UNITED STATES
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 QUARTERLY PERIOD ENDED JUNE 30, 1996.
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: 0-20850
HAGGAR CORP.
(Exact name of the registrant as specified in the charter)
NEVADA 75-2187001
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
6113 LEMMON AVENUE
DALLAS, TEXAS 75209
(Address of principal executive offices)
TELEPHONE NUMBER (214) 352-8481
(Registrant's telephone number including area code)
Indicate by a 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 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 August 12, 1996, there were 8,551,382 shares of the Registrant's Common
Stock outstanding.
HAGGAR CORP. AND SUBSIDIARIES
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Operations
(Three and nine months ended June 30, 1996 and 1995) 3
Consolidated Balance Sheets
(As of June 30, 1996 and September 30, 1995) 4
Consolidated Statements of Cash Flows
(Nine months ended June 30, 1996 and 1995) 5
Notes to Consolidated Financial Statements 6-9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-12
Part II. Other Information.
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 13
Signature 13
Exhibit
2
HAGGAR CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended Nine Months Ended
June 30, June 30,
-------------------- --------------------
1996 1995 1996 1995
-------- -------- -------- --------
Net sales $103,769 $ 85,182 $313,027 $327,333
Cost of goods sold 74,836 63,251 226,910 239,019
-------- -------- -------- --------
Gross profit 28,933 21,931 86,117 88,314
Selling, general and administrative expenses (26,667) (28,794) (79,155) (82,842)
Loss from storm damage -- (24,000) -- (24,000)
Royalty income, net 653 1,019 1,893 2,252
-------- -------- -------- --------
Operating income (loss) 2,919 (29,844) 8,855 (16,276)
Other income, net 318 161 198 558
Interest expense (1,475) (1,433) (3,124) (3,171)
-------- -------- -------- --------
Income (loss) from operations before provision
(benefit) for income taxes 1,762 (31,116) 5,929 (18,889)
Provision (benefit) for income taxes 680 (11,379) 2,259 (6,655)
-------- -------- -------- --------
Net income (loss) $ 1,082 $ (19,737) $3,670 $(12,234)
-------- -------- -------- --------
-------- -------- -------- --------
Net income (loss) per common share and
common share equivalent $ 0.13 $ (2.30) $ 0.43 $ (1.42)
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average number of common shares
and common share equivalents outstanding 8,552 8,588 8,552 8,636
-------- -------- -------- --------
-------- -------- -------- --------
The accompanying notes are an integral part of
these consolidated financial statements.
3
HAGGAR CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
June 30, September 30,
1996 1995
----------- -------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 2,864 $ 2,230
Accounts receivable, net 41,170 66,967
Inventories 144,814 138,907
Deferred tax benefit 10,792 12,828
Insurance receivable -- 23,990
Other current assets 1,861 4,288
-------- --------
Total current assets 201,501 249,210
Property, plant, and equipment, net 63,598 56,616
Marketable securities -- 4,630
Other assets 1,758 4,896
-------- --------
$266,857 $315,352
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,896 $ 26,448
Accrued liabilities 23,220 27,776
Accrued wages and other employee compensation 2,419 3,343
Accrued workers' compensation expense 6,453 7,233
Accrued health insurance expense 3,027 2,708
Federal income taxes payable 130 771
Short-term borrowings 2,058 1,635
Current portion of long-term debt 315 447
-------- --------
Total current liabilities 58,518 70,361
Long-term debt 39,340 78,585
-------- --------
Total liabilities 97,858 148,946
STOCKHOLDERS' EQUITY
Common stock - par value $0.10 per share; 25,000,000
shares authorized and 8,560,636 shares issued at
June 30, 1996 and September 30, 1995 856 856
Additional paid-in capital 41,641 41,641
Unrealized loss on marketable securities -- (206)
Retained earnings 126,503 124,116
-------- --------
169,000 166,407
Less - Treasury stock, 9,254 shares at par value (1) (1)
Total stockholders' equity 168,999 166,406
-------- --------
$266,857 $315,352
-------- --------
-------- --------
The accompanying notes are an integral part of
these consolidated financial statements.
