"),
which yield 7.0% interest per annum, amortized quarterly from May 20, 1998
through February 20, 2004 and are secured by the Amended Target Agreement and by
the United States Cherokee trademarks. The aggregate scheduled amortization
under the Secured Notes is $60.0 million which equals the aggregate minimum
guaranteed royalty payable under the Amended Target Agreement which is also
$60.0 million. As of the end of the Second Quarter, approximately $39.4 million
remains outstanding under the Secured Notes.
Results of Operations
Net revenues for the Second Quarter and the six month period ended July 29,
2000 (the "Six Months") were $7.7 million and $17.3 million, respectively, in
comparison to net revenues for the three and six month periods ended July 31,
1999 of $6.4 million and $13.3 million, respectively. Revenues for the Cherokee
brand were $6.8 million and $15.6 million, respectively, for the Second Quarter
and Six Months compared to $5.6 million and $12.1 million, respectively, for the
three and six month periods ended July 31, 1999. For the Second quarter and Six
Months, royalty revenues of $5.3 million and $12.2 million were recognized from
Target, which accounted for 69% and 70% of total revenues, respectively,
compared to $4.5 million and $9.8 million, or 70% and 74% of total revenues,
respectively, for the three and six months ended July 31, 1999. For the Second
Quarter and Six Months, Sideout brand revenues were $837,000 and $1.6 million
compared to $764,000 and $1.2 million for the three and six month periods ended
July 31, 1999. The increase in net revenues is mainly due to the continued
expansion by Target, in the United States, and Zellers, in Canada, of the
Cherokee trademark over a broader range of categories, and the increased sales
of the Sideout brand at Mervyn's and other retail direct licensees.
8
<PAGE>
The Company's royalty recognition policy provides for recognition of
royalties in the quarter earned, although a large portion of such royalty
payments are actually received during the month following the end of a quarter.
The Company's receivable balance included the accrual of Target, Zellers and
Mervyn's royalty revenues earned during the Second Quarter and subsequently
received in August 2000.
Selling, general, and administrative expenses for the Second Quarter and
the Six Months were $2.5 million and $4.6 million or 32% and 27% of net
revenues. In comparison, selling, general and administrative expenses were $2.1
million and $4.0 million or 33% and 30% of net revenues during the three and six
month periods ended July 31, 1999. The increase in administrative expenses in
absolute terms is due to an increase in salaries due to the addition of
marketing staff, an increase in accrued management bonus and an increase in
trademark amortization.
During the Second Quarter and the Six Months, the Company's interest
expense was $606,000 and $1.2 million compared to $724,000 and $1.5 million for
the three and six month periods ended July 31, 1999. The interest expense is
attributable to the Secured Notes. The decrease in interest expense is due to
the reduction in the Secured Note balance. During the Six months, the Company
paid down $4.9 million of the Secured Notes. For the Second Quarter and the Six
Months, the Company's investment and interest income was $124,000 and $223,000
in comparison to $100,000 and $183,000 for the three and six month periods ended
July 31, 1999. The increase in interest income is due to larger amounts of cash
being available to invest in the Second Quarter.
During the Second Quarter and the Six Months, the Company's net income was
$2.9 million and $7.0 million or $0.34 and $0.83 per share whereas for the three
and six month periods ended July 31, 1999, net income was $2.2 million and $4.8
million or $0.25 and $.55 per share. For the Second Quarter and the Six Months,
the Company incurred a charge for income taxes of $1.9 million and $4.7 million
in comparison to $1.4 million and $3.2 million for the three and six month
periods ended July 31, 1999. The effective tax rate for all periods was 40%.
As of fiscal year ended January 29, 2000, the Company had fully utilized the net
operating losses generated subsequent to the Company's 1994 reorganization,
which were not subject to Section 382 limitations. For fiscal year ended
February 3, 2001, the Company expects to utilize approximately $780,000 of its
limited Section 382(1)(b) net operating losses for both federal and state and is
making quarterly estimated tax payments for its federal and state income tax
liabilities.
