Exhibit 99
VF Announces Record Sales and Earnings for Fourth Quarter and Year
GREENSBORO, N.C.--(BUSINESS WIRE)--February 8, 2006
VF Corporation (NYSE: VFC):
-- 4Q EPS up 3%, including $.03 impact from expensing stock
options
-- 4Q revenues rise 4% to $1.6 billion
-- 2005 cash flow from operations reaches $561 million
-- 2006 guidance reaffirmed
-- Ten million share repurchase program approved
Information regarding VF's fourth quarter conference call webcast
today can be found at the end of this release.
VF Corporation (NYSE: VFC), a global leader in branded lifestyle
apparel, today announced record results for the fourth quarter and
full year 2005. All per share amounts are presented on a diluted
basis.
Net income in the fourth quarter rose to a record $127.5 million
from $125.3 million, with earnings per share rising to $1.13 from
$1.10. As previously announced, during the fourth quarter the Company
early adopted Financial Accounting Standards Board Statement No. 123
(Revised 2004), Share-Based Payment ("Statement 123(R)"), which
requires the expensing of stock options. The impact on net income and
earnings per share in the quarter resulting from this requirement was
$3.2 million and $.03, respectively. Earnings per share before the
change in accounting were $1.16 in the quarter, an increase of 5% over
2004 levels. Total revenues increased 4% to a record $1,646.0 million
from $1,579.2 million. Beginning in the fourth quarter of 2005, the
Company has decided to report gross royalty income as a component of
total revenues. Revenues in all prior periods have been restated to
reflect this change.
For the full year 2005, income increased 9% to $518.5 million from
$474.7 million, before a one-time after-tax cumulative effect
adjustment related to the early adoption of Statement 123(R) of $11.8
million, or $.10 per share, recognized in the first quarter of 2005.
Income in 2005 included $16.9 million related to stock option expense,
equal to $.15 per share. Accordingly, earnings per share before the
change in accounting were $4.69 in 2005, an increase of 11% over the
$4.21 per share in 2004. Including the cumulative effect adjustment,
net income in 2005 was $506.7 million or $4.44 per share. Total
revenues in 2005 rose 6% to $6,502.4 million from $6,124.6 million in
2004. Revenues in 2004 included $87 million in sales from the
Company's Playwear unit, which was sold in 2004.
Additional information regarding the adoption of Statement 123(R)
is included in the attached financial tables.
"We are delighted to deliver another record quarter and year to
our shareholders," said Mackey J. McDonald, chairman and chief
executive officer. "We have strong momentum behind our plans to
transform VF into a company driven by dynamic, growing lifestyle
brands. Our lifestyle businesses - Outdoor and Sportswear - continue
to have excellent growth prospects and over the coming years will
comprise a much bigger part of our overall sales mix. At the same
time, our heritage businesses - Jeanswear, Intimate Apparel and
Imagewear - all have strong market positions and leading brands, and
the ability to continue to be important contributors to VF's profits
and cash flow."
Fourth Quarter Business Review
Outdoor
Our Outdoor coalition had another excellent quarter and continues
to be the primary driver of our Company's top line growth. Total
revenues increased 23% to $343.9 million in the quarter from $279.9
million in last year's period, driven by growth across nearly all our
Outdoor brands. The North Face(R) brand continued to grow revenues in
excess of 20% both in the U.S. and internationally. Revenues of our
Vans(R) brand also rose, with continued momentum in its Classics line
and double-digit growth in comparable store sales within Vans(R) brand
retail stores. Our Kipling(R) brand continued to grow in Europe, while
total revenues of our packs business rose 13%, driven by higher
JanSport(R) brand sales in the U.S. The strong volume gains achieved
by The North Face(R) brand and profit improvements in our Vans(R)
brand contributed to a 45% increase in operating income in the
quarter, with an increase in total Outdoor operating margins to 14.2%
from 12.0%.
