United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the period Ended March 31, 2002 Commission File Number 1-878
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BLAIR CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 25-0691670
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
220 HICKORY STREET, WARREN, PENNSYLVANIA 16366-0001
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(Address of principal executive offices) (Zip Code)
(814) 723-3600
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(Registrant's telephone number, including area code)
Not applicable
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(Former name, former address and former fiscal year, if changed
since last report)
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 periods 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
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As of May 10, 2002 the registrant had outstanding 7,983,980 shares of its common
stock without nominal or par value.
PART I. FINANCIAL INFORMATION -2-
ITEM I. FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
CONSOLIDATED BALANCE SHEETS -3-
BLAIR CORPORATION AND SUBSIDIARIES
March 31 December 31
2002 2001
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ASSETS
Current assets:
Cash and cash equivalents $ 18,484,328 $5,712,495
Customer accounts receivable, less
allowances for doubtful accounts and
returns of $46,149,972 in 2002 and
$45,967,160 in 2001 149,962,957 158,302,205
Inventories - Note G
Merchandise 66,861,527 73,249,927
Advertising and shipping supplies 18,447,688 22,162,217
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85,309,215 95,412,144
Deferred income taxes - Note F 12,547,000 10,675,000
Prepaid expenses 1,666,460 878,870
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Total current assets 267,969,960 270,980,714
Property, plant and equipment:
Land 1,142,144 1,142,144
Buildings 64,996,315 64,443,439
Equipment 60,415,495 60,008,564
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126,553,954 125,594,147
Less allowances for depreciation 75,277,989 73,553,885
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51,275,965 52,040,262
Trademarks 614,590 632,651
Other long-term assets 713,696 459,702
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TOTAL ASSETS $320,574,211 $324,113,329
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable - Note I $ 16,275,000 $ 15,000,000
Trade accounts payable 33,115,539 47,632,277
Advance payments from customers 3,701,965 1,925,619
Accrued expenses - Note D 13,598,794 11,818,546
Accrued federal and state taxes 4,785,250 2,776,985
Current portion of capital lease
obligations - Note E 339,483 336,865
------------ ------------
Total current liabilities 71,816,031 79,490,292
Capital lease obligations, less current
portion - Note E 739,906 824,966
Deferred income taxes - Note F 1,767,000 2,009,000
Stockholders' equity:
Common Stock without par value:
Authorized 12,000,000 shares; issued
10,075,440 shares (including shares
held in treasury) - stated value 419,810 419,810
Additional paid-in capital 14,589,838 14,589,838
Retained earnings 276,360,466 271,954,815
Accumulated other comprehensive income 4,465 -0-
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291,374,579 286,964,463
Less 2,105,571 shares of common stock in
treasury - at cost 43,187,542 43,187,542
Less receivable from stock plans 1,935,763 1,987,850
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Total stockholders' equity 246,251,274 241,789,071
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TOTAL LIABILITIES AND STOCKHOLDERS' $320,574,211 $324,113,329
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EQUITY
See accompanying notes.
CONSOLIDATED STATEMENTS OF INCOME -4-
BLAIR CORPORATION AND SUBSIDIARIES
Three Months Ended
March 31
2002 2001
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Net sales $135,261,455 $133,055,145
Other income - Note H 10,073,077 11,302,939
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145,334,532 144,358,084
Costs and expenses:
Cost of goods sold 64,534,996 64,410,845
Advertising 34,184,362 38,690,287
General and administrative 30,563,710 32,608,388
Provision for doubtful accounts 7,270,302 8,294,021
Interest 121,031 727,489
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136,674,401 144,731,030
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INCOME (LOSS) BEFORE INCOME TAXES 8,660,131 (372,946)
Income tax expense (benefit) - Note F 3,059,000 (141,000)
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NET INCOME (LOSS) $ 5,601,131 $ (231,946)
============ ============
Basic and diluted earnings (loss) per
share based on weighted average shares
outstanding - Note C $.70 $(.03)
==== =====
See accompanying notes.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' -5-
EQUITY
BLAIR CORPORATION AND SUBSIDIARIES
Three Months Ended
March 31
2002 2001
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Common Stock $ 419,810 $ 419,810
Additional paid-in capital 14,589,838 14,612,333
Retained earnings:
Balance at beginning of period 271,954,815 267,444,414
Net income (loss) 5,601,131 (231,946)
Cash dividends declared - Note B (1,195,480) (1,195,326)
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Balance at end of period 276,360,466 266,017,142
Accumulated other comprehensive income:
Balance at beginning of period -0- -0-
Foreign currency translation 4,465 -0-
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Balance at end of period 4,465 -0-
Treasury Stock (43,187,542) (43,218,782)
Receivable from stock plans:
Balance at beginning of period (1,987,850) (2,231,623)
Repayments 52,087 53,336
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Balance at end of period (1,935,763) (2,178,287)
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TOTAL STOCKHOLDERS' EQUITY $246,251,274 $235,652,216
============ ============
See accompanying notes.
CONSOLIDATED STATEMENTS OF CASH FLOWS -6-
BLAIR CORPORATION AND SUBSIDIARIES
Three Months Ended
March 31
2002 2001
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OPERATING ACTIVITIES
Net income (loss) $ 5,601,131 $ (231,946)
Adjustments to reconcile net income
(loss)to net cash provided by
(used in)operating activities:
Depreciation and amortization 1,992,218 1,862,998
Provision for doubtful accounts 7,270,302 8,294,021
Provision for deferred income taxes (2,114,000) 393,000
Changes in operating assets and
liabilities providing (using) cash:
Customer accounts receivable 1,068,946 1,500,480
Inventories 10,102,929 (22,617,910)
Federal and state taxes 2,008,265 (10,655,018)
Prepaid expenses and other assets (1,040,250) (248,213)
Trade accounts payable (14,516,738) (11,943,540)
Advance payments from customers 1,776,346 1,905,796
Accrued expenses 1,780,248 (2,361,618)
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NET CASH PROVIDED BY (USED IN) IN
OPERATING ACTIVITIES 13,929,397 (34,101,950)
INVESTING ACTIVITIES
Purchases of property, plant and
equipment (1,209,860) (2,104,838)
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NET CASH (USED IN) INVESTING ACTIVITIES (1,209,860) (2,104,838)
FINANCING ACTIVITIES
Net proceeds from bank borrowings 1,275,000 35,000,000
Repayments of principal on capital leases (82,442) -0-
Dividends paid (1,195,480) (1,195,326)
Decrease in notes receivable from stock
plans 52,087 53,336
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NET CASH PROVIDED BY FINANCING ACTIVITIES 49,165 33,858,010
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EFFECT OF EXCHANGE RATE CHANGES ON CASH 3,131 -0-
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 12,771,833 (2,348,778)
Cash and cash equivalents at beginning of
year 5,712,495 7,497,907
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $18,484,328 $ 5,149,129
=========== ===========
See accompanying notes.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -7-
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Blair
Corporation and its wholly-owned subsidiaries have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three months ended March 31, 2002 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2002. For further information refer to the financial statements and footnotes
included in the Company's annual report on Form 10-K for the year ended December
31, 2001.
