<PAGE>
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 JUNE 30, 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: 0-20850
HAGGAR CORP.
(Exact name of the registrant as specified in the charter)
NEVADA 75-2187001
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
6113 LEMMON AVENUE
DALLAS, TEXAS 75209
(Address of principal executive offices)
TELEPHONE NUMBER (214) 352-8481
(Registrant's telephone number including area code)
Indicate by a 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 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 7, 1997, there were 8,551,382 shares of the Registrant's Common
Stock outstanding.
<PAGE>
HAGGAR CORP. AND SUBSIDIARIES
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Operations
(Three and nine months ended June 30, 1997 and 1996) 3
Consolidated Balance Sheets
(As of June 30, 1997 and September 30, 1996) 4
Consolidated Statements of Cash Flows
(Nine months ended June 30, 1997 and 1996) 5
Notes to Consolidated Financial Statements 6 - 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 - 12
Part II. Other Information.
Item 6. Exhibits and Reports on Form 8-K 13
Signature 13
Exhibit 14
2
<PAGE>
HAGGAR CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
------------------- -----------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 87,996 $103,769 $290,761 $313,027
Cost of goods sold 63,492 74,836 207,095 226,910
-------- -------- -------- --------
Gross profit 24,504 28,933 83,666 86,117
Selling, general and administrative expenses (27,550) (26,667) (83,831) (79,155)
Royalty income, net 489 653 1,251 1,893
-------- -------- -------- --------
Operating income (loss) (2,557) 2,919 1,086 8,855
Other income, net 116 318 1,305 198
Interest expense (772) (1,475) (2,563) (3,124)
-------- -------- -------- --------
Income (loss) from operations before provision
(benefit) for income taxes (3,213) 1,762 (172) 5,929
Provision (benefit) for income taxes (1,287) 680 (69) 2,259
-------- -------- -------- --------
Net income (loss) $ (1,926) $ 1,082 $ (103) $ 3,670
-------- -------- -------- --------
-------- -------- -------- --------
Net income (loss) per common share and
common share equivalent $ (0.23) $ 0.13 $ (0.01) $ 0.43
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average number of common shares
and common share equivalents outstanding 8,552 8,552 8,552 8,552
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
HAGGAR CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
June 30, September 30,
1997 1996
(unaudited)
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 4,765 $ 2,944
Accounts receivable, net 45,824 74,556
Inventories 114,828 116,356
Deferred tax benefit 13,464 12,410
Federal income taxes receivable 611 --
Other current assets 4,096 3,646
-------- ---------
Total current assets 183,588 209,912
Property, plant, and equipment, net 65,798 65,760
Other assets 725 2,662
-------- ---------
$250,111 $278,334
-------- ---------
-------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,922 $ 23,596
Accrued liabilities 25,601 34,524
Accrued wages and other employee compensation 2,662 3,447
Accrued workers' compensation expense 5,529 5,895
Accrued health insurance expense 2,771 2,541
Federal income taxes payable -- 1,189
Short-term borrowings 2,209 2,067
Current portion of long-term debt 363 481
-------- ---------
Total current liabilities 60,057 73,740
Long-term debt 28,958 42,112
-------- ---------
Total liabilities 89,015 115,852
STOCKHOLDERS' EQUITY
Common stock - par value $0.10 per share; 25,000,000
shares authorized and 8,560,636 shares issued at
June 30, 1997 and September 30, 1996 856 856
Additional paid-in capital 41,641 41,641
Retained earnings 118,600 119,986
-------- ---------
161,097 162,483
Less - Treasury stock, 9,254 shares at par value (1) (1)
-------- ---------
Total stockholders' equity 161,096 162,482
-------- ---------
$250,111 $278,334
-------- ---------
-------- ---------
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
HAGGAR CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
Nine Months Ended
June 30,
-------------------
1997 1996
------ ------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (103) $ 3,670
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 8,440 4,031
Gain on disposal of property, plant, and equipment (357) (190)
Loss on sales of marketable securities -- 532
Changes in assets and liabilities-
Accounts receivable, net 28,732 25,797
Inventories 1,528 (5,907)
Federal income tax receivable (611) --
Deferred tax benefit (1,054) 1,906
Insurance receivable 100 23,990
Other current assets (550) 1,833
Accounts payable (2,674) (5,552)
Accrued liabilities and federal income taxes payable (10,112) (5,197)