Sportswear
Revenues of our sportswear businesses, which include our
Nautica(R) and John Varvatos(R) brands, as well as Kipling(R) brand
sales in North America, were $182.9 million in the quarter compared
with $183.6 million in the prior year period. Our Nautica(R) brand
men's sportswear business continues to perform well, with a 7%
increase in revenues in the quarter. Offsetting this increase was a
decline in sales of off-price goods. Our John Varvatos(R) brand men's
luxury business had another double-digit increase in revenues in the
quarter, and we are continuing to make good progress in our launch of
the Kipling(R) brand in the U.S. Operating margins were 14.4% in the
quarter, a decline from prior year levels, due in part to investments
to support the upcoming launch of Nautica(R) brand women's sportswear,
higher spending behind the brand's Navigate Life(TM) marketing
platform and a decline in profits in our young men's denim business.
Jeanswear
Overall, our jeanswear business continues to be healthy. Total
Jeanswear revenues, which include the Wrangler(R), Lee(R), Riders(R),
Rustler(R) and Wrangler Hero(R) brands, rose slightly in the quarter,
to $686.8 million from $679.8 million. Revenues in both our domestic
and international businesses increased during the quarter, with
particular strength in our Mass Market, Western Specialty, Mexican and
Latin American businesses. Our Lee(R) brand business continues to be
challenged, with aggressive efforts underway to stabilize performance.
Total Jeanswear operating income rose 3% in the quarter, with an
increase in operating margins during the period to 17.8%.
Intimate Apparel
Revenues in our Intimate Apparel coalition were more stable than
in the last several quarters. Total revenues decreased slightly to
$183.6 million in the 2005 quarter from $185.9 million in the 2004
quarter. Our Mass Brands business had an excellent quarter, with
revenues up 13%. As has been the case all during 2005, revenue
comparisons in our Private Brands business were negatively impacted by
the absence of a large program with a private label customer, which
boosted revenues and manufacturing efficiencies in the prior year.
Operating income declined sharply to $3.2 million from $14.3 million,
a result of lower manufacturing capacity utilization and costs
associated with improving our product assortments in department and
mid-tier stores.
Imagewear
Our Imagewear coalition reported higher revenues in the quarter,
up 2% to $234.6 million from $230.9 million, with the increase due to
the acquisition of a licensee of the Harley-Davidson Motor Company,
Inc. in early 2005. Operating margins remained strong, at 15.2% in the
quarter. The decrease in operating income was due in part to difficult
comparisons related to a more profitable mix of sales of World Series
apparel products in 2004 versus 2005.
Operating margins declined in the quarter due in part to the
impact of adopting Statement 123(R). Operating margins in the 2005
quarter were 12.1% compared to 12.9% in the 2004 quarter, with 30
basis points of the decline due to the effects of Statement 123(R).
Operating income was $199.9 million in the quarter, including a $5.0
million impact from Statement 123(R), compared with $204.0 million in
the year-ago period.
Our balance sheet continues to be very strong, giving us ample
flexibility to support future growth. We ended the year with nearly
$300 million in cash. Inventories at year-end were 11% above 2004
year-end, with the majority of the increase in our growing lifestyle
businesses. Debt as a percent of total capital was 22.6% at the end of
the year, or 15.7% net of cash. During the quarter we repurchased one
million shares of common stock, bringing the total shares repurchased
during the year to four million.
Outlook
We're looking forward to another record year in both revenues and
earnings in 2006. We continue to anticipate solid organic growth in
revenues of approximately 4 to 5% in 2006, driven by double-digit
growth in our Outdoor coalition and mid-single digit growth in our
Sportswear and Imagewear coalitions. We expect stable revenues in our
Jeanswear and Intimates coalitions. Identifying and adding strong new
brands to our portfolio remains a priority, but we will maintain a
disciplined approach and only pursue those that have the potential to
make a positive long-term contribution to total shareholder returns.
