Exhibit 99.1
[VF LOGO(TM)]
FOR IMMEDIATE RELEASE Contact: Cindy Knoebel, CFA
VP, Financial & Corporate
Communications
VF Services, Inc.
(336) 424-6189/(212) 696-1110
VF ANNOUNCES FOURTH QUARTER AND FULL YEAR RESULTS
AND DECLARES DIVIDEND
- FOURTH QUARTER SALES RISE 6%
- 2002 GROSS MARGINS RISE THREE PERCENTAGE POINTS, TO 36%
- CASH FLOW FROM OPERATIONS REACHES $646 MILLION
- RETURN ON CAPITAL HITS 17%
- EXPECTING RECORD EPS IN 2003 ON HIGHER SALES
VF's fourth quarter conference call will be held at 2:00 p.m. EST on February 11
and can be accessed via the Company's web site www.vfc.com or
www.companyboardroom.com. A replay will be available shortly after the end of
the conference call through February 25th by dialing 888-266-2086, pass code:
6383318.
GREENSBORO, NORTH CAROLINA - FEBRUARY 11, 2003 - VF CORPORATION (NYSE: VFC), the
world's largest apparel company, today reported results for the fourth quarter
and full year 2002. All per share amounts are presented on a diluted basis.
Commenting on the results, Mackey J. McDonald, chairman and chief executive
officer, said: "2002 was by no means an easy year, but our management team
executed our plan extremely well and surpassed many of the targets we set for
ourselves. We substantially improved our profitability, gained market share in
key categories and achieved our long-term return on capital goal of 17%. We're
approaching 2003 with confidence in the strength of our brands and with momentum
in sales. We're looking forward to a year of renewed growth in most of our
businesses and record earnings per share. Armed with a cash position of nearly
$500 million and a low level of debt, we clearly have the flexibility to pursue
new avenues for growth."
RESULTS FROM CONTINUING OPERATIONS
Fourth quarter sales rose 6% to $1,310.6 million from $1,233.7 million in the
prior year's quarter. Excluding net restructuring charges in both periods,
income increased to $84.4 million in 2002 from $56.0 million in 2001, with
earnings per share increasing 55% to $0.76 from $0.49. Net restructuring
charges, as detailed in the table below, impacted earnings per share by $0.13
and $0.80 in the 2002 and 2001 periods, respectively. Including the charges, the
Company reported income in 2002 of $70.3 million, equal to $0.63 per share
compared with a net loss of $32.7 million, or $0.31 per share, in the prior
year's fourth quarter.
For the full year 2002, sales were $5,083.5 million, compared with $5,220.4
million in 2001. Excluding net restructuring charges in both periods, income
rose to $380.9 million in 2002 from $306.0 million in 2001, with earnings per
share rising 27% to $3.38 from $2.66. Net restructuring charges impacted
earnings per share by $0.14 and $0.77 in 2002 and 2001, respectively.
Accordingly, income from continuing operations
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Page 1 of 12
Page 2 of 12
February 11, 2003
in 2002 was $364.4 million, equal to $3.24 per share, versus income of $217.3
million, or $1.89 per share in 2001.
RESULTS INCLUDING DISCONTINUED OPERATIONS AND CHANGE IN ACCOUNTING POLICY
Including results of discontinued operations and reflecting the change in
accounting policy for goodwill, the Company reported a net loss in 2002 of
$154.5 million, equal to $1.38 per share compared with net income of $137.8
million or $1.19 per share in the prior year.
BUSINESS REVIEW
Nearly every VF business improved its profitability in 2002, as the Company has
realized substantial benefits from the successful completion of its Strategic
Repositioning Program. Domestic Jeanswear profits increased in both the fourth
quarter and full year, primarily as a result of more cost effective sourcing
from overseas locations. Sales rose 4% in the fourth quarter, but declined 4%
for the year. European Jeanswear margins also improved, due in large part to the
success of new, fashionable products from the Lee brand. European Jeanswear
sales increased 5% in the fourth quarter and 8% in 2002; adjusting for currency
effects, sales decreased 3% in the quarter and increased 4% for the full year.
