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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 29, 2001
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Commission file number 0-18914
R&B, INC.
Incorporated pursuant to the Laws
of the Commonwealth of Pennsylvania
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IRS - Employer Identification No. 23-2078856
3400 East Walnut Street, Colmar, Pennsylvania 18915
(215) 997-1800
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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 |_|
As of November 5, 2001 the Registrant had 8,653,783 common shares, $.01 par
value, outstanding.
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Page 1 of 14
R & B, INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
September 29, 2001
Page
Part I -- FINANCIAL INFORMATION
Item 1.Consolidated Financial Statements (unaudited)
Statements of Income:
Thirteen Weeks Ended September 29, 2001 and
September 23, 2000 ......................... 3
Thirty-nine Weeks Ended September 29, 2001 and
September 23, 2000 ......................... 4
Balance Sheets....................................... 5
Statements of Cash Flows............................. 6
Notes to Financial Statements........................ 7
Item 2.Management's Discussion and
Analysis of Financial Condition and
Results of Operations............................. 9
Part II -- OTHER INFORMATION
Item 1.Legal Proceedings.................................... 13
Item 6.Exhibits and Reports on Form 8-K..................... 13
Signature .............................................. 14
Page 2 of 14
PART I. FINANCIAL INFORMATION
R&B, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
For the Thirteen Weeks Ended
-----------------------------
September 29, September 23,
(in thousands, except per share data) 2001 2000
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Net Sales $54,238 $49,700
Cost of goods sold 35,767 32,626
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Gross profit 18,471 17,074
Selling, general and administrative expenses 14,626 13,897
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Income from operations 3,845 3,177
Interest expense, net 1,063 1,322
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Income before taxes 2,782 1,855
Provision for taxes 960 644
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Net Income $ 1,822 $ 1,211
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Earnings Per Share
Basic $0.21 $0.14
Diluted 0.21 0.14
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Average Shares Outstanding
Basic 8,560 8,428
Diluted 8,757 8,510
The accompanying Notes are an integral part of these Consolidated
Financial Statements.
Page 3 of 14
R&B, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
For the Thirty-nine Weeks Ended
-----------------------------
September 29, September 23,
(in thousands, except per share data) 2001 2000
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Net Sales $152,397 $152,185
Cost of goods sold 101,086 100,371
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Gross profit 51,311 51,814
Selling, general and administrative expenses 43,009 41,135
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Income from operations 8,302 10,679
Interest expense, net 3,280 4,658
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Income before taxes 5,022 6,021
Provision for taxes 1,718 2,101
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Net Income $ 3,304 $ 3,920
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Earnings Per Share
Basic $0.39 $0.47
Diluted 0.38 0.46
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Average Shares Outstanding
Basic 8,506 8,420
Diluted 8,592 8,509
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The accompanying Notes are an integral part of these Consolidated
Financial Statements.
Page 4 of 14
R&B, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 29, December 30,
(in thousands, except share data) 2001 2000
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(unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 16,113 $ 7,553
Accounts receivable, less allowance for doubtful
accounts and customer credits of $14,175 and $10,334 43,294 36,322
Inventories 43,137 50,765
Deferred income taxes 6,385 4,896
Prepaids and other current assets 1,526 2,665
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Total current assets 110,455 102,201
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Property, Plant and Equipment, net 19,921 23,332
Intangible Assets 29,969 31,358
Other Assets 2,237 2,988
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Total $162,582 $159,879
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Liabilities and Shareholders' Equity
Current Liabilities:
Current portion of long-term debt $ 10,661 $ 2,583
Accounts payable 7,745 8,159
Accrued compensation 3,685 3,580
Other accrued liabilities 5,892 4,617
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Total current liabilities 27,983 18,939
Long-Term Debt 54,967 65,066
Deferred Income Taxes 4,109 3,490
Commitments and Contingencies
Shareholders' Equity:
Common stock, par value $.01; authorized
25,000,000 shares; issued 8,716,283 and 8,481,517 87 85
Additional paid-in capital 34,854 34,229
Cumulative translation adjustments (1,631) (839)
Retained earnings 42,213 38,909
Total shareholders' equity 75,523 72,384
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Total $162,582 $159,879
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The accompanying Notes are an integral part of these Consolidated Financial
Statements.
