SECURITIES & EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 29, 1995 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-724 PHILLIPS-VAN HEUSEN CORPORATION (Exact name of registrant as specified in its charter) Delaware 13-1166910 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1290 Avenue of the Americas New York, New York 10104 (Address of principal executive offices) (Zip Code) Registrant's telephone number (212) 541-5200 Indicate by check mark whether 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 registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes X No The number of outstanding shares of common stock, par value $1.00 per share, of Phillips-Van Heusen Corporation as of November 28, 1995: 26,791,801 shares.
PHILLIPS-VAN HEUSEN CORPORATION INDEX PART I -- FINANCIAL INFORMATION Independent Accountants Review Report.................................. 1 Consolidated Balance Sheets as of October 29, 1995 and January 29, 1995...................................................... 2 Consolidated Statements of Income for the thirteen weeks and thirty-nine weeks ended October 29, 1995 and October 30, 1994.......... 3 Consolidated Statements of Cash Flows for the thirty-nine weeks ended October 29, 1995 and October 30, 1994........................... 4 Notes to Consolidated Financial Statements............................ 5-7 Management's Discussion and Analysis of Results of Operations and Financial Condition............................................... 8-11 PART II -- OTHER INFORMATION ITEM 6 - Exhibits and Reports on Form 8-K............................. 12-14 Signatures............................................................ 15 Exhibit--Acknowledgment of Independent Accountants.................... 16 Exhibit--Financial Data Schedule...................................... 17
Independent Accountants Review Report Stockholders and Board of Directors Phillips-Van Heusen Corporation We have reviewed the accompanying condensed consolidated balance sheet of Phillips-Van Heusen Corporation as of October 29, 1995, and the related condensed consolidated statements of income and cash flows for the 13 and 39 week periods ended October 29, 1995 and October 30, 1994. These financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Phillips-Van Heusen Corporation as of January 29, 1995, and the related consolidated statements of income, stockholders' equity, and cash flows for the year then ended (not presented herein) and in our report dated March 14, 1995, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of January 29, 1995, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. ERNST & YOUNG LLP New York, New York November 14, 1995 -1-
Phillips-Van Heusen Corporation Consolidated Balance Sheets (In thousands, except per share data) <TABLE> <CAPTION> UNAUDITED AUDITED October 29, January 29, 1995 1995 <S> <C> <C> ASSETS Current Assets: Cash, including cash equivalents of $11,446 and $68,586 $ 22,311 $ 80,473 Trade receivables, less allowances of $4,951 and $1,617 148,086 77,527 Inventories 357,212 255,244 Other, including deferred taxes of $9,754 and $7,108 18,808 16,426 Total Current Assets 546,417 429,670 Property, Plant and Equipment 135,996 136,297 Goodwill 137,205 17,733 Other Assets, including deferred taxes of $9,502 at January 29, 1995 14,798 12,584 $834,416 $596,284 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable $118,417 $ 0 Accounts payable 50,384 38,759 Accrued expenses 94,888 75,014 Current portion of long-term debt 280 260 Total Current Liabilities 263,969 114,033 Long-Term Debt, less current portion 239,403 169,679 Other Liabilities, including deferred taxes of $2,795 at October 29, 1995 62,202 37,112 Stockholders' Equity: Preferred Stock, par value $100 per share; 150,000 shares authorized, no shares outstanding Common Stock, par value $1 per share; 100,000,000 shares authorized; shares issued 26,781,801 and 26,610,310 26,782 26,610 Additional Capital 113,856 112,801 Retained Earnings 128,204 136,049 Total Stockholders' Equity 268,842 275,460 $834,416 $596,284 See accompanying notes. </TABLE> -2-
Phillips-Van Heusen Corporation Consolidated Statements of Income Unaudited (In thousands, except per share amounts) <TABLE> <CAPTION> Thirteen Weeks Thirty-Nine Weeks Ended Ended October 29, October 30, October 29, October 30, 1995 1994 1995 1994 <S> <C> <C> <C> <C> Net sales $448,007 $379,406 $1,080,487 $902,074 Cost of goods sold 308,952 256,019 724,431 604,764 Gross profit 139,055 123,387 356,056 297,310 Selling, general and administrative expenses 116,749 93,582 322,209 257,412 Plant, store closing and restructuring expenses 25,000 - 25,000 - (Loss) income before interest and taxes (2,694) 29,805 8,847 39,898 Interest expense, net 6,559 3,377 17,281 10,061 (Loss) income before taxes (9,253) 26,428 (8,434) 29,837 Income tax (benefit) expense (4,879) 8,578 (4,594) 9,783 Net (loss) income $ (4,374) $ 17,850 $ (3,840) $ 20,054 Net (loss) income per share $ (0.16) $ 0.66 $ (0.14) $ 0.74 Cash dividends per share $ 0.0375 $ 0.0375 $ 0.1125 $ 0.1125 See accompanying notes. </TABLE> -3-