Accrued wages and other employee compensation (785) (924)
Accrued health insurance expense (366) 319
Accrued workers' compensation expense 230 (780)
------- ---------
Net cash provided by operating activities 22,418 43,528
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment, net (9,077) (11,087)
Proceeds from the sale of property, plant and equipment 956 264
Proceeds from the sale of marketable securities -- 5,028
Decrease in other assets 1,937 3,138
------- ---------
Net cash used in investing activities (6,184) (2,657)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from short-term borrowings 142 423
Proceeds from issuance of long-term debt 30,000 349,000
Payments on long-term debt (43,272) (388,377)
Payments of cash dividends (1,283) (1,283)
------- ---------
Net cash used in financing activities (14,413) (40,237)
Increase (decrease) in cash and cash equivalents 1,821 634
Cash and cash equivalents, beginning of period 2,944 2,230
------- ---------
Cash and cash equivalents, end of period $ 4,765 $ 2,864
------- ---------
------- ---------
Supplemental disclosure of cash flow information
Cash paid for:
Interest, net of amounts capitalized $ 1,983 $ 2,304
Income taxes $ 1,171 $ 392
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
HAGGAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS.
The consolidated balance sheet as of June 30, 1997, the consolidated
statements of operations for the three and nine months ended June 30, 1997
and 1996, and the consolidated statements of cash flows for the nine months
ended June 30, 1997 and 1996, have been prepared by Haggar Corp. (the
"Company") without audit. In the opinion of management, all necessary
adjustments (which include only normal recurring adjustments) to present
fairly the consolidated financial position, results of operations, and cash
flows of the Company at June 30, 1997, and for all other periods presented,
have been made. Certain information and footnote disclosures normally
included in the financial statements prepared in accordance with generally
accepted accounting principles have been omitted. These financial statements
should be read in conjunction with the financial statements and accompanying
footnotes in the Company's Annual Report on Form 10-K for the year ended
September 30, 1996.
CONCENTRATIONS OF CREDIT RISK.
Financial instruments which potentially expose the Company to concentrations
of credit risk, as defined by Statement of Financial Accounting Standards
("SFAS") No. 105, "Disclosure of Information about Financial Instruments with
Off-Balance Sheet Risk and Financial Instruments with Concentrations of
Credit Risk," consist primarily of trade accounts receivable. The Company's
customers are not concentrated in any specific geographic region but are
concentrated in the apparel industry. One customer accounted for 25.0% and
25.1% of the Company's net sales for the three months ended June 30, 1997 and
1996, respectively. The same customer accounted for 27.1% and 27.0% of the
Company's net sales for the nine month period ended June 30, 1997 and 1996,
respectively. The Company performs ongoing credit evaluations of its
customers' financial condition and establishes an allowance for doubtful
accounts based upon factors surrounding the credit risk of specific
customers, historical trends, and other information.
INVENTORIES.
Inventories are stated at the lower of cost (first-in, first-out) or market
and consisted of the following at June 30, 1997, and September 30, 1996 (in
thousands):
June 30, September 30,
1997 1996
--------- --------
Piece goods $ 18,662 $ 23,335
Trimmings & supplies 5,898 5,991
Work-in-process 17,688 13,248
Finished garments 72,580 73,782
--------- --------
$114,828 $116,356
--------- --------
--------- --------
Work-in-process and finished garments inventories consisted of materials,
labor and manufacturing overhead.
6
<PAGE>
FINANCIAL INSTRUMENTS.
The Financial Accounting Standards Board ("FASB") issued SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," which
addresses the accounting and reporting requirements for both investments in
equity securities that have readily determinable fair values and for all
investments in debt securities. During the second quarter of fiscal 1996,
the Company sold all of its investments in preferred stock and equity
securities. The proceeds from the sale were used to reduce borrowings under
the Company's line of credit.
Realized gains and losses on investments in preferred stocks were determined
on a specific identification basis. For the three and nine months ended June
30, 1997, there were no realized gains or losses recognized. For the nine
months ended June 30, 1996, realized losses of $532,000 have been recorded.
