June 9, 1995
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
Pursuant to the requirements of the Securities Exchange Act of 1934, we are
transmitting herewith the attached Form 10-Q for the quarter ended April 28,
1995
Sincerely,
KATHY GIES
Lands' End, Inc.
One Lands' End Lane
Dodgeville, WI 53595
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-Q
(Mark one)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the Quarter Ended April 28, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from ...... to ......
Commission file number 1-9769
LANDS' END, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-2512786
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Lands' End Lane, Dodgeville, WI 53595
(Address of principal executive (Zip code)
offices)
Registrant's telephone number, 608-935-9341
including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of June 9, 1995:
Common stock, $.01 par value 34,674,113 shares outstanding
LANDS' END, INC. & SUBSIDIARIES
INDEX TO FORM 10-Q
Page
PART I. FINANCIAL INFORMATION Number
Item 1. Financial Statements
Consolidated Statements of Operations for the
Three Months Ended April 28, 1995, and
April 29, 1994.................................... 3
Consolidated Balance Sheets at April 28, 1995,
and January 27, 1995.............................. 4
Consolidated Statements of Cash Flows for the
Three Months Ended April 28, 1995, and
April 29, 1994.................................... 5
Notes to Consolidated Financial Statements........... 6-12
Item 2. Managements' Discussion and Analysis of
Financial Condition and Results of
Operations........................................ 13-14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................... 15
Item 4. Submission of Matters to a Vote of
Security Holders.................................. 15
Item 6. Exhibits and Reports on Form 8-K..................... 15
Signature..................................................... 16
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LANDS' END, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three months ended
April 28, April 29,
1995 1994
(Unaudited)
Net sales $207,122 $187,012
Cost of sales 115,913 107,294
Gross profit 91,209 79,718
Selling, general and
administrative expenses 89,237 71,911
Income from operations 1,972 7,807
Other income (expense):
Interest expense (401) (41)
Interest income 17 60
Other 604 232
Total other income 220 251
Income before income taxes 2,192 8,058
Income tax provision 885 3,180
Net income $ 1,307 $ 4,878
Net income per share $ 0.04 $ 0.14
The accompanying notes to consolidated financial statements are an integral
part of these consolidated statements.
3
LANDS' END, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
April 28, January 27,
1995 1995
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 4,282 $ 5,426
Receivables 6,856 4,459
Inventory 191,077 168,652
Prepaid expenses 13,273 11,219
Deferred income tax benefit 9,568 8,412
Total current assets 225,056 198,168
Property, plant and equipment, at cost:
Land and buildings 69,763 69,798
Fixtures and equipment 78,103 74,745
Leasehold improvements 1,866 1,862
Total property, plant and equipment 149,732 146,405
Less-accumulated depreciation and amortization 52,492 49,414
Property, plant and equipment, net 97,240 96,991
Intangibles, net 2,436 2,453
Total assets $324,732 $297,612
Liabilities and shareholders' investment
Current liabilities:
Lines of credit $ 45,628 $ 7,539
Current maturities of long-term debt 40 40
Accounts payable 58,659 52,762
Reserve for returns 3,653 5,011
Accrued liabilities 21,418 25,952
Accrued profit sharing 98 1,679
Income taxes payable 1,532 9,727
Total current liabilities 131,028 102,710
Deferred income taxes 5,379 5,379
Long-term liabilities 233 395
Shareholders' investment:
Common stock, 40,221 shares issued 402 402
Donated capital 8,400 8,400
Paid-in capital 25,817 25,817
Deferred compensation (1,353) (1,421)
Currency translation adjustments 304 284
Retained earnings 230,861 229,554
Treasury stock, 5,542 and 5,395
shares at cost, respectively (76,339) (73,908)
Total shareholders' investment 188,092 189,128
Total liabilities and shareholders' investment $324,732 $297,612
The accompanying notes to consolidated financial statements are an integral
part of these consolidated balance sheets.
