<PAGE> 1
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 November 27, 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 0-6708
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Nautica Enterprises, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 95-2431048
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
40 West 57th Street, New York, N.Y. 10019
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (212)541-5757
-----------------------------
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(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.
Yes X No
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court
Yes No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares of Common Stock outstanding as of January 10, 2000 was
34,640,171.
<PAGE> 2
NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES
NOVEMBER 27, 1999
(unaudited)
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I - Financial Information:
Item 1. Financial Statements (unaudited):
Condensed Consolidated Balance Sheets
As at November 27, 1999 and February 27, 1999...........................................................2
Condensed Consolidated Statements of Earnings
For the Nine and Three Month Periods Ended
November 27, 1999 and November 28, 1998.................................................................3
Condensed Consolidated Statements of Cash Flows
For the Nine Month Periods Ended
November 27, 1999 and November 28, 1998.................................................................4
Notes to Condensed Consolidated Financial Statements.....................................................5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations...................................................8
Item 3. Quantitative and Qualitative Disclosures About Market Risk.....................................11
Part II - Other Information.........................................................................................12
</TABLE>
<PAGE> 3
NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share data)
<TABLE>
<CAPTION>
ASSETS (unaudited)
November 27, February 27,
1999 1999
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 27,085 $ 15,498
Short-term investments 33,636 55,049
Accounts receivable - net 127,092 102,471
Inventories 69,419 70,212
Prepaid expenses and other current assets 6,178 5,434
Deferred tax benefit 7,736 7,369
--------- ---------
Total current assets 271,146 256,033
Property, plant and equipment, net of
accumulated depreciation and amortization 76,229 64,524
Other assets 13,756 11,777
--------- ---------
$ 361,131 $ 332,334
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ - $ 50
Accounts payable - trade 29,240 29,596
Accrued expenses and other current liabilities 57,415 40,298
Income taxes payable 11,809 6,523
--------- ---------
Total current liabilities 98,464 76,467
Long-term debt -net - 50
Stockholders' equity:
Preferred stock - par value $.01; authorized,
2,000,000 shares; no shares issued
Common stock - par value $.10; authorized, 100,000,000 shares; issued
42,666,000 shares at November 27, 1999 and 42,604,000 shares at
February 27, 1999 4,719 4,260
Additional paid-in capital 66,772 66,813
Retained earnings 311,978 275,882
Accumulated other comprehensive loss (240) (35)
--------- ---------
383,229 346,920
Less:
Common stock in treasury - at cost;
8,041,000 shares at November 27, 1999
and 5,596,000 at February 27, 1999 (120,562) (91,103)
--------- ---------
Total stockholders' equity 262,667 255,817
--------- ---------
$ 361,131 $ 332,334
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE> 4
NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(amounts in thousands, except share data)
<TABLE>
<CAPTION>
(unaudited) (unaudited)
Nine Months Nine Months Three Months Three Months
Ended Ended Ended Ended
November 27, 1999 November 28, 1998 November 27, 1999 November 28, 1998
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Net Sales $ 463,137 $ 418,914 $ 187,958 $ 157,047
Cost of goods sold 242,156 218,208 96,884 80,742
------------ ------------ ------------ ------------
Gross profit 220,981 200,706 91,074 76,305
Selling, general and administrative expenses 167,534 127,614 64,181 45,224
Net royalty income (4,534) (4,372) (1,693) (1,370)
------------ ------------ ------------ ------------
Operating profit 57,981 77,464 28,586 32,451
Investment income, net 1,386 3,207 538 590
Minority interest in loss of consolidated subsidiary - 405 - 120
------------ ------------ ------------ ------------
Earnings before provision for income taxes 59,367 81,076 29,124 33,161
Provision for income taxes 23,272 32,025 11,417 13,099
------------ ------------ ------------ ------------
NET EARNINGS $ 36,095 $ 49,051 $ 17,707 $ 20,062
============ ============ ============ ============
Net earnings per share of common stock
Basic $ 1.03 $ 1.27 $ 0.51 $ 0.53
============ ============ ============ ============