4
HAGGAR CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
Nine Months Ended
June 30,
-----------------------
1996 1995
--------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 3,670 $ (12,234)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 4,031 (2,337)
Loss (gain) on disposal of property, plant, and equipment (190) 144
Loss (gain) on sales of marketable securities 532 (85)
Changes in assets and liabilities-
Accounts receivable, net 25,797 38,952
Inventories (5,907) (22,805)
Federal income tax receivable -- (936)
Deferred tax benefit 1,906 (12,116)
Insurance receivable 23,990 (8,869)
Other current assets 1,833 812
Accounts payable (5,552) (23,228)
Accrued liabilities and federal income taxes payable (5,197) 9,053
Accrued wages and other employee compensation (924) (3,564)
Accrued health insurance expense 319 (204)
Accrued workers' compensation expense (780) (66)
--------- ---------
Net cash provided by (used in) operating activities 43,528 (32,809)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment, net (11,087) (22,388)
Proceeds from the sale of property, plant and equipment 264 --
Proceeds from the sale of marketable securities 5,028 861
(Increase) decrease in other assets 3,138 (140)
--------- ---------
Net cash used in investing activities (2,657) (21,667)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from short-term borrowings 423 439
Proceeds from issuance of long-term debt 349,000 311,000
Payments on long-term debt (388,377) (257,236)
Payments of cash dividends (1,283) (1,281)
Net proceeds from the issuance of common stock -- 198
--------- ---------
Net cash provided by (used in) financing activities (40,237) 53,120
Increase (decrease) in cash and cash equivalents 634 (1,356)
Cash and cash equivalents, beginning of period 2,230 2,612
--------- ---------
Cash and cash equivalents, end of period $ 2,864 $ 1,256
--------- ---------
--------- ---------
Supplemental disclosure of cash flow information
Cash paid for:
Interest, net of amounts capitalized $ 2,304 $ 2,196
Income taxes $ 392 $ 8,294
The accompanying notes are an integral part
of these consolidated financial statements.
5
HAGGAR CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS.
The consolidated balance sheet as of June 30, 1996, the consolidated statements
of operations for the three and nine months ended June 30, 1996 and 1995, and
the consolidated statements of cash flows for the nine months ended June 30,
1996 and 1995, have been prepared by Haggar Corp. (the "Company") without audit.
In the opinion of management, all necessary adjustments (which include only
normal recurring adjustments) to present fairly the consolidated financial
position, results of operations, and cash flows of the Company at June 30, 1996,
and for all other periods presented, have been made. Certain information and
footnote disclosures normally included in the financial statements prepared in
accordance with generally accepted accounting principles have been omitted.
These financial statements should be read in conjunction with the financial
statements and accompanying footnotes in the Company's Annual Report on Form
10-K for the year ended September 30, 1995.
CONCENTRATIONS OF CREDIT RISK.
Financial instruments which potentially expose the Company to concentrations of
credit risk, as defined by Statement of Financial Accounting Standards ("SFAS")
No. 105, "Disclosure of Information about Financial Instruments with Off-Balance
Sheet Risk and Financial Instruments with Concentrations of Credit Risk,"
consist primarily of trade accounts receivable. The Company's customers are not
concentrated in any specific geographic region but are concentrated in the
apparel industry. For the three months ended June 30, 1996, two customers
accounted for 25.1% and 10.5%, respectively, of the Company's net sales and for
the three months ended June 30, 1995, the same two customers accounted for 25.8%
and 7.0%, respectively, of the Company's net sales. The same two customers
accounted for 27.0% and 9.3%, respectively, of the Company's net sales during
the nine months ended June 30, 1996, and 29.8% and 8.5%, respectively, of the
Company's net sales during the nine months ended June 30, 1995. The Company
performs ongoing credit evaluations of its customers' financial condition and
establishes an allowance for doubtful accounts based upon factors surrounding
the credit risk of specific customers, historical trends, and other information.
INVENTORIES.
