SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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 November 1, 1997 ---------------- 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 1-12107 ------- ABERCROMBIE & FITCH CO. -------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 31-1469076 - ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) Four Limited Parkway East, Reynoldsburg, OH 43068 ------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (614) 577-6500 -------------------------- 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 ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class A Common Stock Outstanding at November 25, 1997 - ---------------------------- -------------------------------------- $.01 Par Value 8,008,176 Shares Class B Common Stock Outstanding at November 25, 1997 - ---------------------------- -------------------------------------- $.01 Par Value 43,000,000 Shares
ABERCROMBIE & FITCH CO. TABLE OF CONTENTS <TABLE> <CAPTION> Page No. -------- <S> <C> Part I. Financial Information Item 1. Financial Statements Consolidated Statements of Income Thirteen and Thirty-nine Weeks Ended November 1, 1997 and November 2, 1996.......................3 Consolidated Balance Sheets November 1, 1997 and February 1, 1997.......................4 Consolidated Statements of Cash Flows Thirty-nine Weeks Ended November 1, 1997 and November 2, 1996.......................5 Notes to Consolidated Financial Statements...........................6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition..............10 Part II. Other Information Item 1. Legal Proceedings..............................................15 Item 5. Other Information .............................................15 Item 6. Exhibits and Reports on Form 8-K...............................15 </TABLE> 2
PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS ABERCROMBIE & FITCH CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Thousands except per share amounts) (Unaudited) <TABLE> <CAPTION> Thirteen Weeks Ended Thirty-nine Weeks Ended -------------------------------- -------------------------------- November 1, November 2, November 1, November 2, 1997 1996 1997 1996 --------------- --------------- --------------- --------------- <S> <C> <C> <C> <C> NET SALES $148,516 $ 87,688 $309,472 $196,139 Cost of Goods Sold, Occupancy and Buying Costs 95,526 56,731 204,755 132,236 --------------- --------------- --------------- --------------- GROSS INCOME 52,990 30,957 104,717 63,903 General, Administrative and Store Operating Expenses 34,581 21,732 79,738 53,252 --------------- --------------- --------------- --------------- OPERATING INCOME 18,409 9,225 24,979 10,651 Interest Expense, Net 1,076 2,643 3,278 3,794 --------------- --------------- --------------- --------------- INCOME BEFORE INCOME TAXES 17,333 6,582 21,701 6,857 Provision for Income Taxes 6,930 2,600 8,680 2,700 --------------- --------------- --------------- --------------- NET INCOME $ 10,403 $ 3,982 $ 13,021 $ 4,157 =============== =============== =============== =============== NET INCOME PER SHARE $ .20 $ .09 $ .25 $ .09 =============== =============== =============== =============== WEIGHTED AVERAGE SHARES OUTSTANDING 51,594 45,945 51,328 43,982 =============== =============== =============== =============== </TABLE> The accompanying notes are an integral part of these consolidated financial statements. 3
ABERCROMBIE & FITCH CO. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Thousands) <TABLE> <CAPTION> November 1, February 1, 1997 1997 ----------------- ----------------- (Unaudited) ASSETS ------ <S> <C> <C> CURRENT ASSETS: Cash $2,623 $1,945 Accounts Receivable 2,433 2,102 Inventories 55,583 34,943 Store Supplies 5,173 5,300 Other 1,292 588 ----------------- ----------------- TOTAL CURRENT ASSETS 67,104 44,878 PROPERTY AND EQUIPMENT, NET 66,696 58,992 DEFERRED INCOME TAXES 4,191 1,885 OTHER ASSETS 6 6 ----------------- ----------------- TOTAL ASSETS $137,997 $105,761 ================= ================= LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Accounts Payable $15,645 $6,414 Accrued Expenses 38,031 22,388 Intercompany Payable 1,441 5,417 Income Taxes Payable 8,157 9,371 ----------------- ----------------- TOTAL CURRENT LIABILITIES 63,274 43,590 LONG-TERM DEBT 50,000 50,000 OTHER LONG-TERM LIABILITIES 1,266 933 SHAREHOLDERS' EQUITY: Common Stock 511 511 Paid-in Capital 117,973 117,980 Retained Deficit (94,232) (107,253) ----------------- ----------------- 24,252 11,238 Less Treasury Stock, at Average Cost (795) -- ----------------- ----------------- TOTAL SHAREHOLDERS' EQUITY 23,457 11,238 ----------------- ----------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $137,997 $105,761 ================= ================= </TABLE> The accompanying notes are an integral part of these consolidated financial statements. 4
