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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
Pennsylvania | 23-1180120 | |
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. employer
identification number) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting Company o |
2
Three Months Ended March | ||||||||
2010 | 2009 | |||||||
Net Sales
|
$ | 1,730,086 | $ | 1,707,301 | ||||
Royalty Income
|
19,793 | 18,173 | ||||||
|
||||||||
|
||||||||
Total Revenues
|
1,749,879 | 1,725,474 | ||||||
|
||||||||
|
||||||||
Costs and Operating Expenses
|
||||||||
Cost of goods sold
|
932,203 | 996,640 | ||||||
Marketing, administrative and general expenses
|
594,416 | 567,386 | ||||||
|
||||||||
|
1,526,619 | 1,564,026 | ||||||
|
||||||||
|
||||||||
Operating Income
|
223,260 | 161,448 | ||||||
|
||||||||
Other Income (Expense)
|
||||||||
Interest income
|
494 | 765 | ||||||
Interest expense
|
(20,499 | ) | (22,015 | ) | ||||
Miscellaneous, net
|
6,423 | 1,249 | ||||||
|
||||||||
|
(13,582 | ) | (20,001 | ) | ||||
|
||||||||
|
||||||||
Income Before Income Taxes
|
209,678 | 141,447 | ||||||
|
||||||||
Income Taxes
|
46,219 | 41,013 | ||||||
|
||||||||
|
||||||||
Net Income
|
163,459 | 100,434 | ||||||
|
||||||||
Net Loss
Attributable to Noncontrolling
Interests in Subsidiaries
|
57 | 505 | ||||||
|
||||||||
|
||||||||
Net Income Attributable to VF Corporation
|
$ | 163,516 | $ | 100,939 | ||||
|
||||||||
|
||||||||
Earnings Per Common Share Attributable to VF Corporation Common Stockholders
|
||||||||
Basic
|
$ | 1.48 | $ | 0.92 | ||||
Diluted
|
1.46 | 0.91 | ||||||
|
||||||||
Weighted Average Shares Outstanding
|
||||||||
Basic
|
110,259 | 109,992 | ||||||
Diluted
|
111,629 | 111,028 | ||||||
|
||||||||
Cash Dividends Per Common Share
|
$ | 0.60 | $ | 0.59 | ||||
|
3
March | December | March | ||||||||||
2010 | 2009 | 2009 | ||||||||||
ASSETS
|
||||||||||||
|
||||||||||||
Current Assets
|
||||||||||||
Cash and equivalents
|
$ | 718,634 | $ | 731,549 | $ | 276,428 | ||||||
Accounts receivable, less allowance for doubtful accounts of:
|
787,682 | 776,140 | 996,507 | |||||||||
March 2010 - $59,351; Dec. 2009 - $60,380;
|
||||||||||||
March 2009 - $49,177
|
||||||||||||
|
||||||||||||
Inventories:
|
||||||||||||
Finished products
|
764,167 | 772,458 | 910,139 | |||||||||
Work in process
|
69,515 | 70,507 | 75,832 | |||||||||
Materials and supplies
|
118,500 | 115,674 | 132,102 | |||||||||
|
||||||||||||
|
952,182 | 958,639 | 1,118,073 | |||||||||
|
||||||||||||
Other current assets
|
189,088 | 163,028 | 230,251 | |||||||||
|
||||||||||||
Total current assets
|
2,647,586 | 2,629,356 | 2,621,259 | |||||||||
|
||||||||||||
Property, Plant and Equipment
|
1,602,996 | 1,601,608 | 1,558,857 | |||||||||
Less accumulated depreciation
|
1,001,137 | 987,430 | 926,444 | |||||||||
|
||||||||||||
|
601,859 | 614,178 | 632,413 | |||||||||
|
||||||||||||
Intangible Assets
|
1,529,538 | 1,535,121 | 1,563,268 | |||||||||
|
||||||||||||
Goodwill
|
1,363,059 | 1,367,680 | 1,437,682 | |||||||||
|
||||||||||||
Other Assets
|
326,409 | 324,322 | 297,942 | |||||||||
|
||||||||||||
|
||||||||||||
|
$ | 6,468,451 | $ | 6,470,657 | $ | 6,552,564 | ||||||
|
||||||||||||
|
||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||
|
||||||||||||
Current Liabilities
|
||||||||||||
Short-term borrowings
|
$ | 48,525 | $ | 45,453 | $ | 287,873 | ||||||
Current portion of long-term debt
|
202,690 | 203,179 | 3,272 | |||||||||
Accounts payable
|
296,437 | 373,186 | 323,536 | |||||||||
Accrued liabilities
|
