SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM 10-Q/A
Amendment No. 1 to
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended January 31, 1998
Commission File No. 1-11722
CHIC BY H.I.S., INC.
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(Exact name of registrant as specified in its charter)
Delaware 13-3494627
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(State of Incorporation) (I.R.S. Employer
Identification No.)
1372 Broadway, New York, New York 10018
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(Address of principal executive offices) (Zip Code)
(212) 302-6400
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Registrant's telephone number,
including area code
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
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Shares
Date Class Outstanding
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March 5, 1998 Common Stock, $.0l Par Value 9,787,868
<PAGE>
CHIC BY H.I.S., INC.
This report on Form 10-Q/A constitutes Amendment No. 1 to the Registrant's
Form 10-Q for the quarter ended January 31, 1998. This report is intended to
amend certain information contained in Part I, Item 1.
INDEX
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Page
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Part I. Financial Information
Item 1: Financial Statements (unaudited, except as noted):
Consolidated Balance Sheets at
January 31, 1998 and November 1, 1997 (audited) 3
Consolidated Statements of Operations
for the thirteen weeks ended January 31,
1998 and February 1, 1997 4
Consolidated Statements of Cash Flows
for the thirteen weeks ended January 31,
1998 and February 1, 1997 5
Consolidated Statements of Stockholders'
Equity for the thirteen weeks ended
January 31, 1998 and February 1, 1997 6
Notes to Consolidated Financial Statements 7-8
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-12
Part II. Other Information
Item 5: Special Note Regarding Forward-Looking Statements 13-14
Item 6: Exhibits and Reports on Form 8-K 15
Signature Page 16
<PAGE>
CHIC BY H.I.S, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
(In thousands, except share and Jan. 31, 1998 Nov. 1, 1997
per share amounts) (Unaudited) (Audited)
<S> <C> <C>
Assets
Current:
Cash and cash equivalents $ 7,480 $7,395
Accounts receivable - net of reserve
for possible losses 35,561 32,926
Inventories 71,753 71,368
Deferred income taxes 2,767 3,020
Prepared expenses and other
current assets 4,588 3,560
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Total Current Assets 122,149 118,269
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Property, Plant and Equipment, at cost
less accumulated depreciation and
amortization 70,801 67,998
Other Assets 3,106 2,436
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$196,056 $188,703
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Liabilities and Stockholder's Equity
Current:
Revolving bank loan $ 23,500 $ 15,000
Foreign bank debt 888 -
Current maturities of long-term debt 1,934 1,997
Obligations under capital leases 757 701
Accounts payable 13,836 17,032
Accrued liabilities:
Payroll, payroll taxes and
commissions 2,837 5,492
Income taxes 6,630 4,802
Other 5,877 5,731
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Total current liabilities 56,259 50,755
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Non-current:
Long-term debt 25,921 25,989
Pension liability 10,654 10,654
Deferred income taxes 2,713 2,713
Obligations under capital leases 1,105 660
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Total non-current liabilities 40,393 40,016
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Minority interest 9,264 8,864
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<PAGE>
Stockholders' Equity
Preferred stock, $.01 par value-shares
authorized 10,000,000; none issued - -
Common stock, $.01 par value-
25,000,000 shares authorized;
9,787,868 and 9,764,968 issued
and outstanding 99 99
Paid-in capital 105,724 105,590
Retained earnings (deficit) (4,783) (6,299)
Foreign currency translation adjustment (246) 332
Excess of additional pension liability
over intangible pension asset (10,654) (10,654)
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Stockholders' Equity 90,140 89,068
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$ 196,056 $ 188,703
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See notes to consolidated financial statements.
</TABLE>
<PAGE>
CHIC BY H.I.S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
Thirteen Thirteen
weeks weeks
(In Thousands, except share and ended January ended February
per share amounts) 31, 1998 1, 1997
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<S> <C> <C>
Net sales 64,245 56,031
Cost of goods sold 47,680 41,220
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Gross profit 16,565 14,811
Licensing revenues 597 538
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17,162 15,349
Selling, general and administrative
expenses 11,907 14,339
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Operating income 5,225 1,010
Interest and finance costs (883) (1,187)
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Income (loss) before provision for income
taxes, minority interest and
extraordinary item 4,372 (177)
Provision for income taxes 1,932 217
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Income (loss) before minority interest
and extraordinary item 2,440 (394)
Minority interest 924 -
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Income (loss) before extraordinary item 1,516 (394)
Extraordinary loss from extinguishment of debt - (330)
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Net income (loss) $ 1,516 $ (724)
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Earnings (loss) per common share:
Basic:
Income (loss) before extraordinary item $.15 ($.04)
Net income (loss) $.15 ($.07)
Diluted:
Income (loss) before extraordinary item $.15 ($.04)
Net income (loss) $.15 ($.07)
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Weighted average number of common shares
and share equivalents outstanding
Basic 9,787,868 9,753,868
Diluted 9,895,017 9,753,868
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See notes to consolidated financial statements.
