| (Mark One) | Form 10-Q | |||
| þ | Quarterly Report Pursuant To | |||
| Section 13 or 15(d) of the | ||||
| Securities Exchange Act of 1934 | ||||
| For Quarter Ended | ||||
| August 2, 2003 | ||||
| o | Transition Report Pursuant To | |||
| Section 13 or 15(d) of the | ||||
| Securities Exchange Act of 1934 | ||||
| Securities and Exchange Commission | ||||
| Washington, D.C. 20549 | ||||
| Commission File No. 1-3083 |
| Genesco Inc. | ||
| A Tennessee Corporation | ||
| I.R.S. No. 62-0211340 | ||
| Genesco Park | ||
| 1415 Murfreesboro Road | ||
| Nashville, Tennessee 37217-2895 | ||
| Telephone 615/367-7000 | ||
| 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 þ No o | ||
| Indicate by check mark whether the registrant is an accelerated | ||
| filer (as defined in Rule 12b-2 of the Exchange Act). | ||
| Yes þ No o |
Common Shares Outstanding September 5, 2003 – 21,744,906
INDEX
| Page | |||||
Part I. Financial Information |
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Item 1. Financial Statements (unaudited): |
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Consolidated Balance Sheet – August 2, 2003, February 1, 2003 and
August 3, 2002 |
3 | ||||
Consolidated
Earnings – Three Months Ended and Six Months Ended
August 2, 2003 and August 3, 2002 |
4 | ||||
Consolidated Cash Flows – Three Months Ended and Six Months Ended
August 2, 2003 and August 3, 2002 |
5 | ||||
Consolidated Shareholders’ Equity – Year Ended
February 1, 2003 and Six Months Ended August 2, 2003 |
6 | ||||
Notes to Consolidated Financial Statements |
7 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations |
26 | ||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
38 | ||||
Item 4. Controls and Procedures |
38 | ||||
Part II. Other Information |
|||||
Item 2. Changes in Securities and Use of Proceeds |
39 | ||||
Item 4. Submission of Matters to a Vote of Security Holders |
40 | ||||
Item 6. Exhibits and Reports on Form 8-K |
40 | ||||
Signature |
42 | ||||
2
| PART I - FINANCIAL INFORMATION | ||
| Item 1. Financial Statements | ||
| Genesco Inc. | ||
| and Consolidated Subsidiaries | ||
| Consolidated Balance Sheet | ||
| In Thousands |
| August 2, | February 1, | August 3, | ||||||||||||||
| 2003 | 2003 | 2002 | ||||||||||||||
Assets |
||||||||||||||||
Current Assets |
||||||||||||||||
Cash and cash equivalents |
$ | 32,968 | $ | 55,929 | $ | 32,214 | ||||||||||
Accounts receivable |
14,579 | 19,412 | 16,785 | |||||||||||||
Inventories |
213,440 | 168,622 | 202,062 | |||||||||||||
Deferred income taxes |
11,533 | 11,909 | 14,395 | |||||||||||||
Other current assets |
13,377 | 13,559 | 12,276 | |||||||||||||
Total current assets |
285,897 | 269,431 | 277,732 | |||||||||||||
Plant, equipment and capital leases |
125,865 | 127,542 | 128,617 | |||||||||||||
Deferred income taxes |
17,787 | 17,787 | 8,611 | |||||||||||||
Other noncurrent assets |
6,720 | 4,454 | 4,702 | |||||||||||||
Noncurrent assets of discontinued operations |
-0- | -0- | 1,085 | |||||||||||||
Total Assets |
$ | 436,269 | $ | 419,214 | $ | 420,747 | ||||||||||
Liabilities and Shareholders’ Equity |
||||||||||||||||
Current Liabilities |
||||||||||||||||