ABERCROMBIE & FITCH CO. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Thousands) (Unaudited) <TABLE> <CAPTION> Thirty-nine Weeks Ended ------------------------------------ November 1, November 2, 1997 1996 ----------------- ----------------- <S> <C> <C> CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $13,021 $4,157 Impact of Other Operating Activities on Cash Flows: Depreciation and Amortization 11,764 8,423 Changes in Assets and Liabilities Inventories (20,640) (20,951) Accounts Payable and Accrued Expenses 24,874 11,696 Income Taxes (3,520) (3,001) Other Assets and Liabilities (151) 56 ----------------- ----------------- NET CASH PROVIDED FROM OPERATING ACTIVITIES 25,348 380 ----------------- ----------------- CASH USED FOR INVESTING ACTIVITIES Capital Expenditures (19,892) (12,910) ----------------- ----------------- FINANCING ACTIVITIES: Increase (Decrease) in Intercompany Payable (3,976) 15,172 Other Equity Changes (802) - Dividend Paid to Parent - (27,000) Proceeds from Credit Agreement - 150,000 Repayment of Trademark Obligations - (32,000) Repayment of Intercompany Debt - (91,000) Repayment of Borrowings Under Credit Agreement - (120,267) Net Proceeds from Sale of Stock - 118,567 ----------------- ----------------- NET CASH PROVIDED FROM (USED FOR) FINANCING ACTIVITIES (4,778) 13,472 ----------------- ----------------- NET INCREASE IN CASH 678 942 Cash, Beginning of Year 1,945 874 ----------------- ----------------- CASH, END OF PERIOD $2,623 $1,816 ================= ================= </TABLE> In the thirty-nine weeks ended November 2, 1996, non-cash financing activities included the distribution of a note representing preexisting obligations of Abercrombie & Fitch's operating subsidiary in respect of certain trademarks in the amount of $32 million by Abercrombie & Fitch's trademark subsidiary to The Limited Inc., distribution of the $50 million long-term mirror note and the conversion of $8.6 million of intercompany debt into the working capital note. The accompanying notes are an integral part of these consolidated financial statements. 5
ABERCROMBIE & FITCH CO. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION Abercrombie & Fitch Co. (the "Company") is a specialty retailer of high quality, casual apparel for men and women with an active, youthful lifestyle. The accompanying consolidated financial statements include the historical financial statements of, and transactions applicable to Abercrombie & Fitch Co. and its subsidiaries and reflect the assets, liabilities, results of operations and cash flows on a historical cost basis. An initial public offering of 8.05 million shares of the Company's Class A common stock was consummated in the third quarter of 1996 and, as a result, approximately 84% of the outstanding common stock of the Company is owned by The Limited, Inc. ("The Limited"). The common stock issued to The Limited (43 million Class B shares) in connection with the incorporation of the Company has been reflected as outstanding for all periods presented. The consolidated financial statements as of November 1, 1997 and for the thirteen and thirty-nine week periods ended November 1, 1997 and November 2, 1996 are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's 1996 Annual Report on Form 10-K. In the opinion of management, the accompanying consolidated financial statements reflect all adjustments (which are of a normal recurring nature) necessary to present fairly the financial position and results of operations and cash flows for the interim periods, but are not necessarily indicative of the results of operations for a full fiscal year. The consolidated financial statements as of November 1, 1997, and for the thirteen and thirty-nine week periods ended November 1, 1997 and November 2, 1996 included herein have been reviewed by the independent accounting firm of Coopers & Lybrand L.L.P. and the report of such firm follows the notes to consolidated financial statements. 2. ADOPTION OF ACCOUNTING STANDARD In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings -------- Per Share." The Company will adopt the requirements for earnings per --------- share in the fourth quarter of 1997, the effect of which will not be material to the Company's consolidated financial statements. 6
3. INVENTORIES The fiscal year of the Company and its subsidiaries is comprised of two principal selling seasons: Spring (the first and second quarters) and Fall (the third and fourth quarters). Valuation of finished goods inventories is based principally upon the lower of average cost or market determined on a first-in, first-out basis utilizing the retail method. Inventory valuation at the end of the first and third quarters reflects adjustments for inventory markdowns and shrinkage estimates for the total selling season. 4. PROPERTY AND EQUIPMENT, NET Property and equipment, net, consisted of (thousands): <TABLE> <CAPTION> November 1, February 1, 1997 1997 ----------- ----------- <S> <C> <C> Property and equipment, at cost $120,099 $101,919 Accumulated depreciation and amortization (53,403) (42,927) ----------- ----------- Property and equipment, net $66,696 $58,992 =========== =========== </TABLE> 5. INCOME TAXES The Company is included in The Limited's consolidated federal and certain state income tax groups for income tax reporting purposes and is responsible for its proportionate share of income taxes calculated upon its federal taxable income at a current estimate of the Company's annual effective tax rate. Income taxes paid during the thirty-nine weeks ended November 1, 1997 and November 2, 1996 approximated $12.2 million and $5.7 million. 