Earnings per share are expected to grow more than revenues in
2006. Based on the $4.44 per share reported in 2005, which includes
the $.10 per share cumulative effect adjustment from adopting
Statement 123(R), earnings per share are expected to rise
approximately 8%. Based on 2005 earnings per share of $4.54 before the
cumulative effect adjustment, we expect an increase in earnings per
share of approximately 6%, in line with our previous guidance. Also as
previously disclosed, the impact on 2006 earnings per share from
expensing stock options is expected to be $.17 per share.
Based on the changing mix of our business and the seasonality
experienced by our growing Outdoor business, as well as improvements
we expect in our Lee brand and Intimates businesses, we expect
stronger earnings comparisons in the second half of the year compared
to the first half. For the first quarter, we expect earnings per share
to be up slightly over prior year levels, with revenues increasing by
approximately 5%.
We also anticipate another strong year of cash flow from
operations, which could reach $600 million in 2006.
Share Repurchase
VF also announced that its Board of Directors has approved an
authorization for the Company to repurchase 10 million shares. We are
nearing the completion of our current 10 million share repurchase
program, which was initiated in 2001. We plan to repurchase
approximately two million shares of common stock this year to offset
the dilution resulting from the exercise of stock options.
Dividend Declared
The Board of Directors declared a regular quarterly cash dividend
of $.29 per share, payable on March 20, 2006 to shareholders of record
as of the close of business on March 10, 2006.
Cautionary Statement on Forward-looking Statements
Certain statements included in this release are "forward-looking
statements" within the meaning of the federal securities laws.
Management cautions that forward-looking statements are not guarantees
and that actual results could differ materially from those expressed
or implied in the forward-looking statements. Important risk factors
that could cause the actual results of operations or financial
condition of the Company to differ include, but are not limited to,
the overall level of consumer spending for apparel; changes in trends
in the segments of the market in which the Company competes; the
financial strength and competitive conditions, including
consolidation, of our customers and of our suppliers; actions of
competitors, customers, suppliers and service providers that may
impact the Company's business; the Company's ability to make and
integrate acquisitions successfully; the Company's ability to achieve
expected sales and earnings growth from ongoing businesses and
acquisitions; the Company's ability to achieve its planned cost
savings; natural disasters; terrorist actions; and the impact of
economic and political factors in the markets where the Company
competes, such as recession or changes in interest rates, currency
exchange rates, price levels, capital market valuations and other
factors over which the Company has no control. Investors are also
directed to consider the risks and uncertainties discussed in
documents filed by the Company with the Securities and Exchange
Commission.
About the Company
VF Corporation is a leader in branded lifestyle apparel including
jeanswear, outdoor products, intimate apparel, image apparel and
sportswear. Its principal brands include Lee(R), Wrangler(R),
Riders(R), Rustler(R), Vanity Fair(R), Vassarette(R), Bestform(R),
Lily of France(R), Nautica(R), John Varvatos(R), JanSport(R),
Eastpak(R), The North Face(R), Vans(R), Reef(R), Napapijri(R),
Kipling(R), Lee Sport(R) and Red Kap(R).
VF Corporation's press releases, annual report and other
information can be accessed through the Company's home page,
www.vfc.com.
Webcast Information
VF will hold its fourth quarter conference call and webcast today
at 8:30 a.m. ET. Interested parties should call (800)811-8845
domestic, or (913)981-4905 international, to access the call. You may
also access this call via the Internet at www.vfc.com. A replay will
be available through February 21, 2006 and can be accessed by dialing
(888)203-1112 domestic, and (719) 457-0820 international. The pass
code is 5524284. A replay also can be accessed at the Company's web
site at www.vfc.com.
