1 of 17 Pages
Exhibit Index
Appears on Page 14
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 August 29, 1997
_____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from_______to______.
Commission File Number: 1-4404
THE STRIDE RITE CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-1399290
(State or other jurisdiction (I.R.S. Employer Identified No.)
of incorporation)
191 Spring Street, Lexington, Massachusetts 02173
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781)824-6000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common stock, $.25 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required 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 report), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ____
-----
As of October 6, 1997, 47,718,394 shares of the Registrant's common stock,
$.25 par value, and the accompanying Preferred Stock Purchase Rights were
outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
THE STRIDE RITE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
August 29, August 30,
1997 November 29, 1996
(Unaudited) 1996 (Unaudited)
Assets
Current assets:
<S> <C> <C> <C>
Cash and cash equivalents $ 7,606 $ 57,269 $ 41,080
Short-term investments 44,504 34,611 30,016
Accounts and notes receivable, net 85,893 44,866 74,959
Inventories:
Finished goods 114,592 115,468 91,210
Work in process 501 615 1,070
Raw materials 919 3,004 5,048
--------
116,012 119,087 97,328
Deferred income taxes and
prepaid expenses 35,633 40,295 43,881
--------
Total current assets 289,648 296,128 287,264
Property and equipment, net 54,016 52,894 54,275
Other assets 18,791 15,308 16,602
--------
Total assets $362,455 $364,330 $358,141
========
</TABLE>
Theaccompanying notes are an integral part of the condensed
consolidated financial statements.
2
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Dollars in Thousands)
<TABLE>
<CAPTION>
August 29, August 30,
1997 November 29, 1996
(Unaudited) 1996 (Unaudited)
Liabilities and Stockholders' Equity
Current Liabilities:
Current maturities of
<S> <C> <C> <C>
long-term debt $ 833 $ 833 $ 833
Short-term debt 9,700 - -
Accounts payable 9,266 25,488 13,591
Income taxes payable 27,069 25,618 25,592
Accrued expenses and other
liabilities 57,662 42,592 39,454
--------
Total current liabilities 104,530 94,531 79,470
Deferred income taxes 8,796 8,275 9,444
Long-term debt - - 833
Stockholders' Equity:
Preferred stock, $1.00 par value
Shares authorized - 1,000,000
Shares issued - None - - -
Common stock, $.25 par value
Shares authorized - 135,000,000
Shares issued - 56,946,544 14,237 14,237 14,237
Capital in excess of par value 22,643 22,778 22,745
Retained earnings 328,263 316,142 323,711
Less cost of 9,228,150 shares of
common stock held in treasury
(7,279,457 on November 29, 1996
and 7,332,306 on August 30, 1996) (116,014) (91,633) (92,299)
---------
Total stockholders' equity 249,129 261,524 268,394
-------- ---------- --------
Total liabilities and stockholders'
equity $362,455 $364,330 $358,141
========
</TABLE>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
3
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the periods ended August 29, 1997 and August 30, 1996
(In Thousands Except Per Share Data)
<TABLE>
Three Months Ended Nine Months Ended
<CAPTION>
August 29, August 30, August 29, August 30,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net sales $144,463 $123,540 $417,872 $366,624
Cost of sales 90,419 80,067 266,555 240,469
Selling and
administrative expenses 41,632 40,061 121,996 116,065
---------- -------- -------- --------
Operating income 12,412 3,412 29,321 10,090
Other income(expense):
Interest income 1,111 878 2,954 2,347
Interest expense (70) (38) (151) (666)
Other, net (561) (346) (1,742) (1,656)
--------
480 494 1,061 25
--------
Income before income taxes 12,892 3,906 30,382 10,115
Provision for income taxes 4,706 713 10,999 2,532
---------
Net income $ 8,186 $ 3,193 $ 19,383 $ 7,583
=========
Net income per share $ .17 $ .06 $ .39 $ .15
=========
Dividends per common
share $ .05 $ .05 $ .15 $ .15
=========
Average common shares and
common equivalents
outstanding during the
period 48,675 49,831 49,341 49,827
========
</TABLE>
The accompanying notes are an integral part of the
