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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED APRIL 3, 1999 OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number:
CARTER HOLDINGS, INC.
(Exact name of registrant as specified in charter)
Massachusetts 13-3912933
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1590 Adamson Parkway, Suite 400
Morrow, Georgia 30260
(Address of principal executive offices, including zip code)
(770) 961-8722
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|
000
Applicable only to corporate issuers:
As of May 18, 1999, there were 752,808 shares of Class A Common Stock, 217,336
Class C Common Stock and 5,000 shares of Class D Common Stock outstanding.
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FORM 10-Q
CARTER HOLDINGS, INC.
INDEX
Page
----
Part I. Financial Information
Item 1. Financial Statements
Unaudited Condensed Consolidated Balance Sheets
as of April 3, 1999 and January 2, 1999.................... 3
Unaudited Condensed Consolidated Statements of
Operations for the three-month periods ended April 3,
1999 and April 4, 1998..................................... 4
Unaudited Condensed Consolidated Statements of Cash
Flows for the three-month periods ended April 3, 1999
and April 4, 1998 ......................................... 5
Notes to Condensed Consolidated Financial Statements
(unaudited)................................................ 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 9
Part II. Other Information.......................................... 13
CARTER HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
(unaudited)
April 3, January 2,
1999 1999
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents ............................ $ 3,429 $ 3,986
Accounts receivable, net ............................. 27,756 34,834
Inventories .......................................... 113,547 101,408
Prepaid expenses and other current assets ............ 4,304 3,433
Deferred income taxes ................................ 11,566 11,725
--------- ---------
Total current assets ............................... 160,602 155,386
Property, plant and equipment, net ..................... 57,499 59,674
Tradename, net ......................................... 93,958 94,583
Cost in excess of fair value of net
assets acquired, net ................................. 29,865 30,191
Deferred debt issuance costs, net ...................... 8,508 8,917
Other assets ........................................... 2,569 2,544
--------- ---------
Total assets ....................................... $ 353,001 $ 351,295
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt ................. $ 900 $ 900
Accounts payable ..................................... 18,949 18,887
Other current liabilities ............................ 31,453 35,075
--------- ---------
Total current liabilities .......................... 51,302 54,862
Long-term debt ......................................... 193,900 186,700
Deferred income taxes .................................. 38,698 38,964
Other long-term liabilities ............................ 9,860 9,569
--------- ---------
Total liabilities .................................. 293,760 290,095
--------- ---------
Commitments and contingencies
Stockholders' equity:
Class A Stock, nonvoting; par value
$.01 per share; 775,000 shares
authorized; 752,808 shares issued
and outstanding; liquidation value of
$.001 per share .................................... 45,168 45,168
Class C Stock, nonvoting; par value
$.01 per share; 500,000 shares authorized;
242,192 shares issued; liquidation value
of $.001 per share ................................. 14,532 14,532
Class C Treasury Stock, 24,856 shares at cost
at April 3, 1999, 23,567 shares at
cost at January 2, 1999 ............................ (1,490) (1,413)
Class D Stock, voting; par value $.01 per
share; 5,000 shares authorized, issued
and outstanding .................................... 300 300
Common Stock, voting; par value $.01 per
share; 1,280,000 shares authorized; none
issued or outstanding .............................. -- --
Retained earnings .................................... 731 2,613
--------- ---------
Total stockholders' equity ....................... 59,241 61,200
--------- ---------
Total liabilities and stockholders' equity ....... $ 353,001 $ 351,295
========= =========
See accompanying notes to the condensed consolidated financial statements
CARTER HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands)
(unaudited)
Three-month period ended
------------------------
April 3, April 4,
1999 1998
-------- --------
Net sales ............................................. $ 86,583 $ 85,144