VF CORPORATION
Consolidated Statements of Income
(In thousands, except per share amounts)
Three Months Ended
December Year Ended December
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
Net Sales $1,626,110 $1,559,761 $6,428,648 $6,054,536
Royalty Income 19,889 19,397 73,729 70,052
----------- ----------- ----------- -----------
Total Revenues 1,645,999 1,579,158 6,502,377 6,124,588
----------- ----------- ----------- -----------
Costs and Operating
Expenses
Cost of goods sold 972,254 923,413 3,785,243 3,644,255
Marketing,
administrative and
general expenses 473,860 451,695 1,888,957 1,702,545
----------- ----------- ----------- -----------
1,446,114 1,375,108 5,674,200 5,346,800
----------- ----------- ----------- -----------
Operating Income 199,885 204,050 828,177 777,788
Other Income (Expense)
Interest income 1,580 2,303 8,039 7,151
Interest expense (13,942) (19,067) (70,463) (76,087)
Miscellaneous, net 4,259 1,312 5,060 3,268
----------- ----------- ----------- -----------
(8,103) (15,452) (57,364) (65,668)
----------- ----------- ----------- -----------
Income before Income
Taxes and Cumulative
Effect of a Change in
Accounting Policy 191,782 188,598 770,813 712,120
Income Taxes 64,312 63,295 252,278 237,418
----------- ----------- ----------- -----------
Income before Cumulative
Effect of a Change in
Accounting Policy 127,470 125,303 518,535 474,702
Cumulative Effect of a
Change in Accounting
Policy - - (11,833) -
----------- ----------- ----------- -----------
Net Income $ 127,470 $ 125,303 $ 506,702 $ 474,702
=========== =========== =========== ===========
Earnings Per Common
Share - Basic
Income before
cumulative effect
of a change in
accounting policy $ 1.15 $ 1.13 $ 4.65 $ 4.30
Cumulative effect
of a change in
accounting policy - - (0.11) -
Net income 1.15 1.13 4.54 4.30
Earnings Per Common
Share - Diluted
Income before
cumulative effect
of a change in
accounting policy $ 1.13 $ 1.10 $ 4.54 $ 4.21
Cumulative effect
of a change in
accounting policy - - (0.10) -
Net income 1.13 1.10 4.44 4.21
Weighted Average Shares
Outstanding
Basic 110,407 110,956 111,192 109,872
Diluted 113,122 114,153 114,192 112,730
Cash Dividends Per
Common Share $ 0.29 $ 0.27 $ 1.10 $ 1.05
Basis of presentation: VF operates and reports using a 52/53 week
fiscal year ending on the Saturday closest to December 31 of each
year. For presentation purposes herein, all references to periods
ended December 2005 and December 2004 relate to the fiscal periods
ended as of December 31, 2005 and January 1, 2005, respectively.
Change in accounting policy: During the fourth quarter of 2005, VF
elected to early adopt FASB Statement No. 123 (Revised), Share-Based
Payment ("Statement 123(R)"), effective as of the beginning of 2005
using the modified retrospective method. Under this method of
adoption, VF recorded a noncash charge of $11.8 million (net of income
taxes of $7.9 million) or $.10 per diluted share as the Cumulative
Effect of a Change in Accounting Policy for periods prior to January
2005. As a result, VF has restated its operating results for the first
three quarters of 2005 to recognize compensation cost for grants of
stock options and other stock-based compensation over the requisite
service periods in amounts previously reported in the pro forma
footnote disclosures under the prior accounting rules. Financial
statements for prior years have not been restated.
Reclassifications: Beginning in the fourth quarter of 2005, Royalty
Income is classified as a separate component of Total Revenues, with
related expenses classified in Marketing, Administrative and General.
Prior period amounts have been reclassified to conform with the 2005
presentation.