condensed consolidated financial statements
4
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the nine months ended August 29, 1997 and August 30, 1996
(Dollars in Thousands)
<TABLE>
<CAPTION>
August 29, August 30,
1997 1996
----------- ------------
Cash was provided from (used for) Operations:
<S> <C> <C>
Net income $19,383 $ 7,583
Adjustments to reconcile to net cash provided
from (used for)operations:
Depreciation and amortization 7,880 7,601
Deferred income taxes, net 477 (375)
Compensation expense related to executive stock
plans 443 393
Equity in loss of affiliate 400 559
Loss on disposal of property and equipment 717 1,564
Loss related to impairment of asset - 3,800
Gain related to long-term investment - (171)
Changes in:
Accounts and notes receivable (41,027) (26,893)
Inventories 3,075 48,170
Long term notes receivable - 61
Prepaid expenses 4,706 (353)
Accounts payable, income taxes, accrued expenses
and other current liabilities 430 (7,728)
--------- ---------
Net cash provided from (used for) operations (3,516) 34,211
-------- --------
Investments:
Short-term investments (9,893) (3,805)
Additions to property and equipment (9,759) (5,966)
Proceeds from sales of property and equipment 259 270
Purchase of noncurrent marketable securities (2,464) (5,989)
Distributions and dividends from long-term
investments - 2,622
Increase in other assets (1,605) (973)
-------- ---------
Net cash used for investments (23,462) (13,841)
-------- ---------
Financing:
Proceeds from sale of stock under stock plans 536 15
Cash dividends paid (7,364) (7,435)
Repurchase of common stock (25,557) -
Short-term debt 9,700 -
-------- --------
Net cash used for financing (22,685) (7,420)
-------- ---------
Net increase (decrease) in cash and cash
equivalents (49,663) 12,950
Cash and cash equivalents at beginning of the
period 57,269 28,130
-------- --------
Cash and cash equivalents at end of the period $ 7,606 $ 41,080
========= ========
</TABLE>
The accompanying notes are an integral part of the
condensed consolidated financial statements
5
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
The financial information included in this Form 10-Q of The Stride Rite
Corporation (the "Company") for the periods ended August 29, 1997 and August 30,
1996 is unaudited and subject to year-end audit adjustments. However, such
information includes all adjustments (including all normal recurring
adjustments) which, in the opinion of management, are considered necessary for a
fair presentation of the consolidated results for those periods. The results of
operations for the nine-month period ended August 29, 1997 are not necessarily
indicative of the results of operations that may be expected for the complete
fiscal year. The year-end condensed balance sheet data was derived from the
Company's audited financial statements, but does not include all disclosures
required by generally accepted accounting principles. For additional
information, reference is made to the Company's financial statements (and the
notes thereto) included in the Company's Form 10-K for the fiscal year ended
November 29, 1996. Certain reclassifications have been made to the 1996
condensed consolidated financial statements to conform to the fiscal 1997
presentation.
NOTE 2
During the first nine months of fiscal 1997, interest payments amounted to
$140,000 ($558,000 in 1996). For the first nine months of 1997, payments for
income taxes totaled $2,283,000 and, in the comparable period of fiscal 1996,
the Company received net refunds of income taxes which amounted to $3,193,000.
6
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Certain statements contained in this Item 2 are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 and are thus prospective. Such forward-looking statements are subject to
risks, uncertainties and other factors which could cause actual results to
differ materially from future results expressed, projected or implied by such
forward-looking statements. Readers are referred to Exhibit 99 to the Company's
Quarterly Report on Form 10-Q for the fiscal period ended March 1, 1996 for a
discussion of certain of such factors. The Company disclaims any obligation to
update any of such forward-looking statements.