Diluted $ 0.98 $ 1.20 $ 0.48 $ 0.51
============ ============ ============ ============
Weighted average number of common shares outstanding
Basic 34,876,000 38,732,000 34,624,000 37,515,000
============ ============ ============ ============
Diluted 36,836,000 40,976,000 36,579,000 39,362,000
============ ============ ============ ============
Cash dividends per common share none none none none
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
-3-
<PAGE> 5
NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
<TABLE>
<CAPTION>
(unaudited)
Nine Months Nine Months
Ended Ended
November 27, 1999 November 28, 1998
----------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 36,095 $ 49,051
-------- --------
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Minority interest in net loss of consolidated subsidiary - (405)
Deferred income taxes (231) -
Depreciation and amortization 13,229 9,257
Provision for bad debts 972 714
Changes in operating assets and liabilities
Accounts receivable (25,593) (18,577)
Inventories 794 (11,824)
Prepaid expenses and other current assets (744) 160
Other assets (2,617) (2,684)
Accounts payable - trade (357) 4,979
Accrued expenses and other current liabilities 17,118 2,596
Income taxes payable 5,286 3,325
-------- --------
Total adjustments 7,857 (12,459)
-------- --------
Net cash provided by operating activities 43,952 36,592
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition, net of cash acquired - (1,650)
Purchase of property, plant and equipment (24,295) (16,643)
Sale of short-term investments 21,071 (1,164)
-------- --------
Net cash used in investing activities (3,224) (19,457)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term debt (100) (50)
Purchase of treasury stock (29,460) (48,104)
Proceeds from issuance of common stock 419 921
-------- --------
Net cash used in financing activities (29,141) (47,233)
-------- --------
Increase (Decrease) in cash and cash equivalents 11,587 (30,098)
Cash and cash equivalents at beginning of period 15,498 34,616
-------- --------
Cash and cash equivalents at end of period $ 27,085 $ 4,518
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes $ 18,017 $ 28,654
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
-4-
<PAGE> 6
NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 27, 1999
(unaudited)
(amounts in thousands)
NOTE 1 - The accompanying financial statements have been prepared without
audit pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. These statements
include all adjustments, consisting only of normal recurring accruals,
considered necessary for a fair presentation of financial position and
results of operations. The financial statements included herein should
be read in conjunction with the financial statements and notes thereto
included in the latest annual report on Form 10-K.
NOTE 2 - The results of operations for the nine-month period ended
November 27, 1999 are not necessarily indicative of the results to be
expected for the full year.
NOTE 3 - The Company utilized the last-in, first-out "LIFO" method for
certain wholesale inventories as at November 27, 1999 and February 27,
1999 and for the nine and three month periods ended November 27, 1999
and November 28, 1998. The "LIFO" inventory for the nine month periods
ended November 27, 1999 and November 28, 1998 are based upon end of
year estimates. Inventories at November 27, 1999 and February 27, 1999
consist primarily of finished goods.
NOTE 4 - The Company has adopted Statement of Financial Accounting
Standards No. 130 ("SFAS No. 130), "Reporting Comprehensive Income."
SFAS No. 130 establishes standards for reporting comprehensive income
and its components in a financial statement. Accumulated other
comprehensive income as presented on the accompanying balance sheets,
consists of the changes in unrealized gains and losses on securities.
Comprehensive income as defined includes all changes in equity during
a period from non-owner sources, as follows:
<TABLE>
<CAPTION>
Nine Nine Three Three
Months Ended Months Ended Months Ended Months Ended
November 27, 1999 November 28, 1998 November 27, 1999 November 28, 1998
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Net earnings $36,095 $49,051 $17,707 $20,062
Changes in unrealized gains
and losses on securities,
net of tax (205) (75) (39) 30
----- ---- ---- --
Comprehensive Income $35,890 $48,976 $17,668 $20,092
======= ======= ======= =======
</TABLE>
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<PAGE> 7
NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOVEMBER 27, 1999
(unaudited)
(amounts in thousands)
NOTE 5 - Short-term investments consist primarily of government and agency
bonds, tax exempt municipal bonds and corporate bonds. These
marketable securities are classified as available-for-sale and are
adjusted to market value at the end of each accounting period.