VF CORPORATION
Consolidated Balance Sheets
(In thousands)
December
-----------------------
2005 2004
----------- -----------
ASSETS
Current Assets
Cash and equivalents $ 296,557 $ 485,507
Accounts receivable, net 764,184 738,345
Inventories 1,081,080 975,369
Deferred income taxes 106,774 99,338
Other current assets 116,781 68,893
----------- -----------
Total current assets 2,365,376 2,367,452
Property, Plant and Equipment 1,551,411 1,539,490
Less accumulated depreciation 987,356 967,236
----------- -----------
564,055 572,254
Intangible Assets 744,313 639,520
Goodwill 1,097,037 1,031,594
Other Assets 400,290 382,342
----------- -----------
$5,171,071 $4,993,162
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 138,956 $ 42,830
Current portion of long-term debt 33,956 401,232
Accounts payable 451,383 369,937
Accrued liabilities 527,848 547,099
----------- -----------
Total current liabilities 1,152,143 1,361,098
Long-term Debt 647,728 556,639
Other Liabilities 539,661 536,131
Commitments and Contingencies
Redeemable Preferred Stock 23,326 26,053
Common Stockholders' Equity
Common Stock 110,108 111,388
Additional paid-in capital 1,277,486 1,087,641
Accumulated other comprehensive income
(loss) (164,802) (113,071)
Retained earnings 1,585,421 1,427,283
----------- -----------
Total common stockholders' equity 2,808,213 2,513,241
----------- -----------
$5,171,071 $4,993,162
=========== ===========
VF CORPORATION
Consolidated Statements of Cash Flows
(In thousands)
Year Ended December
---------------------
2005 2004
--------- ---------
Operating Activities
Net income $ 506,702 $ 474,702
Adjustments to reconcile net income
to cash provided by operating activities:
Cumulative effect of a change in
accounting policy 11,833 -
Depreciation 99,549 110,868
Amortization 33,715 29,849
Stock-based compensation 43,782 10,956
Provision for doubtful accounts 7,831 4,206
Pension funding in excess of expense (14,857) (236)
Deferred income taxes 433 16,172
Other, net (10,970) 20,984
Changes in operating assets and liabilities, net of
acquisitions:
Accounts receivable (10,388) (20,991)
Inventories (95,992) 51,450
Other current assets (45,756) (19,006)
Accounts payable 80,105 3,812
Accrued compensation (11,104) 48,897
Other accrued liabilities (33,537) (1,407)
--------- ---------
Cash provided by operating activities 561,346 730,256
Investing Activities
Capital expenditures (110,307) (81,410)
Business acquisitions, net of cash acquired (211,838) (655,089)
Software purchases (17,546) (13,018)
Sale of property, plant and equipment 17,683 12,900
Sale of VF Playwear business 6,667 4,517
Other, net 798 (103)
--------- ---------
Cash used by investing activities (314,543) (732,203)
Financing Activities
Increase (decrease) in short-term borrowings 95,673 (19,056)
Proceeds from long-term debt 117,792 -
Payments on long-term debt (401,253) (3,494)
Purchase of Common Stock (229,003) -
Cash dividends paid (124,116) (117,731)
Proceeds from issuance of Common Stock 99,974 106,613
Tax benefits of stock option exercises 17,741 -
Other, net (301) (730)
--------- ---------
Cash used by financing activities (423,493) (34,398)
Net Cash Used by Discontinued Operations - (3,320)
Effect of Foreign Currency Rate Changes on Cash (12,260) 10,387
--------- ---------
Net Change in Cash and Equivalents (188,950) (29,278)
Cash and Equivalents - Beginning of Year 485,507 514,785
--------- ---------
Cash and Equivalents - End of Year $ 296,557 $ 485,507
========= =========
VF CORPORATION
Supplemental Financial Information
Business Segment Information
(In thousands)
Three Months Ended
December Year Ended December
----------------------- -----------------------
2005(a) 2004 2005(a) 2004
----------- ---------- ----------- ----------
Coalition Revenues:
Jeanswear $ 686,844 $ 679,827 $2,697,066 $2,706,364
Outdoor Apparel and
Equipment 343,886 279,869 1,454,872 1,011,508
Intimate Apparel 183,560 185,872 848,222 906,522
Imagewear 234,617 230,907 805,775 770,293
Sportswear 182,911 183,570 650,813 618,763
Other 14,181 19,114 45,629 111,138
---------- ---------- ---------- ----------
Total revenues $1,645,999 $1,579,159 $6,502,377 $6,124,588
========== ========== ========== ==========
Coalition Profit:
Jeanswear $ 122,062 $ 118,144 $ 452,461 $ 442,151
Outdoor Apparel and
Equipment 48,753 33,699 233,433 156,385
Intimate Apparel 3,175 14,307 59,595 117,804
Imagewear 35,752 44,263 126,287 117,035
Sportswear 26,360 31,202 100,139 67,202
Other 1,383 (107) (1,063) (10,726)
---------- ---------- ---------- ----------
Total coalition
profit 237,485 241,508 970,852 889,851
Corporate and Other
Expenses (33,341) (36,146) (137,615) (108,795)
Interest, net (12,362) (16,764) (62,424) (68,936)
---------- ---------- ---------- ----------
Income Before Income
Taxes and Cumulative
Effect of a Change
in Accounting Policy $ 191,782 $ 188,598 $ 770,813 $ 712,120
========== ========== ========== ==========
(a) 2005 includes the effects of the change in accounting policy for
stock-based compensation.
