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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 28, 2003
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 0-23161
Tropical Sportswear Int'l Corporation
(Exact name of registrant as specified in its charter)
Florida 59-3424305
- --------------------------------------------------- --------------------------
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.
4902 W. Waters Avenue Tampa, FL 33634-1302
- ---------------------------------------------------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (813) 249-4900
(Former name, former address and former fiscal year, if changed since last report.)
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 the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. [X] Yes [ ] No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).
[X] Yes [ ] No
As of August 6, 2003 there were 11,121,702 shares of the registrant's Common Stock outstanding.
TROPICAL SPORTSWEAR INT'L CORPORATION
FORM 10-Q
TABLE OF CONTENTS
PART I Financial Information Page No.
--------
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations 13
Item 3 Quantitative and Qualitative Disclosures about Market Risk 19
Item 4 Controls and Procedures 19
PART II Other Information
Item 1 Legal Proceedings 19
Item 2 Changes in Securities 19
Item 3 Defaults upon Senior Securities 19
Item 4 Submission of Matters to a Vote of Security Holders 20
Item 5 Other Information 20
Item 6 Exhibits and Reports on Form 8-K 20
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
TROPICAL SPORTSWEAR INT'L CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share amounts)
Thirteen Thirteen Thirty-nine Thirty-nine
Weeks Ended Weeks Ended Weeks Ended Weeks Ended
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
------------------ ------------------ ------------------ ------------------
Net sales $ 96,732 $ 116,262 $ 308,498 $ 346,883
Cost of goods sold 87,706 84,855 255,649 249,926
------------------ ------------------ ------------------ ------------------
Gross profit 9,026 31,407 52,849 96,957
Selling, general and administrative
Expenses 20,624 24,291 63,201 72,716
Other charges 2,361 12,316 6,113 12,316
------------------ ------------------ ------------------ ------------------
Operating income (loss) (13,959) (5,200) (16,465) 11,925
Other (income) expense:
Interest expense, net 3,046 3,520 8,743 10,681
Other, net 220 (142) (874) (797)
------------------ ------------------ ------------------ ------------------
3,266 3,378 7,869 9,884
Income (loss) before income taxes (17,225) (8,578) (24,334) 2,041
Provision (benefit) for income taxes 13,339 (2,947) 10,610 1,045
------------------ ------------------ ------------------ ------------------
Net income (loss) (30,564) (5,631) (34,944) 996
Foreign currency translations and
Other 788 905 1,175 1,142
------------------ ------------------ ------------------ ------------------
Comprehensive income (loss) ($29,776) ($4,726) ($33,769) $ 2,138
================== ================== ================== ==================
Net income (loss) per share:
Basic ($2.75) ($0.69) ($3.16) $0.13
------------------ ------------------ ------------------ ------------------
Diluted ($2.75) ($0.69) ($3.16) $0.12
================== ================== ================== ==================
See accompanying notes.
TROPICAL SPORTSWEAR INT'L CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 28, September 28,
2003 2002
----------------- ------------------
ASSETS (unaudited) (audited)
Current Assets:
Cash and cash equivalents $ 8,855 $ 28,284
Marketable securities - 11,100
Accounts receivable, net 78,608 91,009
Inventories, net 98,739 74,797
Prepaid expenses and other current assets 14,908 22,874
----------------- ------------------
Total current assets 201,110 228,064
Property and equipment, net 57,040 48,473
Intangible assets, including trademarks and goodwill, net 47,182 47,326
Other assets 8,182 12,345
----------------- ------------------
Total assets $ 313,514 $ 336,208
================= ==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 38,356 $ 60,599
Current portion of long-term debt and capital leases 1,293 1,251
----------------- ------------------
Total current liabilities 39,649 61,850
Long-term debt and capital leases 141,447 108,922
Other non-current liabilities 9,414 9,064
----------------- ------------------
Total liabilities 190,510 179,836
Shareholders' Equity:
Preferred stock - -
Common stock 114 110
Additional paid in capital 88,947 88,549
Accumulated other comprehensive loss (3,948) (5,122)
Retained earnings 37,891 72,835
----------------- ------------------
Total shareholders' equity 123,004 156,372
----------------- ------------------
Total liabilities and shareholders' equity $ 313,514 $ 336,208
================= ==================
See accompanying notes.
TROPICAL SPORTSWEAR INT'L CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
Thirty-nine Thirty-nine
Weeks Ended Weeks Ended
June 28, June 29,
2003 2002
---------------------- ----------------
OPERATING ACTIVITIES
Net income (loss) $ (34,944) $ 996
Adjustments to reconcile net income (loss) to net cash
(used in) provided by operating activities:
Depreciation and amortization 5,001 5,597
Deferred income taxes and other 9,945 778
Changes in operating assets and liabilities:
Accounts receivable 12,402 (404)
Inventories (23,942) (10,163)
Prepaid expenses and other current assets 2,696 11,834
Accounts payable and accrued expenses (21,429) 8,790
-------------------- ----------------
Net cash (used in) provided by operating activities (50,271) 17,428
-------------------- ----------------
INVESTING ACTIVITIES
Capital expenditures (14,986) (5,545)
Sale of marketable securities 11,100 86
Other, net 256 -
-------------------- ----------------
Net cash used in investing activities (3,630) (5,459)
-------------------- ----------------
Financing activities:
Net change in long-term debt and capital leases 32,117 (40,833)
Proceeds from sale of common stock - 63,870
Proceeds from exercise of stock options 5 2,588
==================== ================
Net cash provided by financing activities 32,122 25,625
-------------------- ----------------
Change in currency translation and other 2,350 1,172
Net (decrease) increase in cash and cash equivalents (19,429) 38,766
Cash and cash equivalents at beginning of period 28,284 1,714
-------------------- ----------------
Cash and cash equivalents at end of period $8,855 $40,480
==================== ================
See accompanying notes.
