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Exhibit 99
LEVI 1155 Battery Street, San Francisco, CA 94111
STRAUSS
& Co.
NEWS Investor Contact: Christine Greany
Integrated Corporate Relations
(203) 222-9013
FOR IMMEDIATE RELEASE
---------------------
Media Contact: Linda Butler
Levi Strauss & Co.
(415) 501-2233
LEVI STRAUSS & CO. FOURTH-QUARTER AND FISCAL 2000 FINANCIAL RESULTS
SHOW SUBSTANTIAL PROGRESS IN BUSINESS TURNAROUND
Annual Net Sales Decline Slows; Net Income Nearly Doubles;
Improving Sales Trends Expected to Continue in Fiscal 2001
SAN FRANCISCO (January 10, 2001) - Levi Strauss & Co. today announced improved
financial results for the fourth quarter and fiscal year ended November 26,
2000. The company achieved substantial progress in its business turnaround in
fiscal 2000, narrowing its sales decline, significantly improving both operating
and net income, increasing cash flow and reducing debt. Specifically, the
company:
o Slowed its net sales decline to 9.6 percent (7 percent on a constant
currency basis) from a 13.7 percent decline in 1999;
o Increased net income, on an adjusted basis, 97 percent to $201.8 million;
reported net income rose more than 40 times to $223.4 million;
o Cut its debt by $538 million.
Levi Strauss & Co. President and Chief Executive Officer Philip Marineau said,
"Our goal this past year was to deliver strong financial performance, and we
succeeded beyond our expectations. We've improved our sales trends, meeting our
target of slowing the sales decline to single digits for the year, and
out-performed last year in all our key financial measures including earnings.
We've made great progress in our business turnaround and we've done it in a
tough retail environment, which is all the more encouraging."
For the 12-month period ended November 26, 2000, net sales declined 9.6 percent
to $4.645 billion from $5.139 billion in the prior year. Had currency rates
remained constant at 1999 levels, net sales would have declined approximately 7
percent for the year.
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LS&CO. Q4/Add One
January 10, 2001
"Our strong financial performance was driven, in part, by product innovation in
our Levi's(R), Dockers(R), and Slates(R) brands," said Marineau. "Consumers have
responded positively to our updated basics and new products, including Levi's(R)
Engineered Jeans(TM), Levi's(R) 569 jeans, classic corduroys and low-rise jeans
for women. While a business turnaround such as this is a multi-year process,
it's clear that our strategies are beginning to take hold. We are well
positioned to stabilize our business in fiscal 2001."
Fourth-Quarter Results
----------------------
The company ended the year with good momentum. Marineau said, "We turned in our
best performance of 2000 in the fourth quarter. Our sales decline slowed to 4
percent on a constant currency basis, a substantial achievement from the first
quarter when we had nearly a 13 percent decline. We also realized higher gross
margins, gross profits and income in the fourth quarter than we had in each of
the previous three quarters - all the while continuing to pay down our debt."
Total net sales for the fourth quarter declined 8.6 percent to $1.286 billion
from $1.407 billion in the year-earlier period, however exchange rates had a
significant negative impact. Had currency exchange rates remained constant at
1999 levels, net sales would have declined approximately 4 percent.
Fourth-quarter gross margin rose in 2000 to 43.0 percent from 37.4 percent in
the prior-year period and reflects the company's lowered sourcing and fabric
costs, reduced inventory markdowns and improved product mix. Gross profit for
the fourth quarter improved to $553 million compared to $526 million in the same
period of 1999.
Operating income for the fourth quarter was $164.1 million compared to $321.2
million in the same period last year. Excluding certain adjustments related to
restructuring costs and incentive compensation programs, operating income for
the fourth quarter of 2000 would have increased 89 percent compared to the
prior-year period.
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LS&CO. Q4/Add Two
January 10, 2001
EBITDA, which the company defines as operating income excluding depreciation,
amortization, restructuring charges and reversal of charges for a long-term
incentive program, improved to $152.4 million compared to $102.9 million in the
fourth quarter of 1999. EBITDA margin rose sharply to 11.8 percent, compared to
7.3 percent in the prior-year period.
Fourth-quarter net income decreased to $75.4 million from $157.0 million in
1999. Excluding the adjustments to operating income in both years, net income
would have increased to approximately $54 million as opposed to a loss of $2
million in the same period last year.
Fiscal-Year 2000 Results
------------------------
Bill Chiasson, the company's chief financial officer, said, "We have made great
strides in improving the financial picture at Levi Strauss & Co. Our gross
margins are back to historic levels, we have a tighter rein on expenses, we're
doing a better job of controlling our inventories, and we've reduced our debt by
more than half-a-billion dollars. We ended the year with EBITDA margins of 12.8
percent, within our full-year target range, and expect to achieve our goal of
11.5 percent to 13.5 percent in 2001. Importantly, utilizing our strong cash
flow to continue reducing debt remains a top priority."
Gross margin in fiscal 2000 rose to 42.1 percent from 38.1 percent in 1999,
while gross profit was $1.955 billion compared to $1.959 billion last year.
Operating income for the year increased significantly to $538.8 million from
$199.3 million in 1999. Excluding adjustments, operating income would have
increased 43 percent. EBITDA in 2000 rose 26 percent to $596.6 million or 12.8
percent of sales compared to $473.3 million or 9.2 percent of sales in 1999.