Costs of goods sold ................................... 56,544 54,084
-------- --------
Gross profit .......................................... 30,039 31,060
Selling, general and administrative expenses .......... 28,042 29,800
-------- --------
Operating income ...................................... 1,997 1,260
Interest expense ...................................... 5,240 5,132
-------- --------
Loss before benefit from income taxes ................. (3,243) (3,872)
Benefit from income taxes ............................. 1,361 1,900
-------- --------
Net loss .............................................. ($ 1,882) ($ 1,972)
======== ========
See accompanying notes to the condensed consolidated financial statements
CARTER HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
Three-month period ended
------------------------
April 3, April 4,
1999 1998
-------- --------
Cash flows from operating activities:
Net loss ......................................... ($ 1,882) ($ 1,972)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization .................. 4,473 4,173
Deferred tax benefit ........................... (107) (61)
Effect of changes in operating assets
and liabilities:
(Increase) decrease in assets:
Accounts receivable .......................... 7,078 3,276
Inventories .................................. (12,139) (14,950)
Prepaid expenses and other assets ............ (1,109) (142)
Increase (decrease) in liabilities:
Accounts payable and other liabilities ....... (2,264) 3,203
-------- --------
Net cash used in operating activities ........ (5,950) (6,473)
-------- --------
Cash flows from investing activities:
Capital expenditures ............................. (733) (1,580)
Proceeds from sale of fixed assets ............... 8 3
-------- --------
Net cash used in investing activities ........ (725) (1,577)
-------- --------
Cash flows from financing activities:
Proceeds from revolving line of credit ........... 29,300 36,000
Payments of revolving line of credit ............. (22,100) (27,500)
Proceeds from sale of Class C Treasury stock ..... -- 60
Repurchase of Capital stock ...................... (137) (137)
Other ............................................ (945) 494
-------- --------
Net cash provided by financing activities .... 6,118 8,917
-------- --------
Net (decrease) increase in cash and
cash equivalents ................................. (557) 867
Cash and cash equivalents, beginning of period ..... 3,986 4,259
-------- --------
Cash and cash equivalents, end of period ........... $ 3,429 $ 5,126
======== ========
See accompanying notes to the condensed consolidated financial statements
CARTER HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1--BASIS OF PREPARATION:
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements of Carter Holdings, Inc. and its subsidiaries
(the "Company") contain all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial position of the Company
as of April 3, 1999, and the results of its operations and cash flows for the
three-month periods ended April 3, 1999 and April 4, 1998. Operating results for
the three-months ended April 3, 1999 are not necessarily indicative of the
results that may be expected for the fiscal year ending January 1, 2000. The
accompanying condensed consolidated balance sheet of the Company as of January
2, 1999 has been derived from the audited consolidated financial statements
included in the Company's fiscal 1998 Annual Report on Form 10-K.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission and the instructions to Form 10-Q. The
accounting policies followed by the Company are set forth in its Annual Report
on Form 10-K in the Notes to the Company's consolidated financial statements for
the fiscal year ended January 2, 1999.
NOTE 2--THE COMPANY:
Carter Holdings, Inc. is a holding company whose primary asset consists of
an investment in 100% of the outstanding capital stock of The William Carter
Company, Inc. ("Carter's").
The Company is a manufacturer and marketer of premier branded
childrenswear under the Carter's and Carter's Classics labels. The Company
manufactures its products in plants located in the southern United States, Costa
Rica, the Dominican Republic and Mexico. Products are manufactured for wholesale
distribution to major domestic retailers and for the Company's 144 retail outlet
stores that market its brand name merchandise and certain products manufactured
by other companies. The Company's retail operations represented approximately
41% of its consolidated net sales in the first quarter of 1999 and approximately
39% in the first quarter of 1998.
