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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Mark One
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1993
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For transition period from to
Comission File No. 0-13365
OSHKOSH B'GOSH, INC.
A Delaware Corporation I.R.S. Employer No. 39-0519915
112 Otter Avenue, Oshkosh, Wisconsin 54901
Telephone number: (414) 231-8800
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Class A Common Stock, Par Value $.01 per share
Class B Common Stock, Par Value $.01 per share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No---
[ ] Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definite proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.
As of March 11, 1994, there were outstanding 13,294,752 shares of Class A Common
Stock and 1,291,048 shares of Class B Common Stock, of which 12,029,455 shares
and 386,241 shares, respectively, were held by non-affiliates of the
registrant. Based upon the closing sales prices as of March 11, 1994, the
aggregate market value of the Class A Common Stock and Class B Common Stock held
by non-affiliates was $180,441,825 and $6,469,537, respectively.
DOCUMENTS INCORPORATED BY REFERENCE
Oshkosh B'Gosh, Inc definitive Proxy Statement for its annual meeting to be held
on May 6, 1994 (or such later date as the directors may determine), Incorporated
into Part III
INDEX
PART I PAGE
Item 1. Business 1
(a) General Development of Business 1
(b) Financial Information About Industry Segments 2
(c) Narrative Description of Business 2
Products 2
Raw Materials, Manufacturing and Sourcing 3
Trademarks 4
Seasonality 4
Working Capital 5
Sales and Marketing 5
Backlog 6
Competitive Conditions 6
Environmental Matters 6
Employees 7
Item 2. Properties 7
Item 3. Legal Proceedings 8
Item 4. Submission of Matters to a Vote of Security Holders 8
PART II
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters 8
Item 6. Selected Financial Data 9
Item 7. Management's Discussion and Analysis of Results
of Operations and Financial Condition 9
Item 8. Financial Statements and Supplementary Data 14
Item 9. Disagreements on Accounting and Financial Disclosure 32
PART III
Item 10. Directors and Executive Officers of the Registrant 33
Item 11. Executive Compensation 33
Item 12. Security Ownership of Certain Beneficial Owners
and Management 33
Item 13. Certain Relationships and Related Transactions 33
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 33
PART I
ITEM 1. BUSINESS
(a) General Development of Business
Oshkosh B'Gosh, Inc. (together with its subsidiaries, the "Company") was
founded in 1895 and was incorporated in the state of Delaware in 1929. The
Company designs, manufactures, sources and sells apparel for the children's
wear, youth wear, and men's wear markets. While its heritage is in the men's
workwear market, the Company is currently best known for its line of high
quality children's wear. The children's wear business represented
approximately 89% of consolidated Company revenues for 1993. The success of
the children's wear business can be attributed to the Company's core themes:
quality, durability, style, trust and Americana. These themes have propelled
the Company to the position of market leader in the branded children's wear
industry. The Company also leverages the economic value of the OshKosh B'Gosh
name via both domestic and international licensing agreements.
The Company's long-term strategy is to provide high quality, high value
clothing for the entire family. Toward this end the Company continues to
expand its business lines and avenues for marketing its products. Essex
Outfitters, Inc. ("Essex"), a wholly owned subsidiary the Company acquired in
1990, is a vertically integrated children's wear retailer. Essex sources its
apparel from third party manufacturers, primarily offshore, imports these
goods and sells them primarily through its own chain of 52 retail stores.
OshKosh B'Gosh International Sales, Inc. was created in 1985 for the sale of
Oshkosh B'Gosh products to foreign distributors. In 1990, the Company formed
OshKosh B'Gosh Europe, S.A. in conjunction with a joint venture with Poron
Diffusion, S.A. to provide further access to European markets. In 1992 the
Company acquired Poron's 49% interest in OshKosh B'Gosh Europe, S.A. During
1993 OshKosh B'Gosh made moves to strategically position itself for
international expansion. OshKosh B'Gosh Asia/Pacific Ltd. was created in Hong
Kong to oversee licensees and distributors in the Pacific Rim, to assist
international licensees with the sourcing of product, and to expand the
Company's presence in that region. OshKosh B'Gosh U.K. Ltd. and OshKosh
B'Gosh Deutschland GmbH, incorporated in the United Kingdom and Germany
respectively, were established to increase sales emphasis in those countries.
The Company's chain of 40 OshKosh B'Gosh factory outlet stores sell irregular
and first quality OshKosh B'Gosh merchandise throughout the United States. In
1993, the Company distributed its first children's wear mail order catalog,
further expanding its channels of distribution.
The Company has been expanding its utilization of off-shore sourcing as a
cost-effective means to produce its products and to this end leased a
production facility in Honduras in 1990 under its wholly owned subsidiary
Manufacturera International Apparel S.A.
(b) Financial Information About Industry Segments
The Company is engaged in only one line of business, namely, the apparel
industry.
(c) Narrative Description of Business
Products
The Company designs, manufactures, sources and markets a broad range of
children's clothing as well as lines of youth wear and men's casual and work
wear clothing under the OshKosh, OshKosh B'Gosh, Baby B'Gosh or Boston Trader
labels. The products are distributed primarily through better quality
department and specialty stores, 92 of the Company's own stores, direct mail
catalogs and foreign retailers. The children's wear business, which is the
largest segment of the business, accounted for approximately 89% of 1993 sales
compared to approximately 96% and 93% of such sales in 1992 and 1991
respectively.
The children's wear and youth wear business is targeted to reach the middle to
upper middle segment of the sportswear market. Children's wear is in size
ranges from newborn/infant to girls 6X and boys 7. Youth wear is in size
ranges girls 7 to 14 and boys 8 to 20.
The Company's children's wear and youth wear businesses include a broad range
of product categories organized primarily in a collection format whereby the
products in that collection share a primary design theme which is carried out
through fabric design, screenprint, embroidery, and trim applications. The
Company also offers basic denim products with multiple wash treatments. The
product offerings for each season will typically consist of a variety of
clothing items including bib overalls, pants, jeans, shorts, and shortalls
(overalls with short pant legs), shirts, blouses and knit tops, skirts,
jumpers, sweaters, dresses, playwear and fleece.
The men's wear line is the original business that started the Company back in
1895. The current line comprises the traditional bib overalls, several styles
of waistband work, carpenter, and painters pants, five and six pocket jeans,
work shirts and flannel shirts as well as a coats and jackets. The line is
designed with a full array of sizes up to and including size 60 inch waists
and 5x size shirts.
Most products are designed by an in-house staff. Product design requires long
lead times, with products generally being designed a year in advance of the
time they actually reach the retail market. In general, the Company's
products are traditional in nature and not intended to be "designer" items.
In designing new products and styles, the Company attempts to incorporate
current trends and consumer preferences in their traditional product offerings.
In selecting fabrics and prints for its products, the Company seeks, where
possible, to obtain exclusive rights to the fabric design from its suppliers
in order to provide the Company with some protection from imitation by
competitors for a limited period of time.
Raw Materials, Manufacturing and Sourcing
All raw materials used in the manufacture of Company products are purchased
from unaffiliated suppliers. In 1993, approximately 65% of the Company's
direct expenditures for raw materials were from its five largest suppliers,
with the largest such supplier accounting for approximately 25% of total raw
material expenditures. Fabric and various non-fabric items, such as thread,
zippers, rivets, buckles and snaps are purchased from a variety of independent
suppliers. The fabric and accessory market in which OshKosh B'Gosh purchases
its raw materials is composed of a substantial number of suppliers with
similar products and capabilities, and is characterized by a high degree of
competition. As is customary in its industry, the Company has no long-term
contracts with its suppliers. To date, the Company has experienced little
difficulty in satisfying its requirements for raw materials, considers its
sources of supply to be adequate, and believes that it would be able to obtain
sufficient raw materials should any one of its product suppliers become
unavailable.
In 1993, approximately 79% of the Company products were manufactured in the
United States using American-made textiles. Production administration is
primarily coordinated from the Company's headquarters facility in Oshkosh with
most production taking place in its eleven Tennessee and five Kentucky plants.
Overseas labor is also accessed through a leased sewing plant in Honduras,
where cut apparel pieces are received from the United States and are
reimported by OshKosh B'Gosh as finished goods. In addition, product is
produced by contractors in 14 countries and imported.
The majority of the product engineering and sample making, allocation of
production among plants and independent suppliers, material purchases and
invoice payments are done through the Company's Oshkosh headquarters. All
designs and specifications utilized by independent manufacturers are provided
by the Company. While no long-term, formal arrangements exist with these
manufacturers, the Company considers these relationships to be satisfactory.
The Company believes it could obtain adequate alternative production capacity
if any of its independent manufacturers become unavailable.
Because higher quality apparel manufacturing is generally labor intensive
(sewing, pressing, finishing and quality control) the Company has continually
sought to upgrade its manufacturing and distribution facilities. Economies
are therefore realized by technical advances in areas like computer-assisted
design, computer-controlled fabric cutting, computer evaluation and matching
of fabric colors, automated sewing processes, and computer-assisted inventory
control and shipping. In order to realize economies of operation within the
domestic production facilities, cutting operations are located in 5 of the
Company's 18 plants, with all product washing, pressing and finishing done in
one facility in Tennessee and all screenprint and embroidery done in one
facility in Kentucky. Quality control inspections of both semi-finished and
finished products are required at each plant, including those of independent
manufacturers, to assure compliance.