Phillips-Van Heusen Corporation Consolidated Statements of Cash Flows Unaudited (In thousands) Thirty-Nine Weeks Ended October 29, October 30, 1995 1994 OPERATING ACTIVITIES: Net (loss) income $ (3,840) $ 20,054 Adjustments to reconcile net (loss) income to net cash used by operating activities: Depreciation and amortization 22,498 17,273 Write-off of fixed assets 11,000 Other-net (3,480) (3,135) Changes in operating assets and liabilities: Receivables (50,618) (41,150) Inventories (65,688) (20,501) Accounts payable and accrued expenses (23,072) 22,692 Other-net (150) (3,036) Net Cash Used By Operating Activities (113,350) (7,803) INVESTING ACTIVITIES: Acquisition of the Apparel Group of Crystal Brands (114,503) - Plant and equipment acquired (25,029) (37,233) Contributions from landlords 6,930 10,561 Other-net 2,411 1,908 Net Cash Used By Investing Activities (130,191) (24,764) FINANCING ACTIVITIES: Proceeds from revolving line of credit and long- term borrowings 204,737 - Payments on revolving line of credit and long- term borrowings (16,580) (245) Exercise of stock options 1,227 996 Payment of dividends (4,005) (3,983) Net Cash Provided (Used) By Financing Activities 185,379 (3,232) DECREASE IN CASH (58,162) (35,799) Cash at beginning of period 80,473 68,070 Cash at end of period $ 22,311 $ 32,271 Note: Net loss for the thirty-nine weeks ended October 29, 1995 includes a $25,000 pre-tax charge for plant, store closing and restructuring expenses. See accompanying notes. -4-
Phillips-Van Heusen Corporation Notes To Consolidated Financial Statements Unaudited (In thousands, except per share amounts) GENERAL The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not contain all disclosures required by generally accepted accounting principles for complete financial statements. Reference should be made to the annual financial statements, including the footnotes thereto, included in the Company's Annual Report to Stockholders for the year ended January 29, 1995. The results of operations for the thirteen and thirty-nine weeks ended October 29, 1995 and October 30, 1994 are not necessarily indicative of those for a full fiscal year because of seasonal factors. The data contained in these financial statements are unaudited and are subject to year-end adjustments; however, in the opinion of management, all known adjustments (which consist only of normal recurring accruals) have been made to present fairly the consolidated operating results for the unaudited periods. Certain reclassifications have been made to the segment information for the thirteen and thirty-nine weeks ended October 30, 1994 to present that information on a basis consistent with the thirteen and thirty-nine weeks ended October 29, 1995. INVENTORIES Inventories are summarized as follows: October 29, January 29, 1995 1995 Raw materials $ 8,988 $ 19,849 Work in process 17,186 17,026 Finished goods 331,038 218,369 Total $357,212 $255,244 Inventories are stated at the lower of cost or market. Cost for the apparel business is determined principally using the last-in first-out method (LIFO), except for certain sportswear inventories which are determined using the first-in first-out method (FIFO). Cost for the footwear business is determined using FIFO. Inventories would have been $15,960 and $12,700 higher than reported at October 29, 1995 and January 29, 1995, respectively, if the FIFO method of inventory accounting had been used for the entire apparel business. The determination of cost of sales and inventories under the LIFO method can only be made at the end of each fiscal year based on inventory cost and quantities on hand. Interim LIFO determinations are based on management's -5-
estimates of expected year-end inventory levels and costs. Such estimates are subject to revision at the end of each quarter. Since estimates of future inventory levels and costs are subject to external factors, interim financial results are subject to year-end LIFO inventory adjustments. SEGMENT DATA The Company operates in two industry segments: (i) apparel - the manufacture, procurement for sale and marketing of a broad range of men's and women's apparel to wholesale customers as well as through Company-owned retail stores, and (ii) footwear - the manufacture, procurement for sale and marketing of a broad range of men's, women's and children's shoes to wholesale customers as well as through Company-owned retail stores. Operating income represents net sales less operating expenses. Excluded from operating results of the segments are interest expense, net, corporate expenses and income taxes. Thirteen Weeks Thirty-Nine Weeks Ended Ended October 29, October 30, October 29, October 30, 1995 1994 1995 1994 Net sales-apparel $343,625 $271,524 $ 804,560 $621,762 Net sales-footwear 104,382 