Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 01, 2016 | Oct. 21, 2016 | |
Document Information [Line Items] | ||
Entity Registrant Name | CARTERS INC | |
Entity Central Index Key | 1,060,822 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Oct. 1, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 49,370,980 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 01, 2016 | Jan. 02, 2016 | Oct. 03, 2015 |
Current assets: | |||
Cash and cash equivalents | $ 140,626 | $ 381,209 | $ 288,260 |
Accounts receivable, net | 271,207 | 207,570 | 246,565 |
Finished goods inventories | 552,726 | 469,934 | 511,520 |
Prepaid expenses and other current assets | 43,155 | 37,815 | 36,414 |
Deferred income taxes | 37,600 | 34,080 | 34,895 |
Total current assets | 1,045,314 | 1,130,608 | 1,117,654 |
Property, plant, and equipment, net of accumulated depreciation of $333,660, $290,636, and $276,230, respectively | 388,440 | 371,704 | 361,305 |
Tradenames, net | 308,973 | 310,848 | 311,842 |
Goodwill | 176,956 | 174,874 | 176,633 |
Other assets | 18,022 | 15,620 | 14,940 |
Total assets | 1,937,705 | 2,003,654 | 1,982,374 |
Current liabilities: | |||
Accounts payable | 155,223 | 157,648 | 173,594 |
Other current liabilities | 126,922 | 105,070 | 105,199 |
Total current liabilities | 282,145 | 262,718 | 278,793 |
Long-term debt, net | 580,613 | 578,972 | 579,612 |
Deferred income taxes | 129,278 | 128,838 | 119,499 |
Other long-term liabilities | 169,535 | 158,075 | 161,527 |
Total liabilities | 1,161,571 | 1,128,603 | 1,139,431 |
Commitments and contingencies - Note 13 | |||
Stockholders' equity: | |||
Preferred stock; par value $.01 per share; 100,000 shares authorized; none issued or outstanding at October 1, 2016, January 2, 2016, and October 3, 2015 | 0 | 0 | 0 |
Common stock, voting; par value $.01 per share; 150,000,000 shares authorized; 49,625,609, 51,764,309, and 52,076,784 shares issued and outstanding at October 1, 2016, January 2, 2016 and October 3, 2015, respectively | 496 | 518 | 521 |
Additional paid-in capital | 0 | 0 | 0 |
Accumulated other comprehensive loss | (31,889) | (36,367) | (33,480) |
Retained earnings | 807,527 | 910,900 | 875,902 |
Total stockholders' equity | 776,134 | 875,051 | 842,943 |
Total liabilities and stockholders' equity | $ 1,937,705 | $ 2,003,654 | $ 1,982,374 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Oct. 01, 2016 | Jan. 02, 2016 | Oct. 03, 2015 |
Statement of Financial Position [Abstract] | |||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 333,660 | $ 290,636 | $ 276,230 |
Preferred stock; par value | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred stock; shares authorized | 100,000 | 100,000 | 100,000 |
Preferred stock; issued | 0 | 0 | 0 |
Preferred stock; outstanding | 0 | 0 | 0 |
Common stock, voting; par value | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, voting; shares authorized | 150,000,000 | 150,000,000 | 150,000,000 |
Common stock voting; shares issued | 49,625,609 | 51,764,309 | 52,076,784 |
Common stock voting; shares outstanding | 49,625,609 | 51,764,309 | 52,076,784 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | |
Income Statement [Abstract] | ||||
Net sales | $ 901,425 | $ 849,806 | $ 2,264,981 | $ 2,147,335 |
Cost of goods sold | 525,879 | 502,267 | 1,296,324 | 1,252,849 |
Gross profit | 375,546 | 347,539 | 968,657 | 894,486 |
Selling, general, and administrative expenses | 255,322 | 230,017 | 712,782 | 650,496 |
Royalty income | (10,670) | (12,699) | (31,270) | (32,688) |
Operating income | 130,894 | 130,221 | 287,145 | 276,678 |
Interest expense | 6,779 | 6,907 | 20,321 | 20,534 |
Interest income | (68) | (91) | (453) | (385) |
Other (income) expense, net | (36) | (622) | 3,673 | (560) |
Income before income taxes | 124,219 | 124,027 | 263,604 | 257,089 |
Provision for income taxes | 43,408 | 44,701 | 92,615 | 91,866 |
Net income | $ 80,811 | $ 79,326 | $ 170,989 | $ 165,223 |
Diluted net income per common share | $ 1.62 | $ 1.52 | $ 3.37 | $ 3.15 |
Dividend declared and paid per common share | 1.60 | 1.51 | 3.34 | 3.12 |
Dividend declared per common share | $ 0.33 | $ 0.22 | $ 0.99 | $ 0.66 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 80,811 | $ 79,326 | $ 170,989 | $ 165,223 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (1,356) | (4,205) | 4,478 | (10,443) |
Comprehensive income | $ 79,455 | $ 75,121 | $ 175,467 | $ 154,780 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - 9 months ended Oct. 01, 2016 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive (Loss) Income [Member] | Retained Earnings [Member] |
Balance at Jan. 02, 2016 | $ 875,051 | $ 518 | $ 0 | $ (36,367) | $ 910,900 |
Balance (in shares) at Jan. 02, 2016 | 51,764,309 | 51,764,309 | |||
Income tax benefit from stock-based compensation | $ 4,067 | 4,067 | |||
Exercise of stock options | 6,386 | $ 1 | 6,385 | ||
Exercise of stock options (in shares) | 144,165 | ||||
Withholdings from vesting of restricted stock | (8,594) | $ (1) | (8,593) | ||
Withholdings from vesting of restricted stock (in shares) | (90,754) | ||||
Restricted stock activity | 0 | $ 2 | (2) | ||
Restricted stock activity (in shares) | 155,248 | ||||
Stock Issued During Period, Shares, New Issues | 11,588 | ||||
Stock Issued During Period, Value, New Issues | 1,174 | 1,174 | |||
Stock-based compensation expense | 11,852 | 11,852 | |||
Repurchase of common stock | (239,138) | $ (24) | (14,883) | (224,231) | |
Repurchase of common stock (in shares) | (2,358,947) | ||||
Cash dividends declared and paid | (50,131) | (50,131) | |||
Comprehensive income | 175,467 | 4,478 | 170,989 | ||
Balance at Oct. 01, 2016 | $ 776,134 | $ 496 | $ 0 | $ (31,889) | $ 807,527 |
Balance (in shares) at Oct. 01, 2016 | 49,625,609 | 49,625,609 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands, CAD in Millions | 9 Months Ended | |
Oct. 01, 2016USD ($) | Oct. 03, 2015USD ($) | |
Cash flows from operating activities: | ||
Net income | $ 170,989 | $ 165,223 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 52,384 | 44,187 |
Amortization of tradenames | 1,875 | 5,422 |
Accretion of contingent consideration | 0 | 809 |
Amortization of debt issuance costs | 1,092 | 1,246 |
Non-cash stock-based compensation expense | 13,026 | 13,304 |
Unrealized foreign currency loss, net | 2,361 | 221 |
Income tax benefit from stock-based compensation | (4,067) | (7,963) |
Loss on disposal of property, plant, and equipment | 821 | 80 |
Deferred income taxes | (2,333) | (1,801) |
Effect of changes in operating assets and liabilities: | ||
Accounts receivable, net | (63,436) | (61,108) |
Finished goods inventories | (81,011) | (73,724) |
Prepaid expenses and other assets | (10,138) | (3,144) |
Accounts payable and other liabilities | 35,011 | 63,282 |
Net cash provided by operating activities | 116,574 | 146,034 |
Cash flows from investing activities: | ||
Capital expenditures | (71,190) | (76,987) |
Proceeds from sale of property, plant, and equipment | 216 | 66 |
Net cash used in investing activities | (70,974) | (76,921) |
Cash flows from financing activities: | ||
Payments of debt issuance costs | 0 | (1,495) |
Borrowings under secured revolving credit facility | 0 | 205,586 |
Payments on secured revolving credit facility | 0 | 205,237 |
Repurchase of common stock | (239,138) | (78,339) |
Payment of contingent consideration | 0 | (7,572) |
Dividends paid | (50,131) | (34,617) |
Income tax benefit from stock-based compensation | 4,067 | 7,963 |
Withholdings from vesting of restricted stock | (8,594) | (12,575) |
Proceeds from exercise of stock options | 6,386 | 5,743 |
Net cash used in financing activities | 287,410 | 120,543 |
Effect of exchange rate changes on cash and cash equivalents | 1,227 | (948) |
Net decrease in cash and cash equivalents | (240,583) | (52,378) |
Cash and cash equivalents, beginning of period | 381,209 | 340,638 |
Cash and cash equivalents, end of period | $ 140,626 | $ 288,260 |
THE COMPANY
THE COMPANY | 9 Months Ended |
Oct. 01, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE COMPANY | THE COMPANY Carter's, Inc. and its wholly owned subsidiaries (collectively, the "Company," "its," "us" and "our") design, source, and market branded childrenswear under the Carter's, Child of Mine, Just One You, Precious Firsts , OshKosh , and other brands. The Company's products are sourced through contractual arrangements with manufacturers worldwide for wholesale distribution to major domestic and international retailers and for the Company's own retail stores and websites that market its brand name merchandise and other licensed products manufactured by other companies. As of October 1, 2016 , the Company operated 636 Carter’s stores in the United States, 267 OshKosh stores in the United States, and 156 stores in Canada. |
BASIS OF PREPARATION AND ADOPTI
BASIS OF PREPARATION AND ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Oct. 01, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PREPARATION AND ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS | BASIS OF PREPARATION AND ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS The accompanying unaudited condensed consolidated financial statements include the accounts of Carter's, Inc. and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and the rules and regulations of the Securities and Exchange Commission (the "SEC"). All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all normal and recurring adjustments necessary to state fairly the consolidated financial condition, results of operations, comprehensive income, statement of stockholders' equity, and cash flows of the Company for the interim periods presented. Except as otherwise disclosed, all such adjustments consist only of those of a normal recurring nature. Operating results for the fiscal quarter and three fiscal quarters ended October 1, 2016 are not necessarily indicative of the results that may be expected for the 2016 fiscal year ending December 31, 2016 . The preparation of these unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates. The accompanying condensed consolidated balance sheet as of January 2, 2016 was derived from the Company's audited consolidated financial statements included in its most recently filed Annual Report on Form 10-K. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC and the instructions to Form 10-Q. The accounting policies the Company follows are set forth in its most recently filed Annual Report on Form 10-K. There have been no material subsequent changes to these accounting policies, except as noted below for new accounting pronouncements adopted at the beginning of fiscal 2016. Adoption of New Accounting Pronouncements At the Beginning of Fiscal 2016 At the beginning of fiscal 2016, the Company adopted the following Accounting Standards Updates ("ASU"): ASU No. 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"); ASU No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"); and ASU No. 2015-04, Practical Expedient for the Measurement Date of an Employer's Defined Benefit Obligation and Plan Assets ("ASU 2015-04"). ASU 2015-05 The Company prospectively adopted the provisions of ASU No. 2015-05, Customer's Accounting for Fees Paid in a Cloud Computing Arrangement at the beginning of fiscal 2016, as it relates to the accounting for fees paid in connection with arrangements with cloud-based software providers. Under the new guidance, unless a software arrangement includes specific elements enabling customers to possess and operate software on platforms other than those offered by the cloud-based provider, the costs of such arrangements are accounted for as an operating expense in the period in which such costs are incurred. The adoption of this guidance did not have a material effect on the Company's financial position, results of operations, or cash flows. For the Company's adoption of ASU 2015-03, refer to Note 6, Long-Term Debt , accompanying the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q. The Company adopted this guidance effective at the beginning of fiscal 2016 and the provisions have been applied to each prior period presented for comparative purposes. For the Company's adoption of ASU 2015-04, refer to Note 8, Employee Benefit Plans , accompanying the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 9 Months Ended |
Oct. 01, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | ACCUMULATED OTHER COMPREHENSIVE LOSS The components, net of applicable income taxes, of accumulated other comprehensive loss consisted of the following: (dollars in thousands) October 1, 2016 January 2, 2016 October 3, 2015 Cumulative foreign currency translation adjustments $ (25,108 ) $ (29,586 ) $ (25,840 ) Pension and post-retirement liability adjustments (6,781 ) (6,781 ) (7,640 ) Total accumulated other comprehensive loss $ (31,889 ) $ (36,367 ) $ (33,480 ) Changes in accumulated other comprehensive loss for the third quarter and the first three quarters of fiscal 2016 consisted of additional losses of $1.4 million and additional gains of $4.5 million for foreign currency translation adjustments, respectively. Changes in accumulated other comprehensive loss for the third quarter and the first three quarters of fiscal 2015 consisted of additional losses of $4.2 million and $10.4 million for foreign currency translation adjustments, respectively. During the first, second and third quarters of both fiscal 2016 and fiscal 2015 , no amounts were reclassified from accumulated other comprehensive loss to the statement of operations. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Oct. 01, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND TRADENAMES INTANGIBLE ASSETS The Company's goodwill and other intangible assets were as follows: October 1, 2016 January 2, 2016 (dollars in thousands) Weighted-average useful life Gross amount Accumulated amortization Net amount Gross amount Accumulated amortization Net amount Carter's goodwill Indefinite $ 136,570 $ — $ 136,570 $ 136,570 $ — $ 136,570 Canadian acquisition Indefinite 40,386 — 40,386 38,304 — 38,304 Total goodwill $ 176,956 $ — $ 176,956 $ 174,874 $ — $ 174,874 Carter's tradename Indefinite $ 220,233 $ — $ 220,233 $ 220,233 $ — $ 220,233 OshKosh tradename Indefinite 85,500 — 85,500 85,500 — 85,500 Other tradenames 2-20 years 42,016 38,776 3,240 41,992 36,877 5,115 Total tradenames $ 347,749 $ 38,776 $ 308,973 $ 347,725 $ 36,877 $ 310,848 October 3, 2015 (dollars in thousands) Weighted-average useful life Gross amount Accumulated amortization Net amount Carter's goodwill Indefinite $ 136,570 $ — $ 136,570 Canadian acquisition Indefinite 40,063 — 40,063 Total goodwill $ 176,633 $ — $ 176,633 Carter's tradename Indefinite $ 220,233 $ — $ 220,233 OshKosh tradename Indefinite 85,500 — 85,500 Other tradenames 2-20 years 42,012 35,903 6,109 Total tradenames $ 347,745 $ 35,903 $ 311,842 The changes in the carrying values between the comparative periods for goodwill related to the Company's 2011 acquisition of its Canadian business (Bonnie Togs) were solely due to fluctuations in the foreign currency exchange rates between the Canadian and U.S. dollar that were used in the remeasurement process for preparing the Company's consolidated financial statements. The portion of the changes in the carrying values for other trademarks, including the related accumulated amortization, that was not attributable to amortization expense was also impacted by these same foreign currency exchange rate fluctuations. The Company recorded approximately $1.9 million in amortization expense for the first three fiscal quarters ended October 1, 2016 . Amortization expense for the third fiscal quarter ended October 1, 2016 was not material. The Company recorded approximately $1.0 million and $5.4 million in amortization expense for the fiscal quarter and the first three fiscal quarters ended October 3, 2015 , respectively. At October 1, 2016 , one tradename had an unamortized balance of approximately $3.2 million , and the future amortization expense is estimated to be approximately $0.2 million for each of the next five fiscal years. |
COMMON STOCK
COMMON STOCK | 9 Months Ended |
Oct. 01, 2016 | |
Stockholders' Equity Note [Abstract] | |
