UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 April 1, 2000.
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 1-6666
SALANT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3402444
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1114 Avenue of the Americas, New York, New York 10036
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 221-7500
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 required to be filed by section 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 -
As of April 28, 2000, there were outstanding 9,901,140 shares of the Common
Stock of the registrant.
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Condensed Consolidated Statements of Operations
Condensed Consolidated Statements of Comprehensive Income/(Loss)
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Cash Flows
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 4. Submission of Matter to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
4
<TABLE>
<CAPTION>
Salant Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands, except per share data)
Three Months Ended
April 1, April 3,
2000 1999
--------- ---------
<S> <C> <C>
Net sales $ 56,656 $ 78,582
Cost of goods sold 43,015 61,749
--------- ---------
Gross profit 13,641 16,833
Selling, general and
administrative expenses (12,049) (16,744)
Royalty income 40 1,077
Goodwill amortization (130) (130)
Provision for restructuring (Note 5) -- (4,039)
Other (expense)/income (12) 15
-------- ---------
Income/(Loss) from continuing operations before
interest and income taxes 1,490 (2,988)
Interest (income)/expense, net (251) 806
-------- ---------
Income/(Loss) from continuing operations
before income taxes 1,741 (3,794)
Income taxes -- 22
-------- ----------
Income/(Loss) from continuing operations 1,741 (3,816)
Loss from discontinued operations -- (1,955)
-------- ---------
Net income/(loss) $ 1,741 $ (5,771)
========= =========
Basic and diluted income/(loss) per share (Note 7):
Income/(loss) per share from continuing operations $ 0.18 $ (0.38)
Loss per share from discontinued operations _ -- (0.20)
--------- ---------
Basic and diluted income/(loss) per share $ 0.18 $ (0.58)
========= =========
Weighted average common stock outstanding 9,901 10,000
========= =========
</TABLE>
<TABLE>
<CAPTION>
See Notes to Condensed Consolidated Financial Statements.
Salant Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
(Unaudited)
(Amounts in thousands)
Three Months Ended
April 1, April 3,
2000 1999
------- --------
<S> <C> <C>
Net income/(loss) $ 1,741 $ (5,771)
Other comprehensive income, net of tax:
Foreign currency translation adjustments 31 36
--------- --------
Comprehensive income/(loss) $ 1,772 $ (5,807)
======== ========
</TABLE>
<TABLE>
<CAPTION>
See Notes to Condensed Consolidated Financial Statements.
1
Salant Corporation and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
April 1, January 1, April 3,
2000 2000 1999
(Unaudited) (*) (Unaudited)
----------- ---------- -----------
ASSETS
Current assets:
<S> <C> <C> <C>
Cash and cash equivalents $ 13,017 $ 30,116 $ 6,898
Accounts receivable, net 35,625 15,956 49,144
Inventories (Note 3) 36,579 41,669 53,388
Prepaid expenses and other current assets 5,865 5,490 5,233
Assets held for sale (Note 5) 100 100 1,400
Net assets of discontinued operations -- -- 1,540
--------- ---------- ----------
Total current assets 91,186 93,331 117,603
Property, plant and equipment, net 13,639 14,185 12,942
Other assets 13,819 14,287 13,403
---------- ---------- ----------
Total assets $ 118,644 $ 121,803 $ 143,948
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIENCY)
Current liabilities:
Accounts payable 12,724 12,097 6,788
Liabilities subject to compromise (Note 1) 3,560 4,604 136,575
Accrued liabilities 7,903 11,751 13,551
Deposits -- -- 12,196
Net liabilities of discontinued operations 1,001 1,309 --
Reserve for business restructuring (Note 5) 1,950 2,308 7,473
--------- ---------- ----------
Total current liabilities 27,138 32,069 176,583
Deferred liabilities 4,133 4,133 4,010
Shareholders'equity/(deficiency) (Note 1)
Common stock - old -- -- 15,405
Common Stock - new 10,000 10,000 --
Additional paid-in capital 206,040 206,040 107,249
Deficit (125,556) (127,297) (153,668)
Accumulated other comprehensive income (Note 4) (2,913) (2,944) (4,017)
Less - treasury stock, at cost (198) (198) (1,614)
---------- ---------- ----------
Total shareholders' equity/(deficiency) 87,373 85,601 (36,645)
---------- ---------- ----------
Total liabilities and shareholders' equity $ 118,644 $ 121,803 $ 143,948
========== ========== ==========
</TABLE>
(*) Derived from the audited financial statements.