6. LONG-TERM DEBT Long-term debt consists of a note which represents the Company's portion of certain long-term debt of The Limited with interest rate (7.8%) and maturity of the note (May 15, 2002) paralleling that of corresponding debt of The Limited. Interest paid during the thirty-nine weeks ended November 1, 1997 and November 2, 1996, including interest on the intercompany cash management account (see Note 7), approximated $5.4 million and $2.5 million. 7
7. INTERCOMPANY RELATIONSHIP WITH PARENT The Limited provides various services to the Company including, but not limited to, store design and construction supervision, real estate management, travel and flight support and merchandise sourcing. To the extent expenditures are specifically identifiable they are charged to the Company. All other related support expenses are charged to the Company and other divisions of The Limited based upon various allocation methods. The Company participates in The Limited's centralized cash management system whereby cash received from operations is transferred to The Limited's centralized cash accounts and cash disbursements are funded from the centralized cash accounts on a daily basis. Prior to the initial capitalization of the Company, the intercompany cash management account was non-interest bearing. After the initial capitalization of the Company on July 11, 1996, the intercompany cash management account became an interest earning asset or interest bearing liability of the Company depending upon the level of cash receipts and disbursements. Interest on the intercompany cash management account is calculated based on 30-day commercial paper rates for "AA" rated companies as reported in the Federal Reserve's H.15 statistical release. The average outstanding balance of the non-interest bearing intercompany payable to The Limited in the twenty-six week period ended August 3, 1996 approximated $64.5 million. A summary of the intercompany payment activity during the non-interest-bearing period for the twenty-six week period ended August 3, 1996 follows: <TABLE> <S> <C> Balance at February 3, 1996 $86,045 Mast and Gryphon purchases 23,178 Other transactions with related parties 9,667 Centralized cash management (16,417) Settlement of current period income taxes 5,700 Payment to The Limited (91,000) Conversion to Working Capital Note (8,616) ------------- Balance at August 3, 1996 $8,557 ============= </TABLE> The Company's proprietary credit card processing is performed by Alliance Data Systems which is approximately 40%-owned by The Limited. The Company and The Limited are parties to a corporate agreement under which the Company granted to The Limited a continuing option to purchase, under certain circumstances, additional shares of Class B Common Stock or shares of nonvoting capital stock of the Company. The Corporate Agreement further provides that, upon request of The Limited, the Company will use its best efforts to effect the registration of any of the shares of Class B Common Stock and nonvoting capital stock held by The Limited for sale. 8
[LETTERHEAD OF COOPERS & LYBRAND APPEARS HERE] REPORT OF INDEPENDENT ACCOUNTANTS To The Board of Directors of Abercrombie & Fitch Co. We have reviewed the condensed consolidated balance sheet of Abercrombie & Fitch Co. at November 1, 1997, and the related condensed consolidated statements of operations and cash flows for the thirteen-week and thirty-nine-week periods ended November 1, 1997 and November 2, 1996. These financial statements are the responsibility of the Company's management. We conducted our review 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, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements 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 as of February 1, 1997, and the related consolidated statements of operations, shareholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated February 24, 1997, 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 February 1, 1997, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. /s/ Coopers & Lybrand L.L.P. COOPERS & LYBRAND L.L.P. Columbus, Ohio November 17, 1997 9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS During the third quarter of 1997, net sales increased 69% to $148.5 million from $87.7 million a year ago. Earnings per share were $.20 in the third quarter of 1997 compared to $.09 in 1996. Year-to-date earnings per share were $.25 in 1997 compared to $.08 per share on an adjusted basis. The adjusted results for the prior year periods presented reflect: 1) 51.05 million shares outstanding to give effect to the 8.05 million shares issued to the public, and 2) interest expense on the Company's ongoing capital structure and seasonal borrowings. Seasonal