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UNITED STATES
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 January 1, 2005
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission File Number 001-08769
R. G. BARRY CORPORATION
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(Exact name of Registrant as specified in its charter)
Ohio 31-4362899
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
13405 Yarmouth Road N.W., Pickerington, Ohio 43147
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (614) 864-6400
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of each class
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Common Shares, Par Value $1.00
Series I Junior Participating Class A Preferred Share Purchase Rights
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 (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [ ] No [X]
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter: $14,449,422 as of July 3, 2004.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date: 9,836,602 common shares, $1.00
par value, as of March 21, 2005.
Documents Incorporated by Reference:
(1) Portions of the Registrant's Annual Report to Shareholders for the
fiscal year ended January 1, 2005, are incorporated by reference
into Parts I and II of this Annual Report on Form 10-K.
(2) Portions of the Registrant's definitive Proxy Statement for its
Annual Meeting of Shareholders to be held on May 20, 2005, are
incorporated by reference into Part III of this Annual Report on
Form 10-K.
Index to Exhibits begins on Page E-1.
PART I
ITEM 1. BUSINESS.
GENERAL
R. G. Barry Corporation ("R. G. Barry" or the "Company") was incorporated
under Ohio law in 1984. R. G. Barry's principal executive offices are located at
13405 Yarmouth Road N.W., Pickerington, Ohio 43147, and its telephone number is
(614) 864-6400. R. G. Barry's common shares were listed on the New York Stock
Exchange ("NYSE") under the symbol "RGB" through June 11, 2004, when its common
shares were delisted by the NYSE. R. G. Barry's common shares commenced trading
on June 14, 2004 in the "Pink Sheets" under the symbol "RGBC.PK," and soon
thereafter commenced trading on the Over the Counter Bulletin Board under the
symbol "RGBC.OB."
R. G. Barry maintains an Internet website at www.rgbarry.com (this uniform
resource locator, or URL, is an inactive textual reference only and is not
intended to incorporate R. G. Barry's website into this Annual Report on Form
10-K). R. G. Barry makes available free of charge on or through its website, its
annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K, and any amendments to those reports, filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as soon as reasonably practicable after R. G. Barry
electronically files such material with, or furnishes it to, the Securities and
Exchange Commission (the "SEC").
R. G. Barry and its primary subsidiaries, The Dearfoams Company, R. G.
Barry International, Inc., Escapade, S.A. and Fargeot et Compagnie, S.A.
(together, Escapade, S.A. and Fargeot et Compagnie, S.A. are referred to as
"Fargeot"), design, purchase from third party manufacturers, market and
distribute comfort footwear. R. G. Barry also has several wholly-owned Mexican
subsidiaries; however, these subsidiaries have no operations and are all in the
process of being liquidated. Five domestic subsidiaries of the Company were
merged into R. G. Barry on December 29, 2004 and no longer exist.
During the fiscal year ended January 1, 2005 (the "2004 fiscal year"), the
Company had two operating segments: the Barry Comfort North America group, which
includes at- and around-the-home comfort footwear products marketed and sold in
North America; and the Barry Comfort Europe group, which includes footwear
products sold by Fargeot. In addition, as discussed in greater detail
immediately below, in June 2003, the Company discontinued operations of a third
operating segment - the Thermal group, which included thermal retention
technology products. Financial information about the Company's two current
operating segments for each of the fiscal years in the three - year period ended
January 1, 2005, is presented in Note (14) of the Notes to Consolidated
Financial Statements included in R. G. Barry's Annual Report to Shareholders for
the fiscal year ended January 1, 2005, which financial information is
incorporated herein by this reference.
During 2003, R. G. Barry sold substantially all of the assets of RGB
Technology, Inc., its subsidiary formerly known as Vesture Corporation ("RGB
Technology"), to a corporation, now known as Vesture Corporation. In connection
with this sale, RGB Technology will receive royalties on Vesture Corporation's
net sales through 2007 at a royalty rate equal to 5% of Vesture Corporation's
net sales in excess of $500,000 in each year through 2007, but excluding Vesture
Corporation's sales of products that utilize certain specific patents (the
"excluded products"). Most of the products sold by Vesture Corporation are
expected to be excluded products, thus the amount of future royalties expected
from Vesture Corporation is not anticipated to be material to the operations of
the Company. After the sale of
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RGB Technology's business assets, the Company discontinued the thermal products
operating segment of its business.
CHANGES IN THE BARRY COMFORT NORTH AMERICA GROUP BUSINESS
Two major drivers of change continue to directly impact the Company's at-
and around-the-home comfort footwear business: globalization and retail
consolidation. The confluence of these forces has created a very competitive
marketplace in which an increasing number of suppliers are pursuing fewer and
fewer customers. The Company's initiative for several years has been on moving
the Company's core comfort footwear business to a fast-to-market,
product-design, market-driven focus.
To achieve these goals, the Company took a number of actions in fiscal
2003 and 2002 to move all remaining U.S. manufacturing operations to
Company-operated plants in Mexico and to reduce the total volume of slippers
manufactured by the Company by purchasing more of its slippers from independent
suppliers in China and elsewhere. In 2003, the Company manufactured
approximately 17.4 million pairs of slippers in its plants in Mexico and sourced
approximately 12.2 million pairs from contract manufacturers in China. In 2001
and 2002, the Company manufactured approximately 20.5 million pairs and 17.5
million pairs, respectively, and sourced approximately 5.6 million pairs and 8.9
million pairs, respectively, from contract manufacturers in China. The Company
had pursued a strategy to produce in its own plants in Mexico goods for which
there was clearly-defined demand visibility from its customers, and to source
from China or elsewhere goods for which customer demand was not as predictable.
Effective mid-year 2004, the Company changed this strategy and decided to rely
entirely on independent contract manufacturers, as discussed below.
The efforts of the Company to realign its manufacturing and sourcing
operations were reflected in various actions taken over the past several years.
In the fourth quarter of 2001, the Company announced a decision to close its
molding operations in Texas and to relocate those activities to Nuevo Laredo,
Mexico. In the fourth quarter of 2002, the Company announced a decision to close
its Goldsboro, North Carolina distribution center in early 2003. The Goldsboro
facility was closed in the second quarter of 2003, and was sold in July 2003. In
January 2004, the Company discontinued slipper sewing operations at its Nuevo
Laredo, Mexico manufacturing facility. The Company also reduced sewing
operations at its manufacturing plants in Ciudad Acuna and Zacatecas, Mexico.
During the first half of 2004, the Company closed all of its manufacturing
operations in Mexico. Since that time, the Company has sourced all of its
slipper requirements from independent contract manufacturers located outside of
North America, primarily in China. The Company believes that cost savings have
been achieved by sourcing all of its requirements from China and elsewhere, and
that these cost savings outweigh the potential benefits to the Company of
operating its own manufacturing facilities in Mexico. Although the Company does
not anticipate that its dependence on third party contract manufacturers will
impact the Company's product quality or the Company's ability to deliver its
goods to its customers on a timely basis, business risks of eliminating the
Company's own manufacturing operations still exist. In addition, the loss or
disruption of the Company's third party suppliers could have an adverse impact
on the Company's financial condition and results of operations.
During the third quarter of 2004, the Company closed its distribution
center in Nuevo Laredo, Mexico. Related cross dock distribution operations in
Laredo, Texas were then closed in the fourth quarter of 2004. The Company relies
on its remaining distribution center in San Angelo, Texas and a third party
logistics provider located on the West Coast of the United States to distribute
the Company's products to its customers.
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During the fourth quarter of 2004, the Company closed its operations
support office in San Antonio, Texas. The staff of that office primarily
supported operations in Mexico.
Further information concerning the restructuring changes which occurred in
the Barry Comfort North America group during the 2004 fiscal year, as well as
during the fiscal years ended January 3, 2004 (the "2003 fiscal year") and
December 28, 2002 (the "2002 fiscal year") is presented in Note (15) of the
Notes to Consolidated Financial Statements included in Item 8 of the Company's
Annual Report to Shareholders for the fiscal year ended January 1, 2005, which
information is incorporated herein by this reference.
CHANGES IN THE BARRY COMFORT EUROPE GROUP BUSINESS
In 2003, the Company entered into a five-year licensing agreement for the
sales, marketing and sourcing of its soft washable slipper brands in Europe with
a subsidiary of the privately-held British comfort footwear and apparel firm GBR
Limited. The GBR Limited subsidiary was granted a license to sell, source and
distribute the Company's various brands of at- and around-the-home comfort
footwear, other than Fargeot's products, in all channels of distribution in the
United Kingdom, The Republic of Ireland, France and through selected customers
in specific other European countries in exchange for royalty payments on net
sales. The Company closed its Wales distribution center and Paris sales office
during 2003 and transferred responsibility for its French sales force and all
selling, marketing and financial administration functions in Europe to the GBR
Limited subsidiary. The Company retained title to all of its patents and
trademarks for products sold under the licensing agreement.
The Company's French subsidiary, Fargeot et Compagnie, S.A., is not part
of the licensing agreement with GBR Limited. The Company, through its French
subsidiary, continues to maintain its Fargeot footwear operations in southern
France. Fargeot et Compagnie, S.A. generally serves smaller independent
retailers and export markets with a style of footwear that is different from the
Company's traditional comfort footwear products. Fargeot's products generally
are not washable.