The consolidated financial statements include the accounts of Blair Corporation
and its wholly owned subsidiaries. All significant intercompany accounts are
eliminated upon consolidation.
NOTE B - DIVIDENDS DECLARED
2-09-01 $.15 per share 2-13-02 $.15 per share
4-17-01 .15 4-16-02 .15
8-20-01 .15
11-16-01 .15
NOTE C - EARNINGS PER SHARE AND WEIGHTED SHARES OUTSTANDING Earnings per share
are computed in accordance with Statement of Financial Accounting Standards No.
128, "Earnings per Share." Basic earnings per share are computed using the
weighted average number of shares of common stock outstanding during the period.
For diluted earnings per share, the weighted average number of shares includes
common stock equivalents related to stock options.
Three Months Ended
March 31
2002 2001
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Numerator:
Net income (loss) $ 5,601,131 $ (231,946)
Denominator:
Denominator for basic
earnings (loss) per share -
weighted average shares outstanding 7,969,869 7,968,844
Effect of diluted securities:
Employee stock options 4,704 -0-
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Denominator for diluted
earnings (loss) per share -
weighted average shares outstanding
and assumed conversions 7,974,573 7,968,844
Basic earnings (loss) per share $.70 $(.03)
Diluted earnings (loss) per share $.70 $(.03)
NOTE D - ACCRUED EXPENSES Accrued expenses consist of:
March 31 December 31
2002 2001
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Employee compensation $ 7,629,275 $ 7,274,766
Contribution to profit sharing
and retirement plan feature 592,022 880,397
Taxes, other than taxes on income 1,352,845 456,421
Voluntary separation program 1,304,744 1,379,243
Other accrued items 2,719,908 1,827,719
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$13,598,794 $11,818,546
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued -8-
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
NOTE E - LEASES
Capital Leases
The Company leases certain data processing and telephone equipment under
agreements that expire in various years through 2005. The following is a
schedule by year of future minimum capital lease payments required under capital
leases that have initial or remaining noncancelable lease terms in excess of one
year as of March 31, 2002:
2002 $ 322,094
2003 411,150
2004 405,615
2005 101,404
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1,240,263
Less amount representing interest (160,874)
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Present value of minimum lease payments 1,079,389
Less current portion (339,483)
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Long-term portion of capital lease
obligations $ 739,906
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Operating Leases
The Company leases certain data processing, office and telephone
equipment under agreements that expire in various years through 2006.
The Company has also entered into several lease agreements for
buildings, expiring in various years through 2012. The following is a
schedule by years of future minimum rental payments required under
operating leases that have initial or remaining noncancelable lease
terms in excess of one year as of March 31, 2002:
2002 $ 2,099,797
2003 2,348,680
2004 1,831,376
2005 1,442,049
2006 1,171,881
Thereafter 4,746,868
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$13,640,651
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NOTE F - INCOME TAXES
The liability method is used in accounting for income taxes. Under this method,
deferred tax assets and liabilities are determined based on differences between
financial reporting and tax basis of assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect when the differences
are expected to reverse.
The components of income tax expense (credit) are as follows:
Three Months Ended
March 31
2002 2001
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Currently payable (refundable):
Federal $4,851,000 $ (334,000)
Foreign 40,000 -0-
State 282,000 (200,000)
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5,173,000 (534,000)
Deferred (2,114,000) 393,000
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$ 3,059,000 $ (141,000)
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The differences between total tax expense (refund) and the amount computed by
applying the statutory federal income tax rate of 35% to income (loss) before
income taxes are as follows:
Three Months Ended
March 31
2002 2001
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Statutory rate applied to
pre-tax income (loss) $ 3,031,046 $ (130,531)
State income taxes, net
of federal tax benefit 22,100 (97,500)
Other items 5,854 87,031
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$ 3,059,000 $ (141,000)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued -9-
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
NOTE F - INCOME TAXES continued
Components of the provision for deferred income tax (credit) expense are as
follows:
Three Months Ended
March 31
2002 2001
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Advertising costs $ (884,000) $ 2,998,000
Provision for doubtful accounts (186,000) (490,000)
Provision for estimated returns (673,000) (869,000)
Severance costs 29,000 (955,000)
Depreciation (242,000) (57,000)
Other items - net (158,000) (234,000)
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$(2,114,000) $ 393,000
=========== ============
Components of the deferred tax asset and liability under the liability method as
of March 31, 2002 and December 31, 2001 are as follows:
March 31 December 31
2002 2001
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Current net deferred tax asset:
Doubtful accounts $13,867,000 $13,681,000
Returns allowances 2,494,000 1,821,000
Inventory obsolescence 1,704,000 1,584,000
Inventory costs (924,000) (924,000)
Vacation pay 1,469,000 1,469,000
Advertising costs (7,070,000) (7,954,000)
State net operating loss 540,000 600,000
Other items 1,007,000 998,000
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Total deferred tax asset $13,087,000 $11,275,000
State valuation allowance (540,000) (600,000)
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Deferred tax asset,
net of valuation allowance $12,547,000 $10,675,000
=========== ===========
Long-term deferred tax liability:
Property, plant and equipment $ 1,767,000 $ 2,009,000
=========== ===========
NOTE G - INVENTORIES
Inventories are valued at the lower of cost or market. Cost of merchandise
inventories is determined principally on the last-in, first-out (LIFO) method.