Results of Operations
The following table summarizes the Company's performance for the third
quarter and first nine months of fiscal 1997 as compared to the results for the
same periods in fiscal 1996:
Increase (Decrease) Percent vs. 1996 Results:
<TABLE>
<CAPTION>
Third Quarter Nine Months
<S> <C> <C>
Net sales 16.9% 14.0%
Gross profit 24.3% 19.9%
Selling and administrative expenses 3.9% 5.1%
Operating income 263.8% 190.6%
Income before income taxes 230.1% 200.4%
Net income 156.4% 155.6%
</TABLE>
Operating Ratios as a Percentage to Net Sales:
<TABLE>
<CAPTION>
Third Quarter Nine Months
1997 1996 1997 1996
---- ---- ----
<S> <C> <C> <C> <C>
Gross profit 37.4% 35.2% 36.2% 34.4%
Selling and administrative expenses 28.8% 32.4% 29.2% 31.7%
Operating income 8.6% 2.8% 7.0% 2.8%
Income before income taxes 8.9% 3.2% 7.3% 2.8%
Net income 5.7% 2.6% 4.6% 2.1%
</TABLE>
7
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations (continued)
Net sales in the third quarter of fiscal 1997 increased $20.9 million or
16.9% from the net sales level achieved in the comparable period of fiscal 1996.
For the first nine months of fiscal 1997, consolidated net sales were above last
year's first nine months by $51.2 million or 14%. An 18% increase in revenues
from the Company's wholesale divisions during the first nine months of fiscal
1997 offset a 4.4% decline in retail sales in the latest nine-month period. In
the third quarter of fiscal 1997, wholesale division revenues increased 20.7%
from the same period of fiscal 1996, while retail sales increased 0.5%. With
respect to the wholesale divisions of the Company, unit shipments of current
line merchandise during the first nine months of 1997 were 9% higher than the
comparable period in 1996 and average selling prices in the first nine months of
1997 increased 9.1% from last year, primarily due to the mix of sales between
the Company's various branded divisions. The higher sales of current line
merchandise during the first nine months of 1997 offset a 33% decline in the
sales of discontinued products compared to the prior period. Excluding the
impact of product mix changes, net sales in the first nine months of 1997
decreased by approximately $3.1 million due to selling price deflation.
In the third quarter and first nine months of fiscal 1997, the increased
revenues of the Company's wholesale businesses reflected the shipment of the
initial orders of its Tommy Hilfiger(R) division. The Tommy Hilfiger(R) men's
product line, which is being marketed under a license agreement with Tommy
Hilfiger(R) Licensing, Inc., was introduced to consumers in leading department
stores and other specialty retailers on February 1, 1997. The Spring 1997
product line included athletic, sport and casual collections for men. In the
third quarter of 1997, the Tommy Hilfiger(R) division introduced outdoor and
dress styles for men and delivered an expanded men's athletic product line and a
boys' product line for back-to-school selling. The Company's other wholesale
divisions also contributed to the higher revenues in the first nine months of
1997. Sales of the Stride Rite Children's Group to independent dealers, family
shoe stores and department stores during the nine-month period of 1997 increased
2% as compared to sales in the same period of 1996. However, Children's Group
sales in the third quarter of 1997 decreased 1% from 1996 as reorders from
department store accounts were slower than expected. Shipments in the third
quarter of 1997 were also impacted by the labor action at United Parcel Service
of America, Inc. which caused some level of business disruption during August, a
critical month in the back-to-school season. For the nine-month period of 1997,
Sperry Top-Sider sales were 14% higher than 1996 with a 24% increase in the
sales of current line merchandise offsetting a 50% decline in the sales of
discontinued products.
