VF Announces Record Third Quarter and Increases Dividend

VF Corporation (NYSE: VFC), a global leader in branded lifestyle apparel, today announced results for the third quarter and nine months ended September 29, 2007. All per share amounts are presented on a diluted basis and, unless otherwise noted, reflect continuing operations.

Revenues rose 15% to a record $2,073.2 million, compared with $1,810.1 million in the third quarter of 2006, driven by higher revenues across our Outdoor, Jeanswear and Imagewear businesses and from revenues from our 2007 acquisitions, including, most recently, Seven For All Mankind and lucy activewear. Income from continuing operations in the current quarter increased 13% to a record $209.3 million, compared with $186.0 million in the prior years quarter. Earnings per share from continuing operations rose 13%, to a record $1.86 from $1.64 last year. Net income, including the effects of discontinued operations was $207.2 million, or $1.84 per share, compared with $197.7 million, or $1.75 per share in the prior year quarter.

For the nine months of 2007, revenues rose 14% to a record $5,264.2 million from $4,617.0 million. Income from continuing operations also increased 14% to $449.2 million, compared with $393.7 million in the prior year period. Earnings per share from continuing operations rose 13% to $3.96. Net income, including the effects of discontinued operations, was $427.2 million, or $3.76 per share, compared with $424.9 million, or $3.77 per share in the prior year period.

These results in this environment prove that VF has the right brands and strategies to win, said Mackey J. McDonald, Chairman and Chief Executive Officer. We are uniquely positioned within the apparel industry for long-term success. Due to our successful transformation, VF is a very different company than it used to be. What sets VF apart today is our highly diversified base of products and customers, our large and rapidly growing international business, our expanding base of owned retail stores and our very successful track record of acquisitions. Above all, it is our ability to consistently execute on well-defined goals and strategies that will enable us to continue to generate strong returns for our shareholders.

Third Quarter Business Review

Outdoor

Our Outdoor coalition continues to experience tremendous growth. Revenues increased 22% to $806 million, with our domestic and international businesses each growing more than 20% during the quarter. TheNorth Face®, Vans®, JanSport®, Kipling® and Napapijri® brands each enjoyed double-digit revenue gains in the quarter. The early 2007 acquisition of the Eagle Creek® brand of adventure travel gear added $10 million to revenues in the quarter. Outdoor operating income grew 16% in the quarter, with operating margins remaining at the 20% level.

Jeanswear

Revenues in our Jeanswear coalition, which includes our Wrangler®,Lee® and Riders®brands, rose 3% in the quarter, driven by a 13% increase in revenues of our international jeans business. Foreign currency translation contributed to the international revenue gain, accounting for about half of the increase. Our Lee® and Wrangler® brands both experienced strong growth in Europe. Our jeans business in China grew more than 40% in the quarter, with healthy revenue gains also in Canada, Mexico and Russia. Domestic jeanswear revenues declined slightly in the quarter, reflecting softer retail market conditions in the U.S. Total Jeanswear operating income rose strongly, up 15%, with operating margins reaching nearly 18% in the quarter.

Sportswear

Total revenues of our Sportswear coalition, which includes our Nautica® and John Varvatos® brands as well as the Kipling® brand in North America, declined 6% in the quarter. Our Kipling® and John Varvatos® businesses each posted double-digit revenue growth. Revenues of our Nautica® branded business declined 10% in the quarter, reflecting the impact of a shift in shipping dates by most of the brands customers and generally sluggish conditions in department stores. Operating income declined in the quarter due to the Nautica® brand volume decrease and increased promotional activity. We expect more favorable comparisons in the fourth quarter, with an increase in revenues and operating margins more consistent with prior year levels.

Contemporary Brands

In August we completed the acquisitions of the Seven For All Mankind premium denim and lucy womens activewear businesses, and formed our new Contemporary Brands coalition. Reflecting the revenues of the two businesses since being acquired, our Contemporary Brands coalition generated $33 million in revenues and $5 million in operating income in the quarter. Both the 7 For All Mankind® and lucy® brands continue to have great potential and will be important contributors to the future growth of our lifestyle brand portfolio.

Imagewear

Total revenues of our Imagewear coalition rose 24%. The February 2007 acquisition of the Majestic Athletic business contributed $44 million to revenues in the quarter. Organic growth was 4% in the quarter, driven by a double-digit revenue increase in our licensed sports apparel business. As part of its acquisition of Majestic Athletic, VF Imagewear extended its licensing agreements with both Major League Baseball and the Major League Baseball Players Association. These license agreements cover authentic, replica and fanwear products across multiple channels of distribution. Additionally, we recently renewed our licensing agreement with the National Football League for fanwear products across various distribution channels. Operating income increased 23% in the quarter, with margins remaining strong and stable.