TROPICAL SPORTSWEAR INT'L CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
June 28, 2003 and September 28, 2002
(In thousands, except share and per share amounts)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of Tropical Sportswear Int'l Corporation
(the "Company") include the accounts of Tropical Sportswear Int'l Corporation and its subsidiaries. These
financial statements have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not
include all information and footnotes required by generally accepted accounting principles. The unaudited
condensed consolidated financial statements should be read in conjunction with the audited financial statements
and related notes included in the Company's Annual Report on Form 10-K for the year ended September 28, 2002. In
the opinion of management, the unaudited condensed consolidated financial statements contain all necessary
adjustments (which include only normal, recurring adjustments) for a fair presentation of the interim periods
presented. Operating results for the thirty-nine weeks ended June 28, 2003 are not necessarily indicative of
results that may be expected for the entire fiscal year ending September 27, 2003.
2. INVENTORIES
Inventories consist of the following:
June 28, September 28,
2003 2002
------------- ------------------
Raw materials $ 6,895 $ 7,772
Work in process 13,548 18,696
Finished goods 87,708 51,736
Reserve for excess and slow moving inventory (9,412) (3,407)
------------- ------------------
$98,739 $74,797
============= ==================
3. DEBT AND CAPITAL LEASES
Long-term debt and capital leases consist of the following:
June 28, September 28,
2003 2002
---------------- -------------------
Revolving credit line $ 33,476 $ -
Real estate loan 7,000 7,000
Senior subordinated notes 100,000 100,000
Other 2,264 3,173
--------------- -------------------
142,740 110,173
Less current maturities (1,293) (1,251)
--------------- -------------------
$141,447 $108,922
=============== ===================
On June 6, 2003 the Company renewed its revolving credit line (the "Facility"). The Facility provides for
borrowings of up to $95.0 million, subject to certain borrowing base limitations. Borrowings under the Facility
bear variable rates of interest based on LIBOR plus an applicable margin (3.7% at June 28, 2003) and are secured
by substantially all of the Company's domestic assets. The Facility matures in June 2006. Under the terms of the
Facility, the Company is only subject to financial covenants when availability is below $20.0 million. As of June
28, 2003, $42.1 million was available for borrowings under the Facility.
As of June 28, 2003, the Company violated certain of the financial covenants associated with a real estate loan,
held by Bank of America, and was in technical default under terms of the real estate loan and in technical default
under the terms of the Facility, due to the cross default provision. Fleet Capital has agreed to assume this
real estate loan and eliminate all financial covenants. Additionally, all other lenders in the Facility agreed to
waive the cross default provision that was triggered by the default on the real estate loan. The Company is party
to an interest rate swap agreement which had the effect of fixing the interest rate on $7.0 million of the real
estate loan. The Company will terminate the interest rate swap agreement concurrent with Fleet Capital assuming
the loan and record a charge in the fourth quarter of approximately $1.2 million to terminate the interest rate
swap.
4. EARNINGS PER SHARE
Basic and diluted net income (loss) per share are computed as follows:
Thirteen Thirteen Thirty-nine Thirty-nine
Weeks ended Weeks ended Weeks ended Weeks ended
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
--------------- -------------- -------------- ---------------
Numerator for basic net income (loss)
per share:
Net income (loss) ($30,564) ($5,631) ($34,944) $ 996
Denominator for basic net income (loss)
per share:
Weighted average shares of common
stock outstanding 11,118 8,204 11,066 7,877
Effect of dilutive stock options using
the treasury stock method - - - 224
--------------- -------------- -------------- ---------------
Denominator for diluted net income
(loss) per share 11,118 8,204 11,066 8,101
=============== ============== ============== ===============
Net income (loss) per common share:
Basic ($2.75) ($0.69) ($3.16) $0.13
=============== ============== ============== ===============
Diluted ($2.75) ($0.69) ($3.16) $0.12
=============== ============== ============== ===============
For periods where the company incurred a net operating loss, the effect of stock options is excluded from the
computation of diluted earnings per share because their inclusion in the calculation would have been
anti-dilutive.
5. SALE OF DUCK HEAD(R)TRADEMARKS
On June 2, 2003, the Company announced its sale of the Duck Head(R)trademarks to Goody's Family Clothing, Inc.
("Goody's") for $4.0 million in cash. Under the purchase agreement, the Company will continue to sell existing
Duck Head(R) inventory for a period of time and Goody's will purchase certain remaining inventory from the Company
no later than October 1, 2003. Goody's has also assumed all licenses associated with the Duck Head(R)trademarks.
In connection with the sale, the Company recorded a net gain of $3.7 million, which is net of expenses related
the sale and a reduction of certain of the remaining assets, including inventory.
On January 20, 2003, the Company announced its intention to exit its Duck Head(R)retail outlet business as leases
expired. With the sale of the Duck Head(R)trademarks, the timing of the exit from this business will be
accelerated and a substantial portion of the net proceeds from the sale of the brand will be used for the
accelerated closure. All retail outlet stores are expected to be closed no later than September 2003.
8. RESTRUCTURING OF SAVANE INTERNATIONAL CORP.
On April 18, 2002, the Company announced a plan to consolidate the administrative, cutting and related functions
of the Savane division in El Paso, Texas into the Tampa, Florida facility. The Company has completed all aspects
of this consolidation in the fiscal quarter ending March 29, 2003. As part of the consolidation, the Company has
vacated its El Paso, Texas administration building and cutting facility.
As a result of these initiatives (internally referred to as "Project Synergy"), the Company recorded exit
accruals related to this consolidation during fiscal 2002. As of June 28, 2003, the Company has an accrual of
approximately $1.7 million, related to exit costs, which primarily consist of lease terminations. The activity
in the exit accruals related to Project Synergy during the thirty-nine weeks ended June 28, 2003 were as
follows:
Thirty-nine weeks
ended
June 28, 2003
-----------------------
Beginning balance $ 4,295
Reductions (1,550)
Cash payments (988)
-----------------------
Ending balance $ 1,757
=======================
The Company has remaining accrued liabilities related to the 1998 acquisition of Savane International Corp. The
exit costs primarily consist of estimated lease termination costs and related expenses. The activity in the exit
accruals related to this acquisition during the thirty-nine weeks ended June 28, 2003 were as follows:
Thirty-nine weeks
ended
June 28, 2003
-----------------------
Beginning balance $ 2,216
Cash payments (1,499)
-----------------------
Ending balance $ 717
=======================
9. RECENT ACCOUNTING PRONOUNCEMENTS
In October 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting
Standard No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" (Statement No. 144), which
is effective for financial statements issued for fiscal years beginning after December 15, 2001 and interim
periods within those fiscal years. Statement No. 144 supersedes Statement of Financial Accounting Standard No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of," and
provides a single accounting model for long-lived assets to be disposed of. The adoption of Statement No. 144
has not had a material impact on the Company's financial position and results of operations.