Inventories are stated at the lower of cost (first-in, first-out) or market and
consisted of the following at June 30, 1996, and September 30, 1995 (in
thousands):
June 30, September 30,
1996 1995
--------- -------------
Piece goods $ 23,129 $ 22,260
Trimmings & supplies 6,824 11,808
Work-in-process 18,844 27,614
Finished garments 96,017 77,225
--------- ---------
$ 144,814 $ 138,907
--------- ---------
--------- ---------
Work-in-process and finished garments inventories consisted of materials, labor
and manufacturing overhead.
6
INSURANCE RECEIVABLE.
On May 5, 1995, severe thunderstorms struck the Dallas - Fort Worth metropolitan
area causing widespread damage. During the high winds and heavy rains caused by
these thunderstorms, a portion of the roof over the Company's main distribution
center collapsed. The Company has received a $35,000,000 insurance settlement
related to the inventory and approximately $5,100,000 related to real and
personal property damaged during the storm. As of September 30, 1995, the
Company had received $15,000,000 of the $35,000,000 insurance inventory claim.
At that point in time the claims for real and other personal property damage
had not yet been submitted to the insurance carrier. Accordingly, a receivable
of $20,000,000 related to the uncollected portion of the inventory claim and
approximately $4,000,000 related to the estimated real and other personal
property claim is reflected in the accompanying balance sheet as of September
30, 1995. Collections in excess of the recorded receivable resulted in a
$1,100,000 gain from the settlement of the real and other personal property
claims and reduced selling, general and administrative expenses for the nine
months ended June 30, 1996.
FINANCIAL INSTRUMENTS.
The Financial Accounting Standards Board ("FASB") issued SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," which
addresses the accounting and reporting requirements for both investments in
equity securities that have readily determinable fair values and for all
investments in debt securities. The Company had net investments in preferred
stock of approximately $5,224,000 as of September 30, 1995. These investments
were classified as available-for-sale securities and were reported at their fair
value as of September 30, 1995, with unrealized gains and losses excluded from
earnings and reported as a separate component of stockholders' equity, net of
tax. During the second quarter of fiscal 1996, the Company sold all of its
investments in preferred stock and equity securities. The proceeds from the
sale were used to reduce borrowings under the Company's line of credit.
Realized gains and losses on investments in preferred stocks were determined on
a specific identification basis. For the nine months ended June 30, 1996,
realized losses of $532,000 have been recorded. For the three and nine months
ended June 30, 1995, realized gains of $85,000 have been recorded. The realized
gains and losses for the three and nine months ended June 30, 1996 and 1995, are
included in "Other income, net" stated in the accompanying Consolidated
Statements of Operations.
For the three and nine months ended June 30, 1996, the Company earned dividend
and interest income of $21,000 and $166,000, respectively, compared to dividend
and interest income for the same periods in the prior fiscal year of $166,000
and $487,000, respectively.
7
LONG-TERM DEBT.
Long-term debt consisted of the following at June 30, 1996, and September 30,
1995 (in thousands):
June 30, September 30,
1996 1995
--------- -------------
Borrowings under revolving
credit line $ 10,000 $ 49,000
Industrial Development Revenue
Bonds with interest at a rate equal
to that of high-quality, short-term,
tax-exempt obligations, as defined
(3.40% at June 30, 1996),
payable in annual installments of
$100, and a final payment of
$2,000 in 2005, secured by
certain buildings and equipment 2,900 3,000
Senior Notes Payable 25,000 25,000
Other 1,755 2,032
--------- ---------
39,655 79,032
Less - Current portion 315 447
--------- ---------
$ 39,340 $ 78,585
--------- ---------
--------- ---------
As of June 30, 1996, the Company had a $100,000,000 revolving credit line
agreement (the "Agreement") with certain banks subject to certain borrowing base
limitations. The Company had additional available borrowing capacity of
approximately $81,000,000 under this Agreement at June 30, 1996. The Company
incurred approximately $130,000 in commitment fees related to the available
borrowing capacity during the nine month period ended June 30, 1996. The
interest rates for the nine month period ended June 30, 1996, ranged from 6.63%
to 8.75%. The facility will mature December 31, 1997, with a one year renewal
at the option of the banks and is unsecured, except that the Company is
prohibited from pledging its accounts receivable and inventories during the term
of the Agreement. The Agreement contains limitations on incurring additional
indebtedness and requires the maintenance of certain financial ratios.