During November 2004, the minority owner of Escapade, S.A., the parent of
Fargeot et Compagnie, S.A., exercised his contractual right to "put" to the
Company the remaining 20% interest which the Company did not own. The Company
acquired that ownership interest for the $279,000 fair value determined in
accordance with the terms of the 1999 purchase agreement under which the Company
had purchased its original ownership interest.
No significant restructuring changes occurred in the Barry Comfort Europe
Group during the 2004 fiscal year. Further information concerning the
restructuring changes which occurred in the Barry Comfort Europe group during
the 2003 and 2002 fiscal years is presented in Note (15) of the Notes to
Consolidated Financial Statements included in the R. G. Barry's Annual Report to
Shareholders for the fiscal year ended January 1, 2005, which information is
incorporated herein by this reference.
PRINCIPAL PRODUCTS
The Company designs, purchases from third party contract manufacturers,
markets and distributes comfort footwear for women, men and children. The
Company is in the business of responding to consumer demand for comfortable
footwear combined with attractive appearance.
3
Historically, the Company's primary products have been foam-soled, soft,
washable slippers for men, women and children. The Company developed and
introduced women's Angel Treads*, the world's first foam-soled, soft, washable
slipper, in 1947. Since that time, the Company has introduced additional
slipper-type brand lines for men, women and children designed to provide
comfort, softness and washability. These footwear products are sold, for the
most part, under various brand names including Angel Treads*, Dearfoams*,
Dearfoams* for Kids, Dearfoams* for Men, EZfeet*, Fargeot, Madye's*, Snug
Treds*, Soft Notes*, and Terrasoles*. The Company also markets slipper-type
footwear under trademarks it licenses from third parties. See "TRADEMARKS AND
LICENSES."
The Company's foam-soled footwear lines have fabric uppers usually made of
washable materials, including terry cloth, velour, fleece, satin and nylon, as
well as uppers made of suede and other man-made materials. Different brand lines
are marketed for women, men and children with a variety of styles, colors and
ornamentation.
The marketing strategy for the Company's slipper-type brand lines includes
expanding counter and floor space for these products by creating and marketing
brand lines to different portions of the consumer market. Retail prices for the
Company's footwear normally range from approximately $5 to $30 per pair,
depending on the style of footwear, type of retail outlet and retailer mark-up.
The Company believes that many consumers of its slippers are loyal to the
Company's brand lines, usually own more than one pair of slippers and have a
history of repeat purchases. Substantially all of the slipper brand lines are
displayed on a self-selection basis in see-through packaging at the point of
purchase and have appeal to the "impulse" buyer and to the "gift" buyer. The
Company believes that many of the slippers are purchased as gifts for others
during the Christmas season, with approximately 70% of sales occurring in the
second half of the year compared to approximately 30% in the first half of the
year.
Certain basic styles of slipper-type footwear have become standard in the
Company's brand lines and are in demand year after year. For some of these
styles, the most significant changes made in response to fashion changes are in
ornamentation, fabric and/or color. The Company often introduces new, updated
styles of slippers with a view toward enhancing the fashion appeal and freshness
of its products. The Company anticipates that it will continue to introduce new
styles in future years in response to fashion changes.
Most consumers of the Company's footwear fit within a range of four to six
sizes. This allows the Company to carry lower levels of inventories in these
slipper lines compared to other more traditional footwear manufacturers.
Terrasoles*, which the Company introduced in 2002 and markets as a part of
the Dearfoams* brand, is a footwear concept targeted to adult women and men.
These consumers define comfort as firm, secure footing, rather than the more
traditional soft, yielding comfort of our slippers. Their lifestyles are such
that they are in and out of the house frequently, but they do not want to
frequently change footwear. Terrasoles* is a technology that offers a firm
comfort insole and footbed combination, with the additional benefit of outdoor
as well as indoor usage. Terrasoles* are offered as a fashion-appropriate,
affordable alternative for those consumers who want the flexibility of firm
comfortable footwear, whether indoors or outside of their homes.
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* Hereinafter denotes a trademark of the Company registered in the United States
Department of Commerce Patent and Trademark Office.
4
MARKETING
The Company's various slipper-type brand lines are sold (i) to traditional
department stores, including promotional department stores, national chain
department stores and specialty stores; (ii) through mass merchandising channels
of distribution such as discount stores, warehouse clubs, drug and variety chain
stores and supermarkets; (iii) and to independent retail establishments. The
Company markets these products primarily through Company account managers and,
to a lesser extent, through independent sales representatives. The Company does
not finance its customers' purchases, although return accommodations are granted
in certain limited circumstances.
During the spring and fall of each year, new designs and styles are
presented to buyers representing the Company's retail customers at regularly
scheduled showings. Company designers also produce new styles and designs
throughout the year which are evaluated by the Company's sales and marketing
personnel. In an effort to encourage market exposure to the Company's products,
buyers for department stores and other large retail customers are invited to
spring and fall showings, and Company salespersons regularly visit retail
customers. The Company also makes catalogs available to its current and
potential customers and periodically follows up with current and potential
customers by telephone. In addition, the Company participates in trade shows,
both regionally and nationally.
The Company maintains a sales office in New York City to which buyers for
department stores and other large retail customers may make periodic visits.
During the past several Christmas selling seasons, the Company has
provided temporary merchandisers to service the retail selling floors at some
department stores and chain stores nationally. During the 2004 Christmas selling
season, the Company provided approximately 13,000 man hours of temporary
merchandisers. The Company believes that this point-of-sale management of the
retail selling floor, combined with computerized automatic demand pull
replenishment systems the Company maintained with the stores, put the Company in
a position to optimize its comfort footwear business during the fourth quarter.
Sales during the last six months of each year have historically been
greater than during the first six months. Consequently, the Company's inventory
is largest in early fall in order to support the retailers' demand for the fall
and Christmas selling seasons. The Company advertises principally in the print
media and its promotional efforts are often conducted in cooperation with
customers. Many of the Company's products are displayed at the retail-store
level on a self-selection and gift-purchase basis.
The Company relies upon its distribution center in San Angelo, Texas and a
third party logistics provider located on the West Coast of the United States to
distribute products to the Company's customers.
The Company, both directly and through licensing arrangements, also
markets its comfort footwear products in several countries and regions
throughout the world, primarily in Canada and Western Europe. In each of 2004
and 2003, the Company's European, Canadian and Mexican net sales comprised
approximately 9% of its consolidated net sales. Financial information for each
of the three fiscal years ended January 1, 2005, for the geographic areas in
which the Company operates is presented in Note (14) of the Notes to
Consolidated Financial Statements included in R. G. Barry's Annual Report to
Shareholders for the fiscal year ended January 1, 2005, which financial
information is incorporated herein by this reference.
As discussed above in the section captioned "CHANGES IN THE BARRY COMFORT
EUROPE GROUP BUSINESS," in January 2003, the Company entered into a five-year
licensing agreement that permits a
5
subsidiary of GBR Limited to sell, market and independently source the Company's
soft washable slipper brands in Western Europe. The Company is entitled to
receive royalty payments on net sales of products covered by this licensing
agreement.
RESEARCH AND DEVELOPMENT
Most of the Company's research efforts relate to the design and consumer
testing of new styles of slipper-type footwear. During 2004, 2003 and 2002, the
amounts spent by the Company in connection with the research and design of new
products and the improvement or redesign of existing products were approximately
$2.5 million, $3.0 million and $3.2 million, respectively. Substantially all of
the foregoing activities were Company-sponsored. Approximately 20 Company
employees are engaged full time in product design activities.
RAW MATERIALS
The principal raw materials used by the Company's third party contract
manufacturers in the manufacture of the Company's products are textile fabrics,
threads, foams and other synthetic products. All are available from a wide range
of suppliers. To the Company's knowledge, the Company's contract manufacturers
thus far have not experienced any significant difficulty in obtaining raw
materials from their respective suppliers.
TRADEMARKS AND LICENSES
Approximately 95% of the Company's sales are represented by products sold
under trademarks owned by the Company. The Company is the holder of many
trademarks which identify its products, principally: Angel Treads*, Dearfoams*,
Dearfoams* for Kids, Dearfoams* for Men, EZfeet*, Fargeot, Madye's*, and
Terrasoles*. The Company believes that its products are identified by its
trademarks and, thus, its trademarks are of significant value. Each registered
trademark has a duration of 20 years and is subject to an indefinite number of
renewals for a like period upon appropriate application. The Company intends to
continue the use of each of its trademarks and to renew each of its registered
trademarks.
The Company has also sold comfort footwear under various names as licensee
under license agreements with the owners of those names. During the 2004 fiscal
year, total net sales under the Liz Claiborne**, Claiborne**, Villager** and
NASCAR** labels pursuant to the license agreements described below represented
approximately 5% of the Company's consolidated net sales. In the 2003 fiscal
year, total net sales in total under the Liz Claiborne**, Claiborne**,
Villager**, and NASCAR** labels represented approximately 6% of the Company's
consolidated net sales. In the 2002 fiscal year, total net sales under the Liz
Claiborne**, Claiborne**, and Villager** labels represented less than 3% of the
Company's consolidated net sales.
In November 2000, the Company entered into a license agreement with a
subsidiary of Liz Claiborne, Inc. which allows the Company to manufacture and
market slippers under the Liz Claiborne**, Claiborne** and Villager** labels. R.