Accounts payable |
$ | 80,074 | $ | 43,660 | $ | 82,305 | ||||||||||
Accrued liabilities |
36,502 | 43,263 | 32,709 | |||||||||||||
Provision for discontinued operations |
248 | 1,343 | 3,190 | |||||||||||||
Total current liabilities |
116,824 | 88,266 | 118,204 | |||||||||||||
Long-term debt |
86,250 | 103,245 | 103,245 | |||||||||||||
Other long-term liabilities |
47,298 | 44,924 | 24,591 | |||||||||||||
Provision for discontinued operations |
44 | -0- | -0- | |||||||||||||
Total liabilities |
250,416 | 236,435 | 246,040 | |||||||||||||
Contingent liabilities (see Note 9) |
||||||||||||||||
Shareholders’ Equity |
||||||||||||||||
Non-redeemable preferred stock |
7,596 | 7,599 | 7,600 | |||||||||||||
Common shareholders’ equity: |
||||||||||||||||
Common stock, $1 par value: |
||||||||||||||||
Authorized: 80,000,000 shares |
||||||||||||||||
Issued/Outstanding: |
||||||||||||||||
August 2, 2003 – 22,259,610/21,771,146; |
||||||||||||||||
February 1, 2003 – 22,221,566/21,733,102; |
||||||||||||||||
August 3, 2002 – 22,350,553/21,862,089 |
22,260 | 22,222 | 22,351 | |||||||||||||
Additional paid-in capital |
97,642 | 97,488 | 99,099 | |||||||||||||
Retained earnings |
106,078 | 103,779 | 79,810 | |||||||||||||
Accumulated other comprehensive loss |
(29,866 | ) | (30,452 | ) | (16,296 | ) | ||||||||||
Treasury shares, at cost |
(17,857 | ) | (17,857 | ) | (17,857 | ) | ||||||||||
Total shareholders’ equity |
185,853 | 182,779 | 174,707 | |||||||||||||
Total Liabilities and Shareholders’ Equity |
$ | 436,269 | $ | 419,214 | $ | 420,747 | ||||||||||
The accompanying Notes are an integral part of these Consolidated Financial Statements.
3
| Genesco Inc. | ||
| and Consolidated Subsidiaries | ||
| Consolidated Earnings | ||
| In Thousands, except per share amounts |
| Three Months Ended | Six Months Ended | |||||||||||||||||
| August 2, | August 3, | August 2, | August 3, | |||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||||
Net sales |
$ | 179,478 | $ | 174,842 | $ | 372,224 | $ | 365,435 | ||||||||||
Cost of sales |
95,989 | 91,991 | 200,643 | 192,436 | ||||||||||||||
Selling and administrative expenses |
80,271 | 74,666 | 160,924 | 149,892 | ||||||||||||||
Restructuring adjustment (gain) |
(139 | ) | -0- | (139 | ) | -0- | ||||||||||||
Earnings from operations before interest and other |
3,357 | 8,185 | 10,796 | 23,107 | ||||||||||||||
Loss on early retirement of debt |
2,581 | -0- | 2,581 | -0- | ||||||||||||||
Interest expense |
2,366 | 2,114 | 4,572 | 4,079 | ||||||||||||||
Interest income |
(217 | ) | (192 | ) | (391 | ) | (485 | ) | ||||||||||
Total interest expense, net |
2,149 | 1,922 | 4,181 | 3,594 | ||||||||||||||
Pretax earnings (loss) |
(1,373 | ) | 6,263 | 4,034 | 19,513 | |||||||||||||
Income taxes (benefit) |
(482 | ) | 2,300 | 1,588 | 7,348 | |||||||||||||
Net Earnings (Loss) |
$ | (891 | ) | $ | 3,963 | $ | 2,446 | $ | 12,165 | |||||||||
Basic earnings (loss) per common share |
$ | (.04 | ) | $ | .18 | $ | .11 | $ | .55 | |||||||||
Diluted earnings (loss) per common share |
$ | (.04 | ) | $ | .17 | $ | .10 | $ | .51 | |||||||||
The accompanying Notes are an integral part of these Consolidated Financial Statements.