The realized gains and losses for the nine months ended June 30, 1996, are
included in "Other income, net" stated in the accompanying Consolidated
Statements of Operations.
LONG-TERM DEBT.
Long-term debt consisted of the following at June 30, 1997, and September 30,
1996 (in thousands):
June 30, September 30,
1997 1996
------- -------
Borrowings under revolving
credit line $ -- $ 13,000
Industrial Development Revenue
Bonds with interest at a rate equal
to that of high-quality, short-term,
tax-exempt obligations, as defined
(4.2% at June 30, 1997),
payable in annual installments of
$100 to $200, and a final payment of
$2,000 in 2005, secured by
certain buildings and equipment 2,800 2,900
Allstate notes 25,000 25,000
Other 1,158 1,693
------- -------
28,958 42,593
Less - Current portion 363 481
------- -------
$29,321 $42,112
------- -------
------- -------
As of June 30, 1997, the Company had a $100,000,000 revolving credit line
agreement (the "Agreement") with certain banks subject to certain borrowing
base limitations. The Company had no debt outstanding and additional
available borrowing capacity of approximately $85,000,000 under this
Agreement at June 30, 1997. The Company incurred approximately $126,000 in
commitment fees related to the available borrowing capacity during the nine
month period ended June 30, 1997. The interest rates for the nine month
period ended June 30, 1997, ranged from 6.03 % to 8.50%, and the weighted
average interest rate for the quarter and nine month period was 8.09%. The
Agreement is unsecured, except that the Company is prohibited from pledging
its accounts receivable and inventories during the term of the Agreement.
The Agreement contains limitations on incurring additional indebtedness and
requires the maintenance of certain financial ratios. In addition, the
Agreement requires the Company and Haggar Clothing Co., the Company's main
operating subsidiary, to maintain tangible net worth, as defined, in excess
of $149,000,000 and $55,000,000 as of June 30, 1997. For fiscal years after
1996, the Agreement requires the Company to maintain a tangible net worth in
excess of the tangible net worth requirement of the preceding fiscal year
plus 50% of the Company's consolidated net income. The Agreement prohibits
the
7
<PAGE>
payment of any dividend if a default exists after giving effect to such
dividend. Effective June 30, 1997, the Agreement was amended to extend the
maturity date of the Agreement to December 31, 1999, with a one year renewal
at the option of the banks and to relax certain of these financial ratios for
the third and fourth quarters of fiscal 1997.
In fiscal 1995, the Company completed the sale and issuance of $25,000,000 in
senior notes (the "Allstate notes"). Proceeds from the notes were used to
partially fund the construction of the Company's new Customer Service Center
("CSC"). Significant terms of the senior notes include a maturity date of
ten years from the date of issuance, interest payable semi-annually and
annual principal payments beginning in the fourth year. The interest rate on
the senior notes is fixed at 8.49%. The terms and conditions of the note
purchase agreement governing the senior notes include restriction on the sale
of assets, limitation on additional indebtedness and the maintenance of
certain net worth requirements.
NET INCOME PER COMMON SHARE AND COMMON SHARE EQUIVALENT.
Net income per common share and common share equivalent is calculated by
dividing net income applicable to common stock by the weighted average shares of
common stock and common stock equivalents outstanding. Common share equivalents
represent the effect, if any, of the assumed purchase of common shares, using
the treasury stock method, pursuant to common stock options issued under the
Company's long-term incentive plan.
SFAS No. 128, "Earnings Per Share," issued in February 1997, mandates a
change in the methodology for calculating earnings per share. The Company
will implement the provisions of SFAS No. 128 in the first quarter of fiscal
1998. Had SFAS No. 128 been implemented during the third quarter of fiscal
1997 the implementation would not have had a significant impact on the
calculation of earnings per share of the Company.
SUBSEQUENT EVENTS.
Subsequent to June 30, 1997, the Company declared a cash dividend of $0.05
per share payable to the stockholders of record on August 4, 1997. The
dividend of approximately $428,000 will be paid on August 18, 1997.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the attached
consolidated financial statements and the notes thereto, and with the
Company's Annual Report on Form 10-K for the fiscal year ended September 30,
1996.