G. Barry's Liz Claiborne** Slippers for Women and Claiborne** Slippers for Men
are sold in upper-tier department stores and specialty retailers nationwide. The
Liz Claiborne** Slippers for Women initially have been sold in the United States
and Canada, although the licensor may, in its discretion, grant R. G. Barry the
right to distribute these slippers in other foreign countries. The initial term
of the license agreement continues through December 31, 2005, and is
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** Denotes a trademark of the licensor registered in the United States
Department of Commerce Patent and Trademark Office.
6
renewable if the net sales of slippers bearing the Liz Claiborne**, Claiborne**
and Villager** labels for the year immediately preceding the last year of the
initial term equal or exceed a specified level. The licensor has the right to
terminate the license agreement if minimum specified net sales levels are not
achieved for two consecutive years.
In May 2003, R. G. Barry entered into licensing agreements regarding the
marketing, production and distribution of NASCAR** leisure footwear, robes and
towel wraps. These products feature colorful images of eight drivers (Dale
Earnhardt, Dale Earnhardt Jr., Jeff Gordon, Jimmie Johnson, Bobby Labonte, Ryan
Newman, Tony Stewart and Rusty Wallace), their cars and the NASCAR** logo.
Products became available in stores nationwide in the fall of 2003. The Company
is currently negotiating extensions of these licensing agreements.
The Company has also marketed comfort footwear to customers which sell the
footwear under their own private labels. These sales represented approximately
3% of the Company's consolidated net sales during each of the 2004, 2003 and
2002 fiscal years.
SIGNIFICANT CUSTOMERS
The customers of the Company which accounted for more than 10% of the
Company's consolidated net sales during the 2004, 2003, and 2002 fiscal years
were Wal-Mart Stores, Inc. and J.C. Penney Company, Inc., both Barry Comfort
North America customers. Wal-Mart Stores, Inc. accounted for approximately 29%,
25% and 26% of consolidated net sales in the 2004, 2003 and 2002 fiscal years,
respectively. J. C. Penney Company, Inc. accounted for approximately 11% of
consolidated net sales in each of the 2004, 2003 and 2002 fiscal years. In
addition, during the 2003 fiscal year, Kohl's Corporation accounted for
approximately 10% of the Company's consolidated net sales.
SEASONALITY AND BACKLOG OF ORDERS
The Company's backlogs of orders at the close of the 2004 and 2003 fiscal
years were approximately $2.8 million and $4.2 million, respectively. Consistent
with prior years, the Company anticipates that a large percentage of the
unfilled sales orders as of the end of the 2004 fiscal year will be filled
during the current year.
The Company's backlog of unfilled sales orders is often largest after the
spring and fall showings of the Company. For example, the Company's approximate
backlog of unfilled sales orders following the conclusion of such showings
during the last two fiscal years was: August 2004: $31.8 million; February 2004:
$4.2 million; August 2003: $45.7 million; and February 2003: $7.7 million. The
Company's approximate backlog of unfilled sales orders at the end of February
2005 was $2.7 million. As discussed earlier, the Company's backlog of unfilled
sales orders reflects the seasonal nature of the Company's sales - approximately
68% of such sales occurred during the second half of 2004 as compared to
approximately 32% during the first half of 2004. The reduction in the Company's
backlog from August 2003 to August 2004 and from February 2003 to February 2004
is the result of changing customer patterns in placing orders with the Company.
For the past several years, customers have trended toward placing orders for
products much closer to the time of expected delivery; whereas, in prior years
those orders may have been placed earlier in the season. In addition, during the
2004 fiscal year, the Company instituted a more restrictive return privilege
policy which caused some retailers to be more cautious in their levels of
initial commitments to purchase the Company's slipper products.
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INVENTORY
While some styles of the Company's slipper-type brand lines change little
from year to year, the Company has introduced, and intends to continue to
introduce, new, updated styles in an effort to enhance the comfort, freshness
and fashion appeal of its products. As a result, the Company anticipates that
many of its slipper styles will continue to change from season to season,
particularly in response to fashion changes. The Company has historically had a
limited and manageable exposure to obsolete inventory but, in the past few
years, obsolete inventory was a more significant issue for the Company. During
the late summer months of 2003, the Company purchased approximately $6 million
of inventory from its Chinese suppliers which arrived in warehouses earlier than
needed. While the Company expected to sell that inventory during the fourth
quarter of 2003, orders from customers of approximately $5 million did not
materialize in late 2003 as had been planned. As a result, the Company ended the
2003 fiscal year with finished goods inventory in excess of planned amounts. The
Company evaluated its inventory position and took write-downs of approximately
$5.4 million during 2003, to value inventory at net realizable value.
During 2004, the Company shifted from a manufacturing-based business to a
business that imports all of its goods from third party contract manufacturers
located outside the United States. The Company reduced its inventory levels and
took steps to reduce its inventory risks and the amount of write-downs necessary
by acquiring inventory closer to its time of needed shipment to its customers
and more in line with the visibility of customer demand. During the 2004 fiscal
year, the Company also sold approximately $8.0 million of slow-moving and
closeout type products. Inventory write-downs amounted to $2.1 million during
the 2004 fiscal year. Inventory at the end of the 2004 fiscal year amounted to
$20.2 million compared with $32.8 million at the end of the 2003 fiscal year.
The Company believes that its exposure to obsolete inventory in 2005 will be
reduced.
SOURCING
The Company has a representative office in Hong Kong, which is responsible
for facilitating the procurement of outsourced products from the Far East. The
Company currently purchases goods from approximately 10 different contract
manufacturers located in China. As the Company has increased the volume of goods
it purchases from third party foreign contract manufacturers, it has also
expanded the number of manufacturers that produce its goods. Although the
Company's experience with its contract manufacturers in China has been very good
in terms of reliability, delivery times and product quality, the Company's
increasing reliance on third party contract manufacturers does create some added
risk to the Company's business because it no longer controls the manufacturing
of its products. This lack of control could impact the quality of its products
and the Company's ability to deliver its products to customers on a timely
basis, although to date the Company has not experienced any substantial adverse
quality or timeliness issues. In addition, the substantial increase in the
volume of goods sourced from independent contract manufacturers in China in 2004
and to be sourced in 2005 has resulted in additional responsibilities for the
Company's sourcing operations, including its office in Hong Kong. This
dependence on Chinese manufacturers creates a risk to the Company if the Company
is unable to adequately source its needs going forward.
COMPETITION
The Company operates in a relatively small segment of the overall footwear
industry, providing comfort footwear for use at- and around-the-home. Although
the Company believes it is the world's largest marketer of comfort footwear for
at- and around-the-home, it is a very small factor in the highly competitive
footwear industry. The Company competes primarily on the basis of the price,
value, quality and comfort of its products, service to its customers and its
marketing expertise. The Company knows of
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no reliable published statistics which indicate its current relative position in
the footwear or any other industry or in the portion of the footwear industry
providing comfort footwear for at- and around-the-home.
MANUFACTURING, SALES AND DISTRIBUTION FACILITIES
The Company formerly operated manufacturing facilities in Mexico,
including sewing plants in Ciudad Acuna, and Zacatecas, Mexico and a slipper
component cutting and sole molding plant in Nuevo Laredo, Mexico. During 2004,
the Company closed these plants and no longer operates any of its own
manufacturing facilities.
The Company currently maintains sales offices in New York City and
Bentonville, Arkansas and a sourcing representative office in Hong Kong and
occasionally conducts sales activities at its headquarters in Pickerington,
Ohio. The Company previously operated a sales office in Paris, France but closed
this office during 2003.
The Company currently operates distribution centers in San Angelo, Texas
and Thiviers, France. In 2004, the Company closed its distribution centers in
Laredo, Texas and in Nuevo Laredo, Mexico, and distribution centers in
Goldsboro, North Carolina and Rhymney, Gwent, Wales were closed during the first
half of 2003. Beginning in 2003 and continuing through 2004 and into 2005, the
Company has made increasing use of an independent third party warehouse and
distribution service center located on the West Coast of the United States.
The Company's principal administrative, sales and distribution facilities
are described more fully below under "ITEM 2. PROPERTIES."
FARGEOT ET COMPAGNIE, S.A.
The Company has 100% of the ownership interest in a French company,
Escapade, S.A., of which Fargeot et Compagnie, S.A. is a wholly-owned
subsidiary. Until 2004, the Company owned 80% of Escapade. At the end of 2004,
the 20% minority holder of Escapade exercised a contractual "put" right and the
Company purchased his minority interest. As a result, Escapade, S.A., is now a
wholly-owned subsidiary of the Company. Fargeot manufactures and distributes
comfort slippers and casual shoes. The principal market for its products is
France and Western Europe.
EFFECT OF ENVIRONMENTAL REGULATION
Compliance with federal, state and local provisions regulating the
discharges materials into the environment, or otherwise relating to the
protection of the environment, has not had a material effect on the Company's
capital expenditures, earnings or competitive position. The Company believes
that the nature of its operations has little, if any, environmental impact. The
Company, therefore, anticipates no material capital expenditures for
environmental control facilities for its current year or for the foreseeable
future.
EMPLOYEES
At the close of the 2004 fiscal year, the Company employed approximately
300 associates worldwide.
9
ITEM 2. PROPERTIES.