Reflecting an improved mix of sales and new product initiatives, margins in the
Company's Outdoor business rose by two percentage points in 2002. Sales in the
Company's Outdoor businesses rose 17% in the fourth quarter and 3% in 2002. An
increase of 22% in first quality sales of The North Face brand products and an
11% increase in international Outdoor sales in 2002 were partially offset by
lower domestic sales of JanSport and Eastpak brand daypacks.
Profitability also improved in the Company's domestic Intimates business, as the
Company completed the integration of its Bestform and Vanity Fair Intimates
units. Domestic Intimate apparel sales were flat in the fourth quarter while
full year sales were down 4%.
Imagewear profitability improved significantly during the year. The Company's
Workwear business returned to historical levels of profitability and margins
expanded in the Company's Licensed Sports Apparel unit. Imagewear sales rose 10%
in the fourth quarter and declined 3% in 2002. Sales in the Company's Licensed
Sports Apparel unit grew strongly in 2002, driven by the rollout of new,
licensed apparel products for the National Football League.
Overall, gross margins improved three full percentage points in 2002, to 36.0%
from 32.9%, due primarily to lower cost sourcing and improved capacity
utilization. Operating margins increased to 12.2% from 8.7%. Excluding net
restructuring charges in both 2002 and 2001, operating margins increased to
12.8% from 11.1%. One of the Company's goals in 2002 was to reinvest some of the
savings realized from its Strategic Repositioning Program back into its core
brands. During the year, the Company increased advertising spending 11%.
The Company's financial position continues to be exceptionally strong. Cash flow
from operations was $646 million; at the end of the year the Company had $496
million in cash and $664 million in debt. During the year, the Company reduced
total debt by $318 million, resulting in a net debt-to-total capital ratio at
year-end of 9.2%. The Company continues to aggressively manage working capital
and reduced inventories by more than $35 million, or 4%, in 2002.
RESTRUCTURING CHARGES AND RELATED ITEMS
The following table details the amounts and effects related to the Company's
Strategic Repositioning Program:
...Continued
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February 11, 2003
Fourth Quarter 2002 Fourth Quarter 2001
-------------------- ---------------------
(In thousands, except per Pretax Pretax
share amounts) Amount EPS Amount EPS
------ ----- ------ ------
Earnings per share from
continuing operations, excluding
nonrecurring items $0.76 $0.49
Nonrecurring items:
Restructuring charges $(32,272) (.18) $(125,365) (.80)
Reversal of prior years'
restructuring charges 7,274 .04 - -
Gain on sale of closed
facilities 2,264 .01 - -
===== ======
Earnings per share from
continuing operations, as reported
before accounting change $0.63 $(0.31)
----- ------
Full Year 2002 Full Year 2001
-------------------- ---------------------
Pretax Pretax
Amount EPS Amount EPS
------ ----- ------ ------
Earnings per share from
continuing operations, excluding
nonrecurring items $3.38 $2.66
Nonrecurring items:
Restructuring charges $(46,012) (.25) $(125,365) (.77)
Reversal of prior years'
restructuring charges 14,787 .08 - -
Gain on sale of closed
facilities 4,883 .03 - -
----- -----
Earnings per share from
continuing operations, as reported
before accounting change $3.24 $1.89
===== =====
OUTLOOK
The Company believes it has built a platform for strong, profitable growth for
the years ahead. While the Company expects little improvement in market
conditions in 2003, it believes its focus on continuous product innovation will
result in higher sales for most of its businesses in 2003. At the same time, the
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February 11, 2003
Company's aggressive focus on managing its cost structure should allow earnings
per share to grow between 5% and 10% in 2003, despite significant increases in
pension, healthcare and other costs. The Company achieved its long-term return
on capital goal of 17% in 2002, and expects further improvement in 2003.
Specifically, the Company expects its Outdoor, International Jeanswear and
Intimate Apparel businesses to post mid-single digit percentage gains in sales.
Imagewear sales are expected to be flat, while Domestic Jeanswear sales are
expected to decline approximately 3%, reflecting competitive challenges in the
mass channel of distribution. Total sales for the Company are planned to rise
approximately 1% in 2003.
