<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JULY 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 0-24026
MAXWELL SHOE COMPANY INC.
------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 04-2599205
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
101 SPRAGUE STREET
PO BOX 37
HYDE PARK (BOSTON), MA 02137-0037
(Address of principal executive offices) (Zip code)
(617) 364-5090
------------------------------------------------------------
(Registrant's telephone number, including area code)
NONE
------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
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. [X] Yes [_] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Shares of common stock outstanding at September 9, 1999:
Class A 8,795,899
---------------------------
Class B None
---------------------------
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<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
- -------
MAXWELL SHOE COMPANY INC.
BALANCE SHEETS
(Unaudited--In Thousands)
<TABLE>
<CAPTION>
July 31, October 31,
1999 1998
-------- -------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................ $ 26,816 $18,731
Restricted cash...................................................... 25,000 0
Accounts receivable, trade (net of allowance for doubtful
accounts and discounts of $1,422 in 1999, $581 in 1998).......... 31,020 35,655
Inventory, net....................................................... 18,520 22,928
Prepaid expenses..................................................... 591 430
Prepaid income taxes................................................. 0 1,177
Deferred income taxes................................................ 1,154 1,074
-------- -------
Total current assets.................................................... 103,101 79,995
Property and equipment, net............................................. 7,109 6,231
Trademarks.............................................................. 4,491 4,767
Other assets............................................................ 12 12
-------- -------
$114,713 $91,005
======== =======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable..................................................... $ 2,063 $ 3,824
Accrued expenses..................................................... 13,505 5,938
Deferred income taxes................................................ 593 306
Current portion of capital lease obligation.......................... 125 125
-------- -------
Total current liabilities............................................... 16,286 10,193
Long-term deferred income taxes......................................... 1,283 1,283
Capital lease obligation................................................ 126 220
Stockholders' equity:
Preferred stock, par value $.01, 1,000 shares
authorized, none outstanding..................................... 0 0
Class A common stock, par value $.01, 20,000 shares authorized,
8,796 outstanding in 1999, (8,794 outstanding in 1998)........... 88 88
Additional paid-in capital........................................... 43,028 43,016
Deferred compensation................................................ (260) (306)
Retained earnings.................................................... 54,162 36,511
-------- -------
Total stockholders' equity.............................................. 97,018 79,309
-------- -------
$114,713 $91,005
======== =======
</TABLE>
2
<PAGE>
MAXWELL SHOE COMPANY, INC.
STATEMENTS OF INCOME
(Unaudited--In Thousands Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
July 31, July 31,
------------------------------- ---------------------------------
1999 1998 1999 1998
--------- ------- -------- --------
<S> <C> <C> <C> <C>
Net sales.................................... $ 39,066 $47,386 $111,219 $123,500
Cost of sales................................ 30,753 34,330 82,922 89,683
--------- ------- -------- --------
Gross profit................................. 8,313 13,056 28,297 33,817
Operating expenses:
Selling..................................... 1,883 2,827 6,842 7,852
General and administrative.................. 4,376 3,706 12,160 11,273
--------- ------- -------- --------
6,259 6,533 19,002 19,125
--------- ------- -------- --------
Operating income............................. 2,054 6,523 9,295 14,692
Other expenses (income)
Interest.................................... 7 6 20 27
Amortization of Trademarks.................. 92 92 275 275
Other, net.................................. (19,952) (274) (20,417) (368)
--------- ------- -------- --------
(19,853) (176) (20,122) (66)
--------- ------- -------- --------
Income before income taxes................... 21,907 6,699 29,417 14,758
Income taxes................................. 8,763 2,231 11,766 4,916
--------- ------- -------- --------
Net income................................... $ 13,144 $ 4,468 $ 17,651 $ 9,842
========= ======= ======== ========
Net income per share
Basic....................................... $ 1.49 $ .51 $ 2.01 $ 1.23
Diluted..................................... $ 1.39 $ .46 $ 1.86 $ 1.08
Shares used to compute net
income per share:
Basic....................................... 8,796 8,791 8,796 8,025
Diluted..................................... 9,434 9,705 9,480 9,103
</TABLE>
3
<PAGE>
MAXWELL SHOE COMPANY INC.