The Company owns its corporate headquarters and executive offices located
at 13405 Yarmouth Road N.W. in Pickerington, Ohio, containing approximately
55,000 square feet. The Company has granted a mortgage on this facility to
secure indebtedness to a lender. See the section entitled "Management's
Discussion & Analysis of Financial Condition & Results of Operation - Liquidity
and Capital Resources" Contained in R. G. Barry's Annual Report to Shareholders
for the fiscal year ended January 1, 2005.
The Company leases space aggregating approximately 550,000 square feet at
an approximate aggregate annual rental of $1.8 million. The following table
describes the Company's principal leased properties:
Approximate Approximate Lease
Location Use Square Feet Annual Rental Expires Renewals
-------- --- ----------- ------------- ------- --------
Empire State Building Sales Office 1,700 $ 44,000 2006 None
New York City, N.Y.
2800 Loop 306 Shipping, Distribution Center 145,800 $160,000 (1)(2) 2005 10 years
San Angelo, Texas
Distribution Center Shipping, Distribution Center 172,800 $330,000 (1) 2007 3 years
San Angelo, Texas
Manhattan Avenue Shipping, Distribution Center ** 144,000 $770,000 (1) 2012 None
Nuevo Laredo, Mexico
Bob Bullock Loop Warehouse, Storage ** 76,000 $191,000 (1) 2006 5 years
Laredo, Texas
8000 Interstate Administrative Office ** 11,000 $252,000 2007 None
Highway 10 West
San Antonio, Texas
West Gate Tower Sourcing Representative Office 1,300 $ 28,800 2005 None
7 Wing Hong Street
Lai Chi Kok, Kowloon
Hong Kong
- ----------
** These facilities are no longer operated by the Company, and are being
marketed for sublease.
(1) Net lease.
(2) This facility is anticipated to be closed prior to the end of 2005.
The Company believes that all of the buildings owned or leased by it are
well maintained, in good operating condition, and suitable for their present
uses.
10
ITEM 3. LEGAL PROCEEDINGS.
On December 22, 2003, RGB Technology, a subsidiary of R. G. Barry, settled
the pending patent litigation involving RGB Technology, Thermal Solutions, Inc.
and CookTek, LLC. R. G. Barry previously reported that RGB Technology was
involved in a patent infringement lawsuit in the United States District Court
for the Middle District of North Carolina (Civil Action No. 1:01CV01006) related
to RGB Technology's MICROCORE(R) pizza delivery system. The terms of the
settlement are confidential, but the settlement resolves all areas of dispute
between the parties and concludes the pending litigation. As a part of this
settlement, RGB Technology made payments totaling approximately $287,000 in
2004.
On June 8, 2004, the Company received a "30-day letter" from the Internal
Revenue Service ("IRS") proposing certain adjustments which, if sustained, would
result in an additional tax obligation approximating $4 million plus interest.
The proposed adjustments relate to the years 1998 through 2002. Substantially
all of the proposed adjustments relate to the timing of certain deductions taken
during that period. On July 7, 2004, the Company submitted to the IRS a letter
protesting the proposed adjustments, and reiterating its position. The IRS has
acknowledged receipt of the Company's July 7 letter and the Company is currently
waiting on a response from the IRS and intends to vigorously contest the
proposed adjustments by the IRS. In the opinion of management, the resolution of
these matters is not expected to have a material adverse effect on the Company's
financial position or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of the shareholders of R. G.
Barry during the fourth quarter of 2004.
SUPPLEMENTAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table lists the names and ages of the executive officers of
R. G. Barry as of March 21, 2005, the positions with R. G. Barry presently held
by each executive officer and the business experience of each executive officer
during the past five years. Unless otherwise indicated, each individual has had
his principal occupation for more than five years. The executive officers serve
at the discretion of the Board of Directors subject to their respective
contractual rights under employment agreements with R. G. Barry.
Position(s) Held with R. G. Barry and
Name Age Principal Occupation(s) for Past Five Years
- ---- --- -------------------------------------------
Thomas M. Von Lehman 55 President and Chief Executive Officer of R. G. Barry since March 10, 2004; a
principal of The Meridian Group, an investment banking and corporate renewal
consulting firm, from 2001 to March 10, 2004; Vice President, Specialty Chemicals
of PPG Industries, Inc., a coatings, glass and chemicals producer, from 1996 to
2001
Daniel D. Viren 58 Senior Vice President - Finance and Chief Financial Officer since June 2000,
Secretary and Treasurer since October 2000, Senior Vice President - Administration
from 1992 to July 1999, Assistant Secretary from 1994 to July 1999, and a Director
from 2001 to 2004, of R. G. Barry; Senior Vice President and Chief Financial
Officer of Metatec International, Inc. (now known as Inoveris, LLC), an
international information distribution company, from July 1999 to June 2000
11
Position(s) Held with R. G. Barry and
Name Age Principal Occupation(s) for Past Five Years
- ---- --- -------------------------------------------
Harry F. Miller 62 Vice President - Human Resources of R. G. Barry since 1993
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
The information called for in Item 201 (a) through (c) of SEC Regulation
S-K is incorporated herein by reference to the information under the caption
"MARKET AND DIVIDEND INFORMATION" contained in R. G. Barry's Annual Report to
Shareholders for the fiscal year ended January 1, 2005.
No disclosure is required under Item 701 of SEC Regulation S-K.
R. G. Barry did not purchase any of its common shares during the fiscal
year ended January 1, 2005. R. G. Barry does not currently have in effect a
publicly announced repurchase plan or program.
ITEM 6. SELECTED FINANCIAL DATA
The information called for in this Item 6 is incorporated herein by
reference to the information under the caption "SIX YEAR REVIEW OF SELECTED
FINANCIAL DATA" contained in R. G. Barry's Annual Report to Shareholders for the
fiscal year ended January 1, 2005.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
The information called for by this Item 7 is incorporated herein by
reference to the information under the caption "MANAGEMENT'S DISCUSSION &
ANALYSIS OF FINANCIAL CONDITION & RESULTS OF OPERATIONS" contained in R. G.
Barry's Annual Report to Shareholders for the fiscal year ended January 1, 2005.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As of January 1, 2005, neither R. G. Barry nor any of its subsidiaries was
a party to any market risk sensitive instruments which would require disclosure
under Item 305 of SEC Regulation S-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Consolidated Balance Sheets of R. G. Barry and its subsidiaries as of
January 1, 2005 and January 3, 2004, and the related Consolidated Statements of
Operations, of Shareholders' Equity and Comprehensive Income and of Cash Flows
for each of the fiscal years in the three-year period ended January 1, 2005, and
the related Notes to Consolidated Financial Statements and the Report of
Independent Registered Public Accounting Firm appearing in R. G. Barry's Annual
Report to Shareholders for the fiscal year ended January 1, 2005, are
incorporated herein by reference. This information set forth under the caption
"Quarterly Financial Data" in R. G. Barry's Annual Report to Shareholders for
the fiscal year ended January 1, 2005, is also incorporated herein by reference.
12
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
(a) Evaluation of Disclosure Controls and Procedures.
With the participation of the President and Chief Executive Officer (the
principal executive officer) and the Senior Vice President-Finance, Chief
Financial Officer, Secretary and Treasurer (the principal financial officer) of
R. G. Barry Corporation, R. G. Barry's management has evaluated the
effectiveness of R. G. Barry's disclosure controls and procedures (as defined in
Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), as of the end of the period covered by this Annual Report on
Form 10-K. Based on that evaluation, R. G. Barry's President and Chief Executive
Officer and R. G. Barry's Senior Vice President-Finance, Chief Financial
officer, Secretary and Treasurer have concluded that:
(1) information required to be disclosed by R. G. Barry in this Annual
Report on Form 10-K and the other reports that it files or submits
under the Exchange Act would be accumulated and communicated to R.
G. Barry's management, including its principal executive officer and
principal financial officer, as appropriate to allow timely
decisions regarding required disclosure;
(2) information required to be disclosed by R. G. Barry in this Annual
Report on Form 10-K and the other reports that it files or submits
under the Exchange Act would be recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and
forms; and
(3) R. G. Barry's disclosure controls and procedures are effective as of
the end of the period covered by this Annual Report on Form 10-K to
ensure that material information relating to R. G. Barry and its
consolidated subsidiaries is made known to them, particularly during
the period for which the periodic reports of R. G. Barry, including
this Annual Report on Form 10-K, are being prepared.
(b) Changes in Internal Control Over Financial Reporting.
There were no changes in R. G. Barry's internal control over financial
reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred
during R. G. Barry's fiscal quarter ended January 1, 2005, that materially
affected, or are reasonably likely to materially affect, R. G. Barry's internal
control over financial reporting.
ITEM 9B. OTHER INFORMATION.
On March 31, 2005, the Company and The CIT Group/Commercial Services, Inc.
("CIT") entered into a new asset-based financing agreement (the "CIT ABL
Facility"). The CIT ABL Facility replaces the Company's current financing
arrangement with CIT. The CIT ABL Facility is a two-year committed facility
under which CIT is obligated to advance the Company funds so long as the Company
complies with the CIT financing agreement, including satisfying covenants
requiring that the Company meet various financial condition and financial
performance requirements.