4
LANDS' END, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
April 28, April 29,
1995 1994
(Unaudited)
Cash flows (used for) from operating activities:
Net income $ 1,307 $ 4,878
Adjustments to reconcile net income to net
cash flows from operating activities-
Depreciation and amortization 3,214 2,477
Deferred compensation expense 68 78
Deferred income taxes (1,156) -
Changes in current assets and liabilities
excluding the effects of acquisitions:
Receivables (2,397) 1,980
Inventory (22,425) (18,379)
Prepaid expenses (2,054) 3,586
Accounts payable 5,897 (13,548)
Reserve for returns (1,358) (198)
Accrued liabilities (4,534) (412)
Accrued profit sharing (1,581) (2,089)
Income taxes payable (8,195) (9,053)
Other (142) 155
Net cash flows used for operating activities (33,356) (30,525)
Cash flows (used for) from investing activities:
Cash paid for capital additions and
businesses acquired (3,446) (2,578)
Net cash flows used for investing activities (3,446) (2,578)
Cash flows (used for) from financing activities:
Proceeds from short-term and long-term debt 38,089 17,986
Purchases of treasury stock (2,431) (6,011)
Net cash flows from financing activities 35,658 11,975
Net increase (decrease) in cash
and cash equivalents (1,144) (21,128)
Beginning cash and cash equivalents 5,426 21,569
Ending cash and cash equivalents $ 4,282 $ 441
Supplemental cash flow disclosures:
Interest paid $ 260 $ 48
Income taxes paid 11,400 12,205
The accompanying notes to consolidated financial statements are an integral
part of these consolidated statements.
5
LANDS' END, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information pertaining to April 28, 1995, and the three months
ended April 28, 1995, and April 29, 1994, is unaudited)
The condensed consolidated financial statements included herein have been
prepared by Lands' End, Inc. (the company), without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission, and in the
opinion of management contain all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly the financial position.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the company believes that the disclosures are adequate
to make the information presented not misleading. The results of operations
for the interim periods disclosed within this report are not necessarily
indicative of future financial results. It is suggested that these condensed
consolidated financial statements be read in conjunction with the financial
statements and the notes thereto included in the company's latest annual
report on Form 10-K.
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of business
Lands' End, Inc., (the company) is a direct marketer of traditionally styled
apparel, domestics (primarily bedding and bath items), soft luggage, and other
products.
Principles of consolidation
The consolidated financial statements include the accounts of the company and
its subsidiaries after elimination of intercompany accounts and transactions.
Fiscal year
The company utilizes a 52-53 week fiscal year ending on the Friday nearest
January 31. Fiscal 1996 will be a 53-week year ending on February 2, 1996.
The additional week will be added in the fourth quarter of fiscal 1996.
Fair values of financial instruments
The fair value of financial instruments does not materially differ from their
carrying values.
Inventory
Inventory, primarily merchandise held for sale, is stated at last-in, first-
out (LIFO) cost, which is lower than market. If the first-in, first-out
(FIFO) method of accounting for inventory had been used, inventory would have
been approximately $19.2 million and $18.9 million higher than report at
April 28, and January 27, 1995, respectively.
Catalog costs
Prepaid expenses primarily consist of catalog production and mailing costs
that have not yet been fully amortized over the expected revenue stream, which
is within six months from the date catalogs are mailed. The company's
reporting of such advertising costs is in conformance with the provisions of
the AICPA Statement of Position No. 93-7, "Reporting on Advertising Costs,"
which became effective for the company in the first quarter of fiscal 1996.
6
LANDS' END, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information pertaining to April 28, 1995, and the three months
ended April 28, 1995, and April 29, 1994, is unaudited)
Depreciation
Depreciation expense is calculated using the straight-line method over the
estimated useful lives of the assets, which are 20 to 30 years for buildings
and land improvements and 5 to 10 years for leasehold improvements and
furniture, fixtures, equipment, and software. The company provides one-half
year of depreciation in the year of addition and retirement.
Intangibles
Intangible assets consist of goodwill in excess of the fair market value of
net assets of businesses purchased. Goodwill is being amortized over 40 years
on a straight-line basis. Other intangibles are amortized over a shorter
life. Total accumulated amortization of these intangibles was $0.3 million as
of April 28, and January 27, 1995, respectively.
