<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, for the quarterly period ended March 31, 1997
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, for the transition period from _____________ to
_____________
Commission File Number: 0-26430
TARRANT APPAREL GROUP
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4181026
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3151 EAST WASHINGTON BOULEVARD
LOS ANGELES, CALIFORNIA 90023
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (213) 780-8250
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 [ ]
Number of shares of Common Stock of the registrant outstanding as of April 29,
1997 was 6,571,164.
1
<PAGE> 2
TARRANT APPAREL GROUP
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
---------------------------------
1997 1996
----------- -----------
(UNAUDITED)
<S> <C> <C>
OPERATING ACTIVITIES
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,021,375 $ 1,489,757
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization . . . . . . . . . . . . . . 194,072 247,337
(Gain) Loss on sale of fixed assets . . . . . . . . . . . 105 (2,083)
Provision for returns and discounts . . . . . . . . . . . 186,461 (428,806)
Changes in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . 2,961,460 4,499,388
Due from affiliates . . . . . . . . . . . . . . . . . . (280,325) 648,886
Inventory . . . . . . . . . . . . . . . . . . . . . . . (2,292,730) 5,055,143
Temporary quota . . . . . . . . . . . . . . . . . . . . (2,109,977) (2,311,640)
Prepaid expenses . . . . . . . . . . . . . . . . . . . (21,188) (407,094)
Prepaid income taxes . . . . . . . . . . . . . . . . . 511,672 --
Accounts payable . . . . . . . . . . . . . . . . . . . (1,528,054) (3,647,286)
Accrued expenses . . . . . . . . . . . . . . . . . . . 1,581,586 (297,260)
----------- -----------
Net cash provided by operating activities . . . . . 1,224,457 4,846,338
----------- -----------
INVESTING ACTIVITIES
Purchase of fixed assets . . . . . . . . . . . . . . . . . . . (95,540) (40,274)
Purchase of permanent quota . . . . . . . . . . . . . . . . . . (115,786) (112,452)
----------- -----------
Net cash used in investing activities . . . . . . . (211,326) (152,726)
----------- -----------
FINANCING ACTIVITIES
Bank borrowings, net . . . . . . . . . . . . . . . . . . . . . 983,336 (4,995,878)
Exercise of stock options including related tax benefit . . . . 226,584 --
----------- -----------
Net cash provided by (used in) financing activities 1,209,920 (4,995,878)
----------- -----------
Increase (decrease) in cash and cash equivalents . . . . . . . 2,223,051 (302,266)
Cash and cash equivalents at beginning of period . . . . . . . 1,120,456 7,881,210
----------- -----------
Cash and cash equivalents at end of period . . . . . . . . . . $ 3,343,507 $ 7,578,944
=========== ===========
</TABLE>
See accompanying notes.
5
<PAGE> 3
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Tarrant Apparel Group, along with Gerard Guez, its Chairman and
Chief Executive Officer and Todd Kay, its President, have been named
co-defendants in a civil lawsuit brought by the American Textile
Manufacturers Institute on behalf of the United States in the United
States District Court for the District of Los Angeles (Case No.
CV96-6765 HLH). The Limited, Inc. of Columbus, Ohio, Mast Industries,
Inc. of Andover, Massachusetts and other defendants related to The
Limited were also named as co-defendants. The United States has
declined to intervene in the lawsuit. The lawsuit alleges, among other
things, that the defendants knowingly filed improper statements about
the country of origin of imported merchandise with the United States
Customs Service. The complaint seeks an unspecified amount of monetary
damages. Since receiving notification of the lawsuit, Tarrant's
management has contacted its customers to explain the Company's
longstanding manufacturing and monitoring procedures to ensure against
unlawful activities. The Company and its counsel are not yet able to
evaluate the potential outcome or to estimate the amount or likelihood
of potential damages, if any.
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.
None.
14
<PAGE> 4
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.
TARRANT APPAREL GROUP
Date: April 30, 1997 By: /s/ Mark B. Kristof
-------------------------------
Mark B. Kristof
Vice President - Finance and
Chief Financial Officer
(Duly Authorized Officer and Principal
Financial and Accounting Officer)
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED STATEMENTS OF INCOME AND BALANCE SHEETS AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH MARCH 31, 1997 FORM 10-Q REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 3,343,507
<SECURITIES> 0
<RECEIVABLES> 43,437,580
<ALLOWANCES> 2,101,617
<INVENTORY> 13,112,899
<CURRENT-ASSETS> 63,748,375
<PP&E> 4,905,475
<DEPRECIATION> 2,339,759
<TOTAL-ASSETS> 66,704,525
<CURRENT-LIABILITIES> 27,503,835
<BONDS> 0
15,712,318
0
<COMMON> 0
<OTHER-SE> 23,488,372
<TOTAL-LIABILITY-AND-EQUITY> 66,704,525
<SALES> 53,604,701
<TOTAL-REVENUES> 53,645,658
<CGS> 44,822,034
<TOTAL-COSTS> 44,822,034
<OTHER-EXPENSES> 5,390,025
<LOSS-PROVISION> (142,755)
<INTEREST-EXPENSE> 462,224
<INCOME-PRETAX> 2,971,375
<INCOME-TAX> 950,000
<INCOME-CONTINUING> 2,021,375
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,021,375
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0
</TABLE>