Cost of advertising and shipping supplies is determined on the first-in,
first-out (FIFO) method. Advertising and shipping supplies include printed
advertising material and related mailing supplies for promotional mailings which
are generally scheduled to occur within two months. These costs are expensed
when mailed. If the FIFO method had been used for all inventories, the total
amount would have increased by approximately $5,366,000 at both March 31, 2002
and December 31, 2001.
NOTE H - OTHER INCOME Other income consists of:
Three Months Ended
March 31
2002 2001
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Finance charges on time
payment accounts $ 9,134,044 $ 9,784,595
Commissions earned 398,631 889,203
Other items 540,402 629,141
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$10,073,077 $11,302,939
=========== ===========
Finance charges on time payment accounts are recognized on an accrual basis of
accounting.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued -10-
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
NOTE I - FINANCING ARRANGEMENTS
On December 20, 2001, the Company entered into a Credit Agreement with PNC Bank,
National Association, as agent, and certain other banks. The Agreement puts in
place a syndicated revolving credit facility of up to $30 million, secured by
inventory and certain other assets of the Company and its subsidiaries. At the
present time, $20 million of the $30 million is available to the Company, with
the balance obtainable upon meeting certain provisions. The interest rate is, at
the Company's option, based on a base rate option (greater of Prime or Fed Funds
Rate plus .5%), swing loan rate option (as quoted by PNC Bank), or Euro-rate
option (Euro-rate plus 1.75%) as defined in the Credit Agreement. The Company is
required to meet certain covenants that specifically relate to tangible net
worth, maintaining a defined leverage ratio and fixed charge coverage ratio, and
complying with certain indebtedness restrictions. As of March 31, 2002, the
Company was in compliance with all the Credit Agreement's covenants. At March
31, 2002, the Company had borrowings of $1,275,000 (swing loan) and letters of
credit totaling $7.3 million outstanding under the Credit Agreement. The
$1,275,000 swing loan was made on Friday, March 29, 2002 and paid back on
Monday, April 1, 2002. No other borrowings have occurred since April 1, 2002. At
December 31, 2001, nothing was outstanding under the Credit Agreement.
Also, on December 20, 2001, the Company completed a securitization of up to $100
million in accounts receivable with PNC Bank, National Association, as
administrator, and certain conduit purchasers. The Company sold all right, title
and interest in and to certain of its accounts receivables to Blair Factoring
Company, a wholly-owned subsidiary. Blair Factoring Company is a separate
bankruptcy remote special purpose entity that entered into a Receivable Purchase
Agreement with PNC Bank, National Association, as administrator, and certain
conduit purchasers. The Company's consolidated financial statements reflect all
the accounts of Blair Factoring Company, including the receivables and secured
borrowings. Transactions entered into under the Receivable Purchase Agreement
are considered secured borrowings and collateral transactions under the
provisions of Statement of Financial Accounting Standards No. 140, Accounting
for Transfers and Services of Financial Assets and Extinguishment of
Liabilities. At the present time, $50 million of the $100 million is available
to the Company, with the balance obtainable upon meeting certain provisions. The
interest rate approximates 1-month LIBOR plus the appropriate spread (55 basis
points at March 31, 2002) as defined in the Receivables Purchase Agreement. The
securitization requires certain performance standards for the Company's accounts
receivable portfolio in addition to complying with the covenants in the Credit
Agreement. As of March 31, 2002, the Company was in compliance with all the
requirements of the Receivables Purchase Agreement. At both March 31, 2002 and
December 31, 2001, the Company had $15 million outstanding, the minimum amount
required to be outstanding, under the Receivables Purchase Agreement, all of
which was classified as short-term.
Both the revolving credit facility and the securitization have three-year terms
expiring December 20, 2004. The two new agreements replaced a $55,000,000
Revolving Credit Facility that was to expire on December 31, 2001. The
$55,000,000 Revolving Credit Facility was an extension, and reduction, of the
$95,000,000 Revolving Credit Facility that expired on November 13, 2001. At
March 31, 2001, the Company had $60 million outstanding under the $95,000,000
Revolving Credit Facility, all of which was classified as short-term.
Additionally, the Company had available a $25 million line for letters of
credit. As of December 20, 2001, no new letters of credit can be issued under
the $25 million line and the line will expire around mid-year 2002 when the last
letter of credit is scheduled to expire. Outstanding letters of credit amounted
to approximately $935,000 at March 31, 2002 and $10,000,000 at December 31, 2001
and related primarily to inventory purchases. New letters of credit issued after
December 20, 2001 will be issued under the Credit Agreement dated December 20,
2001. No letters of credit were issued under the Credit Agreement as of December
31, 2001 and, as previously stated, $7.3 million of letters of credit were
outstanding under the Credit Agreement as of March 31, 2002.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued -11-
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
NOTE J - NEW ACCOUNTING PRONOUNCEMENTS
Accounting for Derivative Instruments and Hedging Activities The Financial
Accounting Standards Board issued Statement No.133, "Accounting for Derivative
Instruments and Hedging Activities." The Company adopted the new statement
effective January 1, 2001. The Company has historically not invested in
derivative instruments, and as a result, the adoption of this statement has had
no impact on the financial statements of the Company.
Business Combinations and Goodwill and Other Intangible Assets
The Financial Accounting Standards Board issued Statements of Financial
Accounting Standards No. 141, "Business Combinations," and No. 142,
"Goodwill and Other Intangible Assets." The Company adopted the new
rules on accounting for goodwill and other intangible assets effective
January 1, 2002. The adoption of these statements did not have an
impact on the Company.