STATEMENTS OF CASH FLOW
(Unaudited--In Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
July 31,
--------------------------------
1999 1998
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income.............................................................. $ 17,651 $ 9,842
Adjustments to reconcile net income to net cash provided
(used) by operating activities
Gain from sale of license............................................ (19,500) 0
Depreciation and amortization........................................ 1,229 850
Deferred income taxes................................................ 207 325
Deferred compensation................................................ 46 0
Doubtful accounts provision.......................................... 841 94
Changes in operating assets and liabilities:
Accounts receivable.............................................. 2,294 (10,694)
Inventory........................................................ 2,908 (5,697)
Prepaid expenses and other current assets........................ (161) (322)
Accounts payable................................................. (1,761) 775
Accrued income taxes............................................. 1,177 42
Accrued expenses................................................. 5,067 2,278
-------- --------
Net cash provided (used) by operating activities........................ 9,998 (2,507)
INVESTING ACTIVITIES
Proceeds from sale of license........................................... 25,000 0
Restricted cash......................................................... (25,000) 0
Purchases of property and equipment..................................... (1,831) (4,562)
-------- --------
Net cash used by investing activities................................... (1,831) (4,562)
FINANCING ACTIVITIES
Proceeds from sale of common stock...................................... 0 13,239
Proceeds from exercise of stock options................................. 12 1,301
Payments on capital lease obligations................................... (94) (93)
-------- --------
Net cash provided (used) by financing activities........................ (82) 14,447
-------- --------
Net increase in cash and cash equivalents............................... 8,085 7,378
Cash and cash equivalents at beginning of year.......................... 18,731 3,129
-------- --------
Cash and cash equivalents at end of quarter $ 26,816 $ 10,507
======== ========
Interest paid........................................................... $ 20 $ 27
======== ========
Income taxes paid....................................................... $ 1,072 $ 4,478
======== ========
</TABLE>
4
<PAGE>
MAXWELL SHOE COMPANY INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
July 31, 1999
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of Maxwell Shoe Company
Inc. (the "Company") 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 only
of normal recurring adjustments, considered necessary for a fair
presentation have been included. The results of the interim periods
presented herein are not necessarily indicative of the results to be
expected for any other interim period or the full year. These financial
statements should be read in conjunction with the financial statements and
notes thereto included in the Company's 10-K Annual Report for the fiscal
year ended October 31, 1998.
2. NET INCOME PER SHARE
Basic income per share is computed based on the weighted average number of
common shares outstanding during the period. Diluted income per share is
computed based on basic shares outstanding increased by incremental shares
assumed issued for dilutive common stock equivalents in the form of stock
options.
3. ACCOUNTINGS PRONOUNCEMENTS
Effective November 1, 1998, the Company adopted Statement No. 130,
"Reporting Comprehensive Income" (FAS 130) and Statement No. 131,
"Disclosure About Segments of an Enterprise and Related Information"
(FAS 131). FAS 130 establishes standards for reporting and displaying
comprehensive income and its components. Total comprehensive income is
equal to net income for all periods presented. FAS 131 establishes
standards for public companies to report information about operating
segments in financial statements, and supersedes FAS 14, "Financial
Reporting for Segments of a Business Enterprise," but retains the
requirements to report information about major customers.
In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (FAS 133), which provides for
accounting of foreign exchange contracts. This Statement is effective for
the Company in fiscal 2000 and is not expected to have a material impact on
the Company's financial statements based on current and expected levels of
foreign exchange activity.
4. SALE OF LICENSE
On July 9, 1999, the Company completed a transaction under which the
Company sold to Jones Apparel Group, Inc. the Company's license to
manufacture and distribute Jones New York footwear. In consideration of
the sale of the license and certain other assets, the Company received a
cash payment of $25.0 million. In connection with the license sale, the
Company
5
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MAXWELL SHOE COMPANY INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
July 31, 1999
recorded $5.5 million in reserves for expenses related to the transaction,
accounts receivable and inventory liquidation. In addition, the proceeds
from the transaction are currently held for the account of the Company by
an independent intermediary pending future utilization for acquisitions. If
such funds are not so utilized on or before January 5, 2000, the funds will
be unrestricted.
