<PAGE>
================================================================================
UNITED STATES
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 January 31, 1999
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 1-11752
ST. JOHN KNITS, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
California 95-2245070
(State or Other Jurisdiction of Incorporation or (I.R.S. Employer Identification Number)
Organization)
17422 Derian Avenue, Irvine, California 92614
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
Registrant's Telephone Number, Including Area Code: (949) 863-1171
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
----- ----
The number of outstanding shares of registrant's Common Stock, no par value, was
16,581,482 shares as of March 11, 1999.
================================================================================
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ST. JOHN KNITS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
January 31, November 1,
1999 1998
------------------ -----------------
(unaudited)
ASSETS
------
Current assets:
<S> <C> <C>
Cash and cash equivalents.............................................. $ 27,494,394 $ 14,336,872
Investments............................................................ 1,178,887 1,175,427
Accounts receivable, net............................................... 26,821,494 35,562,189
Inventories............................................................ 47,729,821 47,748,286
Deferred income tax benefit............................................ 7,743,961 7,743,961
Other.................................................................. 2,759,672 2,377,352
------------------ -----------------
Total current assets................................................... 113,728,229 108,944,087
------------------ -----------------
Property and equipment:
Machinery and equipment................................................ 47,721,151 47,023,808
Leasehold improvements................................................. 33,547,294 30,691,098
Buildings.............................................................. 17,904,691 17,883,700
Furniture and fixtures................................................. 6,598,709 6,462,833
Land................................................................... 5,786,857 5,786,857
Construction in progress............................................... 1,237,555 666,481
------------------ -----------------
112,796,257 108,514,777
Less-Accumulated depreciation and amortization......................... 40,729,352 38,627,543
------------------ -----------------
72,066,905 69,887,234
------------------ -----------------
Other assets.................................................................. 3,377,896 3,558,347
------------------ -----------------
$189,173,030 $182,389,668
================== =================
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable....................................................... $ 6,142,418 $ 8,303,874
Accrued expenses....................................................... 11,154,514 11,329,773
Income taxes payable................................................... 3,973,649 120,657
------------------ -----------------
Total current liabilities.............................................. 21,270,581 19,754,304
------------------ -----------------
Long-term debt................................................................ 349,398 407,599
------------------ -----------------
Minority interest............................................................. 642,414 653,435
------------------ -----------------
Shareholders' equity:
Preferred Stock, no par value: Authorized-2,000,000 shares, issued -- --
and outstanding-none.................................................
Common Stock, no par value: Authorized-40,000,000 shares, issued
and outstanding- 16,581,482 and 16,579,484 shares, respectively...... 502,799 502,799
Unrealized loss on securities.......................................... (29,179) (27,504)
Cumulative translation adjustment..................................... 82,240 197,249
Additional paid-in capital............................................. 17,925,905 17,882,672
Retained earnings...................................................... 148,428,872 143,019,114
------------------ -----------------
166,910,637 161,574,330
------------------ -----------------
$189,173,030 $182,389,668
================== =================
</TABLE>
See accompanying notes.
2
<PAGE>
ST. JOHN KNITS, INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
Thirteen Weeks Ended
-----------------------------------------------
January 31, 1999 February 1,1998
--------------------- ---------------------
(unaudited)
<S> <C> <C>
Net sales.................................................................. $73,388,512 $68,760,977
Cost of sales.............................................................. 33,829,085 28,982,889
--------------------- ---------------------
Gross profit............................................................... 39,559,427 39,778,088
Selling, general and administrative expenses............................... 30,134,846 24,192,763
--------------------- ---------------------
Operating income........................................................... 9,424,581 15,585,325
Other income............................................................... 426,395 228,136
--------------------- ---------------------
Income before income taxes................................................. 9,850,976 15,813,461
Income taxes............................................................... 4,026,680 6,593,294
--------------------- ---------------------
Net income................................................................. 5,824,296 9,220,167
--------------------- ---------------------
Comprehensive income, net of tax:
Foreign currency translation adjustments................................. (67,970) (37,580)
Unrealized loss on securities............................................ (990) --
Comprehensive income....................................................... $ 5,755,336 $ 9,182,587
===================== =====================
Net income per common share - basic........................................ $ 0.35 $ 0.55
===================== =====================
Net income per common share - diluted...................................... $ 0.34 $ 0.54
===================== =====================
Dividends per share........................................................ $ 0.025 $ 0.025
===================== =====================
Shares used in the calculation of net income per share-basic............... 16,580,311 16,645,097
===================== =====================
Shares used in the calculation of net income per share-diluted............. 16,960,982 17,075,004
===================== =====================
</TABLE>
See accompanying notes.