<TABLE>
<CAPTION>
See Notes to Condensed Consolidated Financial Statements.
1
Salant Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
Three Months Ended
------------------
April 1, April 3,
2000 1999
-------- --------
Cash Flows from Operating Activities:
<S> <C> <C>
Income/(Loss) from continuing operations $ 1,741 $ (3,816)
Adjustments to reconcile income/(loss) from continuing
operations to net cash (used)/provided by
operating activities:
Depreciation 1,242 1,180
Amortization 130 130
Change in operating assets and liabilities:
Accounts receivable (19,669) (10,785)
Inventories 5,090 16,202
Prepaid expenses and other current assets (375) 33
Accounts payable 627 3,959
Accrued and other liabilities (3,848) 11,403
Reserve for restructuring (358) 3,922
Liabilities subject to compromise (1,044) (7,232)
-------- --------
Net cash (used)/provided by continuing operations (16,464) 14,996
Cash (used)/provided by discontinued operations (308) 3,364
-------- --------
Net cash (used)/provided by operating activities: (16,772) 18,360
-------- --------
Cash Flows from Investing Activities:
Capital expenditures (206) (1,146)
Store fixture expenditures (152) (76)
Proceeds from sale of assets -- 27,000
-------- --------
Net cash (used)/provided by investing activities (358) 25,778
-------- --------
Cash Flows from Financing Activities:
Net short-term borrowings -- (38,496)
Other, net 31 36
-------- --------
Net cash provided/(used) by financing activities 31 (38,460)
-------- ---------
Net (decrease)/increase in cash and cash equivalents (17,099) 5,676
Cash and cash equivalents - beginning of year 30,116 1,222
-------- --------
Cash and cash equivalents - end of quarter $ 13,017 $ 6,898
======== ========
Supplemental disclosures of cash flow information: Cash paid during the period
for:
Interest $ 36 $ 861
======== ========
Income taxes $ 178 $ 22
======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
1
SALANT CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Amounts in Thousands of Dollars, Except Share Data)
(Unaudited)
Note 1. Financial Restructuring
On December 29, 1998 (the "Filing Date"), Salant Corporation filed a petition
under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code")
with the United States Bankruptcy Court for the Southern District of New York
(the "Bankruptcy Court") (the "1998 Case") in order to implement a restructuring
of its 10-1/2 % Senior Secured Notes due December 31, 1998 (the "Senior Notes").
Salant also filed its plan of reorganization (the "Plan") with the Bankruptcy
Court on the Filing Date in order to implement its restructuring. On April 16,
1999, the Bankruptcy Court issued an order (the "Confirmation Order") confirming
the Plan. The effective date of the Plan occurred on May 11, 1999 (the
"Effective Date"). See the Company's Annual Report on Form 10-K for the period
ended January 1, 2000 for more information on the Plan.
The authorized capital stock of Salant as of the Effective Date consists of (i)
45,000,000 shares of New Common Stock, $1.00 par value per share and (ii)
5,000,000 shares of preferred stock, $2.00 par value per share. No preferred
stock has been issued either in connection with the Plan or otherwise.
Post-restructuring, Salant has focused primarily on its Perry Ellis men's
apparel business and, as a result, Salant exited its other businesses, including
its Children's Group and non-Perry Ellis menswear divisions. During 1999, the
Company sold its John Henry and Manhattan businesses. These businesses included
the John Henry, Manhattan and Lady Manhattan trade names, the John Henry and
Manhattan dress shirt inventory, the leasehold interest in the dress shirt
facility located in Valle Hermosa, Mexico, and the equipment located at the
Valle Hermosa facility and at Salant's facility located in Andalusia, Alabama.
During 1999, Salant also sold its Children's Group, which primarily involved the
sale of inventory related to the Children's Group. As a result of the above,
Salant will now report its business operations as a single segment.
Note 2. Basis of Presentation and Consolidation
The accompanying unaudited Condensed Consolidated Financial Statements include
the accounts of Salant Corporation ("Salant") and subsidiaries (collectively,
the "Company"). (As used herein, the Company includes Salant and its
subsidiaries but excludes Salant Children's Group.)
