UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 21, 2004
HARTMARX CORPORATION
(Exact name of registrant as specified in charter)
DELAWARE 1-8501 36-3217140
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
101 North Wacker Drive
Chicago, Illinois 60606
(Address of principal executive offices) (Zip Code)
(312) 372-6300
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
ITEM 12. Results of Operations and Financial Condition.
On January 21, 2004, Hartmarx Corporation (the "Company")
issued the press release attached hereto as Exhibit 99.1.
The information furnished pursuant to this Current Report on
Form 8-K (including the exhibit hereto) shall not be considered "filed" under
the Securities Exchange Act of 1934, as amended, nor shall it be incorporated
by reference into future filings by the Company under the Securities Act of
1933, as amended, or under the Securities Exchange Act of 1934, as amended,
unless the Company expressly sets forth in such future filing that such
information is to be considered "filed" or incorporated by reference therein.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
HARTMARX CORPORATION
By: /s/ Taras R. Proczko
-------------------------------
Taras R. Proczko
Senior Vice President
Dated: January 21, 2004
EXHIBIT LIST
Exhibit Number Description
---------------------------------
99.1 Press Release dated January 21, 2004
EXHIBIT 99.1
FOR IMMEDIATE RELEASE Contact: Erin Gaffney 212-840-4771
Web Site: www.hartmarx.com
HARTMARX REPORTS SIGNIFICANTLY HIGHER 2003 ANNUAL EARNINGS;
ANTICIPATES ANOTHER YEAR OF STRONG EARNINGS IMPROVEMENT IN 2004
CHICAGO, January 21, 2004 - - Hartmarx Corporation (NYSE: HMX) today reported
operating results for its fourth quarter and year ended November 30, 2003. Full
year sales were $561.8 million compared to $570.3 million in 2002. Net earnings
improved to $8.7 million or $.26 per basic share and $.25 per diluted share in
2003 compared to net earnings of $.9 million or $.02 per basic and diluted
share last year. Fourth quarter results in 2003 reflected revenues of $151.5
million and net earnings of $3.1 million or $.09 per basic and diluted share.
Last year's fourth quarter revenues were $151.1 million with earnings per basic
and diluted share of $.08.
Homi B. Patel, president and chief executive officer of Hartmarx,
commented, "In April this year, at our Stockholders' meeting, we announced
three financial goals for 2003. We are pleased that we achieved all three.
First, we had a significant improvement in earnings per share from $.02 in 2002
to $.25, exceeding First Call's original estimate by $.02. Second, debt was
reduced by $19.0 million from a year ago exceeding our $15.0 million goal.
Year-end debt of $104.4 million is at its lowest level in well over a decade.
Finally, we had a small sales increase of $2.7 million in the second half of
the year. Frankly, we were disappointed that we were not sales positive for the
full year, but poor retail conditions for most of the year precluded that
accomplishment. Our improved operating results over the past two years has
resulted from a combination of higher gross margin, a reduction in operating
expenses and a very substantial decrease in interest costs. Improved sourcing,
optimal utilization of domestic manufacturing factories and elimination of
duplicate back office functions have all contributed to the improvement, and we
intend to continue to fine tune all of these areas in 2004."
"The improving economy and stock market recovery in recent months are
encouraging, although consumer spending for apparel in department store
channels still remains sluggish. We are currently estimating that our fiscal
2004 revenues will increase in the low to mid single digits and that earnings
should increase by 25% to 40%. These estimates exclude the impact of any future
acquisitions," Mr. Patel concluded.
--more--
The full year gross margin rate in 2003 improved to 30.2% compared to
28.8% in 2002. The current year reflected proportionately higher men's
sportswear and womenswear sales compared to tailored clothing product
categories. Tailored clothing gross margins reflected excellent manufacturing
utilization and increased off-shore sourcing. Gross margins last year were
favorably impacted by lower inventory quantities valued under the LIFO method.
Selling, general and administrative expenses of $148.8 million declined $1.4
million reflecting further headcount reductions during the year, partially
offset by higher expenses associated with men's sportswear and women's product
categories relative to tailored clothing. Earnings before interest and taxes
("EBIT") were $22.6 million in 2003 compared to $21.1 million in 2002. As
previously reported, EBIT results for 2002 were favorably impacted by $4.5
million of litigation settlement proceeds, less $.4 million of restructuring
charges.
Interest expense for the full year declined significantly to $7.4
million in 2003 from $15.5 million in 2002, principally attributable to a lower
effective interest rate resulting from the August 2002 refinancing and
subsequent repayments of high-cost debt. Results for 2003 also included the $.8
million first quarter pre-tax refinancing charge associated with the January
2003 early retirement of the remaining 12.5% senior unsecured notes,
representing the non-cash write-off of unamortized debt discount and financing
fees; last year's results included $4.2 million of refinancing charges and
write-offs associated with the August 2002 refinancing of the Company's senior
credit facility and subsequent early retirement in November 2002 of a portion
of the then outstanding 12.5% senior unsecured notes. At November 30, 2003,
total debt of $104.4 million declined $19.0 million from $123.4 million at
November 30, 2002. Further debt reduction from operating activities is
anticipated during 2004.