509,228 | 470,765 | 483,523 | |||||||||
|
||||||||||||
Total current liabilities
|
1,056,880 | 1,092,583 | 1,098,204 | |||||||||
|
||||||||||||
Long-term Debt
|
937,826 | 938,494 | 1,140,414 | |||||||||
|
||||||||||||
Other Liabilities
|
648,879 | 626,295 | 739,777 | |||||||||
|
||||||||||||
Commitments and Contingencies
|
||||||||||||
|
||||||||||||
Stockholders’ Equity
|
||||||||||||
Common stock, stated value $1; shares
authorized, 300,000,000; shares outstanding:
|
109,981 | 110,285 | 110,276 | |||||||||
March 2010 - 109,980,912; Dec. 2009 - 110,285,132;
|
||||||||||||
March 2009 - 110,276,129
|
||||||||||||
Additional paid-in capital
|
1,938,184 | 1,864,499 | 1,763,818 | |||||||||
Accumulated other comprehensive income (loss)
|
(246,241 | ) | (209,742 | ) | (297,760 | ) | ||||||
Retained earnings
|
2,024,856 | 2,050,109 | 1,996,972 | |||||||||
Noncontrolling interests in subsidiaries
|
(1,914 | ) | (1,866 | ) | 863 | |||||||
|
||||||||||||
|
||||||||||||
Total stockholders’ equity
|
3,824,866 | 3,813,285 | 3,574,169 | |||||||||
|
||||||||||||
|
||||||||||||
|
$ | 6,468,451 | $ | 6,470,657 | $ | 6,552,564 | ||||||
|
4
Three Months Ended March | ||||||||
2010 | 2009 | |||||||
Operating Activities
|
||||||||
Net income
|
$ | 163,459 | $ | 100,434 | ||||
Adjustments to reconcile net income to cash provided (used)
by operating activities:
|
||||||||
Depreciation
|
27,396 | 22,035 | ||||||
Amortization of intangible assets
|
9,978 | 9,102 | ||||||
Other amortization
|
3,695 | 3,311 | ||||||
Stock-based compensation
|
14,774 | 11,668 | ||||||
Pension funding under expense
|
10,324 | 18,338 | ||||||
Other, net
|
27,410 | 22,125 | ||||||
Changes in operating assets and liabilities,
net of acquisitions:
|
||||||||
Accounts receivable
|
(25,230 | ) | (152,542 | ) | ||||
Inventories
|
3,867 | 27,282 | ||||||
Other current assets
|
(4,373 | ) | 40,211 | |||||
Accounts payable
|
(74,409 | ) | (109,748 | ) | ||||
Accrued compensation
|
(31,548 | ) | (8,982 | ) | ||||
Accrued income taxes
|
26,213 | (3,858 | ) | |||||
Accrued liabilities
|
58,312 | (2,594 | ) | |||||
Other assets and liabilities
|
(25,714 | ) | (12,145 | ) | ||||
|
||||||||
|
||||||||
Cash provided (used) by operating activities
|
184,154 | (35,363 | ) | |||||
|
||||||||
Investing Activities
|
||||||||
Capital expenditures
|
(17,339 | ) | (16,983 | ) | ||||
Business acquisitions, net of cash acquired
|
(29,111 | ) | (207,219 | ) | ||||
Software purchases
|
(701 | ) | (1,840 | ) | ||||
Other, net
|
(2,486 | ) | 593 | |||||
|
||||||||
|
||||||||
Cash used by investing activities
|
(49,637 | ) | (225,449 | ) | ||||
|
||||||||
Financing Activities
|
||||||||
Increase in short-term borrowings
|
2,837 | 235,912 | ||||||
Payments on long-term debt
|
(1,061 | ) | (1,110 | ) | ||||
Purchase of Common Stock
|
(118,001 | ) | — | |||||
Cash dividends paid
|
(66,224 | ) | (64,966 | ) | ||||
(Cost) proceeds from issuance of Common Stock, net
|
52,394 | (6,740 | ) | |||||
Tax benefits of stock option exercises
|
1,669 | (2,438 | ) | |||||
|
||||||||
|
||||||||
Cash provided (used) by financing activities
|
(128,386 | ) | 160,658 | |||||
|
||||||||
Effect of Foreign Currency Rate Changes on Cash
|
(19,046 | ) | (5,262 | ) | ||||
|
||||||||
|
||||||||
Net Change in Cash and Equivalents
|
(12,915 | ) | (105,416 | ) | ||||
|
||||||||
Cash and Equivalents — Beginning of Year
|
731,549 | 381,844 | ||||||
|
||||||||
|
||||||||
Cash and Equivalents — End of Period
|
$ | 718,634 | $ | 276,428 | ||||
|
||||||||
See notes to consolidated financial statements.