VF CORPORATION
Supplemental Financial Information
Effects of Adoption of FASB Statement No. 123 (R)
2005 Consolidated Statement of Income - Reconciliation,
Compared with 2004
(In thousands, except per share amounts)
Three Months Ended December
--------------------------------------------------
2005 2004
-------------------------------------- ----------
As
Reported -
After
Prior Adoption
Accounting Effects of of
Policy Adoption of Statement As
(Opinion 25) Statement 123(R) 123(R) Reported
------------ ---------------- ---------- -----------
Net Sales $1,626,110 $1,626,110 $1,559,761
Royalty Income 19,889 19,889 19,397
---------- ---------- ----------
Total Revenues 1,645,999 1,645,999 1,579,158
---------- ---------- ----------
Costs and Operating
Expenses
Cost of goods
sold 971,610 $ 644 972,254 923,413
Marketing,
administrative
and general
expenses 469,548 4,312 473,860 451,695
---------- ------- ---------- ----------
1,441,158 4,956 1,446,114 1,375,108
---------- ------- ---------- ----------
Operating Income 204,841 (4,956) 199,885 204,050
Other Income
(Expense)
Interest
income 1,580 1,580 2,303
Interest
expense (13,942) (13,942) (19,067)
Miscellaneous,
net 4,259 4,259 1,312
---------- --------------- ---------- ----------
(8,103) - (8,103) (15,452)
---------- --------------- ---------- ----------
Income before Income
Taxes and Cumulative
Effect of a Change
in Accounting
Policy 196,738 (4,956) 191,782 188,598
Income Taxes 66,054 (1,742) 64,312 63,295
---------- ------- ---------- ----------
Income before
Cumulative Effect
of a Change in
Accounting Policy 130,684 (3,214) 127,470 125,303
Cumulative Effect
of a Change in
Accounting
Policy - - - -
---------- ------- ---------- ----------
Net Income $ 130,684 $(3,214) $ 127,470 $ 125,303
========== ======= ========== ==========
Earnings Per Common
Share - Basic
Income before
cumulative
effect of a
change in
accounting
policy $ 1.18 $ (0.03) $ 1.15 $ 1.13
Cumulative
effect of a
change in
accounting
policy - - - -
Net income 1.18 (0.03) 1.15 1.13
Earnings Per Common
Share - Diluted
Income before
cumulative
effect of a
change in
accounting
policy $ 1.16 $ (0.03) $ 1.13 $ 1.10
Cumulative
effect of a
change in
accounting
policy - - - -
Net income 1.16 (0.03) 1.13 1.10
Note: The above reconciliation from the prior accounting rules for
stock-based compensation to the newly adopted Statement 123(R) is
provided to assist the reader in understanding the impact of this
change in accounting policy on VF's 2005 Consolidated Statement of
Income.