Effective December 31, 1995, the Agreement was amended to relax certain of these
financial ratios for the first and second quarters of fiscal 1996. In addition,
the Agreement requires the Company and Haggar Clothing Co. (the Company's main
operating subsidiary) to maintain tangible net worth, as defined, in excess of
$144,900,000 and $40,000,000, respectively, as of June 30, 1996.
In the first quarter of fiscal 1995, the Company completed the sale and issuance
of $25,000,000 in senior notes. The proceeds from the notes have been used to
partially fund the construction of the Company's new Customer Service Center.
Significant terms of the senior notes include a maturity date of ten years from
the date of issuance, interest payable semi-annually and annual principal
payments beginning in the fourth year. The interest rate on the senior notes is
fixed at 8.49%. The terms and conditions of the note purchase agreement
governing the senior notes include restriction on the sale of assets, limitation
on additional indebtedness and the maintenance of certain net worth
requirements. The balance of the cost of the Customer Service Center has been
financed with internally generated funds and bank borrowings.
NET INCOME PER COMMON SHARE AND COMMON SHARE EQUIVALENT.
Net income per common share and common share equivalent is calculated by
dividing net income applicable to common stock by the weighted average shares of
common stock and common stock equivalents outstanding. Common share equivalents
represent the effect, if any, of the assumed purchase of common shares, using
the treasury stock method, under the Company's long-term incentive plan.
8
SUBSEQUENT EVENTS.
Subsequent to June 30, 1996, the Company declared a cash dividend of $0.05 per
share payable to the stockholders of record on August 5, 1996. The dividend of
approximately $427,000 will be paid on August 19, 1996.
9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the attached
consolidated financial statements and the notes thereto, and with the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 1995.
RESULTS OF OPERATIONS
The Company's third quarter of fiscal 1996 net income to common stockholders of
$1.1 million compares to a net loss of $19.7 million in the third quarter of
fiscal 1995. The net loss in the third quarter of 1995 is primarily the result
of the $24.0 million loss from storm damage and the impact of decreased sales as
a result of the Company's inability to ship product following the May 1995
disaster.
Net sales for the quarter ended June 30, 1996, increased 22.0% to $103.8
million from $85.2 million for the third quarter of fiscal 1995. The increase
in net sales is primarily the result of abnormally low sales in the third
quarter of fiscal 1995 as a result of the May 1995 disaster. Net sales for the
nine months ended June 30, 1996, decreased 4.4% to $313.0 million compared to
$327.3 million in the prior fiscal year. The 4.4% decrease in the first nine
months of fiscal 1996 reflects an 11.9% increase in unit sales and is offset by
a 14.9% decrease in the average sales price. For the nine months ended June 30,
1996, the decrease in net sales is primarily the result of decreased holiday
sales at the retail level during the first quarter of fiscal 1996, and severe
weather conditions in the Eastern U.S. during portions of the second quarter of
fiscal 1996, which slowed the efforts to clear year-end inventory left over from
the decreased holiday sales. However, during the third quarter of fiscal 1996
net sales were substantially higher than the third quarter fiscal 1995 due to
the May 1995 disaster which severely impacted sales volume. Additionally, during
the third quarter of fiscal 1996, net sales were lower than anticipated as a
result of shipping difficulties in the Company's new Fort Worth Customer Service
Center (CSC). Despite acceptable initial test results, the automated shipping
systems within the CSC were unable to accommodate under operational conditions
the level of shipment volume needed, thus impacting net sales for the quarter.
