-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H9Xy9C8fsh8kagIU/5AqvgKCycs2fLCswKX1r9prVP/vdw8CFzIiVuReQheHUG2j 03del7oB+bvyLRaWNKk+7Q== 0000914760-02-000161.txt : 20020909 0000914760-02-000161.hdr.sgml : 20020909 20020909170129 ACCESSION NUMBER: 0000914760-02-000161 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020625 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020909 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KELLWOOD CO CENTRAL INDEX KEY: 0000055080 STANDARD INDUSTRIAL CLASSIFICATION: WOMEN'S, MISSES', AND JUNIORS OUTERWEAR [2330] IRS NUMBER: 362472410 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-07340 FILM NUMBER: 02759785 BUSINESS ADDRESS: STREET 1: 600 KELLWOOD PKWY STREET 2: P O BOX 14374 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145763100 MAIL ADDRESS: STREET 1: 600 KELLYWOOD PKWY STREET 2: P O BOX 14374 CITY: ST LOUIS STATE: MO ZIP: 63178 8-K/A 1 k020288ka.txt SEPTEMBER 5, 2002 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of Earliest Event Reported): June 25, 2002 KELLWOOD COMPANY (Exact name of registrant as specified in its charter) Delaware 001-07340 362472410 (State of Incorporation) (Commission File Number) (IRS Employer Identification No.) 600 Kellwood Parkway, St. Louis, Missouri 63017 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (314) 576-3100 Item 2. Acquisition or Disposition of Assets. On June 25, 2002, Kellwood Company, a Delaware corporation ("Kellwood") completed its exchange offer for all of the outstanding common stock of Gerber Childrenswear, Inc. ("Gerber"), pursuant to an Agreement and Plan of Merger dated May 15, 2002 (the "Merger Agreement"). Kellwood acquired approximately 96% of the shares of common stock of Gerber in the exchange offer. Pursuant to the Merger Agreement, on June 26, 2002, Gerber was merged with and into Cradle, Inc., a wholly-owned subsidiary of Kellwood (the "Merger"). As a result of the Merger, Gerber has become a subsidiary of Kellwood and the remaining outstanding shares of Gerber common stock (except for shares held by Kellwood or Cradle, Inc.) were converted into the right to receive 0.11823 shares of Kellwood common stock and $3.42 cash. The issuance of Kellwood common stock in the Merger was registered under the Securities Act of 1933, as amended, on a Form S-4 (File No. 333-88962) filed with the Securities and Exchange Commission on May 23, 2002, and as thereafter amended on June 20, 2002 (the "Registration Statement"). The Registration Statement was declared effective on June 21, 2002. Kellwood filed a Current Report on Form 8-K reporting the execution of the Merger Agreement, which Current Report is incorporated herein by reference. Under Item 7 of such Current Report, Kellwood undertook to file the financial information required by Item 7(a) and Item 7(b) of Form 8-K by amendment to such Current Report within the time proscribed in Item 7. Set forth below as part of this Amendment No. 1 to the Current Report is such financial information required by Item 7(a) and Item 7(b) of Form 8-K. Item 7. Financial Statements and Exhibits (a) Financial Statements of Business Acquired. The consolidated financial statements of Gerber Childrenswear, Inc. required by this item have been previously reported with the Commission and are contained in Gerber's annual report on Form 10-K for the fiscal year ended December 31, 2001 and Quarterly Report on Form 10-Q for the quarterly period ended March 30, 2002, and both of which are incorporated herein by reference. (b) Pro Forma Financial Information. -2- INTRODUCTION TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS The following unaudited pro forma combined condensed financial statements have been prepared to give effect to the proposed merger of Kellwood and Gerber using the purchase method of accounting and the assumptions and adjustments described in the accompanying notes to unaudited pro forma combined condensed financial statements. These pro forma statements were prepared as if the Merger had been completed as of February 1, 2001 for statement of operations purposes and April 30, 2002 for balance sheet purposes. The unaudited pro forma combined condensed financial statements are presented for illustrative purposes only and are not necessarily indicative of the financial position or results of operations that would have actually been reported had the Merger occurred February 1, 2001 for statement of operations purposes and April 30, 2002 for balance sheet purposes, nor is it necessarily indicative of the future financial position or results of operations. The pro forma combined condensed financial statements include adjustments, which are based upon preliminary estimates, to reflect the allocation of the purchase price to the acquired assets and liabilities of Gerber, before any integration adjustments. The final allocation of the purchase price will be determined after the completion of the Merger and will be based upon actual tangible and intangible assets acquired as well as liabilities assumed. Because the unaudited pro forma combined condensed financial statements are based upon preliminary estimates, the pro forma adjustments may differ materially based upon the final allocation. These unaudited pro forma combined condensed financial statements are based upon the respective historical consolidated financial statements of Kellwood and Gerber and should be read in conjunction with the historical consolidated financial statements of Kellwood and Gerber and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the reports and other information Kellwood and Gerber have on file with the SEC. -3- KELLWOOD COMPANY UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET APRIL 30, 2002 ($ IN MILLIONS)