3
<PAGE>
ST. JOHN KNITS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Thirteen Weeks Ended
----------------- ------------------
January 31, 1999 February 1, 1998
----------------- ------------------
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income.......................................................... $ 5,824,296 $ 9,220,167
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization...................................... 3,321,950 2,618,978
(Gain) loss on disposal of property and equipment.................. (99,666) 9,167
Partnership losses................................................. 78,385 87,175
Minority interest in income (loss) of consolidated subsidiaries.... (11,021) 25,226
Decrease in accounts receivable.................................... 8,740,695 7,834,595
(Increase) decrease in inventories................................. 18,465 (3,822,810)
(Increase) decrease in other current assets........................ (382,320) 68,973
Decrease in other assets........................................... 4,676 110,753
Decrease in accounts payable....................................... (2,161,456) (702,208)
Decrease in accrued expenses....................................... (175,259) (829,229)
Increase in income taxes payable................................... 3,852,992 4,609,545
----------------- ------------------
Net cash provided by operating activities........................ 19,011,737 19,230,332
----------------- ------------------
Cash flows from investing activities:
Proceeds from sale of property and equipment....................... 120,000 250
Purchase of property and equipment................................. (5,446,566) (8,046,924)
Purchase of short-term investments................................. (3,460) (34,086)
Capital distributions from partnership............................. 22,000 24,000
Net cash used in investing activities............................ (5,308,026) (8,056,760)
----------------- ------------------
Cash flows from financing activities:
Issuance of common stock........................................... 43,233 1,209,215
Dividends paid..................................................... (414,537) (415,864)
Principal payments on long-term debt............................... (58,201) --
Net cash provided by (used in) financing activities.............. (429,505) 793,351
Effect of exchange rate changes...................................... (115,009) (64,460)
Unrealized loss on securities........................................ (1,675) --
----------------- ------------------
Net increase in cash and cash equivalents............................ 13,157,522 11,902,463
Beginning balance, cash and cash equivalents......................... 14,336,872 14,266,564
----------------- ------------------
Ending balance, cash and cash equivalents............................ $27,494,394 $26,169,027
================= ==================
Supplemental disclosures of cash flow information:
Cash received during the thirteen weeks for interest income........ $ 94,158 $ 330,647
================= ==================
Cash paid during the thirteen weeks for:
Interest expense................................................. $ 2,644 $ --
================= ==================
Income taxes..................................................... $ 167,200 $ 1,431,128
================= ==================
</TABLE>
See accompanying notes.
4
<PAGE>
ST. JOHN KNITS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements of St. John
Knits, Inc. and its subsidiaries (collectively referred to herein as "the
Company") reflect all adjustments (which include only normal recurring
adjustments) considered necessary to present fairly the financial position,
results of operations and cash flows of the Company for the periods presented.
It is suggested that the accompanying unaudited consolidated financial
statements and footnotes thereto be read in conjunction with the financial
statements and footnotes included in the Company's Annual Report on Form 10-K
for the year ended November 1, 1998 as filed with the Securities and Exchange
Commission on January 29, 1999.
The results of operations for the periods presented are not necessarily
indicative of the operating results that may be expected for the year ending
October 31, 1999.
2. Summary of Accounting Policies
a. Company Operations
The Company is a leading designer, manufacturer and marketer of women's
clothing and accessories. The Company's products are distributed primarily
through specialty retailers and Company owned retail boutiques and outlets. All
intercompany and interdivisional transactions and accounts have been eliminated.
b. Definition of Fiscal Year
The Company utilizes a 52-53 week fiscal year whereby the fiscal year ends
on the Sunday nearest to October 31. The quarters also end on the Sunday
nearest the end of the quarter, which accordingly were January 31, 1999 and
February 1, 1998.
3. Dividends
The Company declared a quarterly dividend of $0.025 per share on December
16, 1998 for all shareholders of record on January 15, 1999. The dividend was
paid on February 17, 1999. On March 12, 1999, the Company declared another
quarterly cash dividend of $0.025 per share to be paid on May 6, 1999 to
shareholders of record on April 8, 1999.