Customer orders for fashion products are booked from three to six months in
advance of shipping. Because most Company production of styled products is
scheduled to fill orders already booked, the Company believes that it is
better able to plan its production and delivery schedules than would be the
case if production were in advance of actual orders. In order to secure
necessary fabrics on a timely basis and to obtain manufacturing capacity from
independent suppliers, the Company must make substantial advance commitments,
often as much as five to seven months prior to receipt of customer orders.
Inventory levels therefore depend on Company judgment of market demand.
Trademarks
The Company utilizes the OshKosh, OshKosh B'Gosh or Baby B'Gosh trademarks on
most of its products, either alone or in conjunction with a white triangular
background. In addition, "The Genuine Article" is embroidered on the small
OshKosh B'Gosh patch to signify apparel that is classic in design and all-but-
indestructible in quality construction. The Company currently uses
approximately 21 registered and unregistered trademarks in the United States.
These trademarks and universal awareness of the OshKosh B'Gosh name are
significant in marketing the products.
In addition the Company licenses the Boston Trader and Trader Kids trademarks
for use on its youth wear and some children's wear. The Company has recently
decided to replace its Boston Trader line of children's apparel with a new
brand called Genuine Kids.
Seasonality
Products are designed and marketed primarily for three principal selling
seasons:
RETAIL SALES SEASON PRIMARY BOOKING PERIOD SHIPPING PERIOD
Spring/Summer August-September January-April
Fall/Back-to-School January-February May-August
Winter/Holiday May-June September-December
Spring/Summer and Fall/Back-to-School are the Company's primary selling
seasons and together accounted for approximately 65% of the Company's 1993
wholesale sales.
The Company has historically experienced and expects to continue to experience
seasonal fluctuations in its sales and net income from its OshKosh B'Gosh
factory stores and Trader Kids outlet stores. Historically, a
disproportionately high amount of the Company's retail sales and a majority of
its net income have been realized during the months of August and November.
Working Capital
Working capital needs are affected primarily by inventory levels, outstanding
accounts receivables and trades payables. The Company has unsecured credit
arrangements, negotiated annually, which provide for maximum borrowings and
letters of credit totalling $60 million at December 31, 1993 including $45
million under commercial paper borrowing arrangements. These credit
arrangements are used to support working capital needs as well a
support letters of credit issued for product being imported and other
corporate needs. As of December 31, 1993 there were no outstanding
obligations against these credit arrangements. Letters of credit of
approximately $15 million were outstanding at December 31, 1993.
Inventory levels are affected by order backlog and anticipated sales, accounts
receivables are affected by payment terms offered. It is general practice in
the apparel industry to offer payment terms of ten to sixty days from date of
shipment. The Company offers net 30 days terms only.
The Company believes that its working capital requirements and financing
resources are comparable with those of other major, financially sound apparel
manufacturers.
Sales and Marketing
Company products are sold primarily through better quality department and
specialty stores, although sales are also made through direct mail catalog
companies, foreign retailers and other outlets, including 91 Company operated
retail factory stores and one retail showcase store. One customer, J. C.
Penney Company, Inc., accounted for approximately 10.2% of the Company's 1993
sales, and its largest ten and largest 100 customers accounted for
approximately 47% and 67% of sales, respectively. In 1993, the Company's
products were sold to approximately 4,200 customers (14,000 to 15,000 stores)
throughout the United States, and a sizeable number of international accounts.
Products are sold primarily by a direct employee sales force with the balance
of sales made through manufacturer's representatives, to in-house accounts or
through outlet stores. In addition to the central sales office in Oshkosh,
the Company maintains regional sales offices and product showrooms in Dallas
and New York. Most members of the Company's sales force are assigned to
defined geographic territories, with some assigned to specific large national
accounts. In sparsely populated areas and new markets, a manufacturer's
representative represents the Company on a non-exclusive basis.
Direct advertising in consumer and trade publications is the primary method of
advertising used. The Company also offers a cooperative advertising program,
paying half of its customers' advertising expenditures for their products,
generally up to two percent of the higher of the customer's prior or current
year's gross purchases from the Company.
Backlog
The dollar amount of backlog of orders believed to be firm as of the end of
the Company's fiscal year and as of the preceding fiscal year is not material
for an understanding of the business of the Company taken as a whole.
Competitive Conditions
The apparel industry is highly competitive and consists of a number of
domestic and foreign companies. Some competitors have assets and sales
greater than those of the Company. In addition, the Company competes with a
number of firms that produce and distribute only a limited number of products
similar to those sold by the Company or sell only in certain geographic areas
being supplied by the Company.
A characteristic of the apparel industry is the requirement that a
manufacturer recognize fashion trends and adequately provide products to meet
such trends. Competition within the apparel industry is generally in terms of
quality, price, service, style and, with respect to branded product lines,
consumer recognition and preference. The Company believes that it competes
primarily on the basis of quality, style, and consumer recognition and to a
lesser extent on the basis of service and price. The Company is focusing
attention on the issue of price and service and has taken and will continue
to take steps to reduce prices, become more competitive in the eyes of value
conscious consumers and deliver the service expected by its customers.
The Company's share of the overall children's wear market is quite small.
This is due to the diverse structure of the market where there is no truly
dominant producer of children's garments across all size ranges and garment
types. In the Company's channel of distribution, department and speciality
stores, it holds the largest share of the children's wear market.
Environmental Matters
The Company's compliance with Federal, State, and local environmental laws and
regulations had no material effect upon its capital expenditures, earnings, or
competitive position. The Company does not anticipate any material capital
expenditures for environmental control in either the current or succeeding
fiscal years.
Employees
At December 31, 1993, the Company employed approximately 6,400 persons.
Approximately 43% of the Company's personnel are covered by collective
bargaining agreements with the United Garment Workers of America.
The Company considers its relations with its personnel to be good.
ITEM 2. PROPERTIES
The Company's principal executive and administrative offices are located in
Oshkosh, Wisconsin. Its principal office, manufacturing and distribution
operations are conducted at the following locations:
Approximate
Floor Area in Principal
Location Square Feet Use
Albany, KY 20,000 Manufacturing
Byrdstown, TN 32,000 Manufacturing
Celina, TN 100,000 Manufacturing
Celina, TN 90,000 Laundering/Pressing
Columbia, KY 78,000 Manufacturing
Columbia, KY 23,000 Manufacturing
Dallas, TX (1) 1,995 Sales Offices/Showroom
Dover, TN 87,000 Manufacturing
Gainesboro, TN 61,000 Manufacturing
Gainesboro, TN 29,000 Warehousing
Hermitage Springs, TN 52,000 Manufacturing
Jamestown, TN 43,000 Manufacturing
Liberty, KY 218,000 Manufacturing/Warehousing
Liberty, KY 32,000 Warehousing
Los Angeles, CA (2) 1,145 Sales Offices/Showroom
Marrowbone, KY 27,000 Manufacturing
McEwen, TN (3) 29,000 Manufacturing
New York City, NY (4) 18,255 Sales Offices/Showrooms
Oshkosh, WI 99,000 Exec. & Operating Co. Offices
Oshkosh, WI 88,000 Manufacturing
Oshkosh, WI 86,000 Wholesale Distribution
/Warehousing
Oshkosh, WI 42,000 Retail Distribution
/Warehousing
Red Boiling Springs,TN 41,000 Manufacturing
White House, TN 284,000 Distribution/Warehousing
All properties are owned by the Registrant with the exception of: (1) Lease
expiration date - 1994, (2) Lease expiration date - 1993, (3) Lease expiration
date - 1997, (4) Lease expiration date - 2007.
The Company believes that its properties are well maintained and its
manufacturing equipment is in good operating condition and sufficient for
current production.
Substantially all of the Company's retail stores occupy leased premises. For
information regarding the terms of the leases and rental payments thereunder,
refer to the "Leases" note to the consolidated financial statements on page 26
of this Form 10-K.
ITEM 3. LEGAL PROCEEDINGS
The Company and its subsidiaries are not parties to any material pending legal
proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS.
The Company's Class A Common Stock and Class B Common Stock is traded in the
over-the-counter market on the NASDAQ National Market System under the symbols
GOSHA and GOSHB, respectively.
Quarterly Common Stock Data
1993 1992
Stock Price Dividends Stock Price Dividends
Quarter High Low Per Share High Low Per Share
Class A common stock
1st $22-1/2 $14-1/2 $0.1025 $30-3/4 $25 $0.1025
2nd 19 14-1/2 0.1025 30-1/4 20-3/4 0.1025
3rd 18-1/4 13-1/2 0.1025 25-1/4 21 0.1025
4th 20-1/2 16-1/4 0.205 24-1/4 19-1/4 0.205
Class B common stock
1st $18 $12 $0.09 $23-1/2 $19 $0.09
2nd 18 15-1/4 0.09 22 16 0.09
3rd 18 13-3/4 0.09 19 16 0.09
4th 20-3/4 17 0.18 18 14 0.18
The table reflects the "last" price quotation on the NASDAQ
National Market System and does not reflect mark-ups, mark-downs,
or commissions and may not represent actual transactions.