NOTE 3--INVENTORIES:
Inventories consisted of the following ($000):
April 3, January 2,
1999 1999
---- ----
Finished goods.......... $ 79,121 $ 68,236
Work in process ........ 23,060 21,286
Raw materials .......... 11,366 11,886
-------- --------
Total .................. $113,547 $101,408
======== ========
CARTER HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
NOTE 4--TREASURY STOCK TRANSACTIONS:
During each of the quarters ended April 3, 1999 and April 4, 1998 the
Company repurchased 2,289 of its Class C stock owned by former employees of
Carter's for cash payments of approximately $137,000. In addition, during each
of the quarters ended April 3, 1999 and April 4, 1998, employees of the Company
were issued 1,000 shares of Class C stock from shares repurchased for $60.00 per
share. The 1999 transaction involved no cash proceeds, and the Company
recognized $60,000 as compensation expense.
NOTE 5--ENVIRONMENTAL MATTERS:
The Company has been named as a third-party defendant in an action
involving environmental claims relating to property located near its previously
owned facility in Needham, Massachusetts. In February 1999, the Company and the
plaintiff reached a tentative settlement by which the Company would pay the
plaintiff $2,500. Such settlement is subject to the approval of other parties
involved in this litigation. The Company is also in the process of investigating
a potential claim under environmental laws in Lamar County, Georgia. Based on
the information available at this time, the ultimate outcome of these matters is
uncertain, and therefore, the Company is unable to determine the amount of its
liability, if any. Accordingly, no accrual has been recorded in the accompanying
financial statements for these matters.
NOTE 6--SEGMENT INFORMATION:
The Company's two reportable segments are "Retail" and "Wholesale and
Other". The Company generally sells the same products in each business segment.
The Company evaluates the performance of its Retail segment based on, among
other things, its earnings before interest, taxes, depreciation and amortization
expenses ("EBITDA"). The Retail segment's EBITDA is determined on a direct
contribution basis only and does not include allocations of all costs incurred
to support Retail operations. Retail EBITDA, therefore, does not reflect the
actual results which would be derived if such allocations were made. EBITDA
shown in the accompanying table for the Wholesale and Other segment is an amount
determined by deduction based on consolidated EBITDA. The Wholesale and Other
segment includes all other revenue and expenses of the Company not directly
related to the Retail segment and is not a measurement used by management in its
decision-making process.
CARTER HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
NOTE 6--SEGMENT INFORMATION: (Continued)
The table below presents certain segment information for the periods
indicated ($000):
Wholesale
Retail and Other Total
------ --------- -----
Three months ended April 3, 1999:
Sales ................................ $ 35,207 $ 51,376 $ 86,583
EBITDA ............................... $ 6,221 ($ 161) $ 6,060
Three months ended April 4, 1998:
Sales ................................ $ 33,589 $ 51,555 $ 85,144
EBITDA ............................... $ 4,895 $ 163 $ 5,058
A reconciliation of total segment EBITDA to total consolidated loss before
income taxes is presented below ($000):
Three months ended
April 3, April 4,
1999 1998
---- ----
Total EBITDA for reportable segments ............. $ 6,060 $ 5,058
Depreciation and amortization expense ............ (4,063) (3,798)
Interest expense ................................. (5,240) (5,132)
------- -------
Consolidated loss before income taxes ............ ($3,243) ($3,872)
======= =======
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS:
The following Management's Discussion and Analysis of Financial Condition
and Results of Operations contains forward-looking statements which involve
risks and uncertainties. The Company's actual results could differ materially
from those anticipated in these forward-looking statements. The Company
undertakes no obligation to release publicly any revisions to these
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of anticipated or unanticipated events.
RESULTS OF OPERATIONS
Three-months ended April 3, 1999 compared to three-months ended April 4,
1998
In the first quarter of fiscal 1999, consolidated net sales increased $1.4
million (1.7%) to $86.6 million from $85.1 million in the first quarter of
fiscal 1998. The Company's wholesale sales decreased $0.2 million (0.3%) to
approximately $51.4 million in the first quarter of 1999 from $51.6 million in
the first quarter of 1998. The decrease in wholesale sales was primarily due to
the timing of new product releases which, in 1998, increased first quarter
wholesale revenues by 11.7%. New product launches are scheduled for the second
and fourth quarters of 1999.