4. Earnings Per Share
The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 128 "Earnings Per Share" during the first quarter of fiscal 1998. Under the
new requirement, primary earnings per share was replaced with basic earnings per
share. Basic earnings per share excludes the dilutive effect of common stock
equivalents, including stock options. Diluted earnings per share includes all
dilutive items. Dilution is calculated based upon the treasury stock method,
which assumes that all dilutive securities were exercised and that the proceeds
received were applied to repurchase outstanding shares at the average market
price during the period.
5
<PAGE>
5. Comprehensive Income
The Company has adopted SFAS No. 133 "Reporting Comprehensive Income"
during the first quarter of fiscal 1999. This statement requires that all items
that meet the definition of components of comprehensive income be reported in a
financial statement for the period in which they are recognized. Components of
comprehensive income include revenues, expenses, gains and losses that under
generally accepted accounting principles are included in comprehensive income
but excluded from net income.
6. Inventories
A summary of the components of inventories is as follows:
<TABLE>
<CAPTION>
January 31, November 1,
1999 1998
----------------- ------------------
<S> <C> <C>
Raw materials......................................... $14,028,538 $14,529,822
Work in process....................................... 8,039,031 8,896,248
Finished products..................................... 25,662,252 24,322,216
----------- -----------
$47,729,821 $47,748,286
================= ==================
</TABLE>
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
The following table is derived from the Company's Consolidated Statements
of Income and sets forth, for the periods indicated, the results of operations
as a percentage of net sales:
<TABLE>
<CAPTION>
Percent of Net Sales
Thirteen Weeks Ended
("First Quarter")
------------------------------------
January 31, February 2,
1999 1998
--------------- ---------------
<S> <C> <C>
Net sales..................................................... 100.0% 100.0%
Cost of sales................................................. 46.1 42.2
-------------- ---------------
Gross profit.................................................. 53.9 57.8
Selling, general and administrative expenses.................. 41.1 35.2
-------------- ---------------
Operating income.............................................. 12.8 22.6
Other income.................................................. 0.6 0.3
-------------- ---------------
Income before income taxes.................................... 13.4 22.9
Income taxes.................................................. 5.5 9.6
-------------- ---------------
Net income.................................................... 7.9% 13.3%
=============== ===============
</TABLE>
7
<PAGE>
First Quarter Fiscal 1999 Compared to First Quarter Fiscal 1998
Net sales for the first quarter of fiscal 1999 increased by $4,628,000, or
6.7% over the first quarter of fiscal 1998. This increase was principally
attributable to (i) an increase in sales by Company owned retail stores of
$3,686,000, due in part to the expansion of the Las Vegas boutique which was
completed in May 1998, increased sales for the New York boutique and the
addition of one retail boutique and one outlet store since the beginning of the
first quarter of fiscal 1998, (ii) an increase in sales of $2,111,000 recorded
by Amen Wardy Home Stores, LLC, a 51 percent owned subsidiary which commenced
operations during the fourth quarter of fiscal 1997 and (iii) an increase in
international sales of $441,000, which includes the sales of St. John Company,
Ltd., a majority owned subsidiary which commenced operations in Japan during the
fourth quarter of fiscal 1997. These increases were offset by a decrease in
sales to existing domestic retail customers. Net sales increased primarily as a
result of increased unit sales of various product lines.
Gross profit for the first quarter of fiscal 1999 decreased by $219,000, or
0.6% as compared with the first quarter of fiscal 1998, and decreased as a
percentage of net sales to 53.9% from 57.8%. This decrease in the gross profit
margin was primarily due to a decrease in the gross profit margin for the
Knitwear line, as a result of increased production costs which were not offset
by a corresponding increase in the selling price. This increase in the
production costs was due in part to the reevaluation of the Company's quality
control program and the related procedures which were implemented during the
second half of fiscal 1998.
Selling, general and administrative expenses for the first quarter of
fiscal 1999 increased by $5,942,000, or 24.6% over the first quarter of fiscal
1998, and increased as a percentage of net sales to 41.1% from 35.2%. This
increase was primarily due to an increase in the costs incurred by the Company
to promote and market its products to its major customers and costs incurred
related to the start-up of the new home furnishing division, Amen Wardy Home
Stores, and also due to costs incurred related to the proposed Agreement and
Plan of Merger as described below.