13
Under the CIT ABL Facility, the Company is required to meet certain
financial covenants including: (a) minimum Tangible Net Worth at the end of each
fiscal quarters of 2005 and 2006, (b) negative Earnings Before Income Taxes,
Depreciation, and Amortization (excluding certain extraordinary or nonrecurring
gains and losses) for the two fiscal quarters ended June 30, 2005, not exceeding
a specified level (c) Minimum Net Availability at the end of each fiscal year
beginning in 2005, and (d) a minimum Fixed Charge Coverage Ratio test at the end
of fiscal 2005 and each 12-month period ending at the end of each fiscal quarter
thereafter. The foregoing capitalized terms are defined in the CIT ABL Facility.
The CIT ABL Facility provides the Company with advances in a maximum
amount equal to the lesser of (a) $35 million or (b) a Borrowing Base (as
defined in the CIT ABL Facility). The Borrowing Base is determined by the
agreement and is based primarily on the sum of (i) the amount of 80% of the
receivables due under the factoring agreement, if any, and 80% of the Company's
total eligible accounts receivable; (ii) the amount of the Company's eligible
inventory; (iii) a $3.5 million overformula availability during the Company's
peak borrowing season from April through October; and (iv) a $4.0 million
allowance on the Company's eligible intellectual property from January 1 to
October 31. The CIT ABL Facility includes a $3 million subfacility for CIT's
guarantee of letters of credit to issued by letter of credit banks that is
counted against the maximum borrowing amount noted above.
Interest on the CIT ABL Facility is initially at a rate per annum equal to
the JPMorgan Chase Bank prime rate plus 1%. In the event the Company satisfies
various requirements as of the end of fiscal 2005, the rate per annum may be
reduced to the JPMorgan Chase Bank prime rate plus 0.5%. Each month when the
Company's borrowing needs require inclusion of the $3.5 million overformula in
the Borrowing Base, the interest rate will be increased by 0.5%.
As part of the original CIT financing arrangement, the Company entered
into a factoring agreement with CIT, under which CIT purchased accounts
receivable that met CIT's eligibility requirements. Although the CIT ABL
Facility is intended to replace the Company's current factoring arrangement with
CIT, the factoring agreement will remain in effect for all accounts currently
being factored under that agreement. However, going forward the CIT ABL Facility
will be the exclusive loan facility between the Company and CIT and no
additional accounts will be factored and no further advances will be made by CIT
under the factoring agreement.
The Company's obligations under the original CIT financing arrangement
were secured by a first priority lien and mortgage on substantially all of the
Company's assets, including accounts receivable, inventory, intangibles,
equipment, intellectual property and real estate. The liens and mortgage that
secured the original CIT arrangement remain in place and have been amended and
modified to secure the new CIT ABL Facility. In addition, in connection with the
original CIT agreement the Company pledged to CIT the stock in its U.S.
wholly-owned subsidiaries and the subsidiaries guaranteed the Company's
indebtedness under the original CIT agreement. The pledge agreement and the
subsidiary guarantees have also been amended to secure the new CIT ABL Facility.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required under Item 401 of SEC Regulation S-K to be
disclosed in this Item 10 is, except as noted in the following sentence,
incorporated herein by reference to R. G. Barry Corporation's definitive Proxy
Statement relating to the Annual Meeting of Shareholders to be held on May 20,
2005 (the "2005 Proxy Statement"), under the captions "ELECTION OF DIRECTORS,"
and
14
"COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS - Employment Contracts and
Termination of Employment and Change in Control Arrangements." In addition,
information concerning R. G. Barry's executive officers is included in the
portion of Part I of this Annual Report on Form 10-K entitled "SUPPLEMENTAL
ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT."
No disclosure is required under Item 405 of SEC Regulation S-K.
The Board of Directors of R. G. Barry has adopted a Code of Ethics for
Senior Financial Officers and Directors covering the senior financial officers
and directors of R. G. Barry and its subsidiaries, including R. G. Barry's
President and Chief Executive Officer (the principal executive officer) and
Senior Vice President-Finance, Chief Financial Officer, Secretary and Treasurer
(the principal financial officer and principal accounting officer). As required
by the applicable rules of the SEC, R. G. Barry intends to disclose the
following on the "Investor & Financial Information - Board of Directors" page of
its website located at www.rgbarry.com within the required time period following
their occurrence: (A) the date and nature of any amendment to a provision of its
Code of Ethics for Senior Financial Officers and Directors that (i) applies to
R. G. Barry's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, (ii) relates to any element of the "code of ethics" definition
enumerated in Item 406(b) of SEC Regulation S-K, and (iii) is not a technical,
administrative or other non-substantive amendment; and (B) a description of any
waiver (including the nature of the waiver, the name of the person to whom the
waiver was granted and the date of the waiver), including an implicit waiver,
from a provision of the Code of Ethics for Senior Financial Officers and
Directors granted to R. G. Barry's principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions that relates to one or more of the items set forth
in Item 406(b) of SEC Regulation S-K.
The text of the Code of Ethics for Senior Financial Officers and Directors
is posted on the "Investor & Financial Information - Board of Directors" page of
R. G. Barry's website located at www.rgbarry.com. Interested persons may also
obtain a copy of the Code of Ethics for Senior Financial Officers and Directors,
without charge, by writing to R. G. Barry at its principal executive offices
located at 13405 Yarmouth Road N.W., Pickerington, Ohio 43147, Attention: Daniel
D. Viren. In addition, a copy of R. G. Barry's Code of Ethics for Senior
Financial Officers and Directors was filed as Exhibit 14 to R. G. Barry's
Current Report on Form 8-K filed with the SEC on September 7, 2004.
ITEM 11. EXECUTIVE COMPENSATION.
The information called for in this Item 11 is incorporated herein by
reference to R. G. Barry Corporation's 2005 Proxy Statement, under the captions
"SHARE OWNERSHIP," "ELECTION OF DIRECTORS" and "COMPENSATION OF EXECUTIVE
OFFICERS AND DIRECTORS." Such incorporation by reference shall not be deemed to
specifically incorporate by reference the information referred to in Item
402(a)(8) of SEC Regulation S-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
The information called for in this Item 12 regarding the security
ownership of certain beneficial owners and management is incorporated herein by
reference to R. G. Barry Corporation's 2005 Proxy Statement, under the captions
"SHARE OWNERSHIP" and "COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS."
The information called for in this Item 12 regarding securities authorized
for issuance under equity compensation plans is incorporated herein by reference
to R. G. Barry Corporation's 2005 Proxy
15
Statement, under the caption "COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS -
Equity Compensation Plan Information."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information called for in this Item 13 is incorporated herein by
reference to R. G. Barry Corporation's 2005 Proxy Statement, under the captions
"SHARE OWNERSHIP," "ELECTION OF DIRECTORS" and "COMPENSATION OF EXECUTIVE
OFFICERS AND DIRECTORS."
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICE.
The information called for in this Item 14 is incorporated herein by
reference to R. G. Barry Corporation's 2005 Proxy Statement, under the captions
"AUDIT COMMITTEE MATTERS - Pre-Approval Policies and Procedures" and "AUDIT
COMMITTEE MATTERS - Fees of Independent Registered Public Accounting Firm."
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a)(1) Financial Statements.
For a list of all financial statements incorporated by reference in
this Annual Report on Form 10-K, see "Index to Financial Statements
and Financial Statement Schedules" on page 19.
(a)(2) Financial Statement Schedules.
For a list of all financial statement schedules included in this
Annual Report on Form 10-K, see "Index to Financial Statements and
Financial Statement Schedules" on page 19.
(a)(3) Exhibits.
Exhibits filed with this Annual Report on Form 10-K are attached
hereto. For list of these exhibits, see "Index to Exhibits"
beginning at page E-1.
(b) Exhibits
Exhibits filed with this Annual Report on Form 10-K are attached
hereto. For a list of such exhibits, see "Index to Exhibits"
beginning at page E-1.
(c) Financial Statement Schedules
Financial statement schedules included with this Annual Report on
Form 10-K are attached hereto. See "Index to Financial Statements
and Financial Statement Schedules" on page 19.
16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
R. G. BARRY CORPORATION
Dated: April 1, 2005 By: /s/ Daniel D. Viren
-------------------------------
Daniel D. Viren,
Senior Vice President-Finance,
Chief Financial Officer,
Secretary and Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
Name Capacity Date
- ---- -------- ----
/s/ Thomas M. Von Lehman President and Chief Executive Officer April 1, 2005
- ------------------------------ (Principal Executive Officer)
Thomas M. Von Lehman
/s/ Daniel D. Viren Senior Vice President - Finance, Chief April 1, 2005
- ------------------------------ Financial Officer, Secretary and
Daniel D. Viren Treasurer (Principal Financial Officer and
Principal Accounting Officer)
* Chairman of the Board and Director April 1, 2005
- -------------------------------
Gordon Zacks
Director April 1, 2005
- -------------------------------
Christian Galvis
* Director April 1, 2005
- -------------------------------
David P. Lauer
* Director April 1, 2005
- -------------------------------
Roger E. Lautzenhiser
* Director April 1, 2005
- -------------------------------
Janice Page
* Director April 1, 2005
- -------------------------------
Edward M. Stan
* Director April 1, 2005
- -------------------------------
Harvey Weinberg
17
- ----------
* By Daniel D. Viren pursuant to Powers of Attorney executed by the directors
and executive officers listed above, which Powers of Attorney have been filed
with the Securities and Exchange Commission.