HISTORICAL ------------------------------------ KELLWOOD GERBER APRIL 30, MARCH 30, PRO FORMA PRO FORMA 2002 2002 ADJUSTMENTS COMBINED ---------------- ---------------- -------------- ------------- ASSETS: Current assets: Cash........................... $ 152.1 $ 42.9 ($ 69.8) (1) $ 125.2 Receivables, net............... 331.2 32.9 364.1 Inventories, net .............. 269.7 47.9 2.0 (7) 319.6 Prepaid taxes and expenses..... 32.3 7.9 40.2 ---------------- ---------------- -------------- ------------- Total current assets.................. 785.3 131.6 (67.8) 849.1 ---------------- ---------------- -------------- ------------- Property, plant and equipment......... 277.0 53.0 (22.3) (6) 307.7 less accumulated depreciation & amortization....................... (172.5) (22.3) 22.3 (6) (172.5) ---------------- ---------------- -------------- ------------- 104.5 30.7 0.0 135.2 ---------------- ---------------- -------------- ------------- Intangible assets, net................ 113.6 15.6 (15.6) (3) 127.2 13.6 (4) Other assets.......................... 48.1 6.1 54.2 ---------------- ---------------- -------------- ------------- Total assets.......................... $ 1,051.5 $ 184.0 ($ 69.8) $ 1,165.7 ================ ================ ============== ============= LIABILITIES & SHAREOWNERS' EQUITY: Current liabilities: Current portion of long-term debt $ 18.2 $ 0.7 $ 18.9 Notes payable.................... 8.4 0.0 8.4 Accounts payable................. 134.0 7.3 141.3 Accrued expenses................. 84.8 17.9 $ 2.0 (2) 104.7 ---------------- ---------------- -------------- ------------- Total current liabilities............. 245.4 25.9 2.0 273.3 ---------------- ---------------- -------------- ------------- Long-term debt........................ 303.9 1.3 305.2 ---------------- ---------------- -------------- ------------- Deferred income taxes and other....... 38.6 14.4 2.6 (8) 55.6 ---------------- ---------------- -------------- ------------- Shareowners' equity: Common stock..................... 176.3 70.0 (70.0) (5) 244.3 68.0 (1) Retained earnings................ 434.6 77.8 (77.8) (5) 434.6 Accumulated comprehensive income... (12.0) (4.6) 4.6 (5) (12.0) ---------------- ---------------- -------------- ------------- 598.9 143.2 (75.2) 666.9 less: Treasury stock, at cost...... (135.3) (0.8) 0.8 (5) (135.3) ---------------- ---------------- -------------- ------------- 463.6 142.4 (74.4) 531.6 ---------------- ---------------- -------------- ------------- Total liabilities & shareowners' equity $ 1,051.5 $ 184.0 $ (69.8) $1,165.7 ================ ================ ============== =============
-4- KELLWOOD COMPANY UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED APRIL 30, 2002 ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
HISTORICAL ----------------------------- KELLWOOD GERBER PRO FORMA APRIL 30, MARCH 30, ADJUSTMENTS PRO FORMA 2002 2002 (1) (2) (3) (4) COMBINED ------------ ------------- ------------------------------------------------- ------------ Net sales.............. $ 570.7 $ 51.0 $ 621.7 Cost of products sold.. 459.5 37.6 $1.6 498.7 Selling, general and administrative expense 83.8 7.8 (1.6) 90.0 Provision for realignment 7.3 0.0 7.3 Amortization of intangible assets... 0.7 0.0 0.0 $ 0.0 $ 0.2 0.9 Interest expense....... 6.8 0.0 0.1 6.9 Interest (income) and other, net.......... (0.5) 0.0 (0.1) $0.3 (0.3) ------------ ------------- -------- ---------- --------- ---------- ------------ Earnings before income 13.1 5.6 0.0 0.0 (0.2) (0.3) 18.2 taxes.................. Income taxes........... 4.6 2.0 0.0 0.0 (0.1) (0.1) 6.4 ------------ ------------- -------- ---------- --------- ---------- ------------ Net earnings........... $ 8.5 $ 3.6 $ 0.0 $0.0 ($ 0.1) ($ 0.2) $ 11.8 ============ ============= ======== ========== ========= ========== ============ Earnings per share Basic............... $0.37 $0.18 $0.47 (5) ------------ ------------- ------------ Diluted............. $0.37 $0.18 $0.46 (5) ============ ============= ============
-5- KELLWOOD COMPANY UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS FOR THE YEAR ENDED JANUARY 31, 2002 ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