VF CORPORATION
Supplemental Financial Information
Effects of Adoption of FASB Statement No. 123 (R)
2005 Consolidated Statement of Income - Reconciliation,
Compared with 2004
(In thousands, except per share amounts)
Year Ended December
-----------------------------------------------------
2005 2004
-------------------------------- -------------------
Effects
Prior of As Reported -
Accounting Adoption After
Policy of Adoption
(Opinion Statement of Statement As
25) 123(R) 123(R) Reported
----------- --------- ------------ -------------------
Net Sales $6,428,648 $6,428,648 $ 6,054,536
Royalty Income 73,729 73,729 70,052
---------- ---------- -------------------
Total Revenues 6,502,377 6,502,377 6,124,588
---------- ---------- -------------------
Costs and
Operating
Expenses
Cost of goods
sold 3,782,319 $ 2,924 3,785,243 3,644,255
Marketing,
administrative
and general
expenses 1,865,186 23,771 1,888,957 1,702,545
---------- -------- ---------- -------------------
5,647,505 26,695 5,674,200 5,346,800
---------- -------- ---------- -------------------
Operating
Income 854,872 (26,695) 828,177 777,788
Other Income
(Expense)
Interest
income 8,039 8,039 7,151
Interest
expense (70,463) (70,463) (76,087)
Miscellaneous,
net 5,060 5,060 3,268
---------- --------- ---------- -------------------
(57,364) - (57,364) (65,668)
---------- -------- ---------- -------------------
Income before
Income Taxes
and Cumulative
Effect of a
Change in
Accounting
Policy 797,508 (26,695) 770,813 712,120
Income Taxes 262,104 (9,826) 252,278 237,418
---------- -------- ---------- -------------------
Income before
Cumulative
Effect of a
Change in
Accounting
Policy 535,404 (16,869) 518,535 474,702
Cumulative
Effect of a
Change in
Accounting
Policy (11,833) (11,833) -
----------- -------- ---------- -------------------
Net Income $ 535,404 $(28,702) $ 506,702 $ 474,702
========== ======== ========== ===================
Earnings Per
Common Share -
Basic
Income before cumulative
effect of a change
in accounting
policy $ 4.80 $ (0.15) $ 4.65 $ 4.30
Cumulative
effect of a
change
in accounting
policy - (0.11) (0.11) -
Net income 4.80 (0.26) 4.54 4.30
Earnings Per
Common Share -
Diluted
Income before
cumulative
effect of a
change in
accounting
policy $ 4.69 $ (0.15) $ 4.54 $ 4.21
Cumulative
effect of a
change in
accounting
policy - (0.10) (0.10) -
Net income 4.69 (0.25) 4.44 4.21
Note: The above reconciliation from the prior accounting rules for
stock-based compensation to the newly adopted Statement 123(R) is
provided to assist the reader in understanding the impact of this
change in accounting policy on VF's 2005 Consolidated Statement of
Income.
VF CORPORATION
Supplemental Financial Information
Effects of Adoption of FASB Statement No. 123(R)
2005 Consolidated Statements of Income By Quarter
(In thousands, except per share amounts)
2005
----------------------------------------------------------
First Second Third Fourth
Quarter(b) Quarter(b) Quarter(b) Quarter Year
----------- ----------- ----------- ----------- ----------
Net Sales $1,563,643 $1,435,831 $1,803,064 $1,626,110 $6,428,648
Royalty
Income 18,542 16,276 19,022 19,889 73,729
---------- ---------- ---------- ---------- ----------
Total
Revenues 1,582,185 1,452,107 1,822,086 1,645,999 6,502,377
---------- ---------- ---------- ---------- ----------
Costs and
Operating
Expenses
Cost of goods
sold 915,564 841,812 1,055,613 972,254 3,785,243
Marketing,
administrative
and general
expenses 480,115 456,511 478,471 473,860 1,888,957