By: /s/ Daniel D. Viren
-----------------------------
Daniel D. Viren
18
R. G. BARRY CORPORATION
ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED JANUARY 1, 2005
INDEX TO FINANCIAL STATEMENTS
The consolidated balance sheets of R. G. Barry Corporation and subsidiaries as
of January 1, 2005 and January 3, 2004 and the related consolidated statements
of operations, shareholders' equity and comprehensive income and cash flows for
each of the fiscal years in the three-year period ended January 1, 2005,
together with the opinion thereon of KPMG LLP dated February 25, 2005, except as
to Note 18, which is as of March 31, 2005, appearing in the R. G. Barry
Corporation Annual Report to Shareholders for the fiscal year ended January 1,
2005, are incorporated by reference in this Annual Report on Form 10-K. The
following additional financial data should be read in conjunction with the
consolidated financial statements in such Annual Report to Shareholders.
ADDITIONAL FINANCIAL DATA
The following additional financial data should be read in conjunction with
the Consolidated Financial Statements of R. G. Barry Corporation and its
subsidiaries included in the Annual Report to Shareholders for the fiscal year
ended January 1, 2005. Schedules not included with this additional financial
data have been omitted because they are not applicable or the required
information is shown in the Consolidated Financial Statements or Notes thereto.
Additional Financial Data:
Report of Independent Registered Public Accounting Firm
on Financial Statement Schedules:
Included at page 20 of this Annual Report on Form 10-K
Schedules for the fiscal years ended January 1, 2005,
January 3, 2004 and December 28, 2002:
Schedule 2--Valuation and Qualifying Accounts: Included at
pages 21 through 23 of this Annual Report on Form 10-K
19
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders
R. G. Barry Corporation:
Under date of February 25, 2005, except as to Note 18, which is as of March 31,
2005, we reported on the consolidated balance sheets of R. G. Barry Corporation
and subsidiaries as of January 1, 2005 and January 3, 2004, and the related
consolidated statements of operations, shareholders' equity and comprehensive
income and cash flows for each of the fiscal years in the three-year period
ended January 1, 2005, as contained in the fiscal 2004 annual report to
shareholders. These consolidated financial statements and our report thereon is
incorporated by reference in the annual report on Form 10-K for the fiscal year
2004. In connection with our audits of the aforementioned consolidated financial
statements, we also audited the related consolidated financial statement
schedules as listed in the accompanying index. These financial statement
schedules are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statement schedules based on our
audits.
In our opinion, such financial statement schedules, when considered in relation
to the basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.
/s/ KPMG LLP
Columbus, Ohio
February 25, 2005
20
SCHEDULE 2
R. G. BARRY CORPORATION AND SUBSIDIARIES
Valuation and Qualifying Accounts
January 1, 2005
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
CHARGE
(CREDIT)
CHARGES TO TO COSTS AND
COSTS AND EXPENSES FOR
BALANCE AT EXPENSES PRIOR YEAR ADJUSTMENTS BALANCE AT
BEGINNING FOR THE ACCRUAL AND END OF
DESCRIPTION OF PERIOD CURRENT YEAR ADJUSTMENTS DEDUCTIONS PERIOD
Reserves deducted from accounts
receivable:
Allowance for doubtful receivables $ 226,000 -- (209,000) 17,000 (1) --
Allowance for returns 7,763,000 4,105,000 (118,000) 7,645,000 (2) 4,105,000
Allowance for promotions 10,505,000 10,889,000 (186,000) 13,218,000 (3) 7,990,000
$ 18,494,000 14,994,000 (513,000) 20,880,000 12,095,000
Notes:
1. Write-off uncollectible accounts.
2. Represents 2004 sales returns reserved for in fiscal 2003.
3. Represents 2004 promotions expenditures committed to and reserved for in
fiscal 2003.
21
SCHEDULE 2
R. G. BARRY CORPORATION AND SUBSIDIARIES
Valuation and Qualifying Accounts
January 3, 2004
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
CHARGE
(CREDIT)
CHARGES TO TO COSTS AND
COSTS AND EXPENSES FOR
BALANCE AT EXPENSES PRIOR YEAR ADJUSTMENTS BALANCE AT
BEGINNING FOR THE ACCRUAL AND END OF
DESCRIPTION OF PERIOD CURRENT YEAR ADJUSTMENTS DEDUCTIONS PERIOD
Reserves deducted from accounts
receivable:
Allowance for doubtful receivables $ 434,000 355,000 -- 563,000 (1) 226,000
Allowance for returns 10,182,000 7,763,000 341,000 10,523,000 (2) 7,763,000
Allowance for promotions 9,648,000 11,536,000 (104,000) 10,575,000 (3) 10,505,000
$20,264,000 19,654,000 237,000 21,661,000 18,494,000
Notes:
1. Write-off uncollectible accounts.
2. Represents 2003 sales returns reserved for in fiscal 2002.
3. Represents 2003 promotions expenditures committed to and reserved for in
fiscal 2002.
22
SCHEDULE 2
R. G. BARRY CORPORATION AND SUBSIDIARIES
Valuation and Qualifying Accounts
December 28, 2002
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
CHARGE
(CREDIT)
CHARGES TO TO COSTS AND
COSTS AND EXPENSES FOR
BALANCE AT EXPENSES PRIOR YEAR ADJUSTMENTS BALANCE AT
BEGINNING FOR THE ACCRUAL AND END OF
DESCRIPTION OF PERIOD CURRENT YEAR ADJUSTMENTS DEDUCTIONS PERIOD
Reserves deducted from accounts
receivable:
Allowance for doubtful receivables $ 302,000 220,000 -- 88,000 (1) 434,000
Allowance for returns 8,743,000 10,182,000 1,424,000 10,167,000 (2) 10,182,000
Allowance for promotions 8,574,000 13,570,000 11,000 12,507,000 (3) 9,648,000
$17,619,000 23,972,000 1,435,000 22,762,000 20,264,000
Notes:
1. Write-off uncollectible accounts.
2. Represents 2002 sales returns reserved for in fiscal 2001.
3. Represents 2002 promotions expenditures committed to and reserved for in
fiscal 2001.
23
R. G. BARRY CORPORATION
ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED JANUARY 1, 2005
INDEX TO EXHIBITS
Exhibit No. Description Location
- ----------- ----------- --------
2.1 Stock Purchase Agreement, dated July 22, 1999, Incorporated herein by reference to Exhibit
between Mr. Thierry Civetta, Mr. Michel 2.1 to Registrant's Quarterly Report on
Fargeot, FCPR County Natwest Venture France, Form 10-Q for the quarterly period ended
SCA Capital Prive-Investissements, Hoche October 2, 1999 (File No. 001-08769)
Investissements, and SA Capital Prive, parties
of the first part, and R. G. Barry Corporation
("Registrant") and Escapade, S.A., parties of
the second part
2.2 Asset Purchase Agreement, dated as of May 14, Incorporated herein by reference to Exhibit
2003, by and among RGB Technology, Inc. 2 to Registrant's Current Report on Form
(formerly known as Vesture Corporation), 8-K dated and filed July 2, 2003 (File No.
Registrant and Vesture Acquisition Corp. 001-08769)
2.3 First Amendment to Asset Purchase Agreement, Incorporated herein by reference to Exhibit
dated December 29, 2003, by and among RGB 2.3 to Registrant's Annual Report on Form
Technology, Inc. (formerly known as Vesture 10-K for the fiscal year ended January 3,
Corporation), Registrant and Vesture 2004 (File No. 001-08769) ("Registrant's
Corporation (formerly known as Vesture January 2004 Form 10-K")
Acquisition Corp.)
3.1 Articles of Incorporation of Registrant (as Incorporated herein by reference to Exhibit
filed with Ohio Secretary of State on March 26, 3(a)(i) to Registrant's Annual Report on
1984) Form 10-K for the fiscal year ended
December 31, 1988 (File No. 0-12667)
("Registrant's 1988 Form 10-K")
3.2 Certificate of Amendment to the Articles of Incorporated herein by reference to Exhibit
Incorporation of Registrant Authorizing the 3(a)(i) to Registrant's 1988 Form 10-K
Series I Junior Participating Class B Preferred
Shares (as filed with the Ohio Secretary of
State on March 1, 1988)
3.3 Certificate of Amendment to the Articles of Incorporated herein by reference to Exhibit
Registrant (as filed with the Ohio Secretary of 3(a)(i) to Registrant's 1988 Form 10-K
State on May 9, 1988)
E-1
Exhibit No. Description Location
- ----------- ----------- --------
3.4 Certificate of Amendment to the Articles of Incorporated herein by reference to Exhibit
Incorporation of Registrant (as filed with the 3(b) to Registrant's Annual Report on Form
Ohio Secretary of State on May 22, 1995) 10-K for the fiscal year ended December 30,
1995 (File No. 001-08769) ("Registrant's
1995 Form 10-K")
3.5 Certificate of Amendment to Articles of Incorporated herein by reference to Exhibit
Incorporation of Registrant (as filed with the 3(c) to Registrant's 1995 Form 10-K
Ohio Secretary of State on September 1, 1995)
3.6 Certificate of Amendment to Articles of Incorporated herein by reference to Exhibit
Incorporation of Registrant (as filed with the 4(h)(6) to Registrant's Registration
Ohio Secretary of State on May 30, 1997) Statement on Form S-8, filed June 6, 1997
(Registration No. 333-28671)
3.7 Certificate of Amendment to the Articles of Incorporated herein by reference to Exhibit
Incorporation of Registrant Authorizing Series 3(a)(7) to Registrant's Annual Report on
I Junior Participating Class A Preferred Shares Form 10-K for the fiscal year ended January
(as filed with the Ohio Secretary of State on 3, 1998 (File No. 001-08769) ("Registrant's
March 10, 1998) 1997 Form 10-K")
3.8 Articles of Incorporation of Registrant Incorporated herein by reference to Exhibit
(reflecting amendments through March 10, 1998) 3(a)(8) to Registrant's 1997 Form 10-K
[for purposes of SEC reporting compliance only
- not filed with the Ohio Secretary of State]
3.9 Certificate adopting amendments to Code of Incorporated herein by reference to Exhibit
Regulations of Registrant (shareholders' action 3.1 to Registrant's Quarterly Report on
on May 27, 2004) Form 10-Q for the quarterly period ended
July 3, 2004 (File No.