Liquidity and Capital Resources
On July 29, 2000, the Company had approximately $3.9 million in cash and
cash equivalents, which includes $2.7 million held in the collection account for
distribution to the Secured Note holders. Cash flow needs over the next 12
months are expected to be met through the operating cash flows generated from
licensing revenues, and the Company's cash and cash equivalents.
During the Six Months, net cash provided by operations was $7.1 million.
Net cash used in investing activities was $851,000, relating primarily to the
purchase of trademarks. Net cash used in financing activities was $7.4 million,
which was comprised of two quarterly payments on
9
<PAGE>
the Secured Notes totaling $4.9 million, an increase of $386,000 in restricted
cash and the repurchase of Cherokee common stock totaling $2.1 million.
Inflation and Changing Prices
Inflation did not have a significant effect on the Company's operations
during the Second Quarter or the prior year period.
Special Note Regarding Forward-Looking Statements
This Form 10-Q contains certain forward-looking statements, including
without limitation, statements containing the words, "believes," "anticipates,"
"estimates," "expects," and words of similar import. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. The Company is subject
to certain risk factors, which include, but are not limited to, restrictions on
distributions by Spell C, uncertainty regarding the Sideout brand, competition,
dependence on a single licensee, dependence on intellectual property rights, and
other factors referenced in this Form 10-Q and/or discussed further in the
Company's Form 10-K and other filings with the Securities and Exchange
Commission. The forward-looking information provided by the Company pursuant to
the safe harbor established under the Private Securities Litigation Reform Act
of 1995 should be evaluated in conjunction with the risk factors listed in the
Company's Form 10-K under "Risk Factors." Given the known and unknown risks and
uncertainties, undue reliance should not be placed on the forward-looking
statements contained herein. In addition, the Company disclaims any intent or
obligation to update any of the forward-looking statements contained herein to
reflect future events and developments.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE
ABOUT MARKET RISK
Market risk generally represents the risk that losses may occur in the
values of financial instruments as a result of movements in interest rates,
foreign currency exchange rates and commodity prices. The Company does not
enter into derivatives or other financial instruments for trading or speculative
purposes.
Interest
From time to time the Company invests its excess cash in interest-bearing
temporary investments of high-quality issuers. Due to the short time the
investments are outstanding and their general liquidity, these instruments are
classified as cash equivalents in the consolidated balance sheet of the Company
and do not represent a material interest rate risk to the Company. The
Company's only long-term debt obligations are the Secured Notes, which are zero-
coupon secured notes yielding interest of 7.0% per annum. This long-term debt
obligation does not represent a material interest rate risk to the Company.
10
<PAGE>
Foreign Currency
The Company conducts business in various parts of the world. The Company
is exposed to fluctuations in exchange rates to the extent that the foreign
currency exchange rate fluctuates in countries where the Company's licensees do
business. For the Second Quarter, a hypothetical 10% strengthening of the US
dollar relative to the foreign currencies of countries where the Company
operates was not material.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the ordinary course of business, the Company from time to time becomes
involved in legal claims and litigation. In the opinion of management, based
upon consultations with legal counsel, the disposition of litigation currently
pending against the Company is unlikely to have, individually or in the
aggregate, a materially adverse effect on its consolidated business financial
position or results of operations.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS
On May 31, 2000, the Company held its annual meeting of stockholders. At
the meeting, shareholders re-elected four of the current directors on the Board
and approved the nomination of Dave Mullen as a new board member. The results
of the voting were as follows: 7,988,940 votes for and 7,300 abstentions for
directors Timothy Ewing, Dave Mullen, Jess Ravich, Keith Hull and Robert
Margolis.
ITEM 5. OTHER INFORMATION
None.
11
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON 8-K
(a) Exhibits
--------
27.1 Article 5 of Regulation S-X - Financial Data Schedule
(b) Reports on Form 8-K
-------------------
The Company filed no reports on Form 8-K during the Second Quarter.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Dated: August 28, 2000
CHEROKEE INC.
By: /s/ Robert Margolis
-------------------
Robert Margolis
Chief Executive Officer
By: /s/ Carol Gratzke
------------------
Carol Gratzke
Chief Financial Officer
12