107,882 275,927 280,312 Total net sales $448,007 $379,406 $1,080,487 $902,074 Operating (loss) income-apparel* $ (2,624) $ 19,971 $ 2,379 $ 22,067 Operating income-footwear* 4,704 13,086 16,496 25,440 Total operating income* 2,080 33,057 18,875 47,507 Corporate expenses (4,774) (3,252) (10,028) (7,609) Interest expense, net (6,559) (3,377) (17,281) (10,061) (Loss) income before taxes $ (9,253) $ 26,428 $ (8,434) $ 29,837 * Operating income for the thirteen and thirty-nine weeks ended October 29, 1995 includes a $25,000 pre-tax charge, of which $23,000 and $2,000 relate to the Company's apparel and footwear businesses, respectively. These charges relate to plant, store closing and restructuring expenses as described in the accompanying footnote. -6-
ACQUISITION On February 17, 1995, the Company completed the acquisition of the Apparel Group of Crystal Brands, Inc. for $114,503 in cash, net of cash acquired, and subject to certain adjustments. This acquisition was accounted for as a purchase. The acquired operations are included in the Company's consolidated financial statements since February 17, 1995. In connection with the acquisition, the Company acquired assets with a fair value estimated to be $190,427 (including $121,164 of excess of cost over net assets acquired) and assumed liabilities estimated to be $75,924. The Company has not yet determined either the final value of the assets acquired and liabilities assumed or the allocation of these assets and liabilities within the Company's consolidated balance sheet. Accordingly, adjustments to the Company's consolidated balance sheet at October 29, 1995 may be required. If the acquisition had occurred on the first day of fiscal 1994 instead of on February 17, 1995, the Company's proforma consolidated results of operations would have been: Thirty-Nine Weeks Ended October 29, October 30, 1995 1994 Net sales $1,086,618 $1,073,021 Net (loss) income $ (3,903) $ 20,388 Net (loss) income per share $ (0.15) $ 0.75 PLANT, STORE CLOSING AND RESTRUCTURING EXPENSES On September 13, 1995, the Company adopted and began to implement a plan designed to reduce costs and realign the product distribution mix primarily within the Company's apparel business. Significant components of the plan include the closure of three domestic apparel manufacturing facilities before year-end and the closing of approximately 200 less profitable retail outlet stores. As a result, the Company has recorded a pre-tax charge of $25,000 in the third quarter of 1995. Approximately $11,000 of this charge relates to the write-off of fixed assets located in such factories and retail outlet stores. The remaining $14,000 relates to termination benefits for approximately twelve hundred employees impacted by this restructuring. The Company believes these changes will improve future profitability through lower operating costs and improved margins. As part of its ongoing expense and cost reduction initiatives, the Company will continue to evaluate its operating structure. -7-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS Thirteen Weeks Ended October 29, 1995 Compared to Thirteen Weeks Ended October 30, 1994 APPAREL Net sales of the Company's apparel segment in the third quarter were $343.6 million in 1995 and $271.5 million last year, an increase of approximately 26.6%. The acquisition of the Apparel Group of Crystal Brands, Inc. (Gant and Izod) on February 17, 1995, primarily accounted for this increase. Gross profit on apparel sales was 30.0% in the third quarter of 1995 compared to 30.4% in last year's third quarter. Increased promotional selling was mostly offset by higher margins from the newly acquired Izod and Gant businesses. In addition, the third quarter LIFO charge was $2.0 million in 1995 compared to $1.0 million last year. Selling, general and administrative expenses as a percent of apparel sales in the third quarter were 24.0% in 1995 and 23.1% in 1994. The increased percentage relates principally to the inability to fully leverage in-store expenses during this period of retail weakness. FOOTWEAR Net sales of the Company's footwear segment were $104.4 million in the third quarter of 1995 and $107.9 million last year, a decrease of approximately 3.2%. Gross profit on footwear sales was 34.6% in the third quarter of 1995 compared to 37.8% in last year's third quarter. The current quarter contained increased promotional selling, resulting in large part from an exceptionally weak back to school selling season. Selling, general and administrative expenses as a percent of footwear sales in the third quarter were 28.2% in 1995 and 25.6% in 1994. The increased percentage relates principally to the inability to fully leverage in-store expenses during this extended period of retail weakness. INTEREST EXPENSE Net interest expense was $6.6 million in the third quarter of 1995 compared with $3.4 million last year. This increase resulted from the cash purchase of the Apparel Group of Crystal Brands, Inc. -8-