4
| Genesco Inc. | ||
| and Consolidated Subsidiaries | ||
| Consolidated Cash Flows | ||
| In Thousands |
| Three Months Ended | Six Months Ended | |||||||||||||||||
| August 2, | August 3, | August 2, | August 3, | |||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||||
OPERATIONS: |
||||||||||||||||||
Net earnings (loss) |
$ | (891 | ) | $ | 3,963 | $ | 2,446 | $ | 12,165 | |||||||||
Adjustments to reconcile net income to net cash provided
by operating activities: |
||||||||||||||||||
Depreciation |
5,530 | 4,593 | 10,639 | 8,955 | ||||||||||||||
Provision for losses on accounts receivable |
132 | (45 | ) | 292 | (6 | ) | ||||||||||||
Restructuring gain |
(139 | ) | -0- | (139 | ) | -0- | ||||||||||||
Loss on retirement of debt |
2,581 | -0- | 2,581 | -0- | ||||||||||||||
Other |
401 | 263 | 672 | 548 | ||||||||||||||
Effect on cash of changes in working capital and other assets
and liabilities: |
||||||||||||||||||
Accounts receivable |
4,658 | 5,773 | 4,480 | 3,078 | ||||||||||||||
Inventories |
(49,671 | ) | (58,614 | ) | (44,818 | ) | (59,206 | ) | ||||||||||
Other current assets |
804 | 308 | 182 | 441 | ||||||||||||||
Accounts payable and accrued liabilities |
37,295 | 41,014 | 29,657 | 45,683 | ||||||||||||||
Other assets and liabilities |
577 | (506 | ) | 1,517 | (528 | ) | ||||||||||||
Net cash provided by (used in) operating activities |
1,277 | (3,251 | ) | 7,509 | 11,130 | |||||||||||||
INVESTING ACTIVITIES: |
||||||||||||||||||
Capital expenditures |
(4,552 | ) | (7,853 | ) | (9,199 | ) | (25,216 | ) | ||||||||||
Proceeds from asset sales |
473 | 1 | 626 | 1 | ||||||||||||||
Net cash used in investing activities |
(4,079 | ) | (7,852 | ) | (8,573 | ) | (25,215 | ) | ||||||||||
FINANCING ACTIVITIES: |
||||||||||||||||||
Stock repurchase |
-0- | (913 | ) | (31 | ) | (913 | ) | |||||||||||
Dividends paid |
(73 | ) | (74 | ) | (147 | ) | (148 | ) | ||||||||||
Payments of long-term debt |
(104,867 | ) | -0- | (104,867 | ) | -0- | ||||||||||||
Long-term borrowings |
86,250 | -0- | 86,250 | -0- | ||||||||||||||
Deferred note expenditures |
(3,238 | ) | -0- | (3,238 | ) | -0- | ||||||||||||
Options exercised |
27 | 44 | 136 | 976 | ||||||||||||||
Other |
-0- | (6 | ) | -0- | -0- | |||||||||||||
Net cash used in financing activities |
(21,901 | ) | (949 | ) | (21,897 | ) | (85 | ) | ||||||||||
Net Cash Flow |
(24,703 | ) | (12,052 | ) | (22,961 | ) | (14,170 | ) | ||||||||||
Cash and cash equivalents at
beginning of period |
57,671 | 44,266 | 55,929 | 46,384 | ||||||||||||||
Cash and cash equivalents at end of period |
$ | 32,968 | $ | 32,214 | $ | 32,968 | $ | 32,214 | ||||||||||
Supplemental Cash Flow Information: |
||||||||||||||||||
Net cash paid for: |
||||||||||||||||||
Interest |
$ | 2,076 | $ | 639 | $ | 5,523 | $ | 4,128 | ||||||||||
Income taxes |
4,528 | 8,678 | 7,574 | 9,041 | ||||||||||||||
The accompanying Notes are an integral part of these Consolidated Financial Statements.
5