As previously disclosed, due to the significant declines in the securities
markets during 2002, the Company's pension plan is currently in an underfunded
position. As anticipated, the Company has recorded an additional pension
liability in its year-end balance sheet of $177 million, which has resulted in
an aftertax charge to Shareholders' Equity of $127 million. This noncash charge
does not impact the Company's operating results or liquidity.
"We recognize the importance of retirement benefits for our associates and are
committed to returning the plan to a fully funded status," said Mr. McDonald.
Toward this end, the Company made a $75 million contribution to its pension plan
in February 2003. In addition, the Company estimates that pension expense will
increase by $34 million in 2003, impacting earnings per share by $0.20. "This is
a significant increase for us, but we have worked hard to find ways to offset
the impact," commented Mr. McDonald.
The Company also provided the following additional guidance for 2003:
- - Reflecting the higher level of pension contribution noted above, cash flow
from operations should approximate $400 million.
- - Continued progress is expected toward reaching the Company's long-term
goal of a 14% operating margin. Operating margins should reach 13% in
2003, driven by additional improvements in gross margins.
- - Net interest expense should decline approximately $10 million from 2002
levels.
- - Capital expenditures could reach $100 million.
The Company expects a strong first quarter. Earnings are expected to rise
approximately 10%, with sales expected to be up slightly.
DIVIDEND DECLARED
The Board of Directors declared a regular quarterly cash dividend of $.25 per
share, payable on March 20, 2003 to shareholders of record as of the close of
business on March 10, 2003.
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
necessarily limited to, the overall level of consumer spending for apparel;
changes in trends in the segments of the market in which the Company competes;
competitive conditions in and financial strength of the retail industry; actions
of competitors, customers and suppliers that may impact the Company's business;
implementation of the Company's common systems project; and the impact of
economic changes in the markets where the Company competes, such as changes in
interest rates,
...Continued
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February 11, 2003
currency exchange rates, inflation rates, recession, and other external economic
and political 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 (NYSE: VFC) is the world's largest apparel company and a leader
in jeanswear, intimate apparel, playwear, workwear and daypacks. Its principal
brands include Lee(R), Wrangler(R), Riders(R), Rustler(R), Vanity Fair(R),
Vassarette(R), Bestform(R), Lily of France(R), Lee Sport(R), Healthtex(R),
JanSport(R), Eastpak(R), Red Kap(R) and The North Face(R).
VF Corporation's press releases, annual report and other information can be
accessed through the Company's home page, http://www.vfc.com.
...Continued
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February 11, 2003
VF CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED YEAR ENDED
---------------------------- ----------------------------
JANUARY 4 DECEMBER 29 JANUARY 4 DECEMBER 29
2003 2001 * 2003 2001 *
----------- ----------- ----------- -----------
NET SALES $ 1,310,616 $ 1,233,726 $ 5,083,523 $ 5,220,417
COSTS AND OPERATING EXPENSES
Cost of products sold 873,447 902,523 3,254,008 3,504,233
Marketing, administrative
and general expenses 325,180 342,664 1,229,902 1,247,000
Other operating (income) expense, net (4,420) 4,622 (22,311) 14,757
----------- ----------- ----------- -----------
1,194,207 1,249,809 4,461,599 4,765,990
----------- ----------- ----------- -----------
OPERATING INCOME 116,409 (16,083) 621,924 454,427
OTHER INCOME (EXPENSE)
Interest, net (11,834) (19,236) (63,928) (86,557)
Miscellaneous, net 1,510 3,000 3,732 1,515
----------- ----------- ----------- -----------
(10,324) (16,236) (60,196) (85,042)
----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING POLICY 106,085 (32,319) 561,728 369,385
INCOME TAXES 35,748 350 197,300 152,107
----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS BEFORE
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING POLICY 70,337 (32,669) 364,428 217,278
DISCONTINUED OPERATIONS, NET OF INCOME TAXES 6,263 (79,928) 8,283 (79,448)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
POLICY FOR GOODWILL -- -- (527,254) --
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 76,600 $ (112,597) $ (154,543) $ 137,830
=========== =========== =========== ===========
EARNINGS (LOSS) PER COMMON SHARE - BASIC
Income from continuing operations $ 0.64 $ (0.31) $ 3.26 $ 1.90
Discontinued operations, net of income taxes 0.06 (0.72) 0.08 (0.71)
Cumulative effect of change in accounting policy -- -- (4.83) --
Net income (loss) 0.70 (1.03) (1.49) 1.19
EARNINGS (LOSS) PER COMMON SHARE - DILUTED
Income from continuing operations $ 0.63 $ (0.31) $ 3.24 $ 1.89
Discontinued operations, net of income taxes 0.06 (0.72) 0.07 (0.69)
Cumulative effect of change in accounting policy -- -- (4.69) --
Net income (loss) 0.69 (1.03) (1.38) 1.19
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 108,379 110,343 109,167 111,294
Diluted 111,199 113,621 112,336 114,764
CASH DIVIDENDS PER COMMON SHARE $ 0.25 $ 0.24 $ 0.97 $ 0.93
* Reclassified to present the Private Label knitwear and the Jantzen
swimwear businesses as discontinued operations.