COMMON STOCK | COMMON STOCK SHARE REPURCHASES In the second quarter of fiscal 2013, the Company's Board of Directors authorized the repurchase of shares of the Company's stock in an amount up to $300 million , inclusive of amounts remaining under previous authorizations. In the third quarter of fiscal 2013, the Board approved an additional $400 million accelerated share repurchase authorization, which has been completed. On February 24, 2016 , the Company's Board of Directors authorized a new $500 million share repurchase program in addition to any amounts remaining under previous authorizations. The total aggregate remaining capacity under all of the outstanding repurchase authorizations as of October 1, 2016 was approximately $335.7 million , based on settled repurchase transactions. The authorizations have no expiration date. Open Market Repurchases The Company repurchased and retired shares in open market transactions in the following amounts for the fiscal periods indicated: Fiscal quarter ended Three fiscal quarters ended October 1, 2016 October 3, 2015 October 1, 2016 October 3, 2015 Number of shares repurchased 587,100 290,800 2,358,947 795,025 Aggregate cost of shares repurchased (dollars in thousands) $ 58,929 $ 29,445 $ 239,138 $ 78,339 Average price per share $ 100.37 $ 101.26 $ 101.37 $ 98.54 Future repurchases may occur from time to time in the open market, in privately negotiated transactions, or otherwise. The timing and amount of any repurchases will be determined by the Company's management, based on its evaluation of market conditions, share price, other investment priorities, and other factors. DIVIDENDS In the third fiscal quarter and the first three fiscal quarters ended October 1, 2016 , the Company paid cash dividends per share of $0.33 and $0.99 , respectively. In the third fiscal quarter and the first three fiscal quarters ended October 3, 2015 , the Company paid cash dividends per share of $0.22 and $0.66 , respectively. Future declarations of dividends and the establishment of future record and payment dates are at the discretion of the Company's Board of Directors and based on a number of factors, including the Company's future financial performance and other investment priorities. Provisions in the indenture governing the senior notes of The William Carter Company ("TWCC"), a 100% owned subsidiary of the Company, and in TWCC's secured revolving credit facility could have the effect of restricting the Company's ability to pay future cash dividends on, or make future repurchases of, its common stock. Provisions related to the indenture governing the senior notes are described in the Company's Annual Report on Form 10-K for the 2015 fiscal year ended January 2, 2016. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Oct. 01, 2016 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consisted of the following: (dollars in thousands) October 1, 2016 January 2, 2016 October 3, 2015 Senior notes at amounts repayable $ 400,000 $ 400,000 $ 400,000 Less unamortized issuance-related costs for senior notes (4,820 ) (5,459 ) (5,666 ) Senior notes, net 395,180 394,541 394,334 Secured revolving credit facility 185,433 184,431 185,278 Total long-term debt, net $ 580,613 $ 578,972 $ 579,612 In the first quarter of fiscal 2015, the Company replaced $20.0 million of outstanding borrowings under the then-existing secured revolving credit facility with CAD 25.5 million of borrowings, which approximated $20.3 million . This transaction is reflected on the Company's consolidated statement of cash flows. Secured Revolving Credit Facility As previously disclosed in the Company's most recent Annual Report on Form 10-K for the 2015 fiscal year ended January 2, 2016, the secured revolving credit facility was amended and restated in September 2015. The aggregate principal amount of the secured revolving credit facility is $500 million consisting of (i) a $400 million U.S. dollar revolving credit facility (including a $175 million sub-limit for letters of credit and a swing line sub-limit of $50 million ) available for borrowings by TWCC and (ii) a $100 million multicurrency revolving credit facility (including a $40 million sub-limit for letters of credit and a swing line sub-limit of $15 million ) available for borrowings by TWCC and certain other subsidiaries of TWCC in U.S. dollars, Canadian dollars, Euros, Pounds Sterling, or other currencies agreed to by the applicable lenders. The secured revolving credit facility also provides for incremental facilities in an aggregate amount not to exceed $250 million , either in the form of a commitment increase under the existing revolving credit facility or the incurrence of one or more tranches of term loans (with the aggregate U.S. dollar amount available to the Company not to exceed $200 million and the aggregate multicurrency amount available not to exceed $50 million ). The Company's secured revolving credit facility matures on September 16, 2020 . As of October 1, 2016 , the Company had approximately $185.4 million in outstanding borrowings under its secured revolving credit facility, exclusive of $4.8 million of outstanding letters of credit. As of October 1, 2016 , approximately $309.7 million remained available for future borrowing. As of October 1, 2016 , the interest rate margins applicable to the secured revolving credit facility were 1.375% for LIBOR (London Interbank Offered Rate) rate loans (which may be adjusted based on a leverage-based pricing grid ranging from 1.125% to 1.875% ) and 0.375% for base rate loans (which may be adjusted based on a leverage-based pricing grid ranging from 0.125% to 0.875% ). As of October 1, 2016 , U.S. dollar borrowings outstanding under the secured revolving credit facility accrued interest at a LIBOR rate plus the applicable base rate , which was 1.90% on that date, and Canadian dollar borrowings accrued interest at a CDOR (Canadian Dollar Offered Rate ) plus the applicable base rate, which was 2.26% on that date. As disclosed in the Company's most recent Annual Report on Form 10-K for the 2015 fiscal year ended January 2, 2016, the Company's secured revolving credit facility contains covenants, including affirmative and financial covenants. As of October 1, 2016 , the Company was in compliance with the financial and other covenants under the secured revolving credit facility. Senior Notes As of October 1, 2016 , TWCC had outstanding $400 million principal amount of senior notes bearing interest at a fixed rate of 5.25% per annum and maturing on August 15, 2021. The senior notes are unsecured and are fully and unconditionally guaranteed by Carter's, Inc. and certain subsidiaries of TWCC. On the Company's consolidated balance sheet, the senior notes are reported net of certain unamortized issuance-related costs, as described in the following section. Adoption of New Accounting Pronouncement Related to Debt Issuance Costs The Company retrospectively adopted the provisions of Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"), at the beginning of fiscal 2016, which requires that debt issuance costs be presented as a direct deduction from the carrying amount of the related debt liability, consistent with the presentation of a debt discount. Prior to the issuance of ASU 2015-03, debt issuance costs were required to be presented as deferred charge assets, separate from the related debt liability. The guidance did not change the recognition and measurement requirements for debt issuance costs. The Company reclassified $4.8 million , $5.5 million , and $5.7 million of unamortized issuance-related debt costs associated with the Company's senior notes from other assets to Long-term debt, net within its consolidated balance sheets as of October 1, 2016 , January 2, 2016, and October 3, 2015 , respectively. Other than this balance sheet reclassification, the adoption of ASU 2015-03 did not have an impact on the Company's consolidated financial statements. Fees paid to lenders to secure revolving lines of credit continue to be presented as a deferred charge (asset) on the balance sheet. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Oct. 01, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION The Company recorded stock-based compensation expense as follows: Fiscal quarter ended Three fiscal quarters ended (dollars in thousands) October 1, 2016 October 3, 2015 October 1, 2016 October 3, 2015 Stock options $ 960 $ 1,015 $ 3,237 $ 3,359 Restricted stock: Time-based awards 1,809 1,599 5,671 5,294 Performance-based awards 996 1,130 2,944 3,556 Stock awards 11 — 1,174 1,095 Total $ 3,776 $ 3,744 $ 13,026 $ 13,304 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 9 Months Ended |
Oct. 01, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS The Company maintains a defined contribution plan and two defined benefit plans. The two defined benefit plans include the OshKosh B'Gosh pension plan and a post-retirement life and medical plan. OSHKOSH B'GOSH PENSION PLAN The net periodic pension cost (benefit) included in the statement of operations was comprised of: Fiscal quarter ended Three fiscal quarters ended (dollars in thousands) October 1, 2016 October 3, 2015 October 1, 2016 October 3, 2015 Interest cost $ 629 $ 623 $ 1,887 $ 1,869 Expected return on plan assets (676 ) (785 ) (2,028 ) (2,355 ) Recognized actuarial loss 145 161 435 483 Net periodic pension cost (benefit) $ 98 $ (1 ) $ 294 $ (3 ) POST-RETIREMENT LIFE AND MEDICAL PLAN The components of post-retirement benefit expense charged to the statement of operations were as follows: Fiscal quarter ended Three fiscal quarters ended (dollars in thousands) October 1, 2016 October 3, 2015 October 1, 2016 October 3, 2015 Service cost – benefits attributed to service during the period $ 31 $ 32 $ 93 $ 96 Interest cost on accumulated post-retirement benefit obligation 44 45 132 135 Amortization net actuarial gain (49 ) (48 ) (147 ) (144 ) Total net periodic post-retirement benefit cost $ 26 $ 29 $ 78 $ 87 Simplified Measurement Date for Defined Benefit Plan Assets and Obligations The Company adopted the provisions of ASU No. 2015-04, Practical Expedient for the Measurement Date of an Employer's Defined Benefit Obligation and Plan Assets ("ASU 2015-04") at the beginning of fiscal 2016. However, the Company is not required to make any such measurements until the end of fiscal 2016. ASU 2015-04 allows employers with fiscal year ends that do not coincide with a calendar month end to make an accounting policy election to measure defined benefit plan assets and obligations as of the end of the month closest to their fiscal year end (i.e., on an alternative measurement date). An employer that makes this election must consistently apply the alternative measurement date from year to year and to all of its defined benefit plans. The Company expects to make the accounting policy election to use December 31 as the measurement date for all of its defined benefit plan assets and obligations for fiscal 2016 and subsequent years. Measurement dates for prior periods will not be impacted. Since the Company's current 52-week fiscal year will end on December 31, 2016, it will not be necessary for the Company to utilize an alternate measurement date for fiscal 2016, and thus the initial adoption of ASU 2015-04 at the beginning of fiscal 2016 will not have an impact on the Company's results of operations, financial condition, or cash flows. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Oct. 01, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES During the first quarters of fiscal 2016 and 2015, the IRS and various state tax authorities completed examinations of the Company's income tax returns. As a result, the Company recognized income tax benefits related to prior years of approximately $0.4 million and $1.8 million in the first quarters of fiscal 2016 and 2015, respectively. In most cases, the Company is no longer subject to state and local tax authority examinations for years prior to fiscal 2012. As of October 1, 2016 , the Company had gross unrecognized income tax benefits of approximately $10.1 million , of which $7.2 million , if ultimately recognized, may affect the Company's effective tax rate in the periods settled. The Company has recorded tax positions for which the ultimate deductibility is more likely than not, but for which there is uncertainty about the timing of such deductions. Included in the reserves for unrecognized tax benefits at October 1, 2016 were approximately $1.2 million of reserves for which the statute of limitations is expected to expire within the next fiscal year. If these tax benefits are ultimately recognized, such recognition, net of federal income taxes, may affect the annual effective tax rate for fiscal 2016 or fiscal 2017 along with the effective tax rate in the quarter in which the benefits are recognized. The Company recognizes interest related to unrecognized tax benefits as a component of interest expense and recognizes penalties related to unrecognized tax benefits as a component of income tax expense. During the fiscal quarter and the first three fiscal quarters ended October 1, 2016 and the fiscal quarter and the first three fiscal quarters ended October 3, 2015 , interest expense recorded on uncertain tax positions was not significant. The Company had approximately $0.9 million , $0.8 million , and $0.9 million of interest accrued on uncertain tax positions as of October 1, 2016 , January 2, 2016 , and October 3, 2015 , respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Oct. 01, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following tables set forth, by level within the fair value hierarchy, the Company’s financial assets and liabilities accounted for at fair value on a recurring basis. October 1, 2016 January 2, 2016 October 3, 2015 (dollars in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Investments $ 11.4 $ — $ — $ 8.6 $ — $ — $ 7.5 $ — $ — Foreign exchange forward contracts (1) $ — $ — $ — $ — $ 2.1 $ — $ — $ 1.5 $ — Liabilities Foreign exchange forward contracts (2) $ — $ 0.4 $ — $ — $ — $ — $ — $ — $ — (1) Included in Prepaid expenses and other current assets in the Company's condensed consolidated balance sheet. (2) Included in Other current liabilities i n the Company's condensed consolidated balance sheet. INVESTMENTS The Company invests in marketable securities, principally equity-based mutual funds, to mitigate the risk associated with the investment return on employee deferrals of compensation. Gains on the investments in marketable securities were $0.4 million and $0.8 million for the third fiscal quarter and the first three fiscal quarters ended October 1, 2016 , respectively. Losses on the investments in marketable securities were $0.4 million and $0.1 million for the third fiscal quarter and the first three fiscal quarters ended October 3, 2015 . These amounts are included in Other expense (income), net on the Company's consolidated statement of operations included in this Quarterly Report on Form 10-Q. FOREIGN EXCHANGE FORWARD CONTRACTS Fair values for unsettled foreign exchange forward contracts are calculated by using readily observable market inputs (market-quoted currency exchange rates in effect between U.S. and Canadian dollars). At October 1, 2016 , the notional value of the open foreign currency forward contracts was approximately $6.0 million . These contracts were marked-to-market, or to fair value, resulting in an unrealized loss of approximately $0.4 million at October 1, 2016 . The Company recorded realized losses of approximately $0.6 million and $0.8 million for foreign currency forward contracts settled during the third fiscal quarter and the first three fiscal quarters ended October 1, 2016 , respectively. The Company recorded realized gains of approximately $1.6 million and $1.9 million for foreign currency forward contracts settled during the third fiscal quarter and the first three fiscal quarters ended October 3, 2015 . These amounts are included in Other expense (income), net on the Company's consolidated statement of operations. The Company did not apply hedge accounting treatment on any of these foreign currency forward contracts. CONTINGENT CONSIDERATION The following table summarizes the changes in the contingent consideration liability during the third fiscal quarter and first three fiscal quarters of 2015 related to the Company's 2011 acquisition of Bonnie Togs in Canada: Fiscal quarter ended Three fiscal quarters ended (dollars in thousands) October 3, 2015 October 3, 2015 Balance at the beginning of period $ 9,022 $ 7,711 Payments made (8,568 ) (8,568 ) Accretion — 809 Foreign currency translation adjustment (454 ) (1,029 ) Final contingent adjustment — 1,077 Balance at the end of period $ — $ — The final payment under the earn-out obligation was paid during the third quarter of fiscal 2015. At October 1, 2016 , January 2, 2016 and October 3, 2015 , the Company had no remaining contingent consideration liability related to the 2011 acquisition of Bonnie Togs in Canada. BORROWINGS As of October 1, 2016 , the fair value of the Company's $185.4 million in outstanding borrowings under its secured revolving credit facility approximated carrying value. The fair value of the Company's senior notes at October 1, 2016 was approximately $419 million . The fair value of these senior notes with a notional value and carrying value of $400 million was estimated using a quoted price as provided in the secondary market, which considers the Company's credit risk and market related conditions, and is therefore within Level 2 of the fair value hierarchy. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Oct. 01, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following is a reconciliation of basic common shares outstanding to diluted common and common equivalent shares outstanding: Fiscal quarter ended Three fiscal quarters ended October 1, 2016 October 3, 2015 October 1, 2016 October 3, 2015 Weighted-average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 49,526,480 51,740,523 50,282,345 51,960,041 Dilutive effect of equity awards 460,271 507,815 470,050 512,861 Diluted number of common and common equivalent shares outstanding 49,986,751 52,248,338 50,752,395 52,472,902 Basic net income per common share (in thousands, except per share data): Net income $ 80,811 $ 79,326 $ 170,989 $ 165,223 Income allocated to participating securities (632 ) (675 ) (1,359 ) (1,557 ) Net income available to common shareholders $ 80,179 $ 78,651 $ 169,630 $ 163,666 Basic net income per common share $ 1.62 $ 1.52 $ 3.37 $ 3.15 Diluted net income per common share (in thousands, except per share data): Net income $ 80,811 $ 79,326 $ 170,989 $ 165,223 Income allocated to participating securities (627 ) (669 ) (1,350 ) (1,545 ) Net income available to common shareholders $ 80,184 $ 78,657 $ 169,639 $ 163,678 Diluted net income per common share $ 1.60 $ 1.51 $ 3.34 $ 3.12 Anti-dilutive shares excluded from dilutive earnings per share computation 246,980 177,300 244,430 180,000 |
OTHER CURRENT AND LONG-TERM LIA
OTHER CURRENT AND LONG-TERM LIABILITIES | 9 Months Ended |
