11-K 1 a11-k.txt FORM 11-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 (Mark One) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the fiscal year ended DECEMBER 31, 1999 --------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number ------------- A. Full title of the plan and the address of the plan, if different from that of the issuer name below: DANSKIN, INC. SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: 530 Seventh Avenue New York, New York 10018 CONTENTS
Page ---- Report of Independent Certified Public Accountants F-3 Financial Statements Statements of Net Assets Available for Plan Benefits as of December 31, 1999 and December 31, 1998 F-4 Statements of Changes in Net Assets Available for Plan Benefits for the Years ended December 31, 1999 and December 31, 1998 F-5 Notes to Financial Statements F-6 - F-11 Supplemental Schedules Report of Independent Certified Public Accountants on Supplemental Schedules F-13 Line 27a - Schedule of Assets Held for Investment Purposes as of December 31, 1999 F-14 Line 27d - Schedule of Reportable Transactions for the year ended December 31, 1999 F-15 - F-16 Exhibit 23.1 Consent of Independent Certified Public Accountants
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Trustees DANSKIN, INC. SAVINGS PLAN We have audited the accompanying statements of net assets available for plan benefits of Danskin, Inc. Savings Plan (the "Plan") as of December 31, 1999 and December 31, 1998 and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of Danskin, Inc. Savings Plan as of December 31, 1999 and December 31, 1998 and the changes in net assets available for plan benefits for the years then ended, in conformity with accounting principles generally accepted in the United States. GRANT THORNTON LLP New York, New York June 20, 2000 F-3 Danskin, Inc. Savings Plan STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS December 31,
ASSETS 1999 1998 ----------- ---------- Cash and cash equivalents $ 129,406 $ 74,262 Investments 6,865,178 7,038,357 Participant Loans 101,758 250,974 ----------- ---------- 7,096,342 7,363,593 LIABILITIES Accrued expenses (13,645) -- ----------- ---------- Net assets available for benefits $ 7,082,697 $7,363,593 ----------- ---------- ----------- ----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS. F-4 Danskin, Inc. Savings Plan STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS Year ended December 31,
1999 1998 ----------- ----------- Additions to net assets attributed to Investment income Net appreciation in fair value of investments $ 811,212 $ 808,780 Interest and dividends 216,365 189,383 ----------- ----------- 1,027,577 998,163 Contributions Participants 532,885 603,252 Employer 109,808 136,028 Rollover 13,751 13,420 ----------- ----------- 656,444 752,700 Total additions 1,684,821 1,750,863 Deductions from net assets attributed to Withdrawals and distributions 1,932,235 1,510,662 Forfeitures 8,386 26,564 Administrative expenses 24,296 29,695 ----------- ----------- Total deductions 1,964,917 1,566,921 ----------- ----------- NET (DECREASE) INCREASE (280,896) 183,942 Net assets available for benefits at Beginning of year 7,363,593 7,179,651 ----------- ----------- End of year $ 7,082,697 $ 7,363,593 ----------- ----------- ----------- -----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS. F-5 Danskin, Inc. Savings Plan NOTES TO FINANCIAL STATEMENTS December 31, 1999 and 1998 NOTE A - DESCRIPTION OF PLAN The following description of the Danskin, Inc. (the "Company" or "Sponsor") Savings Plan (the "Plan") is provided for general information purposes only. Participants should refer to the Plan document for a more complete description of the Plan's provisions. The Plan is a defined contribution plan subject to the requirements of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The Plan became effective July 22, 1986 and was established to provide deferred compensation to all nonunion, full-time salaried employees following attainment of age 21, and all nonunion part-time salaried employees following completion of "Eligibility Service," as defined in the Plan document. CONTRIBUTIONS Each participant may elect to contribute to the Plan by any whole percentage between 1% and 15%. Employee contributions up to 6% of the employee's salary are matched by the Company at a rate of 25%. The Company may, at its discretion, make an additional annual contribution to the Plan which is allocated to employees based upon their compensation. Effective January 1, 1994, the Plan was amended to allow such discretionary contributions to be made in cash or in shares of Danskin, Inc. Common Stock. These employee, Company match and discretionary Company contributions are all deposited in the investment programs made available by the Plan in multiples of 10% as directed by the participant. In the case of discretionary contributions made in shares of Danskin, Inc. Common Stock, such contribution is deposited in the Danskin, Inc., Company Stock Fund. Such election by the participant may be revised on a monthly basis. In addition, the participant may transfer assets among funds as of the first of the month, but no more often than once every three consecutive months. Any amounts forfeited by terminated participants are used to reduce Company matching contributions. For the years ended December 31, 1999 and 1998, respectively, approximately $8,386 and $26,564 were forfeited and used to reduce the Company match. ALLOCATIONS AND VESTING Investment income by fund is allocated to individual accounts monthly based on the proportion each account bears to the total of all account balances within the fund which earned the income. F-6 Danskin, Inc. Savings Plan NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 1999 and 1998 NOTE A (CONTINUED) Plan participants are at all times 100% vested in the value of their contributions and rollover accounts. Participants who were eligible participants on June 30, 1989 are 100% vested in the value of their Company match and discretionary Company contributions. For employees who became eligible participants in the Plan after June 30, 1989, all company-matching contributions vest in accordance with the following schedule:
YEARS OF COMPANY SERVICE PERCENTAGE VESTED ------------------------ ----------------- Less than 3 0% 3 33% 4 66% 5 100%
Participants also become 100% vested in their Company match and discretionary Company contribution accounts upon termination of employment due to death or disability, retirement or termination of the Plan. Upon termination of employment, any portion of a participant's company-matching account that is not vested is forfeited. Forfeitures are used to reduce subsequent Company contributions. BENEFIT DISTRIBUTIONS Upon termination for any reason, participants are entitled to all of their vested balances in a lump-sum payment, or with respect to the Danskin, Inc. Company Stock Fund, may elect to receive that portion of their distribution in shares of Company stock. The Plan includes a loan feature whereby participants may borrow up to 50% of their vested account balances (minimum $1,000, maximum $50,000). Such loans are at the discretion of the Employee Benefits Committee and are repayable within five years (up to ten years for loans to buy a primary residence) and bear interest at a rate in conformity with Department of Labor Regulations. The Plan also includes a provision for withdrawals under certain circumstances, as defined in the Plan, under which participants may withdraw all or a portion of their vested account balances. Under the Plan, a participant may not replace any amounts voluntarily withdrawn. The Company has the right to modify or amend the Plan in whole or in part at any time, provided such amendment does not reduce accrued benefits. F-7 Danskin, Inc. Savings Plan NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 1999 and 1998 NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1. BASIS OF PRESENTATION The accompanying financial statements have been prepared on the accrual basis of accounting; however, obligations for withdrawals and distributions are recorded when paid. 2. VALUATION OF INVESTMENTS Investments included in the statements of net assets available for plan benefits are recorded in the following manner: Travelers Insurance Capital Preservation Fund - Twelve-month instruments bearing interest at market rates which are valued at cost, which approximates market value. Fidelity Advisor Growth Opportunities Portfolio - at fair value based on quotation from NASDAQ. Fidelity Advisor High Yield Fund - at fair value based on quotation from NASDAQ. MSF Emerging Growth Fund - at fair value based on quotation from NASDAQ. Vanguard Index Fund - at fair value based on quotation from NASDAQ. Danskin, Inc. Company Stock Fund - at fair value based on bid quotations from the "pink slips" published by the National Quotation Bureau. 3. ADMINISTRATIVE EXPENSES Administrative expenses incurred by the Plan have been absorbed by the Plan. 4. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make significant estimates and assumptions that affect the reported F-8 Danskin, Inc. Savings Plan NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 1999 and 1998 NOTE B (CONTINUED) amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions and deductions during the reporting period. Actual results could differ from those estimates. 5. RISKS AND UNCERTAINTIES The Plan provides for various investment options in any combination of stocks, mutual funds, and other investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statement of net assets available for plan benefits and the statement of changes in net assets available for plan benefits. NOTE C - MONEY MARKET OBLIGATIONS TRUST All investment and withdrawal activity is processed through liquid assets holding accounts held by the Trustee. Such accounts are considered cash equivalents and all funds deposited remain for periods not to exceed ninety days. These accounts are not participant-directed investment options, but rather a flow-through vehicle for processing investment and withdrawal activity. NOTE D - INVESTMENT FUNDS The following presents investments that represent five percent or more of the Plan's assets:
1999 1998 ---------- ----------- Travelers Insurance Capital Preservation Fund 1,793,749 and 1,891,475 shares, respectively $1,793,749 $1,891,475 Fidelity Advisory Growth Opportunity Fund 48,454 and 48,638 shares, respectively 2,260,864 2,442,114 Fidelity Advisor High Yield Fund 50,184 and 61,100 shares, respectively 570,591 692,258 MFS Service Trust II - Emerging Growth Fund Class A 18,346 and 24,897 shares, respectively 1,221,642 1,110,416 Vanguard Index Trust 500 Portfolio 6,871 and 7,195 shares, respectively 929,830 819,924
F-9 Danskin, Inc. Savings Plan NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 1999 and 1998 NOTE D (CONTINUED) During 1999, the Plan's investments (including realized and unrealized gains and losses) appreciated in value by $811,212 as follows: Mutual funds $ 807,885 Common stock 3,327 ----------- $ 811,212