NOTE K - VOLUNTARY SEPARATION PROGRAM
In the first quarter of 2001, the Company accrued and charged to expense $2.5
million in separation costs. The costs were charged to General and
Administrative Expense in the income statement. The one-time $2.5 million charge
represents severance pay, related payroll taxes and medical benefits due the 56
eligible employees who accepted the voluntary separation program rather than
relocate or accept other positions in the Company. The program was offered to
eligible employees of the Blair Mailing Center from which the merchandise
returns operations have been relocated and the mailing operations have been
outsourced. As of March 31, 2002, approximately $1.2 million of the $2.5 million
has been paid.
NOTE L - CONTINGENCIES
The Company is involved in certain items of litigation, arising in the normal
course of business. While it cannot be predicted with certainty, management
believes that the outcome will not have a material effect on the Company's
financial condition or results of operations.
NOTE M - USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
NOTE N - RECLASSIFICATIONS
Certain amounts in the prior year financial statements have been reclassified
to conform with the current year presentation.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL -12-
CONDITION AND RESULTS OF OPERATIONS
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
Results of Operations
Comparison of First Quarter 2002 and First Quarter 2001
Net income for the first quarter ended March 31, 2002 was $5,601,131, or $.70
per share, compared to a net loss of $231,946, or $.03 per share, for the first
quarter ended March 31, 2001. Results for the first quarter of 2002 reflect
decreases in operating costs and the provision for doubtful accounts. Operating
costs, which include advertising, general and administrative and interest
expenses, decreased 10% in the first quarter of 2002 as compared to the first
quarter of 2001. The provision for doubtful accounts decreased 12% in the first
quarter of 2002 as compared to the first quarter of 2001. Results for the first
quarter of 2001 reflected a one-time $2.5 million cost associated with the
Company's voluntary separation program. Without the one-time charge, the Company
would have reported net income of $1,225,575, or $.15 per share, for the first
quarter of 2001.
Net sales for the first quarter of 2002 were 1.7% higher than net sales for the
first quarter of 2001. Actual response rates were higher in the first quarter of
2002 than in the first quarter of 2001 and were at or near expected levels for
the first quarter of 2002. Gross sales revenue generated per advertising dollar
increased approximately 14% in the first quarter of 2002 as compared to the
first quarter of 2001. The total number of orders shipped decreased slightly
while the average order size increased slightly in the first quarter of 2002 as
compared to the first quarter of 2001. The provision for returned merchandise as
a percentage of gross sales decreased slightly in the first quarter of 2002 as
compared to the first quarter of 2001.
Other income decreased 10.9% in the first quarter of 2002 as compared to the
first quarter of 2001. Decreased finance charges and commissions were primarily
responsible for the lower other income. The lower finance charges resulted from
decreased customer accounts receivable and the lower commissions resulted from
decreased continuity program activity.
Cost of goods sold as a percentage of net sales decreased to 47.7% in the first
quarter of 2002 from 48.4% in the first quarter of 2001. The improvement in cost
of goods sold is attributable to stable or declining product costs, the
Company's efforts to improve gross margins and the lower rate of merchandise
returned.
Advertising expense in the first quarter of 2002 decreased 11.6% from the first
quarter of 2001. Reductions in advertising volume and paper costs were primarily
responsible for the lower advertising cost in the first quarter of 2002. Paper
costs have fallen more than 20% from the beginning of 2001 up to the current
time.
The total number of catalog mailings released in the first quarter of 2002 was
3% less than in the first quarter of 2001 (37 million vs. 38 million). The total
number of prospect catalogs was approximately the same in the first quarters of
both years. Print advertising for Crossing Pointe is all via catalog and is
included in the catalog mailings numbers.
The total number of letter mailings released in the first quarter of 2002 was
30% less than in the first quarter of 2001 (14 million vs. 20 million). Letter
mailings are most productive when targeting the Company's female customers and
are currently used only to promote our women's apparel lines.
Total volume of the co-op and media advertising programs decreased 36% in the
first quarter of 2002 as compared to the first quarter of 2001 (285 million vs.
442 million).
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL -13-
CONDITION AND RESULTS OF OPERATIONS - Continued
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
Results of Operations - Continued
Comparison of First Quarter 2002 and First Quarter 2001 - Continued
The Company launched e-commerce sites for Crossing Pointe
www.crossingpointe.com, and the Blair Online Outlet early in the third quarter
of 2000. The Blair website, www.blair.com, incorporating the Online Outlet, was
launched late third quarter/early fourth quarter of 2000. A redesigned Blair
website was introduced in the first quarter of 2001 featuring improved
navigation and quicker access to the Company's expanded product offerings. In
the first quarter of 2002, the Company has generated $12.6 million in e-commerce
sales demand as compared to $5.5 million in the first quarter of 2001. In all of
2001, the Company generated $35 million in e-commerce orders.
General and administrative expense decreased 6.3% in the first quarter of 2002
as compared to the first quarter of 2001. The lower general and administrative
expense in the first quarter of 2002 was primarily attributable to the one-time
$2.5 million charge for the Company's voluntary separation program in the first
quarter of 2001. The $2.5 million charge represents the cost of the severance
pay, related payroll taxes and medical benefits due the 56 eligible employees
who accepted the voluntary separation program rather than relocate or accept
other positions in the Company. The program was offered to eligible employees of
the former Blair Mailing Center from which the merchandise returns operations
have been relocated and the mailing operations have been outsourced. As of March
31, 2002, $1.2 million of the $2.5 million charge has been paid.
The provision for doubtful accounts as a percentage of credit sales decreased
10.8% in the first quarter of 2002 as compared to the first quarter of 2001. The
provision for doubtful accounts is based on current expectations (consumer
credit and economic trends, etc.), sales mix (prospect/customer) and current and
prior years' experience, especially delinquencies (accounts over 30 days past
due) and actual charge-offs (accounts removed from accounts receivable for
non-payment). The estimated bad debt rate used in the first quarter of 2002 was
approximately 7% lower than the bad debt rate used in the first quarter of 2001.