Net income per share
Net income per share is computed by dividing net income by the weighted
average number of common shares outstanding during each period. The weighted
average common shares outstanding were 34.7 million and 35.9 million for the
three-month periods ended April 28, 1995, and April 29, 1994, respectively.
Common stock equivalents includes awards, grants and stock options which have
been issued by the company. The common stock equivalents do not significantly
dilute basic earnings per share.
Reserve for losses on customer returns
At the time of sale, the company provides a reserve equal to the gross profit
on projected merchandise returns, based on its prior returns experience.
Financial instruments with off-balance-sheet risk
The company is party to financial instruments with off-balance-sheet risk in
the normal course of business to reduce its exposure to fluctuations in
foreign currency exchange rates and to meet financing needs.
The company enters into forward exchange contracts to hedge anticipated
foreign currency transactions during the upcoming seasons. The purpose of the
company's foreign currency hedging activities is to protect the company from
the risk that the eventual dollar cash flows resulting from these transactions
will be adversely affected by changes in exchange rates. At April 28, 1995,
the company had forward exchange contracts, maturing through April 1996, to
sell approximately 1.0 billion yen and to purchase approximately 4.0 million
Canadian dollars. There were no material deferred gains or losses related to
the outstanding forward exchange contracts as of April 28, 1995.
The company also uses import letters of credit to purchase foreign-sourced
merchandise. The letters of credit are primarily U.S. dollar-denominated and
are issued through third-party financial institutions to guarantee payment for
such merchandise within agreed upon time periods. At April 28, 1995, the
company had outstanding letters of credit of approximately $20.0 million, all
of which had expiration dates of less than 1 year.
The counterparty to the financial instruments discussed above is primarily one
large financial institution; management believes the risk of counterparty
nonperformance on these financial instruments is not significant.
7
LANDS' END, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information pertaining to April 28, 1995, and the three months
ended April 28, 1995, and April 29, 1994, is unaudited)
Foreign currency translation
Financial statements of the foreign subsidiaries are translated into U.S.
dollars in accordance with the provisions of SFAS 52. Foreign currency
translation gains were $0.4 million for the three-month period ended April 28,
1995. Foreign currency gains and losses for the period ended April 29, 1994,
were not material.
Postretirement benefits
The company does not currently provide any postretirement benefits for
employees other than profit sharing.
Reclassification
Certain financial statement amounts have been reclassified to be consistent
with the fiscal 1996 presentation.
NOTE 2. ACCOUNTING CHANGES
The Financial Accounting Standards Board has issued Statement Nos. 112 and
115, "Employer's Accounting for Post-employment Benefits" and "Accounting for
Certain Investments in Debt and Equity Securities," respectively. The company
adopted these standards in fiscal 1995, and there is no material impact on its
financial statements.
NOTE 3. SHAREHOLDERS' INVESTMENT
Capital stock
The company currently has 160 million shares of $0.01 par value common stock.
The company has authorized 5 million shares of preferred stock, $0.01 par
value. The company's board of directors has the authority to issue shares and
to fix dividends, voting and conversion rights, redemption provisions,
liquidation preferences, and other rights and restrictions of the preferred
stock.
Treasury stock
The company's board of directors has authorized the purchase of a total of 8.2
million shares of the company's common stock. A total of 6.3 million and 6.2
million shares had been purchased as of April 28, and January 27, 1995,
respectively.
Stock awards and grants
The company has a restricted stock award plan. Under the provisions of the
plan, a committee of the company's board of directors may award shares of the
company's common stock to its officers and key employees. Such shares vest
over a ten-year period on a straight-line basis from the date of the award.
In addition, the company granted shares of its common stock to individuals as
an inducement to enter the employ of the company.