Note: If the nonamortization provisions of FASB Statement No. 142 had been
applied at the beginning of 2001, income from continuing operations before the
cumulative effect of a change in accounting policy would have been a loss of
$24,552 and income of $250,431 for the fourth quarter and full year of 2001,
respectively. Basic and diluted earnings per share from continuing operations
before the cumulative effect of a change in accounting policy would have been a
loss of $.24 for the fourth quarter of 2001 and income of $2.21 for the full
year of 2001.
...Continued
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February 11, 2003
VF CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
JANUARY 4 DECEMBER 29
2003 2001 *
----------- -----------
ASSETS
CURRENT ASSETS
Cash and equivalents $ 496,367 $ 332,049
Accounts receivable, net 587,859 572,012
Inventories 830,518 866,565
Other current assets 153,885 160,715
Current assets of discontinued operations 5,283 100,079
----------- -----------
Total current assets 2,073,912 2,031,420
PROPERTY, PLANT AND EQUIPMENT 1,539,269 1,643,368
Less accumulated depreciation 972,723 1,001,031
----------- -----------
566,546 642,337
GOODWILL 473,355 998,046
OTHER ASSETS 386,832 400,310
NONCURRENT ASSETS OF DISCONTINUED OPERATIONS 2,506 30,903
----------- -----------
$ 3,503,151 $ 4,103,016
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 60,918 $ 77,900
Current portion of long-term debt 778 696
Accounts payable 298,456 240,292
Accrued liabilities 502,057 440,307
Current liabilities of discontinued operations 12,635 54,638
----------- -----------
Total current liabilities 874,844 813,833
LONG-TERM DEBT 602,287 904,035
OTHER LIABILITIES 331,270 228,501
REDEEMABLE PREFERRED STOCK 36,902 45,631
DEFERRED CONTRIBUTIONS TO EMPLOYEE
STOCK OWNERSHIP PLAN -- (1,780)
----------- -----------
36,902 43,851
COMMON SHAREHOLDERS' EQUITY
Common Stock 108,525 109,998
Additional paid-in capital 930,132 884,638
Accumulated other comprehensive income (loss) (214,141) (103,040)
Retained earnings 833,332 1,221,200
----------- -----------
Total common shareholders' equity 1,657,848 2,112,796
----------- -----------
$ 3,503,151 $ 4,103,016
=========== ===========
* Reclassified to present the Private Label knitwear and the Jantzen
swimwear businesses as discontinued operations.