Oct. 01, 2016 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT AND LONG-TERM LIABILITIES | OTHER CURRENT AND LONG-TERM LIABILITIES Other current liabilities that exceeded five percent of total current liabilities, at the end of any comparable period, were as follows: (dollars in thousands) October 1, 2016 January 2, 2016 October 3, 2015 Accrued bonuses and incentive compensation $ 10,638 $ 17,934 $ 12,574 Income taxes payable 32,242 3,802 25,902 Accrued employee benefits 10,808 19,751 10,102 Accrued and deferred rent 14,875 12,590 12,286 Other long-term liabilities that exceeded five percent of total liabilities, at the end of any comparable period, were as follows: (dollars in thousands) October 1, 2016 January 2, 2016 October 3, 2015 Deferred lease incentives $ 73,840 $ 70,060 $ 70,778 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Oct. 01, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company is subject to various claims and pending or threatened lawsuits in the normal course of business. The Company is not currently a party to any legal proceedings that it believes would have a material adverse impact on its financial position, results of operations, or cash flows. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Oct. 01, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The table below presents certain information for our reportable segments and unallocated corporate expenses for the periods indicated: Fiscal quarter ended Three fiscal quarters ended (dollars in thousands) October 1, % of October 3, % of October 1, % of October 3, % of Net sales : Carter’s Wholesale $ 356,258 39.5 % $ 343,555 40.4 % $ 842,136 37.2 % $ 824,600 38.4 % Carter’s Retail (a) 314,699 34.9 % 294,928 34.7 % 860,854 38.0 % 799,635 37.2 % Total Carter’s (U.S.) 670,957 74.4 % 638,483 75.1 % 1,702,990 75.2 % 1,624,235 75.6 % OshKosh Retail (a) 106,999 11.9 % 98,292 11.6 % 267,715 11.8 % 244,787 11.4 % OshKosh Wholesale 17,474 1.9 % 18,794 2.2 % 38,772 1.7 % 49,151 2.3 % Total OshKosh (U.S.) 124,473 13.8 % 117,086 13.8 % 306,487 13.5 % 293,938 13.7 % International (b) 105,995 11.8 % 94,237 11.1 % 255,504 11.3 % 229,162 10.7 % Total net sales $ 901,425 100.0 % $ 849,806 100.0 % $ 2,264,981 100.0 % $ 2,147,335 100.0 % Operating income (loss) : % of Segment Net Sales % of Segment Net Sales % of % of Carter’s Wholesale $ 81,551 22.9 % $ 74,347 21.6 % $ 187,655 22.3 % $ 172,485 20.9 % Carter’s Retail (a) 48,051 15.3 % 51,733 17.5 % 127,738 14.8 % 134,557 16.8 % Total Carter’s (U.S.) 129,602 19.3 % 126,080 19.7 % 315,393 18.5 % 307,042 18.9 % OshKosh Retail (a) 2,652 2.5 % 6,171 6.3 % (614 ) (0.2 )% 3,396 1.4 % OshKosh Wholesale 4,450 25.5 % 4,487 23.9 % 8,266 21.3 % 9,715 19.8 % Total OshKosh (U.S.) 7,102 5.7 % 10,658 9.1 % 7,652 2.5 % 13,111 4.5 % International (b) (c) 19,645 18.5 % 18,220 19.3 % 37,191 14.6 % 30,967 13.5 % Corporate expenses (d) (e) (f) (25,455 ) (24,737 ) (73,091 ) (74,442 ) Total operating income $ 130,894 14.5 % $ 130,221 15.3 % $ 287,145 12.7 % $ 276,678 12.9 % (a) Includes eCommerce results. (b) Net sales include international retail, eCommerce, and wholesale sales. Operating income includes international licensing income. (c) Includes charges associated with the revaluation of the Company's contingent consideration related to the Company's 2011 acquisition of Bonnie Togs of approximately $1.9 million for the first three fiscal quarters ended October 3, 2015 . (d) Corporate expenses include expenses related to incentive compensation, stock-based compensation, executive management, severance and relocation, finance, building occupancy, information technology, certain legal fees, consulting, and audit fees. (e) Includes charges related to the amortization of the H.W. Carter and Sons tradenames of approximate $1.7 million for the first three fiscal quarters ended October 1, 2016 , and approximately $1.0 million and $5.3 million for the fiscal quarter and the first three fiscal quarters ended October 3, 2015 , respectively. (f) Includes charges related to the Company's direct sourcing initiative of $0.5 million for the fiscal quarter and for the three fiscal quarters periods ended October 1, 2016. |
PENDING ADOPTION OF RECENT ACCO
PENDING ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Oct. 01, 2016 | |
Accounting Policies [Abstract] | |
PENDING ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS | PENDING ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS Revenue Recognition In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which has been codified in Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers . This guidance clarifies the principles for recognizing revenue and will be applicable to all contracts with customers regardless of industry-specific or transaction-specific fact patterns. Further, the guidance will require improved disclosures as well as additional disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue that is recognized. The standard is effective for the Company beginning in the first quarter of fiscal 2018, including interim periods within that first fiscal year, and early adoption is now permitted for 2017. Upon becoming effective, the Company will apply the amendments in the updated standard either retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application. Since the original issuance of ASU 2014-09, the FASB has issued several amendments and updates to this guidance, and additional amendments and updates are currently being considered by the FASB. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial position, results of operations, and cash flows. Simplified Subsequent Measurement of Inventory In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory ("ASU 2015-11"). Upon adoption by an entity, ASU 2015-11 will simplify subsequent measurements of inventory by replacing the current lower of cost or market test with a lower of cost and net realizable value test. The new guidance applies only to inventories for which cost is determined by methods other than last-in-first-out (LIFO) and the retail inventory method. For inventory within the scope of ASU 2015-11, entities will be required to compare the cost of inventory to only one measure, its net realizable value, and not the three measures required by current guidance ("market," "subject to a floor," and a "ceiling"). When evidence exists that the net realizable value of inventory is less than its cost (due to damage, physical deterioration, obsolescence, changes in price levels or other causes), entities will recognize the difference as a loss in earnings in the period in which it occurs. ASU 2015-11 is effective for public entities for fiscal years beginning after December 15, 2016, and interim periods within the year of adoption. Early adoption is permitted. The Company expects to adopt the provisions of ASU 2015-11 at the beginning of fiscal 2017. At this time, the Company does not believe the adoption of ASU 2015-11 will have a material impact on its consolidated financial condition, results of operations, or cash flows. Balance Sheet Classification of Deferred Taxes In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes ("ASU 2015-17"). Current GAAP requires the deferred taxes for each tax jurisdiction (or tax-paying component of a jurisdiction) to be presented as a net current asset or liability and net noncurrent asset or liability. ASU 2015-17 requires a jurisdiction-by-jurisdiction analysis based on the classification of the assets and liabilities to which the underlying temporary differences relate based on the period in which the attribute is expected to be realized. Upon adoption of ASU 2015-17, all deferred tax assets and liabilities will be classified as noncurrent on an entity's balance sheet. As a result, each jurisdiction will have only one net noncurrent deferred tax asset or liability. ASU 2015-17 will not change the existing guidance that prohibits the offsetting of deferred tax liabilities of one jurisdiction against the deferred tax assets of another jurisdiction. ASU 2015-17 is effective for public entities in fiscal years beginning after December 15, 2016, including interim periods in the year of adoption. Early adoption is permitted, and adoption may be applied either prospectively or retrospectively. The Company plans to adopt ASU 2015-17 at the beginning of the first quarter of fiscal 2017. ASU 2015-17 will only involve classification of certain deferred tax assets and liabilities on the Company's consolidated balance sheet and will have no impact on the Company's results of operations or cash flows. The Company does not expect the adoption of ASU 2015-17 will have a material effect on the Company's consolidated balance sheet. Leases In February 2016, the FASB issued new lease accounting guidance in ASU No. 2016-02, Leases . Under this new guidance, lessees will be required to recognize for all leases (with the exception of short-term leases): 1) a lease liability equal to the lessee's obligation to make lease payments arising from a lease, measured on a discounted basis and 2) a right-of-use asset which will represent the lessee's right to use, or control the use of, a specified asset for the lease term. The new standard will be effective for the Company at the beginning of fiscal 2019, including interim periods within the year of adoption. The new standard requires a modified retrospective basis, and early adoption is permitted. The Company is still evaluating the potential impacts of ASU 2016-02 on its consolidated financial statements. However, the Company expects that the adoption of ASU 2016-02 will require the Company to recognize right-of-use assets and lease liabilities that will be material to the Company's consolidated balance sheet. Accounting for Share-Based Payments to Employees In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which amends ASC Topic 718, Stock Compensation . ASU 2016-09 includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. All tax benefits and deficiencies related to share-based payments will be recognized and recorded through the statement of operations for all awards settled or expiring after the adoption of ASU 2016-09. Currently, tax benefits in excess of compensation costs ("windfalls") are recorded in equity, and tax deficiencies ("shortfalls") are recorded in equity to the extent of previous windfalls and then to the statement of operations. ASU 2016-09 will also require, either prospectively or retrospectively, that all tax-related cash flows resulting from share-based payments be reported as operating activities on the statement of cash flows, a change from the current requirement to present windfall tax benefits as an inflow from financing activities and an outflow from operating activities on the statement of cash flows. Additionally, ASU 2016-09 will allow entities to make an accounting policy election for the impact of most types of forfeitures on the recognition of expense for share-based payment awards by allowing the forfeitures to be either estimated, as is currently required, or recognized when they actually occur. If elected, the change to recognize forfeitures when they occur will be adopted using a modified retrospective approach, with a cumulative effect adjustment recorded to retained earnings. ASU 2016-09 will be effective for the Company at the beginning of fiscal 2017, including interim periods in the year of adoption. Early adoption is permitted in any interim or annual period. The potential impacts that the adoption of ASU 2016-09 will have on the Company's income tax expense or benefit and related cash flows during and after the period of adoption are dependent in part upon future grants and vesting of stock-based compensation awards and other factors that are not fully controllable or predicable by the Company such as the future market price of the Company's common stock, the timing of employee exercises of vested stock options, and the future achievement of performance criteria that affect performance-based awards. However, based on the Company’s stock price as of October 1, 2016 and its outstanding unvested restricted stock awards and unexercised stock options, the Company anticipates that adoption of this pronouncement at the beginning of fiscal 2017 will reduce its income tax expense and increase its net income, and these anticipated income tax benefits will be reported as a component of cash flows from operating activities instead of cash flows from financing activities. |
GUARANTOR UNAUDITED CONDENSED C
GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | 9 Months Ended |
Oct. 01, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS The Company’s senior notes constitute debt obligations of its wholly-owned subsidiary, The William Carter Company ("TWCC" or the "Subsidiary Issuer"), are unsecured and are fully and unconditionally guaranteed by Carter’s, Inc. (the "Parent"), by certain of the Parent's current domestic subsidiaries (other than TWCC), and, subject to certain exceptions, future restricted subsidiaries that guarantee the Company’s secured revolving credit facility or certain other debt of the Company or the subsidiary guarantors. Under specific customary conditions, the guarantees are not full and unconditional because subsidiary guarantors can be released and relieved of their obligations under customary circumstances contained in the indenture governing the senior notes. These circumstances include, among others, the following, so long as other applicable provisions of the indentures are adhered to: any sale or other disposition of all or substantially all of the assets of any subsidiary guarantor, any sale or other disposition of capital stock of any subsidiary guarantor, or designation of any restricted subsidiary that is a subsidiary guarantor as an unrestricted subsidiary. For additional information, refer to the Company's Annual Report on Form 10-K for the 2015 fiscal year ended January 2, 2016. The condensed consolidating financial information for the Parent, the Subsidiary Issuer, and the guarantor and non-guarantor subsidiaries has been prepared from the books and records maintained by the Company. The accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X Rule 3-10. The financial information may not necessarily be indicative of the financial position, results of operations, comprehensive income (loss), and cash flows, had the Parent, Subsidiary Issuer, guarantor or non-guarantor subsidiaries operated as independent entities. Intercompany revenues and expenses included in the subsidiary records are eliminated in consolidation. As a result of this activity, an amount due to/due from affiliates will exist at any time. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions. The Company has accounted for investments in subsidiaries under the equity method. The guarantor subsidiaries are 100% owned directly or indirectly by the Parent and all guarantees are joint, several, and unconditional. In December 2015, as part of a foreign subsidiary restructuring, certain non-guarantor subsidiaries became subsidiaries of certain other non-guarantor subsidiaries. The restructuring did not retroactively impact the prior status of the guarantor and the non-guarantor subsidiaries, and accordingly the condensed consolidating financial information for periods prior to the restructuring have not been adjusted to reflect the restructuring. Condensed Consolidating Balance Sheets (unaudited) As of October 1, 2016 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 91,299 $ 8,477 $ 40,850 $ — $ 140,626 Accounts receivable, net — 234,979 27,047 9,181 — 271,207 Intercompany receivable — 60,570 72,037 4,035 (136,642 ) — Finished goods inventories — 300,044 231,511 65,732 (44,561 ) 552,726 Prepaid expenses and other current assets — 22,446 15,988 4,721 — 43,155 Deferred income taxes — 20,346 15,579 1,675 — 37,600 Total current assets — 729,684 370,639 126,194 (181,203 ) 1,045,314 Property, plant, and equipment, net — 159,149 194,078 35,213 — 388,440 Goodwill — 136,570 — 40,386 — 176,956 Tradenames, net — 223,473 85,500 — — 308,973 Other assets — 17,130 641 251 — 18,022 Intercompany long-term receivable — — 340,887 — (340,887 ) — Intercompany long-term note receivable — 100,000 — — (100,000 ) — Investment in subsidiaries 776,134 707,381 127,447 — (1,610,962 ) — Total assets $ 776,134 $ 2,073,387 $ 1,119,192 $ 202,044 $ (2,233,052 ) $ 1,937,705 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ — $ 99,175 $ 36,003 $ 20,045 $ — $ 155,223 Intercompany payables — 74,414 58,787 3,441 (136,642 ) — Other current liabilities — 24,842 92,168 9,912 — 126,922 Total current liabilities — 198,431 186,958 33,398 (136,642 ) 282,145 Long-term debt, net — 561,180 — 19,433 — 580,613 Deferred income taxes — 83,998 45,280 — — 129,278 Intercompany long-term liability — 340,887 — — (340,887 ) — Intercompany long-term note payable — — 100,000 — (100,000 ) — Other long-term liabilities — 68,196 88,906 12,433 — 169,535 Stockholders' equity 776,134 820,695 698,048 136,780 (1,655,523 ) 776,134 Total liabilities and stockholders' equity $ 776,134 $ 2,073,387 $ 1,119,192 $ 202,044 $ (2,233,052 ) $ 1,937,705 As of January 2, 2016 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 325,771 $ 14,652 $ 40,786 $ — $ 381,209 Accounts receivable, net — 178,842 23,980 4,748 — 207,570 Intercompany receivable — 52,676 133,092 3,317 (189,085 ) — Finished goods inventories — 271,148 184,618 48,960 (34,792 ) 469,934 Prepaid expenses and other current assets — 17,460 14,261 6,094 — 37,815 Deferred income taxes — 19,502 13,544 1,034 — 34,080 Total current assets — 865,399 384,147 104,939 (223,877 ) 1,130,608 Property, plant, and equipment, net — 162,031 180,322 29,351 — 371,704 Goodwill — 136,570 — 38,304 — 174,874 Tradenames, net — 225,348 85,500 — — 310,848 Other assets — 14,634 665 321 — 15,620 Intercompany long-term receivable — — 294,070 — (294,070 ) — Intercompany long-term