|
5
VF Corporation Stockholders | ||||||||||||||||||||
Accumulated | ||||||||||||||||||||
Additional | Other | Non- | ||||||||||||||||||
Common | Paid-in | Comprehensive | Retained | controlling | ||||||||||||||||
Stock | Capital | Income (Loss) | Earnings | Interests | ||||||||||||||||
Balance, December 2008
|
$ | 109,848 | $ | 1,749,464 | $ | (276,294 | ) | $ | 1,972,874 | $ | 1,353 | |||||||||
Net income (loss)
|
— | — | — | 461,271 | (2,813 | ) | ||||||||||||||
Common Stock dividends
|
— | — | — | (261,682 | ) | — | ||||||||||||||
Purchase of treasury stock
|
(1,560 | ) | — | — | (110,415 | ) | — | |||||||||||||
Stock compensation plans, net
|
1,977 | 115,035 | — | (12,732 | ) | — | ||||||||||||||
Common Stock held in trust for
deferred compensation plans
|
20 | — | — | 793 | — | |||||||||||||||
Distributions to noncontrolling interests
|
— | — | — | — | (480 | ) | ||||||||||||||
Foreign currency translation
|
— | — | 37,468 | — | 74 | |||||||||||||||
Defined benefit pension plans
|
— | — | 25,021 | — | — | |||||||||||||||
Derivative financial instruments
|
— | — | 510 | — | — | |||||||||||||||
Marketable securities
|
— | — | 3,553 | — | — | |||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Balance, December 2009
|
110,285 | 1,864,499 | (209,742 | ) | 2,050,109 | (1,866 | ) | |||||||||||||
Net income (loss)
|
— | — | — | 163,516 | (57 | ) | ||||||||||||||
Common Stock dividends
|
— | — | — | (66,224 | ) | — | ||||||||||||||
Purchase of treasury stock
|
(1,500 | ) | — | — | (116,501 | ) | — | |||||||||||||
Stock compensation plans, net
|
1,199 | 73,685 | — | (5,780 | ) | — | ||||||||||||||
Common Stock held in trust for
deferred compensation plans
|
(3 | ) | — | — | (264 | ) | — | |||||||||||||
Foreign currency translation
|
— | — | (63,526 | ) | — | 9 | ||||||||||||||
Defined benefit pension plans
|
— | — | 7,589 | — | — | |||||||||||||||
Derivative financial instruments
|
— | — | 18,496 | — | — | |||||||||||||||
Marketable securities
|
— | — | 942 | — | — | |||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Balance, March 2010
|
$ | 109,981 | $ | 1,938,184 | $ | (246,241 | ) | $ | 2,024,856 | $ | (1,914 | ) | ||||||||
|
6
7
March 2010 | December 2009 | |||||||||||||||||||
Weighted | Gross | Net | Net | |||||||||||||||||
Average | Carrying | Accumulated | Carrying | Carrying | ||||||||||||||||
Dollars in thousands | Life * | Amount | Amortization | Amount | Amount | |||||||||||||||
Amortizable intangible assets:
|
||||||||||||||||||||
Customer relationships
|
19 years | $ | 445,865 | $ | 86,939 | $ | 358,926 | $ | 361,039 | |||||||||||
License agreements
|
24 years | 179,628 | 44,989 | 134,639 | 137,447 | |||||||||||||||
Trademarks and other
|
7 years | 14,910 | 8,990 | 5,920 | 6,615 | |||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Amortizable intangible assets, net
|
499,485 | 505,101 | ||||||||||||||||||
|
||||||||||||||||||||
Indefinite-lived intangible assets:
|
||||||||||||||||||||
Trademarks
|
1,030,053 | 1,030,020 | ||||||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Intangible assets, net
|
$ | 1,529,538 | $ | 1,535,121 | ||||||||||||||||
|
* | Amortization of customer relationships – accelerated methods; license agreements – accelerated and straight-line methods; trademarks and other – accelerated and straight-line methods. |
8
Outdoor & | Contemporary | |||||||||||||||||||||||
In thousands | Action Sports | Jeanswear | Imagewear | Sportswear | Brands | Total | ||||||||||||||||||
Balance, December 2009
|
$ | 574,879 | $ | 238,930 | $ | 56,703 | $ | 157,314 | $ | 339,854 | $ | 1,367,680 | ||||||||||||
2010 acquisition
|
16,779 | — | — | — | — | 16,779 | ||||||||||||||||||
Adjustment to contingent
consideration
|
(78 | ) | — | — | — | — | (78 | ) | ||||||||||||||||
Currency translation
|
(14,934 | ) | (3,066 | ) | — | — | (3,322 | ) | (21,322 | ) | ||||||||||||||