The Company has paid cash dividends on its common stock each year
since 1936. The Company's Certificate of Incorporation requires
that when any dividend (other than a dividend payable solely in
shares of the Company's stock) is paid on the Company's Class B
Common Stock, a dividend equal to 115% of such amount per share
must concurrently be paid on each outstanding share of Class A
Common Stock.
As of March 11, 1994, there were 2,081 holders of record of Class
A Common Stock and 203 holders of record of Class B Common Stock.
ITEM 6. SELECTED FINANCIAL DATA
Financial Highlights
Year Ended December 31,
1993 1992 1991 1990 1989
Net sales $340,186 $346,206 $365,173 $323,377 $315,076
Net income 4,523 15,135 23,576 29,552 37,598
Return on sales 1.3% 4.4% 6.5% 9.1% 11.9%
Working capital $111,794 $111,075 $106,803 $103,063 $88,677
Total assets 229,131 226,195 214,963 192,196 163,266
Long-term debt (less
current maturities) 757 1,293 2,379 3,459 4,530
Shareholders' equity 171,998 175,153 167,380 151,166 128,652
Net income per share $0.31 $1.04 $1.62 $2.03 2.58
Cash dividends declared
per share
Class A 0.5125 0.5125 0.5125 0.49 0.4275
Class B 0.45 0.45 0.45 0.43 0.37
Shareholders' equity 11.79 12.01 11.48 10.36 8.82
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
YEAR ENDED DECEMBER 31, 1993
COMPARED TO YEAR ENDED DECEMBER 31, 1992
Net sales in 1993 were $340.2 million, down 1.7% from 1992 sales
of $346.2 million. The Company's domestic wholesale business of
approximately $257 million in 1993 was 9.3% less than 1992 sales,
due primarily to a decline in unit shipments of approximately 10%
in 1993 from 1992. The decrease in domestic wholesale unit
shipments related primarily to the effects of the competitive
pricing environment in the children's wear business, the
Company's difficulty in meeting the delivery requirements of its
wholesale customers as well as the Company's expanding focus on
its retail operations. The Company currently anticipates further
reduction in its domestic wholesale unit shipments in 1994. In
an effort to improve customer delivery requirements, the Company
is currently undertaking a significant reengineering process.
The Company anticipates continued improvement in its delivery
performance in 1994.
Company retail sales at its Oshkosh B'Gosh branded outlet stores
and its wholly-owned subsidiary Essex Outfitters Trader Kids
stores expanded to approximately $65.0 million in 1993, a 49.4%
increase over 1992 retail sales of approximately $43.5 million.
Retail sales increases resulted primarily from the opening of an
additional 38 retail stores during 1993. The Company anticipates
continued expansion in its retail business through the opening of
an additional 35 to 45 retail stores in 1994, which should offset
the reduction in the domestic wholesale business.
Gross margin as a percent of sales improved to 28.0% in 1993,
compared with 25.1% in 1992. During 1993, the Company
experienced a slight improvement in its domestic wholesale gross
margins. Increased retail store sales, at higher gross profit
margins, had a significant impact on improved overall gross
margin performance. Gross margins for 1992 were unfavorably
impacted by manufacturing inefficiencies resulting from the
restructuring of production lines and increasing workers'
compensation insurance and employee health care costs. The
Company currently anticipates further modest improvement in its
gross margins in the second half of 1994.
Selling, general and administrative expenses increased $12.1
million in 1993 from 1992. As a percent of net sales, selling,
general and administrative expenses were 23.1% in 1993, up from
19.2% in 1992. The primary reason for increasing selling,
general and administrative expenses is the Company's increasing
focus on its retail business. In addition, the Company initiated
a catalog division in the second half of 1993 which added
approximately $1.2 million to its selling, general and
administrative expense. Increasing emphasis on foreign sales
opportunities, including the start-up costs associated with the
opening of sales offices, have also added to the Company's
selling, general and administrative expense structure. In 1994,
the Company's continued expansion in its retail business, along
with further development of its foreign business and catalog
division will result in higher selling, general and
administrative expenses in relation to its net sales.
During the fourth quarter of 1993, the Company recorded a pretax
restructuring charge of $10.8 million. Restructuring costs (net
of income tax benefit) reduced net income by $7.1 million ($.49
per share) in 1993. After review of the Company's manufacturing
capacity, operational effectiveness, sales volume and alternative
sourcing opportunities, the Company decided to sell its Camden,
Tennessee and McKenzie, Tennessee manufacturing plants as well as
evaluate other capacity reduction alternatives. During 1993 the
Company reduced its total workforce by over 1,200 employees.
Sale of the McKenzie plant in 1994 will reduce the Company's
workforce by approximately 230 employees. The Company's $10.8
million restructuring charge includes approximately $3.3 million
for facility closings, write-down of the related assets and
severance costs pertaining to workforce reductions.
The restructuring charge also reflects the Company's decision to
market its Boston Trader line of children's apparel under the new
trade name Genuine Kids and the resulting costs of the Company's
decision not to renew the Boston Trader license arrangement
beyond 1994, as well as expenses to consolidate its retail
operations. Accordingly, the restructuring charge includes
approximately $7.5 million for write-off of previously
capitalized trademark rights and expenses related to
consolidating the Company's retail operations.
The Company anticipates that these restructuring actions, net of
income tax benefit, will require expenditures of approximately
$2.5 million of cash over the next year, which will be funded
entirely by internally generated cash. Company management
believes that while these restructuring actions will not result
in material short term earnings improvement, the restructuring
will better position the Company competitively over a longer term
period of time.
In 1991, the Company recorded the impact of its decision to
discontinue the manufacturing and sale of its Absorba line of
infant's apparel. A pretax restructuring charge of $5.6 million
represented provisions for facility closing and lease termination
costs, severance pay, write-down of the related assets and
estimated operating losses until closing. These restructuring
costs (net of income tax benefit) reduced 1991's net income by
$3.6 million ($.25 per share). During 1992, the Company reduced
its estimate of the Absorba line restructuring costs by $2.8
million due to the efficient and orderly wind down of operations
and favorable settlement of lease obligations. This adjustment
to restructuring costs (net of income taxes) increased 1992 net
income by $1.8 million ($.12 per share).
Royalty income, net of expenses, was $3.4 million in 1993, as
compared to $2.6 million in 1992. The increase in net royalty
income resulted primarily from additional foreign license
agreements.
The effective tax rate for 1993 was 51.3% compared to 39.8% in
1992. The higher 1993 effective tax rate is the result of the
Company's foreign operating losses, which provide no tax benefit,
combined with the Company's substantially lower income before
income taxes in 1993 (which resulted in part from the
restructuring charge). The Company's early adoption of Statement
of Financial Accounting Standards No. 109 on accounting for
income taxes in 1992 had no material impact on 1992's results of
operations. Company management believes that the $10.7 million
deferred tax asset at December 31, 1993 can be fully realized
through reversals of existing taxable temporary differences and
the Company's history of substantial taxable income which allows
the opportunity for carrybacks of current or future losses.
The Company elected early adoption of the of the Statement of
Financial Accounting Standards No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions," in 1992. The
Company elected to record the entire transition obligation in
1992, which resulted in a net $.6 million after tax ($.04 per
share) reduction in net income.
In November of 1992, the Financial Accounting Standards Board
issued its Statement No. 112 entitled "Employers' Accounting for
Postemployment Benefits." The Statement must be applied in the
preparation of the Company's consolidated financial statements
for the year ending December 31, 1994. The Company has
determined that this standard will not have a significant effect
on its consolidated financial statements.
In September 1993, the Company signed a letter of intent to
purchase Rio Sportswear, Inc. and affiliated companies
(collectively "Rio"). In March, 1994, the Company announced that
negotiations with Rio had terminated.
YEAR ENDED DECEMBER 31, 1992
COMPARED TO YEAR ENDED DECEMBER 31, 1991
Net sales for 1992 were $346.2 million, a 5.2% decrease from 1991
sales of $365.2 million. The decrease in net sales was due
primarily to a 3.9% dollar decrease (1.2% in units) in the
Oshkosh B'Gosh domestic wholesale business. The Company's
decision to discontinue the sale of United States licensed
Absorba products in 1992 also had a negative impact on reported
1992 sales, as 1991 sales of Absorba products amounted to $10.3
million. Sales by the Company's remaining subsidiaries totaled
$23.2 million, a 44.2% increase over their 1991 sales.
Gross margins as a percent of sales declined from 29.7% in 1991
to 25.1% in 1992. The decline resulted primarily from a 6.2%
reduction in gross margins of the domestic wholesale children's
wear business. Gross margins for 1992 were also unfavorably
impacted by manufacturing inefficiencies resulting from the
restructuring of production lines to meet the demands of product
complexity and delivery schedules. Rapidly escalating workers'
compensation insurance costs, employee health care costs, and
other employee fringe benefit costs adversely impacted gross
margins. In addition, in 1992 the Company initiated a volume
discount program which placed added pressure on Company gross
margins. Variations in gross margins of subsidiaries had no
material effect on consolidated results.