NOTE E - TERMINATION OF THE PLAN Although it has not expressed any intent to do so, the Company, by action of its Board of Directors, may terminate the Plan for any reason and at any time subject to the provisions of ERISA. Upon termination of the Plan, the rights of participants to the benefits accrued under the Plan to the date of termination become fully vested. NOTE F - TAX STATUS The Plan is intended to be qualified under section 401(a) of the Internal Revenue Code of 1986 (the "Code") and is intended to be exempt from taxation under section 501(a) of the Code. The Plan received a favorable IRS determination letter dated February 2, 1996. The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code and the related trust was tax-exempt as of the financial statement date. Therefore, no provision for income taxes has been included in the Plan's financial statements. NOTE G - ACCOUNTING FOR DISTRIBUTION TO WITHDRAWN PARTICIPANTS All amounts elected to be withdrawn by participants are recorded only when disbursed by the Plan. As of December 31, 1999 and December 31, 1998, $158,749 and $19,147, respectively, has been allocated to accounts of persons who have withdrawn from participation in the earnings and operations of the Plan, but for which disbursement of these funds from the Plan has not yet been made. F-10 Danskin, Inc. Savings Plan NOTES TO FINANCIAL STATEMENTS (CONTINUED) December 31, 1999 and 1998 NOTE G (CONTINUED) The following is a reconciliation of net assets available for plan benefits reported on the financial statements to the Form 5500:
DECEMBER 31, ------------------------ 1999 1998 ---------- ---------- Net assets available for plan benefits per the financial statements $7,082,697 $7,363,593 Amounts allocated to withdrawing participants (158,749) (19,147) ---------- ---------- Net assets available for plan benefits per the Form 5500 $6,923,948 $7,334,446 ---------- ---------- ---------- ----------
The following is a reconciliation for withdrawals per the financial statements to the Form 5500:
DECEMBER 31, ------------------------ 1999 1998 ---------- ---------- Withdrawals per the financial statements $1,932,235 $1,510,662 Add current amounts allocated to withdrawals 158,749 19,147 Less prior year withdrawal allocations (19,147) (173,357) ---------- ---------- Withdrawals per the Form 5500 $2,071,837 $1,356,452 ---------- ---------- ---------- ----------
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefits processed and approved for payment prior to December 31, 1999 and December 31, 1998, but not yet paid as of that date. F-11 SUPPLEMENTAL SCHEDULES F-12 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON SUPPLEMENTAL SCHEDULES DANSKIN, INC. SAVINGS PLAN Our audits were conducted for the purpose of forming an opinion on the basic financial statements, taken as a whole, of the Danskin, Inc. Savings Plan, as of, and for the year ended December 31, 1999. The supplemental schedules, shown on pages 14 to 16, are presented for the purpose of additional analysis, and are not a required part of the basic financial statements, but are supplementary information required by the Rules and Regulations of the Department of Labor for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules are the responsibility of the management of the Plan. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. New York, New York June 20, 2000 F-13 Danskin, Inc. Savings Plan SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES FORM 5500, LINE 27(a) December 31, 1999 Employer Identification Number 72-1284179
Number of shares/ Market Par Value Cost Value --------- ---------- ---------- Pooled Funds Travelers Insurance Capital Preservation Fund 1,793,749 $1,793,749 $1,793,749* Mutual Funds Fidelity Advisory Growth Opportunity 48,454 1,721,235 2,260,864* Fidelity Advisor High Yield Fund 50,184 602,457 570,591* MFS Service Trust II - Emerging Growth Fund Class A 18,346 539,733 1,221,642* Vanguard Index Trust 500 Portfolio 6,871 574,695 929,830* Common Stock Danskin, Inc. 84,127 170,226 88,502 ---------- ---------- Total investments 5,402,095 6,865,178 Loan (8.5% interest rate) 101,758 101,758 Cash and cash equivalents 129,406 129,406 ---------- ---------- Total assets held for investments purposes $5,633,259 $7,096,342 ---------- ---------- ---------- ----------
*Type of investment exceeds 5% of the Plan's net assets at the beginning of the Plan year. F-14 Danskin, Inc. Savings Plan SCHEDULE OF 5% REPORTABLE TRANSACTIONS FORM 5500, LINE 27(d) Year ended December 31, 1999 SINGLE TRANSACTIONS There were no reportable single transactions. F-15 Danskin, Inc. Savings Plan SCHEDULE OF 5% REPORTABLE TRANSACTIONS FORM 5500, LINE 27(d) Year ended December 31, 1999 Series of transactions in the same security and with the same person
Net gain Description Purchase Sales Cost or (Loss) ----------- ---------- ---------- ---------- ---------- Mutual Funds Fidelity Advisors Growth Opportunities Portfolio $ 59,780 $ 445,166 $ 294,060 $ 151,106 Number of transactions 4 8 MFS Service Trust II Emerging Growth Fund Class A $ 33,627 $ 391,102 $ 220,448 $ 170,654 Number of transactions 4 8 Cash and cash equivalents Money Market Obligations Trust $1,832,530 $1,862,050 $1,862,050 -- Number of transactions 55 91
There were no reportable series of nonsecurity transactions with the same person. F-16