Unrealized market gains and losses, net of deferred tax, are reported
in stockholders' equity. Realized gains and losses on sales of
investments are determined on a specific identification basis, and are
included in the consolidated statements of earnings. For the nine
months ended November 27, 1999 and November 28, 1998, gross realized
gains totaled $21 and $405 and gross realized losses totaled $252 and
$47, respectively. There were no realized gains during the three
months ended November 27, 1999. For the three months ended November
28, 1998, gross realized gains totaled $97. For the three months ended
November 27, 1999 and November 28, 1998, gross realized losses totaled
$13 and $16, respectively.
The unrealized losses on available-for-sale securities which were
included in accumulated other comprehensive loss were losses of $400
(net of deferred tax of $160) and $58 (net of deferred tax of $23) as
of November 27, 1999 and February 27, 1999, respectively.
NOTE 6 - Basic net earnings per share excludes dilution and is computed by
dividing income available to common shareholders by the
weighted-average common shares outstanding for the period. Diluted net
earnings per share reflects the weighted-average common shares
outstanding plus the potential dilutive effect of options which are
convertible into common shares. Options which were excluded from the
calculation of diluted earnings per share because the exercise prices
of the options were greater than the average market price of the
common shares and, therefore, would be antidilutive, were 2,395,000
and 2,460,000, during the nine months ended November 27, 1999 and
November 28, 1998, respectively.
NOTE 7 - The Company has adopted Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and
Related Information," which established reporting and disclosure
standards for an enterprise's operating segments. Operating segments
are defined as components of an enterprise for which separate
financial information is available and regularly reviewed by the
Company's senior management.
The Company has the following two reportable segments: Wholesale and
Outlet Retail. The Wholesale segment designs, sources, markets, and
distributes sportswear, activewear, outerwear, robes and sleepwear for
men and robes and sleepwear for ladies to retail store customers. The
Outlet Retail segment sells men's apparel and other Nautica-branded
products primarily through outlet retail store locations directly to
consumers.
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<PAGE> 8
NAUTICA ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
November 27, 1999
(unaudited)
(amounts in thousands)
Segment profit is based on earnings before income taxes. The
reportable segments are distinct business units and are separately
managed with different distribution channels.
<TABLE>
<CAPTION>
Outlet All Corporate/
Wholesale Retail Other Eliminations Totals
--------- ------ ----- ------------ ------
<S> <C> <C> <C> <C> <C>
FOR THE NINE MONTHS ENDED NOVEMBER 27, 1999
Net Sales $365,156 $97,981 $463,137
Segment operating profit (loss) 46,953 14,164 $4,534 $(6,284) 59,367
Segment Assets 223,828 49,633 9,577 78,093 361,131
Depreciation expense 11,027 785 306 472 12,590
FOR THE NINE MONTHS ENDED NOVEMBER 28, 1998
Net Sales $328,082 $90,832 $418,914
Segment operating profit (loss) 59,769 18,808 $4,372 $(1,873) 81,076
Segment Assets 191,239 46,066 10,111 75,223 322,639
Depreciation expense 7,681 632 198 267 8,778
</TABLE>
<TABLE>
<CAPTION>
Outlet All Corporate/
Wholesale Retail Other Eliminations Totals
--------- ------ ----- ------------ ------
<S> <C> <C> <C> <C> <C>
FOR THE THREE MONTHS ENDED NOVEMBER 27, 1999
Net Sales $152,282 $35,676 $187,958
Segment operating profit (loss) 23,947 6,038 $1,693 $(2,554) 29,124
Segment Assets 223,828 49,633 9,577 78,093 361,131
Depreciation expense 3,624 286 87 160 4,157
FOR THE THREE MONTHS ENDED NOVEMBER 28, 1998
Net Sales $121,788 $35,258 $157,046
Segment operating profit (loss) 23,872 8,232 $1,370 $(312) 33,162
Segment Assets 191,239 46,066 10,111 75,223 322,639
Depreciation expense 2,492 237 96 89 2,914
</TABLE>
In the Corporate/Eliminations column the segment assets primarily
consist of the Company's cash and investment portfolio and the segment
operating loss consists of corporate expenses offset by investment
income earned.