Gross profit as a percentage of net sales increased to 27.9% in the third
quarter of fiscal 1996 compared to 25.7% in the third quarter of the prior
fiscal year. The increase in gross profit as a percentage of net sales in the
third quarter is primarily the result of a $0.5 million reduction in inventory
reserves which were utilized to offset markdowns taken in the third quarter on
piece goods and trim inventory. However, gross profit as a percentage of net
sales for the third quarter of fiscal 1996 was lower than historical levels due
to a decrease in average sales price. Gross profit for the first nine months of
fiscal 1996 remained relatively stable at 27.5% compared to 27.0% in the first
nine months of fiscal 1995. During the first nine months of fiscal 1996 gross
profit was lower than historical levels due to the decreased average sales
price. Comparatively, during the first nine months of fiscal 1995 gross profit
was lower than historical levels due to a $3.0 million markdown on sport shirts
and a $2.0 million write-off as a result of the Company closing its Robstown
manufacturing facility. The Company's continuing efforts to reduce its excess
inventories during the third quarter of fiscal 1996 were hampered by the
shipping difficulties experienced at the CSC.
Selling, general and administrative expenses as a percentage of net sales
decreased to 25.7% in the third quarter of fiscal 1996 compared to 33.8% in the
third quarter of fiscal 1995. The decrease in selling, general and
administrative expenses as a percent of net sales is primarily the result of
lower net sales volume in the third quarter of fiscal 1995 as a result of the
May 1995 disaster. For the nine months ended June 30, 1996 and 1995, selling,
general and administrative expenses as a percentage of net sales remained stable
at 25.3%. The fact that selling, general and administrative expenses as a
percent of net sales is stable compared to an unusual fiscal 1995 is primarily
the result of increased distribution costs incurred during the first nine months
of fiscal 1996. Distribution costs for the three and nine months
10
ended June 30, 1996 exceeded the distribution costs for the three and nine
months ended June 30, 1995 by $2.2 million and $4.1 million, respectively.
The increase in distribution costs in fiscal 1996 resulted primarily from the
use of additional labor in temporary distribution facilities pending
completion of the CSC. Additionally, during the first nine months $3.3
million of increased selling, general and administrative expenses was the
result of 23 retail stores now open and operational as a part of the
Company's retail division. The increase in selling, general and
administrative expenses was partially offset by a decrease in advertising
costs. Advertising costs for the three and nine months ended June 30, 1996
were $2.4 million lower than advertising costs for the three and nine months
ended June 30, 1995. For the nine months ended June 30, 1996 the selling,
general and administrative expenses have been offset by a $1.1 million gain
resulting from the final settlement of substantially all claims with the
Company's insurance carrier related to the Company's damaged distribution
center and warehouse.
Interest expense in the third quarter of fiscal 1996 remained relatively stable
at $1.5 million compared to $1.4 million in the third quarter of fiscal 1995.
Interest expense for the first nine months of fiscal 1996 decreased to $3.1
million compared to interest expense of $3.2 million in the first nine months of
fiscal 1995. The decrease in interest expense for the first nine months of
fiscal 1996 is the result of capitalization of interest related to the Company's
new Customer Service Center. The Company capitalized interest expense related to
the CSC of approximately $1.4 million during the first nine months of fiscal
1996.
Income tax expense for the third quarter of fiscal 1996, as a percent of income
before provision for income taxes, was 38.6% compared to a 36.6% benefit in the
third quarter of fiscal 1995. For the nine months ended June 30, 1996, income
tax provision as a percent of income before provision for income taxes was 38.1%
compared to a 35.2% benefit in the first nine months of 1995. The effective tax
rates for both the third quarter and the first nine months of fiscal 1996 and
1995 differ from the statutory rate because of certain permanent tax differences
and state income taxes. The permanent tax differences include income from tax-
free investments and equity securities which qualify for the 70% dividend
exclusion and losses from a foreign subsidiary for which the Company receives no
tax benefit.
LIQUIDITY AND CAPITAL RESOURCES
The Company's trade accounts receivable potentially expose the Company to
concentrations of credit risks because most of its customers are in the retail
apparel industry. The Company performs ongoing credit evaluations of its
customers' financial condition and establishes an allowance for doubtful
accounts based upon the factors related to the credit risk of specific
customers, historical trends and other information. The Company's trade
accounts receivable decreased approximately $25.8 million to $41.2 million at
June 30, 1996 from $67.0 million at September 30, 1995. This decrease in trade
accounts receivable is the result of lower than normal sales volume during the
first nine months of fiscal 1996, and seasonal reductions.