The Company's retail store sales were approximately $35.2 million for the
first quarter of 1999, which represented an increase of $1.6 million (4.8%)
compared to the first quarter of 1998. Comparable store sales increased 1.0% in
the first quarter of 1999 compared to the first quarter of 1998. During the
first quarter of 1999, the Company opened one and closed one retail outlet
store. There were 144 outlet stores operating as of April 3, 1999 compared to
139 as of April 4, 1998.
The Company's gross profit decreased $1.0 million (3.3%) to $30.0 million
in the first quarter of 1999 from $31.1 million in the first quarter of 1998.
Gross profit as a percentage of net sales in the first quarter of 1999 decreased
to 34.7% from 36.5% in the first quarter of 1998. The decrease in gross profit
is attributed to a higher mix of sales to the secondary market and costs
incurred to close two sewing facilities in Georgia and Mississippi.
Selling, general and administrative expenses for the first quarter of 1999
decreased 5.9% to $28.0 million from $29.8 million in the first quarter of 1998.
Selling, general and administrative expenses as a percentage of net sales
decreased to 32.4% in the first quarter of 1999 from 35.0% in the first quarter
of 1998. The improvement in selling, general and administrative expenses as a
percentage of net sales is attributed to continued leverage of the retail outlet
stores' operating expenses and reduction of other discretionary expenditures.
Operating income for the first quarter of 1999 increased 58.5% to $2.0
million compared to income of $1.3 million in the first quarter of 1998. This
increase reflects the changes in gross profit and selling, general and
administration expenses described above.
Interest expense in the first quarter of 1999 increased 2.1% to $5.2
million from $5.1 million in the first quarter of 1998. This increase reflects
the cost of higher average revolver borrowings during the first quarter of 1999.
Average revolver borrowings during the first quarter of 1999 were $28.8 million
compared to $17.7 million in the first quarter of 1998. At April 3, 1999,
outstanding debt aggregated $194.8 million compared to $185.6 million at April
4, 1998.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS: (continued)
The Company recorded an income tax benefit of $1.4 million in the first
quarter of 1999 compared to an income tax benefit of $1.9 million in the first
quarter of 1998. The Company's effective tax rate was approximately 42% during
the first quarter of 1999, a rate lower than the first quarter of 1998 due
primarily to higher projected pretax income for 1999.
As a result of the factors described above, the Company reported a net
loss of approximately $1.9 million in the first quarter of 1999 compared to a
net loss of approximately $2.0 million in the first quarter of 1998.
FINANCIAL CONDITION, CAPITAL RESOURCES AND LIQUIDITY
The Company has financed its working capital, capital expenditures and
debt service requirements primarily through internally generated cash flow and
funds borrowed under the Company's revolving credit facility.
Net accounts receivable at April 3, 1999 were $27.8 million compared to
$26.9 million at April 4, 1998. Due to the seasonal nature of the Company's
operations, the net accounts receivable balance at April 3, 1999 is not
comparable to the net accounts receivable balance at January 2, 1999.
Inventories at April 3, 1999 were $113.5 million compared to $102.6
million at April 4, 1998. This increase reflects the growth in inventory
required to support higher levels of sales demands expected in the second and
third quarters of 1999. Due to the seasonal nature of the Company's operations,
inventories at April 3, 1999 are not comparable to inventories at January 2,
1999.
The Company invested $0.7 million and $1.6 million in capital expenditures
during the first quarter of 1999 and 1998, respectively. The Company plans to
invest a total of $16.0 million in capital expenditures in 1999.
At April 3, 1999, the Company had $194.8 million of debt outstanding,
consisting of $100.0 million of 10 3/8% Series A Senior Subordinated Notes,
$20.0 million of 12% Senior Subordinated Notes, $43.2 million in term loan
borrowings and $31.6 million in revolver borrowings under the Senior Credit
Facility, exclusive of approximately $10.4 million of outstanding letters of
credit. At April 3, 1999, the Company had approximately $23.0 million of
financing available under the revolving credit portion of the Senior Credit
Facility.