note receivable — 100,000 — — (100,000 ) — Investment in subsidiaries 875,051 652,598 100,146 — (1,627,795 ) — Total assets $ 875,051 $ 2,156,580 $ 1,044,850 $ 172,915 $ (2,245,742 ) $ 2,003,654 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ — $ 93,585 $ 44,951 $ 19,112 $ — $ 157,648 Intercompany payables — 134,694 51,362 3,029 (189,085 ) — Other current liabilities — 12,996 80,908 11,166 — 105,070 Total current liabilities — 241,275 177,221 33,307 (189,085 ) 262,718 Long-term debt, net — 560,541 — 18,431 — 578,972 Deferred income taxes — 84,038 44,800 — — 128,838 Intercompany long-term liability — 294,070 — — (294,070 ) — Intercompany long-term note payable — — 100,000 — (100,000 ) — Other long-term liabilities — 66,813 79,568 11,694 — 158,075 Stockholders' equity 875,051 909,843 643,261 109,483 (1,662,587 ) 875,051 Total liabilities and stockholders' equity $ 875,051 $ 2,156,580 $ 1,044,850 $ 172,915 $ (2,245,742 ) $ 2,003,654 As of October 3, 2015 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 232,568 $ 17,434 $ 38,258 $ — $ 288,260 Accounts receivable, net — 208,369 29,210 8,986 — 246,565 Intercompany receivable — 87,419 100,357 3,675 (191,451 ) — Intercompany loan receivable — 15,000 — — (15,000 ) — Finished goods inventories — 278,793 216,270 50,553 (34,096 ) 511,520 Prepaid expenses and other current assets — 17,267 14,963 4,184 — 36,414 Deferred income taxes — 22,739 11,192 964 — 34,895 Total current assets — 862,155 389,426 106,620 (240,547 ) 1,117,654 Property, plant, and equipment, net — 160,579 171,615 29,111 — 361,305 Goodwill — 136,570 — 40,063 — 176,633 Tradenames and other intangibles, net — 226,342 85,500 — — 311,842 Other assets — 13,773 784 383 — 14,940 Intercompany long-term receivable — — 264,618 — (264,618 ) — Intercompany long-term note receivable — 100,000 — — (100,000 ) — Investment in subsidiaries 842,943 614,624 19,118 — (1,476,685 ) — Total assets $ 842,943 $ 2,114,043 $ 931,061 $ 176,177 $ (2,081,850 ) $ 1,982,374 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ — $ 100,487 $ 59,060 $ 14,047 $ — $ 173,594 Intercompany payables — 102,208 85,814 3,429 (191,451 ) — Intercompany loan payables — — — 15,000 (15,000 ) — Other current liabilities — 57,316 37,905 9,978 — 105,199 Total current liabilities — 260,011 182,779 42,454 (206,451 ) 278,793 Long-term debt, net — 560,334 — 19,278 — 579,612 Deferred income taxes — 80,871 38,628 — — 119,499 Intercompany long-term liability — 264,618 — — (264,618 ) — Intercompany long-term note payable — — 100,000 — (100,000 ) — Other long-term liabilities — 71,170 78,658 11,699 — 161,527 Stockholders' equity 842,943 877,039 530,996 102,746 (1,510,781 ) 842,943 Total liabilities and stockholders' equity $ 842,943 $ 2,114,043 $ 931,061 $ 176,177 $ (2,081,850 ) $ 1,982,374 Condensed Consolidating Statements of Operations (unaudited) For the fiscal quarter ended October 1, 2016 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 584,206 $ 452,755 $ 79,631 $ (215,167 ) $ 901,425 Cost of goods sold — 409,937 274,521 43,060 (201,639 ) 525,879 Gross profit — 174,269 178,234 36,571 (13,528 ) 375,546 Selling, general, and administrative expenses — 49,965 187,298 26,796 (8,737 ) 255,322 Royalty income — (7,624 ) (5,665 ) — 2,619 (10,670 ) Operating income (loss) — 131,928 (3,399 ) 9,775 (7,410 ) 130,894 Interest expense — 6,634 1,364 108 (1,327 ) 6,779 Interest income — (1,379 ) — (16 ) 1,327 (68 ) (Income) loss in subsidiaries (80,811 ) 9,249 (6,682 ) — 78,244 — Other (income) expense, net — (204 ) 259 (91 ) — (36 ) Income (loss) before income taxes 80,811 117,628 1,660 9,774 (85,654 ) 124,219 Provision for income taxes — 29,407 10,909 3,092 — 43,408 Net income (loss) $ 80,811 $ 88,221 $ (9,249 ) $ 6,682 $ (85,654 ) $ 80,811 For the fiscal quarter ended October 3, 2015 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 539,181 $ 427,028 $ 71,068 $ (187,471 ) $ 849,806 Cost of goods sold — 380,427 263,009 39,180 (180,349 ) 502,267 Gross profit — 158,754 164,019 31,888 (7,122 ) 347,539 Selling, general, and administrative expenses — 49,317 169,379 20,708 (9,387 ) 230,017 Royalty income — (9,175 ) (5,983 ) — 2,459 (12,699 ) Operating income (loss) — 118,612 623 11,180 (194 ) 130,221 Interest expense — 6,754 1,318 169 (1,334 ) 6,907 Interest income — (1,400 ) — (25 ) 1,334 (91 ) (Income) loss in subsidiaries (79,326 ) (1,645 ) (3,904 ) — 84,875 — Other (income) expense, net — 251 (269 ) (604 ) — (622 ) Income (loss) before income taxes 79,326 114,652 3,478 11,640 (85,069 ) 124,027 Provision for income taxes — 35,132 6,098 3,471 — 44,701 Net income (loss) $ 79,326 $ 79,520 $ (2,620 ) $ 8,169 $ (85,069 ) $ 79,326 Condensed Consolidating Statements of Operations (unaudited) For the three fiscal quarters ended October 1, 2016 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 1,396,768 $ 1,208,841 $ 201,679 $ (542,307 ) $ 2,264,981 Cost of goods sold — 995,828 706,525 107,127 (513,156 ) 1,296,324 Gross profit — 400,940 502,316 94,552 (29,151 ) 968,657 Selling, general, and administrative expenses — 132,986 533,364 72,687 (26,255 ) 712,782 Royalty income — (23,753 ) (14,390 ) — 6,873 (31,270 ) Operating income (loss) — 291,707 (16,658 ) 21,865 (9,769 ) 287,145 Interest expense — 19,909 4,070 323 (3,981 ) 20,321 Interest income — (4,353 ) — (81 ) 3,981 (453 ) (Income) loss in subsidiaries (170,989 ) 26,079 (12,739 ) — 157,649 — Other (income) expense, net — (377 ) 432 3,618 — 3,673 Income (loss) before income taxes 170,989 250,449 (8,421 ) 18,005 (167,418 ) 263,604 Provision for income taxes — 69,691 17,658 5,266 — 92,615 Net income (loss) $ 170,989 $ 180,758 $ (26,079 ) $ 12,739 $ (167,418 ) $ 170,989 For the three fiscal quarters ended October 3, 2015 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 1,336,785 $ 1,137,585 $ 170,826 $ (497,861 ) $ 2,147,335 Cost of goods sold — 932,937 699,769 96,788 (476,645 ) 1,252,849 Gross profit — 403,848 437,816 74,038 (21,216 ) 894,486 Selling, general, and administrative expenses — 133,733 484,278 62,208 (29,723 ) 650,496 Royalty income — (24,555 ) (14,462 ) — 6,329 (32,688 ) Operating income (loss) — 294,670 (32,000 ) 11,830 2,178 276,678 Interest expense — 20,189 3,994 425 (4,074 ) 20,534 Interest income — (4,402 ) — (57 ) 4,074 (385 ) (Income) loss in subsidiaries (165,223 ) 31,055 (7,466 ) — 141,634 — Other (income) expense, net — 56 (106 ) (510 ) — (560 ) Income (loss) before income taxes 165,223 247,772 (28,422 ) 11,972 (139,456 ) 257,089 Provision for income taxes — 84,727 3,211 3,928 — 91,866 Net income (loss) $ 165,223 $ 163,045 $ (31,633 ) $ 8,044 $ (139,456 ) $ 165,223 Condensed Consolidating Statements of Comprehensive Income (unaudited) For the fiscal quarter ended October 1, 2016 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 80,811 $ 88,221 $ (9,249 ) $ 6,682 $ (85,654 ) $ 80,811 Foreign currency translation adjustments (1,356 ) (1,356 ) (1,356 ) (1,356 ) 4,068 (1,356 ) Comprehensive income (loss) $ 79,455 $ 86,865 $ (10,605 ) $ 5,326 $ (81,586 ) $ 79,455 For the fiscal quarter ended October 3, 2015 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 79,326 $ 79,520 $ (2,620 ) $ 8,169 $ (85,069 ) $ 79,326 Foreign currency translation adjustments (4,205 ) (4,205 ) (69 ) (4,205 ) 8,479 (4,205 ) Comprehensive income (loss) $ 75,121 $ 75,315 $ (2,689 ) $ 3,964 $ (76,590 ) $ 75,121 Condensed Consolidating Statements of Comprehensive Income (unaudited) For the three fiscal quarters ended October 1, 2016 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 170,989 $ 180,758 $ (26,079 ) $ 12,739 $ (167,418 ) $ 170,989 Foreign currency translation adjustments 4,478 4,478 4,478 4,478 (13,434 ) 4,478 Comprehensive income (loss) $ 175,467 $ 185,236 $ (21,601 ) $ 17,217 $ (180,852 ) $ 175,467 For the three fiscal quarters ended October 3, 2015 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 165,223 $ 163,045 $ (31,633 ) $ 8,044 $ (139,456 ) $ 165,223 Foreign currency translation adjustments (10,443 ) (10,443 ) (38 ) (10,443 ) 20,924 (10,443 ) Comprehensive income (loss) $ 154,780 $ 152,602 $ (31,671 ) $ (2,399 ) $ (118,532 ) $ 154,780 Condensed Consolidating Statements of Cash Flows (unaudited) For the three fiscal quarters ended October 1, 2016 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Cash flows provided by (used in) operating activities: $ — $ 88,493 $ 24,058 $ 4,023 $ — $ 116,574 Cash flows from investing activities: Capital expenditures — (19,782 ) (44,304 ) (7,104 ) — (71,190 ) Intercompany investing activity 291,477 (353 ) (1,855 ) — (289,269 ) — Proceeds from sale of property, plant and equipment — 23 — 193 — 216 Net cash provided by (used in) investing activities 291,477 (20,112 ) (46,159 ) (6,911 ) (289,269 ) (70,974 ) Cash flows from financing activities: Intercompany financing activity — (305,065 ) 14,071 1,725 289,269 — Dividends paid (50,131 ) — — — — (50,131 ) Repurchase of common stock (239,138 ) — — — — (239,138 ) Income tax benefit from stock-based compensation — 2,212 1,855 — — 4,067 Withholdings from vesting of restricted stock (8,594 ) — — — — (8,594 ) Proceeds from exercise of stock options 6,386 — — — — 6,386 Net cash (used in) provided by financing activities (291,477 ) (302,853 ) 15,926 1,725 289,269 (287,410 ) Effect of exchange rate changes on cash — — — 1,227 — 1,227 Net (decrease) increase in cash and cash equivalents — (234,472 ) (6,175 ) 64 — (240,583 ) Cash and cash equivalents, beginning of period — 325,771 14,652 40,786 — 381,209 Cash and cash equivalents, end of period $ — $ 91,299 $ 8,477 $ 40,850 $ — $ 140,626 For the three fiscal quarters ended October 3, 2015 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Cash flows provided by (used in) operating activities: $ — $ 85,213 $ 38,022 $ 22,799 $ — $ 146,034 Cash flows from investing activities: Capital expenditures — (21,953 ) (46,876 ) (8,158 ) — (76,987 ) Intercompany investing activity 119,788 4,357 (2,607 ) (8,582 ) (112,956 ) — Issuance of intercompany loan — (15,000 ) — — 15,000 — Proceeds from repayment of intercompany loan — 20,000 — — (20,000 ) — Proceeds from sale of property, plant and equipment — 59 — 7 — 66 Net cash provided by (used in) investing activities 119,788 (12,537 ) (49,483 ) (16,733 ) (117,956 ) (76,921 ) Cash flows from financing activities: Intercompany financing activity — (127,475 ) 15,846 (1,327 ) 112,956 — Repayment of intercompany loan — — — (20,000 ) 20,000 — Borrowings from intercompany loan — — — 15,000 (15,000 ) — Borrowings under secured revolving credit facility — 166,000 — 39,586 — 205,586 Payment on secured revolving credit facility — (186,000 ) — (19,237 ) — (205,237 ) Dividends Paid (34,617 ) — — — — (34,617 ) Payment on debt issuance costs — (1,495 ) — — — (1,495 ) Payment of contingent consideration — (7,572 ) — — — (7,572 ) Income tax benefit from stock-based compensation — 5,356 2,607 — — 7,963 Repurchase of common stock (78,339 ) — — — — (78,339 ) Withholdings from vesting of restricted stock (12,575 ) — — — — (12,575 ) Proceeds from exercise of stock options 5,743 — — — — 5,743 Net cash (used in) provided by financing activities (119,788 ) (151,186 ) 18,453 14,022 117,956 (120,543 ) Effect of exchange rate changes on cash — — — (948 ) — (948 ) Net (decrease) increase in cash and cash equivalents — (78,510 ) 6,992 19,140 — (52,378 ) Cash and cash equivalents, beginning of period — 311,078 10,442 19,118 — 340,638 Cash and cash equivalents, end of period $ — $ 232,568 $ 17,434 $ 38,258 $ — $ 288,260 |
ACCUMULATED OTHER COMPREHENSI24
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | The components, net of applicable income taxes, of accumulated other comprehensive loss consisted of the following: (dollars in thousands) October 1, 2016 January 2, 2016 October 3, 2015 Cumulative foreign currency translation adjustments $ (25,108 ) $ (29,586 ) $ (25,840 ) Pension and post-retirement liability adjustments (6,781 ) (6,781 ) (7,640 ) Total accumulated other comprehensive loss $ (31,889 ) $ (36,367 ) $ (33,480 ) |
GOODWILL AND OTHER INTANGIBLE25
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets table | The Company's goodwill and other intangible assets were as follows: October 1, 2016 January 2, 2016 (dollars in thousands) Weighted-average useful life Gross amount Accumulated amortization Net amount Gross amount Accumulated amortization Net amount Carter's goodwill Indefinite $ 136,570 $ — $ 136,570 $ 136,570 $ — $ 136,570 Canadian acquisition Indefinite 40,386 — 40,386 38,304 — 38,304 Total goodwill $ 176,956 $ — $ 176,956 $ 174,874 $ — $ 174,874 Carter's tradename Indefinite $ 220,233 $ — $ 220,233 $ 220,233 $ — $ 220,233 OshKosh tradename Indefinite 85,500 — 85,500 85,500 — 85,500 Other tradenames 2-20 years 42,016 38,776 3,240 41,992 36,877 5,115 Total tradenames $ 347,749 $ 38,776 $ 308,973 $ 347,725 $ 36,877 $ 310,848 October 3, 2015 (dollars in thousands) Weighted-average useful life Gross amount Accumulated amortization Net amount Carter's goodwill Indefinite $ 136,570 $ — $ 136,570 Canadian acquisition Indefinite 40,063 — 40,063 Total goodwill $ 176,633 $ — $ 176,633 Carter's tradename Indefinite $ 220,233 $ — $ 220,233 OshKosh tradename Indefinite 85,500 — 85,500 Other tradenames 2-20 years 42,012 35,903 6,109 Total tradenames $ 347,745 $ 35,903 $ 311,842 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt consisted of the following: (dollars in thousands) October 1, 2016 January 2, 2016 October 3, 2015 Senior notes at amounts repayable $ 400,000 $ 400,000 $ 400,000 Less unamortized issuance-related costs for senior notes (4,820 ) (5,459 ) (5,666 ) Senior notes, net 395,180 394,541 394,334 Secured revolving credit facility 185,433 184,431 185,278 Total long-term debt, net $ 580,613 $ 578,972 $ 579,612 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of recorded stock-based compensation cost | The Company recorded stock-based compensation expense as follows: Fiscal quarter ended Three fiscal quarters ended (dollars in thousands) October 1, 2016 October 3, 2015 October 1, 2016 October 3, 2015 Stock options $ 960 $ 1,015 $ 3,237 $ 3,359 Restricted stock: Time-based awards 1,809 1,599 5,671 5,294 Performance-based awards 996 1,130 2,944 3,556 Stock awards 11 — 1,174 1,095 Total $ 3,776 $ 3,744 $ 13,026 $ 13,304 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of pension expense and post-retirement benefit expense | The net periodic pension cost (benefit) included in the statement of operations was comprised of: Fiscal quarter ended Three fiscal quarters ended (dollars in thousands) October 1, 2016 October 3, 2015 October 1, 2016 October 3, 2015 Interest cost $ 629 $ 623 $ 1,887 $ 1,869 Expected return on plan assets (676 ) (785 ) (2,028 ) (2,355 ) Recognized actuarial loss 145 161 435 483 Net periodic pension cost (benefit) $ 98 $ (1 ) $ 294 $ (3 ) |
Schedule of costs and retirement plans | The components of post-retirement benefit expense charged to the statement of operations were as follows: Fiscal quarter ended Three fiscal quarters ended (dollars in thousands) October 1, 2016 October 3, 2015 October 1, 2016 October 3, 2015 Service cost – benefits attributed to service during the period $ 31 $ 32 $ 93 $ 96 Interest cost on accumulated post-retirement benefit obligation 44 45 132 135 Amortization net actuarial gain (49 ) (48 ) (147 ) (144 ) Total net periodic post-retirement benefit cost $ 26 $ 29 $ 78 $ 87 Simplified Measurement Date for Defined Benefit Plan Assets and Obligations The Company adopted the provisions of ASU No. 2015-04, Practical Expedient for the Measurement Date of an Employer's Defined Benefit Obligation and Plan Assets ("ASU 2015-04") at the beginning of fiscal 2016. However, the Company is not required to make any such measurements until the end of fiscal 2016. ASU 2015-04 allows employers with fiscal year ends that do not coincide with a calendar month end to make an accounting policy election to measure defined benefit plan assets and obligations as of the end of the month closest to their fiscal year end (i.e., on an alternative measurement date). An employer that makes this election must consistently apply the alternative measurement date from year to year and to all of its defined benefit plans. The Company expects to make the accounting policy election to use December 31 as the measurement date for all of its defined benefit plan assets and obligations for fiscal 2016 and subsequent years. Measurement dates for prior periods will not be impacted. Since the Company's current 52-week fiscal year will end on December 31, 2016, it will not be necessary for the Company to utilize an alternate measurement date for fiscal 2016, and thus the initial adoption of ASU 2015-04 at the beginning of fiscal 2016 will not have an impact on the Company's results of operations, financial condition, or cash flows. |
FAIR VALUE MEASUREMENTS FAIR VA
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value of investments | October 1, 2016 January 2, 2016 October 3, 2015 (dollars in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Assets Investments $ 11.4 $ — $ — $ 8.6 $ — $ — $ 7.5 $ — $ — Foreign exchange forward contracts (1) $ — $ — $ — $ — $ 2.1 $ — $ — $ 1.5 $ — Liabilities Foreign exchange forward contracts (2) $ — $ 0.4 $ — $ — $ — $ — $ — $ — $ — (1) Included in Prepaid expenses and other current assets in the Company's condensed consolidated balance sheet. (2) Included in Other current liabilities i n the Company's condensed consolidated balance sheet. |
