North Face 2002 Annual Report Download - page 50

Download and view the complete annual report

Please find page 50 of the 2002 North Face annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 72

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72

68
In thousands 2002 2001
Accounts receivable, net $ 2,273 $ 30,322
Inventories –46,489
Other current assets, primarily deferred income taxes 3,010 23,268
Current assets of discontinued operations $ 5,283 $100,079
Property, plant and equipment, net $ 2,500 $ 12,355
Goodwill –17,737
Other assets 6811
Noncurrent assets of discontinued operations $ 2,506 $ 30,903
Accounts payable $ 133 $ 11,296
Accrued liabilities 12,502 43,342
Current liabilities of discontinued operations $12,635 $ 54,638
Note C – Acquisitions
During 2000, the Company acquired the common stock of The North Face, Inc., the Eastpak backpack and daypack
business and 85% of the common stock of H.I.S sportswear AG. The Company also acquired the trademark rights
to the Chic®and Gitano®brands. The aggregate cost for these businesses was $206.5 million, plus repayment of
$107.7 million of indebtedness. Goodwill related to these acquisitions totaled $171.2 million. The Company
acquired the remaining shares of H.I.S sportswear AG during 2001 and 2002 for a total cost of $6.4 million.
All acquisitions have been accounted for as purchases and, accordingly, the purchase prices have been allo-
cated to the net assets acquired based on fair values at the dates of acquisition. The excess of cost over fair value
of the purchased businesses has been recorded as Goodwill. Operating results of these businesses have been
included in the consolidated financial statements since the dates of acquisition.
The Company accrued various restructuring charges in connection with these acquisitions. The charges relate
to severance, closure of manufacturing and distribution facilities, and lease and contract termination costs.
Remaining cash payments related to these actions will be substantially completed during 2003. Activity in the
restructuring accruals is summarized as follows:
Facilities Lease and Contract
In thousands Severance Exit Costs Termination Total
Accrual for 2000 acquisitions $ 9,426 $ 2,026 $ 1,044 $12,496
Cash payments (4,789) (267) (18) (5,074)
Balance December 30, 2000 4,637 1,759 1,026 7,422
Additional accrual 400 1,020 2,400 3,820
Cash payments (2,859) (2,684) (113) (5,656)
Balance December 29, 2001 2,178 95 3,313 5,586
Adjustments to acquisition costs (137) – (516) (653)
Cash payments (1,980) (95) (1,345) (3,420)
Balance January 4, 2003 $ 61 $ – $ 1,452 $ 1,513
Note D – Inventories
In thousands 2002 2001
Finished products $587,954 $621,055
Work in process 110,383 116,864
Materials and supplies 132,181 128,646
$830,518 $866,565