The Company's principal business is the designing, manufacturing, importing and
marketing of men's apparel. The Company sells its products to retailers,
including department stores, specialty stores and major discounters, in addition
to its own outlet stores. For a portion of 1999, the Company made limited sales
of certain products to national chains and mass volume retailers, throughout the
United States.
The results of operations for the three months ended April 1, 2000 and April 3,
1999 are not necessarily indicative of a full year's operations. In the opinion
of management, the accompanying financial statements include all adjustments of
a normal recurring nature which are necessary to present fairly such financial
statements. Significant intercompany balances and transactions have been
eliminated in consolidation. Certain information and footnote disclosures
normally included in the financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted. These
condensed consolidated financial statements should be read in conjunction with
the audited financial statements and notes thereto included in the Company's
annual report on form 10-K for the year ended January 1, 2000.
<TABLE>
<CAPTION>
Note 3. Inventories
April 1, January 1, April 3,
2000 2000 1999
------------ ------------ ------------
<S> <C> <C> <C>
Finished goods $ 23,137 $ 25,385 $ 34,300
Work-in-Process 6,105 10,208 9,438
Raw materials and supplies 7,337 6,076 9,650
--------- --------- ----------
$ 36,579 $ 41,669 $ 53,388
======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Note 4. Accumulated Other Comprehensive Income
Foreign Minimum Accumulated
Currency Pension Other
Translation Liability Comprehensive
Adjustment Adjustment Income
2000
<S> <C> <C> <C>
Beginning of year balance $ (143) $ (2,801) $ (2,944)
Current period change 31 -- 31
----------- --------- -----------
End of quarter balance $ (112) $ 2,801 $ (2,913)
=========== ======= =========
1999
Beginning of year balance $ (197) $ (3,856) $ (4,053)
Current period change 36 -- 36
----------- ------------ -----------
End of quarter balance $ (161) $ (3,856) $ (4,017)
========== ========= =========
</TABLE>
Note 5. Division Restructuring Costs
In the first quarter of 2000, the Company used $358 of the restructuring
reserve, relating primarily to severance costs and expenses related to holding
the Andalusia, Alabama facility as the Company attempts to sell the building. As
of April 1, 2000, the reserve for business restructuring totaling $1,950
consisted of $619 of severance and other employee related costs, $555 for future
lease payments, and $776 of other miscellaneous restructuring costs. It is
anticipated that these expenditures will be completed by the first quarter of
2001.
Note 6. Discontinued Operations
In the first quarter of 2000 the net liabilities of discontinued operations
decreased by $308 to $1,001 due primarily to the payment of accruals. Net sales
of discontinued operations in the first quarter of 2000 and 1999 was $0 and
$5,923, respectively.
Note 7. Pro Forma Information
Loss per share amounts for the three months ended April 3, 1999 is based on the
weighted average number of common shares as if the New Common Stock had been
issued at the beginning of the earliest period presented. Common stock
equivalents are not considered, as the options for the New Common Stock are
anti-dilutive.
The following is a comparison of basic and diluted income/(loss) per share using
the historical shares outstanding. Common stock equivalents are not considered
for the Old Common Stock, as the options were cancelled or anti-dilutive.
<TABLE>
<CAPTION>
Three Months Ended
------------------
April 1, April 3,
2000 1999
------- -------
Basic and diluted income/(loss) per share:
<S> <C> <C>
From continuing operations $ 0.18 $ (0.25)
From discontinued operations -- (0.13)
-------- ---------
Basic and diluted income/(loss) per share $ 0.18 $ (0.38)
====== ========
Weighted average common stock outstanding 9,901 15,170
======= =======
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
First Quarter of 2000 Compared with First Quarter of 1999
Net Sales
Net sales decreased by $21.9 million, or 27.9% in the first quarter of 2000, as
compared to the first quarter of 1999. This decrease primarily resulted from a
reduction of $25.3 million in sales for the non-Perry Ellis businesses that were
sold or closed in 1999. Sales of Perry Ellis products experienced a net increase
of $3.4 million or 6.4% for the first quarter of 2000, as compared to the first
quarter of 1999.
