-----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, Kv7xICdkZ2H+kQ0W6tTKEvy/4/rADQ31iRY1islSEiczuj4XdliCd5+Ml9pYui3R SSelO+w759Veizp3Mnk9Pw== 0001341004-06-001835.txt : 20060630 0001341004-06-001835.hdr.sgml : 20060630 20060629210754 ACCESSION NUMBER: 0001341004-06-001835 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060629 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060630 DATE AS OF CHANGE: 20060629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARTMARX CORP/DE CENTRAL INDEX KEY: 0000723371 STANDARD INDUSTRIAL CLASSIFICATION: APPAREL & OTHER FINISHED PRODS OF FABRICS & SIMILAR MATERIAL [2300] IRS NUMBER: 363217140 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08501 FILM NUMBER: 06935411 BUSINESS ADDRESS: STREET 1: 101 N WACKER DR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3123726300 MAIL ADDRESS: STREET 1: 101 N WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 8-K 1 chi580116-1.txt FORM 8-K 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): June 29, 2006 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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communication pursuant to Rule 425 under the Securities Act (17 C.F.R. 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 C.F.R. 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 C.F.R. 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 C.F.R. 240.13e-4(c)) Item 2.02 Results of Operation and Financial Condition On June 29, 2006, Hartmarx Corporation (the "Company") issued the press release attached hereto as Exhibit 99.1 ITEM 9.01 Financial Statements and Exhibits. (c) Exhibits 99.1 Press Release dated June 29, 2006 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 /s/ TARAS R. PROCZKO ------------------------------ Taras R. Proczko Senior Vice President Dated: June 29, 2006 EXHIBIT LIST Exhibit Number Description -------------- ----------- 99.1 Press Release dated June 29, 2006. EX-99 2 chi2q06.txt EXHIBIT 99.1 Exhibit 99.1 FOR IMMEDIATE RELEASE Contact: Julie Beynon 212-826-3513 --------------------- Web Site: www.hartmarx.com HARTMARX REPORTS OPERATING RESULTS FOR ITS SECOND QUARTER AND SIX MONTHS; LOWERS FULL YEAR 2006 EARNINGS GUIDANCE CHICAGO, June 29, 2006 - - Hartmarx Corporation (NYSE: HMX) today reported operating results for its second quarter and six months ended May 31, 2006. Second quarter revenues were $152.6 million compared to $145.7 million in 2005. Net earnings were $3.9 million or $.10 per diluted share in the current period compared to net earnings of $5.4 million or $.15 per diluted share last year. For the six months, revenues increased to $296.8 million from $289.6 million in 2005. Net earnings were $6.5 million or $.17 per diluted share compared to net earnings of $9.6 million or $.26 per diluted share in 2005. Homi B. Patel, chairman and chief executive officer of Hartmarx, commented, "Our second quarter and year-to-date results are extremely disappointing and below our internal plans. For the first time in five years, we will be lowering the annual earnings guidance established at the beginning of the year. Frankly, we find this unacceptable. "The ongoing consolidation and other ownership changes in the mainstream department store channel resulted in lower margins in the moderate priced tailored clothing product category. We experienced more off-price sales and customer allowances than previously anticipated. The current intensely competitive retail environment in this channel has continued longer than originally expected and does not show signs of improving in the immediate future. We are taking immediate actions to cut operating expenses, reduce inventories to generate cash and prune those programs that are not contributing sufficient incremental margins. We believe that these steps should result in significant earnings improvement for 2007 and put us back on track towards our long-term earnings objectives. "Other product categories performed satisfactorily. Tailored clothing at the higher price points is selling well at retail. The Misook business, acquired in July, 2004, continues to generate excellent earnings; the Simply Blue business, acquired at the end of October, 2005, contributed $11.2 million to year-to-date revenues and approximately $.035 to diluted earnings per share, and is on target to be accretive for the full year within our previously stated range of $.05 to $.07 per share. And, we are actively pursuing acquisitions that can be accretive to earnings, consistent with our strategic criteria. "We are lowering our 2006 full year guidance to reflect the first half shortfall and current outlook. We continue to expect revenues for the full year to increase in the low- to mid-single digits. We now anticipate full year diluted earnings per share in the range of $.50 to $.55, which includes any one-time costs associated with the changes we are making; this compares to the previous guidance of a 12% - 20% earnings improvement over last year's $.63 per diluted share. "Despite the lower year-to-date earnings and expectations for the full year, we are ahead of plan on reducing our investment in working capital and related debt. Whereas at November 30, 2005, inventories were $23.1 million higher than the year earlier date, at May 31, 2006, they