Selling, general and administrative expenses decreased $1.3
million from 1991. As a percent of net sales, selling, general
and administrative expenses were 19.2% and 18.6% for 1992 and
1991 respectively. The primary reason for the decline in the
dollar amount of selling, general and administrative expenses was
the discontinuance of the Absorba operations, offset in part by
increased advertising and factory store expenses. The increased
factory store expenses were primarily the result of opening 7
additional Oshkosh B'Gosh retail stores. Subsidiary marketing
and administrative expenses increased primarily from the addition
of 16 retail stores at the Company's Essex Outfitters, Inc.
subsidiary.
During 1991 the Company decided to discontinue the manufacture
and sale of its United States licensed Absorba products. An
estimated pretax restructuring cost of $5.6 million was recorded
in 1991 for facility closings, severance pay, loss on disposal of
assets and estimated operating losses until closing. Favorable
settlements of lease obligations, efficient and orderly wind down
of operations, and disposition of remaining assets and
inventories at favorable amounts resulted in a reduction in the
Company's provision for restructuring costs by $2.8 million ($1.8
million net of income taxes). The net effect of this reduction
in provision for restructuring costs increased 1992's income by
$.12 per share. As of December 31, 1992, substantially all
assets of Absorba, Inc. were sold and all operations were ceased.
Results of operations of the Company's three remaining
subsidiaries decreased 1992 income before tax by approximately
$.4 million. Results of operations of the remaining subsidiaries
(excluding Absorba) decreased 1991 income by approximately $.9
million. Losses were experienced in operations of Oshkosh B'Gosh
Europe, S.A. and Manufacturera International Apparel, S.A. (our
Honduras manufacturing subsidiary), while Essex Outfitters net
income was approximately equal to that realized in 1991.
The effective tax rate for 1992 and 1991 was 39.8%. The
Company's early adoption of the Financial Accounting Standards
Board Statement No. 109 on accounting for income taxes in 1992
had no material impact on 1992's results of operations.
FINANCIAL CONDITION
During 1993 total assets increased by $2.9 million or 1.3% over
1992. Accounts receivable at December 31, 1993 were $19.5
million compared to $24.4 million at December 31, 1992.
Inventories at the end of 1993 were $100 million, up $7.2 million
from 1992. This increase in inventories relates primarily to the
Company's expanding retail business. Management believes that
year end 1993 inventory levels are generally appropriate for
anticipated 1994 business activity.
Accrued liabilities at the end of 1993 were $29.8 million, up
$13.6 million from 1992. This increase is due primarily to the
Company's provision for restructuring costs recorded in the
fourth quarter of 1993.
On February 20, 1992, the Company finalized a $7 million
Industrial Development Revenue Bond issue to finance construction
of the Celina, Tennessee finishing plant. As a result of
additional capital expenditures associated with the project and
the possible restrictions to future expansion because of limits
imposed by existing Industrial Development Revenue Bond
regulations, the bonds were called on December 18, 1992 and paid
off on January 19, 1993.
LIQUIDITY AND CASH FLOW
The Corporation maintains a relatively liquid financial position.
Net working capital at the end of 1993 was $111.8 million,
approximately the same as at the end of 1992. The current ratio
was 3.8 to 1 at 1993 year end, compared to 4.2 to 1 at year end
1992. Cash provided by operations was approximately $21.6
million in 1993, compared to $22.9 million in 1992.
Capital expenditures were approximately $9 million in 1993 and
$12.6 million in 1992. Capital expenditures for 1994 are
currently budgeted at approximately $12 million.
Liquidity is also provided by short-term borrowings that fund
seasonal working capital needs. The Company has unsecured credit
arrangements, negotiated annually, which provide for maximum
borrowings and letters of credit totaling $60 million at December
31, 1993 including $45 million under commercial paper borrowing
arrangements. The Company believes its present liquidity, in
combination with cash flow from future operations and its
available credit facilities, is sufficient to meet its continuing
operating and capital requirements in the foreseeable future.
Dividends on the Company's Class A and Class B Common Stock
totaled $.5125 per share and $.45 per share, respectively, in
1993, the same as in 1992. The dividend payout rate was 163% in
1993 and 49% in 1992. The Company's lower earnings from
operations in 1993 combined with the fourth quarter 1993
restructuring charge resulted in the unusually high 1993 payout
rate.
INFLATION
The effects of inflation on the Company's operating results and
financial condition were not significant.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Page
Financial Statements:
Reports of Independent Auditors 15
Consolidated Balance Sheets - December 31, 1993 and 1992 17
Consolidated Statements of Income - years ended
December 31, 1993, 1992 and 1991 18
Consolidated Statements of Changes in Shareholders' Equity -
- - years ended December 31, 1993, 1992, and 1991 19
Consolidated Statements of Cash Flows - years ended
December 31, 1993, 1992 and 1991 20
Notes to Consolidated Financial Statements 22
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
The Board of Directors
Oshkosh B'Gosh, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheet of
Oshkosh B'Gosh, Inc. and Subsidiaries as of December 31, 1993,
and the related consolidated statements of income, changes in
shareholders' equity and cash flows for the year then ended. Our
audit also included the 1993 financial statement schedules listed
in the Index at Item 14(a). These financial statements and
schedules are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements and schedules based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Oshkosh B'Gosh, Inc. and Subsidiaries at
December 31, 1993, and the consolidated results of their
operations and their cash flows for the year then ended in
conformity with generally accepted accounting principles. Also,
in our opinion, the related 1993 financial statement schedules,
when considered in relation to the basic financial statements
taken as a whole, present fairly in all material respects the
information set forth therein.
Milwaukee, Wisconsin ERNST & YOUNG
February 11, 1994
REPORT OF SCHUMAKER, ROMENESKO & ASSOCIATES, S.C.,
INDEPENDENT AUDITORS
The Board of Directors
Oshkosh B'Gosh, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheet of
Oshkosh B'Gosh, Inc. and Subsidiaries as of December 31, 1992,
and the related consolidated statements of income, changes in
shareholders' equity and cash flows for the years ended December
31, 1992 and 1991. Our audits also included the 1992 and 1991
financial statement schedules listed in the Index at Item 14(a).
These financial statements and schedules are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Oshkosh B'Gosh, Inc. and Subsidiaries at
December 31, 1992, and the consolidated results of their
operations and their cash flows for the years ended December 31,
1992 and 1991 in conformity with generally accepted accounting
principles. Also, in our opinion, the related 1992 and 1991
financial statement schedules, when considered in relation to the
basic financial statements taken as a whole, present fairly in
all material respects the information set forth therein.
As discussed in Notes 9 and 10 to the consolidated financial
statements, effective January 1, 1992, the Company changed its
method of accounting for income taxes and nonpension
postretirement benefits.
Oshkosh, Wisconsin SCHUMAKER, ROMENESKO & ASSOCIATES, S.C.
February 15, 1993
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands, except share and per share amounts)
December 31,
1993 1992
Assets
Current assets
Cash and cash equivalents $ 17,853 $ 21,129
Accounts receivable, less allowances of
$3,310 in 1993 and $2,265 in 1992 19,477 24,425
Inventories 99,999 92,752
Prepaid expenses and other current assets 3,810 2,185
Deferred income taxes 10,716 5,819
Total current assets 151,855 146,310
Property, plant and equipment, net 71,755 72,312
Other assets 5,521 7,573
Total assets $229,131 $226,195
Liabilities and Shareholders' Equity
Current liabilities
Current maturities of long-term debt $ 536 $ 7,896
Accounts payable 9,720 11,096
Accrued liabilities 29,805 16,243
Total current liabilities 40,061 35,235
Long-term debt 757 1,293
Deferred income taxes 3,040 3,680
Employee benefit plan liabilities 13,275 10,834
Commitments - -
Shareholders' equity
Preferred stock, par value $.01 per share:
Authorized - 1,000,000 shares;
Issued and outstanding - None - -
Common stock, par value $.01 per share:
Class A, authorized - 30,000,000 shares;
Issued and outstanding - 13,280,572 shares
in 1993, 12,776,860 shares in 1992 133 128
Class B, authorized - 3,750,000 shares;
Issued and outstanding - 1,305,228 shares
in 1993, 1,808,940 shares in 1992 13 18
Additional paid-in capital 2,971 2,971
Retained earnings 169,182 172,036
Cumulative foreign currency
translation adjustments (301) -
Total shareholders' equity 171,998 175,153
Total liabilities and shareholders'equity $229,131 $226,195
See notes to consolidated financial statements.