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- ------- OF OPERATIONS
Results of Operations
The following table sets forth net sales by product line or category of
business:
<TABLE>
<CAPTION>
Three Months Ended July 31,
-------------------------------------------
1999 1998
------------------ -------------------
($ Millions)
<S> <C> <C> <C> <C>
Mootsies Tootsies........... $ 16.0 40.9% $ 22.8 48.2%
Jones New York Footwear..... 10.5 26.9 10.1 21.4
Sam & Libby................. 5.0 12.8 5.3 11.1
Dockers Footwear for Women.. .6 1.5
Private Label Footwear...... 6.5 16.6 7.4 15.6
Closeout.................... .5 1.3 1.8 3.7
------ ----- ------ -----
$ 39.1 100.0% $ 47.4 100.0%
====== ===== ====== =====
<CAPTION>
Nine Months Ended July 31,
-------------------------------------------
1999 1998
------------------ -------------------
($ Millions)
<S> <C> <C> <C> <C>
Mootsies Tootsies........... $ 47.8 43.0% $ 59.5 48.2%
Jones New York Footwear..... 30.1 27.1 29.3 23.7
Sam & Libby................. 15.0 13.5 12.7 10.2
Dockers Footwear for Women.. .6 .5
Private Label Footwear...... 16.4 14.7 18.5 15.0
Closeout.................... 1.3 1.2 3.5 2.9
------ ----- ------ -----
$111.2 100.0% $123.5 100.0%
====== ===== ====== =====
</TABLE>
Three Months Ended July 31, 1999 Compared to Three Months Ended July 31, 1998
Net sales were $39.1 million for the three months ended July 31, 1999 compared
to $47.4 million for the same period in the prior year, a decrease of 17.6%.
The net sales decrease was primarily due to a 29.8% decrease in net sales of
Mootsies Tootsies footwear.
Gross profit in the third quarter of fiscal 1999 was $8.3 million compared to
$13.1 million in the third quarter of fiscal 1998. Gross profit as a percentage
of net sales was 21.3% for the third fiscal quarter of 1999 compared to 27.6%
for the same period in the prior year. This reduction was due to the net sales
volume variance as well as the mix of net sales. A significant portion of the
Jones New York net sales were shipped at liquidation prices which generally
approximated cost.
Selling, general and administrative expenses were relatively flat during the
third quarter of fiscal 1999 when compared to the same period in fiscal 1998.
As a percent of net sales, selling, general and administrative expenses for the
third quarter of fiscal 1999 was 16.0% compared to 13.8% in the same period in
1998. The increase in selling, general and administrative expenses as
percentage of net sales was due to the lower net sales volume.
Other income was $19.9 million for the three months ended July 31, 1999 compared
to other income of $176,000 for the same period in the prior year. In 1999,
other income was comprised of $25.0 million
7
<PAGE>
paid by Jones Apparel Group to the Company for the sale of the Company's Jones
New York footwear license, reduced by $5.5 million in reserves for expenses
related to the transaction, accounts receivable and inventory liquidation. In
1998, other income was comprised of interest income and royalty income realized.
The Company has accrued an anticipated effective annual income tax rate of 40%
for fiscal year 1999, compared to 33% for fiscal year 1998. The effective tax
rate for 1998 and the 1998 third fiscal quarter tax rate reflected a $.9 million
tax benefit from the exercise of employee stock options. The benefit resulted
from the realization of a portion of a deferred tax asset previously recorded
and fully reserved in connection with the granting of the options in 1994.
Nine Months Ended July 31, 1999 Compared to Nine Months ended July 31, 1998
Net sales were $111.2 million for the nine months ended July 31, 1999 compared
to $123.5 million for the same period in the prior year, a decrease of 9.9%.
The net sales decrease was due to a 19.7% decrease in net sales of Mootsies
Tootsies footwear.
Gross profit in the first nine months of fiscal 1999 was $28.3 million as
compared to $33.8 million in the first nine months of fiscal 1998, or 25.4% of
net sales as compared to 27.4% for the same period in 1998. The decrease in
gross profit was a result of Jones New York inventory liquidation at prices
which generally approximated cost.