Operating income for the first quarter of fiscal 1999 decreased by
$6,161,000, or 39.5% over the first quarter of fiscal 1998. Operating income as
percentage of net sales decreased to 12.8% from 22.6% during the same period.
This decrease in the operating income as a percentage of net sales was due to
the decrease in the gross profit margin and an increase in selling, general and
administrative expenses as a percentage of net sales.
Liquidity and Capital Resources
The Company's primary cash requirements are to fund the Company's working
capital needs, primarily inventory and accounts receivable, and for the purchase
of property and equipment. During the first quarter of fiscal 1999, cash
provided by operating activities was $19,012,000. Cash provided by operating
activities was primarily generated by net income, a decrease in accounts
receivable and an increase in income taxes payable, while cash used in operating
activities was primarily used to fund the decrease in accounts payable. Cash
used in investing activities was $5,308,000 during the first quarter of fiscal
1999. The principal use of cash in investing activities was for the (i)
construction of leasehold improvements for a new boutique location at South
Coast Plaza in Costa Mesa, California, (ii) the completion of leasehold
improvements for a new Amen Wardy Home boutique at South Coast Plaza and (iii)
costs incurred in connection with the upgrade of the Company's computer systems.
8
<PAGE>
The Company anticipates purchasing property and equipment of approximately
$14,000,000 during the remainder of fiscal 1999. The estimated $14,000,000 will
be used principally for (i) upgrades to the Company's computer systems, (ii) the
purchase of computerized knitting machines and (iii) the construction of
leasehold improvements for a new boutique location in Hawaii and one additional
new boutique location.
As of January 31, 1999, the Company had $92,458,000 in working capital and
$28,673,000 in cash and marketable securities. The Company's principal source
of liquidity is internally generated funds. The Company also has a $25,000,000
bank line of credit ("Line of Credit") which expires on March 1, 2000. The Line
of Credit is unsecured and borrowings thereunder bear interest at the Company's
choice of the bank's reference rate minus 0.25% (7.75% at January 31, 1999) or
an offshore rate plus 1.5%. The availability of funds under the Line of Credit
is subject to the Company's continued compliance with certain covenants,
including a covenant that sets the maximum amount the Company can spend annually
on the acquisition of fixed or capital assets, and certain financial covenants,
including a minimum quick ratio, a minimum tangible net worth and a maximum
ratio of total liabilities to tangible net worth. The Company may not declare
or pay any dividends if the Company fails to perform its obligations under, or
fails to meet the conditions of, the Line of Credit or if payment of the
dividend creates a default under the Line of Credit. As of January 31, 1999, no
amounts were outstanding under the Line of Credit. The Company invests its
excess funds primarily in a money market fund, investment grade commercial paper
and tax exempt municipal bonds.
The Company believes it will be able to finance its working capital and
capital expenditure requirements for the foreseeable future with internally
generated funds. However, if the transactions contemplated by the Agreement and
Plan of Merger described below are consummated, the Company believes it will
also use its revolving credit facility to help finance such requirements.
The Company declared a quarterly cash dividend of $0.025 per share on
December 16, 1998 which was paid on February 17, 1999 to shareholders of record
on January 15, 1999. On March 12, 1999, the Company declared another quarterly
cash dividend of $0.025 per outstanding share to be paid on May 6, 1999 to
shareholders of record on April 8, 1999. Future dividends by the Company remain
subject to limitations under applicable law and other factors the Board of
Directors deem relevant, including results of operations, financial condition
and capital requirements.
Stock Repurchase Plan
The Board of Directors authorized a stock repurchase plan on August 26,
1998. This repurchase program allows the purchase of up to one million shares
of the Company's common stock. During the first quarter of fiscal 1999, the
Company did not make any purchases of its common stock.