Inventories as of June 30, 1996, increased to $144.8 million from $138.9 million
at September 30, 1995. Lower than expected sales during the first quarter
holiday season and inclement weather counteracted the Company's efforts to
reduce inventory during the first nine months of fiscal 1996. Additionally, the
Company's efforts to reduce inventory were hampered by problems with the
automated shipping systems, which were unable under operational conditions to
accommodate the level of shipment volume needed at the Company's CSC during the
third quarter.
The Company's ongoing external financing needs are met through an unsecured
revolving credit facility with certain banks. The Agreement provides the
Company with a $100.0 million line of credit. The amount available under the
Agreement is limited to the lesser of $100.0 million minus any letter of credit
exposure or the borrowing base as defined in the Agreement. Effective December
31, 1995, the Agreement was amended to relax certain financial covenants for the
first and second quarters of fiscal 1996. As of June 30, 1996, the Company had
$10.0 million outstanding under the Agreement and had
11
additional borrowing capacity of approximately $81.0 million. The interest
rates for the nine month period ended June 30, 1996, ranged from 6.63% to
8.75%.
In the first quarter of fiscal 1995, the Company completed the sale and issuance
of $25.0 million in senior notes. Significant terms of the senior notes include
a maturity date of ten years from the date of issuance, interest payable semi-
annually and annual principal payments beginning in the fourth year. The
interest rate on the senior notes is fixed at 8.49%. The terms and conditions
of the note purchase agreement governing the senior notes include restrictions
on the sale of assets, limitations on additional indebtedness, and the
maintenance of certain net worth requirements.
In addition, the Haggar UK subsidiary has established a $2.4 million line of
credit with a bank in the United Kingdom to fund operating activities. As of
June 30, 1996, the subsidiary had approximately $2.1 million outstanding under
this line of credit. The line of credit is collateralized by a letter of credit
from the Company and is payable upon demand. Interest under the line of credit
is payable at 1% above the bank's base rate.
Although there are no material commitments for capital expenditure, the Company
expects to continue to open additional retail stores.
The Company provided cash from operating activities for the nine months ended
June 30, 1996 primarily as a result of the decrease in insurance receivable of
$24.0 million due to the collection of proceeds from the insurance carrier and a
$25.8 million decrease in accounts receivable due to lower sales volume and
seasonal reductions. For the nine months ended June 30, 1995 the Company used
cash in operating activities primarily as a result of an increase in inventories
of $22.8 million and a decrease in accounts payable of $23.2 million. For the
nine months ended June 30, 1996, the Company used cash flows in investing
activities primarily through purchases of property, plant and equipment of $11.0
million offset by proceeds of $5.0 million from the sale of investments in
preferred stock and equity securities during the first quarter of 1996. For the
nine months ended June 30, 1995 cash flows were used in investing activities as
a result of the purchase of $22.4 million in property, plant and equipment.
Cash flows used in financing activities for the nine months ended June 30, 1996,
were primarily the result of a net reduction in long-term debt of $39.4 million.
For the nine months ended June 30, 1995 cash provided by financing activities
was primarily the result of a net increase in long-term debt of $53.8 million.
The Company believes that the cash flow generated from operations and the funds
available under the foregoing credit facilities will be adequate to meet its
working capital and related financing needs for the foreseeable future.
PART II. OTHER INFORMATION.
ITEM 1. LEGAL PROCEEDINGS.
As previously reported, the Company is defendant in two lawsuits arising out of
the collapse of the roof of its distribution center during a storm on May 5,
1995. The Company maintains general liability, workers compensation, and
employers liability insurance. The Company intends to pass back the costs
associated with the storm related lawsuits to its insurance carriers, under the
applicable policies, subject to the deductible limits and other provisions of
those policies.
12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Pages
11 Statement Regarding Computation of Net Income per Common Share. 14
(b) No reports on Form 8-K filed have been filed during the quarter
for which this report is filed.
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.
Haggar Corp.,
Date: August 12, 1996 By: /s/ Ralph A. Beattie
---------------------------
Ralph A. Beattie
Executive Vice President
Chief Financial Officer
Signed on behalf of the
registrant and as principal
financial officer.
13