In April 2002, the FASB issued Statement of Financial Accounting Standard No. 145, "Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections" (Statement No. 145),
which is effective for fiscal years beginning after May 15, 2002. This Statement rescinds FASB Statement No. 4,
"Reporting Gains and Losses from Extinguishment of Debt," as well as an amendment of that Statement, FASB
Statement No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements," as debt extinguishments
are no longer classified as extraordinary items unless they meet the requirements in Accounting Principles Board
Opinion No. 30 of being unusual and infrequently occurring. The adoption of Statement No. 145 has not had a
material impact on the Company's financial position and results of operations.
In June 2002, the FASB issued Statement of Financial Accounting Standard No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities" (Statement No. 146), which is effective for exit or disposal
activities that are initiated after December 31, 2002. Statement No. 146 nullifies Emerging Issues Task Force
No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)" (EITF 94-3). Statement No. 146 requires that a liability
for a cost associated with an exit or disposal activity be recognized when the liability is incurred and
eliminates the definition and requirements of recognition of exit costs in EITF 94-3. The adoption of Statement
No. 146 will affect the timing of recognition of costs associated with any future restructuring activities.
In December 2002, the FASB issued Statement of Financial Accounting Standards Statement No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure" (Statement No. 148), which is effective for fiscal years
and interim periods beginning after December 31, 2002. Statement No. 148 amends FASB Statement No. 123,
Accounting for Stock-Based Compensation, to provide alternative methods of transition to the fair value method of
accounting for stock-based employee compensation. In addition, Statement No. 148 amends the disclosure
provisions of Statement 123 to require disclosure in the summary of significant accounting policies of the
effects of an entity's accounting policy with respect to stock-based employee compensation on reported net income
and earnings per share in annual and interim financial statements. The adoption of Statement No. 148 has not had
a material impact on the Company's financial position and results of operations.
In November 2002, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others"
(FIN 45). FIN 45 elaborates on the existing disclosure requirements for most guarantees, including loan
guarantees such as standby letters of credit. It also clarifies that at the time a company issues a guarantee,
the company must recognize an initial liability for the fair value, or market value, of the obligations it
assumes under that guarantee and must disclose that information in its interim and annual financial statements.
FIN 45 is effective on a prospective basis to guarantees issued or modified after December 31, 2002. The
requirements of FIN 45 are effective for financial statements of interim or annual periods ending after December
15, 2002. We adopted the accounting and disclosure requirements of FIN 45, which resulted in no material impact
on our financial statements.
In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities, an
interpretation of Accounting Research Bulletin No. 51" (the Interpretation). The Interpretation requires the
consolidation of entities in which an enterprise absorbs a majority of the entity's expected losses, receives a
majority of the entity's expected residual returns, or both, as a result of ownership, contractual or other
financial interests in the entity. Currently, entities are generally consolidated by an enterprise when it has a
controlling financial interest through ownership of a majority voting interest in the entity. The
Interpretation's consolidation provisions apply in the interim period beginning June 29, 2003. The Company does
not expect the Interpretation to have a material impact on its consolidated financial statements.
10. STOCK OPTION PLAN PRO FORMA INFORMATION
The Company has elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" (APB 25) and related interpretations in accounting for its employee stock options because the
alternative fair value accounting provided for under FASB Statement 123, "Accounting for Stock Based
Compensation," (Statement No. 123) requires the use of option valuation models that were not developed for use in
valuing employee stock options. Under APB 25, because the exercise price of the Company's employee stock options
equal the market price of the underlying stock on the date of grant, no compensation expense is recognized.
As discussed in Note 6, the interim information regarding pro forma net income and earnings per share is required
by Statement No. 123 and Statement No. 148. For purposes of pro forma disclosures, the estimated fair value of
the options is amortized to expense over the options' vesting period. The Company's pro forma information is as
follows (in thousands except for net income per share information):
Thirteen Thirteen
Weeks ended Weeks ended
June 28, June 29,
2003 2002
--------------- ---------------
Net loss ($30,564) ($5,631)
Pro forma compensation expense, net of tax (101) (1,776)
--------------- ---------------
Pro forma net loss ($30,665) ($7,407)
=============== ===============
Net loss per share-basic ($ 2.75) ($0.69)
Net loss per share-diluted ($ 2.75) ($0.69)
Pro forma net loss per share-basic ($ 2.76) ($0.90)
Pro forma net loss per share-diluted ($ 2.76) ($0.90)
11. SUPPLEMENTAL COMBINING CONDENSED FINANCIAL STATEMENTS
The Company's Senior Subordinated Notes, due 2008 (the "Notes") are jointly and severally guaranteed fully and
unconditionally by the Company's domestic subsidiaries which are 100% owned by Tropical Sportswear Int'l
Corporation (the "Parent"). The Company's wholly-owned foreign subsidiaries are not guarantors with respect to
the Notes and do not have any credit arrangements senior to the Notes except for their local overdraft facilities
and capital lease obligations.
The following is the unaudited supplemental combining condensed statement of operations for the thirteen weeks
and thirty-nine weeks ended June 28, 2003, and the thirteen weeks and thirty-nine weeks ended June 29, 2002, the
supplemental combining condensed balance sheet as of June 28, 2003 and September 28, 2002, and the supplemental
combining condensed statement of cash flows for the thirty-nine weeks ended June 28, 2003, and thirty-nine weeks
ended June 29, 2002. The only intercompany eliminations are the normal intercompany sales, borrowings and
investments in wholly owned subsidiaries. Separate complete financial statements of the guarantor subsidiaries
are not presented because management believes that they are not material to investors.