Agreement and Plan of Merger
On February 2, 1999, the Company signed a definitive merger agreement
between the Company and a group consisting of an affiliate of Vestar Capital
Partners and the Company's founder, Chairman and Chief Executive Officer Bob
Gray and his family. Under the terms of the agreement, approximately 97 percent
of the Company's outstanding common stock will be converted in a series of
merger transactions into the right to receive $30 per share in cash. Pursuant to
an election and pro-ration process, the remaining shares of the Company will be
retained by existing public shareholders, other than the Grays, and will
represent approximately 7 percent of the common stock of the reorganized company
following the transaction. Vestar, through its affiliates, has agreed to
provide approximately $154 million of equity financing. In addition, The Chase
Manhattan Bank and Chase Securities Inc. have agreed to arrange an additional
$315 million of long-term debt and a $25 million revolving credit facility to
help finance the transaction. The completion of the transaction depends on the
satisfaction of customary conditions, including the receipt of financing,
Company shareholder approval and regulatory approvals. Although the
9
<PAGE>
Company cannot be certain whether or when any of the conditions to the
transaction will be satisfied or that the Company will complete the transaction,
the Company anticipates completing the transaction late in the second calendar
quarter of 1999.
Year 2000
The Company uses various types of technology in the operations of its
business. Some of this technology incorporates date identification functions;
however, many of these date identification functions were developed to use only
two digits to identify a year. These date identification functions, if not
corrected, could cause their relating technology to fail or create erroneous
results by or at the year 2000.
The Company is continuing to monitor the impact of Year 2000 issues on its
information and non-information technology systems. As part of this process,
the Company retained the services of an independent contractor with experience
in analyzing and addressing Year 2000 issues. In addition, the Company
developed a five-phased plan with respect to the Year 2000 readiness of its
internal technology systems. This plan involves (i) creating awareness inside
the Company of Year 2000 issues, (ii) analyzing the Company's Year 2000 state of
readiness, (iii) correcting systems or acquiring new ones as needed, (iv)
testing the corrected or new systems and (v) incorporating the corrected or new
systems into the Company's business. The Company has substantially completed
all five phases of the plan.
The Company has also developed a plan to address the impact that Year 2000
issues of its vendors and customers may have on the Company's operations. The
Company is currently finalizing its evaluation of the materiality of its vendor
and customer relationships and has initiated communications with certain of its
significant vendors and customers to identify and minimize disruptions to the
Company's operations and to assist in resolving Year 2000 issues. The Company
has substantially completed its evaluation; however there can be no assurances
that such plan will be completed by the estimated date or that the systems and
products of other companies on which the Company relies will not have an adverse
effect on the Company's business, operations or financial condition. In the
event that satisfactory completion of the Company's Year 2000 evaluation of its
vendors and customers is not assured by the end of fiscal 1999, the Company
intends to determine appropriate contingency plans.
As of January 31, 1999, the Company had incurred approximately $327,000 in
costs related to the Year 2000 issue. The Company believes that additional
costs related to the Year 2000 issue will not be material to the Company's
business, operations or financial condition. However, estimates of Year 2000
related costs are based on numerous assumptions and there is no certainty that
estimates will be achieved and actual costs could be materially greater than
anticipated. The Company anticipates that it will fund its additional Year 2000
costs from current working capital.
Forward Looking Statements
This Quarterly Report on Form 10-Q contains certain statements which
describe the Company's beliefs concerning future business conditions and the
outlook for the Company based on currently available information. Wherever
possible the Company has identified these "forward looking" statements (as
defined in Section 21E of the Securities Exchange Act of 1934) by words such as
"anticipates," "believes," "estimates," "expects" and other similar expressions.
The forward looking statements and associated risks set forth herein may include
or relate to: (i) the Company's anticipated purchases of property and equipment
during the remainder of fiscal 1999, (ii) the Company's belief that it will be
able to fund its working capital and capital expenditure requirements with
internally generated funds, (iii) the Company's anticipated completion of its
Year 2000 readiness plans, (iv) the costs
10
<PAGE>
and source of funds to address the Company's Year 2000 issues and (v) the
Company's anticipated completion of the proposed merger transaction.
These forward looking statements are subject to risks, uncertainties and
other factors which could cause the Company's actual results, performance or
achievements to differ materially from those expressed in, or implied by, these
statements. These risks, uncertainties and other factors include, but are not
limited to, the following: (i) the financial strength of the retail industry and
the level of consumer spending for apparel and accessories, (ii) the Company's
ability to develop, market and sell its products, (iii) increased competition
from other manufacturers and retailers of women's clothing and accessories, (iv)
general economic conditions, (v) any unanticipated problems or delays in the
completion by the Company to become Year 2000 ready or the failure of the
Company's vendors or customers to do so and (vi) the satisfaction of the
conditions to the completion of the proposed merger transaction.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company has exposure to fluctuations in foreign currency exchange rates
for the revenues derived from sales to its foreign customers denominated in
foreign currency. In order to reduce the effects of such fluctuations, under
established procedures and controls, the Company enters into forward contracts.