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
Balance, March 2010
|
$ | 576,646 | $ | 235,864 | $ | 56,703 | $ | 157,314 | $ | 336,532 | $ | 1,363,059 | ||||||||||||
|
Three Months | ||||||||
Ended March | ||||||||
In thousands | 2010 | 2009 | ||||||
Service cost – benefits earned during the year
|
$ | 4,083 | $ | 3,726 | ||||
Interest cost on projected benefit obligations
|
19,108 | 17,950 | ||||||
Expected return on plan assets
|
(19,172 | ) | (13,379 | ) | ||||
Amortization of:
|
||||||||
Actuarial losses
|
11,372 | 15,131 | ||||||
Prior service costs
|
987 | 1,067 | ||||||
|
||||||||
|
||||||||
Net periodic pension cost
|
$ | 16,378 | $ | 24,495 | ||||
|
9
Three Months | ||||||||
Ended March | ||||||||
In thousands | 2010 | 2009 | ||||||
Coalition revenues:
|
||||||||
Outdoor & Action Sports
|
$ | 678,562 | $ | 618,272 | ||||
Jeanswear
|
622,065 | 667,383 | ||||||
Imagewear
|
221,298 | 226,651 | ||||||
Sportswear
|
102,177 | 103,570 | ||||||
Contemporary Brands
|
104,089 | 89,589 | ||||||
Other
|
21,688 | 20,009 | ||||||
|
||||||||
|
||||||||
Total coalition revenues
|
$ | 1,749,879 | $ | 1,725,474 | ||||
|
||||||||
|
||||||||
Coalition profit:
|
||||||||
Outdoor & Action Sports
|
$ | 132,705 | $ | 88,595 | ||||
Jeanswear
|
106,808 | 89,648 | ||||||
Imagewear
|
22,812 | 22,867 | ||||||
Sportswear
|
7,168 | 4,508 | ||||||
Contemporary Brands
|
8,452 | 15,414 | ||||||
Other
|
(1,225 | ) | (2,016 | ) | ||||
|
||||||||
|
||||||||
Total coalition profit
|
276,720 | 219,016 | ||||||
|
||||||||
Corporate and other expenses
|
(47,037 | ) | (56,319 | ) | ||||
Interest, net
|
(20,005 | ) | (21,250 | ) | ||||
|
||||||||
|
||||||||
Income before income taxes
|
$ | 209,678 | $ | 141,447 | ||||
|
10
Three Months | ||||||||
Ended March | ||||||||
In thousands | 2010 | 2009 | ||||||
Net income
|
$ | 163,459 | $ | 100,434 | ||||
|
||||||||
Other comprehensive income (loss):
|
||||||||
Foreign currency translation
|
||||||||
Losses arising during the period
|
(74,763 | ) | (40,338 | ) | ||||
Less income tax effect
|
11,237 | 3,777 | ||||||
Defined benefit pension plans
|
||||||||
Amortization of deferred actuarial losses
|
11,372 | 15,131 | ||||||
Amortization of prior service cost
|
987 | 1,067 | ||||||
Less income tax effect
|
(4,770 | ) | (6,241 | ) | ||||
Derivative financial instruments
|
||||||||
Gains arising during the period
|
20,841 | 12,381 | ||||||
Less income tax effect
|
(8,030 | ) | (4,770 | ) | ||||
Reclassification to net income for (gains) losses realized
|
9,247 | (3,688 | ) | |||||
Less income tax effect
|
(3,562 | ) | 1,420 | |||||
Marketable securities
|
||||||||
Gains (losses) arising during the period
|
942 | (205 | ) | |||||
|
||||||||
|
||||||||
Other comprehensive income (loss)
|
(36,499 | ) | (21,466 | ) | ||||
|
||||||||
|
||||||||
Comprehensive income
|
126,960 | 78,968 | ||||||
|
||||||||
Comprehensive loss attributable to noncontrolling
interests
|
48 | 490 | ||||||
|
||||||||
|
||||||||
Comprehensive income attributable to VF Corporation
|
$ | 127,008 | $ | 79,458 | ||||
|
Foreign | Defined | Derivative | ||||||||||||||||||
Currency | Benefit | Financial | Marketable | |||||||||||||||||
In thousands | Translation | Pension Plans | Instruments | Securities | Total | |||||||||||||||
Balance, December 2009
|
$ | 59,671 | $ | (265,970 | ) | $ | (6,180 | ) | $ | 2,737 | $ | (209,742 | ) | |||||||
Other comprehensive
income (loss)
|
(63,526 | ) | 7,589 | 18,496 | 942 | (36,499 | ) | |||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Balance, March 2010
|
$ | (3,855 | ) | $ | (258,381 | ) | $ | 12,316 | $ | 3,679 | $ | (246,241 | ) | |||||||
|
11
12
Three Months | ||||||||
Ended March | ||||||||
In thousands, except per share amounts | 2010 | 2009 | ||||||
Earnings per share — basic:
|
||||||||