Thirteen Weeks Ended June 28, 2003
---------------------------------------------------------------------------------
Non-Guarantor
Statement of Operations Parent Guarantor Subsidiaries
Only Subsidiaries Eliminations Consolidated
------------ ------------- ------------ -------------- -------------
Net sales $ 50,634 $ 35,275 $ 11,679 $ (856) $ 96,732
Gross profit 6,971 (1,159) 3,317 (103) 9,026
Operating loss (2,629) (11,053) (277) - (13,959)
Interest, income taxes and other, net 12,410 4,003 192 - 16,605
Net loss (15,039) (15,056) (469) - (30,564)
Thirteen Weeks Ended June 29, 2002
-----------------------------------------------------------------------------
Non-
Statement of Operations Parent Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
--------- ------------- ------------ -------------- -------------
Net sales $ 50,435 $53,929 $12,225 $ (327) $116,262
Gross profit 12,865 14,388 4,154 - 31,407
Operating income (loss) 3,774 (8,346) (628) - (5,200)
Interest, income taxes and other, net 1,785 (560) (70) (724) 431
Net income (loss) 1,989 (7,786) (558) 724 (5,631)
Thirty-nine Weeks Ended June 28, 2003
--------------------------------------------------------------------------------
Non-Guarantor
Statement of Operations Parent Guarantor Subsidiaries
Only Subsidiaries Eliminations Consolidated
--------- ------------- ------------ --------------- ---------------
Net sales $ 151,141 $ 122,038 $36,772 ($1,453) $308,498
Gross profit 26,728 14,841 11,531 (251) 52,849
Operating income (loss) (8,553) (9,032) 1,120 - (16,465)
Interest, income taxes and other, net 11,126 6,925 428 - 18,479
Net income (loss) (19,679) (15,957) 692 - (34,944)
Thirty-nine Weeks Ended June 29, 2002
--------------------------------------------------------------------------------
Non-
Statement of Operations Parent Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
--------- ------------- ------------ --------------- ---------------
Net sales $152,158 $ 157,957 $37,467 ($699) $346,883
Gross profit 38,692 45,638 12,627 - 96,957
Operating income 16,133 (5,060) 852 - 11,925
Interest, income taxes and other, net 7,331 3,087 319 192 10,929
Net income (loss) 8,802 (8,147) 533 (192) 996
As of June 28, 2003
---------------------------------------------------------------------------------
Balance Sheet Parent Guarantor Non-Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
----------- ------------- ------------- --------------- --------------
ASSETS
Cash and cash equivalents $ 391 $ 1,130 $ 7,334 $ - $ 8,855
Accounts receivable, net 37,741 32,383 8,484 - 78,608
Inventories, net 43,150 44,857 10,732 - 98,739
Other current assets 4,391 7,637 2,880 - 14,908
----------- ------------- ------------- --------------- --------------
Total current assets 85,673 86,007 29,430 - 201,110
Property and equipment, net 47,511 6,818 2,711 - 57,040
Investment in subsidiaries and other assets 168,045 34,001 (11,397) (135,285) 55,364
----------- ------------- ------------- --------------- --------------
Total assets $301,229 $126,826 $20,744 ($ 135,285) $ 313,514
=========== ============= ============= =============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $34,777 ($ 679) $4,258 $ - $ 38,356
Current portion of long-term debt and
capital leases 261 1,003 29 - 1,293
----------- ------------- ------------- --------------- --------------
Total current liabilities 35,038 324 4,287 - 39,649
Long-term debt and noncurrent portion of
capital leases 140,929 419 99 - 141,447
Other noncurrent liabilities 1,295 8,012 107 - 9,414
Shareholders' equity 123,967 118,072 16,250 (135,285) 123,004
----------- ------------- ------------- --------------- --------------
Total liabilities and shareholders'
equity $301,229 $126,827 $20,743 ($ 135,285) $313,514
=========== ============= ============= =============== ==============
As of September 28, 2002
---------------------------------------------------------------------------------
Balance Sheet Parent Guarantor Non-Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
----------- ------------- ------------- --------------- --------------
ASSETS
Cash and cash equivalents $ 24,274 $ 167 $ 3,843 $ - $ 28,284
Marketable securities 11,100 - - - 11,100
Accounts receivable, net 44,317 36,045 10,647 - 91,009
Inventories, net 34,867 31,050 8,880 - 74,797
Other current assets 10,494 9,234 3,146 - 22,874
----------- ------------- ------------- --------------- --------------
Total current assets 125,052 76,496 26,516 - 228,064
Property and equipment, net 37,152 8,759 2,562 - 48,473
Investment in subsidiaries and other assets 135,189 68,557 (6,638) (137,437) 59,671
----------- ------------- ------------- --------------- --------------
Total assets $297,393 $153,812 $22,440 ($ 137,437) $336,208
=========== ============= ============= =============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued liabilities $43,265 $12,394 $ 5,161 $(221) $ 60,599
Current portion of long-term debt and
capital leases 274 948 29 - 1,251
----------- ------------- ------------- --------------- --------------
Total current liabilities 43,539 13,342 5,190 (221) 61,850
Long-term debt and noncurrent portion of
capital leases 107,643 1,178 101 - 108,922
Other noncurrent liabilities 1,170 7,864 30 - 9,064
Shareholders' equity 145,041 131,428 17,119 (137,216) 156,372
----------- ------------- ------------- --------------- --------------
Total liabilities and shareholders'
equity $297,393 $153,812 $22,440 ($ 137,437) $336,208
=========== ============= ============= =============== ==============
Thirty-nine Weeks Ended June 28, 2003
------------------------------------------------------------------------------
Non-
Statement of Cash Flows Parent Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
----------- ------------- ------------- -------------- ---------------
Net cash provided by (used in) operating
actvities ($ 54,033) $ 1,368 $ 2,394 $ - ($ 50,271)
Net cash used in investing activities (2,829) (568) (233) - (3,630)
Net cash provided by (used in) financing
activities 32,885 (758) (5) - 32,122
Other 94 921 1,335 - 2,350
Net increase (decrease) in cash (23,883) 963 3,491 - (19,429)
Cash and cash equivalents, beginning of
period 24,274 167 3,843 - 28,284
Cash and cash equivalents, end of period 391 1,130 7,334 - 8,855
Thirty-nine Weeks Ended June 29, 2002
--------------------------------------------------------------------------------
Non-
Statement of Cash Flows Parent Guarantor Guarantor
Only Subsidiaries Subsidiaries Eliminations Consolidated
----------- -------------- ------------- -------------- --------------
Net cash provided by operating activities $ 14,221 $ 2,026 $ 1,181 $ - $ 17,428
Net cash used in investing activities (4,287) (957) (215) - (5,459)
Net cash provided by (used in) financing
activities 27,373 (2,601) 853 - 25,625
Other (394) 1,566 - - 1,172
Net increase in cash 36,913 34 1,819 - 38,766
Cash and cash equivalents, beginning of
period 190 249 1,275 - 1,714
Cash and cash equivalents, end of period 37,103 283 3,094 - 40,480
12. CONTINGENCIES
In connection with the transition of the Company's Victorinox(R)apparel division to Swiss Army Brands, Inc.,
("Swiss Army"), Swiss Army is currently disputing certain aspects of the transition agreement and have failed to
pay approximately $4.8 million due under the transition agreement. On June 3, 2003, the Company filed a
declaratory judgment action against Swiss Army, seeking judicial interpretation of the agreement. The Company
and Swiss Army have recently agreed to mediation in an attempt to quickly resolve the issue. However, there can
be no assurance that the $4.8 million will be collected in the fourth quarter or in its entirety.