The estimated bad debt rate has declined due to a tightening of credit granting
and improving delinquency and charge-off rates. At March 31, 2002, the
delinquency rate of open accounts receivable was approximately 3% lower than at
March 31, 2001. The charge-off rate for the first quarter of 2002 was 9% less
than the charge-off rate for the first quarter of 2001. Recoveries of bad debts
previously charged off have been credited back against the allowance for
doubtful accounts. The allowance for doubtful accounts as a percentage of
delinquent accounts increased 4% at March 31, 2002 as compared to March 31,
2001. At this time, the Company feels that the allowance for doubtful accounts
is sufficient to cover the charge-offs from the current customer accounts
receivable portfolio. Also, credit granting, collection and behavior models
continue to be updated and improved, and, along with expanding database
capabilities, provide valuable credit-marketing opportunities.
Interest expense decreased 83% in the first quarter of 2002 as compared to the
first quarter of 2001. Interest expense results primarily from the Company's
borrowings necessary to finance customer accounts receivable, inventories and
growth initiatives. At March 31, 2002, inventories were 15% lower and gross
customer accounts receivable were 6% lower as compared to March 31, 2001. As a
result, average borrowings have been much lower in the first quarter of 2002
than in the first quarter of 2001. Also, interest rates have been substantially
lower in the first quarter of 2002.
Income taxes as a percentage of income (loss) before income taxes were 35.3% in
the first quarter of 2002 and 37.8% in the first quarter of 2001. The federal
income tax rate was 35% in both years. The difference in the total income tax
rate was caused by a change in the Company's effective state income tax rate.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL -14-
CONDITION AND RESULTS OF OPERATIONS -
Continued
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
Liquidity and Sources of Capital
All working capital and cash requirements for the first three months of 2002
were met. Short-term funding was provided by operating activities, a revolving
line of credit and a securitization of receivables.
On December 20, 2001, the Company entered into a Credit Agreement with PNC Bank,
National Association, as agent, and certain other banks. The Agreement puts in
place a syndicated revolving credit facility of up to $30 million, secured by
inventory and certain other assets of the Company and its subsidiaries. At the
present time, $20 million of the $30 million is available to the Company, with
the balance obtainable upon meeting certain provisions. The interest rate is, at
the Company's option, based on a base rate option (greater of Prime or Fed Funds
Rate plus .5%), swing loan rate option (as quoted by PNC Bank), or Euro-rate
option (Euro-rate plus 1.75%) as defined in the Credit Agreement. The Company is
required to meet certain covenants that specifically relate to tangible net
worth, maintaining a defined leverage ratio and fixed charge coverage ratio, and
complying with certain indebtedness restrictions. As of March 31, 2002, the
Company was in compliance with all the Credit Agreement's covenants. At March
31, 2002, the Company had borrowings of $1,275,000 (swing loan) and letters of
credit totaling $7.3 million outstanding under the Credit Agreement. The
$1,275,000 swing loan was made on Friday, March 29, 2002 and paid back on
Monday, April 1, 2002. No other borrowings have occurred since April 1, 2002. At
December 31, 2001, nothing was outstanding under the Credit Agreement.
Also, on December 20, 2001, the Company completed a securitization of up to $100
million in accounts receivable with PNC Bank, National Association, as
administrator, and certain conduit purchasers. The Company sold all right, title
and interest in and to certain of its accounts receivables to Blair Factoring
Company, a wholly-owned subsidiary. Blair Factoring Company is a separate
bankruptcy remote special purpose entity that entered into a Receivable Purchase
Agreement with PNC Bank, National Association, as administrator, and certain
conduit purchasers. The Company's consolidated financial statements reflect all
the accounts of Blair Factoring Company, including the receivables and secured
borrowings. Transactions entered into under the Receivable Purchase Agreement
are considered secured borrowings and collateral transactions under the
provisions of Statement of Financial Accounting Standards No. 140, Accounting
for Transfers and Services of Financial Assets and Extinguishment of
Liabilities. At the present time, $50 million of the $100 million is available
to the Company, with the balance obtainable upon meeting certain provisions. The
interest rate approximates 1-month LIBOR plus the appropriate spread (55 basis
points at March 31, 2002) as defined in the Receivables Purchase Agreement. The
securitization requires certain performance standards for the Company's accounts
receivable portfolio in addition to complying with the covenants in the Credit
Agreement. As of March 31, 2002, the Company was in compliance with all the
requirements of the Receivables Purchase Agreement. At both March 31, 2002 and
December 31, 2001, the Company had $15 million outstanding, the minimum amount
required to be outstanding, under the Receivables Purchase Agreement, all of
which was classified as short-term.
Both the revolving credit facility and the securitization have three-year terms
expiring December 20, 2004. The two new agreements replaced a $55,000,000
Revolving Credit Facility that was to expire on December 31, 2001. The
$55,000,000 Revolving Credit Facility was an extension, and reduction, of the
$95,000,000 Revolving Credit Facility that expired on November 13, 2001. At
March 31, 2001 the Company had $60 million outstanding under the $95,000,000
Revolving Credit Facility, all of which was classified as short-term.
Additionally, the Company had available a $25 million line for letters of
credit. As of December 20, 2001, no new letters of credit can be issued under
the $25 million line and the line will expire around mid-year 2002 when the last
letter of credit is scheduled to expire. Outstanding letters of credit amounted
to
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL -15-
CONDITION AND RESULTS OF OPERATIONS - Continued
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
Liquidity and Sources of Capital - Continued
approximately $935,000 at March 31, 2002 and $10,000,000 at December 31, 2001
and related primarily to inventory purchases. New letters of credit issued after
December 20, 2001 will be issued under the Credit Agreement dated December 20,
2001. No letters of credit were issued under the Credit Agreement as of December
31, 2001 and, as previously stated, $7.3 million of letters of credit were
outstanding under the Credit Agreement as of March 31, 2002.
The ratio of current assets to current liabilities was 3.72 at March 31, 2002,
3.41 at December 31, 2001 and 2.30 at March 31, 2001. Working capital increased
$4,663,507 in the first quarter of 2002 primarily due to the net income. The
2002 increase was primarily reflected in increased cash and cash equivalents and
decreased trade accounts payable more than offsetting decreased inventories and
customer accounts receivable.