Selling, general and administrative expenses as a percentage of net sales
increased to 17.1% in the nine months ended July 31, 1999, compared to 15.5%
during the same period in fiscal 1998 due to the lower net sales volume.
The Company has accrued an anticipated effective annual income tax rate of 40%
for fiscal year 1999, compared to 33% for fiscal year 1998. The effective tax
rate for 1998 reflected a $9 million tax benefit from the exercise of 300,000
employee stock options. The benefit resulted from the realization of a portion
of a deferred tax asset previously recorded and fully reserved in connection
with the granting of the options in 1994.
At July 31, 1999 and 1998, the Company had unfilled customer orders, excluding
Jones New York, (backlog) of $41.1 million and $43.4 million respectively, a
decrease of 5.3%. The backlog at a particular time is affected by a number of
factors, including seasonality and the scheduling of manufacturing and shipment
of products. Orders generally may be canceled by customers without financial
penalty. Accordingly, a comparison of backlog from period to period is not
necessarily meaningful and may not be indicative of eventual actual shipments to
customers. The Company expects that substantially all of its backlog at July
31, 1999 will be shipped within six months from such date.
On July 9, 1999, the Company completed a transaction under which the Company
sold to Jones Apparel Group, Inc. the Company's license to manufacture and
distribute Jones New York footwear. In consideration of the sale of the license
and certain other assets, the Company received a cash payment of $25.0 million.
The Company will ship residual Jones New York footwear until January 5, 2000.
On August 2, 1999 the Company signed a binding letter of intent with Kasper
A.S.L., Ltd., the owner of the Anne Klein trademarks and Schwartz & Benjamin,
the licensee for Anne Klein footwear, a long-term license agreement by which the
Company will manufacture and market Anne Klein II and A Line Anne Klein women's
footwear. The Company expects to begin shipping these brands to major
department stores in the United States and Canada for the Spring 2000 season.
8
<PAGE>
Liquidity and Capital Resources
The Company has relied upon internally generated cash flows from operations, and
financing activities from the proceeds of the sale of stock, stock options, and
borrowings under its revolving credit facility to finance its operations and
expansion. Net cash provided by operating activities totaled approximately
$10.0 million in the nine month period ended July 31, 1999, as compared to net
cash used of $2.5 million for the same period in 1998. The increase in cash
provided by operations in the first nine months of fiscal 1999 was primarily a
result of the decrease in inventory levels and accounts receivable balances and
increase in accrued expenses compared to the same period in the prior year.
Net cash used by investing activities related to the purchase of the Company's
enterprise computer system. In the nine months ended July 31, 1998, net cash
provided from financing activities consisted of $13.2 million from the sale of
stock and $1.3 million from the exercise of stock options. Working capital was
$86.8 million at July 31, 1999 as compared to $69.8 million at October 31, 1998.
The increase is due primarily to the increase in cash from the sale of the Jones
New York footwear license. Of such cash, $25 million is currently held for the
account of the Company by an independent intermediary pending future utilization
for acquisitions. If such funds are not so utilized on or before January 5,
2000, the funds will be unrestricted. Working capital may vary from time to time
as a result of seasonal requirements, the timing of early factory shipments and
the Company's in-stock position, which requires increased inventories, and the
timing of accounts receivable collections.
The Company currently has in place with a financial institution a $35.0 million
discretionary demand credit facility in favor of the Company. A portion of the
revolving credit facility can be utilized to issue letters of credit to
guarantee payment of the Company's purchases of footwear manufactured overseas.
As of July 31, 1999, total outstanding letters of credit were $13.8 million, and
$21.2 million was available for future borrowings.
Capital expenditures were $1.8 million for the nine months ended July 31, 1999.
The Company is in the process of installing new software for the Company's
computer needs. The estimated total cost of capital expenditures for these
projects in fiscal 1999 is $3.2 million. The Company plans to fund this
expenditure with current cash resources or equipment financing arrangements.