VFs gross margins moved to 43.9% from 43.8%, while operating income rose 15% in the quarter, with operating margins reaching 16.0%.

Our balance sheet continues to be in excellent shape. On October 15 we completed the placement of $600 million of long-term debt, with the proceeds used to repay short-term borrowings related to recent acquisitions. While we have invested over $1 billion in acquisitions this year, we continue to expect our year-end debt to capital ratio to be near prior year levels.

International growth continues to be a key driver. International revenues grew 19% in the third quarter and comprised 30% of total revenues in the period. Excluding the impact of foreign currency translation, international revenues were up 12%.

Another key growth driver is the expansion of our direct-to-consumer business primarily through retail store expansion. We continue to grow our retail store base, ending the quarter with 608 owned retail stores, up from 544 at the end of the second quarter and reflecting the addition of 50 lucy® stores. Our retail revenues grew 21% in the quarter, with double-digit revenue growth in our Vans®, The North Face®, Kipling® and John Varvatos® brand stores.

Outlook

We continue to expect very strong fourth quarter and full year results, despite current retail market conditions. For the fourth quarter, we expect an increase in revenues and earnings per share of 18% and 13%, respectively. Reflecting the better-than-anticipated results in the third quarter and our fourth quarter expectations, we now see full year revenues rising 15%, up from our previous guidance of 14%. Earnings per share should increase slightly more than 13%, versus our previous guidance of 12%. We also continue to expect another very strong year of cash flow from operations of approximately $625 million.

Were looking forward to wrapping up another record year in both revenues and earnings, and to continuing the momentum into next year, said Mr. McDonald. At the present time, we are optimistic that we can deliver another record year in 2008, with strong top and bottom line growth. We are gratified by the tremendous success of our Growth Plan and transformation, yet we are perpetually driven to execute at continually higher levels. We expect to continue our momentum with a focus on organic growth, growing our retail sales, expanding our international business, adding new lifestyle brands and continuing to transform our mix of business toward higher growth, higher margin businesses.

Dividend Increased

The Board of Directors declared a quarterly cash dividend of $.58 per share, an increase of $.03. The dividend is payable on December 20, 2007 to shareholders of record as of the close of business on December 10, 2007.

Cautionary Statement on Forward-looking Statements

Certain statements included in this release are "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are made based on our expectations and beliefs concerning future events impacting VF and therefore involve a number of risks and uncertainties. We caution that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements.

Potential risks and uncertainties that could cause the actual results of operations or financial condition of VF to differ materially from those expressed or implied by forward-looking statements in this release include VFs reliance on a small number of large customers; the financial strength of VFs customers; changing fashion trends and consumer demand; increasing pressure on margins; VFs ability to implement its growth strategy; VFs ability to successfully integrate and grow acquisitions; VFs ability to maintain information technology systems; stability of VFs manufacturing facilities and foreign suppliers; continued use by VFs suppliers of ethical business practices; VFs ability to accurately forecast demand for products; continuity of members of VFs management; VFs ability to protect trademarks and other intellectual property rights; maintenance by VFs licensees and distributors of the value of VFs brands; the overall level of consumer spending; general economic conditions and other factors affecting consumer confidence; fluctuations in the price, availability and quality of raw materials and contracted products; foreign currency fluctuations; and legal, regulatory, political and economic risks in international markets. More information on potential factors that could affect VFs financial results is included from time to time in VFs public reports filed with the Securities and Exchange Commission, including VFs Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

About the Company

VF Corporation is a global leader in lifestyle apparel with a diverse portfolio of jeanswear, outdoor, imagewear, sportswear and contemporary apparel brands. Its principal brands include Wrangler®, Lee®, Riders®, The North Face®, Vans®, Reef®, Eagle Creek®, Eastpak®, JanSport®, Napapijri®, Nautica®, Kipling®, John Varvatos®, 7 For All Mankind®, lucy®, Majestic® , Lee Sport® and Red Kap®.

VF Corporation's press releases, annual report and other information can be accessed through the Company's home page, www.vfc.com.

Webcast Information

VF will hold its third quarter conference call and webcast today at 4:30 p.m. ET. Interested parties should call 1- 888-254-2798 domestic, or 1-913-312-0399 international, to access the call. You may also access this call via the Internet at www.vfc.com.A replay will be available through Oct. 25, 2007, and can be accessed by dialing 1- 888-203-1112 domestic, and 1-719-457-0820 international.The pass code is 4079550. A replay also can be accessed at the Companys web site at www.vfc.com.