Merchandise inventory turnover was 2.6 at March 31, 2002, 2.4 at December 31,
2001 and 2.5 at March 31, 2001. Merchandise inventory as of March 31, 2002 was
9% lower than at December 31, 2001 and 40% lower than at March 31, 2001.
Inventory levels have been generally higher from September 30, 2000 through
September 30, 2001 due to lower than expected response rates since mid-2000 and
the introduction of new catalogs in late 2000 and early 2001. Inventory
liquidation efforts, including sales mailings, were increased in the second,
third and forth quarters of 2001 and resulted in lower merchandise inventory
levels at December 31, 2001 and March 31, 2002. The merchandise inventory levels
are net of the Company's reserve for inventory obsolescence. The reserve totaled
$4.5 million at March 31,2002, $4.2 million at December 31, 2001 and $6.8
million at March 31, 2001. Inventory write-offs and write-downs (reductions to
below cost) charged against the reserve for obsolescence were $1.6 million in
the first quarter of 2002 and $1.5 million in the first quarter of 2001. A
monthly provision for obsolete inventory is added to the reserve and expensed to
cost of goods sold, based on the levels of merchandise inventory and merchandise
purchases.
An operating segment is identified as a component of an enterprise for which
separate financial information is available for evaluation by the chief
decision-maker, or decision-making group, in deciding on how to allocate
resources and assess performance. The Company operates as one business segment
consisting of four product lines. The fourth product line, Crossing Pointe, was
added in the third quarter of 2000 and is expected to become a significant
revenue source over the next few years. Home net sales as a percentage of total
net sales were 10.2% ($13.8 million) in the first quarter of 2002 as compared to
14.3% ($19.0 million) in the first quarter of 2001. Menswear net sales as a
percentage of total net sales were 17.5% ($23.6 million) in the first quarter of
2002 as compared to 18.1% ($24.1 million) in the first quarter of 2001.
Womenswear net sales as a percentage of total net sales were 67.6% ($91.5
million) in the first quarter of 2002 as compared to 66.2% ($88.1 million) in
the first quarter of 2001. Crossing Pointe net sales as a percentage of total
net sales were 4.7% ($6.3 million) in the first quarter of 2002 as compared to
1.4% ($1.9 million) in the first quarter of 2001. Home merchandise inventory
totaled $4.2 million at March 31, 2002, $4.0 million at December 31, 2001 and
$16.0 million at March 31, 2001. Menswear merchandise inventory was $11.9
million at March 31, 2002, $13.1 million at December 31, 2001 and $26.7 million
at March 31, 2001. Womenswear merchandise inventory was $46.8 million at March
31, 2002, $51.9 million at December 31, 2001 and $64.5 million at March 31,
2001. Crossing Pointe merchandise inventory was $3.9 million at March 31, 2002,
$4.2 million at December 31, 2001 and $3.9 million at March 31, 2001.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL -16-
CONDITION AND RESULTS OF OPERATIONS - Continued
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
Liquidity and Sources of Capital - Continued
The Company looks upon its credit granting (Blair Credit) as a marketing
advantage. In the early 1990's, the Company started extending revolving credit
to first-time (prospect) buyers. Blair Credit was offered only to established
customers prior to that time. Prospects responded. This led to a broad offering
of pre-approved lines of credit to prospects in 1995 and 1996. Sales, accounts
receivable and bad debts expectedly increased. However, as the receivables aged,
bad debts greatly exceeded expected levels. The Company recognized that it
didn't have all the necessary credit controls in place and put a hold (second
quarter 1996) on pre-approved credit offers and reviewed and strengthened
(mid-1996 and on) credit controls. Blair Credit customers, on average, buy more,
buy more often and are more loyal than cash and credit card customers. The
benefit from the increased sales volume achieved by offering Blair Credit is
significant and more than outweighs the cost of the credit program. The cost
and/or contribution of the credit program itself can be quickly assessed by
comparing finance charges (included in other income) to the provision for
doubtful accounts. For the first quarter of 2002, finance charges were $9.1
million and the provision for doubtful accounts was $7.3 million (net of $1.8
million). For the first quarter of 2001, finance charges were $9.8 million and
the provision for doubtful accounts was $8.3 million (net of 1.5 million). The
assessments do not take into consideration the administrative cost of the credit
program (included in general and administrative expense), the cost of money and
the impact on sales. The Company's gross credit sales decreased 1.8% in the
first quarter of 2002 as compared to the first quarter of 2001.
The Company has added new facilities, modernized its existing facilities and
acquired new cost-saving equipment during the last several years. Capital
expenditures for property, plant and equipment totaled $1.2 million during the
first quarter of 2002 and $2.1 million during the first quarter of 2001. Capital
expenditures had been projected to be $15 million plus for each of the years
2001 and 2002 and nearly $10 million for 2003. However, capital expenditures for
2001 were delayed due to economic conditions. This included slowing the
implementation of the previously announced modernization and enhancement of the
Company's fulfillment operations. Capital expenditures are projected to be
approximately $41 million in total for the years 2002, 2003, and 2004.
Approximately $21 million of the $41 million is attributable to the fulfillment
project.
The Company has contractual obligations consisting of capital leases for data
processing and telephone equipment, and operating leases for buildings and data
processing, office and telephone equipment.
Payments Due by Period
Contractual
Obligations Total 2002 2003-2004 2005-2006 Thereafter
----------- ----- ---- --------- --------- ----------
Capital lease
Obligations $ 1,079,389 $ 254,423 $725,135 $ 99,831 ---
Operating
leases 13,640,651 2,099,797 4,180,056 2,613,930 4,746,868
---------- ---------- ---------- ---------- ----------
Total $14,720,040 $2,354,220 $4,905,191 $2,713,761 $4,746,868
=========== ========== ========== ========== ==========
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL -17-
CONDITION AND RESULTS OF OPERATIONS - Continued
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
Liquidity and Sources of Capital - Continued
The Company has other commercial commitments consisting of a revolving credit
facility of up to $30 million, a securitization of up to $100 million in
accounts receivable, and a credit line for letters of credit.