Year 2000 Matters
The Company is dependent upon complex computer systems for certain phases of its
operations, including sales, distribution and delivery. Since many of the
Company's older computer software programs recognize only the last two digits of
the year in any date (e.g., "97" for "1997"), some software may recognize a date
using "00" as the year 1900 rather than the year 2000 and fail to operate
properly in 1999 or 2000 if the software is not reprogrammed or replaced (the
"Year 2000 Problem"). This could result in system failures or miscalculations
leading to disruptions in the Company's operations, including, among other
things, a temporary inability to process transactions, receive inventory from
suppliers, ship inventory to customers, or engage in similar business
activities. The Company believes that many of its customers and suppliers also
have Year 2000 Problems which could adversely affect the Company. One area in
which customers' Year 2000 Problems could adversely impact the Company and its
operations relates to electronically received orders for the Company's products
through Electronic Data Interchange (EDI). Significant customers and suppliers
have been identified and the Company has opened communication with them in
regards to the Year 2000 Problem. Correspondence has been sent to all
significant customers and suppliers and the Company has been told by a large
majority that they expect to be Year 2000 compliant prior to the development of
material Year 2000 Problems. The Company plans to perform follow-up inquiries
with these significant customers and suppliers. In the event some customers and
suppliers are not Year 2000 compliant, the Company's contingency plan includes
utilization of existing manual order receiving capabilities and increasing
inventory. The Company currently receives approximately 15-20% of orders for
its products through EDI. It is not possible
9
<PAGE>
at present to quantify the financial effect of the Year 2000 Problem if it is
not timely resolved. Although, the Company presently believes that the cost of
fixing the Year 2000 Problem will not have a material effect on the Company's
financial condition or results of operations, expectations about future year
2000-related costs are subject to various uncertainties that could cause the
actual results to differ materially from the Company's expectations, including
the success of the Company in identifying systems and programs that are not
Year 2000 ready, the nature and amount of programming required to upgrade or
replace each of the affected programs, the availability, rate and magnitude of
related labor and consulting costs and the success of the Company's business
partners, vendors and clients in addressing the Year 2000 issue.
Although the Company anticipates that by October 1999 no material business
disruption will occur as a result of the Year 2000 issue, the Year 2000 issue is
unique and the failure to correct a material Year 2000 issue could result in an
interruption, or a failure of, certain normal business activities or operations,
such as loss of communications with store locations, inability to process
transactions, inability for malls to operate, and the disruption of the supply
of product and distribution channel. Such failures could materially and
adversely affect the Company's results of operations, liquidity and financial
condition. Due to general uncertainty inherent in the Year 2000 Problem,
resulting from the uncertainty of the Year 2000 readiness of third parties, the
Company is unable to determine at this time whether the consequences of
Year 2000 failures will have a material impact on the Company's results of
operations, liquidity or financial condition. The Company's Year 2000 Plan is
expected to significantly reduce the Company's level of uncertainty about the
Year 2000 issue and the readiness of its material third parties. The Company
believes that with the completion of the Plan as scheduled, the possibility of
significant interruptions of normal operations should be reduced.
The Company from time to time enters into forward exchange contracts in
anticipation of future purchases of inventory denominated in foreign currency,
principally the Spanish peseta. As of the date of this report, future inventory
purchases required sufficient foreign currency to meet these commitments.
The Company anticipates that it will be able to satisfy its cash requirements
for the remainder of fiscal 1999, including its expected growth, with current
cash resources and cash flow from operations.
Certain statements contained in this Form 10-Q regard matters that are not
historical facts and are forward looking statements (as such term is defined in
the rules promulgated pursuant to the Securities Act of 1933, as amended (the
"Securities Act")). Because such forward looking statements include risks and
uncertainties, actual results may differ materially from those expressed in or
implied by such forward looking statements. Factors that could cause actual
results to differ materially include, but are not limited to: changing consumer
preference, competition from other footwear manufacturers or retailers, loss of
key employees, general economic conditions and adverse factors impacting the
retail footwear industry, and the inability by the Company to source its
products due to political or economic factors or the imposition of trade or duty
restrictions. The Company undertakes no obligation to release publicly the
results of any revisions to these forward looking statements that may be made to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
10
<PAGE>
PART II. OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS.
- ------
None.