VF CORPORATION
Consolidated Statements of Income
(In thousands, except per share amounts)
Three Months Ended SeptemberNine Months Ended September
2007200620072006
Net Sales $ 2,053,136 $ 1,791,648 $ 5,207,175 $ 4,561,246
Royalty Income 20,023 18,450 56,996 55,787
Total Revenues 2,073,159 1,810,098 5,264,171 4,617,033
Costs and Operating Expenses
Cost of goods sold 1,163,399 1,018,021 2,975,009 2,608,175
Marketing, administrative and general expenses 578,721 504,253 1,574,336 1,387,932
1,742,120 1,522,274 4,549,345 3,996,107
Operating Income 331,039 287,824 714,826 620,926
Other Income (Expense)
Interest income 2,202 1,439 7,494 4,149
Interest expense (19,349 ) (15,835 ) (46,373 ) (42,370 )
Miscellaneous, net 1,834 1,869 3,583 3,240
(15,313 ) (12,527 ) (35,296 ) (34,981 )
Income from Continuing Operations Before Income Taxes 315,726 275,297 679,530 585,945
Income Taxes 106,409 89,340 230,330 192,287
Income from Continuing Operations 209,317 185,957 449,200 393,658
Discontinued Operations
Income (loss) from operations (1,870 ) 11,750 2,567 31,266
Loss on disposal (240 ) - (24,554 ) -
(2,110 ) 11,750 (21,987 ) 31,266
Net Income $ 207,207 $ 197,707 $ 427,213 $ 424,924
Earnings Per Common Share - Basic
Income from continuing operations $ 1.91 $ 1.68 $ 4.06 $ 3.57
Discontinued operations - income (loss) from operations (0.02 ) 0.11 0.02 0.28
Discontinued operations - loss on disposal - - (0.22 ) -
Net income 1.89 1.78 3.86 3.85
Earnings Per Common Share - Diluted
Income from continuing operations $ 1.86 $ 1.64 $ 3.96 $ 3.49
Discontinued operations - income (loss) from operations (0.02 ) 0.10 0.02 0.28
Discontinued operations - loss on disposal - - (0.22 ) -
Net income 1.84 1.75 3.76 3.77
Weighted Average Shares Outstanding
Basic 109,671 110,802 110,689 110,179
Diluted 112,424 113,062 113,568 112,649
Cash Dividends Per Common Share $ 0.55 $ 0.55 $ 1.65 $ 1.39
NOTE: VF operates and reports using a 52/53 week fiscal year ending on the Saturday closest to December 31 of each year. Similarly, the fiscal third quarter ends on the Saturday closest to September 30. For presentation purposes herein, all references to periods ended September 2007, December 2006 and September 2006 relate to the fiscal periods ended as of September 29, 2007, December 30, 2006 and September 30, 2006, respectively.
VF CORPORATION
Consolidated Balance Sheets
(In thousands)