INCOME TAXES The Company's 1995 estimated tax rate reflects the substantially greater weight of its tax exempt operations in Puerto Rico due to the depressed level of overall income, further reduced by the $25 million plant, store closing and restructuring expense. CORPORATE EXPENSES Corporate expenses were $4.8 million in the third quarter of 1995 compared to $3.3 million in 1994. A general increase in corporate expenses included an increase in professional fees related to certain brand research and marketing projects. Thirty-Nine Weeks Ended October 29, 1995 Compared to Thirty-Nine Weeks Ended October 30, 1994 APPAREL Net sales of the Company's apparel segment were $804.6 million during the first nine months of 1995, an increase of 29.4% from the prior year's $621.8 million. The acquisition of the Apparel Group of Crystal Brands, Inc. on February 17, 1995, primarily accounted for this increase. Gross profit on apparel sales was 31.5% in the first nine months of 1995 compared to 31.0% in last year's first nine months. The increased percentage relates principally to higher margins on products sold under the newly acquired Izod and Gant businesses. In addition, the current year includes a LIFO charge of $3.3 million compared with a charge of $3.2 million in the prior year. Selling, general and administrative expenses as a percent of apparel sales in the first three quarters were 28.4% in 1995 and 27.4% in 1994. The increased percentage relates principally to the inability to fully leverage in-store expenses during this extended period of retail weakness. FOOTWEAR Net sales of the Company's footwear segment were $275.9 million compared to the prior year's $280.3 million, a decrease of approximately 1.6%. Gross profit on footwear sales was 37.2% in the first nine months of 1995 compared to 37.4% last year. The prior year's first half was impacted by significant clearance markdowns to clear slower moving merchandise from inventory. The Company began the current year with a much improved inventory mix, which in turn reduced clearance markdowns in the first half. Offsetting this positive trend were promotional markdowns in the Company's retail stores in the third quarter due to an exceptionally weak back to school selling season. -9-
Selling, general and administrative expenses as a percent of footwear sales in the first nine months were 30.5% in 1995 and 28.3% in 1994. The increased percentage relates principally to the inability to fully leverage in-store expenses during this extended period of retail weakness. INTEREST EXPENSE Net interest expense was $17.3 million in the first nine months of 1995 compared with $10.1 million last year. This increase resulted from the cash purchase of the Apparel Group of Crystal Brands, Inc. INCOME TAXES The Company's 1995 estimated tax rate reflects the substantially greater weight of its tax exempt operations in Puerto Rico due to the depressed level of overall income, further reduced by the $25 million plant, store closing and restructuring expense. CORPORATE EXPENSES Corporate expenses were $10.0 million in the first nine months of 1995 compared to $7.6 million in 1994. A general increase in corporate expenses included an increase in professional fees related to certain brand research and marketing projects. In addition, the prior year included a credit to the Company's unfunded supplemental savings plan liability. SEASONALITY The Company's business is seasonal, with higher sales and income during its third and fourth fiscal quarters, which coincide with the Company's two peak retail selling seasons: the first running from the start of the summer vacation period in late May and continuing through September; the second being the Christmas selling season beginning with the weekend following Thanksgiving and continuing through the week after Christmas. Also contributing to the relative strength of the third fiscal quarter is the high volume of fall shipments to wholesale customers which are generally more profitable than spring shipments. The slower spring selling season at wholesale combined with retail seasonality makes the first fiscal quarter particularly weak. LIQUIDITY AND CAPITAL RESOURCES The seasonal nature of the Company's business typically requires the use of cash to fund a build-up in the Company's inventory in the first half of each fiscal year. During the third and fourth quarters, the Company's higher level of sales tends to reduce its inventory and generate cash from operations. While this seasonal pattern has continued in 1995, various factors have caused a significant use of cash in the first three quarters of 1995. -10-