...Continued
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February 11, 2003
VF CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
YEAR ENDED
--------------------------
JANUARY 4 DECEMBER 29
2003 2001 *
--------- -----------
OPERATIONS
Net income (loss) $(154,543) $ 137,830
Adjustments to reconcile net income (loss)
to cash provided by operating activities
of continuing operations:
Discontinued operations (8,283) 79,448
Cumulative effect of change in accounting policy 527,254 --
Restructuring costs 26,342 108,740
Depreciation 107,398 121,752
Goodwill amortization and other 2,276 33,850
Deferred income taxes 70,849 (14,750)
Other, net 25,000 (30,370)
Changes in current assets and liabilities:
Accounts receivable 6,953 90,136
Inventories 43,253 170,554
Accounts payable 54,123 (70,422)
Other, net (55,038) (26,212)
--------- ---------
Cash provided by operating activities of
continuing operations 645,584 600,556
INVESTMENTS
Capital expenditures (64,503) (78,320)
Business acquisitions (1,342) (5,057)
Other, net 21,265 (7,456)
--------- ---------
Cash used by investing activities of
continuing operations (44,580) (90,833)
FINANCING
Decrease in short-term borrowings (16,586) (61,850)
Payment of long-term debt (301,564) (114,302)
Purchase of Common Stock (124,623) (146,592)
Cash dividends paid (108,773) (106,864)
Proceeds from issuance of Common Stock 39,753 44,632
Other, net (8,290) 7,193
--------- ---------
Cash used by financing activities of
continuing operations (520,083) (377,783)
NET CASH PROVIDED BY DISCONTINUED OPERATIONS 69,899 81,876
EFFECT OF FOREIGN CURRENCY RATE CHANGES ON CASH 13,498 (658)
--------- ---------
NET CHANGE IN CASH AND EQUIVALENTS 164,318 213,158
CASH AND EQUIVALENTS - BEGINNING OF YEAR 332,049 118,891
--------- ---------
CASH AND EQUIVALENTS - END OF YEAR $ 496,367 $ 332,049
========= =========
* Reclassified to present the Private Label knitwear and the Jantzen
swimwear businesses as discontinued operations.
...Continued
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February 11, 2003
VF CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF INCOME
YEAR 2002, BY QUARTER
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FIRST SECOND THIRD FOURTH FULL
QUARTER * QUARTER * QUARTER QUARTER YEAR
----------- ----------- ----------- ----------- -----------
NET SALES $ 1,212,262 $ 1,160,256 $ 1,400,389 $ 1,310,616 $ 5,083,523
COSTS AND OPERATING EXPENSES
Cost of products sold 784,368 725,076 871,117 873,447 3,254,008
Marketing, administrative and general expenses 295,117 288,578 321,027 325,180 1,229,902
Other operating (income) expense, net (4,497) (5,324) (8,070) (4,420) (22,311)
----------- ----------- ----------- ----------- -----------
1,074,988 1,008,330 1,184,074 1,194,207 4,461,599
----------- ----------- ----------- ----------- -----------
OPERATING INCOME 137,274 151,926 216,315 116,409 621,924
OTHER INCOME (EXPENSE)
Interest, net (17,387) (14,727) (19,980) (11,834) (63,928)
Miscellaneous, net 1,134 392 696 1,510 3,732
----------- ----------- ----------- ----------- -----------
(16,253) (14,335) (19,284) (10,324) (60,196)
----------- ----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES AND CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING POLICY 121,021 137,591 197,031 106,085 561,728
INCOME TAXES 43,974 49,111 68,467 35,748 197,300
----------- ----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS BEFORE
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING POLICY 77,047 88,480 128,564 70,337 364,428
DISCONTINUED OPERATIONS, NET OF INCOME TAXES 1,949 386 (315) 6,263 8,283
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
POLICY FOR GOODWILL (527,254) -- -- -- (527,254)
----------- ----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (448,258) $ 88,866 $ 128,249 $ 76,600 $ (154,543)
=========== =========== =========== =========== ===========
EARNINGS (LOSS) PER COMMON SHARE - BASIC
Income from continuing operations $ 0.67 $ 0.79 $ 1.16 $ 0.64 $ 3.26
Discontinued operations, net of income taxes 0.02 -- -- 0.06 0.08
Cumulative effect of change in accounting policy (4.80) -- -- -- (4.83)
Net income (loss) (4.11) 0.79 1.16 0.70 (1.49)
EARNINGS (LOSS) PER COMMON SHARE - DILUTED
Income from continuing operations $ 0.67 $ 0.79 $ 1.15 $ 0.63 $ 3.24
Discontinued operations, net of income taxes 0.02 -- -- 0.06 0.07
Cumulative effect of change in accounting policy (4.65) -- -- -- (4.69)
Net income (loss) (3.96) 0.79 1.15 0.69 (1.38)
* Reclassified to present the Private Label knitwear and the Jantzen
swimwear businesses as discontinued operations.