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
Year Ended December 31,
1993 1992 1991
Net sales $340,186 $346,206 $365,173
Cost of products sold 244,926 259,344 256,755
Gross profit 95,260 86,862 108,418
Selling, general and
administrative expenses 78,492 66,414 67,726
Restructuring 10,836 (2,800) 5,600
Operating income 5,932 23,248 35,092
Other income (expense):
Interest expense (626) (797) (897)
Interest income 1,114 1,022 1,134
Royalty income, net of expenses 3,417 2,562 3,047
Minority interest in loss of
consolidated subsidiary - 108 602
Miscellaneous (545) (17) 174
Other income - net 3,360 2,878 4,060
Income before income taxes and
cumulative effect of
accounting change 9,292 26,126 39,152
Income taxes 4,769 10,390 15,576
Income before cumulative effect of
accounting change 4,523 15,736 23,576
Cumulative effect of change in
accounting for nonpension
postretirement benefits - (601) -
Net income $ 4,523 $ 15,135 $ 23,576
Income per share before cumulative
effect of accounting change $.31 $1.08 $1.62
Change in accounting for nonpension
postretirement benefits - (.04) -
Net income per common share $.31 $1.04 $1.62
See notes to consolidated financial statements.
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Shareholders' Equity
(Dollars and shares in thousands, except per share amounts)
Cumulative
Foreign
Common Stock Additional Currency
Class A Class B Paid-In Retained Translation
Shares Amount Shares Amount Capaital Earnings Adjustments
Balance - December 31, 1990 12,777 $128 1,809 $18 $2,971 $148,049 $ -
Net income - - - - - 23,576 -
Dividends-Class A
($.5125 per share) - - - - - (6,548) -
-Class B
($.45 per share) - - - - - (814) -
Balance - December 31, 1991 12,777 128 1,809 18 2,971 164,263 -
Net income - - - - - 15,135 -
Dividends-Class A
($.5125 per share) - - - - - (6,548) -
-Class B
($.45 per share) - - - - - (814) -
Balance - December 31, 1992 12,777 128 1,809 18 2,971 172,036 -
Net income - - - - - 4,523 -
Dividends-Class A
($.5125 per share) - - - - - (6,667) -
-Class B
($.45 per share) - - - - - (710) -
Cumulative foreign currency
translation adjustments - - - - - - (301)
Conversions of common shares 504 5 (504) (5) - - -
Balance - December 31, 1993 13,281 $133 1,305 $13 $2,971 $169,182 $(301)
See notes to consolidated financial statements
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in thousands)
Year Ended December 31,
1993 1992 1991
Cash flows from operating activities
Net income $ 4,523 $15,135 $23,576
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 9,233 8,375 6,568
(Gain) loss on disposal
of assets 63 85 (14)
Minority interest in loss of
consolidated subsidiary - (108) (602)
Provision for deferred
income taxes (5,537) 35 (2,832)
Pension expense,
net of contributions 1,852 1,753 2,304
Cumulative effect of
accounting change - 1,001 -
Restructuring 10,836 (2,800) 5,600
Changes in operating assets
and liabilities, net of effects
of acquisitions:
Accounts receivable 4,948 (643) 6,149
Inventories (7,247) 1,478 (3,096)
Prepaid expenses and other
current assets (1,624) (252) (1,336)
Accounts payable (1,376) (2,522) 3,925
Accrued liabilities 5,940 1,313 (339)
Net cash provided by
operating activities 21,611 22,850 39,903
Cash flows from investing activities
Additions to property, plant and
equipment (8,990)(12,563) (19,569)
Proceeds from disposal of assets 1,159 625 256
Investments in subsidiaries - (900) -
Additions to other assets (1,783) (1,602) (580)
Net cash used in
investing activities (9,614)(14,440) (19,893)
See notes to consolidated financial statements.
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (continued)
(Dollars in thousands)
Year Ended December 31,
1993 1992 1991
Cash flows from financing activities
Net decrease in
short-term borrowings $ - $ - $(4,706)
Proceeds from
long-term borrowings - 7,000 -
Payments of long-term debt (7,896) (1,270) (1,071)
Dividends paid (7,377) (7,362) (7,362)
Proceeds from issuance of
subsidiary stock - - 642
Net cash used in
financing activities (15,273) (1,632) (12,497)
Net increase (decrease) in cash
and cash equivalents (3,276) 6,778 7,513
Cash and cash equivalents at
beginning of year 21,129 14,351 6,838
Cash and cash equivalents at
end of year $17,853 $21,129 $14,351
Supplementary disclosures
Cash paid for interest $ 1,030 $ 823 $ 946
Cash paid for income taxes $12,194 $ 9,877 $21,895
See notes to consolidated financial statements.
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share amounts)
Note 1. Significant accounting policies
Business - Oshkosh B'Gosh, Inc. and its majority-owned
subsidiaries (the Company) is engaged primarily in the design,
manufacture and marketing of apparel to wholesale customers and
through Company owned retail stores.
Principles of consolidation - The consolidated financial
statements include the accounts of all majority-owned
subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.
Minority interest represents the minority shareholder's
proportionate share of the net loss of Oshkosh B'Gosh Europe,
S.A. until the Company acquired the remaining interest in July,
1992.
Cash equivalents - Cash equivalents consist of highly liquid debt
instruments such as money market accounts with original
maturities of three months or less. The Company's policy is to
invest cash in conservative instruments as part of its cash
management program and to evaluate the credit exposure of any
investment. Cash and cash equivalents are stated at cost, which
approximates market value.
Inventories - Inventories are stated at the lower of cost or
market. Inventories stated on the last-in, first-out (LIFO)
basis represent 90.6% of total 1993 and 96.3% of total 1992
inventories. Remaining inventories are valued using the first-
in, first-out method.
Property, plant and equipment - Property, plant and equipment are
carried at cost. Depreciation and amortization for financial
reporting purposes is calculated using the straight line method
based on the following useful lives:
Years
Land improvements 10 to 15
Buildings 10 to 40
Leasehold improvements 5 to 10
Machinery and equipment 5 to 10
Income taxes - Effective January 1, 1992, the Company accounts
for income taxes under the provisions of Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income
Taxes". This Statement requires recognition of deferred tax
assets and liabilities for all temporary differences between the
financial reporting and income tax basis of Company assets and
liabilities. In 1991, deferred income taxes were accounted for
under APB Opinion No. 11. The effect of this accounting change
at January 1, 1992 was not material.
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share amounts)
Note 1. Significant accounting policies (continued)
Foreign currency translation - The functional currency for
certain foreign subsidiaries is the local currency. Accordingly,
assets and liabilities are translated at year end exchange rates,
and income statement items are translated at average exchange
rates prevailing during the year. Such translation adjustments
are recorded as a separate component of shareholders' equity.
Revenue recognition - Revenue within wholesale operations is
recognized at the time merchandise is shipped to customers.
Retail store revenues are recognized at the time of sale.
Income per common share - Income per common share amounts are
computed by dividing income by the number of shares of common
stock outstanding (14,585,800 in each year). There are no common
stock equivalents.
Reclassifications - Certain reclassifications of financial
information for the years ended December 31, 1991 and 1992 have
been made to conform with the 1993 presentation.
Note 2. Restructuring
During the fourth quarter of 1993, the Company recorded a pretax
restructuring charge of $10,836. The restructuring charge
includes approximately $3,300 for facility closings, write-down
of the related assets and severance costs pertaining to work
force reductions. The restructuring charge also reflects the
Company's decision to market its Trader Kids line of children's
apparel under the new name Genuine Kids and the resulting costs
of the Company's decision not to renew its Boston Trader license
arrangement beyond 1994, as well as expenses to consolidate its
retail operations. Accordingly, the restructuring charge
includes approximately $7,500 for write-off of unamortized
trademark rights and expenses related to consolidating the
Company's retail operations. Restructuring costs (net of income
tax benefit) reduced net income by $7,100 ($.49 per share) in
1993.
The Company recorded the impact of its decision to discontinue
the manufacturing and sales of its Absorba line of infant's
apparel in 1991. Restructuring costs of $5,600 represented
provisions for facility closing and lease termination costs,
severance pay, write-down of the related assets and estimated
operating losses until closing. Restructuring costs (net of
income tax benefit) reduced net income by $3,600 ($.25 per share)
in 1991.
During 1992, the Company reduced its estimate of the Absorba line
restructuring costs by $2,800 due to the efficient and orderly
wind down of operations and favorable settlement of lease obli-
gations. This adjustment to restructuring costs (net of income
taxes) increased 1992 net income by $1,800 ($.12 per share).
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share amounts)
Note 3. Inventories
A summary of inventories follows:
December 31,
1993 1992
Finished goods $82,737 $71,290
Work in process 5,008 6,695
Raw materials 12,254 14,767
$99,999 $92,752
The replacement cost of inventory exceeds the above LIFO costs by
$14,716 and $17,462 at December 31, 1993 and 1992, respectively.
Note 4. Property, plant and equipment
A summary of property, plant and equipment follows:
December 31,
1993 1992
Land and improvements $ 4,172 $ 3,896
Buildings 37,640 38,107
Leasehold improvements 5,268 2,953
Machinery and equipment 67,026 62,357
Construction in progress 291 537
114,397 107,850
Less: accumulated depreciation
and amortization 42,642 35,538
Property, plant and equipment, net $ 71,755 $ 72,312
Depreciation and amortization expense on property, plant and
equipment for the years ended December 31, 1993, 1992, and 1991
amounted to approximately $8,425, $7,909, and $6,136,
respectively.