Page 5 of 14
R&B, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
For the Thirty-nine Weeks Ended
--------------------------------------
September 29, September 23,
(in thousands) 2001 2000
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Cash Flows from Operating Activities:
Net income $ 3,304 $ 3,920
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization 6,185 5,826
Provision for doubtful accounts 1,060 451
Provision for deferred income taxes (847) 1,548
Provision for non-cash stock compensation 234 -
Changes in assets and liabilities:
Accounts receivable (8,249) 7,955
Inventories 7,082 14,334
Prepaids and other current assets 1,100 (1,099)
Other assets 746 (173)
Accounts payable (287) 234
Other accrued liabilities 1,403 310
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Cash provided by operating activities 11,731 33,306
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Cash Flows from Investing Activities:
Property, plant and equipment additions (1,583) (6,500)
Cash (used in) investing activities (1,583) (6,500)
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Cash Flows from Financing Activities:
ACTIVITIES: a
Net (repayment) of revolving credit - (26,852)
12,297
Repayments of term loans and capital lease obligations (1,981) (341)
Proceeds from capital lease obligations - 1,524
Proceeds from common stock issuances 393 295
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Cash (used in) financing activities (1,588) (25,374)
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Net Increase in Cash and Cash Equivalents 8,560 1,432
Cash and Cash Equivalents, Beginning of Period 7,553 1,467
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Cash and Cash Equivalents, End of Period $ 16,113 $ 2,899
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Supplemental Cash Flow Information
Cash paid for interest expense $ 3,636 $ 4,572
Cash paid for income taxes $ 1,335 $ 1,135
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
Page 6 of 14
R&B, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THIRTY-NINE WEEKS ENDED SEPTEMBER 29, 2001 AND
SEPTEMBER 23, 2000 (UNAUDITED)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. However, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Operating results for the thirty-nine week period ended
September 29, 2001 are not necessarily indicative of the results that may be
expected for the fiscal year ending December 29, 2001. For further information,
refer to the financial statements and footnotes thereto included in R&B, Inc.'s
(the "Company") Annual Report on Form 10-K for the year ended December 30, 2000.
2. Restructuring Charges
In the fourth quarter of fiscal 1999, the Company recorded a
restructuring charge of $11.4 million ($7.5 million after tax or $0.90 per
share) to reflect costs primarily related to inventory write downs associated
with the elimination of a significant number of underperforming products, as
well as the closing of a warehouse and production facility in Carrollton,
Georgia, and a work force reduction. A total of $9.8 million, representing
inventory write downs, was charged to cost of sales and $1.6 million was charged
to selling, general and administrative expenses. There were no significant
changes to the plan.
The following summarizes the restructuring charge and activity through September
29, 2001:
Employee
Inventory Termination Facility
(in thousands) Disposals Benefits Shutdown Total
Costs
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Initial Charge $ 9,800 $ 475 $ 1,125 $11,400
Costs Incurred - 1999 - (124) (300) (424)
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Balance at December 25, 1999 9,800 351 825 10,976
Costs Incurred - 2000 (7,100) (351) (145) (7,596)
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Balance at December 30, 2000 2,700 - 680 3,380
Cost Incurred - 2001 (1,300) - (250) (1,550)
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Balance at September 29, 2001 $ 1,400 $ - $ 430 $ 1,830
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3. Inventories
Inventories include the cost of material, freight, direct labor and
overhead utilized in the processing of the Company's products. Inventories were
as follows:
September 29, December 30,
(in thousands) 2001 2000
- ------------------- --------------- ---------------
Bulk product $11,943 $15,170
Finished product 27,841 31,984
Packaging materials 3,353 3,611
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Total $43,137 $50,765
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Page 7 of 14
4. Intangible Assets
Intangible assets consist primarily of goodwill which is amortized over
periods of 10 to 40 years. Total accumulated amortization as of September 29,
2001 was $9.0 million. Amortization expense of these assets was $0.4 million in
the third quarter of 2001 and 2000, and $1.2 million for the thirty-nine week
periods ended September 29, 2001 and September 23, 2000.