8
LANDS' END, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information pertaining to April 28, 1995, and the three months
ended April 28, 1995, and April 29, 1994, is unaudited)
The following table reflects the activity under the stock award and stock
grant plans:
Awards Grants
Balance at January 29, 1993 141,320 12,000
Granted 27,200 -
Forfeited (3,600) -
Vested (15,760) (2,000)
Balance at January 28, 1994 149,160 10,000
Granted - -
Forfeited (15,940) (10,000)
Vested (17,860) -
Balance at January 27, 1995 115,360 0
Granted - -
Forfeited (900) -
Vested - -
Balance at April 28, 1995 114,460 0
The granting of these awards and grants has been recorded as deferred
compensation based on the fair market value of the shares at the date of
grant. Compensation expense under these plans is recorded as shares vest.
Stock options
The company has 2.5 million shares of common stock, either authorized and
unissued shares or treasury shares, that may be issued pursuant to the
exercise of options granted under the company's stock option plan. Options
are granted at the discretion of a committee of the company's board of
directors to officers and key employees of the company. No option may have an
exercise price less than the fair market value per share of the common stock
at the date of grant.
Activity under the stock option plan is as follows:
Average
Exercise Vested
Options Price Options
Balance at January 29, 1993 1,060,000 $ 9.81 216,000
Granted 637,200 $19.12
Exercised (8,000) $12.69
Balance at January 28, 1994 1,689,200 $13.31 340,000
Granted - -
Exercised (294,000) $ 6.72
Forfeited (928,800) $15.27
Balance at January 27, 1995 466,400 $13.56 195,480
Granted 342,100 $16.50
Exercised - -
Forfeited - -
Balance at April 28, 1995 808,500 $14.80 233,680
9
LANDS' END, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information pertaining to April 28, 1995, and the three months
ended April 28, 1995, and April 29, 1994, is unaudited)
The above options currently outstanding vest over a 5 year period from the
date of grant. The outstanding options expire as follows:
2000 - 100,000
2001 - 72,000
2002 - 60,000
2003 - 234,400
2005 - 342,100
808,500
NOTE 4. INCOME TAXES
Under the liability method prescribed by the Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," deferred taxes are provided
based upon enacted tax laws and rates applicable to the periods in which taxes
become payable.
Temporary differences that give rise to deferred tax assets and liabilities as
of April 28, and January 27, 1995, are as follows (in thousands):
Current Deferred Long-term Deferred
Tax Benefit Tax Liabilities
April 28, Jan. 27, April 28, Jan. 27,
1995 1995 1995 1995
Catalog advertising $(1,539) $(1,539) $ - $ -
Inventory 6,792 7,052 - -
Employee benefits 1,243 1,243 - -
Reserve for returns 1,406 1,406 - -
Depreciation - - 5,379 5,379
Foreign operating loss
carryforwards - - (807) (807)
Valuation allowance - - 807 807
Other 1,666 250 - -
Total $ 9,568 $ 8,412 $ 5,379 $ 5,379
The valuation allowance required under SFAS No. 109 has been established for
the deferred income tax benefits related to certain subsidiary loss
carryforwards, which may not be realized.
In the periods presented, the differences between income taxes at the
statutory federal income tax rate of 35 percent, and income taxes reported in
the consolidated statements of operations are due primarily to the effect of
state income taxes.
NOTE 5. LINES OF CREDIT
The company has unsecured domestic lines of credit with various banks totaling
$110 million. There was $33.3 million outstanding at April 28, at interest
rates averaging 6.5%, compared to no outstanding amount on January 27, 1995.
In addition, the company has unsecured lines of credit with foreign banks
totaling the equivalent of $23 million for a wholly owned foreign subsidiary.
There was $12.3 million outstanding at April 28, compared to $7.5 as of
January 27, 1995, at interest rates averaging 3.0%.
10
LANDS' END, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information pertaining to April 28, 1995, and the three months
ended April 28, 1995, and April 29, 1994, is unaudited)
NOTE 6. LONG-TERM DEBT
There was no long-term debt as of April 28, and January 27, 1995.
The company has an agreement that expires December 31, 1995, with a bank for a
$20 million credit facility available to fund treasury stock purchases and
capital expenditures.