HISTORICAL ----------------------------- KELLWOOD GERBER PRO FORMA JANUARY DECEMBER ADJUSTMENTS PRO FORMA 31, 2002 31, 2001 (1) (2) (3) (4) COMBINED ------------ ------------- ------------------------------------------------- ------------ Net sales.............. $2,281.7 $209.5 $2,491.2 Costs and expenses Cost of products sold.. 1,823.6 155.8 $5.5 1,984.9 Selling, general and administrative expense 354.8 36.2 (6.5) 384.5 Amortization of intangible assets... 9.4 0.0 1.0 ($ 1.0) $1.0 10.4 Interest expense....... 34.8 (0.7) 1.3 $ 3.4 38.8 Interest (income) and other, net.......... (1.2) (2.7) (1.3) (5.2) ------------ ------------- -------- ---------- --------- ---------- ------------ Earnings before income 60.3 20.9 0.0 1.0 (1.0) (3.4) 77.8 taxes.................. Income taxes........... 22.6 7.5 0.0 0.4 (0.4) (1.3) 28.8 ------------ ------------- -------- ---------- --------- ---------- ------------ Net earnings........... $ 37.7 $ 13.4 $ 0.0 $0.6 ($ 0.6) ($ 2.1) $ 49.0 ============ ============= ======== ========== ========= ========== ============ Earnings per share Basic............... $1.66 $0.68 $1.95 (5) ------------ ------------- ------------ Diluted............. $1.65 $0.68 $1.94 (5) ============ ============= ============
-6- NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS NOTE 1-BASIS OF PRESENTATION On May 15, 2002, Kellwood entered into the Merger Agreement to acquire all the outstanding Gerber Shares. The acquisition of Gerber is to be accounted for under the purchase method of accounting. Accordingly, the purchase price will be allocated to the tangible and intangible assets acquired and the liabilities assumed on the basis of their respective fair values on the acquisition date. As of May 17, 2002, there were 8,414,279 shares of Voting Common Stock outstanding and 11,396,046 shares of Class B Common Stock outstanding. Each Gerber share will be exchanged for at least $3.42 in cash and up to $3.43 in value of Kellwood Common Stock, subject to adjustment under the Merger Agreement (together with the associated preferred stock purchase rights). In accordance with the terms of the Merger Agreement, Gerber stockholders will receive 0.11823 shares of Kellwood Common Stock for each Gerber share validly tendered and not withdrawn. The value of Kellwood Common Stock used in the Stock Consideration, was determined based upon the average of the closing price of one share of Kellwood Common Stock on the NYSE, as reported in The Wall Street Journal, for the 18 trading days immediately preceding the second trading day prior to the initial scheduled expiration date of the Offer. For purposes of the presentation of the pro forma combined condensed financial statements the average closing price used to estimate the number of Kellwood shares to be issued is $29.01. The purchase price of the Gerber acquisition is approximately $137.8 million, including the cash paid for Gerber shares, value of the Kellwood Common Stock to be issued for Gerber shares, the estimated amount of stock and cash paid to holders of Gerber stock options, and estimated transaction costs. These estimates are preliminary and the actual amount of cash paid and number of shares of Kellwood Common Stock issued will depend on the actual number of Gerber shares outstanding during the tender offer period. The purchase price allocation utilized is preliminary. The final determination of the allocation of purchase price will be determined based on the fair value of assets acquired and the fair value of liabilities assumed as of the date that the acquisition is consummated. At this time finite-lived intangible assets have been estimated at 50% of the total purchase price in excess of net tangible assets acquired. The purchase price allocation will remain preliminary until Kellwood is able to (a) complete a third party valuation of property, plant and equipment and intangible assets (b) conduct a detailed review of the value of deferred tax assets and liabilities of Gerber, and (c) evaluate the fair value of other assets and liabilities acquired. The final determination of the purchase price allocation is expected to be completed within the year following the consummation of the Merger. NOTE 2-PRO FORMA ADJUSTMENTS UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET The following adjustments reflected in the unaudited pro forma combined condensed balance sheet reflect the estimated impact of events that are directly attributable to the merger of Kellwood and Gerber. (1) To record the estimated cash paid and value of Kellwood shares issued to Gerber shareholders and estimated cash paid for transaction costs. For purposes of the unaudited pro forma combined condensed balance sheet, as of April 30, 2002, the cash portion of the purchase consideration is assumed to have been financed through Kellwood's existing excess cash balance. (2) To accrue additional liability for Gerber's pension plan to reflect the fair value of liabilities at April 30, 2002, and to conform Gerber's actuarial assumptions to Kellwood's actuarial assumptions. (3) To eliminate Gerber's historical goodwill and intangible assets. (4) To record goodwill and intangible assets arising from the transaction. (5) To eliminate Gerber's historical common stock, retained earnings, treasury stock, and accumulated comprehensive income. (6) To