Schedule of changes in contingent consideration | The following table summarizes the changes in the contingent consideration liability during the third fiscal quarter and first three fiscal quarters of 2015 related to the Company's 2011 acquisition of Bonnie Togs in Canada: Fiscal quarter ended Three fiscal quarters ended (dollars in thousands) October 3, 2015 October 3, 2015 Balance at the beginning of period $ 9,022 $ 7,711 Payments made (8,568 ) (8,568 ) Accretion — 809 Foreign currency translation adjustment (454 ) (1,029 ) Final contingent adjustment — 1,077 Balance at the end of period $ — $ — |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic common shares outstanding to diluted common and common equivalent shares outstanding | The following is a reconciliation of basic common shares outstanding to diluted common and common equivalent shares outstanding: Fiscal quarter ended Three fiscal quarters ended October 1, 2016 October 3, 2015 October 1, 2016 October 3, 2015 Weighted-average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 49,526,480 51,740,523 50,282,345 51,960,041 Dilutive effect of equity awards 460,271 507,815 470,050 512,861 Diluted number of common and common equivalent shares outstanding 49,986,751 52,248,338 50,752,395 52,472,902 Basic net income per common share (in thousands, except per share data): Net income $ 80,811 $ 79,326 $ 170,989 $ 165,223 Income allocated to participating securities (632 ) (675 ) (1,359 ) (1,557 ) Net income available to common shareholders $ 80,179 $ 78,651 $ 169,630 $ 163,666 Basic net income per common share $ 1.62 $ 1.52 $ 3.37 $ 3.15 Diluted net income per common share (in thousands, except per share data): Net income $ 80,811 $ 79,326 $ 170,989 $ 165,223 Income allocated to participating securities (627 ) (669 ) (1,350 ) (1,545 ) Net income available to common shareholders $ 80,184 $ 78,657 $ 169,639 $ 163,678 Diluted net income per common share $ 1.60 $ 1.51 $ 3.34 $ 3.12 Anti-dilutive shares excluded from dilutive earnings per share computation 246,980 177,300 244,430 180,000 |
OTHER CURRENT AND LONG-TERM L31
OTHER CURRENT AND LONG-TERM LIABILITIES (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other current liabilities | : (dollars in thousands) October 1, 2016 January 2, 2016 October 3, 2015 Accrued bonuses and incentive compensation $ 10,638 $ 17,934 $ 12,574 Income taxes payable 32,242 3,802 25,902 Accrued employee benefits 10,808 19,751 10,102 Accrued and deferred rent 14,875 12,590 12,286 |
Schedule of other long-term liabilities | : (dollars in thousands) October 1, 2016 January 2, 2016 October 3, 2015 Deferred lease incentives $ 73,840 $ 70,060 $ 70,778 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Segment Reporting [Abstract] | |
Schedule of segment information | The table below presents certain information for our reportable segments and unallocated corporate expenses for the periods indicated: Fiscal quarter ended Three fiscal quarters ended (dollars in thousands) October 1, % of October 3, % of October 1, % of October 3, % of Net sales : Carter’s Wholesale $ 356,258 39.5 % $ 343,555 40.4 % $ 842,136 37.2 % $ 824,600 38.4 % Carter’s Retail (a) 314,699 34.9 % 294,928 34.7 % 860,854 38.0 % 799,635 37.2 % Total Carter’s (U.S.) 670,957 74.4 % 638,483 75.1 % 1,702,990 75.2 % 1,624,235 75.6 % OshKosh Retail (a) 106,999 11.9 % 98,292 11.6 % 267,715 11.8 % 244,787 11.4 % OshKosh Wholesale 17,474 1.9 % 18,794 2.2 % 38,772 1.7 % 49,151 2.3 % Total OshKosh (U.S.) 124,473 13.8 % 117,086 13.8 % 306,487 13.5 % 293,938 13.7 % International (b) 105,995 11.8 % 94,237 11.1 % 255,504 11.3 % 229,162 10.7 % Total net sales $ 901,425 100.0 % $ 849,806 100.0 % $ 2,264,981 100.0 % $ 2,147,335 100.0 % Operating income (loss) : % of Segment Net Sales % of Segment Net Sales % of % of Carter’s Wholesale $ 81,551 22.9 % $ 74,347 21.6 % $ 187,655 22.3 % $ 172,485 20.9 % Carter’s Retail (a) 48,051 15.3 % 51,733 17.5 % 127,738 14.8 % 134,557 16.8 % Total Carter’s (U.S.) 129,602 19.3 % 126,080 19.7 % 315,393 18.5 % 307,042 18.9 % OshKosh Retail (a) 2,652 2.5 % 6,171 6.3 % (614 ) (0.2 )% 3,396 1.4 % OshKosh Wholesale 4,450 25.5 % 4,487 23.9 % 8,266 21.3 % 9,715 19.8 % Total OshKosh (U.S.) 7,102 5.7 % 10,658 9.1 % 7,652 2.5 % 13,111 4.5 % International (b) (c) 19,645 18.5 % 18,220 19.3 % 37,191 14.6 % 30,967 13.5 % Corporate expenses (d) (e) (f) (25,455 ) (24,737 ) (73,091 ) (74,442 ) Total operating income $ 130,894 14.5 % $ 130,221 15.3 % $ 287,145 12.7 % $ 276,678 12.9 % (a) Includes eCommerce results. (b) Net sales include international retail, eCommerce, and wholesale sales. Operating income includes international licensing income. (c) Includes charges associated with the revaluation of the Company's contingent consideration related to the Company's 2011 acquisition of Bonnie Togs of approximately $1.9 million for the first three fiscal quarters ended October 3, 2015 . (d) Corporate expenses include expenses related to incentive compensation, stock-based compensation, executive management, severance and relocation, finance, building occupancy, information technology, certain legal fees, consulting, and audit fees. (e) Includes charges related to the amortization of the H.W. Carter and Sons tradenames of approximate $1.7 million for the first three fiscal quarters ended October 1, 2016 , and approximately $1.0 million and $5.3 million for the fiscal quarter and the first three fiscal quarters ended October 3, 2015 , respectively. (f) Includes charges related to the Company's direct sourcing initiative of $0.5 million for the fiscal quarter and for the three fiscal quarters periods ended October 1, 2016. |
GUARANTOR UNAUDITED CONDENSED33
GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Consolidating Balance Sheets | Condensed Consolidating Balance Sheets (unaudited) As of October 1, 2016 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 91,299 $ 8,477 $ 40,850 $ — $ 140,626 Accounts receivable, net — 234,979 27,047 9,181 — 271,207 Intercompany receivable — 60,570 72,037 4,035 (136,642 ) — Finished goods inventories — 300,044 231,511 65,732 (44,561 ) 552,726 Prepaid expenses and other current assets — 22,446 15,988 4,721 — 43,155 Deferred income taxes — 20,346 15,579 1,675 — 37,600 Total current assets — 729,684 370,639 126,194 (181,203 ) 1,045,314 Property, plant, and equipment, net — 159,149 194,078 35,213 — 388,440 Goodwill — 136,570 — 40,386 — 176,956 Tradenames, net — 223,473 85,500 — — 308,973 Other assets — 17,130 641 251 — 18,022 Intercompany long-term receivable — — 340,887 — (340,887 ) — Intercompany long-term note receivable — 100,000 — — (100,000 ) — Investment in subsidiaries 776,134 707,381 127,447 — (1,610,962 ) — Total assets $ 776,134 $ 2,073,387 $ 1,119,192 $ 202,044 $ (2,233,052 ) $ 1,937,705 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ — $ 99,175 $ 36,003 $ 20,045 $ — $ 155,223 Intercompany payables — 74,414 58,787 3,441 (136,642 ) — Other current liabilities — 24,842 92,168 9,912 — 126,922 Total current liabilities — 198,431 186,958 33,398 (136,642 ) 282,145 Long-term debt, net — 561,180 — 19,433 — 580,613 Deferred income taxes — 83,998 45,280 — — 129,278 Intercompany long-term liability — 340,887 — — (340,887 ) — Intercompany long-term note payable — — 100,000 — (100,000 ) — Other long-term liabilities — 68,196 88,906 12,433 — 169,535 Stockholders' equity 776,134 820,695 698,048 136,780 (1,655,523 ) 776,134 Total liabilities and stockholders' equity $ 776,134 $ 2,073,387 $ 1,119,192 $ 202,044 $ (2,233,052 ) $ 1,937,705 As of October 3, 2015 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 232,568 $ 17,434 $ 38,258 $ — $ 288,260 Accounts receivable, net — 208,369 29,210 8,986 — 246,565 Intercompany receivable — 87,419 100,357 3,675 (191,451 ) — Intercompany loan receivable — 15,000 — — (15,000 ) — Finished goods inventories — 278,793 216,270 50,553 (34,096 ) 511,520 Prepaid expenses and other current assets — 17,267 14,963 4,184 — 36,414 Deferred income taxes — 22,739 11,192 964 — 34,895 Total current assets — 862,155 389,426 106,620 (240,547 ) 1,117,654 Property, plant, and equipment, net — 160,579 171,615 29,111 — 361,305 Goodwill — 136,570 — 40,063 — 176,633 Tradenames and other intangibles, net — 226,342 85,500 — — 311,842 Other assets — 13,773 784 383 — 14,940 Intercompany long-term receivable — — 264,618 — (264,618 ) — Intercompany long-term note receivable — 100,000 — — (100,000 ) — Investment in subsidiaries 842,943 614,624 19,118 — (1,476,685 ) — Total assets $ 842,943 $ 2,114,043 $ 931,061 $ 176,177 $ (2,081,850 ) $ 1,982,374 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ — $ 100,487 $ 59,060 $ 14,047 $ — $ 173,594 Intercompany payables — 102,208 85,814 3,429 (191,451 ) — Intercompany loan payables — — — 15,000 (15,000 ) — Other current liabilities — 57,316 37,905 9,978 — 105,199 Total current liabilities — 260,011 182,779 42,454 (206,451 ) 278,793 Long-term debt, net — 560,334 — 19,278 — 579,612 Deferred income taxes — 80,871 38,628 — — 119,499 Intercompany long-term liability — 264,618 — — (264,618 ) — Intercompany long-term note payable — — 100,000 — (100,000 ) — Other long-term liabilities — 71,170 78,658 11,699 — 161,527 Stockholders' equity 842,943 877,039 530,996 102,746 (1,510,781 ) 842,943 Total liabilities and stockholders' equity $ 842,943 $ 2,114,043 $ 931,061 $ 176,177 $ (2,081,850 ) $ 1,982,374 As of January 2, 2016 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 325,771 $ 14,652 $ 40,786 $ — $ 381,209 Accounts receivable, net — 178,842 23,980 4,748 — 207,570 Intercompany receivable — 52,676 133,092 3,317 (189,085 ) — Finished goods inventories — 271,148 184,618 48,960 (34,792 ) 469,934 Prepaid expenses and other current assets — 17,460 14,261 6,094 — 37,815 Deferred income taxes — 19,502 13,544 1,034 — 34,080 Total current assets — 865,399 384,147 104,939 (223,877 ) 1,130,608 Property, plant, and equipment, net — 162,031 180,322 29,351 — 371,704 Goodwill — 136,570 — 38,304 — 174,874 Tradenames, net — 225,348 85,500 — — 310,848 Other assets — 14,634 665 321 — 15,620 Intercompany long-term receivable — — 294,070 — (294,070 ) — Intercompany long-term note receivable — 100,000 — — (100,000 ) — Investment in subsidiaries 875,051 652,598 100,146 — (1,627,795 ) — Total assets $ 875,051 $ 2,156,580 $ 1,044,850 $ 172,915 $ (2,245,742 ) $ 2,003,654 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ — $ 93,585 $ 44,951 $ 19,112 $ — $ 157,648 Intercompany payables — 134,694 51,362 3,029 (189,085 ) — Other current liabilities — 12,996 80,908 11,166 — 105,070 Total current liabilities — 241,275 177,221 33,307 (189,085 ) 262,718 Long-term debt, net — 560,541 — 18,431 — 578,972 Deferred income taxes — 84,038 44,800 — — 128,838 Intercompany long-term liability — 294,070 — — (294,070 ) — Intercompany long-term note payable — — 100,000 — (100,000 ) — Other long-term liabilities — 66,813 79,568 11,694 — 158,075 Stockholders' equity 875,051 909,843 643,261 109,483 (1,662,587 ) 875,051 Total liabilities and stockholders' equity $ 875,051 $ 2,156,580 $ 1,044,850 $ 172,915 $ (2,245,742 ) $ 2,003,654 |
Condensed Consolidating Statements of Operations | Condensed Consolidating Statements of Operations (unaudited) For the fiscal quarter ended October 1, 2016 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 584,206 $ 452,755 $ 79,631 $ (215,167 ) $ 901,425 Cost of goods sold — 409,937 274,521 43,060 (201,639 ) 525,879 Gross profit — 174,269 178,234 36,571 (13,528 ) 375,546 Selling, general, and administrative expenses — 49,965 187,298 26,796 (8,737 ) 255,322 Royalty income — (7,624 ) (5,665 ) — 2,619 (10,670 ) Operating income (loss) — 131,928 (3,399 ) 9,775 (7,410 ) 130,894 Interest expense — 6,634 1,364 108 (1,327 ) 6,779 Interest income — (1,379 ) — (16 ) 1,327 (68 ) (Income) loss in subsidiaries (80,811 ) 9,249 (6,682 ) — 78,244 — Other (income) expense, net — (204 ) 259 (91 ) — (36 ) Income (loss) before income taxes 80,811 117,628 1,660 9,774 (85,654 ) 124,219 Provision for income taxes — 29,407 10,909 3,092 — 43,408 Net income (loss) $ 80,811 $ 88,221 $ (9,249 ) $ 6,682 $ (85,654 ) $ 80,811 For the fiscal quarter ended October 3, 2015 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 539,181 $ 427,028 $ 71,068 $ (187,471 ) $ 849,806 Cost of goods sold — 380,427 263,009 39,180 (180,349 ) 502,267 Gross profit — 158,754 164,019 31,888 (7,122 ) 347,539 Selling, general, and administrative expenses — 49,317 169,379 20,708 (9,387 ) 230,017 Royalty income — (9,175 ) (5,983 ) — 2,459 (12,699 ) Operating income (loss) — 118,612 623 11,180 (194 ) 130,221 Interest expense — 6,754 1,318 169 (1,334 ) 6,907 Interest income — (1,400 ) — (25 ) 1,334 (91 ) (Income) loss in subsidiaries (79,326 ) (1,645 ) (3,904 ) — 84,875 — Other (income) expense, net — 251 (269 ) (604 ) — (622 ) Income (loss) before income taxes 79,326 114,652 3,478 11,640 (85,069 ) 124,027 Provision for income taxes — 35,132 6,098 3,471 — 44,701 Net income (loss) $ 79,326 $ 79,520 $ (2,620 ) $ 8,169 $ (85,069 ) $ 79,326 Condensed Consolidating Statements of Operations (unaudited) For the three fiscal quarters ended October 1, 2016 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 1,396,768 $ 1,208,841 $ 201,679 $ (542,307 ) $ 2,264,981 Cost of goods sold — 995,828 706,525 107,127 (513,156 ) 1,296,324 Gross profit — 400,940 502,316 94,552 (29,151 ) 968,657 Selling, general, and administrative expenses — 132,986 533,364 72,687 (26,255 ) 712,782 Royalty income — (23,753 ) (14,390 ) — 6,873 (31,270 ) Operating income (loss) — 291,707 (16,658 ) 21,865 (9,769 ) 287,145 Interest expense — 19,909 4,070 323 (3,981 ) 20,321 Interest income — (4,353 ) — (81 ) 3,981 (453 ) (Income) loss in subsidiaries (170,989 ) 26,079 (12,739 ) — 157,649 — Other (income) expense, net — (377 ) 432 3,618 — 3,673 Income (loss) before income taxes 170,989 250,449 (8,421 ) 18,005 (167,418 ) 263,604 Provision for income taxes — 69,691 17,658 5,266 — 92,615 Net income (loss) $ 170,989 $ 180,758 $ (26,079 ) $ 12,739 $ (167,418 ) $ 170,989 For the three fiscal quarters ended October 3, 2015 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net sales $ — $ 1,336,785 $ 1,137,585 $ 170,826 $ (497,861 ) $ 2,147,335 Cost of goods sold — 932,937 699,769 96,788 (476,645 ) 1,252,849 Gross profit — 403,848 437,816 74,038 (21,216 ) 894,486 Selling, general, and administrative expenses — 133,733 484,278 62,208 (29,723 ) 650,496 Royalty income — (24,555 ) (14,462 ) — 6,329 (32,688 ) Operating income (loss) — 294,670 (32,000 ) 11,830 2,178 276,678 Interest expense — 20,189 3,994 425 (4,074 ) 20,534 Interest income — (4,402 ) — (57 ) 4,074 (385 ) (Income) loss in subsidiaries (165,223 ) 31,055 (7,466 ) — 141,634 — Other (income) expense, net — 56 (106 ) (510 ) — (560 ) Income (loss) before income taxes 165,223 247,772 (28,422 ) 11,972 (139,456 ) 257,089 Provision for income taxes — 84,727 3,211 3,928 — 91,866 Net income (loss) $ 165,223 $ 163,045 $ (31,633 ) $ 8,044 $ (139,456 ) $ 165,223 |
Condensed Consolidating Statements of Comprehensive Income | Condensed Consolidating Statements of Comprehensive Income (unaudited) For the fiscal quarter ended October 1, 2016 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 80,811 $ 88,221 $ (9,249 ) $ 6,682 $ (85,654 ) $ 80,811 Foreign currency translation adjustments (1,356 ) (1,356 ) (1,356 ) (1,356 ) 4,068 (1,356 ) Comprehensive income (loss) $ 79,455 $ 86,865 $ (10,605 ) $ 5,326 $ (81,586 ) $ 79,455 For the fiscal quarter ended October 3, 2015 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 79,326 $ 79,520 $ (2,620 ) $ 8,169 $ (85,069 ) $ 79,326 Foreign currency translation adjustments (4,205 ) (4,205 ) (69 ) (4,205 ) 8,479 (4,205 ) Comprehensive income (loss) $ 75,121 $ 75,315 $ (2,689 ) $ 3,964 $ (76,590 ) $ 75,121 Condensed Consolidating Statements of Comprehensive Income (unaudited) For the three fiscal quarters ended October 1, 2016 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 170,989 $ 180,758 $ (26,079 ) $ 12,739 $ (167,418 ) $ 170,989 Foreign currency translation adjustments 4,478 4,478 4,478 4,478 (13,434 ) 4,478 Comprehensive income (loss) $ 175,467 $ 185,236 $ (21,601 ) $ 17,217 $ (180,852 ) $ 175,467 For the three fiscal quarters ended October 3, 2015 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Net income (loss) $ 165,223 $ 163,045 $ (31,633 ) $ 8,044 $ (139,456 ) $ 165,223 Foreign currency translation adjustments (10,443 ) (10,443 ) (38 ) (10,443 ) 20,924 (10,443 ) Comprehensive income (loss) $ 154,780 $ 152,602 $ (31,671 ) $ (2,399 ) $ (118,532 ) $ 154,780 |