</TABLE>
CHIC BY H.I.S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
Thirteen Weeks Ended
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January 31, February 1,
(In Thousands) 1998 1997
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<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 1,516 ($724)
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Adjustments to reconcile net income (loss)
to net cash used in operating
activities:
Minority interest 924 -
Depreciation and amortization 1,266 976
Deferred income taxes 253 (1,525)
Decrease (increase in):
Accounts receivable (2,635) 6,949
Inventories (385) (13,105)
Prepaid expenses and other current assets (1,028) (3,053)
Other assets (670) (1,329)
Increase (decrease) in:
Accounts payable (3,196) 5,587
Accrued liabilities (680) (1,746)
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Total adjustments (6,151) (7,246)
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Net cash used in operating activities (4,635) (7,970)
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Cash flows from investing activities:
Purchase of property, plant and equipment (3,259) (1,216)
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Cash Flows from financing activities:
Increase in loans under revolving line
of credit 8,500 25,900
Increase in foreign bank debt 888 4,113
Repayment of long-term debt - (43,000)
Proceeds from the issuance of common stock 134 -
Increase in deferred financing costs - (150)
Principal payments under capitalized
lease obligations (202) (221)
Retirement of capitalized lease obligation (175) -
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Net cash provided by (used in)
financing activities 9,145 (13,358)
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Increase (decrease) in cash and
cash equivalents 1,251 (22,544)
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<PAGE>
Effect of exchange rates on cash (1,166) (1,491)
Cash and cash equivalents, beginning of
period 7,395 27,178
Cash and cash equivalents, end
of period $ 7,480 $ 3,143
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See notes to consolidated financial statements.
</TABLE>
<PAGE>
CHIC BY H.I.S, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
Common Paid-in
(In Thousands) Total Stock capital
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<S> <C> <C> <C>
Balance, November 2, 1996 $ 80,878 $ 98 $ 105,526
Net loss (724) - -
Foreign currency translation adjustment (1,360) - -
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Balance, February 1, 1997 $ 78,794 $ 98 $ 105,526
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Balance, November 1, 1997 $ 89,068 $ 99 $ 105,590
Net income 1,516 - -
Foreign currency translation adjustment (578) - -
Stock options exercised 134 - 134
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Balance, January 31, 1998 $ 90,140 $ 99 $ 105,724
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</TABLE>
<TABLE>
Excess of
additional
Foreign pension
Retained currency liability
earnings translation over intangible
(deficit) adjustment pension asset
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<S> <C> <C> <C>
($ 16,764) $ 1,645 ($ 9,627)
(724) - -
- (1,360) -
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($ 17,488) $ 285 ($ 9,627)
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($ 6,299) $ 332 ($ 10,654)
1,516 - -
- (578) -
- - -
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$(4,783) $( 246) $(10,654)
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</TABLE>
See notes to consolidated financial statements.
CHIC BY H.I.S, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
2. Inventories
Inventories consist of the following:
<TABLE>
(In Thousands) January 31, 1998 November 1, 1997
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<S> <C> <C>
Raw Materials $ 8,037 $ 8,138
Work-in-process 18,138 16,461
Finished Goods 45,578 46,769
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$ 71,753 $ 71,368
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</TABLE>
3. Recent Accounting Standards
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per
Share," which provides for the calculation of "basic" and "diluted"
earnings per share. Basic earnings per share includes no dilution and
is computed by dividing income available to common shareholders by the
weighted average number of common shares outstanding for the period.
Diluted earnings per share reflects the potential dilution from the
assumed exercise of stock options in a manner similar to fully diluted
earnings per share, except that the use of the market price at the end
of the period, when that price is higher than the average market price
for the period, has been eliminated. This standard is effective for
period ending after December 15, 1997. The adoption of this standard did
not have a significant effect on the Company's earnings per share
calculation.
In June 1997, the Financial Accounting Standards Board issued two new
disclosure standards. Results of operations and financial position will
be unaffected by implementation of these new standards.
SFAS No. 130, "Reporting Comprehensive Income," established standards for
reporting and display of comprehensive income, its components and
accumulated balances. Comprehensive income is defined to include all
changes in equity except those resulting from investments by owners and
distributions to owners. Among other disclosures, SFAS No. 130 requires
that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported
in a financial statement that is displayed with the same prominence as
other financial statements.<PAGE>
CHIC BY H.I.S, INC. AND SUBSIDIARIES
SFAS No. 131, "Disclosure about Segments of an Enterprise and Related
Information," which supersedes SFAS No. 14, "Financial Reporting for
Segments of a Business Enterprise," establishes standards for the way
that public enterprises report information about operating segments in
annual financial statements and requires reporting of selected
information about operating segments in interim financial statements
issued to the public. It also establishes standards for disclosures
regarding products and services, geographic areas and major customers.
SFAS No. 131 defines operating segments as components of and enterprises
about which separate financial information is available that is evaluated
regularly by management in deciding how to allocate resources and in
assessing performance.
Both SFAS Nos. 130 and 131 are effective for financial statements for
periods beginning after December 15, 1997 and require comparative
information for earlier, years to be restated.
<PAGE>
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.
CHIC BY H.I.S, INC.
Dated: April 27, 1998 By: /s/ Burton M. Rosenberg
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Burton M. Rosenberg
Chief Executive Officer
Dated: April 27, 1998 By: /s/ Christine A. Hadjigeorge
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Christine A. Hadjigeorge
Chief Financial Officer