ITEM 2: CHANGES IN SECURITIES.
- -------
None.
ITEM 3: DEFAULTS UPON SENIOR SECURITIES.
- ------
None.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
- ------
None
ITEM 5: OTHER INFORMATION.
- -------
None.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K:
- -------
(a) Exhibits
Exhibit 99 Anne Klein press release dated August 2, 1999
(b) Report on Form 8-K
The Company filed a report on Form 8-K dated June 14, 1999
regarding the sale of the Jones New York footwear license to
Jones Apparel Group and certain other matters.
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.
Maxwell Shoe Company Inc.
Date: September 9, 1999 By: /s/ Richard J. Bakos
----------------------------------
Richard J. Bakos
Vice President, Finance and
Chief Financial Officer
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-START> NOV-01-1998
<PERIOD-END> JUL-31-1999
<CASH> 51,816
<SECURITIES> 0
<RECEIVABLES> 32,442
<ALLOWANCES> 1,422
<INVENTORY> 18,520
<CURRENT-ASSETS> 103,101
<PP&E> 10,737
<DEPRECIATION> 3,628
<TOTAL-ASSETS> 114,713
<CURRENT-LIABILITIES> 16,286
<BONDS> 0
0
0
<COMMON> 88
<OTHER-SE> 96,930
<TOTAL-LIABILITY-AND-EQUITY> 114,713
<SALES> 111,219
<TOTAL-REVENUES> 111,219
<CGS> 82,922
<TOTAL-COSTS> 82,922
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 841
<INTEREST-EXPENSE> 20
<INCOME-PRETAX> 29,417
<INCOME-TAX> 11,766
<INCOME-CONTINUING> 17,651
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,651
<EPS-BASIC> 2.01
<EPS-DILUTED> 1.86
</TABLE>
<PAGE>
EXHIBIT 99.1
[ANNE KLEIN LOGO APPEARS HERE] [MAXWELL SHOE COMPANY LOGO APPEARS HERE]
For: Kasper A.S.L., Ltd and
Maxwell Shoe Company Inc.
Approved By: Mary Ann Domuracki
Executive Vice President
Finance and Administration
Kasper A.S.L., Ltd
201-864-0328
FOR IMMEDIATE RELEASE
- ---------------------
Richard Bakos
Chief Financial Officer
Maxwell Shoe Company
617-333-4007
KASPER A.S.L, LTD., MAXWELL SHOE COMPANY AND
SCHWARTZ & BENJAMIN ANNOUNCE A JOINT AGREEMENT
TO LICENSE A LINE ANNE KLEIN AND ANNE KLEIN II FOOTWEAR
~ To Be Shipped To Retailers For Spring 2000 Season ~
Secaucus, NJ and Boston, MA, August 2, 1999 Kasper A.S.L., Ltd.,
(Nasdaq:KASP), the owner of the Anne Klein trademarks ("Anne Klein"), Schwartz &
Benjamin, the licensee for Anne Klein footwear, and Maxwell Shoe Company Inc.
(Nasdaq:MAXS), jointly announced that they have signed a binding letter of
intent to enter into a long-term license agreement by which Maxwell Shoe Company
will, manufacture and market A LINE ANNE KLEIN and ANNE KLEIN II women's
footwear.
Maxwell Shoe Company will introduce these lines at the WFA Shoe Show in
Las Vegas on August 2, 1999 and will begin shipping to major department stores
in the United States and Canada for the Spring 2000 season.
Arthur S. Levine, Chairman and Chief Executive Officer of Anne Klein and
Kasper
- more -
<PAGE>
Page: 2
KASPER A.S.L, LTD., MAXWELL SHOE COMPANY AND
SCHWARTZ & BENJAMIN ANNOUNCE A JOINT AGREEMENT
TO LICENSE A LINE ANNE KLEIN AND ANNE KLEIN II FOOTWEAR
~ To Be Shipped To Retailers For Spring 2000 Season ~
A.S.L., Ltd. commented, "As our first license agreement under the Anne Klein
trademarks, we are excited to embark on this new strategic partnership with
Schwartz and Benjamin and Maxwell Shoe. Under the creative direction of Ken
Kaufman and Isaac Franco, who lead the Anne Klein design team, this is an
important step in our efforts to selectively extend and differentiate the ANNE
KLEIN(R), ANNE KLEIN II(R) and A LINE ANNE KLEIN(TM) labels. These labels are
segmented to enhance consumer awareness with a consistent attitude and varied
product lines."