5. Freight Expense Reclassification
In the fourth quarter of fiscal 2000, the Company adopted the provisions
of Emerging Issues Task Force (EITF) Issue No. 00-01, "Accounting for Shipping
and Handling Fees and Costs", by reclassifying freight expense from selling,
general and administrative expense to cost of sales in all periods presented.
The adoption of EITF 00-01 increased cost of sales and reduced selling, general
and administrative expenses by $1.3 million and $3.8 million in the thirteen
week and the thirty-nine week periods ended September 29, 2001, respectively.
6. Earnings Per Share
Earnings per share is computed under Statement of Financial Accounting
Standards No. 128, "Earnings Per Share". The Company has included basic and
diluted earnings per share on the face of the Statements of Operations for each
period presented. Weighted average shares for "diluted" earnings per share
includes the assumption of the exercise of all potentially dilutive securities
("in the money" stock options).
7. Recent Accounting Pronouncements
In June 2001, the Financial Accounting Standards Board issued SFAS No.
141, "Business Combinations" (effective July 1, 2001) and SFAS No. 142,
"Goodwill and Other Intangible Assets" (effective for the Company on January 1,
2002). SFAS No. 141 prohibits pooling-of-interests accounting for acquisitions.
SFAS No. 142 specifies that goodwill will no longer be amortized but instead
will be subject to periodic impairment testing. The Company is in the process
of evaluating the financial statement impact of adoption of SFAS No. 142.
Page 8 of 14
R&B, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
Over the periods presented, the Company has focused its efforts on providing
an expanding array of new product offerings and strengthening its relationships
with its customers. To that end, the Company has made significant investments to
increase market penetration, primarily in the form of product development,
customer service and customer credits and allowances.
The Company calculates its net sales by subtracting credits and allowances
from gross sales. Credits and allowances include costs for co-operative
advertising, product returns, discounts given to customers who purchase new
products for inclusion in their stores, and the cost of competitors' products
that are purchased from the customer in order to induce a customer to purchase
new product lines from the Company. The credits and allowances are designed to
increase market penetration and increase the number of product lines carried by
customers by displacing competitors' products within customers' stores and
promoting consolidation of customers' suppliers.
The Company may experience significant fluctuations from quarter to quarter
in its results of operations due to the timing of orders placed by the Company's
customers. Generally, the first quarter has the lowest level of customer orders,
but the timing of the introduction of new products and product lines to
customers may cause significant fluctuations from quarter to quarter.
In the fourth quarter of fiscal 2000, the Company adopted the provisions of
Emerging Issues Task Force (EITF) Issue No. 00-01, "Accounting for Shipping and
handling Fees and Costs", by reclassifying freight expense from selling, general
and administrative expense to cost of sales in all periods presented. The
adoption of EITF 00-01 increased cost of sales and reduced selling, general and
administrative expenses by $1.3 million and $3.8 million in the thirteen week
and thirty-nine week periods ended September 23, 2001, respectively.
Results of Operations
The following table sets forth, for the periods indicated, the percentage of
net sales represented by certain items in the Company's Consolidated Statements
of Income.
As a Percentage of Sales
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For the Thirteen Weeks Ended For the Thirty-nine Weeks Ended
--------------------------------- -----------------------------------
September 29, September 23, September 29, September 23,
2001 2000 2001 2000
- ----------------------- --------------- ---------------- ---------------- ------------------
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 65.9% 65.6% 66.3% 66.0%
- ----------------------- --------------- ---------------- ---------------- ------------------
Gross profit 34.1% 34.4% 33.7% 34.0%
Selling, general and
administrative expenses 27.0% 28.0% 28.3% 27.0%
- ----------------------- --------------- ---------------- ---------------- ------------------
Income from operations 7.1% 6.4% 5.4% 7.0%
Interest expense, net 2.0% 2.7% 2.1% 3.0%
- ----------------------- --------------- ---------------- ---------------- ------------------
Income before taxes 5.1% 3.7% 3.3% 4.0%
Provision for taxes 1.7% 1.3% 1.1% 1.4%
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Net income 3.4% 2.4% 2.2% 2.6%
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Page 9 of 14
Thirteen Weeks Ended September 29, 2001 Compared to
Thirteen Weeks Ended September 23, 2000
Net sales increased $4.5 million, or 9.1%, to $54.2 million for the
thirteen weeks ended September 29, 2001 from $49.7 million for the same period
in 2000. This sales increase is primarily attributable to the successful
introduction of several new products and stronger order patterns across all
businesses.