NOTE 7. LEASES
The company leases store and office space and equipment under various leasing
arrangements. The leases are accounted for as operating leases. Total rental
expense under these leases was $2.9 million and $2.1 million for the three-
month periods ended April 28, 1995, and April 29, 1994, respectively.
Total future fiscal year commitments under these leases as of April 28, 1995,
are as follows (in thousands):
1996 (nine months) $ 6,704
1997 8,512
1998 5,873
1999 3,704
2000 2,613
After 2000 3,932
$31,338
NOTE 8. RETIREMENT PLAN
The company has a retirement plan which covers most regular employees and
provides for annual contributions at the discretion of the board of directors.
Also included in the plan is a 401(k) feature which allows employees to make
contributions and the company matches a portion of those contributions. Total
expense provided under this plan was $0.5 million and $0.7 million for the
three-month periods ended April 28, 1995, and April 29, 1994, respectively.
NOTE 9. ACQUISITION AND ANTICIPATED DISPOSITION
In July 1994, the company formed a wholly-owned subsidiary that acquired the
marketing rights and assets of MontBell America, Inc., which designs, develops
and distributes premier technical outdoor clothing and equipment through the
wholesale channel to outdoor specialty stores, primarily in the United States.
Then in February 1995, the company announced its intention to sell its wholly-
owned subsidiary MontBell America, Inc.
11
LANDS' END, INC. & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Information pertaining to April 28, 1995, and the three months
ended April 28, 1995, and April 29, 1994, is unaudited)
In March 1993, the company purchased a majority interest in a catalog company,
The Territory Ahead. Merchandise offered in the catalog consists of private
label sportswear, accessories and luggage. Beginning in 2003, the minority
shareholders have the option to require the company to purchase their shares,
and the company will have the option to require the minority shareholders to
sell their shares in The Territory Ahead. The price per share would be based
on the fair market value of The Territory Ahead.
Results of operations of MontBell America, Inc., and The Territory Ahead were
not material to the company, and as a result, no pro forma data is presented.
The transactions were accounted for using the purchase method. The excess of
the purchase price over the fair value of net assets was recorded as goodwill.
The operating results of MontBell America, Inc., and The Territory Ahead are
included in the consolidated financial statements of the company from their
respective dates of acquisition.
12
Item 2. Management's Discussion
and Analysis
Results of Operations
Three Months Ended April 28, 1995, compared with
Three Months Ended April 29, 1994
The company's net sales in the first quarter of fiscal 1996 increased 10.8
percent to $207.1 million from $187.0 million in the first quarter of fiscal
1995. The company's international and new businesses accounted for nearly all
of the sales increase in the quarter. Sales from the company's core men's and
women's business were flat compared with last year. Customer sales per
catalog mailed in the U.S. continue to be lower into the second quarter.
The quarter ending inventory was about $191 million, up almost 14 percent from
about $168 million a year ago. Growth in the international and new business
areas accounted for about half of the inventory increase. Higher inventory
levels may result in greater product liquidations at lower margins in future
periods.
Gross profit in the quarter just ended was $91.2 million, or 44.0 percent of
net sales, compared with $79.7 million, or 42.6 percent of net sales, in the
first quarter of the prior year. The increase in gross profit margin was due
to stronger growth in higher margin businesses and lower merchandise costs,
primarily the result of improvements in domestic and foreign sourcing. This
was partially offset by increased sales of liquidated merchandise at steeper
markdowns. Liquidations of excess inventory were about 11 percent of net
sales in the quarter just ended, primarily due to the timing of the
fall/winter clearance catalog. This compares to 8 percent in the prior year.
For the first quarter this year, selling, general and administrative expenses
increased 24 percent to $89.2 million, compared with $71.9 million for the
similar quarter last year. As a percentage of net sales, SG&A was 43.1
percent, compared with 38.5 percent in the same period last year. The
increase in the SG&A ratio was primarily the result of relatively lower than
anticipated demand generated by the catalogs. Higher postal rates and paper
prices and lower sales per catalog mailed in the U.S. had a negative effect on
the SG&A ratio. International and new businesses experienced stronger growth
rates during the quarter. Since these businesses have higher operating costs,
this also had a negative impact on the SG&A ratio.