Mark J. Cocozza, Chairman and Chief Executive Officer of Maxwell Shoe
Company added, "We are extremely enthusiastic about the signing of this
agreement to manufacture footwear under the widely-recognized A LINE ANNE KLEIN
and ANNE KLEIN II brand names. The addition of these trademarks is consistent
with our strategy of building a strong portfolio of brands and we believe this
endeavor will provide a substantial opportunity for Maxwell Shoe Company to
capture market share."
Daniel Schwartz, President of Schwartz & Benjamin, commented, "The
consummation of this sublicense with Maxwell Shoe is an important step in the
growth of all three Anne Klein labels. We look forward to working in
conjunction with both Anne Klein and Maxwell Shoe to continue to build upon the
solid foundation we established for the ANNE KLEIN(R) footwear brand over the
past twenty-five years."
Maxwell Shoe Company has appointed Richard Brandt as President of Maxwell
Shoe Company's Division dedicated to the footwear brands A LINE ANNE KLEIN and
ANNE KLEIN II. Mr. Brandt was previously President of Maxwell's Jones New York
footwear division.
Kasper A.S.L., Ltd. designs, markets and distributes women's suits,
sportswear and dresses throughout the United States, Europe and Canada.
Schwartz & Benjamin designs and markets footwear as licensee under the ANNE
KLEIN, ANNE KLEIN COLLECTION, and YVES SAINT LAURENT brand labels.
Maxwell Shoe Company Inc. designs, develops and markets casual and dress
- more -
<PAGE>
Page: 3
KASPER A.S.L, LTD., MAXWELL SHOE COMPANY AND
SCHWARTZ & BENJAMIN ANNOUNCE A JOINT AGREEMENT
TO LICENSE A LINE ANNE KLEIN AND ANNE KLEIN II FOOTWEAR
~ To Be Shipped To Retailers For Spring 2000 Season ~
footwear for women and children. The Company's brands include Mootsies
Tootsies, Sam & Libby and Dockers/(R)/ Footwear for Women and J.G. Hook.
Kasper A.S.L., Ltd.'s Safe Harbor Statement:
This press release contains forward-looking statements within the meaning of the
U.S. federal securities laws. Such forward-looking statements are not guarantees
of future performance and are subject to a number of risks and uncertainties
that could cause actual results to differ materially from those forward-looking
statements. For a discussion of those risks and uncertainties, please see
"Disclosure Regarding Forward-Looking Information" in Kasper's Quarterly Report
on Form 10-Q, filed with the U.S. Securities and Exchange Commission on May 18,
1999.
Maxwell Shoe Company's Safe Harbor Statement:
Certain statements contained in this press release regard matters that are not
historical facts and are forward looking statements (as such term is defined in
the rules promulgated pursuant to the Securities Act of 1933, as amended).
Because such forward looking statements contain risks and uncertainties, actual
results may differ materially from those expressed in or implied by such forward
looking statements. Factors that could cause actual results to differ
materially include, but are not limited to: changing consumer preference,
competition from other footwear manufacturers or retailers, loss of key
employees, inability to successfully launch the A Line Anne Klein and Anne Klein
II brands, general economic conditions and adverse factors impacting the retail
footwear industry, and the inability by the Company to source its products due
to political or economic factors or the imposition of trade or duty
restrictions. The Company undertakes no obligation to release publicly the
results of any revisions to these forward looking statements that may be made to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events. Investors are also directed to other risks
discussed in documents filed by the Company with the Securities and Exchange
Commission.
For more information, please contact:
Morgen-Walke Associates
212-850-5600
Kapser A.S.L., Ltd. Maxwell Shoe Company
Investor Contact: Investor Contact:
Caroline Eustace/Bernadette Maglione Shannon Moody
Press Relations: Stacy Roth Press Relations: Michael McMullan/
David Nugent
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