Other than the above matter, the Company is not involved in any legal proceedings, other than various claims and
lawsuits arising in the normal course of the Company's business, that the Company believes could reasonably be
expected to have a material adverse effect on the Company's business, financial position or results of operations.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the Company's results of operations is based upon our unaudited
consolidated financial statements, which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of financial statements in conformity with generally accepted
accounting principles requires that we make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. These estimates
and assumptions are based on historical and other facts believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ materially from these estimates under
different assumptions or conditions. We have chosen accounting policies that we believe are appropriate to
accurately and fairly report our operating results and financial position, and we apply those accounting policies
in a consistent manner. We have identified the policies below as critical to our business operations and the
understanding of our results of operations.
Critical Accounting Policies
Inventories - Inventories are stated at the lower of cost or market. Cost is determined using the first-in,
first-out method. We evaluate our inventory by style, color and size to determine excess or slow moving product
based on projected sales. We record provisions for markdowns and losses on excess and slow-moving inventory to
the extent the cost of inventory exceeds estimated net realizable value. If actual market conditions or
competitive pressures change, the level of inventory reserves would change.
Reserve for Allowances and Doubtful Accounts - Accounts receivable consists of amounts due from our customers
from our normal business activities. We maintain a reserve for allowances and doubtful accounts, which is based
on historical collection and deduction write-off experience, and an estimate of potential sales returns.
Estimates for sales returns include provision for order shortages, purchase order variances and other customer
discrepancies. For fiscal 2002, we did not provide a reserve for credit losses as substantially all of our
receivables were assigned under factoring agreements, without recourse, except for credit losses on the first
0.10% of amounts factored. During fiscal 2003, we have discontinued factoring of our receivables, but have
maintained credit insurance for those accounts which we deem necessary. We will continue to assess the adequacy
of our reserves based on qualitative and quantitative measures.
Long-Lived Assets - We estimate the depreciable lives of our property, plant and equipment and review them for
impairment when events or circumstances indicate that their carrying amounts may be impaired. Most of our
property, plant and equipment is used in our cutting and distribution processes. We periodically evaluate the
carrying value of assets which are held for sale to determine if, based on market conditions, the values of these
assets should be adjusted. Although we believe we have appropriately recorded our assets held for sale at their
estimated realizable value, net of estimated disposal costs, the actual sale of these assets could result in
gains or losses which could differ from our estimated amounts. To assess the recoverability of goodwill and
other intangible assets, we make assumptions regarding estimated future cash flows and other factors to determine
whether the carrying values are recoverable from operations. If these assumptions or estimates change, we may be
required to record impairment charges to reduce the value of these assets.
Valuation Allowances for Deferred Tax Assets - Valuation allowances are recorded to reduce deferred tax assets
if, based on the weight of the evidence, it is more likely than not that some or all of the deferred tax assets
will not be realized. The evidence considered in making that determination includes, offsetting deferred tax
liabilities, future taxable income, as well as prudent tax planning strategies. We have recorded deferred income
tax assets related to state net operating loss carry forwards, foreign net operating loss carry forwards, foreign
tax credit carry forwards and certain other accruals. We have recorded valuation allowances to reduce the
deferred tax assets relating to these operating loss carry forwards and accruals based on an evaluation of the
benefits expected to be realized. If we determine that we would be able to realize more of our net deferred tax
assets than we currently expect, we would reduce the valuation allowance, which would have the effect of
increasing income in the period that we make the determination. Conversely, if we determine that we will not be
able to realize all or part of our net deferred tax assets in the future, we will increase the valuation
allowance, which would have the effect of reducing income in the period that we make the determination.
Contingencies - The Company accrues for contingent obligations, including estimated legal costs, when the
obligations are probable and the amount is reasonably estimable. As facts concerning contingencies become known,
we reassess our position and make appropriate adjustments to the financial statements. Estimates that are
particularly sensitive to future changes include tax, legal and other regulatory matters such as imports and
exports, which are subject to change as events evolve and as additional information becomes available during the
administrative and litigation process.
Results of Operations
On April 18, 2002 we announced a plan to consolidate the administrative, cutting and related functions of the
Savane division in El Paso, Texas into the Tampa, Florida facility. We have completed all aspects of this
consolidation in the fiscal quarter ending March 29, 2003. As part of the consolidation, we vacated our El Paso,
Texas administration building and cutting facility. We experienced delays and difficulties in consolidating our
El Paso, Texas cutting functions into our Tampa, Florida facilities that have resulted in delays in delivering
products to our customers and lost sales in our first quarter and second quarters of fiscal 2003. In addition,
during the first six months of fiscal 2003, we recorded sales allowances of approximately $5.6 million related to
delivery issues associated with the consolidation project.