eliminate Gerber's historical accumulated depreciation. -7- (7) To record an adjustment to the fair market value of Gerber's inventory acquired and conform Gerber's inventory reserves to Kellwood's accounting practices. (8) To record deferred taxes attributable to the tax effect of pro forma adjustments. UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS The following adjustments are reflected in the pro forma combined condensed statements of operations to reflect the estimated impact of the Merger on the historical combined results of Kellwood and Gerber. The income tax effect of certain pro forma adjustments were calculated using an estimated 38% statutory tax rate. (1) To reclassify certain Gerber expenses to conform to Kellwood's accounting policy including $5.5 million in the year ended January 31, 2002, and $1.6 million in the three months ended April 30, 2002, of distribution expenses reclassified to cost of products sold from selling, general and administrative expense. (2) To remove amortization of historical goodwill previously reported by Gerber. (3) To amortize estimated definite-lived identifiable intangible assets of Gerber acquired by Kellwood, utilizing an estimated 7 year life. (4) To record a pro forma adjustment of additional interest expense for the twelve months ended January 31, 2002 and reduced interest income for the three months ended April 30, 2002, to finance the cash purchase price. The interest expense adjustment utilized a 5% interest rate, which approximates the fiscal 2001 average rate for Kellwood's similar debt instruments. The interest income adjustment utilized a 1.5% interest rate, which approximates the fiscal 2002 average rate for Kellwood's similar cash investments. Had the Merger been effective February 1, 2001, the cash paid to Gerber shareholders would have been financed through short-term notes payable before the 12 months ended January 31, 2002, and excess cash for the three months ended April 30, 2002. (5) Pro forma basic and diluted earnings per common share are computed by dividing the pro forma net income attributable to common shareholders by the pro forma weighted-average number of common shares outstanding. A reconciliation of shares used to compute historical basic and diluted earnings per common share to shares used to compute pro forma basic and diluted earnings per common share is as follows:
JANUARY 31, 2002 APRIL 30, 2002 ---------------- -------------- Shares used to compute Kellwood historical basic earnings per common share.................................................. 22,761 22,953 Shares issued in acquisition.................................. 2,344 2,344 --------------------- ---------------------- Shares used to compute pro forma basic earnings per common share 25,105 25,297 ===================== ====================== Shares used to compute Kellwood historical diluted earnings per 22,912 23,211 common share.................................................. Shares issued in acquisition.................................. 2,344 2,344 --------------------- ---------------------- Shares used to compute pro forma diluted earnings per common share......................................................... 25,256 25,555 ===================== ======================
The number of shares issued in acquisition was determined with an assumed Kellwood stock price of $29.01. -8- (c) Exhibits Number No. Description ---------- ----------- 2.1 Agreement and Plan of Merger dated as of May 15, 2002, among Kellwood Company, a Delaware corporation, Cradle, Inc., a Delaware corporation and a wholly owned subsidiary of Kellwood, and Gerber Childrenswear, Inc., a Delaware corporation. * 2.2 Voting and Tender Agreement dated as of May 15, 2002, among Kellwood Company, a Delaware corporation, and Citicorp Venture Capital, Ltd., a New York corporation, CCT Partners III, L.P., a Delaware limited partnership, and Citicorp Mezzanine Partners, L.P., a Delaware limited partnership. * 23.1 Consent of Ernst & Young LLP with respect to the financial statements of Gerber. 99.1 Press release dated May 15, 2002 by Kellwood Company. * * Previously filed. -9- 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. KELLWOOD COMPANY By: /s/ W. L. Capps, III ------------------------------------ W. L. Capps, III Senior Vice President Finance and Chief Financial Officer Dated: September 9, 2002 -10- EX-23 3 k020288kax231.txt CONSENT OF E&Y Exhibit 23.1 CONSENT OF ERNST & Young LLP, Independent Auditors We consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 033-64847 and 033-38106) of Kellwood Company of our report dated February 22, 2002 with respect to the consolidated financial statements of Gerber Childrenswear, Inc. included in the Annual Report (Form 10-K) for the year ended December 31, 2001 filed with the Securities and Exchange Commission and incorporated by reference in the Current Report on Form 8-K/A of Kellwood Company to be filed with the Securities and Exchange Commission on September 9, 2002. Greenville, South Carolina September 6, 2002 -----END PRIVACY-ENHANCED MESSAGE-----