...Continued
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February 11, 2003
VF CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF INCOME
YEAR 2001, BY QUARTER
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FOURTH
FIRST SECOND THIRD QUARTER * FULL
QUARTER * QUARTER * QUARTER * (SEE NOTE) YEAR *
----------- ----------- ----------- ----------- -----------
NET SALES $ 1,340,388 $ 1,239,644 $ 1,406,659 $ 1,233,726 $ 5,220,417
COSTS AND OPERATING EXPENSES
Cost of products sold 880,485 807,584 913,641 902,523 3,504,233
Marketing, administrative and general expenses 312,446 290,731 301,159 342,664 1,247,000
Other operating (income) expense, net 3,822 4,011 2,302 4,622 14,757
----------- ----------- ----------- ----------- -----------
1,196,753 1,102,326 1,217,102 1,249,809 4,765,990
----------- ----------- ----------- ----------- -----------
OPERATING INCOME 143,635 137,318 189,557 (16,083) 454,427
OTHER INCOME (EXPENSE)
Interest, net (22,921) (22,696) (21,704) (19,236) (86,557)
Miscellaneous, net (718) (933) 166 3,000 1,515
----------- ----------- ----------- ----------- -----------
(23,639) (23,629) (21,538) (16,236) (85,042)
----------- ----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES AND CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING POLICY 119,996 113,689 168,019 (32,319) 369,385
INCOME TAXES 44,387 42,560 64,810 350 152,107
----------- ----------- ----------- ----------- -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS 75,609 71,129 103,209 (32,669) 217,278
DISCONTINUED OPERATIONS, NET OF INCOME TAXES 1,877 (1,748) 351 (79,928) (79,448)
----------- ----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 77,486 $ 69,381 $ 103,560 $ (112,597) $ 137,830
=========== =========== =========== =========== ===========
EARNINGS (LOSS) PER COMMON SHARE - BASIC
Income from continuing operations $ 0.66 $ 0.63 $ 0.92 $ (0.31) $ 1.90
Discontinued operations, net of income taxes 0.02 (0.02) -- (0.72) (0.71)
Net income (loss) 0.68 0.61 0.92 (1.03) 1.19
EARNINGS (LOSS) PER COMMON SHARE - DILUTED
Income from continuing operations $ 0.65 $ 0.62 $ 0.90 $ (0.31) $ 1.89
Discontinued operations, net of income taxes 0.02 (0.02) -- (0.72) (0.69)
Net income (loss) 0.67 0.60 0.90 (1.03) 1.19
* Reclassified to present the Private Label knitwear and the Jantzen
swimwear businesses as discontinued operations.
Note: The fourth quarter of 2001 included restructuring charges of $125.4
million ($.80 per share) for continuing operations. In addition, the
fourth quarter included a $111.4 million charge ($.73 per share) to write
down the businesses to be exited to net realizable value.
...Continued
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February 11, 2003
VF CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FOURTH QUARTER 2002 FOURTH QUARTER 2001
---------------------------- ----------------------------
AS AS
REPORTED PRO FORMA * REPORTED PRO FORMA *
----------- ----------- ----------- -----------
NET SALES $ 1,310,616 $ 1,310,616 $ 1,233,726 $ 1,233,726
COSTS AND OPERATING EXPENSES
Cost of products sold 873,447 857,416 902,523 829,829
Marketing, administrative and general expenses 325,180 318,477 342,664 293,956
Other operating (income) expense, net (4,420) (4,420) 4,622 659
----------- ----------- ----------- -----------
1,194,207 1,171,473 1,249,809 1,124,444
----------- ----------- ----------- -----------
OPERATING INCOME 116,409 139,143 (16,083) 109,282
OTHER INCOME (EXPENSE)
Interest, net (11,834) (11,834) (19,236) (19,236)
Miscellaneous, net 1,510 1,510 3,000 3,000
----------- ----------- ----------- -----------
(10,324) (10,324) (16,236) (16,236)
----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING POLICY 106,085 128,819 (32,319) 93,046
INCOME TAXES 35,748 44,452 350 37,037
----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS BEFORE
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING POLICY 70,337 84,367 (32,669) 56,009