The Company believes that cash generated from operations, together with
availability under the revolving credit portion of the Senior Credit Facility,
will be adequate to meet its debt service requirements, capital expenditures and
working capital needs for the foreseeable future, although no assurance can be
given in this regard.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS: (continued)
EFFECTS OF INFLATION
The Company is affected by inflation primarily through the purchase of raw
material, increased operating costs and expenses and higher interest rates. The
effects of inflation on the Company's operations have not been material in
recent years.
SEASONALITY
The Company experiences seasonal fluctuations in its sales and
profitability, with generally lower sales and gross profit in the first and
second quarters of its fiscal year. The Company believes that seasonality of
sales and profitability is a factor that affects the baby and children's apparel
industry generally and is primarily due to retailers' emphasis on price
reductions in the first quarter and promotional retailers' and manufacturers'
emphasis on closeouts of prior year's product lines. Accordingly, the results of
operations for the three-month period ended April 3, 1999 are not indicative of
the results to be expected for the full year.
MARKET RISKS
In the operation of its business, the Company has market risk exposures to
foreign sourcing, raw material prices and interest rates. Each of these risks
and the Company's strategies to manage the exposure is discussed below.
The Company currently sources approximately 68% of its sewing production
through its offshore facilities. As a result, the Company may be adversely
affected by political instability resulting in the disruption of trade from
foreign countries in which the Company's manufacturing facilities are located,
the imposition of additional regulations relating to imports, duties, taxes and
other charges on imports, any significant decreases in the value of the dollar
against foreign currencies and restrictions on the transfer of funds. These and
other factors could result in the interruption of production in offshore
facilities or a delay in the receipt of the products by the Company in the
United States. The Company's future performance may be subject to such factors,
which are beyond the Company's control, and there can be no assurance that such
factors would not have a material adverse effect on the Company's financial
condition and results of operations.
The principal raw materials used by the Company are cotton and polyester
yarns and chemicals, dyes and pastes used in textile manufacturing, as well as
finished fabrics and trim materials. These materials are available from a number
of suppliers. Prices for these materials are affected by changes in market
demand and there can be no assurance that prices for these and other raw
materials will not increase in the near future.
The Company's operating results are subject to risk from interest rate
fluctuations on debt which carries variable interest rates. At April 3, 1999,
outstanding debt aggregated $194.8 million, of which $74.8 million bore interest
at a variable rate, so that an increase of 1% in the applicable rate would
increase the Company's annual interest expense by $748,000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS: (continued)
YEAR 2000 READINESS
The Company utilizes electronic technology that processes information and
performs calculations that are date and time dependent. Virtually every computer
operation, encompassing all information systems as well as manufacturing
equipment and plant facilities with embedded logic, unless it is already Year
2000 ("Y2K") ready, will be affected in some way by the rollover of the
two-digit year value from "99" to "00" and the inadvertent recognition by
electronic technology of "00" as the year 1900 rather than 2000. The Company is
aware that it may not only be negatively affected by the failure of its own
systems to be Y2K ready, but may also be adversely impacted by the Y2K
non-readiness of its vendors, customers, service providers and any other party
with which the Company transacts business.
The Company has completed its assessment of all systems (hardware and
software), facilities, suppliers and service providers for all locations.
Through this process, the Company has identified remedial steps necessary to be
Y2K ready. Because the Company primarily uses software provided by third party
vendors, it has not incurred substantial internal programming costs associated
with modifying code and data to handle dates past the Year 2000. The latest
software releases provided by major third-party vendors to the Company have been
certified to be Y2K ready.
The Company is in the process of upgrading its systems (hardware and
software) to Y2K ready releases. The replacement/upgrading of affected hardware
and software supporting the Company's manufacturing and administrative locations
is substantially complete. The Company expects to complete the remaining
replacements/upgrades by the third quarter of 1999. Integrated testing and
validation of all the Company's systems is expected to be completed during the
third quarter of 1999.