In May 2003, we transitioned our Victorinox(R)apparel division to Swiss Army. On June 2, 2003 we sold the Duck
Head(R)trademarks to Goody's Family Clothing, Inc. ("Goody's") for $4.0 million in cash. Under the purchase
agreement, the Company will continue to sell existing Duck Head(R)inventory for a period of time and that Goody's
will purchase certain remaining inventory from the Company no later than October 1, 2003. Goody's has also
assumed all licenses associated with the Duck Head(R)trademarks. On January 20, 2003, we announced our intention
to exit our Duck Head(R)retail outlet business as leases expire. With the sale of the Duck Head(R) trademarks, the
timing of this exit will be accelerated and substantial portion of the $4.0 million in proceeds will be used for
the accelerated closure. All retail outlet stores are expected to be closed no later than September 2003. Duck
Head(R), Duck Head(R) retail outlets and Victorinox(R) represent less than 5% of our total Fiscal 2003 year to date
net sales. We believe that exiting these businesses will free up valuable resources that can be devoted to our
core business.
We have continued the realignment of our business by disposing of the unprofitable businesses noted above and
reducing operating expenses. We have also completed the transition of our Mexico production to the Dominican
Republic.
The following table sets forth, for the periods indicated, selected items in the Company's consolidated
statements of income expressed as a percentage of net sales:
Thirteen Thirteen Thirty-nine Thirty-nine
Weeks ended Weeks ended Weeks ended Weeks ended
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
-------------- --------------- ---------------- --------------
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 90.7 73.0 82.9 72.0
-------------- --------------- ---------------- --------------
Gross profit 9.3 27.0 17.1 28.0
Selling, general and administrative 21.3 20.9 20.4 21.0
expenses
Other charges 2.4 10.6 2.0 3.6
-------------- --------------- ---------------- --------------
Operating income (loss) (14.4) (4.5) (5.3) 3.4
Interest expense, net 3.2 2.9 2.8 3.0
Other, net 0.2 (0.1) (0.2) (0.2)
-------------- --------------- ---------------- --------------
Income (loss) before income taxes (17.8) (7.3) (7.9) 0.6
Provision (benefit) for income taxes (13.8) (2.5) (3.4) 0.3
-------------- --------------- ---------------- --------------
Net income (loss) (31.6)% (4.8)% (11.3)% 0.3%
============== =============== ================ ==============
Thirteen weeks ended June 28, 2003 compared to the thirteen weeks ended June 29, 2002
Net Sales. Net sales decreased to $96.7 million for the third quarter of fiscal 2003 from $116.3
million in the comparable prior year quarter. The decrease was primarily due to a decrease in units shipped and
a decrease in average price per unit as a result of the poor retail environment. Net sales were also impacted by
higher than normal levels of returns and allowances.
Gross Profit. Gross profit decreased to $9.0 million, or 9.3% of net sales, for the third quarter of
fiscal 2003, from $31.4 million, or 27.0% of net sales, for the comparable prior year quarter. The reduction in
the gross margin was due to a combination of factors including lower average selling prices and higher than
normal levels of excess inventory sold at discounted prices. Additionally, the market for excess inventory has
become much more competitive as many other suppliers are actively disposing of excess inventory. The lower
market prices caused us to record higher reserves for remaining excess inventory. Lastly, sales of higher margin
branded products were a lower portion of this year's sales.
Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased to
$20.6 million, or 21.3% of net sales, for the third quarter of fiscal 2003, from $24.3 million, or 20.9% of net
sales, for the comparable prior year quarter. The decrease in operating expenses was primarily due to successful
cost cutting measures, including reduced compensation, advertising and other discretionary spending reductions.
Other Charges. Other charges of $2.4 million was comprised of a $2.8 million estimated loss on the sale
of one of our corporate aircraft, $2.2 million related to reserves for contract disputes/litigations, $0.8 million
related to partial termination costs for our Duck Head(R)retail outlet business and $0.2 million for investment
banking advisory fees, offset in part by a $3.7 million gain on the sale of the Duck Head(R)trademarks.
Interest Expense. Interest expense decreased to $3.0 million for the third quarter of fiscal 2003, from
$3.5 million for the comparable prior year quarter. The decrease was primarily due to lower average outstanding
borrowings.
Income Taxes. We currently have $19.5 million of net deferred tax assets comprised of temporary timing
differences of future deductible expenses and net operating losses available to offset future taxable income in
the United States. After review of the provisions of Statement of Financial Accounting Standards No. 109
("Accounting for Income Taxes"), we have provided a full valuation allowance against these assets. That valuation
allowance of $19.5 million is included in our third quarter income tax provision as a non-cash increase to tax
expense. The use of these deferred tax assets to offset taxable profits in future years would result in a
reduction in our effective tax rate in those future years.
Thirty-nine weeks ended June 28, 2003 compared to the thirty-nine weeks ended June 29, 2002
Net Sales. Net sales decreased to $308.5 million for the thirty-nine weeks ended June 28, 2003 from
$346.9 million in the comparable prior year period. This decrease was primarily due to a decrease in the average
selling prices, and higher than normal levels of returns and allowances including approximately $5.6 million of
customer allowances due to production delay issues related to Project Synergy.
Gross Profit. Gross profit decreased to $52.8 million, or 17.1% of net sales, for the thirty-nine weeks
ended June 28, 2003, from $97.0 million, or 28.0% of net sales, for the comparable prior year period. The
reduction in the gross margin percentage was due to a combination of factors including lower average selling
prices and higher than normal amounts of excess inventory sold at discounted prices. Additionally, the market
for excess inventory has become much more competitive as many other suppliers are actively disposing of excess
inventory. The lower market prices caused us to record higher reserves for remaining excess inventory. Lastly,
sales of higher margin branded products were a lower portion of this year's sales.
Selling, General and Administrative Expenses. Selling, general and administrative expenses decreased to
$63.2 million, or 20.4% of net sales, for the thirty-nine weeks ended June 28, 2003, from $72.7 million, or 21.0%
of net sales, for the comparable prior year period. The decrease in operating expenses was primarily due to
successful cost cutting measures, including reduced compensation, advertising and other discretionary spending
reductions.