---------- ---------- ---------- ---------- ---------
1,395,679 1,298,323 1,534,084 1,446,114 5,674,200
---------- ---------- ---------- ---------- ---------
Operating
Income 186,506 153,784 288,002 199,885 828,177
Other Income
(Expense)
Interest
income 3,016 2,041 1,402 1,580 8,039
Interest
expense (18,674) (18,490) (19,357) (13,942) (70,463)
Miscellaneous,
net 119 (137) 819 4,259 5,060
---------- ---------- ---------- ---------- -------
(15,539) (16,586) (17,136) (8,103) (57,364)
---------- ---------- ---------- ---------- -------
Income before
Income Taxes
and Cumulative
Effect of a
Change in
Accounting
Policy 170,967 137,198 270,866 191,782 770,813
Income Taxes 56,281 40,449 91,236 64,312 252,278
---------- ---------- ---------- ---------- -------
Income before
Cumulative
Effect of a
Change
in Accounting
Policy 114,686 96,749 179,630 127,470 518,535
Cumulative
Effect of a
Change in
Accounting
Policy (11,833) - - - (11,833)
---------- ---------- ---------- ---------- -------
Net Income $ 102,853 $ 96,749 $ 179,630 $ 127,470 $ 506,702
========== ========== ========== ========== ========
Earnings Per
Common Share -
Basic
Income before
cumulative
effect of a
change in
accounting
policy $ 1.02 $ 0.87 $ 1.61 $ 1.15 $ 4.65
Cumulative
effect of a
change
in accounting
policy (0.11) - - - (0.11)
Net income 0.92 0.87 1.61 1.15 4.54
Earnings Per
Common Share -
Diluted
Income before
cumulative
effect of a
change in
accounting
policy $ 1.00 $ 0.85 $ 1.57 $ 1.13 $ 4.54
Cumulative
effect of a
change
in
accounting
policy (0.10) - - - (0.10)
Net income 0.89 0.85 1.57 1.13 4.44
(b) Restated to include the effects of the change in accounting policy
for stock- based compensation.
VF CORPORATION
Supplemental Financial Information
Effects of Adoption of FASB Statement No. 123 (R)
2005 Business Segment Information By Quarter
(In thousands)
First Second Third Fourth
Quarter(c) Quarter(c) Quarter(c) Quarter Year
----------- ------------ ----------- --------- -----------
Coalition
Revenues:
Jeanswear $ 713,502 $ 601,974 $ 694,746 $ 686,844 $2,697,066
Outdoor
Apparel
and
Equipment 285,381 300,434 525,171 343,886 1,454,872
Intimate
Apparel 227,703 223,191 213,768 183,560 848,222
Imagewear 187,304 180,809 203,045 234,617 805,775
Sportswear 159,596 134,372 173,934 182,911 650,813
Other 8,699 11,327 11,422 14,181 45,629
---------- ---------- ---------- ---------- ---------
Total
revenues $1,582,185 $1,452,107 $1,822,086 $1,645,999 $6,502,377
========== ========== ========== ========== ==========
Coalition
Profit:
Jeanswear $ 116,679 $ 91,827 $ 121,893 $ 122,062 $ 452,461
Outdoor
Apparel
and
Equipment 31,725 41,712 111,243 48,753 233,433
Intimate
Apparel 22,308 13,060 21,052 3,175 59,595
Imagewear 29,570 24,157 36,808 35,752 126,287
Sportswear 26,429 18,562 28,788 26,360 100,139
Other (724) (204) (1,518) 1,383 (1,063)
---------- ---------- ---------- ---------- ---------
Total
coalition
profit 225,987 189,114 318,266 237,485 970,852
Corporate
and Other
Expenses (39,362) (35,467) (29,445) (33,341) (137,615)
Interest,
net (15,658) (16,449) (17,955) (12,362) (62,424)
---------- ---------- ---------- ---------- ---------
Income Before
Income Taxes
and Cumulative
Effect of a
Change in
Accounting
Policy $ 170,967 $ 137,198 $ 270,866 $ 191,782 $ 770,813
========== ========== ========== ========== ==========
(c) Restated to include the effects of the change in accounting
policy for stock- based compensation.
CONTACT: VF Services, Inc.
Cindy Knoebel, CFA
VP, Financial & Corporate Communications
212-841-7141/336-424-6189