Cash used by operations in the first nine months totalled $113.4 million in 1995 compared with $7.8 million last year. Integration costs resulting from the acquisition of the Apparel Group of Crystal Brands, Inc. and an inventory build-up for a planned increase in fourth quarter sales, also resulting from the acquisition, were the primary reasons for the increase. In addition, a reduced level of earnings, resulting in large part from a $25.0 million pre- tax charge for plant, store closing and restructuring expenses in the third quarter of 1995, contributed to this increase. The Company has a revolving credit agreement under which the Company may, at its option, borrow and repay amounts (including letters of credit) up to a maximum of $400 million. The Company believes that its borrowing capacity under this facility is adequate for the coming year. At the end of the third quarter, the Company estimated that $70 million of the outstanding cash borrowings under this facility are non-current. The acquisition of the Apparel Group of Crystal Brands, Inc. for cash was funded from the Company's cash reserves and from borrowings under this facility. The resulting increase in long-term debt has increased the Company's long-term debt (net of invested cash) as a percentage of total capital to 45.9% at the end of the current quarter compared with 34.8% at the end of last year's third quarter. PLANT, STORE CLOSING AND RESTRUCTURING EXPENSES On September 13, 1995, the Company adopted and began to implement a plan designed to reduce costs and realign the product distribution mix primarily within the Company's apparel business. Significant components of the plan include the closure of three domestic apparel manufacturing facilities before year-end and the closing of approximately 200 less profitable retail outlet stores. As a result, the Company has recorded a pre-tax charge of $25 million in the third quarter of 1995. Approximately $11 million of this charge relates to the write-off of fixed assets located in such factories and retail outlet stores. The remaining $14 million relates to termination benefits for approximately twelve hundred employees impacted by this restructuring. The Company believes these changes will improve future profitability through lower operating costs and improved margins. As part of its ongoing expense and cost reduction initiatives, the Company will continue to evaluate its operating structure. -11-
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (a) The following exhibits are included herein: 4.1 Specimen of Common Stock certificate (incorporated by reference to Exhibit 4 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1981). 4.2 Preferred Stock Purchase Rights Agreement (the "Rights Agreement"), dated June 10, 1986 between PVH and The Chase Manhattan Bank, N.A. (incorporated by reference to Exhibit 3 to the Company's Quarterly Report as filed on Form 10-Q for the period ended May 4, 1986). 4.3 Amendment to the Rights Agreement, dated March 31, 1987 between PVH and The Chase Manhattan Bank, N.A. (incorporated by reference to Exhibit 4(c) to the Company's Annual Report on Form 10-K for the year ended February 2, 1987). 4.4 Supplemental Rights Agreement and Second Amendment to the Rights Agreement, dated as of July 30, 1987, between PVH and The Chase Manhattan Bank, N.A. (incorporated by reference to Exhibit (c)(4) to the Company's Schedule 13E-4, Issuer Tender Offer Statement, dated July 31,1987). 4.5 Credit Agreement, dated as of December 16, 1993, among PVH, Bankers Trust Company, The Chase Manhattan Bank, N.A., Citibank, N.A., The Bank of New York, Chemical Bank and Philadelphia National Bank, and Bankers Trust Company, as agent (incorporated by reference to Exhibit 4.5 to the Company's Annual Report on Form 10-K for the fiscal year ended January 30, 1994). 4.6 First Amendment, dated as of February 13, 1995, to the Credit Agreement dated as of December 16, 1993 (incorporated by reference to Exhibit 4.6 to the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 1995). 4.7 Second Amendment, dated as of July 17, 1995, to the Credit Agreement dated as of December 16, 1993. 4.8 Third Amendment, dated as of September 27, 1995, to the Credit Agreement dated as of December 16, 1993. 4.9 Fourth Amendment, dated as of September 28, 1995, to the Credit Agreement dated as of December 16, 1993. 4.10 Note Agreement, dated October 1, 1992, among PVH, The Equitable Life Assurance Society of the United States, Equitable Variable Life Insurance Company, Unum Life Insurance Company of America, Nationwide Life Insurance Company, Employers Life Insurance Company of Wausau and Lutheran Brotherhood (incorporated by reference to Exhibit 4.21 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1993). -12-