Other Charges. Other charges of $6.1 million was comprised of a $5.3 million charge related to a
separation agreement with our former chief executive officer, $2.8 million estimated loss on the sale of one of
our corporate aircraft, $2.2 million related to reserves for contract disputes/litigations, $0.8 million related
to partial termination costs for our Duck Head(R)retail outlet business and $0.2 million for investment banking
advisory fees, offset in part by a $3.7 million gain on the sale of the Duck Head(R) trademarks and a $1.5 million
reduction to previously recorded estimates for severance, relocation, and lease termination costs related to
Project Synergy.
Interest Expense. Interest expense decreased to $8.7 million for the thirty-nine weeks ended June 28,
2003, from $10.7 million for the comparable prior year period. The decrease was primarily due to lower average
outstanding borrowings.
Income Taxes. We currently have $19.5 million of net deferred tax assets comprised of temporary timing
differences of future deductible expenses and net operating losses available to offset future taxable income in
the United States. After review of the provisions of Statement of Financial Accounting Standards No. 109
("Accounting for Income Taxes"), we have provided a full valuation allowance against these assets. That valuation
allowance of $19.5 million is included in our third quarter income tax provision as a non-cash increase to tax
expense. The use of these deferred tax assets to offset taxable profits in future years would result in a
reduction in our effective tax rate in these years.
Liquidity and Capital Resources
On June 6, 2003, we renewed our revolving credit line (the "Facility"). The Facility provides for borrowings of
up to $95.0 million, subject to certain borrowing base limitations. Borrowings under the Facility bear variable
rates of interest based on LIBOR plus an applicable margin (3.7% at June 28, 2003) and are secured by
substantially all of the Company's domestic assets. The Facility matures in June 2006. Under the terms of the
Facility, the Company is only subject to financial covenants when availability is below $20.0 million. As of June
28, 2003, $42.1 million was available for borrowings under the Facility.
As of June 28, 2003, the Company violated certain of the financial covenants associated with a real estate loan,
held by Bank of America, and was in technical default under terms of the real estate loan and in technical default
under the terms of the Facility, due to the cross default provision. Fleet Capital has agreed to assume this
real estate loan and eliminate all financial covenants. Additionally, all other lenders in the Facility agreed to
waive the cross default provision that was triggered by the default on the real estate loan. The Company is party
to an interest rate swap agreement which had the effect of fixing the interest rate on $7.0 million of the real
estate loan. The Company will terminate the interest rate swap agreement concurrent with Fleet Capital assuming
the loan and record a charge in the fourth quarter of approximately $1.2 million to terminate the interest rate
swap.
Capital expenditures totaled $15.0 million for the thirty-nine weeks ended June 28, 2003 and are expected to
approximate $16.0 to $17.0 million for the entire fiscal year. The expenditures expected for the remainder of the
fiscal year primarily relate to the upgrade or replacement of various other equipment and computer systems
including hardware and software.
During the thirty-nine weeks ended June 28, 2003, we used $50.3 million of cash in our operations. This was
primarily the result of a net loss of $34.9 million (which included non-cash expenses of $14.9 million), an
increase in inventories of $23.9 million, a decrease in accounts receivable of $12.4 million, a decrease in
prepaid expenses and other current assets of $2.7 million, and a decrease in accounts payable and accrued expenses
of $21.5 million.
In connection with the disposal of our two corporate aircraft, we expect to use approximately $5.0 to $5.5
million of cash to terminate the underlying leases. We expect this to occur during our fourth quarter. In
connection with the final closure of our Duck Head(R)retail outlet stores, we expect to use approximately $1.5 to
$2.0 million of cash associated with lease terminations and severance. We expect this to also occur during our
fourth quarter.
In connection with the transition of our Victorinox(R)apparel division to Swiss Army Brands, Inc., ("Swiss Army"),
Swiss Army is currently disputing certain aspects of the transition agreement and have failed to pay us
approximately $4.8 million due to us under the transition agreement. On June 3, 2003, we filed a declaratory
judgment action against Swiss Army, seeking judicial interpretation of the agreement. We and Swiss Army have
recently agreed to mediation in an attempt to quickly resolve the issue. However, there can be no assurance that
the $4.8 million will be collected in the fourth quarter or in its entirety.
Our estimate of capital needs is subject to a number of risks and uncertainties that could result in additional
capital needs that have not been anticipated. An important source of capital is our ability to begin to generate
positive cash flow from operations. This is dependent upon our ability to increase revenues, to generate
adequate gross profit from those sales, to reduce excess inventories and to control costs and expenses. Another
important source of capital is our ability to borrow under the Facility. We have violated certain covenants in
our borrowing agreements, and to this point, we have been able to obtain waivers from our lenders allowing us
continued access to this source of capital. However, there can be no assurances that we will be able to obtain
waivers from our lenders should a violation occur in the future. Although there can be no assurances, we believe
that our existing working capital and borrowings available under our Facility provide sufficient resources to
support current business activities.
Seasonality
Our business has been generally seasonal, with higher sales and income in the second and third fiscal quarters.
Also, some of our products, such as shorts and corduroy pants, tend to be seasonal in nature. If these types of
seasonal products represent a greater percentage of our sales in the future, the seasonality of our sales may be
increased. This could alter the differences in sales and income levels in the second and third fiscal quarters
from the first and fourth fiscal quarters.