8
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations - continued:
The Sperry Top-Sider divisions' sales during the third quarter of 1997 decreased
3% as compared to the same period in fiscal 1996 as reorders for basic boat
shoes slowed.During the third quarter of 1997, sales of the Company's
International division increased 20% from 1996. For the first nine months of
1997, International division sales were above 1996 by 37%, reflecting the
introduction of Tommy Hilfiger(R) products in Canada and Latin America and
increased sales of Sperry Top-Sider and Keds products in South America. Sales of
the Keds division decreased 16% during the third quarter of 1997 and declined
11% for the first nine months of 1997 as compared to the same periods in fiscal
1996. Sales of Keds current line merchandise declined 8% from 1996 for both the
third quarter and nine-month periods, while sales of discontinued styles in 1997
declined 67% for the third quarter and 37% for the nine months. In the first
nine months of 1997, weak reorders resulted in a 17% reduction in the sales of
the basic Keds Champion(R) product line. Sales of Keds new "Ready to Wear"
style, which was introduced in a leather version during the third quarter, were
not sufficient to offset the Champion(R) decline.
For the first nine months of fiscal 1997, sales of the Company's Retail
division, which includes the Stride Rite children's booteries and leased
departments, manufacturers' outlets and the initial stores of the Great Feet(TM)
and Keds retail concepts, decreased 4.4% from 1996 as a lower store count offset
a 3.1% increase in sales at comparable stores. In the third quarter of fiscal
1997, comparable store sales were increased 5% from the same period in 1996. At
the end of the third quarter of 1997, the Retail division operated 204 stores,
down 4% from the total of 212 stores open in August 1996.
Gross Profit
During the first nine months of fiscal 1997, gross profit increased $25.2
million from the comparable period in 1996, a gain of 19.9% compared to the net
sales increase of 14% over the same period. The consolidated gross profit
percentage in the first nine months of 1997 increased 1.8 percentage points,
finishing at 36.2% in 1997 compared to 34.4% in 1996. The gross profit
performance also improved in the third quarter of 1997 as compared to 1996 with
the consolidated gross profit percentage improving 2.2 percentage points in the
quarterly period to 37.4%. The increased sales of current line merchandise and
the lower sales of discontinued styles in the first nine months of 1997 produced
a more profitable product mix than in the comparable period of 1996. Inventory
obsolescence charges and retail markdowns were
9
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations,continued:
lower in the 1997 period due to a more disciplined approach to purchasing
seasonal products. The LIFO provision also had a favorable impact on gross
profit comparisons, with LIFO increasing gross profit by $1.4 million (0.3% of
net sales) in the first nine months of 1997 compared to a gross profit reduction
of $1.7 million (0.5%of net sales) in the comparable period of fiscal 1996. The
primary cause of the favorable LIFO impact in fiscal 1997 is the reduction of
certain manufactured inventory quantities which were valued at costs prevailing
in prior years. Inefficiencies in domestic manufacturing operations reduced the
gross profit percentage by 0.4 percentage points in the first nine months of
1997. In February 1997, the Company announced the closure of its two children's
footwear manufacturing facilities in Missouri. Existing reserves and accruals
are expected to be sufficient to offset the employee severance and other
nonrecurring costs resulting from this decision. The facilities were closed
during the third quarter of fiscal 1997 following the transfer of styles to
lower cost resources in the Far East and Mexico. Finally, the decreased
contribution to consolidated sales of the Retail division, the division of the
Company with the highest gross profit percentage, also negatively impacted the
Company's consolidated gross profit performance in the first nine months of
1997, as retail sales accounted for 15.2% of total sales in 1997 compared to
18.1% of sales in the first nine months of 1996.
Operating Costs
Selling and administrative expenses in the first nine months of fiscal 1997
increased $5.9 million or 5.1% above the similar period in 1996. This rate of
increase compares favorably to the overall gain in net sales of 14%. Operating
costs as a percentage of net sales decreased from last year by 2.5 percentage
points in the first nine months (29.2% in 1997 compared to 31.7% in 1996). The
operating cost comparison between the 1997 and 1996 third quarter periods was
also favorable as expenses increased by only 3.9% compared to the sales gain of
16.9% and the relationship of expenses to net sales declined by 3.6 percentage
points. Expenses in the third quarter and nine-month period of 1996 included a
provision of $3.8 million related to the impairment in value of certain
software-related expenses which were capitalized in prior years.