Note 5. Short-term borrowings
The Company has unsecured credit arrangements, negotiated
annually, which provide for maximum borrowings and letters of
credit totaling $60,000 at December 31, 1993 including $45,000
under commercial paper borrowing arrangements. Bank credit lines
are maintained in full support of outstanding commercial paper.
Interest under the lines is at or below the lenders' prime rate.
There were no outstanding obligations against these credit
arrangements at December 31, 1993 or 1992. Letters of credit of
approximately $15,000 were outstanding at December 31, 1993, with
$41,000 of the unused line of credit available for borrowing.
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share amounts)
Note 6. Accrued liabilities
A summary of accrued liabilities follows:
December 31,
1993 1992
Compensation $ 4,701 $ 4,181
Group health insurance 1,700 1,900
Worker's compensation 8,600 5,705
Income taxes 640 753
Restructuring costs 8,186 422
Other 5,978 3,282
$29,805 $16,243
Note 7. Long-term debt
The Company's long-term debt is summarized as follows:
December 31,
1993 1992
Obligations under industrial
development revenue bonds:
Fixed rate $ - $ 80
Floating rate 666 8,372
Other mortgage notes and loans
with interest at varying rates 627 737
Total 1,293 9,189
Less current maturities 536 7,896
Total long-term debt $ 757 $1,293
The industrial development revenue bonds are due in varying
installments through 1995. The floating interest rates on the
bonds range from 65% to approximately 80% of prime rate (prime
rate was 6.0% at December 31, 1993).
Annual total maturities of principal on long-term debt are as
follows:
Year ending
December 31,
1994 $ 536
1995 240
1996 42
1997 43
1998 45
Thereafter 387
1,293
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share amounts)
Note 8. Leases
The Company leases certain property and equipment including
retail sales facilities and regional sales offices under
operating leases. Certain leases provide the Company with renewal
options. Leases for retail sales facilities provide for minimum
rentals plus contingent rentals based on sales volume.
Minimum future rental payments under noncancellable operating
leases are as follows:
Year ending
December 31,
1994 $ 7,346
1995 6,668
1996 5,639
1997 4,662
1998 3,858
Thereafter 13,587
Total minimum lease payments $41,760
Total rent expense charged to operations for all operating leases
is as follows:
Year Ended December 31,
1993 1992 1991
Minimum rentals $7,718 $5,921 $4,873
Contingent rentals 167 179 201
Total rent expense $7,885 $6,100 $5,074
Note 9. Income taxes
Income tax expense (credit) is comprised of the following:
Year Ended December 31,
1993 1992 1991
Current:
Federal $ 8,571 $ 8,155 $15,370
State and local 1,735 1,800 3,038
10,306 9,955 18,408
Deferred (5,537) 435 (2,832)
Totals $ 4,769 $10,390 $15,576
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share amounts)
Note 9. Income taxes (continued)
The components of the Company's deferred tax asset and deferred
tax liability include:
December 31,
1993 1992
[Assets (Liabilities)]
Current deferred taxes
Accounts receivable allowances $ 1,272 $ 844
Inventory valuation 2,129 1,403
Accrued liabilities 3,714 3,304
Restructuring costs 3,204 160
Other 397 108
Total net current deferred tax assets$10,716 $ 5,819
Non-current deferred taxes
Depreciation $(8,266) $(7,304)
Deferred employee benefits 4,419 3,496
Trademark 807 128
Foreign losses 1,807 979
Valuation allowance (1,807) (979)
Total net long-term
deferred tax liabilities $(3,040) $(3,680)
The sources of deferred income taxes for the year ended December
31, 1991 and the tax effect of each are as follows:
Depreciation $1,047
Accounts receivable allowances (90)
Deferred employee benefits (498)
Inventory valuation (837)
Restructuring costs (2,000)
Other (454)
Totals $(2,832)
For financial reporting purposes, income before income taxes and
cumulative effect of accounting change includes the following
components:
Year Ended December 31,
1993 1992 1991
Pretax income (loss):
United States $11,704 $27,574 $41,272
Foreign (2,412) (1,448) (2,120)
$ 9,292 $26,126 $39,152
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share amounts)
Note 9. Income taxes (continued)
A reconciliation of the federal statutory income tax rate to the
effective tax rates reflected in the consolidated statements of
income follows:
Year Ended December 31,
1993 1992 1991
Federal statutory tax rate 35.0% 34.0% 34.0%
Differences resulting from:
State and local income taxes, net
of federal income tax benefit 4.1 4.2 4.1
Foreign losses with no tax benefit 9.1 1.9 1.8
Other 3.1 (.3) (.1)
51.3% 39.8% 39.8%
Note 10. Retirement plans
The Company has defined contribution and defined benefit pension
plans covering substantially all employees. Charges to
operations by the Company for these pension plans totaled $4,621,
$4,477, and $4,615 for 1993, 1992 and 1991, respectively.
Defined benefit pension plans - The Company sponsors several
qualified defined benefit pension plans covering certain hourly
and salaried employees. In addition, the Company maintains a
supplemental unfunded salaried pension plan to provide those
benefits otherwise due employees under the salaried plan's
benefit formulas, but which are in excess of benefits permitted
by the Internal Revenue Service.
The benefits provided are based primarily on years of service and
average compensation. The pension plans' assets are comprised
primarily of listed securities, bonds, treasury securities,
commingled equity and fixed income investment funds and cash
equipvalents. Plan assets included 7,000 and 10,000 shares of
Oshkosh B'Gosh, Inc. Class A common stock at December 31, 1993
and 1992, respectively, and 5,000 shares of Oshkosh B'Gosh, Inc.
Class B common stock in both years, with a total market value of
approximately $236 and $307 at December 31, 1993 and 1992,
respectively.
The Company's funding policy for qualified plans is to contribute
amounts which are actuarially determined to provide the plans
with sufficient assets to meet future benefit payment
requirements consistent with the funding requirements of federal
laws and regulations.
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share amounts)
Note 10. Retirement Plans (continued)
The actuarial computations utilized the following assumptions.
December 31,
1993 1992 1991
Discount rate 7.0% 7.0-7.5% 6.5-7.0%
Expected long-term rate
of return on assets 7.0% 7.5-8.0% 7.0-7.5%
Rates of increase in
compensation levels 0-4.5% 0-5.5% 0-6.0%
Net periodic pension cost was comprised of:
December 31,
1993 1992 1991
Service cost - benefits
earned during the period $2,318 $2,309 $2,077
Interest cost on projected
benefit obligations 1,808 1,601 1,409
Actual return on plan assets (1,708) (1,037) (2,351)
Net amortization and deferral 1,259 636 2,213
Net periodic pension cost $3,677 $3,509 $3,348
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share amounts)
Note 10. Retirement plans (continued)
The following table sets forth the funded status of the Company's
defined benefit plans and the amount recognized in the Company's
consolidated balance sheets. The funded status of plans with
assets exceeding the accumulated benefit obligation (ABO) is
segregated by column from that of plans with the ABO exceeding
assets.
December 31,
1993 1992
Assets ABO Assets ABO
Exceed Exceeds ExceedExceeds
ABO Assets ABO Assets
Actuarial present value of
benefit obligations:
Vested benefits $ 9,051 $ 6,308 $ 6,423$ 5,118
Nonvested benefits 1,604 449 1,119 449
Total accumulated benefit
obligation $10,655 $ 6,757 $ 7,542$ 5,567
Projected benefit obligation $22,299 $ 6,835 $18,026$ 6,076
Plan net assets at fair value 12,070 2,777 10,363 2,456
Projected benefit obligation in
excess of plan net assets (10,229) (4,058) (7,663)(3,620)
Unamortized transition (asset)
obligation (1,535) (23) (1,689) 175
Unrecognized prior service
cost 2,821 2,867 3,055 2,589
Unrecognized net (gain) loss 3,546 (592) 2,950 (539)
Adjustment to recognize
minimum liability - (2,200) - (1,716)
Accrued pension liability
at December 31 $(5,397)$(4,006)$(3,347)$(3,111)
Defined contribution plan - The Company maintains a defined
contribution retirement plan covering certain salaried employees.
Annual contributions are discretionary and are determined by the
Company's Executive Committee. Charges to operations by the
Company for contributions under this plan totaled $565, $658 and
$853 for 1993, 1992 and 1991, respectively.
The Company also has a supplemental retirement program for
designated employees. Annual provisions to this unfunded plan
are discretionary and are determined by the Company's Executive
Committee. Charges to operations by the Company for additions to
this plan totaled $379, $310 and $414 for 1993, 1992 and 1991,
respectively.
Deferred employee benefit plans - The Company has deferred
compensation and supplemental retirement arrangements with
certain key officers.
