SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 26, 1999
PHILLIPS-VAN HEUSEN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-724 13-1166910
(Commission file number) (IRS Employer Identification Number)
200 Madison Avenue, New York, New York 10016
(Address of principal executive offices)
Registrant's telephone number: (212) 381-3500
1290 Avenue of the Americas, New York, New York 10104
(Former name or former address, if changed since last Report)
Page 1 of 7 pages
Exhibit Index located on page 4
ITEM 2. DISPOSITION OF ASSETS
On February 26, 1999, Phillips-Van Heusen Corporation (the "Company") sold
the Gant, Hugger and Rugger trademarks and certain related assets associated
with the Company's Gant operations for $71.0 million cash to Pyramid
Sportswear AB ("Pyramid"), which is the brand's international licensee.
Pyramid is a wholly-owned subsidiary of Pyramid Partners AB, in which the
Company has a minority interest. The purchase price was negotiated between
the parties. As part of the transaction, Pyramid and an affiliated company
assumed certain obligations and liabilities associated with the Company's Gant
operations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro forma financial information.
See page 4 for a listing of the pro forma financial information submitted
as part of this Report.
(c) Exhibits
See page 4 for a listing of the exhibits submitted as part of this Report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
PHILLIPS-VAN HEUSEN CORPORATION
By
Name: Vincent A. Russo
Title: Vice President
and Controller
Date: March 10, 1999
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INDEX TO FINANCIAL STATEMENTS AND EXHIBITS INCLUDED
AS PART OF ITEM 7
Page
(b) Pro forma Financial Statements
(i) Explanatory Note 5
(ii) Phillips-Van Heusen Corporation Pro Forma Consolidated
Condensed Balance Sheet as of January 31, 1999 6
(iii) Phillips-Van Heusen Corporation Pro Forma Consolidated
Condensed Statement of Income for the Year Ended
January 31, 1999 7
(c) Exhibits
99.1 Asset Purchase Agreement, dated February 23, 1999, between
Phillips-Van Heusen Corporation and Pyramid Sportswear AB
99.2 Assignment and Assumption Agreement, dated
February 23, 1999, between Phillips-Van Heusen
Corporation and Pyramid Sportswear Acquisition Corporation
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PRO FORMA FINANCIAL STATEMENTS - EXPLANATORY NOTE
On February 26, 1999, Phillips-Van Heusen Corporation (the "Company")
sold the Gant, Hugger and Rugger trademarks and certain related assets
associated with the Company's Gant operations for $71.0 million cash to
Pyramid Sportswear AB ("Pyramid"), which is the brand's international
licensee. Pyramid is a wholly-owned subsidiary of Pyramid Partners AB, in
which the Company has a minority interest. The purchase price was negotiated
between the parties. As part of the transaction, Pyramid and an affiliated
company assumed certain obligations and liabilities associated with the
Company's Gant operations. The accompanying pro forma financial statements
reflect the Company's estimate of how the Company's consolidated balance sheet
as of January 31, 1999 (the date of the Company's most recently completed
fiscal year ("fiscal 1998")) and its consolidated statement of income for
fiscal 1998, would have been affected if the acquisition had occurred on
February 2, 1998, the first day of fiscal 1998.
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PHILLIPS-VAN HEUSEN CORPORATION
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
Actual Pro forma
January 31, Pro forma January 31,
1999 Adjustments 1999
ASSETS
Current Assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . $ 10,957 $ 62,612 $ 73,569
Trade receivables. . . . . . . . . . . . . . . . . . . . . . . . 88,038 (14,347) 73,691
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . 232,695 (15,471) 217,224
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,327 36,327
Total Current Assets . . . . . . . . . . . . . . . . . . . . . 368,017 32,794 400,811
Property, Plant and Equipment. . . . . . . . . . . . . . . . . . . 108,846 (16,366) 92,480
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113,344 (27,648) 85,696
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,106 (9,539) 74,567
Total Assets $674,313 $(20,759) $653,554
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable. . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,000 $(20,000)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . 44,851 (5,676) $ 39,175
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . 67,835 2,965 70,800
Total Current Liabilities. . . . . . . . . . . . . . . . . . . 132,686 (22,711) 109,975
Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . 248,723 248,723
Other Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . 64,016 64,016
Stockholders' Equity:
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . 27,288 27,288
Additional capital . . . . . . . . . . . . . . . . . . . . . . . 117,683 117,683
Retained earnings. . . . . . . . . . . . . . . . . . . . . . . . 83,917 1,952 85,869
Total Stockholders' Equity . . . . . . . . . . . . . . . . . . 228,888 1,952 230,840
Total Liabilities & Stockholders' Equity . . . . . . . . . . . $674,313 $(20,759) $653,554
The pro forma adjustments were developed based on the cash proceeds from
Pyramid Sportswear AB, the write-off of goodwill and other assets related
either to the Gant trademark or Gant's operations, and the liquidation of
Gant's working capital in connection with the sale. The pro forma
adjustments to cash also include the effect of pro forma adjustments to
the Company's fiscal 1998 consolidated condensed statement of income for
those items with a cash impact. The tax effect of the pro forma adjustments
to the Company's fiscal 1998 consolidated condensed statement of income is
recorded to other non-current assets as an adjustment to the Company's
deferred tax carryforward asset.
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PHILLIPS-VAN HEUSEN CORPORATION
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF INCOME
(In thousands, except per share data)
Actual Pro forma
Year Ended Year Ended
January 31, Pro forma January 31,
1999 Adjustments 1999
Net sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$1,303,085 $(81,865) $1,221,220
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . 856,160 (57,423) 798,737
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 446,925 (24,442) 422,483
Selling, general and administrative expenses . . . . . . . . . . . . . 394,940 (23,539) 371,401
Year 2000 computer conversion expenses . . . . . . . . . . . . . . . . 8,500 8,500
Income before interest, taxes and extraordinary item . . . . . . . . . 43,485 (903) 42,582
Interest expense, net. . . . . . . . . . . . . . . . . . . . . . . . . 26,112 (3,750) 22,362
Income before taxes and extraordinary item . . . . . . . . . . . . . . 17,373 2,847 20,220
Income tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . 4,486 895 5,381
Income before extraordinary item . . . . . . . . . . . . . . . . . . .$ 12,887 $ 1,952 $ 14,839
Basic and diluted income per share before
extraordinary item . . . . . . . . . . . . . . . . . . . . . . . . .$ 0.47 $ 0.54
The pro forma adjustments were developed based on the elimination of the
Company's Gant operations in fiscal 1998, reduced depreciation and
amortization from the write-off of goodwill and other assets related to
Gant's operations, and reduced interest expense resulting from the sale
proceeds and liquidation of Gant's working capital, net of associated
costs. Income tax was estimated at 39% on all items, excluding adjustments
to certain non-tax deductible goodwill amortization.
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