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Exhibit 99
LEVI 1155 Battery Street, San Francisco, CA 94111
STRAUSS
& Co. CONFIDENTIAL
NEWS
Investor Contact: Christine Greany
Integrated Corporate Relations
(203) 222-9013
Media Contact: Linda Butler
For Immediate Release Levi Strauss & Co.
--------------------- (415) 501-2233
LEVI STRAUSS & CO. THIRD-QUARTER AND NINE-MONTH FINANCIAL RESULTS
REFLECT ONGOING PROGRESS IN BUSINESS TURNAROUND
SAN FRANCISCO (September 19, 2000) - Levi Strauss & Co. today announced
financial results for the third quarter and first nine months ended August 27,
2000 that reflect ongoing progress in the company's business turnaround. The
company maintained a single-digit sales decline for the second consecutive
quarter and is seeing solid improvements year-to-date in other key measures
including cash flow, net income and debt reduction.
Net sales for the third quarter declined 8 percent to $1.128 billion from $1.226
billion in the year-earlier period. Had currency exchange rates remained
constant at 1999 levels, net sales would have declined 6 percent. These results
reflect a continued single-digit sales decline trend, compared to double-digit
declines in the prior-year periods. The company attributed its sales trends to
positive consumer response to products, ongoing operational improvements and new
product-focused advertising.
"We are further along in the turnaround than we expected at the start of the
year," said Philip Marineau, president and chief executive officer. "While there
will be quarter-to-quarter fluctuations, when we look at our year-to-date
performance we are substantially exceeding our plans in terms of unit volume,
revenue and earnings. Based on what we are seeing today, we expect to end this
fiscal year with strong operating earnings growth of up to 40 percent versus
last year.
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LS&CO. Q3 / Add One
September 19, 2000
"Innovative new products and updated basics, including Levi's(R) Engineered
Jeans(TM), Levi's(R) corduroys, SILVERTAB(R) apparel and Dockers(R) khakis are
connecting with consumers and selling through strongly at retail," continued
Marineau, who joined the company one year ago as CEO to lead the turnaround.
"This is particularly good news in light of the weak apparel retail market right
now, especially in the United States. We've launched exciting new marketing
campaigns worldwide, are carefully managing our inventories and are looking
forward to the important holiday selling season."
Bill Chiasson, chief financial officer, explained that since the start of the
fiscal year, "Our sales decline has slowed and first-quality mix has improved.
By all key performance measures, including margins, inventory levels and
improved cash flow, we are exceeding our business plans. Importantly, we have
brought debt levels down $465 million since the beginning of the year. While a
turnaround such as this is measured in many quarters, not months, we expect to
stabilize the company as we move into 2001, positioning us for profitable growth
over the long term."
Third-Quarter Results
---------------------
Gross margin for the third quarter improved to 41.2 percent over 39.0 percent in
the comparable period last year. The company attributed the gross margin
strength to an improved mix of basic and fashion-oriented products, as well as
lower sourcing costs. Third-quarter gross profit was $464.3 million compared to
$478.6 million in 1999.
Operating income for the third quarter was $105.8 million versus $140.4 million
in the third quarter last year. On a comparable basis, excluding certain
adjustments related to benefit programs and incentive compensation programs,
operating income for the third quarter of 2000 would have increased 7 percent
compared to the prior-year period.
EBITDA, which the company defines as operating income excluding depreciation,
amortization and restructuring charges, was $131.1 million compared to $154.2
million in the third quarter of 1999. EBITDA margin was 11.6 percent, compared
to 12.6 percent in the prior-year period.
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LS&CO. Q3 / Add Two
September 19, 2000
Third-quarter net income declined 32 percent to $37.8 million versus $55.2
million in 1999. On a comparable basis, excluding the adjustments to operating
income, net income would have increased 32 percent.
Nine-Month Results
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Net sales for the nine-month period ended August 27, 2000 declined 10 percent to
$3.359 billion from $3.733 billion in the prior-year period. Had currency rates
remained constant at 1999 levels, net sales would have declined 8.1 percent.
Gross margin for the nine-month period rose to 41.7 percent compared with 38.4
percent in 1999, while gross profit for the period was $1.402 billion compared
to $1.433 billion in the 1999 period.
Operating income for the nine-month period rose to $353.8 million compared with
an operating loss of $138.0 million, including restructuring charges and other
one-time adjustments, in the prior-year period. On a comparable basis, excluding
one-time adjustments in both current and prior-year periods, operating income
would have increased 48 percent, due primarily to gross margin improvements and
effective management of marketing, general and administrative expenses. EBITDA
for the nine-month period rose 20 percent to $423.4 million or 12.6 percent of
sales compared with $354.3 million or 9.5 percent of sales in the prior-year
period.
For the nine-month period, net income increased to $148.0 million compared with
a net loss of $151.7 in the year-earlier period, which included restructuring
charges. On a comparable basis, excluding one-time adjustments, net income would
have increased 53 percent.
As of August 31, 2000, total debt had been reduced to $2.2 billion from $2.3
billion on May 28, 2000 and $2.7 billion on November 30, 1999.
--more--
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LS&CO. Q3 / Add Three
September 19, 2000
Levi Strauss & Co. is one of the world's leading branded apparel companies,
marketing its brands in more than 80 countries worldwide. The company designs
and markets jeans and jeans-related pants, casual and dress pants, shirts,
jackets and related accessories for men, women and children under the Levi's(R),
Dockers(R) and Slates(R) brands.