Net income attributable to VF Corporation
common stockholders
|
$ | 163,516 | $ | 100,939 | ||||
|
||||||||
|
||||||||
Weighted average Common Stock outstanding
|
110,259 | 109,992 | ||||||
|
||||||||
|
||||||||
Earnings per share attributable to VF
Corporation common stockholders
|
$ | 1.48 | $ | 0.92 | ||||
|
||||||||
|
||||||||
Earnings per share — diluted:
|
||||||||
Net income attributable to VF Corporation
common stockholders
|
$ | 163,516 | $ | 100,939 | ||||
|
||||||||
|
||||||||
Weighted average Common Stock outstanding
|
110,259 | 109,992 | ||||||
Stock options and other dilutive securities
|
1,370 | 1,036 | ||||||
|
||||||||
Weighted average Common Stock and
dilutive securities outstanding
|
111,629 | 111,028 | ||||||
|
||||||||
|
||||||||
Earnings per share attributable to VF
Corporation common stockholders
|
$ | 1.46 | $ | 0.91 | ||||
|
• | Level 1 — Fair value based on quoted prices in active markets for identical assets or liabilities. | |
• | Level 2 — Fair value based on significant directly observable data (other than Level 1 quoted prices) or significant indirectly observable data through corroboration with observable market data. Inputs would normally be (i) quoted prices in active markets for similar assets or liabilities, (ii) quoted prices in |
13
inactive markets for identical or similar assets or liabilities or (iii) information derived from or corroborated by observable market data. | ||
• | Level 3 — Fair value based on prices or valuation techniques that require significant unobservable data inputs. Inputs would normally be a reporting entity’s own data and judgments about assumptions that market participants would use in pricing the asset or liability. |
Fair Value Using: | ||||||||||||||||
Quoted Prices | Significant | |||||||||||||||
in Active | Other | Significant | ||||||||||||||
Total | Markets for | Observable | Unobservable | |||||||||||||
Fair | Identical Assets | Inputs | Inputs | |||||||||||||
In thousands | Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
March 2010
|
||||||||||||||||
Financial assets:
|
||||||||||||||||
Cash equivalents — money market funds
|
$ | 429,659 | $ | 429,659 | $ | — | $ | — | ||||||||
Cash equivalents — time deposits
|
85,036 | 85,036 | — | — | ||||||||||||
Derivative instruments
|
31,130 | — | 31,130 | — | ||||||||||||
Investment securities
|
190,485 | 150,265 | 40,220 | — | ||||||||||||
|
||||||||||||||||
Financial liabilities:
|
||||||||||||||||
Derivative instruments
|
4,947 | — | 4,947 | — | ||||||||||||
Deferred compensation
|
209,303 | — | 209,303 | — | ||||||||||||
|
||||||||||||||||
December 2009
|
||||||||||||||||
Financial assets:
|
||||||||||||||||
Cash equivalents — money market funds
|
$ | 372,516 | $ | 372,516 | $ | — | $ | — | ||||||||
Cash equivalents — time deposits
|
81,554 | 81,554 | — | — | ||||||||||||
Derivative instruments
|
8,536 | — | 8,536 | — | ||||||||||||
Investment securities
|
182,306 | 140,872 | 41,434 | — | ||||||||||||
|
||||||||||||||||
Financial liabilities:
|
||||||||||||||||
Derivative instruments
|
13,587 | — | 13,587 | — | ||||||||||||
Deferred compensation
|
199,831 | — | 199,831 | — |
14
Fair Value of Derivatives | Fair Value of Derivatives | |||||||||||||||
with Unrealized Gains | with Unrealized Losses | |||||||||||||||
March | December | March | December | |||||||||||||
In thousands | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Foreign exchange contracts
designated as hedging instruments
|
$ | 34,887 | $ | 11,183 | $ | 8,031 | $ | 16,769 | ||||||||
|
||||||||||||||||
Foreign exchange contracts
not designated as hedging instruments
|
43 | 560 | 716 | 25 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Total derivatives
|
$ | 34,930 | $ | 11,743 | $ | 8,747 | $ | 16,794 | ||||||||
|
15
In thousands | March 2010 | December 2009 | ||||||
Other current assets