Amount of Commitment
Expiration Per Period
Other Total
Commercial Amounts Less than 1 - 3 4 - 5 After 5
Commitments Committed 1 year years years Years
----------------- ----------- ------------ ----------- ----- -------
Line of Credit-
Revolving $20,000,000 -0- $20,000,000 -0- -0-
Line of Credit-
Securitization 50,000,000 -0- 50,000,000 -0- -0-
Line of Credit-
Letters of Credit 15,000,000 15,000,000 -0- -0- -0-
------------ ----------- ----------- --- ---
Total $85,000,000 $15,000,000 $70,000,000 -0- -0-
============ =========== =========== === ===
If an event of default should occur, payments and/or maturity of the lines of
credit could be accelerated. The Company is not in default and doesn't expect to
be in default of any of the provisions of the credit facilities.
The Company continues to have significant deferred tax assets primarily
resulting from reserves against accounts receivable. The Company believes these
assets are realizable based upon past earnings and availability in the
carry-back period.
The Company recently declared a quarterly dividend of $.15 per share payable on
June 15, 2002. It is the Company's intent to continue paying dividends; however,
the Company will evaluate its dividend practice on an ongoing basis. See "Future
Considerations".
The Company has, from the fourth quarter of 1996 through the year 2000,
repurchased a total of 1,620,940 shares of its Common Stock - 864,720 shares
purchased on the open market and 756,220 shares from the Estate of John L.
Blair. In 2000, the Company purchased 268,704 shares on the open market. No
shares were repurchased in 2001 or in the first quarter of 2002.
Future cash needs will be financed by cash flow from operations, the existing
borrowing arrangement and, if needed, other financing arrangements that may be
available to the Company. The Company's current projection of future cash
requirements, however, may be affected in the future by numerous factors,
including changes in customer payments on accounts receivable, consumer credit
industry trends, sales volume, operating cost fluctuations, revised capital
spending plans and unplanned capital spending.
Critical Accounting Policies
Preparation of the Company's financial statements requires the application of a
number of accounting policies which are described in "Note 1, Significant
Accounting Policies" in the "Notes to Consolidated Financial Statements" in the
Company's 2001 Annual Report. The critical accounting policies, which if
interpreted differently under different conditions or circumstances could result
in material changes to the reported results, deal with properly valuing accounts
receivable and inventory. Properly valuing accounts receivable and inventory
requires establishing proper reserve and allowance levels, specifically the
allowances for doubtful accounts and returns and the reserve for inventory
obsolescence.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL -18-
CONDITION AND RESULTS OF OPERATIONS - Continued
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
Critical Accounting Policies - continued
The allowance for doubtful accounts and related items, provision for doubtful
accounts and Blair Credit, are discussed in "Results of Operations," "Liquidity
and Sources of Capital" and "Future Considerations."
The allowance for returns is a deduction from customer accounts receivable. A
monthly provision for anticipated returns is recorded as a percentage of gross
sales, based upon historical experience. The provision is charged against gross
sales to arrive at net sales, and actual returns are charged against the
allowance for returns. Returns are generally more predictable as they settle
within two-to three months but are impacted by season, new products and/or
product lines, type of sale (cash, credit card, Blair Credit) and sales mix
(prospect/customer). The Company feels that the allowance for returns is
sufficient to cover the returns that will occur after March 31, 2002 from sales
prior to April 1, 2002.
The reserve for inventory obsolescence and related items, inventory levels and
write-downs, are discussed in "Liquidity and Sources of Capital" and "Future
Considerations." The Company feels that the reserve for inventory obsolescence
is sufficient to cover the write-offs and write-downs that will occur after
March 31, 2002 on merchandise inventory as of March 31, 2002.
Impact of Inflation and Changing Prices
Although inflation has moderated in our economy, the Company is continually
seeking ways to cope with its impact. To the extent permitted by competition,
increased costs are passed on to customers by selectively increasing selling
prices over a period of time. Profit margins have been pressured by paper cost
and postal rate increases. Paper prices were higher in 1998 than in 1997, lower
in 1999 than in 1998, again higher in 2000 than in 1999 and stable to declining
throughout 2001 and up to the current time. Postal rates increased on January
10, 1999, on January 7, 2001, and again on July 1, 2001. It is anticipated that
postal rates will increase at a greater percentage and more frequently, starting
with the next increase around mid-year 2002. The Company spent approximately $90
million on postage in 2001.
The Company principally uses the LIFO method of accounting for its merchandise
inventories. Under this method, the cost of products sold reported in the
financial statements approximates current costs and thus reduces distortion in
reported income due to increasing costs. However, the Company has been
experiencing decreasing merchandise costs and the LIFO reserve has fallen to
$5,366,000 at March 31, 2002 from $6,717,000 at December 31, 2000.
Property, plant and equipment are continuously being expanded and updated. Major
projects are discussed under "Liquidity and Sources of Capital." Assets acquired
in prior years will be replaced at higher costs but this will take place over
many years. New assets, when acquired, will result in higher depreciation
charges, but in many cases, due to technological improvements, savings in
operating costs should result. The charges to operations for depreciation
represent the allocation of historical costs incurred over past years and are
significantly less than if they were based on the current cost of productive
capacity being used.
Accounting Pronouncements
In June 1998, Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities", was
issued. The Company adopted Statement No. 133 effective January 1,
2001. The adoption of Statement No. 133 did not have an impact on
the financial statements of the Company, as the Company has
historically not utilized derivative instruments.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL -19-
CONDITION AND RESULTS OF OPERATIONS - Continued
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
Accounting Pronouncements - continued
In June 2001, Statements of Financial Accounting Standards No. 141,
"Business Combinations", and No. 142, "Goodwill and Other Intangible
Assets", were issued.
The Company adopted the Statements effective January 1,2002 and adoption of
these Statements did not have an impact on the Company.
Future Considerations
The Company is faced with the ever-present challenge of maintaining and
expanding its customer file. This involves the acquisition of new customers
(prospects), the conversion of new customers to established customers (active
repeat buyers) and the retention and/or reactivation of established customers.