- 7 -
<PAGE> 9
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (unaudited)
RESULTS OF OPERATIONS
For the Nine Months Ended November 27, 1999:
Net sales increased 10.6% to $463.1 million in the nine months ended
November 27, 1999 from $418.9 million in the comparable prior year period. The
increase in sales is due primarily to increased unit volume rather than price
increases. Wholesale sales increased 11.3% to $365.1 million from $328.1 million
due to the launch of the Nautica Sport Tech, Nautica Jeans Company and Nautica
Ladies Robes and Sleepwear product lines. Outlet Retail sales increased 7.9% to
$98.0 million from $90.8 million as a result of sales from new stores opened in
the last twelve months, offsetting negative comparable store sales.
Gross profit for the period was 47.7% compared to 47.9% in the comparable
prior year period. This decrease is primarily due to the impact of lower margins
on new product lines.
Total selling, general and administrative expenses increased by $39.9
million to $167.5 million from $127.6 million. Selling, general and
administrative expenses as a percentage of net sales increased to 36.2% from
30.5% in the comparable prior year period. Such increase is due to costs
associated with the launch and support of new product lines, and higher outlet
retail, general selling and retail development expenses.
Net royalty income increased by $.1 million to $4.5 million from $4.4
million in the comparable prior year period. The increase is primarily due to
strength in boys apparel and men's accessories.
Investment income decreased by $1.8 million to $1.4 million from $3.2
million in the comparable prior year period. The decrease is the result of lower
average cash and investment account balances, due to the Company's stock
purchase program and lower rates of returns on investments.
The provision for income taxes decreased to 39.2% from 39.5% of earnings
before income taxes in the comparable prior year period. The decrease is due
primarily to a reduction in the effective state income tax rates.
Net earnings decreased 26.4% to $36.1 million from $49.1 million in the
comparable prior year period as a result of the factors discussed above.
-8-
<PAGE> 10
For the Three Months Ended November 27, 1999:
Net sales increased 19.7% to $188.0 million in the three months ended
November 27, 1999 from $157.0 million in the comparable prior year period. The
increase in sales is due primarily to increased unit volume rather than price
increases. Wholesale sales increased 25.0% to $152.3 million from $121.8 million
due to the launch of the Nautica Sport Tech, Nautica Jeans Company and Nautica
Ladies Robes and Sleepwear fall product lines. Outlet Retail sales increased
1.2% to $35.7 million from $35.3 million as a result of sales from new stores
opened in the last twelve months offsetting negative comparable store sales.
Gross profit for the period was 48.5% compared to 48.6% in the comparable
prior year period. This decrease is primarily due to the impact of lower margins
on new product lines.
Total selling, general and administrative expenses increased by $19.0
million to $64.2 million from $45.2 million. Selling, general and administrative
expenses as a percentage of net sales increased to 34.1% from 28.8% in the
comparable prior year period. The increase in the percentage of net sales is due
to costs associated with the launch and support of new product lines, and higher
outlet retail, general selling and retail development expenses.
Net royalty income increased by $.3 million to $1.7 million from $1.4
million in the comparable prior year period. The increase is primarily due to
strength in boys apparel and men's accessories.
Investment income decreased by $.1 million to $.5 million from $.6 million
in the comparable prior year period. The decrease is the result of lower rates
of returns on investments.
The provision for income taxes decreased to 39.2% from 39.5% of earnings
before income taxes in the comparable prior year period. The decrease is due
primarily to a reduction in the effective state income tax rates.
Net earnings decreased 11.7% to $17.7 million from $20.1 million in the
comparable prior year period as a result of the factors discussed above.
- 9 -
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended November 27, 1999, the Company generated cash
from operating activities of $44.0 million, principally from net earnings.
Increases in accounts receivable of $25.6 million, due to increased sales, were
financed principally by cash generated from net earnings and increases in
accrued expenses. Accounts receivable was 28.4% higher than the same period in
the prior year due to increased sales and the timing of shipments, with a
greater percentage occurring in the latter part of the quarter. Inventory was
11.6% lower than the same period in the prior year due to reduced outlet
inventory and the receipt of production closer to the time of customer delivery.