4.11 Indenture, dated as of November 1, 1993, between PVH and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.01 to the Company's Registration Statement on Form S-3 (Reg. No. 33- 50751) filed on October 26, 1993). *10.1 1987 Stock Option Plan, including all amendments through June 13, 1995. *10.2 1973 Employees' Stock Option Plan (incorporated by reference to Exhibit 1 to the Company's Registration Statement on Form S-8 (Reg. No. 2-72959) filed on July 15, 1981). *10.3 Supplement to 1973 Employees' Stock Option Plan (incorporated by reference to the Company's Prospectus filed pursuant to Rule 424(c) to the Registration Statement on Form S-8 (Reg. No. 2-72959) filed on March 31, 1982). *10.4 Phillips-Van Heusen Corporation Special Severance Benefit Plan, as amended and restated as of June 13, 1995. *10.5 Phillips-Van Heusen Corporation Capital Accumulation Plan (incorporated by reference to the Company's Report on Form 8-K filed on January 16, 1987). *10.6 Phillips-Van Heusen Corporation Amendment to Capital Accumulation Plan (incorporated by reference to Exhibit 10(n) to the Company's Annual Report on Form 10-K for the fiscal year ended February 2, 1987). *10.7 Form of Agreement amending Phillips-Van Heusen Corporation Capital Accumulation Plan with respect to individual participants (incorporated by reference to Exhibit 10(1) to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1988). *10.8 Form of Agreement amending Phillips-Van Heusen Corporation Capital Accumulation Plan with respect to individual participants. *10.9 Phillips-Van Heusen Corporation Supplemental Defined Benefit Plan, dated January 1, 1991, as amended and restated on June 2, 1992 (incorporated by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1993). *10.10 Phillips-Van Heusen Corporation Supplemental Savings Plan, dated as of January 1, 1991 and amended and restated as of January 1, 1992 (incorporated by reference to Exhibit 10.29 to the Company's Annual Report on Form 10-K for the fiscal year ended February 2, 1992). 10.11 Asset Sale Agreement, dated January 24, 1995, Among the Company and Crystal Brands, Inc., Crystal Apparel, Inc., Gant Corporation, Crystal Sales, Inc., Eagle Shirtmakers, Inc., and Crystal Brands (Hong Kong) Limited (incorporated by reference to Exhibit 1 to the Company's Report on Form 8-K dated March 6, 1995). -13-
*10.12 Agreement, dated as of April 28, 1993, between Bruce J. Klatsky, Lawrence S. Phillips and the Company (incorporated by reference to Exhibit 10.11 to the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 1995). *10.13 Non-Incentive Stock Option Agreement, dated as of April 28, 1993, between the Company and Bruce J. Klatsky. Non-Incentive Stock Option Agreement, dated as of December 3, 1993, between the Company and Bruce J. Klatsky (reload of April 28, 1993 Non-Incentive Stock Option Agreement) (incorporated by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 1995). *10.14 Amendment, dated December 6, 1993, to the Agreement, dated April 28, 1993, between Bruce J. Klatsky, Lawrence S. Phillips and the Company (incorporated by reference to Exhibit 10.13 to the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 1995). *10.15 Consulting and non-competition agreement, dated February 14, 1995, between the Company and Lawrence S. Phillips (incorporated by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 1995). *10.16 Performance Restricted Stock Plan, effective as of April 18, 1995 (incorporated by reference to Exhibit 10.15 to the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 1995). 15. Acknowledgement of Independent Accountants. 27. Financial Data Schedule. * Management contract or compensatory plan or arrangement required to be identified pursuant to Item 14(a) of this report. (b) Reports on Form 8-K No reports have been filed on Form 8-K during the quarter covered by this report. -14-
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. PHILLIPS-VAN HEUSEN CORPORATION Registrant December 11, 1995 /s/ Emanuel Chirico Emanuel Chirico, Controller Vice President and Chief Accounting Officer -15-
Exhibit 15 November 14, 1995 Stockholders and Board of Directors Phillips-Van Heusen Corporation We are aware of the incorporation by reference in the Registration Statement (Form S-8, No. 33-59101), Registration Statement (Form S-8, No. 33-59602), Registration Statement (Form S-8, No. 33-38698), Post-Effective amendment No. 1 to the Registration Statement (Form S-8, No. 33-24057), Post-Effective amendment No. 2 to the Registration Statement (Form S-8, No. 2-73803), Post- Effective amendment No. 4 to the Registration Statement (Form S-8, No. 2- 72959), Post-Effective amendment No. 6 to the Registration Statement (Form S- 8, No. 2-64564), and Post-Effective amendment No. 13 to the Registration Statement (Form S-8, No. 2-47910), of Phillips-Van Heusen Corporation of our report dated November 14, 1995 relating to the unaudited condensed consolidated interim financial statements of Phillips-Van Heusen Corporation which are included in its Form 10-Q for the three month period ended October 29, 1995. Pursuant to Rule 436(c) of the Securities Act of 1933, our report is not a part of the registration statements or post-effective amendments prepared or certified by accountants within the meaning of Section 7 or 11 of the Securities Act of 1933. ERNST & YOUNG LLP New York, New York -16-