|
$ | 28,881 | $ | 6,843 | ||||
Accrued current liabilities
|
(4,107 | ) | (13,476 | ) | ||||
Other assets (noncurrent)
|
2,249 | 1,693 | ||||||
Other liabilities (noncurrent)
|
(840 | ) | (111 | ) |
In thousands | Location | |||||||||||||||||||
of Gain | Location of | Gain (Loss) | ||||||||||||||||||
(Loss) on | Gain (Loss) on | Hedged Items | Gain (Loss) | on Related | ||||||||||||||||
Fair Value | Derivatives | Derivatives | in Fair Value | Recognized | Hedged Items | |||||||||||||||
Hedging | Recognized | Recognized in | Hedge | on Related | Recognized in | |||||||||||||||
Relationships | in Income | Income | Relationships | Hedged Items | Income | |||||||||||||||
Quarter ended March 2010 | ||||||||||||||||||||
Foreign exchange
|
Miscellaneous Income (expense) | $ | 7,033 | Advances — intercompany | Miscellaneous Income (expense) | $ | (7,042 | ) | ||||||||||||
|
||||||||||||||||||||
Quarter ended March 2009 | ||||||||||||||||||||
Foreign exchange
|
Miscellaneous income (expense) | $ | 10,868 | Advances — intercompany | Miscellaneous income (expense) | $ | (11,327 | ) |
16
In thousands | ||||||||||||||||||||
Gain (Loss) on | Location of | Gain (Loss) Reclassified | ||||||||||||||||||
Derivatives | Gain (Loss) | from Accumulated | ||||||||||||||||||
Cash Flow | Recognized in OCI- | Reclassified from | OCI into Income- | |||||||||||||||||
Hedging | Quarter Ended March | Accumulated | Quarter Ended March | |||||||||||||||||
Relationships | 2010 | 2009 | OCI into Income | 2010 | 2009 | |||||||||||||||
Foreign
exchange
|
$ | 20,841 | $ | 12,381 | Net sales | $ | 969 | $ | — | |||||||||||
|
Cost of goods sold | 6,954 | 1,197 | |||||||||||||||||
|
Miscellaneous income (expense) | 1,295 | 2,462 | |||||||||||||||||
Interest rate
|
— | — | Interest expense | 29 | 29 | |||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Total
|
$ | 20,841 | $ | 12,381 | $ | 9,247 | $ | 3,688 | ||||||||||||
|
17
• | Revenues grew to $1,749.9 million, an increase of 1% from the prior year quarter, with strengthening trends across our businesses. | |
• | Our business in Asia continues to grow rapidly, with revenues up 31% in the quarter. | |
• | Our direct-to-consumer business grew 23% in the quarter, driven by both new store openings and comp store revenue growth. The direct-to-consumer businesses of The North Face â , Vans â , 7 for All Mankind â , Kipling â , Nautica â , lucy â and Napapijri â brands each achieved strong revenue growth in the quarter. | |
• | Gross margin reached a record 46.7%. | |
• | Earnings per share increased by 60% to a record $1.46 from $0.91 in the prior year quarter. As anticipated, earnings per share benefitted from lower pension expense and foreign currency translation rates by $.05 and $.06, respectively, compared with the 2009 quarter. Also included in the current quarter was an $.11 per share tax credit as well as $.09 in restructuring expenses related primarily to actions to reduce product costs. (All per share amounts are presented on a diluted basis.) | |
• | Our balance sheet remains strong with cash of $718.6 million, a debt to total capital ratio of 23.7% and a net debt to total capital ratio of 11.0%. VF has over $1.3 billion of available liquidity under committed bank credit lines. Long-term debt payments of $200.0 million are due in October 2010 with no other payments required until 2017. | |
• | Inventories at March 2010 declined 15% from the prior year quarter, reflecting our continued focus on inventory reduction. | |
• | Operating cash flow reached a first quarter record of $184.2 million. | |
• | We purchased the remaining 50% equity interest of a joint venture that markets the Vans ® brand in Mexico (“Vans Mexico”). See Note C to the Consolidated Financial Statements for more information. | |