Gross Profit
The gross profit percentage increased by 2.7% in the first quarter of 2000, as
compared to the first quarter of 1999. This increase resulted from the reduction
of sales at lower margins in non-Perry Ellis businesses that were closed or sold
in 1999. The gross profit percentage on Perry Ellis products decreased by 3.6%
from the first quarter 1999, primarily due to a change in sales mix.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses for the first quarter of
2000 decreased to $12.0 million (21.3% of net sales) from $16.7 million (21.3%
of net sales) for the first quarter of 1999. The decrease in SG&A was primarily
a result of the elimination of personnel and overhead costs related to the sales
and closure of businesses that have been sold or discontinued.
Provision for Restructuring
In the first quarter of 1999, the Company recorded a restructuring provision of
$4.0 million. The provision was primarily for severance related to the sale of
the John Henry and Manhattan dress shirt businesses and trademarks and the
restructuring of the Company to focus primarily on the Perry Ellis men's apparel
business. No additional accruals were required for the first quarter of 2000.
Income from Continuing Operations Before Interest/Income Taxes
Income from continuing operations before interest and taxes was $1.5 million for
the first quarter of 2000 as compared to a loss of $3.0 million for the first
quarter of 1999. The improvement of $4.5 million is due primarily to
restructuring charges for first quarter of 1999 that the Company incurred
relating to the businesses that were sold or closed.
Interest Income/Expense, Net
Net interest income was $251,000 for the first quarter of 2000 compared with
interest expense of $806,000 for the first quarter of 1999. The decrease in
interest expense resulted from the elimination of short-term borrowings and the
increase in funds invested from the proceeds of the sale of the John Henry and
Manhattan businesses.
Discontinued Operations
In the first quarter of 1999, the Company provided $2.0 million for future
losses related to the phase out period and the closing of the Children's Group's
production and distribution facilities.
Net Income/(Loss)
In the first quarter of 2000, the Company reported net income of $1.7 million,
or $0.18 per share, as compared with a net loss of $5.8 million, or $(0.58) per
share, in the first quarter of 1999.
Earnings Before Interest, Taxes, Depreciation, Amortization, Restructuring
Charges and Loss on Discontinued Operations
Earnings before interest, taxes, depreciation, amortization, restructuring
charges, and discontinued operations was $2.9 million (5.0% of net sales) in the
first quarter of 2000, compared to $2.4 million (3.0% of net sales) in the first
quarter of 1999, an increase of $0.5 million, or 21.2%. The Company believes
this information is helpful in understanding cash flow from operations that is
available for debt service and capital expenditures. This measure is not
contained in Generally Accepted Accounting Principles and is not a substitute
for operating income, net income or net cash flows from operating activities.
Liquidity and Capital Resources
On May 11, 1999, the effective date of the Plan, the Company entered into a
syndicated revolving credit facility (the "Credit Agreement") with CIT pursuant
to and in accordance with the terms of a commitment letter dated December 7,
1998.
The Credit Agreement provides for a general working capital facility, in the
form of direct borrowings and letters of credit, up to $85 million subject to an
asset-based borrowing formula. The Credit Agreement consists of an $85 million
revolving credit facility, with at least a $35 million letter of credit
subfacility. As collateral for borrowings under the Credit Agreement, the
Company granted to CIT and a syndicate of lenders arranged by CIT (the
"Lenders") a first priority lien on and security interest in substantially all
of the assets of the Company. The Credit Agreement has an initial term of three
years.
The Credit Agreement also provides, among other things, that (i) the Company
will be charged an interest rate on direct borrowings of .25% in excess of the
Prime Rate or at the Company's request, 2.25% in excess of LIBOR (as defined in
the Credit Agreement), and (ii) the Lenders may, in their sole discretion, make
loans to the Company in excess of the borrowing formula but within the $85
million limit of the revolving credit facility. The Company is required under
the Credit Agreement to maintain certain financial covenants relating to
consolidated tangible net worth, capital expenditures, maximum pre-tax
losses/minimum pre-tax income and minimum interest coverage ratios. The Company
was in compliance with all applicable covenants at April 1, 2000.