Condensed Consolidating Statements of Cash Flows | Condensed Consolidating Statements of Cash Flows (unaudited) For the three fiscal quarters ended October 1, 2016 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Cash flows provided by (used in) operating activities: $ — $ 88,493 $ 24,058 $ 4,023 $ — $ 116,574 Cash flows from investing activities: Capital expenditures — (19,782 ) (44,304 ) (7,104 ) — (71,190 ) Intercompany investing activity 291,477 (353 ) (1,855 ) — (289,269 ) — Proceeds from sale of property, plant and equipment — 23 — 193 — 216 Net cash provided by (used in) investing activities 291,477 (20,112 ) (46,159 ) (6,911 ) (289,269 ) (70,974 ) Cash flows from financing activities: Intercompany financing activity — (305,065 ) 14,071 1,725 289,269 — Dividends paid (50,131 ) — — — — (50,131 ) Repurchase of common stock (239,138 ) — — — — (239,138 ) Income tax benefit from stock-based compensation — 2,212 1,855 — — 4,067 Withholdings from vesting of restricted stock (8,594 ) — — — — (8,594 ) Proceeds from exercise of stock options 6,386 — — — — 6,386 Net cash (used in) provided by financing activities (291,477 ) (302,853 ) 15,926 1,725 289,269 (287,410 ) Effect of exchange rate changes on cash — — — 1,227 — 1,227 Net (decrease) increase in cash and cash equivalents — (234,472 ) (6,175 ) 64 — (240,583 ) Cash and cash equivalents, beginning of period — 325,771 14,652 40,786 — 381,209 Cash and cash equivalents, end of period $ — $ 91,299 $ 8,477 $ 40,850 $ — $ 140,626 For the three fiscal quarters ended October 3, 2015 (dollars in thousands) Parent Subsidiary Issuer Guarantor Subsidiaries Non-Guarantor Subsidiaries Consolidating Adjustments Consolidated Cash flows provided by (used in) operating activities: $ — $ 85,213 $ 38,022 $ 22,799 $ — $ 146,034 Cash flows from investing activities: Capital expenditures — (21,953 ) (46,876 ) (8,158 ) — (76,987 ) Intercompany investing activity 119,788 4,357 (2,607 ) (8,582 ) (112,956 ) — Issuance of intercompany loan — (15,000 ) — — 15,000 — Proceeds from repayment of intercompany loan — 20,000 — — (20,000 ) — Proceeds from sale of property, plant and equipment — 59 — 7 — 66 Net cash provided by (used in) investing activities 119,788 (12,537 ) (49,483 ) (16,733 ) (117,956 ) (76,921 ) Cash flows from financing activities: Intercompany financing activity — (127,475 ) 15,846 (1,327 ) 112,956 — Repayment of intercompany loan — — — (20,000 ) 20,000 — Borrowings from intercompany loan — — — 15,000 (15,000 ) — Borrowings under secured revolving credit facility — 166,000 — 39,586 — 205,586 Payment on secured revolving credit facility — (186,000 ) — (19,237 ) — (205,237 ) Dividends Paid (34,617 ) — — — — (34,617 ) Payment on debt issuance costs — (1,495 ) — — — (1,495 ) Payment of contingent consideration — (7,572 ) — — — (7,572 ) Income tax benefit from stock-based compensation — 5,356 2,607 — — 7,963 Repurchase of common stock (78,339 ) — — — — (78,339 ) Withholdings from vesting of restricted stock (12,575 ) — — — — (12,575 ) Proceeds from exercise of stock options 5,743 — — — — 5,743 Net cash (used in) provided by financing activities (119,788 ) (151,186 ) 18,453 14,022 117,956 (120,543 ) Effect of exchange rate changes on cash — — — (948 ) — (948 ) Net (decrease) increase in cash and cash equivalents — (78,510 ) 6,992 19,140 — (52,378 ) Cash and cash equivalents, beginning of period — 311,078 10,442 19,118 — 340,638 Cash and cash equivalents, end of period $ — $ 232,568 $ 17,434 $ 38,258 $ — $ 288,260 |
THE COMPANY (Details)
THE COMPANY (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Oct. 01, 2016USD ($)store | Oct. 03, 2015USD ($) | Oct. 01, 2016USD ($)store | Oct. 03, 2015USD ($) | |||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | $ 901,425 | $ 849,806 | $ 2,264,981 | $ 2,147,335 | ||||
Royalty income | (10,670) | (12,699) | (31,270) | (32,688) | ||||
Operating Income (Loss) | $ 130,894 | $ 130,221 | $ 287,145 | $ 276,678 | ||||
Operating income (loss) as percentage of segment net sales | 14.50% | 15.30% | 12.70% | 12.90% | ||||
Net income | $ 80,811 | $ 79,326 | $ 170,989 | $ 165,223 | ||||
United States [Member] | Carter's [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Number of locations | store | 636 | 636 | ||||||
United States [Member] | OshKosh [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Number of locations | store | 267 | 267 | ||||||
Canada [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Number of international retail stores | store | 156 | 156 | ||||||
Operating Segments [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | $ 901,425 | 849,806 | $ 2,264,981 | 2,147,335 | ||||
Operating Segments [Member] | Carter's [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | 670,957 | 638,483 | 1,702,990 | 1,624,235 | ||||
Operating Income (Loss) | $ 129,602 | $ 126,080 | $ 315,393 | $ 307,042 | ||||
Operating income (loss) as percentage of segment net sales | 19.30% | 19.70% | 18.50% | 18.90% | ||||
Operating Segments [Member] | OshKosh [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | $ 124,473 | $ 117,086 | $ 306,487 | $ 293,938 | ||||
Operating Income (Loss) | $ 7,102 | $ 10,658 | $ 7,652 | $ 13,111 | ||||
Operating income (loss) as percentage of segment net sales | 5.70% | 9.10% | 2.50% | 4.50% | ||||
Operating Segments [Member] | Retail [Member] | Carter's [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | [1] | $ 314,699 | $ 294,928 | $ 860,854 | $ 799,635 | |||
Operating Income (Loss) | $ 48,051 | [1] | $ 51,733 | [1] | $ 127,738 | $ 134,557 | [1] | |
Operating income (loss) as percentage of segment net sales | 15.30% | [1] | 17.50% | [1] | 14.80% | 16.80% | [1] | |
Operating Segments [Member] | Retail [Member] | OshKosh [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | [1] | $ 106,999 | $ 98,292 | $ 267,715 | $ 244,787 | |||
Operating Income (Loss) | $ 2,652 | [1] | $ 6,171 | [1] | $ (614) | $ 3,396 | [1] | |
Operating income (loss) as percentage of segment net sales | 2.50% | [1] | 6.30% | [1] | (0.20%) | 1.40% | [1] | |
Operating Segments [Member] | Wholesale [Member] | Carter's [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | $ 356,258 | $ 343,555 | $ 842,136 | $ 824,600 | ||||
Operating Income (Loss) | $ 81,551 | $ 74,347 | $ 187,655 | $ 172,485 | ||||
Operating income (loss) as percentage of segment net sales | 22.90% | 21.60% | 22.30% | 20.90% | ||||
Operating Segments [Member] | Wholesale [Member] | OshKosh [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | $ 17,474 | $ 18,794 | $ 38,772 | $ 49,151 | ||||
Operating Income (Loss) | $ 4,450 | $ 4,487 | $ 8,266 | $ 9,715 | ||||
Operating income (loss) as percentage of segment net sales | 25.50% | 23.90% | 21.30% | 19.80% | ||||
[1] | Includes eCommerce results. |
ACCUMULATED OTHER COMPREHENSI35
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | Jan. 02, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Document Fiscal Year Focus | 2,016 | ||||
Foreign currency translation adjustments | $ 1,356 | $ 4,205 | $ (4,478) | $ 10,443 | |
Total accumulated other comprehensive loss | (31,889) | (33,480) | (31,889) | (33,480) | $ (36,367) |
Cumulative Foreign Currency Translation Adjustments [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Total accumulated other comprehensive loss | (25,108) | (25,840) | (25,108) | (25,840) | (29,586) |
Pension and Post-retirement Liability Adjustment [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Total accumulated other comprehensive loss | $ (6,781) | $ (7,640) | $ (6,781) | $ (7,640) | $ (6,781) |
GOODWILL AND OTHER INTANGIBLE36
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | Jan. 03, 2015 | Jan. 02, 2016 | |
Goodwill and Other Intangible Assets [Line Items] | |||||
Amortization costs | $ 1,000 | $ 1,900 | $ 5,400 | ||
Document Fiscal Year Focus | 2,016 | ||||
Finite-Lived Intangible Assets, Amortization Expense, 2018 | $ 200 | ||||
Finite-Lived Intangible Assets, Amortization Expense, 2019 | 200 | ||||
Finite-Lived Intangible Assets, Amortization Expense, 2020 | 200 | ||||
Goodwill, Gross amount | 176,633 | 176,956 | 176,633 | $ 174,874 | |
Goodwill, Net amount | 176,633 | 176,956 | 176,633 | 174,874 | |
Total, Net amount | 311,842 | 308,973 | 311,842 | 310,848 | |
Carter's Goodwill [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Goodwill, Gross amount | 136,570 | 136,570 | 136,570 | 136,570 | |
Goodwill, Net amount | 136,570 | 136,570 | 136,570 | 136,570 | |
Carter's Tradename [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Indefinite intangible assets | 220,233 | 220,233 | 220,233 | 220,233 | |
Oshkosh Trade Name [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Indefinite intangible assets | 85,500 | 85,500 | 85,500 | 85,500 | |
Bonnie Togs Goodwill [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Goodwill, Gross amount | 40,063 | 40,386 | 40,063 | 38,304 | |
Goodwill, Net amount | 40,063 | 40,386 | 40,063 | 38,304 | |
Tradenames [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Finite intangible assets, Accumulated amortization | 35,903 | 38,776 | 35,903 | 36,877 | |
Intangible assets, Gross amount | 347,745 | 347,749 | 347,745 | 347,725 | |
Indefinite-lived trademarks | 311,842 | 308,973 | 311,842 | 310,848 | |
Other Tradenames [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Finite intangible assets, Net amount | 6,109 | 3,240 | 6,109 | 5,115 | |
Finite-Lived Intangible Assets, Amortization Expense, 2017 | 200 | ||||
Finite intangible assets, Gross amount | 42,012 | 42,016 | 42,012 | 41,992 | |
Finite intangible assets, Accumulated amortization | $ 35,903 | $ 38,776 | $ 35,903 | $ 36,877 | |
Minimum | Other Tradenames [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Weighted-average useful life | 2 years | 2 years | 2 years | ||
Maximum | Other Tradenames [Member] | |||||
Goodwill and Other Intangible Assets [Line Items] | |||||
Weighted-average useful life | 20 years | 20 years | 20 years |
COMMON STOCK (Share Repurchases
COMMON STOCK (Share Repurchases) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Oct. 01, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | Sep. 28, 2013 | Feb. 24, 2016 | Jun. 29, 2013 | |
Stockholders' Equity Note [Abstract] | |||||||
Stock Repurchase Program, Authorized Amount | $ 500,000,000 | $ 300,000,000 | |||||
Share repurchase, additional authorized amount | $ 400,000,000 | ||||||
Remaining capacity under authorization | $ 335,700,000 | $ 335,700,000 | |||||
Number of shares repurchased and retired | 587,100 | 290,800 | 2,358,947 | 795,025 | |||
Cost of repurchased and retired shares | $ 58,929,000 | $ 29,445,000 | $ 239,138,000 | $ 78,339,000 | |||
Average price per share | $ 100.37 | $ 101.26 | $ 101.37 | $ 98.54 | |||
Dividend declared per common share | $ 0.33 | $ 0.22 | $ 0.99 | $ 0.66 |
LONG-TERM DEBT (Schedule of Lon
LONG-TERM DEBT (Schedule of Long Term Debt) (Details) $ in Thousands, CAD in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Apr. 04, 2015USD ($) | Apr. 04, 2015CAD | Oct. 01, 2016USD ($) | Oct. 03, 2015USD ($) | Jan. 03, 2015USD ($) | Jan. 02, 2016USD ($) | |
Debt Instrument [Line Items] | ||||||
Borrowings under secured revolving credit facility | $ 20,300 | CAD 25.5 | $ 0 | $ 205,586 | ||
Long-term debt | 580,613 | 579,612 | $ 578,972 | |||
Senior Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Issuance Cost | 4,820 | 5,666 | $ 5,459 | |||
Long-term Debt, net | 395,180 | 394,334 | 394,541 | |||
Long-term debt | 400,000 | 400,000 | 400,000 | |||
Secured revolving credit facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Available for future borrowing | 309,700 | |||||
Long-term debt | $ 185,433 | $ 185,278 | $ 184,431 | |||
CANADIAN NATIONAL STOCK EXCHANGE [Member] | Secured revolving credit facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Description of Variable Rate Basis | CDOR |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) CAD in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Oct. 01, 2016USD ($) | Oct. 03, 2015USD ($) | Apr. 04, 2015USD ($) | Apr. 04, 2015CAD | Oct. 01, 2016USD ($) | Oct. 03, 2015USD ($) | Jan. 03, 2015USD ($) | Jan. 02, 2016USD ($) | |
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 500,000,000 | $ 500,000,000 | ||||||
Long-term debt | 580,613,000 | $ 579,612,000 | 580,613,000 | $ 579,612,000 | $ 578,972,000 | |||
Outstanding letters of credit | 4,800,000 | 4,800,000 | ||||||
Payments on secured revolving credit facility | $ 20,000,000 | 0 | 205,237,000 | |||||
Borrowings under secured revolving credit facility | $ 20,300,000 | CAD 25.5 | 0 | 205,586,000 | ||||
Non-cash stock-based compensation expense | 3,776,000 | 3,744,000 | 13,026,000 | 13,304,000 | ||||
Incremental Facilities [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 250,000,000 | $ 250,000,000 | ||||||
LIBOR [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate (as a percentage) | 1.375% | 1.375% | ||||||
LIBOR [Member] | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.125% | |||||||
LIBOR [Member] | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.875% | |||||||
Base Rate [Member] | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.125% | |||||||
Base Rate [Member] | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Basis Spread on Variable Rate | 0.875% | |||||||
Secured revolving credit facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000,000 | $ 100,000,000 | ||||||
Long-term debt | 185,433,000 | 185,278,000 | 185,433,000 | 185,278,000 | 184,431,000 | |||
Available for future borrowing | $ 309,700,000 | $ 309,700,000 | ||||||
Secured revolving credit facility [Member] | LIBOR [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Description of Variable Rate Basis | LIBOR | |||||||
Secured revolving credit facility [Member] | Base Rate [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate (as a percentage) | 0.375% | 0.375% | ||||||
Secured revolving credit facility [Member] | CANADIAN NATIONAL STOCK EXCHANGE [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Description of Variable Rate Basis | CDOR | |||||||
Swingline BOA [Member] | Multicurrency Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 15,000,000 | $ 15,000,000 | ||||||
Senior Notes [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | 400,000,000 | $ 400,000,000 | 400,000,000 | 400,000,000 | $ 400,000,000 | |||
Debt Issuance Cost | (4,820,000) | $ (5,666,000) | $ (5,459,000) | |||||
Debt Instrument, face amount | $ 400,000,000 | $ 400,000,000 | ||||||
Interest rate (as a percentage) | 5.25% | 5.25% | ||||||
United States of America, Dollars | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowings under secured revolving credit facility | $ 175,000,000 | |||||||
United States of America, Dollars | Incremental Facilities [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 200,000,000 | 200,000,000 | ||||||
United States of America, Dollars | Secured revolving credit facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 400,000,000 | $ 400,000,000 | ||||||
United States of America, Dollars | Secured revolving credit facility [Member] | LIBOR [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective interest rate (as a percentage) | 1.90% | 1.90% | ||||||
United States of America, Dollars | Secured revolving credit facility [Member] | CANADIAN NATIONAL STOCK EXCHANGE [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Effective interest rate (as a percentage) | 2.26% | 2.26% | ||||||
United States of America, Dollars | Swingline BOA [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000,000 | $ 50,000,000 | ||||||
Canada, Dollars | ||||||||
Debt Instrument [Line Items] | ||||||||
Borrowings under secured revolving credit facility | 40,000,000 | |||||||
Canada, Dollars | Incremental Facilities [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50,000,000 | $ 50,000,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non-cash stock-based compensation expense | $ 3,776 | $ 3,744 | $ 13,026 | $ 13,304 |
Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non-cash stock-based compensation expense | 960 | 1,015 | 3,237 | 3,359 |
Time-based Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non-cash stock-based compensation expense | 1,809 | 1,599 | 5,671 | 5,294 |
Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non-cash stock-based compensation expense | 996 | 1,130 | 2,944 | 3,556 |
Stock Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Non-cash stock-based compensation expense | $ 11 | $ 0 | $ 1,174 | $ 1,095 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | |
Pension Plans [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Interest cost on accumulated benefit obligation | $ 629 | $ 623 | $ 1,887 | $ 1,869 |
Expected return on plan assets | (676) | (785) | (2,028) | (2,355) |
Amortization of net actuarial loss (gain) | 145 | 161 | 435 | 483 |
Net periodic pension cost (benefit) | 98 | (1) | 294 | (3) |
Post-retirement Benefit [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Interest cost on accumulated benefit obligation | 44 | 45 | 132 | 135 |
Service cost – benefits attributed to service during the period | 31 | 32 | 93 | 96 |
Amortization of net actuarial loss (gain) | (49) | (48) | (147) | (144) |
Net periodic pension cost (benefit) | $ 26 | $ 29 | $ 78 | $ 87 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | Oct. 01, 2016 | Apr. 02, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Apr. 04, 2015 |
Income Tax Disclosure [Abstract] | |||||
Tax reserve Statue of Limitation, Benefits Recognized | $ 0.4 | $ 1.8 | |||
Gross unrecognized tax benefits | $ 10.1 | ||||
Unrecognized tax benefits that if recognized would impact effective tax rate | 7.2 | ||||
Reserves for unrecognized tax benefits | 1.2 | ||||
Interest accrued on uncertain tax positions | $ 0.9 | $ 0.8 | $ 0.9 |
FAIR VALUE MEASUREMENTS Fair 43
FAIR VALUE MEASUREMENTS Fair Value measurements (Hierarchy) (Details) - USD ($) $ in Thousands | Oct. 01, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jan. 03, 2015 | Dec. 28, 2013 |
Fair Value, Inputs, Level 1 [Member] | |||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||||
Investments, Fair Value Disclosure | $ 11,400 | $ 8,600 | $ 7,500 | ||
Fair Value, Inputs, Level 2 [Member] | |||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||||
Foreign Currency Contract, Asset, Fair Value Disclosure | 0 | $ 2,100 | 1,500 | ||
Foreign Currency Contracts, Liability, Fair Value Disclosure | $ 400 | ||||
Fair Value, Inputs, Level 3 [Member] | |||||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | |||||
Business Combination, Contingent Consideration, Liability | $ 0 | $ 9,022 | $ 7,711 |
FAIR VALUE MEASUREMENTS FAIR 44
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Investments) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | |
Fair Value Disclosures [Abstract] | ||||
Gain (Loss) on Investments | $ 0.4 | $ (0.4) | $ 0.8 | $ (0.1) |
FAIR VALUE MEASUREMENTS FAIR 45
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Foreign exchange forward contracts) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | |
Fair Value Disclosures [Abstract] | ||||
Investment Foreign Currency, Contract, Amount Purchased | $ 6 | $ 6 | ||
Foreign currency transaction gain (loss) | $ (0.6) | $ 1.6 | (0.8) | $ 1.9 |
Unrealized Gain (Loss) on Investments | $ (0.4) |
FAIR VALUE MEASUREMENTS FAIR 46