These contractual arrangements are entered with a major financial institution.
The Company does not hold derivative financial instruments for trading.
The primary business objective of this hedging program is to secure the
anticipated profit on sales denominated in foreign currencies. Forward
contracts are entered into at the time the Company prices its products. The
Company's primary exposure to foreign exchange fluctuation is on the deutsche
mark. At January 31, 1999, the Company had contracts maturing through November
30, 1999 to sell 8.0 million deutsche marks at rates ranging from 1.66 to 1.77
deutsche marks to the U.S. dollar.
11
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation S-K.
None
(b) Reports on Form 8-K.
1. On November 12, 1998, the Company filed a Form 8-K with the Securities and
Exchange Commission reporting that the Board of Directors of the Company
declared a dividend of one preferred share purchase right for each
outstanding share of Common Stock to shareholders of record on November 4,
1998.
2. On December 14, 1998, the Company filed a Form 8-K with the Securities and
Exchange Commission reporting that, on December 8, 1998, the Board of
Directors of the Company formed an independent committee to evaluate a
definitive proposal from Company founder, Chairman and Chief Executive
Officer Bob Gray and his family to buy the Company's outstanding shares not
owned by the Gray family for $28 per share in cash.
3. On December 15, 1998, the Company filed a Form 8-K with the Securities and
Exchange Commission reporting that, on December 11, 1998, the Board of
Directors added Robert Davis, Daniel Thomas Reiner and Mark R. Goldston to
three newly created positions on the Board of Directors.
4. On January 19, 1999, the Company filed a Form 8-K with the Securities and
Exchange Commission reporting that, on December 30, 1998, the Company
received an extension of the expiration date of the purchase offer from Bob
Gray and Vestar Capital Partners from December 31, 1998 to January 15,
1999.
5. On January 19, 1999, the Company filed a Form 8-K with the Securities and
Exchange Commission reporting that Executive Vice President David C.
Frankel resigned from the Company.
6. On January 19, 1999, the Company filed a Form 8-K with the Securities and
Exchange Commission reporting that, on January 14, 1999, the Company
received an extension of the expiration date of the purchase offer from Bob
Gray and Vestar Capital Partners from January 15, 1999 to January 22, 1999.
7. On January 26, 1999, the Company filed a Form 8-K with the Securities and
Exchange Commission reporting that, on January 21, 1999, the Company
received an extension of the expiration date of the purchase offer from Bob
Gray and Vestar Capital Partners from January 22, 1999 to February 1, 1999.
12
<PAGE>
SIGNATURES
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.
March 11, 1999
ST. JOHN KNITS, INC.
By: /s/ Bob Gray
-----------------------------
Bob Gray
Chairman of the Board and
Chief Executive Officer
By: /s/ Roger G. Ruppert
----------------------------
Roger G. Ruppert
Senior Vice President - Finance,
Chief Financial Officer
(Principal Financial Officer)
13
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Description of Exhibit Numbered Page
--------- ------------------------- ---------------
<S> <C> <C>
27.1 Financial Data Schedule
</TABLE>
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-01-1998
<PERIOD-START> NOV-02-1998
<PERIOD-END> JAN-31-1999
<CASH> 27,494
<SECURITIES> 1,179
<RECEIVABLES> 26,821
<ALLOWANCES> 0
<INVENTORY> 47,730
<CURRENT-ASSETS> 113,728
<PP&E> 112,796
<DEPRECIATION> 40,729
<TOTAL-ASSETS> 189,173
<CURRENT-LIABILITIES> 21,271
<BONDS> 0
0
0
<COMMON> 503
<OTHER-SE> 166,408
<TOTAL-LIABILITY-AND-EQUITY> 189,173
<SALES> 73,389
<TOTAL-REVENUES> 73,389
<CGS> 33,829
<TOTAL-COSTS> 33,829
<OTHER-EXPENSES> 30,135
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 9,851
<INCOME-TAX> 4,027
<INCOME-CONTINUING> 5,824
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,824
<EPS-PRIMARY> .35
<EPS-DILUTED> .34
</TABLE>
