Form 10-Q
(Mark One)
þ Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
For Quarter Ended November 1, 2003
o Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
Securities and Exchange Commission
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 December 5, 2003 – 21,712,435 |
INDEX
| Page | |||||
Part I. Financial Information |
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Item 1. Financial Statements (unaudited): |
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Consolidated Balance Sheet – November 1, 2003, February 1, 2003 and
November 2, 2002 |
3 | ||||
Consolidated Earnings - Three Months Ended and Nine Months Ended
November 1, 2003 and November 2, 2002 |
4 | ||||
Consolidated Cash Flows - Three Months Ended and Nine Months Ended
November 1, 2003 and November 2, 2002 |
5 | ||||
Consolidated Shareholders’ Equity - Year Ended
February 1, 2003 and Nine Months Ended November 1, 2003 |
6 | ||||
Notes to Consolidated Financial Statements |
7 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations |
28 | ||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
43 | ||||
Item 4. Controls and Procedures |
43 | ||||
Part II. Other Information |
|||||
Item 6. Exhibits and Reports on Form 8-K |
44 | ||||
Signature |
45 | ||||
2
| PART I - FINANCIAL INFORMATION |
| Item 1. Financial Statements | ||||
| Genesco Inc. | ||||
| and Consolidated Subsidiaries |
| Consolidated Balance Sheet | ||||
| In Thousands |
| November 1, | February 1, | November 2, | ||||||||||||||
| 2003 | 2003 | 2002 | ||||||||||||||
Assets |
||||||||||||||||
Current Assets |
||||||||||||||||
Cash and cash equivalents |
$ | 44,306 | $ | 55,929 | $ | 10,260 | ||||||||||
Accounts receivable |
18,731 | 19,412 | 24,597 | |||||||||||||
Inventories |
205,918 | 168,622 | 199,773 | |||||||||||||
Deferred income taxes |
11,360 | 11,909 | 7,289 | |||||||||||||
Other current assets |
14,004 | 13,559 | 14,732 | |||||||||||||
Total current assets |
294,319 | 269,431 | 256,651 | |||||||||||||
Property, equipment and capital leases |
126,842 | 127,542 | 129,271 | |||||||||||||
Deferred income taxes |
17,787 | 17,787 | 15,730 | |||||||||||||
Other noncurrent assets |
6,678 | 4,454 | 4,513 | |||||||||||||
Noncurrent assets of discontinued operations |
-0- | -0- | 1,140 | |||||||||||||
Total Assets |
$ | 445,626 | $ | 419,214 | $ | 407,305 | ||||||||||
Liabilities and Shareholders’ Equity |
||||||||||||||||
Current Liabilities |
||||||||||||||||
Notes payable |
$ | -0- | $ | -0- | $ | 5,000 | ||||||||||
Accounts payable |
78,318 | 43,660 | 50,839 | |||||||||||||
Accrued liabilities |
40,407 | 43,263 | 37,838 | |||||||||||||
Provision for discontinued operations |
240 | 1,343 | 2,543 | |||||||||||||
Total current liabilities |
118,965 | 88,266 | 96,220 | |||||||||||||
Long-term debt |
86,250 | 103,245 | 103,245 | |||||||||||||
Other long-term liabilities |
45,788 | 44,924 | 25,604 | |||||||||||||
Provision for discontinued operations |
39 | -0- | -0- | |||||||||||||
Total liabilities |
251,042 | 236,435 | 225,069 | |||||||||||||
Contingent liabilities (see Note 9) |
||||||||||||||||
Shareholders’ Equity |
||||||||||||||||
Non-redeemable preferred stock |
7,579 | 7,599 | 7,597 | |||||||||||||
Common shareholders’ equity: |
||||||||||||||||
Common stock, $1 par value: |
||||||||||||||||
Authorized: 80,000,000 shares |
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Issued/Outstanding: |
||||||||||||||||
November 1, 2003 – 22,215,640/21,727,176; |
||||||||||||||||
February 1, 2003 – 22,221,566/21,733,102; |
||||||||||||||||
November 2, 2002 – 22,178,099/21,689,635 |
22,216 | 22,222 | 22,178 | |||||||||||||
Additional paid-in capital |
96,826 | 97,488 | 96,790 | |||||||||||||
Retained earnings |
115,416 | 103,779 | 89,844 | |||||||||||||
Accumulated other comprehensive loss |
(29,596 | ) | (30,452 | ) | (16,316 | ) | ||||||||||
Treasury shares, at cost |
(17,857 | ) | (17,857 | ) | (17,857 | ) | ||||||||||
Total shareholders’ equity |
194,584 | 182,779 | 182,236 | |||||||||||||
Total Liabilities and Shareholders’ Equity |
$ | 445,626 | $ | 419,214 | $ | 407,305 | ||||||||||
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 | Nine Months Ended | ||||||||||||||||
| November 1, | November 2, | November 1, | November 2, | ||||||||||||||
| 2003 | 2002 | 2003 | 2002 | ||||||||||||||
Net sales |
$ | 212,483 | $ | 213,157 | $ | 584,707 | $ | 578,592 | |||||||||
Cost of sales |