All major customers, outside vendors and service providers have been
contacted regarding their Y2K readiness. Appropriate steps and follow-up
measures have been instituted to ensure their readiness on an individual basis
by June 1999. Because of the concerns regarding the Y2K issue and the potential
for disruption of business operations, the Company has established a
comprehensive contingency planning process. The scope of the Y2K contingency
plans includes, but is not limited to, failures or disruptions in: information
systems, plant facilities, equipment, utilities, transportation, voice/data
communications, material supplies and/or key support services. The development
of the contingency plans is scheduled for completion in May 1999.
The Company has incurred and expects to continue to incur internal
staffing and other costs as a result of modifying existing systems to be Y2K
ready. Such costs will continue to be expensed as incurred and funded through
internally generated cash flow while costs to acquire new equipment and software
will be capitalized and depreciated over their useful lives. The hardware
replacements and software upgrades were principally planned to improve operating
controls and their implementation was not significantly accelerated as a result
of Y2K issues. To date, the Company has incurred $1.3 million of costs in
connection with Y2K readiness. The Company plans to spend approximately $2.8
million in the remainder of 1999 to complete its readiness, substantially all of
which represents investments in new equipment. The costs to date and the
estimated costs to complete do not include internal payroll costs, which are not
tracked separately.
Management recognizes that the failure of the Company, or any party with
which the Company conducts business, to be Y2K ready in a timely manner could
have a material adverse impact on the operations of the Company. If the
Company's systems were to fail because they were not Y2K ready, the Company
could incur significant costs and inefficiencies. Manual systems for sales,
manufacturing, retail operations and/or financial control would have to be
implemented and staffed. If the Company was not Y2K ready, some customers might
decide to cease doing business with the Company. Disruptions in electric power,
in other critical services or in the delivery of raw materials could cause
significant business interruptions. Similarly, business interruptions incurred
by the Company's customers could result in deferred or canceled orders.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS: (continued)
The dates on which the Company believes Y2K readiness will be complete are
based on management's best estimates, which were derived utilizing numerous
assumptions of future events, including the continued availability of certain
resources, third-party modification plans and other factors. However, there can
be no guarantee that these estimates will be achieved, or that there will not be
a delay in, or increased costs associated with the implementation of Y2K
readiness. Specific factors that might cause differences between the estimates
and actual results include, but are not limited to, the lack of availability of
skilled personnel, increased costs for outside resources, untimely responses by
key service providers and the inability to implement interfaces between the new
systems and the existing systems on a timely basis.
Due to the general uncertainty of the Y2K risk, resulting, in part, from
the uncertainty about the Y2K readiness of third-parties, the Company cannot
ensure its ability to resolve problems associated with the Y2K issue or to limit
exposure to third-party liability that may affect its operations and business,
in a timely or cost-effective manner.
PART II--OTHER INFORMATION:
ITEM 1. LEGAL PROCEEDINGS:
From time to time, the Company has been involved in various legal
proceedings. Management believes that all such litigation is routine in nature
and incidental to the conduct of its business, and that none of such litigation,
if resolved adversely to the Company, would have a material adverse effect on
the financial condition or results of operations of the Company.
ITEM 2. CHANGES IN SECURITIES:
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES:
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
None
ITEM 5. OTHER INFORMATION:
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------ -----------------------
*27 Financial Data Schedule.
* Filed herewith
(b) Reports on Form 8-K
No report was filed by the Registrant during the quarter ended April 3,
1999.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CARTER HOLDINGS, INC.
Date: May 18, 1999 /s/ FREDERICK J. ROWAN, II
Frederick J. Rowan, II
Chairman of the Board of Directors,
President and Chief Executive Officer
Date: May 18, 1999 /s/ MICHAEL D. CASEY
Michael D. Casey
Senior Vice President and
Chief Financial Officer