EXHIBIT 99.2
UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENTS OF EARNINGS
The unaudited pro forma combined consolidated statements of earnings for the
year ended January 31, 2004 and for the three months ended May 1, 2004 combine
the historical Genesco Inc. and Hat World Corporation statements of earnings as
if the acquisition of Hat World Corporation, which occurred on April 1, 2004,
had been completed on February 2, 2003, the first day of the fiscal year ended
January 31, 2004.
The pro forma adjustments reflecting the Hat World Corporation acquisition are
based on the purchase method of accounting, available financial information, and
certain estimates and assumptions set forth in the notes to the Unaudited Pro
Forma Combined Consolidated Statements of Earnings. The pro forma adjustments do
not reflect any operating efficiencies or additional costs that may result with
respect to the combined business of Genesco Inc. and Hat World Corporation.
The unaudited pro forma combined consolidated statements of earnings for the
year ended January 31, 2004 and for the three months ended May 1, 2004 do not
purport to represent what the actual results of operations of the combined
businesses would have been if the acquisition of Hat World Corporation had
occurred on the date indicated in these pro forma combined consolidated
statements of earnings nor does this information purport to project the results
for any future periods. The unaudited pro forma condensed combined statements of
earnings and the accompanying notes should be read in conjunction with the
historical financial statements and related notes of Genesco Inc. included in
Genesco's Annual Report on Form 10-K and Quarterly Report on Form 10-Q and the
historical financial statements of Hat World Corporation included herein.
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Genesco Inc. and Subsidiaries
Unaudited Pro Forma Combined Consolidated Statements of Earnings
Year Ended January 31, 2004
In Thousands, except per share amounts
As Reported Hat World Pro Forma Pro Forma
Per Form 10-K Corporation Adjustments Combined
------------- ----------- ----------- ----------
Net sales $ 837,379 $ 199,419 $1,036,798
Cost of sales 448,601 92,738 541,339
Selling and administrative expenses 332,674 87,734 $ 2,315 (1)(2) 422,723
Restructuring and other charges,net 901 0 901
--------- --------- ---------- ----------
Earnings from operations 55,203 18,947 (2,315) 71,835
--------- --------- ---------- ----------
Loss on early retirement of debt 2,581 2,581
Interest expense, net:
Interest expense 7,902 1,269 4,267 (3) 13,438
Interest income (613) (1) 497 (4) (117)
--------- --------- ---------- ----------
Total interest expense, net 7,289 1,268 4,764 13,321
--------- --------- ---------- ----------
Pretax earnings 45,333 17,679 (7,079) 55,933
Income taxes 15,715 6,865 (2,628) (5) 19,952
--------- --------- ---------- ----------
Earnings from continuing operations 29,618 10,814 (4,451) 35,981
--------- --------- ---------- ----------
Discontinued Operations:
Provision for Future Losses (888) 0 0 (888)
--------- --------- ---------- ----------
Net earnings $ 28,730 $ 10,814 $ (4,451) $ 35,093
========= ========= ========== ==========
Basic earnings per common share:
Continuing Operations $ 1.35 $ 1.64
Net Earnings $ 1.31 $ 1.60
Diluted earnings per common share:
Continuing Operations $ 1.33 $ 1.62
Net Earnings $ 1.29 $ 1.58
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Genesco Inc. and Subsidiaries
Unaudited Pro Forma Combined Consolidated Statements of Earnings
Three Months Ended May 1, 2004
In Thousands, except per share amounts
Two Months Ended
As Reported March 31, 2004 Pro Forma Pro Forma
Per Form 10-Q Hat World Corporation Adjustments Combined
------------- --------------------- ----------- ---------
Net sales $ 225,526 $ 32,961 $258,487
Cost of sales 114,848 14,971 129,819
Selling and administrative expenses 99,230 17,715 (6) $ 386 (1)(2) 117,331
Restructuring and other charges,net 146 0 146
--------- -------- ------- --------
Earnings from operations 11,302 275 (386) 11,191
--------- -------- ------- --------
Interest expense, net:
Interest expense 2,035 131 684 (3) 2,850
Interest income (153) 116 (4) (37)
--------- -------- ------- --------
Total interest expense, net 1,882 131 800 2,813
--------- -------- ------- --------
Pretax earnings 9,420 144 (1,186) 8,378
Income taxes 3,596 858 (450) (5) 4,004
--------- -------- ------- --------
Net earnings (loss) $ 5,824 $ (714) $ (736) $ 4,374
========= ======== ======= ========
Basic net earnings per common share $ 0.26 $ 0.20
Diluted net earnings per common share $ 0.26 $ 0.19
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GENESCO INC.
Notes to Unaudited Pro Forma Combined Consolidated Statements of Earnings
(1) Additional rent from lease write-up of $2,170,000 and $362,000 for the
periods ended January 31, 2004 and May 1, 2004, respectively.
(2) Amortization of customer list of $145,000 and $24,000 for the periods
ended January 31, 2004 and May 1, 2004, respectively.
(3) Incremental interest expense from the $100.0 million term loan borrowed on
April 1, 2004 to fund the acquisition including amortization of deferred
financing fees.
(4) Decrease in interest income from the use of $67.5 million in cash on hand
to fund the acquisition.
(5) Adjustment to income taxes using the incremental tax rates of 37.12% and
37.94% for the periods ended January 31, 2004 and May 1, 2004,
respectively.
(6) Includes $2.0 million of non-recurring transaction costs.
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