113,355 | 112,318 | 313,998 | 304,754 | |||||||||||||
Selling and administrative expenses |
82,426 | 82,197 | 243,350 | 232,089 | |||||||||||||
Restructuring adjustment (gain) |
-0- | -0- | (139 | ) | -0- | ||||||||||||
Earnings from operations |
16,702 | 18,642 | 27,498 | 41,749 | |||||||||||||
Loss on early retirement of debt |
-0- | -0- | 2,581 | -0- | |||||||||||||
Interest expense |
1,590 | 2,236 | 6,162 | 6,315 | |||||||||||||
Interest income |
(80 | ) | (74 | ) | (471 | ) | (559 | ) | |||||||||
Total interest expense, net |
1,510 | 2,162 | 5,691 | 5,756 | |||||||||||||
Pretax earnings |
15,192 | 16,480 | 19,226 | 35,993 | |||||||||||||
Income taxes |
5,780 | 6,373 | 7,368 | 13,721 | |||||||||||||
Net Earnings |
$ | 9,412 | $ | 10,107 | $ | 11,858 | $ | 22,272 | |||||||||
Basic earnings per common share |
$ | .43 | $ | .46 | $ | .54 | $ | 1.01 | |||||||||
Diluted earnings per common share |
$ | .42 | $ | .41 | $ | .53 | $ | .92 | |||||||||
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 | Nine Months Ended | |||||||||||||||||
| November 1, | November 2, | November 1, | November 2, | |||||||||||||||
| 2003 | 2002 | 2003 | 2002 | |||||||||||||||
OPERATIONS: |
||||||||||||||||||
Net earnings |
$ | 9,412 | $ | 10,107 | $ | 11,858 | $ | 22,272 | ||||||||||
Adjustments to reconcile net earnings to net cash provided
by (used in) operating activities: |
||||||||||||||||||
Depreciation |
5,550 | 5,131 | 16,189 | 14,086 | ||||||||||||||
Provision for losses on accounts receivable |
37 | (68 | ) | 329 | (74 | ) | ||||||||||||
Restructuring gain |
-0- | -0- | (139 | ) | -0- | |||||||||||||
Loss on retirement of debt |
-0- | -0- | 959 | -0- | ||||||||||||||
Other |
387 | 235 | 1,059 | 783 | ||||||||||||||
Effect on cash of changes in working capital and other assets
and liabilities: |
||||||||||||||||||
Accounts receivable |
(4,189 | ) | (7,744 | ) | 291 | (4,666 | ) | |||||||||||
Inventories |
7,521 | 2,289 | (37,297 | ) | (56,917 | ) | ||||||||||||
Other current assets |
(184 | ) | (2,456 | ) | (2 | ) | (2,015 | ) | ||||||||||
Accounts payable |
(4,283 | ) | (27,901 | ) | 36,162 | 27,340 | ||||||||||||
Other accrued liabilities |
3,898 | 4,349 | (2,858 | ) | (6,160 | ) | ||||||||||||
Other assets and liabilities |
(1,541 | ) | 1,001 | (24 | ) | 473 | ||||||||||||
Net cash provided by (used in) operating activities |
16,608 | (15,057 | ) | 26,527 | (4,878 | ) | ||||||||||||
INVESTING ACTIVITIES: |
||||||||||||||||||
Capital expenditures |
(6,773 | ) | (5,855 | ) | (15,972 | ) | (31,071 | ) | ||||||||||
Proceeds from asset sales |
12 | 13 | 638 | 14 | ||||||||||||||
Net cash used in investing activities |
(6,761 | ) | (5,842 | ) | (15,334 | ) | (31,057 | ) | ||||||||||
FINANCING ACTIVITIES: |
||||||||||||||||||
Stock repurchase |
(1,367 | ) | (3,131 | ) | (1,398 | ) | (4,044 | ) | ||||||||||
Increase (decrease) in bank overdrafts |
2,528 | (3,465 | ) | (1,504 | ) | (2,514 | ) | |||||||||||
Revolver borrowings, net |
-0- | 5,000 | -0- | 5,000 | ||||||||||||||
Dividends paid |
(74 | ) | (73 | ) | (221 | ) | (221 | ) | ||||||||||
Payments of capital leases |
-0- | (1 | ) | -0- | (1 | ) | ||||||||||||
Payments of long-term debt |
-0- | -0- | (103,245 | ) | -0- | |||||||||||||
Long-term borrowings |
-0- | -0- | 86,250 | -0- | ||||||||||||||
Deferred note expenditures |
-0- | -0- | (3,238 | ) | -0- | |||||||||||||
Options exercised and shares issued in
Employee Stock Purchase Plan |
404 | 615 | 540 | 1,591 | ||||||||||||||
Net cash provided by (used in) financing activities |
1,491 | (1,055 | ) | (22,816 | ) | (189 | ) | |||||||||||
Net Cash Flow |
11,338 | (21,954 | ) | (11,623 | ) | (36,124 | ) | |||||||||||
Cash and cash equivalents at
beginning of period |
32,968 | 32,214 | 55,929 | 46,384 | ||||||||||||||
Cash and cash equivalents at end of period |
$ | 44,306 | $ | 10,260 | $ | 44,306 | $ | 10,260 | ||||||||||
Supplemental Cash Flow Information: |
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Net cash paid for: |
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Interest |
$ | 586 | $ | 3,471 | $ | 6,109 | $ | 7,599 | ||||||||||
Income taxes |
131 | 1,889 | 7,705 | 10,930 | ||||||||||||||
The accompanying Notes are an integral part of these Consolidated Financial Statements.
5
|
Genesco Inc. and Consolidated Subsidiaries |
|
Consolidated Shareholders’ Equity In Thousands |
| Total | Accumulated | Total< | ||||||||||||||||||||||||||||||