Fourth quarter revenues of $151.5 million in 2003 were slightly ahead
of the fourth quarter of 2002. EBIT was $6.7 million compared to last year's
$9.4 million; fourth quarter results for 2002 included favorable effects from
the liquidation of inventory quantities valued under the LIFO inventory method
carried at lower costs prevailing in prior years, as well as a favorable
restructuring adjustment of $.5 million. The fourth quarter of 2002 also
included $1.4 million of refinancing expense associated with the early
retirement of senior unsecured notes, as discussed above. After consideration
of interest, refinancing expense and income taxes, fourth quarter net earnings
were $3.1 million or $.09 per share in 2003 compared to $3.0 million or $.08
per share in 2002.
Hartmarx produces and markets business, casual and golf apparel under
its own brands including Hart Schaffner & Marx, Hickey-Freeman, Palm Beach,
Coppley, Cambridge, Keithmoor, Racquet Club, Naturalife, Pusser's of the West
Indies, Royal, Brannoch, Riserva, Sansabelt, Barrie Pace and Hawksley & Wight.
In addition, the Company has certain exclusive rights under licensing
agreements to market selected products under a number of premier brands such as
Austin Reed, Tommy Hilfiger, Kenneth Cole, Burberry men's tailored clothing,
Ted Baker, Bobby Jones, Jack Nicklaus, Claiborne, Evan-Picone, Pierre Cardin,
Perry Ellis, Andrea Jovine and KM by Krizia. The Company's broad range of
distribution channels includes fine specialty and leading department stores,
value-oriented retailers and direct mail catalogs.
--more--
The comments set forth above contain forward-looking statements made
in reliance upon the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements can be
identified by the use of forward-looking terminology such as "anticipate,"
"believe," "continue," "estimate," "expect," "intend," "may," "should" or
"will" or the negatives thereof or other comparable terminology.
Forward-looking statements are not guarantees as actual results could differ
materially from those expressed or implied in such forward-looking statements
as a result of certain factors, including those factors set forth in Hartmarx's
filings with the Securities and Exchange Commission ("SEC"). The statements
could be significantly impacted by such factors as the level of consumer
spending for men's and women's apparel, the prevailing retail environment, the
Company's relationships with its suppliers, customers, licensors and licensees,
actions of competitors that may impact the Company's business, possible
acquisitions and the impact of unforeseen economic changes, such as interest
rates, or in other external economic and political factors over which the
Company has no control. The reader is also directed to the Company's periodic
filings with the SEC for additional factors that may impact the Company's
results of operations and financial condition. The Company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
-- Financial Summary Follows --
HARTMARX CORPORATION
--- UNAUDITED FINANCIAL SUMMARY --
(000's omitted, except per share amounts)
Statement of Earnings Twelve Months Ended November 30, Three Months Ended November 30,
2003 2002 2003 2002
--------- --------- --------- ---------
Net sales $ 561,849 $ 570,300 $ 151,476 $ 151,093
Licensing and other income 1,898 2,723 366 971
--------- --------- --------- ---------
563,747 573,023 151,842 152,064
--------- --------- --------- ---------
Cost of goods sold 392,350 405,822 103,132 102,120
Selling, general & administrative
expenses 148,788 150,201 41,966 41,087
Restructuring charge - 366 - (504)
Settlement proceeds re:
termination of systems project - (4,500) - -
--------- --------- --------- ---------
541,138 551,889 145,098 142,703
--------- --------- --------- ---------
Earnings before interest and taxes 22,609 21,134 6,744 9,361
Interest expense 7,429 15,509 1,889 3,081
Refinancing expense 795 4,202 - 1,401
--------- --------- --------- ---------
Earnings before taxes 14,385 1,423 4,855 4,879
Tax provision (5,680) (557) (1,765) (1,920)
--------- --------- --------- ---------
Net earnings $ 8,705 $ 866 $ 3,090 $ 2,959
========= ========= ========= =========
Earnings per share:
Basic $ .26 $.02 $.09 $.08
Diluted $ .25 $.02 $.09 $.08
Average shares: Basic 34,063 33,577 34,283 34,248
Diluted 34,456 33,662 35,187 34,333
* * *
November 30
-----------------------------
Condensed Balance Sheet 2003 2002
----------- -----------
Cash $ 2,964 $ 6,854
Accounts receivable, net 117,778 126,221
Inventories 124,010 115,175
Other current assets 19,834 17,912
--------- ---------
Current Assets 264,586 266,162
Other assets, including goodwill 31,023 30,317
Deferred taxes 53,572 61,722
Prepaid and intangible pension asset 60,871 64,527
Net fixed assets 29,323 32,555
--------- ---------
Total $ 439,375 $455,283
========= =========
Accounts payable and accrued expenses $ 78,342 $83,875
Total debt 104,404 123,364
Minimum pension liability 64,178 69,473
Shareholders' equity 192,451 178,571
--------- ---------
Total $ 439,375 $455,283
========= =========
Book value per share $5.49 $5.21
===== =====
In accordance with SFAS No. 145, financial results for 2002 reflect the reclassification of the
extraordinary items associated with the refinancing of the Company's Senior Credit Facility and early
retirement of senior unsecured notes to a separate line, "Refinancing Expense", in the Statement of
Earnings.
This information is preliminary and may be changed prior to filing Form 10-K. Accordingly, no investment
decisions should be based solely on this data.