September

DecemberSeptember
200720062006
ASSETS
Current Assets
Cash and equivalents $ 193,855 $ 343,224 $ 154,196
Accounts receivable, net 1,266,490 809,594 1,078,172
Inventories 1,295,994 958,262 1,040,024
Other current assets 209,422 205,004 211,861
Current assets of discontinued operations 14,861 261,926 281,214
Total current assets 2,980,622 2,578,010 2,765,467
Property, Plant and Equipment 1,524,030 1,455,154 1,415,282
Less accumulated depreciation 883,304 862,096 855,239
640,726 593,058 560,043
Intangible Assets 1,434,904 755,693 761,895
Goodwill 1,265,878 1,030,925 1,016,264
Other Assets 373,854 348,862 382,735
Noncurrent Assets of Discontinued Operations - 159,145 190,053
$ 6,695,984 $ 5,465,693 $ 5,676,457
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 1,053,043 $ 88,467 $ 302,641
Current portion of long-term debt 67,403 68,876 35,670
Accounts payable 413,814 385,700 357,370
Accrued liabilities 606,348 392,815 473,696
Current liabilities of discontinued operations 267 78,990 76,404
Total current liabilities 2,140,875 1,014,848 1,245,781
Long-term Debt 594,792 635,359 665,475
Other Liabilities 592,524 536,728 628,500
Noncurrent Liabilities of Discontinued Operations - 13,586 13,575
Commitments and Contingencies
Common Stockholders' Equity
Common Stock 109,737 112,185 111,208
Additional paid-in capital 1,601,708 1,469,764 1,407,986
Accumulated other comprehensive income (loss) (29,634 ) (123,652 ) (155,956 )
Retained earnings 1,685,982 1,806,875 1,759,888
Total common stockholders' equity 3,367,793 3,265,172 3,123,126
$ 6,695,984 $ 5,465,693 $ 5,676,457
VF CORPORATION
Consolidated Statements of Cash Flows
(In thousands)
Nine Months Ended September
20072006
Operating Activities
Net income $ 427,213 $ 424,924
Adjustments to reconcile net income to cash provided (used) by operating activities of continuing operations:
Loss (income) from discontinued operations 21,987 (31,266 )
Depreciation 69,081 65,857
Amortization of intangible assets 17,655 13,130
Other amortization 17,507 15,293
Stock-based compensation 47,682 36,054
Pension funding under (over) expense 4,621 (42,901 )
Other, net (9,150 ) 3,396
Changes in operating assets and liabilities,
net of acquisitions:
Accounts receivable (353,469 ) (384,930 )
Inventories (196,290 ) (121,011 )
Accounts payable (9,694 ) (45,090 )
Accrued income taxes 60,792 (18,088 )
Accrued liabilities and other 67,858 84,410
Cash provided (used) by operating activities of continuing operations 165,793 (222 )
(Loss) income from discontinued operations (21,987 ) 31,266
Adjustments to reconcile (loss) income from discontinued operations to cash provided (used) by discontinued operations:
Loss on disposal of discontinued operations 24,554 -
Other, net (15,738 ) (7,869 )
Cash provided (used) by discontinued operations (13,171 ) 23,397
Cash provided by operating activities 152,622 23,175
Investing Activities
Capital expenditures (79,085 ) (76,691 )
Business acquisitions, net of cash acquired (1,082,844 ) (69,611 )
Proceeds from sale of Intimate Apparel business 348,714 -
Proceeds from sale of Playwear business 884 4,667
Software purchases (1,885 ) (8,598 )
Other, net 11,458 4,159
Cash used by investing activities of continuing operations (802,758 ) (146,074 )
Discontinued operations, net (243 ) 3,163
Cash used by investing activities (803,001 ) (142,911 )
Financing Activities
Increase in short-term borrowings 963,713 154,802
Payments on long-term debt (29,628 ) (1,519 )
Purchase of Common Stock (350,000 ) (118,582 )
Cash dividends paid (182,831 ) (154,775 )
Proceeds from issuance of Common Stock, net 77,594 79,699
Tax benefits of stock option exercises 15,119 12,063

Cash provided (used) by financing activities

493,967 (28,312 )
Effect of Foreign Currency Rate Changes on Cash 7,043 5,687
Net Change in Cash and Equivalents (149,369 ) (142,361 )
Cash and Equivalents - Beginning of Year 343,224 296,557
Cash and Equivalents - End of Period $ 193,855 $ 154,196
VF CORPORATION
Supplemental Financial Information
Business Segment Information
(In thousands)
Three Months Ended SeptemberNine Months Ended September
2007200620072006
Coalition Revenues
Jeanswear $ 758,485 $ 738,171 $ 2,174,691 $ 2,080,161
Outdoor 806,113 658,987 1,791,611 1,415,679
Imagewear 267,470 215,743 711,046 598,204
Sportswear 172,964 183,995 475,055 488,226
Contemporary Brands 32,667 - 32,667 -
Other 35,460 13,202 79,101 34,763

Total coalition revenues

$ 2,073,159 $ 1,810,098 $ 5,264,171 $ 4,617,033
Coalition Profit
Jeanswear $ 135,727 $ 117,766 $ 366,617 $ 329,639
Outdoor 161,305 139,606 298,012 232,553
Imagewear 41,553 33,734 98,059 92,892
Sportswear 17,110 24,919 45,918 63,257
Contemporary Brands 4,854 - 4,854 -
Other 530 405 2,988 (522 )
Total coalition profit 361,079 316,430 816,448 717,819
Corporate and Other Expenses (28,206 ) (26,737 ) (98,039 ) (93,653 )
Interest, net (17,147 ) (14,396 ) (38,879 ) (38,221 )
Income from Continuing Operations Before Income Taxes
$ 315,726 $ 275,297 $ 679,530 $ 585,945

Contacts:

VF Services, Inc.
Cindy Knoebel, CFA, VP, Financial &
Corporate Communications, 212-841-7141

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