These actions are vital in growing the business but are being negatively
impacted by increased operating costs, a declining labor pool, increased
competition in the retail sector, high levels of consumer debt, varying consumer
response rates and an uncertain economy. The preceding factors can also
negatively impact the Company's ability to properly value accounts receivable
and inventories by making it more difficult to establish proper reserve and
allowance levels, specifically, the allowances for doubtful accounts and returns
and the reserve for inventory obsolescence.
The Company's marketing strategy includes targeting customers in the "40 to 60,
low-to-moderate income" market and in the "60+, low-to-moderate income" market.
The "40 to 60" market is the fastest growing segment of the population. Also,
customers in the "low-to-moderate income" market tend to be more credit-needy
and utilize Blair credit to a greater degree. Success of the Company's marketing
strategy requires investment in database management, financial and operating
systems, prospecting programs, catalog marketing, new product lines, telephone
call centers, e-commerce, fulfillment operations and credit management.
Management believes that these investments should improve Blair Corporation's
position in new and existing markets and provide opportunities for future
earnings growth.
The Company recently announced a partnership with accomplished actress, artist,
author and mother, Jane Seymour, to launch the "Jane Seymour Signature
Collection" of women's apparel. The Jane Seymour inspired fashions will be sold
exclusively through the Company's Crossing Pointe catalog and website
(www.crossingpointe.com). The first "Jane Seymour Signature Collection" fashions
previewed in early January 2002 on the Crossing Pointe website and debuted in
the Crossing Pointe Spring 2002 Catalog mailed at the end of January 2002.
Safe Harbor Statement Under the Private Securities Litigation Reform
---------------------------------------------------------------------
Act of 1995
-----------
Forward-looking statements in this report, including without limitation,
statements relating to the Company's plans, strategies, objectives,
expectations, intentions and adequacy of resources, are made pursuant to the
Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.
Words such as "believes", "anticipates", "plans", "expects", and similar
expressions are intended to identify forward-looking statements. Any statements
contained in this report that are not statements of historical fact may be
deemed to be forward-looking statements. Such forward-looking statements are
included in, but not limited to, the following sections of the report:
- The paragraph on the provision for doubtful accounts in the Results of
Operations, Comparison of First Quarter 2002 and First Quarter 2001.
- Liquidity and Sources of Capital.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL -20-
CONDITION AND RESULTS OF OPERATIONS - Continued
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
Safe Harbor Statement Under the Private Securities Litigation Reform
---------------------------------------------------------------------
Act of 1995-
-----------
continued
- Critical Accounting Policies
- The Impact of Inflation and Changing Prices.
- Future Considerations.
Investors are cautioned that such forward-looking statements involve risks and
uncertainties which could cause actual results to differ materially from those
in the forword-looking statements, including without limitation the following:
(i) the Company's plans, strategies, objectives, expectations and intentions are
subject to change at any time at the discretion of the Company; (ii) the
Company's plans and results of operations will be affected by the Company's
ability to manage its growth, accounts receivable and inventory;(iii) external
factors such as, but not limited to, changes in consumer response rates, changes
in consumer credit trends, success of new business lines and increases in
postal, paper and printing costs; and (iv) other risks and uncertainties
indicated from time to time in the Company's filings with the Securities and
Exchange Commission.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The carrying amounts of cash, customer accounts receivable, accounts payable,
and accrued liabilities approximate fair value due to the short-term maturities
of these assets and liabilities. The interest rates on the Company's securitized
and revolving credit facilities are adjusted regularly to reflect current market
rates. Accordingly, the carrying amounts of the Company's borrowings also
approximate fair value.
PART II. OTHER INFORMATION -21-
BLAIR CORPORATION AND SUBSIDIARIES
March 31, 2002
Item 1. Legal Proceedings
The Company is from time to time a party to ordinary routine litigation
incidental to various aspects of its operations. Management is not currently
aware of any litigation that will have a material adverse impact on the
Company's financial condition or results of operations.
Item 2. Changes in Securities and Use of Proceeds
Not Applicable.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not Applicable.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
3.1 Restated Certificate of Incorporation(1)
3.2 Amended Bylaws of Blair Corporation(2)
4 Specimen Common Stock Certificate(3)
10.1 Stock Accumulation and Deferred Compensation Plan for
Directors(4)
10.2 Blair Corporation 2000 Omnibus Stock Plan(5) 10.3 Blair Credit
Agreement(6) 11 Statement regarding computation of per share
earnings(7)
(b) Reports on Form 8-K
On January 9, 2002, the Company filed a Form 8-K reporting
the syndicated
revolving credit facility of up to $30 million and the
securitization of
up to $100 million in certain of its accounts receivable, both
effective
December 20, 2001
------------------
(1) Incorporated by reference to Exhibit A to the Quarterly Report on Form 10-Q
of the Company filed with the SEC on August 10, 1995 (SEC File No. 1-878).
(2) Incorporated by reference to Exhibit 4.3 to the Form S-8 Registration
Statement filed
with the SEC on July 19, 2000 (SEC File No. 333-41770).
(3) Incorporated by reference to Exhibit 4.1 to the Form S-8 Registration
Statement filed
with the SEC on July 19, 2000 (SEC File No. 333-41770).
(4) Incorporated herein by reference to Exhibit A to the Company's Proxy
Statement filed
with the SEC on March 20, 1998 (SEC File No. 1-878).
(5) Incorporated herein by reference to Exhibit A to the Company's Proxy
Statement filed
with the SEC on March 17, 2000 (SEC File No. 1-878).
(6) Incorporated herein by reference to Exhibit 99.1 to the Company's Form
8-K filed
with the SEC on January 9, 2002 (SEC File No. 1-878).
(7) Incorporated by reference to Note C of the financial statements included
herein.
-22
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BLAIR CORPORATION
---------------------------
(Registrant)
Date May 10, 2002 By KENT R. SIVILLO
------------------------ ---------------------------
KENT R. SIVILLO
Vice President Finance
(Principal Financial Officer
and Duly Authorized Officer)