The company's third-quarter investor conference call, featuring Phil Marineau,
chief executive officer; Bill Chiasson, chief financial officer; and Joe Maurer,
treasurer, will be available through a live audio Webcast at www.levistrauss.com
on September 19 at 10 a.m. Eastern Daylight Time. A replay is available on the
Web site the same day beginning at approximately 2 p.m. Eastern Daylight Time
and will remain until November 19. A telephone replay also is available at (402)
220-1356 from approximately noon Eastern Daylight Time through September 26.
This news release includes forward-looking statements about sales performance
and trends, fashion trends, new product development in our three brands, product
mix, inventory position and management, expense levels including overhead and
advertising expense, debt repayment and liquidity, customer orders, retail
relationships and developments including sell-through, presentation of product
at retail and marketing collaborations, and marketing and advertising
initiatives. We have based these forward-looking statements on our current
assumptions, expectations and projections about future events. When used in this
announcement, the words "believe," "anticipate," "intend," "estimate,"
"expect," "project" and similar expressions are intended to identify
forward-looking statements, although not all forward-looking statements contain
these words.
These forward-looking statements are subject to risks and uncertainties
including, without limitation, risks related to the impact of competitive
products; changing fashion trends; dependence on key distribution channels,
customers and suppliers; our supply chain executional performance; ongoing
competitive pressures in the apparel industry; changing international retail
environments; changes in the level of consumer spending or preferences in
apparel; trade restrictions; political or financial instability in countries
where our products are manufactured; and other risks detailed in our
registration statement on Form S-4 filed with the Securities and Exchange
Commission on May 4, 2000 and our other filings with the Securities and Exchange
Commission. Our actual results might differ materially from historical
performance or current expectations. We do not undertake any obligation to
update or revise publicly any forward-looking statements, whether as a result of
new information, future events or otherwise.
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<TABLE>
<CAPTION>
LEVI STRAUSS & CO.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Dollars in Thousands)
(Unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
Aug. 27, Aug. 29, Aug. 27, Aug. 29,
-------- -------- -------- --------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales........................................................ $1,127,740 $1,226,413 $3,359,221 $3,732,645
Cost of goods sold............................................... 663,418 747,766 1,957,328 2,299,742
---------- ---------- ---------- ----------
Gross profit.................................................. 464,322 478,647 1,401,893 1,432,903
Marketing, general and administrative expenses................... 358,524 338,223 1,048,052 1,164,985
Excess capacity/restructuring charge............................. -- -- -- 405,885
---------- ---------- ---------- ----------
Operating income (loss)....................................... 105,798 140,424 353,841 (137,967)
Interest expense................................................. 59,406 45,742 177,177 132,718
Other (income) expense, net...................................... (11,763) 7,139 (51,003) (29,919)
---------- ---------- ---------- ----------
Income (loss) before taxes.................................... 58,155 87,543 227,667 (240,766)
Income tax expense (benefit)..................................... 20,354 32,391 79,683 (89,083)
---------- ---------- ---------- ----------
Net income (loss)............................................. $ 37,801 $ 55,152 $ 147,984 $ (151,683)
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<CAPTION>
NET SALES BY REGION
(in millions)
(Unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
Net Sales Aug. 27, Aug. 29, Percent Aug. 27, Aug. 29, Percent
-------- -------- ------- -------- -------- -------
2000 1999 Change 2000 1999 Change
---- ---- ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Americas $ 802.6 $ 858.8 (6.5%) $2,255.3 $2,480.4 (9.1%)
Europe 235.9 289.8 (18.6%) 817.5 1,004.0 (18.6%)
Asia 89.2 77.8 14.7% 286.4 248.2 15.4%
Total Company $1,127.7 $1,226.4 (8.0%) $3,359.2 $3,732.6 (10.0%)
Three Months Ended Nine Months Ended
------------------ -----------------
Net Sales at Prior- Year Aug. 27, Aug. 29, Percent Aug. 27, Aug. 29, Percent
Currency Exchange Rates -------- -------- ------- -------- -------- -------
2000 1999 Change 2000 1999 Change
---- ---- ------ ---- ---- ------
(Restated) (Restated)
---------- ----------
Americas $ 802.7 $ 858.8 (6.5%) $2,252.8 $2,480.4 (9.2%)
Europe 263.7 289.8 (9.0%) 904.6 1,004.0 (9.9%)
Asia 86.4 77.8 11.1% 273.4 248.2 10.2%
Total Company $1,152.8 $1,226.4 (6.0%) $3,430.8 $3,732.6 (8.1%)
</TABLE>
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<TABLE>
<CAPTION>
LEVI STRAUSS & CO.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
Aug. 27, November 28,
-------- ------------
2000 1999
---- ----
<S> <C> <C>
(Unaudited)
ASSETS
------
Cash and cash equivalents............................................................ $ 75,446 $ 192,816
Trade receivables, net............................................................... 652,252 759,273
Total inventories ................................................................... 646,167 671,487
Property, plant and equipment, net. ................................................. 556,226 685,026
Other assets......................................................................... 1,241,539 1,356,915
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Total Assets....................................................... $3,171,630 $3,665,517
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LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current maturities of long-term debt and short-term borrowings....................... $ 232,159 $ 233,992
Accounts payable..................................................................... 211,712 262,389
Restructuring reserves............................................................... 89,741 258,784
Long-term debt, less current maturities.............................................. 1,967,191 2,430,617
Long-term employee related benefits.................................................. 361,852 325,518
Post-retirement medical benefits..................................................... 551,380 541,815
Other liabilities ................................................................... 895,156 900,964
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Total liabilities.................................................. 4,309,191 4,954,079
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Total stockholders' deficit........................................ (1,137,561) (1,288,562)
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Total Liabilities and Stockholders' Deficit........................ $3,171,630 $3,665,517
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