Cost of goods sold for the thirteen weeks ended September 29, 2001
increased to $35.8 million from $32.6 million for the same period last year. The
increase in cost of sales is the result of higher sales levels in the current
year and an additional provision for discontinued and excess inventories of $1.5
million in the current year. This additional provision is the result of the
Company reassessing its inventory reserves and reserve methodology based upon
recent product line updates and changes in the marketplace. As a percentage of
sales, gross profit for the thirteen weeks ended September 29, 2001 decreased to
34.1% from 34.4% in the prior year. The decrease in gross profit percentage is
the result of the $1.5 million inventory provision discussed above.
Selling, general and administrative expenses for the thirteen weeks
ended September 29, 2001 increased to $14.6 million from $13.9 million for the
same period last year.. This increase is primarily the result of higher
distribution costs due to the higher sales levels achieved in the current year.
As a percentage of sales, selling, general and administrative expenses for the
thirteen weeks ended September 29, 2001 decreased to 27.0% from 28.0% in the
prior year. This decline in costs as a percentage of sales was the result of
continued cost control initiatives by the Company.
Interest expense, net, decreased to $1.1 million in the thirteen weeks
ended September 29, 2001 from $1.3 million in the prior year due to lower
borrowing levels.
Provisions for income taxes of $1.0 million and $0.6 million were
recorded for the thirteen weeks ended September 29, 2001 and September 23, 2000,
respectively. The Company's effective tax rate was 34.5% in the thirteen weeks
ended September 29, 2001 and 34.7% in the prior year.
Thirty-nine Weeks Ended September 29, 2001 Compared to
Thirty-nine Weeks Ended September 23, 2000
Sale of Lift Support Inventory - During the first quarter of fiscal
2000, the Company sold all of its inventory and certain other assets related to
its lift support product line as a result of a strategic decision to eliminate
this product line. Results for the thirty-nine weeks ended September 23, 2000
include non-recurring net sales of $5.5 million and gross profit of $1.6
million, attributable to the sale of the inventory and related assets. The gain
on the sale was $1.6 million ($1.1 million after tax or $0.13 per share).
Net sales increased to $152.4 million for the thirty-nine weeks ended
September 29, 2001 from $152.2 million for the same period in 2000, or $146.7
million without the revenues from the sale of the lift support inventory
described above. Net sales for the thirty-nine weeks ended September 29, 2001
increased $5.7 million after adjusting prior year amounts for the lift support
sale. This sales increase is primarily the result of incremental 2001 revenues
from the Company's third quarter 2000 initiative to supply Wal-Mart with its
"Pik-a-Nut" brand of hardware and general use fasteners. The Company also
experienced sales increases from the successful introduction of several new
products and stronger order patterns across all businesses in the third quarter
of 2001; however, these increases were offset by lower sales of certain
subsidiary product lines earlier in the year.
Cost of goods sold for the thirty-nine weeks ended September 29, 2001
increased to $101.1 million from $100.4 million for the same period last year,
or $96.5 million without costs associated with the sale of the lift support
inventory described above. The increase in cost of sales is the result of higher
sales levels in the current year and an additional provision for discontinued
and excess inventories of $1.5 million in the current year. This additional
provision is the result of the Company reassessing its inventory reserves based
upon recent product line updates and changes in the automotive aftermarket.