Net income for the quarter just ended was $1.3 million, down 73 percent from
the $4.9 million earned in the prior year. Net income for the first quarter
was 4 cents per share, compared with 14 cents per share in the prior year.
Seasonality of Business
The company's business is highly seasonal. Historically, a disproportionate
amount of the company's net sales and a majority of its profits have been
realized during the fourth quarter. If the company's sales were materially
different from seasonal norms during the fourth quarter, the company's annual
operating results could be materially affected. In addition, as the company
continues to refine its marketing efforts by experimenting with the timing of
its catalog mailings, quarter results may fluctuate. Accordingly, results for
the individual quarters are not necessarily indicative of the results to be
expected for the entire year.
13
Liquidity and capital resources
To date, the bulk of the company's working capital needs have been met through
funds generated from operations and from short-term bank loans. The company's
principal need for working capital has been to meet peak inventory
requirements associated with its seasonal sales pattern. In addition, the
company's resources have been used to make asset additions, purchase treasury
stock, pay cash dividends to shareholders, and acquire new businesses.
During fiscal 1995, the board of directors evaluated its dividend practice
whereby it had paid annual dividends. Given the company's intent to buy back
additional shares, the board determined that the current practice was no
longer desirable and payment of a cash dividend is not planned for the
foreseeable future.
The company continues to explore investment opportunities arising from the
expansion of its international businesses, the development of new businesses
and the acquisition of existing businesses. While this investment spending
has had a negative impact on earnings, it is not expected to have a material
effect on liquidity.
At April 28, 1995, the company had unsecured domestic credit facilities
totaling $110 million, of which $33.3 million was used primarily to fund
inventory purchases. The company also maintains foreign credit lines for use
in foreign operations totaling the equivalent of approximately $23 million, of
which $12.3 million was used at April 28, 1995. The company has a separate
$20 million bank facility available to fund treasury stock purchases and
capital expenditures. This facility runs through December 31, 1995.
Since June 1989, the company's board of directors has authorized the company
from time to time to purchase a total of 8.2 million shares of treasury stock,
of which 6.4 million shares have been purchased as of June 9, 1995. For
further information, see note 3 to the consolidated financial statements.
Capital expenditures for fiscal 1996 are currently planned to be about $23
million, of which about $3 million had been expended through April 28, 1995.
Major projects include new computer hardware and software and material
handling equipment.
Possible future changes
Congress has from time to time considered proposals that would require mail
order companies to collect and remit sales and use tax in states where the
company does not have a physical presence. As it is anticipated that the
change, if adopted, will be applied prospectively, the company believes there
would be no material impact on financial results.
14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There are no material legal proceedings presently pending, except for
routine litigation incidental to the business, to which Lands' End,
Inc., is a party or of which any of its property is the subject.
Items 2 and 3 are not applicable and have been omitted.
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareholders held on May 17, 1995, pursuant
to the Notice of Annual Meeting of Shareholders and Proxy
Statement dated April 17, 1995.
(a) Each of the two nominees (John N. Latter and Michael J. Smith)
were elected as directors. John N. Latter had 30,740,526 votes
for and 81,243 votes withheld. Michael J. Smith had 30,617,710
votes for and 204,059 votes withheld;
(b) An amendment to the Company's Stock Option Plan to extend the
termination date of the Stock Option Plan from December 31,
1995, until December 31, 2000, was approved. (30,243,081 votes
for, 224,812 votes against, 99,895 votes abstained and 253,981
broker non-votes);
(c) The appointment of Arthur Andersen LLP as independent public
accountants for the Company for the fiscal year ending
February 2, 1996, was ratified. (30,728,814 votes for, 44,518
votes against, and 48,437 votes abstained.)