Factors Affecting the Company's Business and Prospects
This report contains forward-looking statements subject to the safe harbor created by the Private Securities
Litigation Reform Act of 1995. Management cautions that these statements represent projections and estimates of
future performance and involve certain risks and uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain factors including, without
limitation: negative effects resulting from increased inventory levels; difficulties in achieving continued
operating efficiencies; disruptions in the business associated with the consolidation of the cutting and
administrative functions of the Savane division from El Paso, Texas to Tampa, Florida; loss or reduction of
customer programs or customers generally; loss of programs or customers as a result of product delivery problems;
failure to achieve the planned cost savings associated with the consolidation and reorganization; failure of our
customers to accept our post-consolidation integrated production and selling of products; disruptions in the
business associated with changes in management; potential negative effects from the termination of the
Victorinox(R)license agreement and the transition of this business to Swiss Army Brands, Inc.; potential negative
effects on existing customer relationships of selling the Duck Head(R)trademarks; the potential negative effects
resulting from our decision to more quickly exit out of our Duck Head(R)retail outlet business; potential negative
effects of loan agreement covenant violations, should any occur; potential negative effects of transitioning a
majority of our production from Mexico to the Dominican Republic; restrictions and limitations placed on us by
our debt instruments; general economic conditions, including but not necessarily limited to, recession or other
cyclical effects impacting our customers in the United States or abroad, changes in interest rates or currency
exchange rates; potential changes in demand in the retail market; reduction in the level of the consumer
spending; customer or consumer rejection or non acceptance of major product initiatives such as our Savane(R)
Motion Moves With You(TM)pant; the availability and price of raw materials and global manufacturing costs and
restrictions; increases in costs; the continued acceptance of our existing and new products by our major
customers; the financial strength of our major customers; our inability to continue to use certain licensed
trademarks and tradenames, including Bill Blass(R)and Van Heusen(R); business disruptions and costs arising from
acts of terrorism or other military activities around the globe; and other risk factors listed from time to time
in our SEC reports, filings and announcements, including our Annual Report on Form 10-K. In addition, the
estimated financial results for any period do not necessarily indicate the results that may be expected for any
future period, and we undertake no obligation to update them.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Our market risk is primarily limited to fluctuations in interest rates as it pertains to our borrowings under the
Facility and the Real Estate Loan. There have been no material changes to the Item 7A disclosure made in our
Annual Report on Form 10-K for the fiscal year ended September 28, 2002.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our
disclosure controls and procedures (as such term is defined in Rules 13a-14(c) and 15d-14(c)
under the Securities Exchange Act of 1934, as amended) as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"). Based on such evaluation, our
Chief Executive Officer and Chief Financial Officer have concluded that as of the Evaluation
Date, our disclosure controls and procedures provide reasonable assurance that they are alerted
on a timely basis to material information relating to Tropical Sportswear Int'l Corporation
(including its consolidated subsidiaries) required to be included in our reports filed or
submitted under the Securities Exchange Act of 1934, as amended.
(b) Changes in Internal Controls
Since the Evaluation Date, there have not been any changes in our internal controls or other
factors that could significantly affect such controls.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) The Exhibits to this report on Form 10-Q are listed on the Exhibit Index, which immediately
follows the signature page hereto.
(b) Reports on Form 8-K
On June 2, 2003, Tropical Sportswear Int'l Corporation issued a press release to announce the
sale of the Duck Head(R)trademarks to Goody's Family Clothing, Inc. and that the Company had
retained Merrill Lynch & Co. to assist in the evaluation of strategic alternatives for maximizing
shareholder value.
SIGNATURES
Pursuant to the requirements 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.
TROPICAL SPORTSWEAR INT'L CORPORATION
-------------------------------------
(Registrant)
/s/ N. Larry McPherson
N. Larry McPherson
Executive Vice President,
Chief Financial Officer,
and Treasurer
(in the dual capacity of duly authorized
officer and principal accounting officer)
August 4, 2003
Index to Exhibits
Exhibit
Number Description
- ------ -----------
*3.1 Amended and Restated Articles of Incorporation of Tropical Sportswear Int'l Corporation (filed
as Exhibit 3.1 to Tropical Sportswear Int'l Corporation's Form 10-Q filed May 14, 2002).
*3.2 Amended and Restated By-Laws of Tropical Sportswear Int'l Corporation (filed as Exhibit 3.2 to
Tropical Sportswear Int'l Corporation's Form 10-Q filed August 12, 2002).
*4.1 Specimen Certificate for the Common Stock of Tropical Sportswear Int'l Corporation (filed as
Exhibit 4.1 to Amendment No. 1 to Tropical Sportswear Int'l Corporation's Registration
Statement on Form S-1 filed October 2, 1997).
*4.2 Shareholders' Agreement dated as of September 29, 1997 among Tropical Sportswear Int'l
Corporation, William W. Compton, the Compton Family Limited Partnership, Michael Kagan, the
Kagan Family Limited Partnership, Shakale Internacional, S.A. and Accel, S.A. de C.V. (filed as
Exhibit 4.2 to Amendment No. 1 to Tropical Sportswear Int'l Corporation's Registration
Statement on Form S-1 filed October 2, 1997).
*4.3 Indenture dated as of June 24, 1998 among Tropical Sportswear Int'l Corporation, the Subsidiary
Guarantors named therein, and SunTrust Bank, Atlanta, as trustee (filed as Exhibit 4.4 to
Tropical Sportswear Int'l Corporation's Registration Statement on Form S-4 filed August 20,
1998).
*4.4 Shareholder Protection Rights Agreement, dated as of November 13, 1998, between Tropical
Sportswear Int'l Corporation and Firstar Bank Milwaukee, N.A. (which includes as Exhibit B
thereto the Form of Right Certificate) (filed as Exhibit 99.1 of Tropical Sportswear Int'l
Corporation's current report on Form 8-K dated November 13, 1998).
*4.5 Supplemental Indenture No. 1 dated as of August 23, 2000 among Tropical Sportswear Int'l
Corporation, each of the New Subsidiary Guarantors named therein, and SunTrust Bank, Atlanta,
as trustee (filed as Exhibit 4.5 to Tropical Sportswear Int'l Corporation's Annual Report on
Form 10-K filed December 19, 2000).
10.1 Amended and Restated Loan and Security Agreement with Fleet Capital Corporation dated June 6,
2003 (filed herewith).
10.2 Asset Purchase Agreement by and among Goody's Family Clothing, Inc., TSI Brands, Inc., and
Tropical Sportswear Int'l Corporation dated May 30,2003 (filed herewith).
31.1 Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14 and
15d-14 as adopted pursuant to section 302 of the Sarbanes-Oxley act of 2002.
31.2 Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14 and
15d-14 as adopted pursuant to section 302 of the Sarbanes-Oxley act of 2002.
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to section 906 of the Sarbanes-Oxley act of 2002.
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to section 906 of the Sarbanes-Oxley act of 2002.
* Incorporated by reference.