During the nine months ended November 28, 1998, the Company generated cash from
operating activities of $36.6 million, principally from net earnings. Increases
in accounts receivable and inventory of $18.6 and $11.8 million, respectively,
were due to increased sales, and were financed principally by cash generated
from net earnings, and increases in accounts payable. Accounts receivable and
inventory were higher by 2.9% and 15.3%, respectively, than balances in the
preceding year. These increases were related to sales increases.
During the nine months ended November 27, 1999, the Company's principal
investing activities related primarily to the continued expansion of the Nautica
in-store shop programs. The Company expects to continue to incur capital
expenditures to support the in-store shop program, open additional outlet retail
stores, and to launch and support new product lines. At November 27, 1999, there
were no other material commitments for capital expenditures.
During the nine months ended November 27, 1999, the Company purchased
2,444,500 shares of its outstanding common stock at a cost of $29.5 million.
The Company has a total of $100.0 million in lines of credit with two
commercial banks available for short-term borrowings and letters of credit.
These lines are collateralized by inventory and accounts receivable. At November
27, 1999 and February 27, 1999, letters of credit outstanding under the lines
were $57.8 million and $37.9 million, respectively, and there were no short-term
borrowings outstanding.
Historically, the Company has experienced its highest level of sales in the
second and third quarters and its lowest level in the first and fourth quarters
due to seasonal patterns. In the future, the timing of seasonal shipments may
vary by quarter. The Company anticipates that internally generated funds from
operations, existing cash balances, short-term investments and the Company's
existing credit lines will be sufficient to satisfy its cash requirements.
INFLATION AND CURRENCY FLUCTUATIONS
The Company believes that inflation and the effect of fluctuations of the
dollar against foreign currencies have not had a material effect on the cost of
imports or the Company's results of operations.
YEAR 2000
The Company has been engaged in a process to ensure that its systems will
recognize and process transactions for the year 2000 and beyond. The Company
believes that it has implemented successfully the systems and programming
changes necessary to address year 2000 issues with respect to its internal
systems. The cost of such actions has not had a material adverse effect on the
Company's results of operations or financial condition. The Company developed a
plan which identified all systems requiring modification or replacement,
established a timeframe for ensuring its
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<PAGE> 12
year 2000 compliance and appointed a responsible party in the organization for
the particular system. The Company has finished the year 2000 testing and
implementation of the systems upgrade and will be continuously monitoring and
testing the internal systems through the end of 1999 and the early part of 2000.
The Company also has initiated discussions with its significant suppliers,
customers and financial institutions to ensure that those parties have
appropriate plans to remediate year 2000 issues when their systems interface
with the Company's systems or may otherwise impact operations. Although the
Company is not aware of any material operational issues or costs associated with
preparing its internal systems for the year 2000, there can be no assurance that
there will not be a delay in, or increased costs associated with, the
implementation of the necessary systems and changes to address the year 2000
issues. The Company's current estimate of costs to be incurred is less than
$500,000, which is mostly being incurred internally and does not reflect
significant incremental costs. The Company and its significant suppliers,
customers, and financial institutions' inability to implement such systems and
changes could have an adverse effect on future results of operations, or
financial condition of the Company.
As of January 10, 2000, the Company has not had any adverse consequences as
a result of year 2000 issues.
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
This Quarterly Report contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E
of the Securities Exchange Act of 1934, as amended, that are not historical
facts but rather reflect the Company's current expectations concerning future
results and events. The words "believes," "anticipates," "expects" and similar
expressions, which identify forward-looking statements, are subject to certain
risks and uncertainties, including those which are economic, competitive and
technological, that could cause actual results to differ materially from those
forecast or anticipated. Readers are cautioned not to place undue reliance on
these forward-looking statements which speak only as of the date hereof. The
Company undertakes no obligation to republish revised forward-looking statements
to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events. Readers are also urged to carefully review
and consider the various disclosures made by the Company in this report, as well
as the Company's periodic reports on Forms 10-K and 10-Q and other filings with
the Securities and Exchange Commission.