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share amounts)
Note 10. Retirement plans (continued)
Postretirement health and life insurance plan - The Company
sponsors an unfunded defined benefit postretirement health
insurance plan that covers eligible salaried employees. Life
insurance benefits are provided under the plan to qualifying
retired employees. The postretirement health insurance plan is
offered, on a shared cost basis, only to employees electing early
retirement. This coverage ceases when the employee reaches age
65 and becomes eligible for Medicare. Retiree contributions are
adjusted periodically.
In 1992, the Company adopted the provisions of SFAS No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions." In applying this pronouncement, the Company elected
to immediately recognize the accumulated postretirement benefit
obligation as of the beginning of 1992 of approximately $1
million in the first quarter of 1992 as a change in accounting
principle. The charge, net of an income tax benefit of $400, was
$601 or $.04 per share.
The following table sets forth the funded status of the plan and
the postretirement benefit cost recognized in the Company's
consolidated balance sheets:
December 31,
1993 1992
Accumulated postretirement benefit obligation:
Retirees $ 119 $ 140
Fully eligible active plan participants 216 231
Other active plan participants 670 795
1,005 1,166
Plan assets - -
Unrecognized net gain 281 -
Accrued postretirement benefit cost $1,286 $1,166
Net periodic postretirement benefit cost was comprised of:
Year Ended
December 31,
1993 1992
Service cost - benefits attributed to employee
service during the year $ 98 $119
Interest cost on accumulated postretirement
benefit obligation 61 75
Net amortization and deferral (18) -
Net periodic postretirement benefit cost $141 $194
The discount rate used in determining the accumulated
postretirement benefit obligation was 7.0% in 1993 and 7.5% in
1992. The assumed health care cost trend rate used in measuring
the accumulated postretirement benefit obligation was 15%,
declining gradually to 6% by 2012 and then declining further to
an ultimate rate of 4% by 2022.
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in thousands, except share and per share amounts)
Note 10. Retirement Plans (continued)
The health care cost trend rate assumption has a significant
impact on the amounts reported. Increasing the assumed health
care cost trend rate by one percentage point would increase the
accumulated postretirement benefit obligation at December 31,
1993 by approximately $121 and the aggregate of the service and
interest cost components of net periodic postretirement benefit
cost for 1993 by approximately $26. The charge for retiree
health care benefits prior to the adoption of SFAS No. 106 was
immaterial.
Note 11. Common stock
In May, 1993 shareholders of the Company approved a stock
conversion plan whereby shares of Class B common stock may be
converted to an equal number of Class A common shares.
The Company's common stock authorization provides that dividends
be paid on both the Class A and Class B common stock at any time
that dividends are paid on either. Whenever dividends (other
than dividends of Company stock) are paid on the common stock,
each share of Class A common stock is entitled to receive 115% of
the dividend paid on each share of Class B common stock.
The Class A common stock shareholders are entitled to receive a
liquidation preference of $7.50 per share before any payment or
distribution to holders of the Class B common stock.
Thereafter, holders of the Class B common stock are entitled to
receive $7.50 per share before any further payment or
distribution to holders of the Class A common stock. Thereafter,
holders of the Class A common stock and Class B common stock
share on a pro-rata basis in all payments or distributions upon
liquidation, dissolution or winding up of the Company.
Note 12. Business and credit concentrations
The Company provides credit, in the normal course of business, to
department and specialty stores. The Company performs ongoing
credit evaluations of its customers and maintains allowances for
potential credit losses.
The Company's customers are not concentrated in any specific
geographic region. Sales to a customer, as a percentage of total
sales, amounted to approximately 10% in 1993. In 1992, sales to
two customers, as a percentage of total sales, amounted to
approximately 12% each. In 1991, sales to a single customer, as
a percentage of total sales, amounted to approximately 12%.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item is incorporated by
reference to the definitive Proxy Statement of Oshkosh B'Gosh,
Inc. for its annual meeting to be held on May 6, 1994.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by
reference to the definitive Proxy Statement of Oshkosh B'Gosh,
Inc. for its annual meeting to be held on May 6, 1994.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by this item is incorporated by
reference to the definitive Proxy Statement of Oshkosh B'Gosh,
Inc. for its annual meeting to be held on May 6, 1994.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated by
reference to the definitive Proxy Statement of Oshkosh B'Gosh,
Inc. for its annual meeting to be held on May 6, 1994.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
(a) (1) Financial Statements
Financial statements for Oshkosh B'Gosh, Inc. listed in
the Index to Financial Statements and Supplementary Data
on page 14 are filed as part of this Annual Report.
(2) Financial Statement Schedules
Schedule V - Property, Plant and Equipment F-1
Schedule VI - Accumulated Depreciation and Amortization
of Property, Plant and Equipment F-2
Schedule VIII - Valuation and Qualifying Accounts F-3
Schedule IX - Short-Term Borrowings F-4
Schedule X - Supplementary Income Statement InformationF-5
Schedules and notes not included have been omitted because
they are not applicable or the required information is
included in the consolidated financial statements and notes
thereto.
(3) Index to Exhibits
(b) Reports on Form 8-K
The registrant filed a Form 8-K, Item 4 Change of
Independent Auditors, on December 13, 1993.
3) Exhibits
3.1 Certificate of Incorporation of Oshkosh B'Gosh, Inc., as
restated, October 20, 1988, previously filed as Exhibit
3.1 to the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1988, Commission File
Number 0-13365, is incorporated herein by reference.
3.2 By-laws of Oshkosh B'Gosh, Inc., as adopted through May
1, 1992, previously filed as Exhibit 3.2 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, Commission File Number 0-
13365, is incorporated herein by reference.
*10.1 Employment Agreement dated July 7, 1980, between Oshkosh
B'Gosh, Inc. and Charles F. Hyde as extended by "Request
For Later Retirement" dated April 15, 1986 and accepted
by Board of Directors' resolution on May 2, 1986,
previously filed as Exhibit 10.1 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1986, Commission File Number 0-13365, is
incorporated herein by reference.
*10.2 Employment Agreement dated July 7, 1980, between Oshkosh
B'Gosh, Inc. and Thomas R. Wyman, previously filed as
Exhibit 10.2 to the Registrant's Registration Statement
No. 2-96586 on Form S-1, is incorporated herein by
reference.
*10.3 Oshkosh B'Gosh, Inc. Pension Plan as amended, previously
filed as Exhibit 10.3 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1992,
Commission File Number 0-13365, is incorporated herein by
reference.
*10.4 Oshkosh B'Gosh, Inc. Profit Sharing Plan, as amended on
August 5, 1985, previously filed as Exhibit 10.4 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1985, Commission File Number 0-
13365, is incorporated herein by reference.
*10.5 Oshkosh B'Gosh, Inc. Restated Excess Benefit Plan as
amended, previously filed as Exhibit 10.5 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, Commission File Number 0-
13365, is incorporated herein by reference.
*10.6 Oshkosh B'Gosh, Inc. Executive Deferred Compensation Plan
as amended, previously filed as Exhibit 10.6 to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992, Commission File Number 0-
13365, is incorporated herein by reference.
*Represents a plan that covers compensation, benefits and/or
related arrangements for executive management.
*10.7 Oshkosh B'Gosh, Inc. Officers Medical and Dental
Reimbursement Plan, previously filed as Exhibit 10.7 to
the Registrant's Registration Statement No. 2-96586 on
Form S-1, is incorporated herein by reference.
10.8 Loan Agreement between Oshkosh B'Gosh, Inc. and the
Industrial Development Board of the Town of Dover,
Tennessee, dated as of May 1, 1984 (Series 1984A),
previously filed as Exhibit 10.8 to the Registrant's
Registration Statement No. 2-96586 on Form S-1, is
incorporated herein by reference.
10.9 Loan Agreement between Oshkosh B'Gosh, Inc. and the
Industrial Development Board of the Town of Dover,
Tennessee, dated as of May 1, 1984 (Series 1984B),
previously filed as Exhibit 10.9 to the Registrant's
Registration Statement No. 2-96586 on Form S-1, is
incorporated herein by reference.
10.10 Loan Agreement between Oshkosh B'Gosh, Inc. and the
Industrial Development Board of Clay County, Tennessee,
dated as of December 1, 1983 (Series 1983A), previously
filed as Exhibit 10.10 to the Registrant's Registration
Statement No. 2-96586 on Form S-1, is incorporated herein
by reference.
10.11 Loan Agreement between Oshkosh B'Gosh, Inc. and the
Industrial Development Board of Clay County, Tennessee,
dated as of December 1, 1983 (Series 1983B), previously
filed as Exhibit 10.11 to the Registrant's Registration
Statement No. 2-96586 on Form S-1, is incorporated herein
by reference.
10.12 Loan Agreement between Oshkosh B'Gosh, Inc. and City of
Oshkosh, Wisconsin, dated as of November 1, 1983,
previously filed as Exhibit 10.12 to the Registrant's
Registration Statement No. 2-96586 on Form S-1, is
incorporated herein by reference.
10.13 Lease Agreement between Oshkosh B'Gosh, Inc. and City of
Oshkosh, Wisconsin, dated as of March 1, 1975, previously
filed as Exhibit 10.13 to the Registrant's Registration
Statement No. 2-96586 on Form S-1, is incorporated herein
by reference.