001-08769)("Registrant's July 3, 2004 Form
10-Q")
3.10 Code of Regulations of Registrant (reflects all Incorporated herein by reference to Exhibit
amendments through May 27, 2004) 3.2 to Registrant's July 3, 2004 Form 10-Q
4.1 Rights Agreement, dated as of February 19, Incorporated herein by reference to Exhibit
1998, between Registrant and The Bank of New 4 to Registrant's Current Report on Form
York, as Rights Agent 8-K, dated March 13, 1998 and filed March
16, 1998 (File No. 001-08769)
E-2
Exhibit No. Description Location
- ----------- ----------- --------
4.2 Loan Agreement, dated as of January 21, 2000, Incorporated herein by reference to Exhibit
among Banque Tarneaud, S.A., Banque Nationale 4 to Registrant's Quarterly Report on Form
de Paris, and Escapade, S.A. 10-Q for the quarterly period ended April
1, 2000 (File No. 001-08769)
9.1 Zacks-Streim Voting Trust and amendments thereto Incorporated herein by reference to Exhibit
9 to Registrant's Annual Report on Form
10-K for the fiscal year ended January 2,
1993 (File No. 001-08769)
9.2 Documentation related to extension of term of Incorporated herein by reference to Exhibit
the Voting Trust Agreement for the Zacks-Streim 9(b) to Registrant's 1995 Form 10-K
Voting Trust
*10.1 R. G. Barry Corporation Associates' Retirement Incorporated herein by reference to Exhibit
Plan (As Amended and Restated Effective January 10.1 to Registrant's Annual Report on Form
1, 1997) 10-K for the fiscal year ended December 29,
2001 (File No. 001-08769) ("Registrant's
2001 Form 10-K")
*10.2 Amendment No. 1 to the R. G. Barry Corporation Incorporated herein by reference to Exhibit
Associates' Retirement Plan (amended and 10.2 to Registrant's Annual Report on Form
restated effective January 1, 1997, and 10-K for the fiscal year ended December 28,
executed on December 31, 2001) 2002 (File No. 001-08769) ("Registrant's
2002 Form 10-K")
*10.3 Amendment No. 2 to the R. G. Barry Corporation Incorporated herein by reference to Exhibit
Associates' Retirement Plan (amended and 10.3 to Registrant's 2002 Form 10-K
restated effective January 1, 1997, and
executed on December 31, 2001) for the Economic
Growth and Tax Relief Reconciliation Act of 2001
*10.4 Amendment No. 3 to the R. G. Barry Corporation Incorporated herein by reference to Exhibit
Associates' Retirement Plan (executed on 10.4 to Registrant's January 2004 Form 10-K
February 20, 2004, effective as of March 31,
2004)
*10.5 R. G. Barry Corporation Supplemental Retirement Incorporated herein by reference to Exhibit
Plan Effective January 1, 1997 10.2 to Registrant's Annual Report on Form
10-K for the fiscal year ended January 1,
2000 (File No. 001-08769) ("Registrant's
January 2000 Form 10-K")
E-3
Exhibit No. Description Location
- ----------- ----------- --------
*10.6 R. G. Barry Corporation Supplemental Benefit Incorporated herein by reference to Exhibit
Plans Trust (effective as of September 1, 1995 10.1 to Registrant's July 3, 2004 Form 10-Q
*10.7 Amendment No. 1 to the R. G. Barry Corporation Incorporated here in by reference to
Supplemental Retirement Plan Effective January Exhibit 10.3 to Registrant's January 2000
1, 1997 (executed May 15, 1998, effective as of Form 10-K
May 12, 1998)
*10.8 Amendment No. 2 to the R. G. Barry Corporation Incorporated herein by reference to Exhibit
Supplemental Retirement Plan Effective January 10.4 to Registrant's January 2000 Form 10-K
1, 1997 (executed March 28, 2000, effective as
of January 1, 2000)
*10.9 Amendment No. 3 to the R. G. Barry Corporation Incorporated herein by reference to Exhibit
Supplemental Retirement Plan Effective January 10.8 to Registrant's January 2004 Form 10-K
1, 1997 (executed on February 20, 2004,
effective as of March 31, 2004)
*10.10 Employment Agreement, dated July 1, 2001, Incorporated herein by reference to Exhibit
between Registrant and Gordon Zacks 10.5 to Registrant's 2001 Form 10-K
*10.11 Confidential Separation Agreement, dated March Incorporated herein by reference to Exhibit
10, 2004, by and between Registrant and Gordon 10.1 to Registrant's Current Report on Form
Zacks 8-K, dated and filed March 11, 2004 (File No.
001-08769) ("Registrant's March 11, 2004 Form
8-K")
*10.12 Agreement, dated September 27, 1989, between Incorporated herein by reference to Exhibit
Registrant and Gordon Zacks 28.1 to Registrant's Current Report on Form 8-K
dated October 11, 1989, filed October 12, 1989
(File No. 0-12667)
*10.13 Amendment No. 1, dated as of October 12, 1994, Incorporated herein by reference to Exhibit
between Registrant and Gordon Zacks 5 to Amendment No. 14 to Schedule 13D,
dated January 27, 1995, filed by Gordon
Zacks on February 13, 1995
*10.14 Amended Split-Dollar Insurance Agreement, dated Incorporated herein by reference to Exhibit
March 23, 1995, between Registrant and Gordon 10(h) to Registrant's 1995 Form 10-K
B. Zacks
E-4
Exhibit No. Description Location
- ----------- ----------- --------
*10.15 R. G. Barry Corporation 1988 Stock Option Plan Incorporated herein by reference to Exhibit
(Reflects amendments through May 11, 1993) 4(r) to Registrant's Registration Statement
on Form S-8, filed August 18, 1993
(Registration No. 33-67594)
*10.16 Form of Stock Option Agreement used in Incorporated herein by reference to Exhibit
connection with the grant of incentive stock 10(k) to Registrant's 1995 Form 10-K
options pursuant to the R. G. Barry Corporation
1988 Stock Option Plan
*10.17 Form of Stock Option Agreement used in Incorporated herein by reference to Exhibit
connection with the grant of non-qualified 10(1) to Registrant's 1995 Form 10-K
stock options pursuant to the R. G. Barry
Corporation 1988 Stock Option Plan
*10.18 Annual Incentive Program (in effect beginning Incorporated herein by reference to Exhibit
with fiscal year ended December 29, 2001) 10.13 to Registrant's December 2000 Form
10-K
*10.19 R. G. Barry Corporation Employee Stock Purchase Incorporated herein by reference to Exhibit
Plan (Reflects amendments and revisions for 10.1 to Registrant's Quarterly Report on
stock dividends and stock splits through May 8, Form 10-Q for the quarterly ended June 28,
2003) 2003 (File No. 001-08769)
*10.20 R. G. Barry Corporation 1994 Stock Option Plan Incorporated herein by reference to Exhibit
(Reflects stock splits through June 22, 1994) 4(q) to Registrant's Registration Statement
on Form S-8, filed August 24, 1994
(Registration No. 33-83252)
*10.21 Form of Stock Option Agreement used in Incorporated herein by reference to Exhibit
connection with the grant of incentive stock 10.16 to Registrant's December 2000 Form
options pursuant to the R. G. Barry Corporation 10-K
1994 Stock Option Plan
*10.22 Form of Stock Option Agreement used in Incorporated herein by reference to Exhibit
connection with the grant of non-qualified 10.17 to Registrant's December 2000 Form
stock options pursuant to the R. G. Barry 10-K
Corporation 1994 Stock Option Plan
*10.23 Executive Employment Agreement, effective as of Incorporated herein by reference to Exhibit
January 5, 2004, between Registrant and 10.23 to Registrant's January 2004 Form 10-K
Christian Galvis
*10.24 Restricted Stock Agreement, effective as of Incorporated herein by reference to Exhibit
January 4, 1998, between Registrant and 10(s) to Registrant's 1997 Form 10-K
Christian Galvis
E-5
Exhibit No. Description Location
- ----------- ----------- --------
*10.25 R. G. Barry Corporation Deferred Compensation Incorporated herein by reference to Exhibit
Plan As Amended and Restated (Effective as of 10(v) to Registrant's 1995 Form 10-K
September 1, 1995)
*10.26 Amendment No. 1 to the R. G. Barry Corporation Incorporated herein by reference to Exhibit
Deferred Compensation Plan (Effective as of 10.23 to Registrant's January 2000 Form 10-K
March 1, 1997)
*10.27 Amendment No. 2 to the R. G. Barry Corporation Incorporated herein by reference to Exhibit
Deferred Compensation Plan (Effective as of 10.21 to Registrant's 2001 Form 10-K
December 1, 1999)
*10.28 Amendment No. 3 to the R. G. Barry Corporation Incorporated herein by reference to Exhibit
Deferred Compensation Plan (Effective as of 10.24 to Registrant's 2002 Form 10-K
December 1, 1999)
*10.29 Amendment No. 4 to the R. G. Barry Corporation Incorporated herein by reference to Exhibit
Deferred Compensation Plan (Effective as of 10.29 to Registrant's January 2004 Form 10-K
February 21, 2004)
*10.30 R. G. Barry Corporation Stock Option Plan for Incorporated herein by reference to Exhibit
Non-Employee Directors (Reflects share splits 10(x) to Registrant's 1997 Form 10-K
and amendments through February 19, 1998)
*10.31 R. G. Barry Corporation 1997 Incentive Stock Incorporated herein by reference to Exhibit
Plan (Reflects amendments through May 13, 1999) 10 to Registrant's Registration Statement
on Form S-8, filed June 18, 1999
(Registration No. 333-81105)
*10.32 Form of Stock Option Agreement used in Incorporated herein by reference to Exhibit
connection with the grant of incentive stock 10.24 to Registrant's December 2000 Form
options pursuant to the R. G. Barry Corporation 10-K
1997 Incentive Stock Plan
*10.33 Form of Stock Option Agreement used in Incorporated herein by reference to Exhibit
connection with the grant of non-qualified 10.25 to Registrant's December 2000 Form
stock options pursuant to the R. G. Barry 10-K
Corporation 1997 Incentive Stock Plan
*10.34 R. G. Barry Corporation 2002 Stock Incentive Incorporated herein by reference to Exhibit 10
Plan to Registrant's Registration Statement on Form
S-8, filed June 14, 2002 (Registration No.