were $156.9 million, $7.7 million higher than the year earlier period. Total debt was $109.4 million at May 31, 2006 compared to $105.9 million in the year earlier period; total debt declined approximately $19 million from the year earlier period after excluding the amounts paid for Simply Blue and Hartmarx stock repurchases. We anticipate that we will meet or exceed our goal of reducing debt (excluding the impact of acquisitions, stock repurchases or dividends) by 20% at year-end. "As of today's date, the Company has repurchased 494,500 Hartmarx shares at an average cost of $7.76, pursuant to the previously announced authorization to acquire up to 2 million of its common shares. We will continue to repurchase our stock on the open market as conditions warrant," Mr. Patel concluded. Second quarter operating earnings were $8.5 million in 2006 compared to $10.7 million in 2005. For the six months, operating earnings declined to $14.8 million from $19.2 million in 2005. The decrease reflected a lower gross margin rate of 33.0% for the six months compared to 34.1% in 2005 and resulted from more off-price sales and customer allowances principally affecting moderate priced tailored clothing and certain of the women's lines. Selling, general and administrative expenses were $84.3 million compared to $80.6 million in 2005 on the higher sales, representing 28.4% of sales compared to 27.8% in 2005. The $3.7 million increase reflected, among other things, incremental expenses of $4.4 million related to the Simply Blue business, $.7 million of stock compensation expense resulting from the adoption of FASB Statement No. 123R, effective for the Company's fiscal year beginning on December 1, 2005, and approximately $2.2 million of incremental costs associated with two new retail stores opened in the second half of 2005, the launch of the "hickey" brand and additional Hart Schaffner Marx brand marketing costs. Interest expense was $4.5 million year-to-date compared to $3.4 million in 2005, reflecting both the higher borrowing level due to the $21 million paid in October, 2005 for the Simply Blue acquisition as well as higher rates. Hartmarx produces and markets business, casual and golf apparel under its own brands, including Hart Schaffner Marx, Hickey-Freeman, Palm Beach, Coppley, Cambridge, Keithmoor, Society Brand, Racquet Club, Naturalife, Pusser's of the West Indies, Royal, Brannoch, Sansabelt, Exclusively Misook, Barrie Pace, Christopher Blue, Worn and L. Paseo. 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, DKNY Donna Karan New York, Pierre Cardin, Perry Ellis, Jeffrey Banks, Jhane Barnes, Lyle & Scott, Golden Bear, Jag and Starington. The Company's broad range of distribution channels includes fine specialty and leading department stores, value-oriented retailers and direct mail catalogs. 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. 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 Securities and Exchange Commission 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 Three Months Ended May 31, Six Months Ended May 31, 2006 2005 2006 2005 --------- --------- ---------- --------- Net sales $ 152,566 $ 145,742 $ 296,770 $ 289,564 Licensing and other income 398 283 1,181 1,048 --------- --------- ---------- --------- 152,964 146,025 297,951 290,612 --------- --------- ---------- --------- Cost of goods sold 102,922 95,165 198,831 190,823 Selling, general & administrative expenses 41,511 40,179 84,277 80,583 --------- --------- ---------- --------- 144,433 135,344 283,108 271,406 --------- --------- ---------- --------- Operating earnings 8,531 10,681 14,843 19,206 Interest expense 2,441 1,806 4,548 3,381 --------- --------- ---------- --------- Earnings before taxes 6,090 8,875 10,295 15,825 Tax provision 2,210 3,450 3,830 6,195 --------- --------- ---------- --------- Net earnings $ 3,880 $ 5,425 $ 6,465 $ 9,630 ========= ========= ========== ========= Earnings per share: Basic $ .11 $ .15 $ .18 $ .27 Diluted $ .10 $ .15 $. 17 $ .26 Average shares: Basic 36,814 36,412 36,808 36,168 Diluted 37,545 37,245 37,516 37,020 * * * May 31, ------------------------------ Condensed Balance Sheet 2006 2005 ----------- ----------- Cash $ 6,546 $ 6,459 Accounts receivable, net 112,047 110,899 Inventories 156,878 149,198 Prepaid expenses and other assets 16,220 16,986 Goodwill and intangible assets 75,127 58,629 Deferred income taxes 46,012 52,265 Intangible pension asset 35,963 39,411 Net fixed assets 36,105 33,936 ----------- ----------- Total assets $ 484,898 $ 467,783 =========== =========== Accounts payable and accrued expenses $ 93,924 $ 98,055 Total debt 109,404 105,880 Accrued pension liability 28,730 28,204 Shareholders' equity 252,840 235,644 ----------- ----------- Total liabilities and shareholders' equity $ 484,898 $467,783 =========== =========== Book value per share $6.83 $6.41 ===== ===== Selected cash flow data (year-to-date): Capital expenditures $1,844 $8,724 Depreciation of fixed assets 2,776 2,360 Amortization of intangible assets, long-lived assets and unearned employee benefits 1,726 1,604 This information is preliminary and may be changed prior to filing Form 10-Q. No investment decisions should be based solely on this data.
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