Pursuant to the Credit Agreement, the Company will pay or paid the following
fees: (i) a documentary letter of credit fee of 1/8 of 1.0% on issuance and 1/8
of 1.0% on negotiation; (ii) a standby letter of credit fee of 1.0% per annum
plus bank charges; (iii) a commitment fee of $325 thousand; (iv) an unused line
fee of .25%; (v) an agency fee of $100 thousand (only for the second and third
years of the term of the Credit Agreement); (vi) a collateral management fee of
$8,333 per month; and (vii) a field exam fee of $750 per day plus out-of-pocket
expenses.
At the end of the first quarter 2000, there were no direct borrowings
outstanding; letters of credit outstanding under the Credit Agreement were $31.5
million and the Company had unused availability, based on outstanding letters of
credit and existing collateral, of $32.8 million. In addition to the unused
availability, the Company had approximately $13.0 million of cash available to
fund its operations. At the end of the first quarter 1999, direct borrowings and
letters of credit outstanding were $23.3 million and $22.7 million,
respectively, and the Company had unused availability of $33.9 million and $6.9
million of cash available.
The Company's cash used by operating activities for the first quarter of 2000
was $16.8 million, which primarily reflects (i) a decrease in inventory of $5.1
million, (ii) an increase in accounts payable of $0.6 million, (iii) non-cash
charges, such as depreciation and amortization of $1.4 million and (iv) income
from continuing operations of $1.7 million. These items were offset by an
increase in net accounts receivable of $19.7 million, a decrease in accrued
liabilities of $3.8 million, a decrease in liabilities subject to compromise of
$1.0 million, and other items of $1.1 million.
Cash used by investing activities for the first quarter of 2000 was $358
thousand, which reflects $206 thousand of capital expenditures and $152 thousand
for the installation of store fixtures in department stores. During fiscal 2000,
the Company plans to make capital expenditures of approximately $3.3 million and
to spend an additional $1.8 million for the installation of store fixtures in
department stores.
Factors that May Affect Future Results and Financial Condition.
This report contains or incorporates by reference forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Where any such forward-looking statement includes a statement of the assumptions
or bases underlying such forward-looking statement, the Company cautions that
assumed facts or bases almost always vary from the actual results, and the
differences between assumed facts or bases and actual results can be material,
depending on the circumstances. Where, in any forward-looking statement, the
Company or its management expresses an expectation or belief as to future
results, there can be no assurance that the statement of the expectation or
belief will result or be achieved or accomplished. The words "believe",
"expect", "estimate", "project", "seek", "anticipate" and similar expressions
may identify forward-looking statements. The Company's future operating results
and financial condition are dependent upon the Company's ability to successfully
design, manufacture, import and market apparel. Taking into account the
foregoing, the following are identified as important factors that could cause
results to differ materially from those expressed in any forward-looking
statement made by, or on behalf of, the Company:
Competition. The apparel industry in the United States is highly competitive and
characterized by a relatively small number of multi-line manufacturers (such as
the Company) and a large number of specialty manufacturers. The Company faces
substantial competition in its markets from manufacturers in both categories.
Many of the Company's competitors have greater financial resources than the
Company. The Company also competes for private label programs with the internal
sourcing organizations of many of its own customers.
Strategic Initiatives. Management of the Company is considering various
strategic opportunities, including but not limited to, new menswear licenses
and/or acquisitions. Management is also exploring ways to increase productivity
and efficiency, and to reduce the cost structures of its respective businesses.
Through this process management expects to increase its distribution channels
and achieve effective economies of scale. No assurance may be given that any
transactions resulting from this process will be announced or completed.
Apparel Industry Cycles and other Economic Factors. The apparel industry
historically has been subject to substantial cyclical variation, with consumer
spending on apparel tending to decline during recessionary periods. A decline in
the general economy or uncertainties regarding future economic prospects may
affect consumer spending habits, which, in turn, could have a material adverse
effect on the Company's results of operations and financial condition.
Retail Environment. Various retailers, including some of the Company's
customers, have experienced declines in revenue and profits in recent periods
and some have been forced to file for bankruptcy protection. To the extent that
these financial difficulties continue, there can be no assurance that the
Company's financial condition and results of operations would not be adversely
affected.