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Contingent Consideration) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Oct. 03, 2015 | Oct. 03, 2015 | |
Business Acquisition, Contingent Consideration [Line Items] | ||
Accretion | $ 1,900 | |
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | $ 0 | 1,077 |
Fair Value, Inputs, Level 3 [Member] | ||
Business Acquisition, Contingent Consideration [Line Items] | ||
Business Combination, Contingent Consideration Arrangements, Change In Amount Of Contingent Consideration Liability, Payments | 8,568 | 8,568 |
Balance at beginning of period | 9,022 | |
Accretion | 0 | 809 |
Foreign currency translation adjustment | (454) | (1,029) |
Balance at end of period | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS FAIR 47
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Borrowings) (Details) - USD ($) | Oct. 01, 2016 | Jan. 02, 2016 | Oct. 03, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | $ 580,613,000 | $ 578,972,000 | $ 579,612,000 |
Secured revolving credit facility [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | 185,433,000 | 184,431,000 | 185,278,000 |
Senior Notes [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | 400,000,000 | $ 400,000,000 | $ 400,000,000 |
Debt Instrument, face amount | 400,000,000 | ||
Fair Value [Member] | Fair Value, Inputs, Level 2 [Member] | Senior Notes [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Long-term debt | $ 419,000,000 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | |
Weighted-average number of common and common equivalent shares outstanding: | ||||
Basic number of common shares outstanding | 49,526,480 | 51,740,523 | 50,282,345 | 51,960,041 |
Dilutive effect of equity awards | 460,271 | 507,815 | 470,050 | 512,861 |
Diluted number of common and common equivalent shares outstanding | 49,986,751 | 52,248,338 | 50,752,395 | 52,472,902 |
Basic net income per common share (in thousands, except per share data): | ||||
Net income | $ 80,811 | $ 79,326 | $ 170,989 | $ 165,223 |
Income allocated to participating securities | (632) | (675) | (1,359) | (1,557) |
Net income available to common shareholders | $ 80,179 | $ 78,651 | $ 169,630 | $ 163,666 |
Basic net income per common share | $ 1.62 | $ 1.52 | $ 3.37 | $ 3.15 |
Diluted net income per common share (in thousands, except per share data): | ||||
Net income | $ 80,811 | $ 79,326 | $ 170,989 | $ 165,223 |
Income allocated to participating securities | (627) | (669) | (1,350) | (1,545) |
Net income available to common shareholders | $ 80,184 | $ 78,657 | $ 169,639 | $ 163,678 |
Diluted net income per common share | $ 1.60 | $ 1.51 | $ 3.34 | $ 3.12 |
Anti-dilutive shares (in shares) | 246,980 | 177,300 | 244,430 | 180,000 |
OTHER CURRENT AND LONG-TERM L49
OTHER CURRENT AND LONG-TERM LIABILITIES (Other Current Liabilities) (Details) - USD ($) $ in Thousands | Oct. 01, 2016 | Jan. 02, 2016 | Oct. 03, 2015 |
Other Liabilities Disclosure [Abstract] | |||
Accrued Income Taxes, Current | $ 32,242 | $ 3,802 | $ 25,902 |
Accrued bonuses and incentive compensation | 10,638 | 17,934 | 12,574 |
Accrued employee benefits | 10,808 | 19,751 | 10,102 |
Accrued and deferred rent | $ 14,875 | $ 12,590 | $ 12,286 |
OTHER CURRENT AND LONG-TERM L50
OTHER CURRENT AND LONG-TERM LIABILITIES (Other Long-Term Liabilities) (Details) - USD ($) $ in Thousands | Oct. 01, 2016 | Jan. 02, 2016 | Oct. 03, 2015 |
Other Liabilities Disclosure [Abstract] | |||
Deferred lease incentives | $ 73,840 | $ 70,060 | $ 70,778 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Oct. 01, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | |||||
Segment Reporting Information [Line Items] | ||||||||
Accretion | $ 1,900 | |||||||
Net sales | $ 901,425 | $ 849,806 | $ 2,264,981 | 2,147,335 | ||||
Operating Income (Loss) | $ 130,894 | $ 130,221 | $ 287,145 | $ 276,678 | ||||
Operating income (loss) as percentage of segment net sales | 14.50% | 15.30% | 12.70% | 12.90% | ||||
Amortization of tradenames | $ 1,000 | $ 1,900 | $ 5,400 | |||||
Sourcing Relocation [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Corporate expenses | $ (500) | (500) | ||||||
H.W. Carter and Sons Tradename [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Amortization of tradenames | 1,000 | 1,700 | 5,300 | |||||
Operating Segments [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | $ 901,425 | $ 849,806 | $ 2,264,981 | $ 2,147,335 | ||||
Percentage of total net sales | 100.00% | 100.00% | 100.00% | 100.00% | ||||
Operating Segments [Member] | Carter's [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | $ 670,957 | $ 638,483 | $ 1,702,990 | $ 1,624,235 | ||||
Percentage of total net sales | 74.40% | 75.10% | 75.20% | 75.60% | ||||
Operating Income (Loss) | $ 129,602 | $ 126,080 | $ 315,393 | $ 307,042 | ||||
Operating income (loss) as percentage of segment net sales | 19.30% | 19.70% | 18.50% | 18.90% | ||||
Operating Segments [Member] | OshKosh [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | $ 124,473 | $ 117,086 | $ 306,487 | $ 293,938 | ||||
Percentage of total net sales | 13.80% | 13.80% | 13.50% | 13.70% | ||||
Operating Income (Loss) | $ 7,102 | $ 10,658 | $ 7,652 | $ 13,111 | ||||
Operating income (loss) as percentage of segment net sales | 5.70% | 9.10% | 2.50% | 4.50% | ||||
Operating Segments [Member] | Wholesale [Member] | Carter's [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | $ 356,258 | $ 343,555 | $ 842,136 | $ 824,600 | ||||
Percentage of total net sales | 39.50% | 40.40% | 37.20% | 38.40% | ||||
Operating Income (Loss) | $ 81,551 | $ 74,347 | $ 187,655 | $ 172,485 | ||||
Operating income (loss) as percentage of segment net sales | 22.90% | 21.60% | 22.30% | 20.90% | ||||
Operating Segments [Member] | Wholesale [Member] | OshKosh [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | $ 17,474 | $ 18,794 | $ 38,772 | $ 49,151 | ||||
Percentage of total net sales | 1.90% | 2.20% | 1.70% | 2.30% | ||||
Operating Income (Loss) | $ 4,450 | $ 4,487 | $ 8,266 | $ 9,715 | ||||
Operating income (loss) as percentage of segment net sales | 25.50% | 23.90% | 21.30% | 19.80% | ||||
Operating Segments [Member] | Retail [Member] | Carter's [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | [1] | $ 314,699 | $ 294,928 | $ 860,854 | $ 799,635 | |||
Percentage of total net sales | [1] | 34.90% | 34.70% | 38.00% | 37.20% | |||
Operating Income (Loss) | $ 48,051 | [1] | $ 51,733 | [1] | $ 127,738 | $ 134,557 | [1] | |
Operating income (loss) as percentage of segment net sales | 15.30% | [1] | 17.50% | [1] | 14.80% | 16.80% | [1] | |
Operating Segments [Member] | Retail [Member] | OshKosh [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | [1] | $ 106,999 | $ 98,292 | $ 267,715 | $ 244,787 | |||
Percentage of total net sales | [1] | 11.90% | 11.60% | 11.80% | 11.40% | |||
Operating Income (Loss) | $ 2,652 | [1] | $ 6,171 | [1] | $ (614) | $ 3,396 | [1] | |
Operating income (loss) as percentage of segment net sales | 2.50% | [1] | 6.30% | [1] | (0.20%) | 1.40% | [1] | |
Operating Segments [Member] | International [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net sales | [2] | $ 105,995 | $ 94,237 | $ 255,504 | $ 229,162 | |||
Percentage of total net sales | [2] | 11.80% | 11.10% | 11.30% | 10.70% | |||
Operating Income (Loss) | $ 19,645 | [2],[3] | $ 18,220 | [2],[3] | $ 37,191 | $ 30,967 | [2],[3] | |
Operating income (loss) as percentage of segment net sales | 18.50% | [2],[3] | 19.30% | [2],[3] | 14.60% | 13.50% | [2],[3] | |
Corporate [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Corporate expenses | $ (25,455) | $ (24,737) | $ 73,091 | $ 74,442 | [4],[5] | |||
[1] | Includes eCommerce results. | |||||||
[2] | Net sales include international retail, eCommerce, and wholesale sales. Operating income includes international licensing income. | |||||||
[3] | Includes charges associated with the revaluation of the Company's contingent consideration related to the Company's 2011 acquisition of Bonnie Togs of approximately $1.9 million for the first three fiscal quarters ended October 3, 2015. | |||||||
[4] | (e)Includes charges related to the amortization of the H.W. Carter and Sons tradenames of approximate $1.7 million for the first three fiscal quarters ended October 1, 2016, and approximately $1.0 million and $5.3 million for the fiscal quarter and the first three fiscal quarters ended October 3, 2015, respectively. | |||||||
[5] | Corporate expenses include expenses related to incentive compensation, stock-based compensation, executive management, severance and relocation, finance, building occupancy, information technology, certain legal fees, consulting, and audit fees. |
GUARANTOR UNAUDITED CONDENSED52
GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Balance Sheets) (Details) - USD ($) $ in Thousands | Oct. 01, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Jan. 03, 2015 |
Current assets: | ||||
Cash and cash equivalents | $ 140,626 | $ 381,209 | $ 288,260 | $ 340,638 |
Accounts receivable, net | 271,207 | 207,570 | 246,565 | |
Intercompany receivable | 0 | 0 | 0 | |
Intercompany Loan Receivables | 0 | |||
Finished goods inventories | 552,726 | 469,934 | 511,520 | |
Prepaid expenses and other current assets | 43,155 | 37,815 | 36,414 | |
Deferred income taxes | 37,600 | 34,080 | 34,895 | |
Total current assets | 1,045,314 | 1,130,608 | 1,117,654 | |
Property, plant, and equipment, net of accumulated depreciation of $333,660, $290,636, and $276,230, respectively | 388,440 | 371,704 | 361,305 | |
Goodwill | 176,956 | 174,874 | 176,633 | |
Tradenames, net | 308,973 | 310,848 | 311,842 | |
Other assets | 18,022 | 15,620 | 14,940 | |
Intercompany long term receivable | 0 | 0 | 0 | |
Intercompany long term note receivable | 0 | 0 | 0 | |
Investment in subsidiaries | 0 | 0 | 0 | |
Total assets | 1,937,705 | 2,003,654 | 1,982,374 | |
Current liabilities: | ||||
Accounts payable | 155,223 | 157,648 | 173,594 | |
Intercompany Loan Payables | 0 | |||
Intercompany payables | 0 | 0 | 0 | |
Other current liabilities | 126,922 | 105,070 | 105,199 | |
Total current liabilities | 282,145 | 262,718 | 278,793 | |
Long-term debt, net | 580,613 | 578,972 | 579,612 | |
Deferred income taxes | 129,278 | 128,838 | 119,499 | |
Intercompany long term liability | 0 | 0 | 0 | |
Intercompany long term note payable | 0 | 0 | 0 | |
Other long-term liabilities | 169,535 | 158,075 | 161,527 | |
Total stockholders' equity | 776,134 | 875,051 | 842,943 | |
Total liabilities and stockholders' equity | 1,937,705 | 2,003,654 | 1,982,374 | |
Consolidation, Eliminations [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | 0 | |
Intercompany receivable | (136,642) | (189,085) | (191,451) | |
Intercompany Loan Receivables | (15,000) | |||
Finished goods inventories | (44,561) | (34,792) | (34,096) | |
Prepaid expenses and other current assets | 0 | 0 | 0 | |
Deferred income taxes | 0 | 0 | 0 | |
Total current assets | (181,203) | (223,877) | (240,547) | |
Property, plant, and equipment, net of accumulated depreciation of $333,660, $290,636, and $276,230, respectively | 0 | 0 | 0 | |
Goodwill | 0 | 0 | 0 | |
Tradenames, net | 0 | 0 | 0 | |
Other assets | 0 | 0 | 0 | |
Intercompany long term receivable | (340,887) | (294,070) | (264,618) | |
Intercompany long term note receivable | (100,000) | (100,000) | (100,000) | |
Investment in subsidiaries | (1,610,962) | (1,627,795) | (1,476,685) | |
Total assets | (2,233,052) | (2,245,742) | (2,081,850) | |
Current liabilities: | ||||
Accounts payable | 0 | 0 | 0 | |
Intercompany Loan Payables | (15,000) | |||
Intercompany payables | (136,642) | (189,085) | (191,451) | |
Other current liabilities | 0 | 0 | 0 | |
Total current liabilities | (136,642) | (189,085) | (206,451) | |
Long-term debt, net | 0 | 0 | 0 | |
Deferred income taxes | 0 | 0 | 0 | |
Intercompany long term liability | (340,887) | (294,070) | (264,618) | |
Intercompany long term note payable | (100,000) | (100,000) | (100,000) | |
Other long-term liabilities | 0 | 0 | 0 | |
Total stockholders' equity | (1,655,523) | (1,662,587) | (1,510,781) | |
Total liabilities and stockholders' equity | (2,233,052) | (2,245,742) | (2,081,850) | |
Parent [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts receivable, net | 0 | 0 | 0 | |
Intercompany receivable | 0 | 0 | 0 | |
Intercompany Loan Receivables | 0 | |||
Finished goods inventories | 0 | 0 | 0 | |
Prepaid expenses and other current assets | 0 | 0 | 0 | |
Deferred income taxes | 0 | 0 | 0 | |
Total current assets | 0 | 0 | 0 | |
Property, plant, and equipment, net of accumulated depreciation of $333,660, $290,636, and $276,230, respectively | 0 | 0 | 0 | |
Goodwill | 0 | 0 | 0 | |
Tradenames, net | 0 | 0 | 0 | |
Other assets | 0 | 0 | 0 | |
Intercompany long term receivable | 0 | 0 | 0 | |
Intercompany long term note receivable | 0 | 0 | 0 | |
Investment in subsidiaries | 776,134 | 875,051 | 842,943 | |
Total assets | 776,134 | 875,051 | 842,943 | |
Current liabilities: | ||||
Accounts payable | 0 | 0 | 0 | |
Intercompany Loan Payables | 0 | |||
Intercompany payables | 0 | 0 | 0 | |
Other current liabilities | 0 | 0 | 0 | |
Total current liabilities | 0 | 0 | 0 | |
Long-term debt, net | 0 | 0 | 0 | |
Deferred income taxes | 0 | 0 | 0 | |
Intercompany long term liability | 0 | 0 | 0 | |
Intercompany long term note payable | 0 | 0 | 0 | |
Other long-term liabilities | 0 | 0 | 0 | |
Total stockholders' equity | 776,134 | 875,051 | 842,943 | |
Total liabilities and stockholders' equity | 776,134 | 875,051 | 842,943 | |
Subsidiary Issuer [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 91,299 | 325,771 | 232,568 | 311,078 |
Accounts receivable, net | 234,979 | 178,842 | 208,369 | |
Intercompany receivable | 60,570 | 52,676 | 87,419 | |
Intercompany Loan Receivables | 15,000 | |||
Finished goods inventories | 300,044 | 271,148 | 278,793 | |
Prepaid expenses and other current assets | 22,446 | 17,460 | 17,267 | |
Deferred income taxes | 20,346 | 19,502 | 22,739 | |
Total current assets | 729,684 | 865,399 | 862,155 | |
Property, plant, and equipment, net of accumulated depreciation of $333,660, $290,636, and $276,230, respectively | 159,149 | 162,031 | 160,579 | |
Goodwill | 136,570 | 136,570 | 136,570 | |
Tradenames, net | 223,473 | 225,348 | 226,342 | |
Other assets | 17,130 | 14,634 | 13,773 | |
Intercompany long term receivable | 0 | 0 | 0 | |
Intercompany long term note receivable | 100,000 | 100,000 | 100,000 | |
Investment in subsidiaries | 707,381 | 652,598 | 614,624 | |
Total assets | 2,073,387 | 2,156,580 | 2,114,043 | |
Current liabilities: | ||||
Accounts payable | 99,175 | 93,585 | 100,487 | |
Intercompany Loan Payables | 0 | |||
Intercompany payables | 74,414 | 134,694 | 102,208 | |
Other current liabilities | 24,842 | 12,996 | 57,316 | |
Total current liabilities | 198,431 | 241,275 | 260,011 | |
Long-term debt, net | 561,180 | 560,541 | 560,334 | |
Deferred income taxes | 83,998 | 84,038 | 80,871 | |
Intercompany long term liability | 340,887 | 294,070 | 264,618 | |
Intercompany long term note payable | 0 | 0 | 0 | |
Other long-term liabilities | 68,196 | 66,813 | 71,170 | |
Total stockholders' equity | 820,695 | 909,843 | 877,039 | |
Total liabilities and stockholders' equity | 2,073,387 | 2,156,580 | 2,114,043 | |
Guarantor Subsidiaries [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 8,477 | 14,652 | 17,434 | 10,442 |
Accounts receivable, net | 27,047 | 23,980 | 29,210 | |
Intercompany receivable | 72,037 | 133,092 | 100,357 | |
Intercompany Loan Receivables | 0 | |||
Finished goods inventories | 231,511 | 184,618 | 216,270 | |
Prepaid expenses and other current assets | 15,988 | 14,261 | 14,963 | |
Deferred income taxes | 15,579 | 13,544 | 11,192 | |
Total current assets | 370,639 | 384,147 | 389,426 | |
Property, plant, and equipment, net of accumulated depreciation of $333,660, $290,636, and $276,230, respectively | 194,078 | 180,322 | 171,615 | |
Goodwill | 0 | 0 | 0 | |
Tradenames, net | 85,500 | 85,500 | 85,500 | |
Other assets | 641 | 665 | 784 | |
Intercompany long term receivable | 340,887 | 294,070 | 264,618 | |
Intercompany long term note receivable | 0 | 0 | 0 | |
Investment in subsidiaries | 127,447 | 100,146 | 19,118 | |
Total assets | 1,119,192 | 1,044,850 | 931,061 | |
Current liabilities: | ||||
Accounts payable | 36,003 | 44,951 | 59,060 | |
Intercompany Loan Payables | 0 | |||
Intercompany payables | 58,787 | 51,362 | 85,814 | |
Other current liabilities | 92,168 | 80,908 | 37,905 | |
Total current liabilities | 186,958 | 177,221 | 182,779 | |
Long-term debt, net | 0 | 0 | 0 | |
Deferred income taxes | 45,280 | 44,800 | 38,628 | |
Intercompany long term liability | 0 | 0 | 0 | |
Intercompany long term note payable | 100,000 | 100,000 | 100,000 | |
Other long-term liabilities | 88,906 | 79,568 | 78,658 | |
Total stockholders' equity | 698,048 | 643,261 | 530,996 | |
Total liabilities and stockholders' equity | 1,119,192 | 1,044,850 | 931,061 | |
Non-Guarantors Subsidiaries [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 40,850 | 40,786 | 38,258 | $ 19,118 |
Accounts receivable, net | 9,181 | 4,748 | 8,986 | |
Intercompany receivable | 4,035 | 3,317 | 3,675 | |
Intercompany Loan Receivables | 0 | |||
Finished goods inventories | 65,732 | 48,960 | 50,553 | |
Prepaid expenses and other current assets | 4,721 | 6,094 | 4,184 | |
Deferred income taxes | 1,675 | 1,034 | 964 | |
Total current assets | 126,194 | 104,939 | 106,620 | |
Property, plant, and equipment, net of accumulated depreciation of $333,660, $290,636, and $276,230, respectively | 35,213 | 29,351 | 29,111 | |
Goodwill | 40,386 | 38,304 | 40,063 | |
Tradenames, net | 0 | 0 | 0 | |
Other assets | 251 | 321 | 383 | |
Intercompany long term receivable | 0 | 0 | 0 | |
Intercompany long term note receivable | 0 | 0 | 0 | |
Investment in subsidiaries | 0 | 0 | 0 | |