RESULTS OF OPERATIONS
The Company's third quarter of fiscal 1997 net loss to common stockholders of
$1.9 million compares to net income of $1.1 million in the third quarter of
fiscal 1996. Net loss to common stockholders for the nine months ended June
30, 1997, was $0.1 million compared to net income of $3.7 million for the
nine months ended June 30, 1996. The net loss in the third quarter of fiscal
1997 and nine months ended June 30, 1997, is primarily the result of
decreased sales and inventory writedowns.
Net sales for the third quarter ended June 30, 1997, decreased 15.2% to $88.0
million from $103.8 million for the third quarter of fiscal 1996. The
decrease in net sales for the third quarter of fiscal 1997 is the result of a
28.6% decrease in unit sales, offset by a 13% increase in the average sales
price. Net sales for the nine months ended June 30, 1997, decreased 7.1% to
$290.8 million compared to $313.0 million in the prior fiscal year. The 7.1%
decrease in the first nine months of fiscal 1997 is the result of a 12.4%
decrease in unit sales, offset by a 1.3% increase in the average sales price.
The decrease in unit sales for the three months ended June 30, 1997, is
attributable to lower than expected retail sales and product conversions for
two major customers. The increase in the average sales price for the third
quarter resulted from fewer sales markdowns. The decrease in unit sales for
the nine months ended June 30, 1997, is attributable to sluggish holiday
retail sales, the product conversions and shipment delays in the second
quarter. (See, "Management Information System.")
Gross profit as a percentage of net sales was 27.9% in the third quarter of
fiscal 1997 compared to 27.9% for the third quarter of the prior fiscal year.
Operationally, the gross profit as a percentage of net sales in the third
quarter of fiscal 1997 would have been 29.1% but for $1.1 million in
markdowns, attributable to the product conversions. Gross profit as a
percentage of net sales for the first nine months of fiscal 1997 increased to
28.8% compared to 27.5% in the first nine months of fiscal 1996. The
increase in gross profit as a percentage of net sales is primarily the result
of lower manufacturing costs attributable to an increase in the proportion of
offshore production compared to domestic production.
Selling, general and administrative expenses as a percentage of net sales
increased to 31.3% in the third quarter of fiscal 1997 compared to 25.7% in
the third quarter of fiscal 1996. For the nine months ended June 30, 1997,
selling, general and administrative expenses as a percentage of net sales
increased to 28.8% compared to 25.3% in the first nine months of the prior
fiscal year. The increase in selling, general and administrative expenses
for the nine months ended June 30, 1997, is primarily the result of increases
in depreciation expense of approximately $3.6 million for the Customer
Service Center ("CSC"). Additionally, there were 22 additional retail stores
open and operating at the end of the third quarter of fiscal 1997 as compared
to the same quarter in fiscal 1996 which resulted in a further increase of
approximately $4.1 million. These increases to the selling, general and
administrative expenses were partially offset by the decreased shipping costs
for the CSC of approximately $3.9 million primarily due to the reduction in
labor for the CSC.
9
<PAGE>
Other income for the third quarter of fiscal 1997 of $0.1 million was
comparable to other income of $0.3 million for the third quarter of fiscal
1996. For the nine month period ended June 30, 1997, other income was $1.3
million compared to other income of $0.2 million for the same period during
fiscal 1996. The increase in other income for the nine months ended June 30,
1997, was primarily the result of an unrealized loss of approximately $0.5
million on the sale of marketable securities during fiscal 1996 and the
recognition of a gain of approximately $0.5 million on the dissolution of a
joint venture in the United Kingdom during fiscal 1997.
Interest expense in the third quarter of fiscal 1997 decreased to $0.8
million compared to $1.5 million in the third quarter of fiscal 1996.
Interest expense for the first nine months of fiscal 1997 decreased to $2.6
million compared to interest expense of $3.1 million in the first nine months
of fiscal 1996. The decreases in interest expense for the three and nine
months ended June 30, 1997, compared to fiscal 1996, relate primarily to the
decreased borrowings under the Agreement.