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Disclosure about interest rate risk
The Company has no long-term debt, and finances capital needs through
available capital, future earnings and bank lines of credit. The Company's
exposure to market risk for changes in interest rates is primarily in its
investment portfolio. The Company, pursuant to investing guidelines, mitigates
exposure by limiting maturity, placing investments with high credit quality
issuers and limiting the amount of credit exposure to any one issuer. During the
nine months ended November 27, 1999, the Company earned investment income of
$1.4 million. If interest rates had been 1% lower than they were during the
year, investment income would have been $.7 million lower. The market risks
associated with the investment portfolio exposure has not changed materially
since February 27, 1999.
-11-
<PAGE> 13
PART II
OTHER INFORMATION
Items 1 through 9. - All items are inapplicable except:
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Index
<TABLE>
<CAPTION>
Exhibit No. Distribution
- ----------- ------------
<S> <C>
3(a) Registrant's By-laws as currently in effect are
incorporated herein by reference to Registrant's
Registration Statement on Form S-1 (Registration No.
33-21998).
3(b) Registrant's Certificate of Incorporation is
incorporated by reference to the Registration
Statement on Form S-3 (Registration No. 33-71926),
as amended by a Certificate of Amendment dated
June 29, 1995.
10(iii)(a) Registrant's Executive Incentive Stock Option Plan is
incorporated by reference herein from the Registrant's
Registration Statements on Form S-8 (Registration Number
33-1488), as amended by the Company's Registration
Statement on Form S-8 (Registration Number 33-45823).
10(iii)(b) Registrant's 1989 Employee Incentive Stock Plan is
incorporated by reference herein from the Registrant's
Registration Statement on Form S-8 (Registration Number
33-36040).
10(iii)(c) Registrant's 1996 Stock Incentive Plan is incorporated by
reference herein from Registrant's Registration Statement
on Form S-8 (Registration Number 333-55711).
10(iii)(d) Registrant's 1994 Incentive Compensation Plan is
incorporated herein from the Registrant's Annual Report on
Form 10-K for the fiscal year ended February 28, 1997.
10(iii)(e) Registrant's Deferred Compensation Plan is incorporated
herein by reference from the Registrant's Annual Report on
Form 10-K for the fiscal year ended February 28, 1998 .
10(iii)(f) Option Agreement and Royalty Agreement, each dated July 1,
1987, by and among the Registrant and David Chu are
incorporated herein by reference from the Registrant's
Registration Statement on Form S-1 (Registration No.
33-21998), and letter agreement dated May 1, 1998 between
Mr. Chu and the Registrant is incorporated herein by
reference from the Registrant's Annual Report on Form 10-K
for the fiscal year ended February 28, 1998.
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K. None
- 12 -
<PAGE> 14
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.
NAUTICA ENTERPRISES, INC.
By: s/Harvey Sanders
-----------------------------------
Harvey Sanders
Chairman of the Board
and President
Date: January 11, 2000
------------------------
By: s/W. Donald Pennington
-----------------------------------
W. Donald Pennington
Chief Financial Officer
Date: January 11, 2000
------------------------
- 13 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF THE COMPANY AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-4-2000
<PERIOD-START> FEB-28-1999
<PERIOD-END> NOV-27-1999
<CASH> 27,085
<SECURITIES> 33,636
<RECEIVABLES> 130,703
<ALLOWANCES> 3,611
<INVENTORY> 69,419
<CURRENT-ASSETS> 271,146
<PP&E> 121,420
<DEPRECIATION> 45,191
<TOTAL-ASSETS> 361,131
<CURRENT-LIABILITIES> 98,464
<BONDS> 0
0
0
<COMMON> 4,719
<OTHER-SE> 257,948
<TOTAL-LIABILITY-AND-EQUITY> 361,131
<SALES> 463,137
<TOTAL-REVENUES> 469,057
<CGS> 242,156
<TOTAL-COSTS> 242,156
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 59,367
<INCOME-TAX> 23,272
<INCOME-CONTINUING> 36,095
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,095
<EPS-BASIC> 1.03
<EPS-DILUTED> 0.98
</TABLE>