Total assets | 202,044 | 172,915 | 176,177 | |
Current liabilities: | ||||
Accounts payable | 20,045 | 19,112 | 14,047 | |
Intercompany Loan Payables | 15,000 | |||
Intercompany payables | 3,441 | 3,029 | 3,429 | |
Other current liabilities | 9,912 | 11,166 | 9,978 | |
Total current liabilities | 33,398 | 33,307 | 42,454 | |
Long-term debt, net | 19,433 | 18,431 | 19,278 | |
Deferred income taxes | 0 | 0 | 0 | |
Intercompany long term liability | 0 | 0 | 0 | |
Intercompany long term note payable | 0 | 0 | 0 | |
Other long-term liabilities | 12,433 | 11,694 | 11,699 | |
Total stockholders' equity | 136,780 | 109,483 | 102,746 | |
Total liabilities and stockholders' equity | $ 202,044 | $ 172,915 | $ 176,177 |
GUARANTOR UNAUDITED CONDENSED53
GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Income Statement) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | |
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | $ 901,425 | $ 849,806 | $ 2,264,981 | $ 2,147,335 |
Cost of goods sold | 525,879 | 502,267 | 1,296,324 | 1,252,849 |
Gross profit | 375,546 | 347,539 | 968,657 | 894,486 |
Selling, general, and administrative expenses | 255,322 | 230,017 | 712,782 | 650,496 |
Royalty income | (10,670) | (12,699) | (31,270) | (32,688) |
Operating income | 130,894 | 130,221 | 287,145 | 276,678 |
Interest expense | 6,779 | 6,907 | 20,321 | 20,534 |
Interest income | (68) | (91) | (453) | (385) |
(Income) loss in subsidiaries | 0 | 0 | 0 | 0 |
Other (income) expense, net | (36) | (622) | 3,673 | (560) |
Income before income taxes | 124,219 | 124,027 | 263,604 | 257,089 |
Provision for income taxes | 43,408 | 44,701 | 92,615 | 91,866 |
Net income | 80,811 | 79,326 | 170,989 | 165,223 |
Consolidation, Eliminations [Member] | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | (215,167) | (187,471) | (542,307) | (497,861) |
Cost of goods sold | (201,639) | (180,349) | (513,156) | (476,645) |
Gross profit | (13,528) | (7,122) | (29,151) | (21,216) |
Selling, general, and administrative expenses | (8,737) | (9,387) | (26,255) | (29,723) |
Royalty income | 2,619 | 2,459 | 6,873 | 6,329 |
Operating income | (7,410) | (194) | (9,769) | 2,178 |
Interest expense | (1,327) | (1,334) | (3,981) | (4,074) |
Interest income | 1,327 | 1,334 | 3,981 | 4,074 |
(Income) loss in subsidiaries | 78,244 | 84,875 | 157,649 | 141,634 |
Other (income) expense, net | 0 | 0 | 0 | 0 |
Income before income taxes | (85,654) | (85,069) | (167,418) | (139,456) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net income | (85,654) | (85,069) | (167,418) | (139,456) |
Parent [Member] | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | 0 | 0 | 0 | 0 |
Cost of goods sold | 0 | 0 | 0 | 0 |
Gross profit | 0 | 0 | 0 | 0 |
Selling, general, and administrative expenses | 0 | 0 | 0 | 0 |
Royalty income | 0 | 0 | 0 | 0 |
Operating income | 0 | 0 | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Interest income | 0 | 0 | 0 | 0 |
(Income) loss in subsidiaries | (80,811) | (79,326) | (170,989) | (165,223) |
Other (income) expense, net | 0 | 0 | 0 | 0 |
Income before income taxes | 80,811 | 79,326 | 170,989 | 165,223 |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net income | 80,811 | 79,326 | 170,989 | 165,223 |
Subsidiary Issuer [Member] | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | 584,206 | 539,181 | 1,396,768 | 1,336,785 |
Cost of goods sold | 409,937 | 380,427 | 995,828 | 932,937 |
Gross profit | 174,269 | 158,754 | 400,940 | 403,848 |
Selling, general, and administrative expenses | 49,965 | 49,317 | 132,986 | 133,733 |
Royalty income | (7,624) | (9,175) | (23,753) | (24,555) |
Operating income | 131,928 | 118,612 | 291,707 | 294,670 |
Interest expense | 6,634 | 6,754 | 19,909 | 20,189 |
Interest income | (1,379) | (1,400) | (4,353) | (4,402) |
(Income) loss in subsidiaries | 9,249 | (1,645) | 26,079 | 31,055 |
Other (income) expense, net | (204) | 251 | (377) | 56 |
Income before income taxes | 117,628 | 114,652 | 250,449 | 247,772 |
Provision for income taxes | 29,407 | 35,132 | 69,691 | 84,727 |
Net income | 88,221 | 79,520 | 180,758 | 163,045 |
Guarantor Subsidiaries [Member] | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | 452,755 | 427,028 | 1,208,841 | 1,137,585 |
Cost of goods sold | 274,521 | 263,009 | 706,525 | 699,769 |
Gross profit | 178,234 | 164,019 | 502,316 | 437,816 |
Selling, general, and administrative expenses | 187,298 | 169,379 | 533,364 | 484,278 |
Royalty income | (5,665) | (5,983) | (14,390) | (14,462) |
Operating income | (3,399) | 623 | (16,658) | (32,000) |
Interest expense | 1,364 | 1,318 | 4,070 | 3,994 |
Interest income | 0 | 0 | 0 | 0 |
(Income) loss in subsidiaries | (6,682) | (3,904) | (12,739) | (7,466) |
Other (income) expense, net | 259 | (269) | 432 | (106) |
Income before income taxes | 1,660 | 3,478 | (8,421) | (28,422) |
Provision for income taxes | 10,909 | 6,098 | 17,658 | 3,211 |
Net income | (9,249) | (2,620) | (26,079) | (31,633) |
Non-Guarantors Subsidiaries [Member] | ||||
Condensed Income Statements, Captions [Line Items] | ||||
Net sales | 79,631 | 71,068 | 201,679 | 170,826 |
Cost of goods sold | 43,060 | 39,180 | 107,127 | 96,788 |
Gross profit | 36,571 | 31,888 | 94,552 | 74,038 |
Selling, general, and administrative expenses | 26,796 | 20,708 | 72,687 | 62,208 |
Royalty income | 0 | 0 | 0 | 0 |
Operating income | 9,775 | 11,180 | 21,865 | 11,830 |
Interest expense | 108 | 169 | 323 | 425 |
Interest income | (16) | (25) | (81) | (57) |
(Income) loss in subsidiaries | 0 | 0 | 0 | 0 |
Other (income) expense, net | (91) | (604) | 3,618 | (510) |
Income before income taxes | 9,774 | 11,640 | 18,005 | 11,972 |
Provision for income taxes | 3,092 | 3,471 | 5,266 | 3,928 |
Net income | $ 6,682 | $ 8,169 | $ 12,739 | $ 8,044 |
GUARANTOR UNAUDITED CONDENSED54
GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Comprehensive Income) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | $ 80,811 | $ 79,326 | $ 170,989 | $ 165,223 |
Foreign currency translation adjustments | (1,356) | (4,205) | 4,478 | (10,443) |
Comprehensive income | 79,455 | 75,121 | 175,467 | 154,780 |
Parent [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 80,811 | 79,326 | 170,989 | 165,223 |
Foreign currency translation adjustments | (1,356) | (4,205) | 4,478 | (10,443) |
Comprehensive income | 79,455 | 75,121 | 175,467 | 154,780 |
Subsidiary Issuer [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 88,221 | 79,520 | 180,758 | 163,045 |
Foreign currency translation adjustments | (1,356) | (4,205) | 4,478 | (10,443) |
Comprehensive income | 86,865 | 75,315 | 185,236 | 152,602 |
Guarantor Subsidiaries [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | (9,249) | (2,620) | (26,079) | (31,633) |
Foreign currency translation adjustments | (1,356) | (69) | 4,478 | (38) |
Comprehensive income | (10,605) | (2,689) | (21,601) | (31,671) |
Non-Guarantors Subsidiaries [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | 6,682 | 8,169 | 12,739 | 8,044 |
Foreign currency translation adjustments | (1,356) | (4,205) | 4,478 | (10,443) |
Comprehensive income | 5,326 | 3,964 | 17,217 | (2,399) |
Consolidation, Eliminations [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Net income | (85,654) | (85,069) | (167,418) | (139,456) |
Foreign currency translation adjustments | 4,068 | 8,479 | (13,434) | 20,924 |
Comprehensive income | $ (81,586) | $ (76,590) | $ (180,852) | $ (118,532) |
GUARANTOR UNAUDITED CONDENSED55
GUARANTOR UNAUDITED CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Cash Flows) (Details) $ in Thousands, CAD in Millions | 3 Months Ended | 9 Months Ended | ||||
Oct. 01, 2016USD ($) | Oct. 03, 2015USD ($) | Apr. 04, 2015USD ($) | Apr. 04, 2015CAD | Oct. 01, 2016USD ($) | Oct. 03, 2015USD ($) | |
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net Cash Provided by (Used in) Operating Activities | $ 116,574 | $ 146,034 | ||||
Cash flows from investing activities: | ||||||
Capital expenditures | (71,190) | (76,987) | ||||
Intercompany investing activity | 0 | 0 | ||||
Payment of Intercompany Borrowings | 0 | |||||
Proceeds From Repayment of Intercompany Loan | 0 | |||||
Proceeds from sale of property, plant and equipment | 216 | 66 | ||||
Net cash used in investing activities | (70,974) | (76,921) | ||||
Cash flows from financing activities: | ||||||
Intercompany financing activity | 0 | 0 | ||||
Proceeds from intercompany loan | 0 | |||||
Payment, Issuance of Intercompany Loan | 0 | |||||
Borrowings under secured revolving credit facility | $ 20,300 | CAD 25.5 | 0 | 205,586 | ||
Payments on secured revolving credit facility | (20,000) | 0 | (205,237) | |||
Dividends paid | (50,131) | (34,617) | ||||
Payments of debt issuance costs | 0 | (1,495) | ||||
Payment of contingent consideration | 0 | (7,572) | ||||
Repurchase of common stock | (239,138) | (78,339) | ||||
Income tax benefit from stock-based compensation | 4,067 | 7,963 | ||||
Withholdings from vesting of restricted stock | (8,594) | (12,575) | ||||
Proceeds from exercise of stock options | 6,386 | 5,743 | ||||
Net cash (used in) provided by financing activities | (287,410) | (120,543) | ||||
Effect of exchange rate changes on cash and cash equivalents | 1,227 | (948) | ||||
Net increase (decrease) in cash and cash equivalents | (240,583) | (52,378) | ||||
Cash and cash equivalents, beginning of period | 340,638 | 381,209 | 340,638 | |||
Cash and cash equivalents, end of period | $ 140,626 | $ 288,260 | 140,626 | 288,260 | ||
Excess Tax Benefit from Share-based Compensation, Operating Activities | 4,067 | 7,963 | ||||
Gain (Loss) on Disposition of Property Plant Equipment | (821) | (80) | ||||
Amortization of debt issuance costs | 1,092 | 1,246 | ||||
Non-cash stock-based compensation expense | 3,776 | 3,744 | 13,026 | 13,304 | ||
Parent [Member] | ||||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net Cash Provided by (Used in) Operating Activities | 0 | 0 | ||||
Cash flows from investing activities: | ||||||
Capital expenditures | 0 | 0 | ||||
Intercompany investing activity | 291,477 | 119,788 | ||||
Payment of Intercompany Borrowings | 0 | |||||
Proceeds From Repayment of Intercompany Loan | 0 | |||||
Proceeds from sale of property, plant and equipment | 0 | 0 | ||||
Net cash used in investing activities | 291,477 | 119,788 | ||||
Cash flows from financing activities: | ||||||
Intercompany financing activity | 0 | 0 | ||||
Proceeds from intercompany loan | 0 | |||||
Payment, Issuance of Intercompany Loan | 0 | |||||
Borrowings under secured revolving credit facility | 0 | |||||
Payments on secured revolving credit facility | 0 | |||||
Dividends paid | (50,131) | (34,617) | ||||
Payments of debt issuance costs | 0 | |||||
Payment of contingent consideration | 0 | |||||
Repurchase of common stock | (239,138) | (78,339) | ||||
Income tax benefit from stock-based compensation | 0 | 0 | ||||
Withholdings from vesting of restricted stock | (8,594) | (12,575) | ||||
Proceeds from exercise of stock options | 6,386 | 5,743 | ||||
Net cash (used in) provided by financing activities | (291,477) | (119,788) | ||||
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | ||||
Net increase (decrease) in cash and cash equivalents | 0 | 0 | ||||
Cash and cash equivalents, beginning of period | 0 | 0 | 0 | |||
Cash and cash equivalents, end of period | 0 | 0 | 0 | 0 | ||
Subsidiary Issuer [Member] | ||||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net Cash Provided by (Used in) Operating Activities | 88,493 | 85,213 | ||||
Cash flows from investing activities: | ||||||
Capital expenditures | (19,782) | (21,953) | ||||
Intercompany investing activity | (353) | 4,357 | ||||
Payment of Intercompany Borrowings | (15,000) | |||||
Proceeds From Repayment of Intercompany Loan | 20,000 | |||||
Proceeds from sale of property, plant and equipment | 23 | 59 | ||||
Net cash used in investing activities | (20,112) | (12,537) | ||||
Cash flows from financing activities: | ||||||
Intercompany financing activity | (305,065) | (127,475) | ||||
Proceeds from intercompany loan | 0 | |||||
Payment, Issuance of Intercompany Loan | 0 | |||||
Borrowings under secured revolving credit facility | 166,000 | |||||
Payments on secured revolving credit facility | (186,000) | |||||
Dividends paid | 0 | 0 | ||||
Payments of debt issuance costs | (1,495) | |||||
Payment of contingent consideration | (7,572) | |||||
Repurchase of common stock | 0 | 0 | ||||
Income tax benefit from stock-based compensation | 2,212 | 5,356 | ||||
Withholdings from vesting of restricted stock | 0 | 0 | ||||
Proceeds from exercise of stock options | 0 | 0 | ||||
Net cash (used in) provided by financing activities | (302,853) | (151,186) | ||||
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | ||||
Net increase (decrease) in cash and cash equivalents | (234,472) | (78,510) | ||||
Cash and cash equivalents, beginning of period | 311,078 | 325,771 | 311,078 | |||
Cash and cash equivalents, end of period | 91,299 | 232,568 | 91,299 | 232,568 | ||
Guarantor Subsidiaries [Member] | ||||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net Cash Provided by (Used in) Operating Activities | 24,058 | 38,022 | ||||
Cash flows from investing activities: | ||||||
Capital expenditures | (44,304) | (46,876) | ||||
Intercompany investing activity | (1,855) | (2,607) | ||||
Payment of Intercompany Borrowings | 0 | |||||
Proceeds From Repayment of Intercompany Loan | 0 | |||||
Proceeds from sale of property, plant and equipment | 0 | 0 | ||||
Net cash used in investing activities | (46,159) | (49,483) | ||||
Cash flows from financing activities: | ||||||
Intercompany financing activity | 14,071 | 15,846 | ||||
Proceeds from intercompany loan | 0 | |||||
Payment, Issuance of Intercompany Loan | 0 | |||||
Borrowings under secured revolving credit facility | 0 | |||||
Payments on secured revolving credit facility | 0 | |||||
Dividends paid | 0 | 0 | ||||
Payments of debt issuance costs | 0 | |||||
Payment of contingent consideration | 0 | |||||
Repurchase of common stock | 0 | 0 | ||||
Income tax benefit from stock-based compensation | 1,855 | 2,607 | ||||
Withholdings from vesting of restricted stock | 0 | 0 | ||||
Proceeds from exercise of stock options | 0 | 0 | ||||
Net cash (used in) provided by financing activities | 15,926 | 18,453 | ||||
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | ||||
Net increase (decrease) in cash and cash equivalents | (6,175) | 6,992 | ||||
Cash and cash equivalents, beginning of period | 10,442 | 14,652 | 10,442 | |||
Cash and cash equivalents, end of period | 8,477 | 17,434 | 8,477 | 17,434 | ||
Non-Guarantors Subsidiaries [Member] | ||||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net Cash Provided by (Used in) Operating Activities | 4,023 | 22,799 | ||||
Cash flows from investing activities: | ||||||
Capital expenditures | (7,104) | (8,158) | ||||
Intercompany investing activity | 0 | (8,582) | ||||
Payment of Intercompany Borrowings | 0 | |||||
Proceeds From Repayment of Intercompany Loan | 0 | |||||
Proceeds from sale of property, plant and equipment | 193 | 7 | ||||
Net cash used in investing activities | (6,911) | (16,733) | ||||
Cash flows from financing activities: | ||||||
Intercompany financing activity | 1,725 | (1,327) | ||||
Proceeds from intercompany loan | (20,000) | |||||
Payment, Issuance of Intercompany Loan | 15,000 | |||||
Borrowings under secured revolving credit facility | 39,586 | |||||
Payments on secured revolving credit facility | (19,237) | |||||
Dividends paid | 0 | 0 | ||||
Payments of debt issuance costs | 0 | |||||
Payment of contingent consideration | 0 | |||||
Repurchase of common stock | 0 | 0 | ||||
Income tax benefit from stock-based compensation | 0 | 0 | ||||
Withholdings from vesting of restricted stock | 0 | 0 | ||||
Proceeds from exercise of stock options | 0 | 0 | ||||
Net cash (used in) provided by financing activities | 1,725 | 14,022 | ||||
Effect of exchange rate changes on cash and cash equivalents | 1,227 | (948) | ||||
Net increase (decrease) in cash and cash equivalents | 64 | 19,140 | ||||
Cash and cash equivalents, beginning of period | 19,118 | 40,786 | 19,118 | |||
Cash and cash equivalents, end of period | 40,850 | 38,258 | 40,850 | 38,258 | ||
Consolidation, Eliminations [Member] | ||||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||||
Net Cash Provided by (Used in) Operating Activities | 0 | 0 | ||||
Cash flows from investing activities: | ||||||
Capital expenditures | 0 | 0 | ||||
Intercompany investing activity | (289,269) | (112,956) | ||||
Payment of Intercompany Borrowings | 15,000 | |||||
Proceeds From Repayment of Intercompany Loan | (20,000) | |||||
Proceeds from sale of property, plant and equipment | 0 | 0 | ||||
Net cash used in investing activities | (289,269) | (117,956) | ||||
Cash flows from financing activities: | ||||||
Intercompany financing activity | 289,269 | 112,956 | ||||
Proceeds from intercompany loan | 20,000 | |||||
Payment, Issuance of Intercompany Loan | (15,000) | |||||
Borrowings under secured revolving credit facility | 0 | |||||
Payments on secured revolving credit facility | 0 | |||||
Dividends paid | 0 | 0 | ||||
Payments of debt issuance costs | 0 | |||||
Payment of contingent consideration | 0 | |||||
Repurchase of common stock | 0 | 0 | ||||
Income tax benefit from stock-based compensation | 0 | 0 | ||||
Withholdings from vesting of restricted stock | 0 | 0 | ||||
Proceeds from exercise of stock options | 0 | 0 | ||||
Net cash (used in) provided by financing activities | 289,269 | 117,956 | ||||
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | ||||
Net increase (decrease) in cash and cash equivalents | 0 | 0 | ||||
Cash and cash equivalents, beginning of period | $ 0 | 0 | 0 | |||
Cash and cash equivalents, end of period | $ 0 | $ 0 | $ 0 | $ 0 |