The income tax benefit for the third quarter of fiscal 1997, as a percentage
of income or loss before provision for income taxes, was 40.1% compared to a
38.6% provision in the third quarter of fiscal 1996. For the nine months
ended June 30, 1997, the income tax benefit as a percentage of income or loss
before provision for income taxes was 40.1% compared to a 38.1% provision in
the first nine months of 1996. The effective tax rates for both the third
quarter and the first nine months of fiscal 1997 and 1996 differ from the
statutory rate because of certain permanent tax differences and state income
taxes.
LIQUIDITY AND CAPITAL RESOURCES
The Company's trade accounts receivable potentially expose the Company to
concentrations of credit risks because most of its customers are in the
retail apparel industry. The Company performs ongoing credit evaluations of
its customers' financial condition and establishes an allowance for doubtful
accounts based upon the factors related to the credit risk of specific
customers, historical trends and other information. The Company's trade
accounts receivable decreased approximately $28.7 million to $45.8 million at
June 30, 1997, from $74.5 million at September 30, 1996. This decrease in
trade accounts receivable is the result of seasonal reductions and decreased
sales volume in the third quarter of fiscal 1997.
Inventories as of June 30, 1997, decreased to $114.8 million from $116.4
million at September 30, 1996. The comparable inventory levels at September
30, 1996, and at June 30, 1997, reflect the Company's ongoing efforts to
manage inventory at a level commensurate with projected sales.
The Company's ongoing external financing needs are met through an unsecured
revolving credit facility with certain banks. The Agreement provides the
Company with a $100.0 million line of credit. The amount available under the
Agreement is limited to the lesser of $100.0 million minus any letter of
credit exposure or the borrowing base as defined in the Agreement. Effective
June 30, 1997, the Agreement was amended to extend the Agreement through
December 31, 1999, and to relax certain financial covenants for the third and
fourth quarters of fiscal 1997. As of June 30, 1997, the Company had no
borrowings outstanding under the Agreement and had available borrowing
capacity of approximately $85 million.
In fiscal 1995, the Company issued $25.0 million in senior notes.
Significant terms of the senior notes include a maturity date of ten years
from the date of issuance, interest payable semi-annually and annual
principal payments beginning in the fourth year. The interest rate on the
senior notes is fixed at 8.49%. The terms and conditions of the note purchase
agreement governing the senior notes include restrictions on the sale of
assets, limitations on additional indebtedness, and the maintenance of
certain net worth requirements.
10
<PAGE>
The Company's Haggar UK subsidiary maintains $6.6 million in lines of credit
with banks in the United Kingdom to fund operating activities. As of June
30, 1997, the subsidiary had approximately $2.2 million outstanding under the
lines of credit. The lines of credit have been partially collateralized by
approximately $5.0 million in letters of credit from the Company and are
payable upon demand. Interest under the lines of credit is payable at 1%
above the banks' base rates.
During the second quarter of fiscal 1997, the Company reached an agreement
with its joint venturer, Coats Viyella Plc, to dissolve and wind-up the joint
venture of the two firms in the United Kingdom. The dissolution of this
partnership resulted in a gain of approximately $0.5 million, which is
included in other income during the nine months ended June 30, 1997. The
Company intends to continue to market Haggar-Registered Trademark- apparel in
the United Kingdom, including Northern Ireland and the Republic of Ireland,
through its Haggar UK subsidiary.
For the nine months ended June 30, 1997 the Company provided cash from
operating activities of approximately $22.4 million primarily as the result
of a decrease in accounts receivable of $28.7 million. The Company provided
approximately $43.5 million in cash from operating activities for the nine
months ended June 30, 1996, primarily as a result of the decreases in
accounts receivable of $25.8 million, and the decrease in the insurance
receivable of $24.0 million due to the collection of proceeds from the
insurance carrier, offset by a decrease in accrued liabilities and federal
income taxes payable of $5.2 million. The Company used approximately $6.1
million in investing activities for the nine months ended June 30, 1997,
primarily to purchase property, plant and equipment, partially offset by a
decrease in other assets of approximately $1.9 million. For the nine months
ended June 30, 1996, approximately $2.6 million in cash flow was used by
investing activities primarily as the net result of $11.0 million used to
purchase property, plant and equipment, offset by $5.0 million provided by
the sale of all of its investments in preferred stock and equity securities
and a decrease in other assets of $3.3 million. For the nine months ending
June 30, 1997, cash flows used in financing activities were primarily the
result of payment of $43.2 million on long-term debt offset by the issuance
of $30.0 million in long-term debt. Comparatively, cash flows used in
financing activities for the nine months ended June 30, 1996, were primarily
the result of payment of $388.3 million on long-term debt offset by the
issuance of $349.0 million in long-term debt.