Seasonality of Business and Fashion Risk. The Company's principal products are
organized into seasonal lines for resale at the retail level during the Spring,
Transition, Fall and Holiday Seasons. Typically, the Company's products are
designed as much as one year in advance and manufactured approximately one
season in advance of the related retail selling season. Accordingly, the success
of the Company's products is often dependent on the ability of the Company to
successfully anticipate the needs of the Company's retail customers and the
tastes of the ultimate consumer up to a year prior to the relevant selling
season.
Foreign Operations. The Company's foreign sourcing operations are subject to
various risks of doing business abroad, including currency fluctuations
(although the predominant currency used is the U.S. dollar), quotas and, in
certain parts of the world, political instability. Any substantial disruption of
its relationship with its foreign suppliers could adversely affect the Company's
operations. Some of the Company's imported merchandise is subject to United
States Customs duties. In addition, bilateral agreements between the major
exporting countries and the United States impose quotas, which limit the amount
of certain categories of merchandise that may be imported into the United
States. Any material increase in duty levels, material decrease in quota levels
or material decrease in available quota allocation could adversely affect the
Company's operations. The Company's operations in Asia are subject to certain
political and economic risks including, but not limited to, political
instability, changing tax and trade regulations and currency devaluations and
controls. Although the Company has experienced no material foreign currency
transaction losses, its operations in the region are subject to an increased
level of economic instability. The impact of these events on the Company's
business, and in particular its sources of supply cannot be determined at this
time.
Dependence on Contract Manufacturing. As of January 1, 2000, the Company
produced 87% of its products (in units) through arrangements with independent
contract manufacturers. As the Company has closed its manufacturing facilities
during 1999, the use of independent contractors will increase in fiscal year
2000. The use of such contractors and the resulting lack of direct control could
subject the Company to difficulty in obtaining timely delivery of products of
acceptable quality. In addition, as is customary in the industry, the Company
does not have any long-term contracts with its fabric suppliers or product
manufacturers. While the Company is not dependent on one particular product
manufacturer or raw material supplier, the loss of several such product
manufacturers and/or raw material suppliers in a given season could have a
material adverse effect on the Company's performance.
Because of the foregoing factors, as well as other factors affecting the
Company's operating results and financial condition, past financial performance
should not be considered to be a reliable indicator of future performance, and
investors are cautioned not to use historical trends to anticipate results or
trends in the future. In addition, the Company's participation in the highly
competitive apparel industry often results in significant volatility in the
Company's common stock price.
Year 2000 Compliance
The Company has not experienced any material Year 2000 computer problems and, to
the best of the Company's knowledge, its suppliers, customers and financial
institutions also have not experienced any material Year 2000 computer problems.
To date, the Company's computer and the computers used to operate the systems
within the Company's offices and distribution facility (i.e. the conveyors, air
conditioning, telephone and security systems) have functioned properly into the
year 2000. As a result, the Company has been able to service its customers and
communicate with its suppliers without disruption.
PART II - OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a) The Company `s Annual Meeting of Stockholders (the "Annual Meeting") was held
on May 9, 2000.
b) Proxies for the Annual Meeting were solicited pursuant to the
regulation 14A under the Securities Exchange Act of 1934, as amended.
There were no solicitations in opposition to management's nominee for
one director listed in the proxy statement. The nominee for director
listed in the proxy statement was elected.
c) The following matters were voted upon at the Annual Meeting:
1. The election of one Class I director. The results of the vote follow:
Nominee Class For Against
------- -------- --- -------
Talton R. Embry Class I 6,890,314 1,525
2. Approval of the Company's Stock Option Plan. The results of the vote follow:
For Against Abstain
--- ------- -------
6,471,842 79,042 2,151
3. Ratification of Deloitte & Touche LLP as the Company's independent auditors
for the fiscal year 2000. The results of the vote follow:
For Against Abstain
--- ------- -------
6,838,757 52,668 414
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Reports on Form 8-K
During the first quarter of 2000, the Company did not file an 8-K.
Exhibits
Number Description
27 Financial Data Schedule
16
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.
SALANT CORPORATION
Date: May 12, 2000 /s/ Awadhesh K. Sinha
-------------- -----------------------
Awadhesh K. Sinha
Chief Operating Officer and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> Dec-30-2000
<PERIOD-END> Apr-01-2000
<CASH> 13017
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