Item 5 is not applicable and has been omitted.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibit is filed as part of this report:
Table Exhibit
Number Description Number
(11) Statement of recomputation of
earnings per share 1
(b) Reports on Form 8-K
There were no reports filed on Form 8-K during
the three-month period ended April 28, 1995.
15
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, its duly authorized officer and chief financial officer.
LANDS' END, INC.
Date: June 9, 1995 By /s/ STEPHEN A. ORUM
Stephen A. Orum
Executive Vice President,
Chief Operating Officer and
Chief Financial Officer
16
LIST OF DOCUMENTS INCORPORATED BY REFERENCE
In addition to the exhibits filed with this report, the exhibits listed below
have been heretofore filed with the Securities and Exchange Commission as
exhibits to the company's registration statement on Form S-8 (File No. 33-
46133) and on Form S-1 (File No. 33-08217) or to other filings with the
Commission and are incorporated herein as exhibits by reference, pursuant to
Rule 24 of the SEC Rules of Practice. The exhibit number of each document so
filed is stated next to the description of such exhibit. The file number for
all other documents is 1-9769.
Table Exhibit Document
Number Description of Item Number Description
(3) Articles of Incorporation and By-Laws:
Certificate of Incorporation of the
company, as amended through
October 3, 1986. 1 S-1
Amendment to Certificate of
Incorporation of the company, 3 10-Q
dated August 10, 1987. October 1987
Amendment to Certification of Incorporation 4 10-Q
of the company, dated May 20, 1994 July 1994
Amended and Restated by-Laws of
the company. 2 10-K 1993
(4) Equity Instrument and Agreements
relating to Debt Obligations:
Form of Certificate to evidence 1 10-Q
the Common stock. August 1990
(10) Material Contracts:
Form of letter from bank approving
the company's unsecured line of
credit and corresponding note. 7 10-K 1992
Term Loan Note and Loan Agreement
between the company and the
American National Bank and Trust 11 10-Q
Company of Chicago. August 1990
First Amendment to Loan Agreement
between the company and the
American National Bank and Trust
Company of Chicago, dated 13 10-Q
June 1, 1991. August 1991
17
Table Exhibit Document
Number Description of Item Number Description
(10) Second Amendment to Loan Agreement
between the company and the
American National Bank and Trust
Company of Chicago, dated
January 27, 1992. 15 10-K 1992
Third Amendment to Loan Agreement
between the company and the
American National Bank and Trust
Company of Chicago, dated
December 11, 1992. 16 10-K 1993
Fourth Amendment to Loan Agreement
between the company and the
American National Bank and Trust
Company of Chicago, dated
December 1, 1993. 1 10-K 1994
Fifth Amendment to Loan Agreement
between the company and the
American National Bank and Trust
Company of Chicago, dated 2 10-Q
November 22, 1994. October 1994
Buying Agreement between the company 7 10-Q
and European Buying Agency, Ltd. November 1990
Salaried Incentive Bonus Plan 9 S-1
Second Amended and Restated 1989
Restricted Stock Plan of the 12 10-Q
company. November 1991
Stock Option Plan of the company 1 10-K 1995
Amended and Restated Retirement Plan,
dated February 1, 1992. 3 10-K 1994
(13) Annual Report to Shareholders for the
fiscal year ended January 27, 1995 10-K 1995
18
Exhibit 11.1
COMPUTATION OF EARNINGS PER SHARE
LANDS' END, INC. & SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except per share amounts)
Three months ended
April 28, 1995 April 29, 1994
Net income............................. $ 1,307 $ 4,878
Average shares of common stock
outstanding during the period.......... 34,718 35,859
Incremental shares from assumed
exercise of stock options (primary).... 116 763
34,834 36,622
Primary earnings per share............. $ 0.04 $ 0.13
Average shares of common stock
outstanding during the period.......... 34,718 35,859
Incremental shares from assumed exercise
of stock options (fully diluted)....... 116 763
34,834 36,622
Fully diluted earnings per share....... $ 0.04 $ 0.13
Average shares of common stock
outstanding during the period.......... 34,718 35,859
Basic earnings per share............... $ 0.04 $ 0.14