DISCONTINUED OPERATIONS, NET OF INCOME TAXES 6,263 6,263 (79,928) (79,928)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
POLICY FOR GOODWILL -- -- -- --
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 76,600 $ 90,630 $ (112,597) $ (23,919)
=========== =========== =========== ===========
EARNINGS (LOSS) PER COMMON SHARE - BASIC
Income from continuing operations $ 0.64 $ 0.77 $ (0.31) $ 0.50
Discontinued operations, net of income taxes 0.06 0.06 (0.72) (0.72)
Cumulative effect of change in accounting policy -- -- -- --
Net income (loss) 0.70 0.83 (1.03) (0.23)
EARNINGS (LOSS) PER COMMON SHARE - DILUTED
Income from continuing operations $ 0.63 $ 0.76 $ (0.31) $ 0.49
Discontinued operations, net of income taxes 0.06 0.06 (0.72) (0.70)
Cumulative effect of change in accounting policy -- -- -- --
Net income (loss) 0.69 0.81 (1.03) (0.21)
* The pro forma Consolidated Statements of Income exclude the effects of the
2001 / 2002 Strategic Repositioning Program, as follows:
Costs and Operating Expenses
Costs of products sold $ 16,031 $ 72,694
Marketing, administrative and general expenses 6,703 48,708
Other operating (income) expense, net 0 3,963
----------- -----------
$ 22,734 $ 125,365
=========== ===========
...Continued
Page 12 of 12
February 11, 2003
VF CORPORATION
SUPPLEMENTAL FINANCIAL INFORMATION
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FULL YEAR 2002 FULL YEAR 2001
---------------------------- ----------------------------
AS AS
REPORTED PRO FORMA * REPORTED PRO FORMA *
----------- ----------- ----------- -----------
NET SALES $ 5,083,523 $ 5,083,523 $ 5,220,417 $ 5,220,417
COSTS AND OPERATING EXPENSES
Cost of products sold 3,254,008 3,236,160 3,504,233 3,431,539
Marketing, administrative and general expenses 1,229,902 1,221,408 1,247,000 1,198,292
Other operating (income) expense, net (22,311) (22,311) 14,757 10,794
----------- ----------- ----------- -----------
4,461,599 4,435,257 4,765,990 4,640,625
----------- ----------- ----------- -----------
OPERATING INCOME 621,924 648,266 454,427 579,792
OTHER INCOME (EXPENSE)
Interest, net (63,928) (63,928) (86,557) (86,557)
Miscellaneous, net 3,732 3,732 1,515 1,515
----------- ----------- ----------- -----------
(60,196) (60,196) (85,042) (85,042)
----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING POLICY 561,728 588,070 369,385 494,750
INCOME TAXES 197,300 207,194 152,107 188,794
----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS BEFORE
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING POLICY 364,428 380,876 217,278 305,956
DISCONTINUED OPERATIONS, NET OF INCOME TAXES 8,283 8,283 (79,448) (79,448)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
POLICY FOR GOODWILL (527,254) (527,254) -- --
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (154,543) $ (138,095) $ 137,830 $ 226,508
=========== =========== =========== ===========
EARNINGS (LOSS) PER COMMON SHARE - BASIC
Income from continuing operations $ 3.26 $ 3.41 $ 1.90 $ 2.70
Discontinued operations, net of income taxes 0.08 0.08 (0.71) (0.71)
Cumulative effect of change in accounting policy (4.83) (4.83) -- --
Net income (loss) (1.49) (1.34) 1.19 1.99
EARNINGS (LOSS) PER COMMON SHARE - DILUTED
Income from continuing operations $ 3.24 $ 3.38 $ 1.89 $ 2.66
Discontinued operations, net of income taxes 0.07 0.07 (0.69) (0.69)
Cumulative effect of change in accounting policy (4.69) (4.69) -- --
Net income (loss) (1.38) (1.24) 1.19 1.97
* The pro forma Consolidated Statements of Income exclude the effects of the
2001 / 2002 Strategic Repositioning Program, as follows:
Costs and Operating Expenses
Costs of products sold $ 17,848 $ 72,694
Marketing, administrative and general expenses 8,494 48,708
Other operating (income) expense, net 0 3,963
----------- -----------
$ 26,342 $ 125,365
=========== ===========
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