Net income for the year increased dramatically to $223.4 million from $5.4
million in 1999. On a comparable basis, excluding one-time adjustments as
mentioned above, net income would have increased approximately 97 percent to
$201.8 million.
As of November 26, 2000, total debt had been reduced to $2.1 billion from $2.7
billion on November 28, 1999.
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LS&CO. Q4/Add Three
January 10, 2001
Levi Strauss & Co. is one of the world's leading branded apparel companies,
marketing its products 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 fourth-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 January 10, 2001 at 10 a.m. EST. A replay is available on the Web site the
same day beginning at approximately 2 p.m. EST and will remain until January 24.
A telephone replay also is available at (402) 220-5656 from approximately noon
EST through January 17.
This news release includes forward-looking statements about sales performance
and trends, fashion trends, product innovation and 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; U.S. retail conditions and retail conditions
outside the U.S.; 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; general
economic conditions; trade restrictions; political or financial instability in
countries where our products are manufactured; and other risks detailed in our
registration statement and 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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LEVI STRAUSS & CO.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands)
Three Months Ended Twelve Months Ended
------------------ -------------------
Nov. 26, Nov. 28, Nov. 26, Nov. 28,
-------- -------- -------- --------
2000 1999 2000 1999
---- ---- ---- ----
(Audited)
<S> <C> <C> <C> <C>
Net sales........................................................ $1,285,905 $1,406,813 $4,645,126 $5,139,458
Cost of goods sold............................................... 732,841 881,103 2,690,170 3,180,845
---------- ---------- ---------- ----------
Gross profit.................................................. 553,064 525,710 1,954,956 1,958,613
Marketing, general and administrative expenses................... 433,666 464,860 1,481,718 1,629,845
Other operating income........................................... (11,528) (8,280) (32,380) (24,387)
Excess capacity/restructuring charge............................. (33,144) 91,798 (33,144) 497,683
Global Success Sharing Plan...................................... -- (343,873) -- (343,873)
---------- ---------- ---------- ----------
Operating income.............................................. 164,070 321,205 538,762 199,345
Interest expense................................................. 56,921 50,260 234,098 182,978
Other (income) expense, net...................................... (8,864) 21,680 (39,016) 7,868
---------- ---------- ---------- ----------
Income before taxes........................................... 116,013 249,265 343,680 8,499
Income tax expense............................................... 40,605 92,227 120,288 3,144
---------- ---------- ---------- ----------
Net income.................................................... $ 75,408 $ 157,038 $ 223,392 $ 5,355
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<CAPTION>
NET SALES BY REGION
(in millions)
(Unaudited)
Three Months Ended Twelve Months Ended
------------------ -------------------
Net Sales Nov. 26, Nov. 28, Percent Nov. 26, Nov. 28, Percent
-------- -------- ------- -------- -------- -------
2000 1999 Change 2000 1999 Change
---- ---- ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
Americas $ 892.9 $ 939.9 (5.0%) $3,148.2 $3,420.3 (8.0%)
Europe 287.0 356.7 (19.5%) 1,104.5 1,360.8 (18.8%)
Asia 106.0 110.2 (3.8%) 392.4 358.4 9.5%
Total Company $1,285.9 $1,406.8 (8.6%) $4,645.1 $5,139.5 (9.6%)
Three Months Ended Twelve Months Ended
--------------------- ----------------------
Net Sales at Prior-Year Nov. 26, Nov. 28, Percent Nov. 26, Nov. 28, Percent
Currency Exchange Rates -------- -------- ------- -------- -------- -------
2000 1999 Change 2000 1999 Change
---- ---- ------ ---- ---- ------
(Restated) (Restated)
---------- ----------
Americas $ 893.5 $ 939.9 (4.9%) $3,146.3 $3,420.3 (8.0%)
Europe 342.9 356.7 (3.9%) 1,247.5 1,360.8 (8.3%)
Asia 109.3 110.2 (0.8%) 382.7 358.4 6.8%
Total Company $1,345.7 $1,406.8 (4.3%) $4,776.5 $5,139.5 (7.1%)
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LEVI STRAUSS & CO.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
November 26, November 28,
------------ ------------
2000 1999
---- ----
<S> <C> <C>
(Unaudited)
ASSETS
------
Cash and cash equivalents............................................................ $ 117,058 $ 192,816
Trade receivables, net............................................................... 660,128 759,273
Total inventories ................................................................... 652,249 671,487
Property, plant and equipment, net................................................... 574,039 714,523
Other assets......................................................................... 1,202,254 1,331,915
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Total Assets....................................................... $3,205,728 $3,670,014
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LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current maturities of long-term debt and short-term borrowings....................... $ 231,290 $ 233,992
Accounts payable..................................................................... 268,473 262,389
Restructuring reserves............................................................... 71,595 288,281
Long-term debt, less current maturities.............................................. 1,895,140 2,430,617
Long-term employee related benefits.................................................. 358,849 325,518
Post-retirement medical benefits..................................................... 545,574 541,815
Other liabilities.................................................................... 933,380 875,964
---------- ----------
Total liabilities.................................................. 4,304,301 4,958,576
---------- ----------
Total stockholders' deficit........................................ (1,098,573) (1,288,562)
---------- ----------
Total Liabilities and Stockholders' Deficit........................ $3,205,728 $3,670,014
========== ==========
Certain prior year assets and liability amounts have been reclassified to conform to the 2000 presentation.
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