Higher advertising spending, which increased by $3.6 million or 18% in the
first nine months of 1997, accounted for the largest portion of the increase in
operating expenses. The additional advertising costs were primarily related to
the launch of the Tommy Hilfiger(R) product line and a shift in spending to the
first nine months of the year at Stride Rite Children's Group. As a percentage
of net sales, advertising expense
10
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations, continued:
represented 5.7% of sales in the first nine months of 1997, which was slightly
higher than the spending rate of 5.5% of sales in the comparable period in 1996.
Distribution expenses increased 12.6% during the first nine months of 1997 due
to the increased sales volume of the wholesale business units and start-up
expenses of $1.4 million related to a new distribution facility in Huntington,
Indiana. The Company expects to begin shipping Stride Rite brand products from
the new Indiana facility during the fourth quarter of 1997. Distribution
expenses, including the start-up costs, represented 2.6% of net sales in the
first nine months of 1997 compared to 2.7% for the same period in 1996. Retail
store expenses decreased 4.9% during the first nine months of 1997 due to the
closing of underperforming locations over the past year.
Other Income and Taxes
Other income (expense) increased pre-tax income by $1.1 million in the
first nine months of fiscal 1997 compared to a small favorable impact in the
first nine months of fiscal 1996. Interest income increased $0.6 million in 1997
due to higher levels of short-term investments during the first nine months of
1997 than in the comparable 1996 period. Interest expense in the nine month
period of 1997 was lower than 1996, decreasing $0.5 million, as the Company
maintained lower borrowings due to reduced inventory levels. Average short-term
borrowings in the first nine months of 1997 were $1.7 million, down
significantly from the average borrowings of $12.2 million in the comparable
period of 1996.
The provision for income taxes increased $8.5 million in the first nine
months of fiscal 1997 as compared to the similar period in fiscal 1996 primarily
due to the higher pre-tax income earned in the 1997 period. The 1997 effective
income tax rate was also higher, 36.2% compared to 25% in 1996, due to reduced
tax savings related to a company-owned life insurance program.
Net Income
Net income for the first nine months of fiscal 1997 increased $11.8
million, up 155.6% from the income earned in the 1996 nine-month period. With
the improved gross profit performance and an increase in operating expenses
which was well below the rate of sales growth, the Company's after-tax return on
net sales in the first nine months improved by 2.5 percentage points (4.6% of
sales in the first nine months of 1997 compared to 2.1% in the 1996 period).
11
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
THE STRIDE RITE CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
At August 29, 1997, the Company's balance sheet reflects a current ratio of
2.8 to 1 with no long-term debt. The Company's cash and short-term investments
totaled $52.1 million at the end of the latest quarter, below the cash and
investments total of $71.1 million at the end of the first nine months of 1996.
In 1997, other assets also included $9.6 million of investments in
intermediate-term, fixed income instruments compared to $6 million of similar
investments at August 30, 1996. During the first nine months of 1997, the
Company's operations used $3.5 million of cash, down from the $34.2 million of
cash flow provided from operations in 1996 as additional working capital was
required in the first nine months of 1997 to support the increased sales levels.
At August 29, 1997, receivable and inventory levels totaled $201.9
million, an increase of $29.6 million or 17.2% from the $172.3 million asset
amount at the end of the first nine months of 1996. Accounts receivable of $85.9
million at the end of the third quarter of 1997 was 14.5% above from comparable
1996 amount, a rate of growth below the 20.7% increase in revenues of the
Company's wholesale businesses during the third quarter of 1997. Inventories
were higher at the end of the first nine months of 1997, up $18.7 million or
19.2% from the 1996 level with substantially all of the increase related to
inventory associated with the Tommy Hilfiger(R) business.