Selling, general and administrative expenses for the thirty-nine weeks
ended September 29, 2001 increased to $43.0 million from $41.1million for the
same period last year. Approximately $0.5 million of this increase is a result
of severance and other charges related to the consolidation of one of the
Company's subsidiary operations in the second quarter of 2001. The remaining
increase in selling, general and administrative expenses is due to increases in
variable costs as a result of the higher sales levels experienced in the current
year.
Page 10 of 14
Interest expense, net, decreased to $3.3 million in the thirty-nine
weeks ended September 29, 2001 from $4.7 million in the prior year due to lower
borrowing levels.
Provisions for income taxes of $1.7 million and $2.1 million were
recorded for the thirty-nine weeks ended September 29, 2001 and September 23,
2000, respectively. The Company's effective tax decreased to 34.2% in the
thirty-nine weeks ended September 29, 2001 from 34.9% in the prior year due to a
higher mix of earnings from the Company's Swedish subsidiary which has a lower
effective tax rate than the Company's other businesses.
Liquidity and Capital Resources
The Company has financed its growth through the combination of cash flow
from its operations, issuance of senior notes and borrowings under its credit
facilities and industrial revenue bonds. Working capital was $82.5 million as of
September 29, 2001 and $83.3 million as of December 30, 2000. The Company
believes that the cash generated from operations and borrowings under its
revolving credit facility will be sufficient to meet the Company's working
capital needs and to fund expansion for the foreseeable future.
Net cash provided by operating activities was $11.7 million for the
thirty-nine weeks ended September 29, 2001 and $33.3 million in the comparable
period in 2000. Significant net cash flow was provided by operating activities
in the thirty-nine weeks ended September 29, 2001 and September 23, 2000 as a
result of the Company's focus on improving working capital management during
these periods. During 2001, net income, non-cash provisions for depreciation,
amortization, doubtful accounts and non-cash stock compensation as well as
reductions in inventory, prepaid expenses and other asset levels and increases
in other liabilities provided $21.1 million in positive cash flow. These
increases were partially offset by $9.4 million in cash used as a result of an
increase in accounts receivable, slightly lower accounts payable and a non-cash
benefit for deferred income taxes. During 2000, net income, non-cash provisions
for depreciation, amortization, doubtful accounts and deferred taxes as well as
lower accounts receivable and inventory levels and increases in accounts payable
and other liabilities provided $34.6 million in positive cash flow. These
increases were partially offset by $1.3 million in cash used to increase prepaid
expenses and other assets.
Net cash used in investing activities was $1.6 million for the
thirty-nine weeks ended September 29, 2001 and $6.5 million in the comparble
period in 2000. In both periods, additions to property, plant and equipment were
the primary uses of cash.
Net cash used in financing activities was $1.6 million for the
thirty-nine weeks ended September 29, 2001 and $25.4 million in the comparable
period in 2000. Cash generated from operating and investing activities was used
to reduce borrowing levels by $2.0 million in the thirty-nine weeks ended
September 29, 2001 and $27.2 million in the comparable period in 2000. Financing
activities generated $0.4 million in cash in 2001 from common stock issuance
proceeds, and $1.8 million in cash in 2000 from common stock issuances and
capital lease financing.
Senior Notes. In August 1998, the Company completed a private placement
of $60 million in 6.81% Senior Notes due August 21, 2008 on an unsecured basis.
The ten-year Notes bear a 6.81 percent fixed interest rate, payable quarterly,
with an initial four-year interest only period. Annual repayments at the rate of
$8.6 million are due beginning in August 2002.
Revolving Credit Facility. In March 2001, the Company amended its
Revolving Credit Facility. The amended agreement provides for a $10 million
facility for an additional three-year term that expires in March 2004.
Borrowings under the amended facility are on an unsecured basis with interest at
rates ranging from Libor plus 150 to Libor plus 275 basis points. The loan
agreement also contains covenants, the most restrictive of which pertain to net
worth and the ratio of debt to EBITDA. The Company believes that the amended
facility together with cash generated from operations will provide sufficient
funding to meet the Company's working capital needs for the foreseeable future.