• | We repurchased 1.5 million shares of our Common Stock in the first quarter, utilizing our operating cash flow, and are on track to complete the repurchase of 3.0 million shares in the first half of 2010. We will continue to evaluate future share repurchases considering funding required for business acquisitions, our Common Stock price and levels of stock option exercises. |
18
First Quarter | ||||
2010 | ||||
Compared | ||||
In millions | with 2009 | |||
Total revenues — 2009
|
$ | 1,725 | ||
Impact of foreign currency translation
|
38 | |||
Organic growth
|
(29 | ) | ||
Acquisition in prior year (to anniversary date)
|
13 | |||
Acquisition in current year
|
3 | |||
|
||||
|
||||
Total revenues — 2010
|
$ | 1,750 | ||
|
First Quarter | ||||||||
2010 | 2009 | |||||||
Gross margin (total revenues less cost
of goods sold)
|
46.7 | % | 42.2 | % | ||||
Marketing, administrative and general
expenses
|
34.0 | 32.9 | ||||||
|
||||||||
|
||||||||
Operating income
|
12.8 | % | 9.4 | % | ||||
|
19
20
First Quarter | ||||||||||||||||||||||||
Outdoor & | Contemporary | |||||||||||||||||||||||
In millions | Action Sports | Jeanswear | Imagewear | Sportswear | Brands | Other | ||||||||||||||||||
Total revenues — 2009
|
$ | 618 | $ | 667 | $ | 227 | $ | 104 | $ | 90 | $ | 20 | ||||||||||||
Impact of foreign currency
translation
|
21 | 15 | 1 | — | 1 | — | ||||||||||||||||||
Organic growth
|
37 | (60 | ) | (7 | ) | (2 | ) | — | 2 | |||||||||||||||
Acquisition in prior year
(to anniversary date)
|
— | — | — | — | 13 | — | ||||||||||||||||||
Acquisition in current year
|
3 | — | — | — | — | — | ||||||||||||||||||
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
Total revenues — 2010
|
$ | 679 | $ | 622 | $ | 221 | $ | 102 | $ | 104 | $ | 22 | ||||||||||||
|
First Quarter | ||||||||||||||||||||||||
Outdoor & | Contemporary | |||||||||||||||||||||||
In millions | Action Sports | Jeanswear | Imagewear | Sportswear | Brands | Other | ||||||||||||||||||
Coalition profit — 2009
|
$ | 89 | $ | 90 | $ | 23 | $ | 5 | $ | 15 | $ | (2 | ) | |||||||||||
Impact of foreign currency
translation
|
5 | 3 | — | — | — | — | ||||||||||||||||||
Operations
|
39 | 14 | — | 2 | (7 | ) | 1 | |||||||||||||||||
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
Coalition profit — 2010
|
$ | 133 | $ | 107 | $ | 23 | $ | 7 | $ | 8 | $ | (1 | ) | |||||||||||
|
First Quarter | ||||||||||||
Dollars in millions | 2010 | 2009 | Percent Change | |||||||||
Coalition revenues
|
$ | 679 | $ | 618 | 9.8 | % | ||||||
Coalition profit
|
133 | 89 | 49.8 | % | ||||||||
Operating margin
|
19.6 | % | 14.3 | % |
21
First Quarter | ||||||||||||
Dollars in millions | 2010 | 2009 | Percent Change | |||||||||
Coalition revenues
|
$ | 622 | $ | 667 | (6.8 | )% | ||||||
Coalition profit
|
107 | 90 | 19.2 | % | ||||||||
Operating margin
|
17.2 | % | 13.4 | % |
First Quarter | ||||||||||||
Dollars in millions | 2010 | 2009 | Percent Change | |||||||||
Coalition revenues
|
$ | 221 | $ | 227 | (2.4 | )% | ||||||
Coalition profit
|
23 | 23 | (0.4 | )% | ||||||||
Operating margin
|
10.3 | % | 10.1 | % |
First Quarter | ||||||||||||
Dollars in millions | 2010 | 2009 | Percent Change | |||||||||
Coalition revenues
|
$ | 102 | $ | 104 | (1.3 | )% | ||||||
Coalition profit
|
7 | 5 | 59.0 | % | ||||||||
Operating margin
|
7.0 | % | 4.4 | % |
22
First Quarter | ||||||||||||
Dollars in millions | 2010 | 2009 | Percent Change | |||||||||
Coalition revenues
|
$ | 104 | $ | 90 | 16.2 | % | ||||||
Coalition profit
|
8 | 15 | (45.2 | )% | ||||||||
Operating margin
|
8.1 | % | 17.2 | % |
First Quarter | ||||||||||||
Dollars in millions | 2010 | 2009 | Percent Change | |||||||||
Revenues
|
$ | 22 | $ | 20 | 8.4 | % | ||||||
Profit (loss)
|
(1 | ) | (2 | ) | (39.2 | )% | ||||||
Operating margin
|
(5.6 | )% | (10.1 | )% |
23
First Quarter | ||||||||||||