The Company's Board of Directors had previously authorized a 16 million
share stock repurchase program. The Company completed this repurchase program
during the third quarter of 1997. In the first nine months of 1997, the Company
repurchased 2,042,500 shares of common stock for an aggregate expenditure of
$25.6 million in cash. These transactions bring the aggregate expenditure amount
for the 16 million share repurchase program to $145.6 million.
The Company uses bank lines of credit to fund seasonal working capital
needs. Borrowings outstanding under these arrangements at August 29, 1997
amounted to $9.7 million. No borrowings were outstanding at August 30, 1996.
12
<PAGE>
Part II - OTHER INFORMATION
THE STRIDE RITE CORPORATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits Description of Exhibit
Exhibit No.
11 Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K
On July 1, 1997, the Company filed a report on Form 8-K describing the
adoption of a replacement shareholder rights plan, under which preferred
share purchase rights were distributed to stockholders of record on July
17, 1997. This shareholder rights plan replaced a similar plan
instituted by the Company's Board of Directors in July 1987. For
additional information, reference is made to the Form 8-K and Form 8-A
filed on July 1, 1997, including the exhibits thereto.
13
<PAGE>
THE STRIDE RITE CORPORATION
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 duly authorized.
THE STRIDE RITE CORPORATION
(Registrant)
Date: October 10, 1997 By: /s/ John M. Kelliher
--------------------
John M. Kelliher
Vice President, Finance,
Treasurer, and Corporate Controller
14
<PAGE>
THE STRIDE RITE CORPORATION
INDEX TO EXHIBITS
Exhibit No.
Sequential Page No.
11 Computation of Per Share Earnings Page 16 of 17
27 Financial Data Schedule Page 17 of 17
15
<PAGE>
Exhibit 11
THE STRIDE RITE CORPORATION
COMPUTATION OF PER SHARE EARNINGS
(In Thousands except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
August 29, August 30, August 29, August 30,
1997 1996 1997 1996
----------- ----------- ---------- ----------
Net income applicable to common
<S> <C> <C> <C> <C>
shares $ 8,186 $ 3,193 $19,383 $ 7,583
Calculation of shares:
Weighted average number of
common shares outstanding 48,220 49,607 48,863 49,581
Common shares attributable to assumed exercise of dilutive stock options and
stock purchase rights using the
treasury stock method 455 224 478 246
---------
Average common shares and common
equivalents outstanding during
the period 48,675 49,831 49,341 49,827
=========
Net income per common share $ .17 $ .06 $ .39 $ .15
========= ======= =======
</TABLE>
16
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The notes to the condensed consolidated financial statements are an integral
part of such statements and the condensed consolidated financial information in
this schedule. Figures below are in thousands, except per-share data.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> NOV-28-1997 NOV-28-1997
<PERIOD-END> AUG-29-1997 AUG-29-1997
<CASH> 7,606 7,606
<SECURITIES> 44,504 44,504
<RECEIVABLES> 95,326 95,326
<ALLOWANCES> 9,433 9,433
<INVENTORY> 116,012 116,012
<CURRENT-ASSETS> 289,648 289,648
<PP&E> 82,980 82,980
<DEPRECIATION> 28,964 28,964
<TOTAL-ASSETS> 362,455 362,455
<CURRENT-LIABILITIES> 104,530 104,530
<BONDS> 0 0
0 0
0 0
<COMMON> 14,237 14,237
<OTHER-SE> 234,892 234,892
<TOTAL-LIABILITY-AND-EQUITY> 362,455 362,455
<SALES> 144,463 417,872
<TOTAL-REVENUES> 144,463 417,872
<CGS> 90,419 266,555
<TOTAL-COSTS> 90,419 266,555
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 285 1,555
<INTEREST-EXPENSE> 70 151
<INCOME-PRETAX> 12,892 30,382
<INCOME-TAX> 4,706 10,999
<INCOME-CONTINUING> 8,186 19,383
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 8,186 19,383
<EPS-PRIMARY> .17 .39
<EPS-DILUTED> .17 .39
</TABLE>