borrowings are provided through The Limited's centralized cash management system and are reflected in the Company's intercompany balances with The Limited. The following summarized statements of operations data compare the thirteen and thirty-nine week periods ended November 1, 1997 and November 2, 1996 to the adjusted information for the comparable 1996 periods (in thousands except per share data): <TABLE> <CAPTION> Thirteen Weeks Ended ------------------------------------------------ November 1, November 2, November 2, 1997 1996 1996 ------------- ------------- --------------- <S> <C> <C> <C> (Adjusted) Operating income $18,409 $ 9,225 $ 9,225 Interest expense, net 1,076 1,343 2,643 ------------- ------------- --------------- Income before income taxes 17,333 7,882 6,582 Provision for income taxes 6,930 3,150 2,600 ------------- ------------- --------------- Net income $10,403 $ 4,732 $ 3,982 ============= ============= =============== Net income per share $.20 $.09 $.09 ============= ============= =============== Weighted average shares outstanding 51,594 51,050 45,945 ============= ============= =============== </TABLE> 10
<TABLE> <CAPTION> Thirty-nine Weeks Ended ---------------------------------------------- November 1, November 2, November 2, 1997 1996 1996 ------------- ------------- --------------- <S> <C> <C> <C> (Adjusted) Operating income $24,979 $10,651 $10,651 Interest expense, net 3,278 3,891 3,794 ------------- ------------- --------------- Income before income taxes 21,701 6,760 6,857 Provision for income taxes 8,680 2,700 2,700 ------------- ------------- --------------- Net income $13,021 $ 4,060 $ 4,157 ============= ============= =============== Net income per share $.25 $.08 $.09 ============= ============= =============== Weighted average shares outstanding 51,328 51,050 43,982 ============= ============= =============== </TABLE> Financial Summary - ----------------- The following summarized financial and statistical data compares the third quarter and year-to-date periods ended November 1, 1997 to the comparable 1996 periods: <TABLE> <CAPTION> Third Quarter Year - to - Date --------------------------------- ------------------------------ 1997 1996 Change 1997 1996 Change ---------- ---------- --------- --------- --------- -------- <S> <C> <C> <C> <C> <C> <C> Increase in comparable store sales 25% 19% 19% 17% Sales increase attributable to new and remodeled stores 44% 35% 39% 35% Sales per average selling square foot $130 $99 31% $283 $227 25% Sales per average store $1,031 $779 32% $2,243 $1,791 25% (thousands) Average store size at end of quarter (selling square feet) 7,906 7,849 1% Selling square feet at end of quarter (thousands) 1,178 934 26% Number of stores: Beginning of period 139 106 127 100 Opened 10 13 22 19 ---------- ---------- --------- --------- End of period 149 119 149 119 ========== ========== ========= ========= </TABLE> 11
Net Sales - --------- Net sales for the third quarter of 1997 increased 69% to $148.5 million from $87.7 million in the year earlier period. Net sales per average selling square foot increased 31%. The increase in net sales was due to both a comparable store sales increase of 25% and from opening 30 new stores as compared to the third quarter of 1996. Comparable store sales increases were strong in both men's and women's businesses. Year-to-date net sales were $309.5 million, an increase of 58%, from $196.1 million for the same period in 1996. Sales growth resulted from a comparable store sales increase of 19% and the addition of new stores. Net sales per selling square foot for the Company increased 25%. Gross Income - ------------ Gross income, as a percentage of net sales, increased to 35.7% for the third quarter of 1997 from 35.3% for the same period in 1996. The increase was primarily attributable to a reduction in buying and occupancy costs, as a percentage of net sales, due to higher sales productivity associated with the increase in comparable store sales. The 1997 year-to-date gross income, expressed as a percentage of net sales, increased 1.2% to 33.8%, from 32.6% for the comparable period in 1996. This improvement was attributable to higher merchandise margins and lower buying and occupancy costs, as a percentage of net sales. General, Administrative and Store Operating Expenses - ---------------------------------------------------- General, administrative and store operating expenses, expressed as a percentage of net sales, were 23.3% in the third quarter of 1997 as compared to 24.8% for the same period in 1996. The improvement resulted primarily from expense leverage associated with the strong comparable store sales growth. General, administrative and store operating expenses, expressed as a percentage of net sales, were 25.8% and 27.2% for the year-to-date periods in 1997 and 1996, respectively. The improvement resulted from management's continued emphasis on expense control and the favorable leveraging of expenses, primarily store expenses, over higher sales volume. Operating Income - ---------------- Third quarter and year-to-date operating income, expressed as a percentage of net sales, were 12.4% and 8.1%, in 1997, up from 10.5% and 5.4% for the comparable periods in 1996. The improvement in operating income in these periods is a result of higher gross income and lower general, administrative and store operating expenses, expressed as a percentage of net sales. 12