Dollars in millions | 2010 | 2009 | Percent Change | |||||||||
Corporate and Other Expenses
|
$ | (47 | ) | $ | (56 | ) | (16.3 | )% | ||||
Interest, Net
|
(20 | ) | (21 | ) | (5.9 | )% |
24
March | December | March | ||||||||||
Dollars in millions | 2010 | 2009 | 2009 | |||||||||
Working capital
|
$ | 1,590.7 | $ | 1,536.8 | $ | 1,523.1 | ||||||
|
||||||||||||
Current ratio
|
2.5 to 1 | 2.4 to 1 | 2.4 to 1 | |||||||||
|
||||||||||||
Debt to total capital ratio
|
23.7 | % | 23.7 | % | 28.6% |
25
26
• | Inventory purchase obligations representing binding commitments to purchase finished goods, raw materials and sewing labor in the ordinary course of business increased by approximately $320 million at the end of March 2010 due to the seasonality of our businesses. |
27
28
Total Number of | Maximum Number | |||||||||||||||
Total | Weighed | Shares Purchased | of Shares that May | |||||||||||||
Number | Average | as Part of Publicly | Yet be Purchased | |||||||||||||
of Shares | Price Paid | Announced Plans | Under the Plan or | |||||||||||||
Fiscal Period | Purchased | per Share | or Programs | Programs (1) | ||||||||||||
January 3 — January 30, 2010
|
5,500 | $ | 74.01 | 5,500 | 1,638,911 | |||||||||||
January 31 — February 27, 2010
|
386,300 | 76.32 | 386,300 | 11,252,611 | ||||||||||||
February 28 — April 3, 2010
|
1,108,200 | 79.51 | 1,108,200 | 10,144,411 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Total
|
1,500,000 | 1,500,000 | ||||||||||||||
|
(1) | The VF Board of Directors authorized the repurchase of 10.0 million additional shares in February 2010. During the quarter, 1,474,800 shares of Common Stock were purchased under open market transactions. In addition, VF purchased 25,200 shares of Common Stock in connection with VF’s deferred compensation plans. We will continue to evaluate future share purchases — considerations will include funding required for business acquisitions, our Common Stock price and levels of stock option exercises. |
31.1
|
Certification of the principal executive officer, Eric C. Wiseman, pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
|
||
31.2
|
Certification of the principal financial officer, Robert K. Shearer, pursuant to 15 U.S.C. Section 10A, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
|
||
32.1
|
Certification of the principal executive officer, Eric C. Wiseman, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
|
||
32.2
|
Certification of the principal financial officer, Robert K. Shearer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
|
||
101.INS
|
XBRL Instance Document* | |
|
||
101.SCH
|
XBRL Taxonomy Extension Schema Document* | |
|
||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document* | |
|
||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document* | |
|
||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document* | |
|
||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document* |
* | Furnished, not filed. |
29
V.F. CORPORATION
(Registrant) |
||||
By: | /s/ Robert K. Shearer | |||
Robert K. Shearer | ||||
Senior Vice President and
Chief Financial Officer (Chief Financial Officer) |
||||
By: | /s/ Bradley W. Batten | |||
Bradley W. Batten | ||||
Vice President - Controller
(Chief Accounting Officer) |
30
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
Customers
Customer name | Ticker |
---|---|
Abercrombie & Fitch Co. | ANF |
Macy's, Inc. | M |
The Gap, Inc. | GPS |
Kohl's Corporation | KSS |
L Brands, Inc. | LB |
Nordstrom, Inc. | JWN |
Ross Stores, Inc. | ROST |
The TJX Companies, Inc. | TJX |
Suppliers
Supplier name | Ticker |
---|---|
Canaan Inc. | CAN |
DuPont de Nemours, Inc. | DD |
Eastman Chemical Company | EMN |
Dow Inc. | DOW |
RPM International Inc. | RPM |
Huntsman Corporation | HUN |
Quaker Chemical Corporation | KWR |
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|