333-90544)
*10.35 Form of Stock Option Agreement used in Incorporated herein by reference to Exhibit
connection with grant of incentive stock 10.30 of Registrant's 2002 Form 10-K
options pursuant to the R. G. Barry Corporation
2002 Stock Incentive Plan
E-6
Exhibit No. Description Location
- ----------- ----------- --------
*10.36 Form of Stock Option Agreement used in Incorporated herein by reference to Exhibit
connection with grant of non-qualified stock 10.31 of Registrant's 2002 Form 10-K
options pursuant to the R. G. Barry Corporation
2002 Stock Incentive Plan
*10.37 Restricted Stock Agreement, dated as of May 13, Incorporated herein by reference to Exhibit
1999, between Registrant and Gordon Zacks 10.1 to Registrant's Quarterly Report on Form
10-Q for the quarterly period ended July 3,
1999 (File No. 001-08769)
*10.38 Restricted Stock Agreement, effective as of Incorporated herein by reference to Exhibit 10
March 23, 2000, between Registrant and to Registrant's Quarterly Report on Form 10-Q
Christian Galvis for the quarterly period ended April 1, 2000
(File No. 001-08769)
*10.39 Executive Employment Agreement, effective as of Incorporated herein by reference to Exhibit
June 5, 2000, between Registrant and Daniel D. 10.29 to Registrant's December 2000 Form
Viren 10-K
*10.40 First Amendment to Executive Employment Incorporated hereby by reference to Exhibit
Agreement, effective as of June 5, 2003, 10.40 of Registrant's January 2004 Form 10-K
between Registrant and Daniel D. Viren
*10.41 Executive Employment Agreement, effective as of Incorporated hereby by reference to Exhibit
January 5, 2004, between Registrant and Harry 10.41 to Registrant's January 2004 Form 10-K
Miller
*10.42 Agreement, dated February 7, 1952, as amended Incorporated herein by reference to Exhibit
by Agreement of Amendment dated September 18, 10.33 to Registrant's December 2000 Form
1961, a Second Amendment dated April 15, 1968 10-K
and a Third Amendment dated October 31, 2000,
between Registrant and Florence Zacks Melton
10.43 Agreement, dated July 11, 2001, between Incorporated herein by reference to Exhibit
Registrant and S. Goldberg & Co., Inc. 10(b) to Registrant's Current Report on Form
8-K, dated January 7, 2002 and filed January 8,
2002 (File No. 001-08769)
10.44 License Agreement, effective as of January 7, Incorporated herein by reference to Exhibit
2003, among Registrant, R. G. Barry 10.46 to Registrant's 2002 Form 10-K
International, Inc., Barry (G.B.R. Limited) and
GBR Limited
E-7
Exhibit No. Description Location
- ----------- ----------- --------
*10.45 Executive Employment Contract, dated February Incorporated herein by reference to Exhibit
24, 2005, between Registrant and Thomas M. Von 10 to Registrant's Current Report on Form
Lehman 8-K, dated February 28, 2005 and filed
March 1, 2005 (File No. 001-08769)
*10.46 Stock Option Agreement, dated March 10, 2004, Incorporated herein by reference to Exhibit
between Registrant and Thomas M. Von Lehman 10.49 to Registrant's January 2004 Form 10-K
*10.47 Form of Stock Option Agreement between Incorporated herein by reference to Exhibit
Registrant and Thomas M. Von Lehman for options 10.2 to Registrant's Current Report on Form
granted under R. G. Barry Corporation 2002 8-K, dated and filed September 14, 2004
Stock Incentive Plan and pursuant to Executive (File No. 001-08769)
Employment Contract, dated March 10, 2004,
between Registrant and Thomas M. Von Lehman
10.48 Letter Agreement, dated February 20, 2004, Incorporated herein by reference to Exhibit
between R. G. Barry Corporation and The 10.50 to Registrant's January 2004 Form 10-K
Meridian Group
10.49 Factoring Agreement, dated March 29, 2004, Incorporated herein by reference to Exhibit 4.1
between Registrant and The CIT Group/Commercial to Registrant's Current Report on Form 8-K,
Services, Inc. dated and filed April 1, 2004 (File No.
001-08769)("Registrant's April 1, 2004 Form
8-K")
10.50 Letter of Credit Agreement, dated March 29, Incorporated herein by reference to Exhibit
2004, between Registrant and The CIT 4.2 to Registrant's April 1, 2004 Form 8-K
Group/Commercial Services, Inc.
10.51 Grant of Security Interest in Patents, Incorporated herein by reference to Exhibit
Trademarks and Licenses, dated March 29, 2004, 4.3 to Registrant's April 1, 2004 Form 8-K
between Registrant and The CIT Group/Commercial
Services, Inc.
10.52 Equipment Security Agreement, dated March 29, Incorporated herein by reference to Exhibit
2004, between Registrant and The CIT 4.4 to Registrant's April 1, 2004 Form 8-K
Group/Commercial Services, Inc.
10.53 Inventory Security Agreement, dated March 29, Incorporated herein by reference to Exhibit
2004, between Registrant and The CIT 4.5 to Registrant's April 1, 2004 Form 8-K
Group/Commercial Services, Inc.
E-8
Exhibit No. Description Location
- ----------- ----------- --------
10.54 Financing Agreement, dated March 31, 2005, Filed herewith
between Registrant and The CIT Group/Commercial
Services, Inc.
10.55 Amendment to Factoring Agreement, dated March Filed herewith
31, 2005, between Registrant and The CIT
Group/Commercial Services, Inc.
10.56 Amended and Restated Pledge Agreement, dated Filed herewith
March 31, 2005, between Registrant and The CIT
Group/Commercial Services, Inc.
10.57 Reaffirmation of Copyright Security Agreement, Filed herewith
dated March 31, 2005, between Registrant and
The CIT Group/Commercial Services, Inc.
10.58 Reaffirmation of Grant of Security Interest in Filed herewith
Patents, Trademarks and Licenses, dated March
31, 2005, between Registrant and The CIT
Group/Commercial Services, Inc.
10.59 Description of Compensation for Directors of R. Filed herewith
G. Barry Corporation
13.1 Registrant's Annual Report to Shareholders for Filed herewith
the fiscal year ended January 1, 2005 (Not
deemed filed except for the portions thereof
which are specifically incorporated by
reference into this Annual Report on Form 10-K)
14.1 R. G. Barry Corporation Code of Ethics for Incorporated herein by reference to Exhibit
Senior Financial Officers and Directors 14 to Registrant's Current Report on Form
8-K, dated and filed September 7, 2004
(File No. 001-08769)
20.1 Portions of the Proxy Statement for Incorporated herein by reference to the
Registrant's 2005 Annual Meeting of Shareholders Registrant's Proxy Statement for the 2005
Annual Meeting of Shareholders to be filed by
Registrant no later than 120 days after the end
of Registrant's fiscal year ended January 1,
2005 (File No. 001-08769)
21.1 Subsidiaries of Registrant Filed herewith
E-9
Exhibit No. Description Location
- ----------- ----------- --------
23.1 Consent of Independent Registered Public Filed herewith
Accounting Firm
24.1 Powers of Attorney Executed by Directors and Filed herewith
Executive Officers of Registrant
31.1 Rule 13a - 14(a)/15d-14(a) Certification Filed herewith
(Principal Executive Officer)
31.2 Rule 13a - 14(a)/15d-14(a) Certification Filed herewith
(Principal Financial Officer)
32.1 Section 1350 Certification (Principal Executive Filed herewith
Officer and Principal Financial Officer)
- ----------
* Management contract or compensatory plan or arrangement.
E-10