The Company believes that the cash flow generated from operations and the
funds available under the foregoing credit facilities will be adequate to
meet its working capital and related financing needs for the foreseeable
future.
NEW ACCOUNTING STANDARDS.
In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, "Accounting for Stock-Based Compensation." As a result of this
statement, the Company will begin to provide additional disclosures related
to its stock based compensation plans in its 1997 audited financial
statements. Adoption of SFAS No. 123 will not have a material effect on the
Company's financial position or results of operations.
SFAS No. 128, "Earnings Per Share," issued in February 1997, mandates a
change in the methodology for calculating earnings per share. The Company
will implement the provisions of SFAS No. 128 in the first quarter of fiscal
1998. Had SFAS No. 128 been implemented during the third quarter of fiscal
1997 the implementation would not have had a significant impact on the
calculation of earnings per share of the Company.
11
<PAGE>
MANAGEMENT INFORMATION SYSTEM.
During the second quarter of fiscal 1997, the Company modified its previous
management information systems by implementing a software system to manage,
among other things, customer service, order allocation, billing to customers
and calculations of commissions for the Company's sales associates. The
Company expects this system to ultimately improve operational efficiencies
and facilitate future growth. During the implementation of this system, the
Company encountered problems that adversely impacted the second quarter of
fiscal 1997, primarily as the result of shipping delays and lost sales in
March. The Company has addressed these issues and has improved the system's
functionality. Internal changes to the system continue to be made to improve
its operational efficiencies and ease of use.
FORWARD LOOKING STATEMENTS.
This report contains certain forward-looking statements. In addition, from
time to time the Company may issue press releases and other written
communications, and representatives of the Company may make oral statements,
which contain forward-looking information. Except for historical
information, matters discussed in such oral and written communications are
forward-looking statements that involve risks and uncertainties which could
cause actual results to differ materially from those in such forward-looking
statements.
Risks and uncertainties inherent to the Company's line of business include
such factors as natural disasters, general economic conditions, the
performance of the retail sector in general and the apparel industry in
particular, the competitive environment, consumer acceptance of new products,
and the success of advertising, marketing and promotional campaigns.
Additional risks and uncertainties which could cause the Company's actual
results to differ from those contained in any forward-looking statements are
discussed elsewhere herein.
12
<PAGE>
PART II. OTHER INFORMATION.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Pages
11 Statement Regarding Computation of Net Income per Common Share. 14
(b) No reports on Form 8-K filed have been filed during the quarter
for which this report is filed.
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.
Haggar Corp.,
Date: August 7, 1997 By: /s/ David M. Tehle
--------------------------
David M. Tehle
Senior Vice President
Chief Financial Officer
Signed on behalf of the
registrant and as principal
financial officer.
13
<PAGE>
EXHIBIT 11
HAGGAR CORP. AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER COMMON SHARE
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
Three Months Ended Nine Months Ended
June 30, June 30,
---------------------- ----------------------
1997 1996 1997 1996
------- ------ ------ -----
<S> <C> <C> <C> <C>
Net income (loss) to common stockholders $(1,926) $1,082 $ (103) 3,670
------- ------ ------ -----
Weighted average common shares and common
share equivalents outstanding 8,552 8,552 8,552 8,552
------- ------ ------ -----
Net income (loss) per common share and common
share equivalents ($0.23) $0.13 ($0.01) $0.43
------- ------ ------ -----
------- ------ ------ -----
Computation of weighted average common shares
and common share equivalents outstanding:
Weighted average common shares outstanding 8,551 8,551 8,551 8,551
Shares equivalents, due to stock options 1 1 1 1
------- ------ ------ -----
8,552 8,552 8,552 8,552
------- ------ ------ -----
------- ------ ------ -----
</TABLE>
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF INCOME FILED AS PART OF
THE ANNUAL REPORT ON FORM 10-K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH ANNUAL REPORT ON FORM 10-K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
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