Interest Expense - ---------------- Third quarter interest expense of $1.1 million was down $0.2 million from adjusted 1996 third quarter interest expense. The Company's year-to-date interest expense was $3.3 million, down $0.6 million from the adjusted $3.9 million in 1996. Interest expense in the third quarter of 1997 and adjusted 1996 third quarter included $975 thousand associated with the $50 million long- term debt. The balance was primarily from interest on short-term borrowings (see Note 7 of the Company's Consolidated Financial Statements). FINANCIAL CONDITION Liquidity and Capital Resources - ------------------------------- Cash provided from operating activities and cash funding from The Limited's centralized cash management system provide the resources to support operations including projected growth, seasonal working capital requirements and capital expenditures. A summary of certain measures of the Company's liquidity and long-term ongoing capitalization follows (thousands): <TABLE> <CAPTION> November 1, February 1, 1997 1997 --------------- --------------- <S> <C> <C> Working Capital $3,830 $1,288 =============== =============== Capitalization: Long-term Debt $50,000 $50,000 Shareholders' Equity 23,457 11,238 --------------- --------------- Total Capitalization $73,457 $61,238 =============== =============== </TABLE> The $25.3 million net cash provided from operating activities for the thirty- nine weeks ended November 1, 1997 increased from $0.4 million for the comparable period last year due primarily to the increase in net income and an increase in accounts payable and accrued expenses. Depreciation and amortization increased $3.3 million as compared to 1996 as a result of depreciation related to new stores and other property additions. Investing activities were for capital expenditures, primarily for new stores. In 1996, financing activities were due to intercompany transactions and proceeds of $150 million from the Credit Agreement which were used to repay $91 million of intercompany debt and $32 million of Trademark Obligations and fund a $27 million dividend to The Limited. 13
Abercrombie & Fitch's operations are seasonal in nature and typically peak during the back-to-school and Christmas selling periods. Accordingly, cash requirements for inventory expenditures are highest during these periods. Capital Expenditures - -------------------- Capital expenditures, primarily for new and remodeled stores totaled $19.9 million for the thirty-nine weeks ended November 1, 1997 versus $12.9 million for the comparable period of 1996. The Company estimates the average cost for leasehold improvements, furniture and fixtures for stores opened in 1997 will be approximately $780,000 per store, after giving effect to landlord allowances. Additionally, inventory purchases at cost are expected to average approximately $285,000. The Company anticipates spending $28-$32 million in 1997 for capital expenditures, of which $27-$29 million will be for new stores, the remodeling and/or expansion of existing stores and related improvements. The Company intends to add approximately 222,000 net selling square feet in 1997, which will represent a 22% increase over year-end 1996. It is anticipated that the increase will result from the addition of 30 new stores and remodeling and/or expansion of three stores. The Company expects capital expenditures will be funded principally by net cash provided by operating activities. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 - -------------------------------------------------------------------------------- All forward-looking statements made by the Company involve material risks and uncertainties and are subject to change based on various important factors which may be beyond the Company's control. Accordingly, the Company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Such factors include, but are not limited to, changes in consumer spending patterns, consumer preferences and overall economic conditions, the impact of competition and pricing, changes in weather patterns, political stability, currency and exchange risks and changes in existing or potential duties, tariffs or quotas, availability of suitable store locations on appropriate terms, ability to develop new merchandise, ability to hire and train associates, and other factors that may be described in the Company's filings with the Securities and Exchange Commission. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. 14
PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS The Company is a defendant in a variety of lawsuits arising in the ordinary course of business. On November 13, 1997, the United States District Court for the Southern District of Ohio, Eastern Division, dismissed with prejudice an amended complaint previously transferred to that court by the United States District Court, Central District of California. The amended complaint, which had been filed against the Company, The Limited and certain of The Limited's other subsidiaries by the American Textile Manufacturers Institute ("ATMI"), a textile industry trade association, alleged that the defendants violated the federal False Claims Act by submitting false country of origin records to the US Customs Service. On November 26, 1997, ATMI served a motion to alter or amend judgment and a motion to disqualify the presiding judge and to vacate the order of dismissal. The Company is vigorously opposing these motions. Although it is not possible to predict with certainty the eventual outcome of any litigation, in the opinion of management, the foregoing proceedings are not expected to have a material adverse effect on the Company's financial position or results of operations. Item 5. OTHER INFORMATION The Company's Certificate of Incorporation includes provisions relating to potential conflicts of interest that may arise between the Company and The Limited. Such provisions were adopted in light of the fact that the Company and The Limited and its subsidiaries are engaged in retail businesses and may pursue similar opportunities in the ordinary course of business. Among other things, these provisions generally eliminate the liability of directors and officers of the Company with respect to certain matters involving The Limited and its subsidiaries, including matters that may constitute corporate opportunities of The Limited, its subsidiaries or the Company. Any person purchasing or acquiring an interest in shares of capital stock of the Company will be deemed to have consented to such provisions relating to conflicts of interest and corporate opportunities, and such consent may restrict such person's ability to challenge transactions carried out in compliance with such provisions. Investors should review the Company's Certificate of Incorporation before making any investment in shares of the Company's capital stock. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits -------- 3. Articles of Incorporation and Bylaws. 3.1 Amended and Restated Certificate of Incorporation of the Company incorporated by reference to Exhibit 3.1 to the Company's quarterly report on Form 10-Q for the quarter ended November 2, 1996. 3.2 Bylaws of the Company incorporated by reference to Exhibit 3.2 to the Company's quarterly report on Form 10-Q for the quarter ended November 2, 1996. 15
4. Instruments Defining the Rights of Security Holders. 4.1 Specimen Certificate of Class A Common Stock of the Company incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-1 (File No. 333-8231) (the "Form S-1"). 4.2 Certificate of Incorporation of The Limited, Inc. incorporated by reference to Exhibit 4.2 to the Company's Form S-1. 4.3 Bylaws of The Limited, Inc. incorporated by reference to Exhibit 4.3 to the Company's Form S-1. 4.4 Corporate Agreement by and between Abercrombie & Fitch Co. and The Limited, Inc., dated October 1, 1996 incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarter ended November 2, 1996. 10. Material Contracts. 10.1 Abercrombie & Fitch Co. Incentive Compensation Performance Plan incorporated by reference to Exhibit A to the Company's Proxy Statement dated April 14, 1997. 10.2 Abercrombie & Fitch Co. 1997 Restatement of the Abercrombie & Fitch Co. 1996 Stock Option and Performance Incentive Plan incorporated by reference to Exhibit B to the Company's Proxy Statement dated April 14, 1997. 10.3 Abercrombie & Fitch Co. 1996 Stock Plan for Non-Associate Directors incorporated by reference to Exhibit C to the Company's Proxy Statement dated April 14, 1997. 10.4 Employment Agreement by and between Abercrombie & Fitch Co. and Michael S. Jeffries dated as of May 13, 1997 with exhibits and amendment. 11. Statement re: Computation of Per Share Earnings. 15. Letter re: Unaudited Interim Financial Information to Securities and Exchange Commission re: Incorporation of Report of Independent Accountants. 27. Financial Data Schedule. (b) Reports on Form 8-K. -------------------- None. 16
SIGNATURE --------- 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. ABERCROMBIE & FITCH CO. (Registrant) By /s/ Seth R. Johnson --------------------------- Seth R. Johnson, Vice President and Chief Financial Officer* Date: December 15, 1997 - ---------------------------------- * Mr. Johnson is the principal financial officer and has been duly authorized to sign on behalf of the Registrant. 17
EXHIBIT INDEX ------------- Exhibit No. Document - ----------- ---------------------------------- 10.4 Employment Agreement by and between Abercrombie & Fitch Co. and Michael S. Jeffries dated as of May 13, 1997 with exhibits and amendment. 11 Statement re: Computation of Per Share Earnings. 15 Letter re: Unaudited Interim Financial Information to Securities and Exchange Commission re: Incorporation of Report of Independent Accountants. 27 Financial Data Schedule.