Prior to the March 2001 amendment, the Company had a revolving credit
facility that provided for borrowings of up to $35 million with mandatory
reductions throughout 2000 to $10 million at December 30, 2000. Borrowings under
the facility were on an unsecured basis with interest at rates ranging from
Libor plus 150 to 300 basis points. The loan agreement also contained covenants,
the most restrictive of which pertained to net worth and the ratio of debt to
EBITDA.
Page 11 of 14
There were no borrowings under the revolving credit facility at
September 29, 2001. Borrowings under the revolving credit facility amounted to
$1.5 million at September 23, 2000.
Industrial Revenue Bonds. Construction of the Company's Warsaw, Kentucky
facility in 1990 was funded by the Bonds. The Bonds bear interest at a variable
rate (2.5% at September 29, 2001) payable monthly and require annual principal
payments of $300,000 or $350,000 in alternating years with the final payment due
in July, 2009. Bond borrowings amounted to $2.7million at September 29, 2001.
Capitalized Leases. The Company's lease for its Pennsylvania facility is
recorded as a capitalized lease in the Company's financial statements. In
addition, the Company has entered into three sale/leaseback transactions
relating to computer hardware and software. The aggregate amount outstanding
under all capital leases amounted to $2.9 million at September 29, 2001.
Foreign Currency Fluctuations. Approximately 37% of the Company's
products were purchased from a variety of foreign countries. The products
generally are purchased through purchase orders with the purchase price
specified in U.S. dollars. Accordingly, the Company does not have exposure to
fluctuation in the relationship between the dollar and various foreign
currencies between the time of execution of the purchase order and payment for
the product. However, to the extent that the dollar decreases in value to
foreign currencies in the future, the price of the product in dollars for new
purchase orders may increase. The Company attempts to lessen the impact of these
currency fluctuations by resourcing its purchases to other countries.
Impact of Inflation
The Company has not generally been adversely affected by inflation. The
Company believes that price increases resulting from inflation generally could
be passed on to its customers, since prices charged by the Company are not set
by long-term contracts.
Cautionary Statement Regarding Forward Looking Statements
Certain statements periodically made by or on behalf off the
Company and certain statements contained herein including statements in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, such as statements regarding litigation, and certain other
statements contained herein regarding matters that are not historical fact are
forward looking statements (as such term is defined in the Securities Act of
1933), and because such statements involve risks and uncertainties, actual
results may differ materially from those expressed or implied by such forward
looking statements. Factors that cause actual results to differ materially
include but are not limited to those factors discussed in the Company's Annual
Report on Form 10-K under "Business - Investment Considerations."
Quantitative and Qualitative Disclosure about Market Risk
The Company's market risk is the potential loss arising from adverse
changes in interest rates. With the exception of the Company's revolving credit
facility and its Industrial Revenue Bonds, long-term debt obligations are at
fixed interest rates and denominated in U.S. dollars. The Company manages its
interest rate risk by monitoring trends in interest rates as a basis for
determining whether to enter into fixed rate or variable rate agreements. Under
the terms of the Company's revolving credit facility and Industrial Development
Bonds, a change in either LIBOR or tax exempt market interest rates would affect
the rate at which the Company could borrow funds thereafter. The Company
believes that the effect of any such change would be minimal.
The Company uses derivative financial instruments, consisting of foreign
currency forward purchase and sales contracts with terms of less than one year,
to hedge its exposure to changes in foreign currency exchange. Our primary
exposure to changes in foreign currency rates results from changes in exchange
rates on certain third-party trade receivables and payables of the Company's
Swedish subsidiary. The aggregate fair value of all such contracts as of
September 29, 2001 was approximately $0.6 million.
Page 12 of 14
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
In addition to commitments and obligation which arise in the
ordinary course of business, the Company is subject to various claims and legal
actions from time to time involving contracts, competitive practices, trademark
rights, product liability claims and other matters arising out of the conduct of
the Company's business.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
Page 13 of 14
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 thereunto duly authorized.
R & B, INC.
Date November 9, 2001 Richard Berman
---------------- -----------------
Richard Berman
President
Date November 9, 2001 Mathias J. Barton
---------------- ------------------
Mathias J. Barton
Chief Financial Officer and
Principal Accounting Officer
Page 14 of 14