10.14 Acknowledgement and Guaranty Agreement between City of
Liberty, Casey County, Kentucky and Oshkosh B'Gosh, Inc.,
dated October 4, 1984, and related Contract of Lease and
Rent dated as of November 26, 1968, previously filed as
Exhibit 10.14 to the Registrant's Registration Statement
No. 2-96586 on Form S-1, is incorporated herein by
reference.
*Represents a plan that covers compensation, benefits and/or
related arrangements for executive management.
10.15 Loan Agreement between Oshkosh B'Gosh, Inc. and City of
Oshkosh, Wisconsin, dated as of October 1, 1985,
previously filed as Exhibit 10.15 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1985, Commission File Number 0-13365, is
incorporated herein by reference.
10.16 Indemnity Agreement between Oshkosh B'Gosh, Inc. and
William P. Jacobsen (Vice President and Treasurer of
Oshkosh B'Gosh, Inc.) dated as of June 8, 1987,
previously filed as Exhibit 10.16 to the Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1987, Commission File Number 0-13365, is
incorporated herein by reference. (Note: Identical
agreements have been entered into by the Company with
each of the following officers: Charles F. Hyde, Thomas
R. Wyman, John F. Beckman, Anthony S. Giordano, Douglas
W. Hyde, Michael D. Wachtel, and Kenneth H. Masters).
*10.17 Employment agreement dated December 14, 1989 and
effective February 1, 1990, between Oshkosh B'Gosh, Inc.
and Harry M. Krogh, previously filed as Exhibit 10.17 to
the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989, Commission File
Number 0-13365, is incorporated herein by reference.
*10.18 Oshkosh B'Gosh, Inc. Executive Non-Qualified Profit
Sharing Plan effective as of January 1, 1989, previously
filed as Exhibit 10.18 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1990,
Commission File Number 0-13365, is incorporated herein by
reference.
10.19 Loan Agreement between Oshkosh B'Gosh, Inc. and the
Industrial Development Board of Clay County, Tennessee,
dated as of February 1, 1992.
*Represents a plan that covers compensation, benefits and/or
related arrangements for executive management.
21 The following is a list of the subsidiaries of the
Company as of December 31, 1993. The consolidated
financial statements reflect the operations of all
subsidiaries as they existed on December 31, 1993.
State or Other
Jurisdiction of
Name of Incorporation or
Subsidiary Organization
Term Co. (formerly Absorba, Inc.) Delaware
Essex Outfitters, Inc. Delaware
Grove Industries, Inc. Delaware
Manufacturera International Apparel, S.A. Honduras
Oshkosh B'Gosh Europe, S.A. France
Oshkosh B'Gosh International Sales, Inc. Virgin Islands
Oshkosh B'Gosh Asia/Pacific Ltd. Hong Kong
Oshkosh B'Gosh U.K. Ltd. United Kingdom
Oshkosh B'Gosh Deutschland GmbH Germany
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Schedule V
Property, Plant and Equipment
Years Ended December 31, 1993, 1992 and 1991
(Dollars in Thousands)
Balance at Balance
Beginning Additions at End
Classification of Year at Cost Retirements of Year
Year Ended December 31, 1993:
Construction
in Progress $ 537 $ (246) $ - $ 291
Land 1,647 287 59 1,875
Land Improvements 2,249 70 22 2,297
Buildings 38,107 555 1,022 37,640
Machinery and Equipment 62,357 5,909 1,240 67,026
Leasehold Improvements 2,953 2,415 100 5,268
Total $107,850 $ 8,990 $ 2,443 $114,397
Year Ended December 31, 1992:
Construction
in Progress $ 7,380 $(6,843) $ - $ 537
Land 1,264 383 - 1,647
Land Improvements 1,981 268 - 2,249
Buildings 30,122 8,005 20 38,107
Machinery and Equipment 55,096 11,163 3,902 62,357
Leasehold Improvements 1,805 1,431 283 2,953
Total $97,648 $14,407 $ 4,205 $107,850
Year Ended December 31, 1991:
Construction
in Progress $ 3,917 $ 3,463 $ - $ 7,380
Land 1,264 - - 1,264
Land Improvements 1,849 132 - 1,981
Buildings 26,409 3,713 - 30,122
Machinery and Equipment 43,802 11,995 701 55,096
Leasehold Improvements 1,533 272 - 1,805
Total $78,774 $19,575 $ 701 $97,648
Depreciation and Amortization
Depreciation and amortization for financial reporting purposes is
calculated using straight-line methods based on the following
useful lives:
Years
Land Improvements 10 to 15
Buildings 10 to 40
Equipment 5 to 10
Leasehold Improvements 5 to 10
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Schedule VI
Accumulated Depreciation and Amortization of Property, Plant and
Equipment
Years Ended December 31, 1993, 1992 and 1991
(Dollars in Thousands)
Additions
Balance atCharged to Balance
BeginningCosts and at End
Classification of Year Expenses Retirements of Year
Year Ended December 31, 1993:
Land Improvements $ 877 $ 211 $ 3 $ 1,085
Buildings 7,577 1,520 267 8,830
Machinery and Equipment 26,070 6,208 879 31,399
Leasehold Improvements 1,014 486 172 1,328
Total $35,538 $8,425* $1,321 $42,642
Year Ended December 31, 1992:
Land Improvements $ 674 $ 203 $ - $ 877
Buildings 6,101 1,480 4 7,577
Machinery and Equipment 21,567 5,994 1,491 26,070
Leasehold Improvements 914 232 132 1,014
Total $29,256 $7,909* $1,627 $35,538
Year Ended December 31, 1991:
Land Improvements $ 497 $ 177 $ - $ 674
Buildings 5,135 966 - 6,101
Machinery and Equipment 17,237 4,783 453 21,567
Leasehold Improvements 704 210 - 914
Total $23,573 $6,136* $ 453 $29,256
* Excludes amortization of other assets of $808 in 1993, $466 in
1992, and $432 in 1991.
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Schedule VIII
Valuation and Qualifying Accounts
(Dollars in Thousands)
Years Ended December 31,
1993 1992 1991
Accounts Receivable - Allowances:
Balance at Beginning of Period $2,265 $2,335 $2,075
Charged to Costs and Expenses 5,979 4,500 4,513
Deductions - Bad Debts Written off,
Net of Recoveries and Other
Allowances (4,934) (4,570) (4,253)
Balance at End of Period $3,310 $2,265 $2,335
Years Ended December 31,
1993 1992 1991
Restructuring Costs - Allowances:
Balance at Beginning of Period $ 422 $ 5,600 $ -
Charged to Cost and Expenses 10,836 (2,800) 5,600
Actual Restructuring Costs Incurred(3,072) (2,378) -
Balance at End of Period $ 8,186 $ 422 $5,600
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Schedule IX
Short-Term Borrowings
Years Ended December 31, 1993, 1992 and 1991
(Dollars in Thousands)
Weighted
Maximum Average Average
Weighted Amount Amount Interest
Category of Balance Average OutstandingOutstanding Rate
Aggregate at End Interest During During During
Borrowings of Year Rate the Period the Year the Year
Notes Payable
to Banks:
1993 $ -0- -0-% $ 798 $ 2 3.60%
1992 $ -0- -0-% $ 4,990 $ 602 6.39%
1991 $ -0- -0-% $ 5,945 $ 1,047 8.94%
Commercial
Paper:
1993 $ -0- -0-% $23,223 $ 4,269 3.59%
1992 $ -0- -0-% $17,231 $ 2,237 4.29%
1991 $ -0- -0-% $25,854 $ 7,048 6.77%
Notes payable to banks represent short-term borrowings payable
under credit arrangements with lending banks. Borrowings are
arranged on an as needed basis at various terms.
The average amount outstanding during the year represents the
average daily principal balances outstanding during the year.
The weighted average interest rates were computed by dividing the
actual interest incurred on short-term borrowings by the average
short-term borrowings.
OSHKOSH B'GOSH, INC. AND SUBSIDIARIES
Schedule X
Supplementary Income Statement Information
Years Ended December 31, 1993, 1992 and 1991
(Dollars in Thousands)
1993 1992 1991
Advertising $11,209 $10,180 $8,917
Maintenance and Repairs $ 4,609 $4,277
Amounts for taxes other than payroll and income taxes, royalties
and amortization of intangible assets for the years ended
December 31, 1993, 1992 and 1991 and maintenance and repairs for
the year ended December 31, 1993 are not presented as each such
amount does not exceed 1% of net sales as shown in the related
statements of income.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly cause this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
OSHKOSH B'GOSH, INC.
BY: DOUGLAS W. HYDE
President and Chief Executive Officer
BY: DAVID L. OMACHINSKI
Vice President, Treasurer and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, tis report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
CHARLES F. HYDE Chairman of the Board 3/31/94
STEVEN R. DUBACK Secretary and Director 3/29/94
DOUGLAS W. HYDE President, Chief Executive Officer 3/28/94
and Director
WILLIAM P. JACOBSEN Senior Vice President and Director 3/30/94
MICHAEL D. WACHTEL Executive Vice President, Chief 3/27/94
Operating Officer and Director