- Acquisition creates a global leader in
workwear;
- 2021* revenue and earnings per share
(EPS) now expected to exceed $15 billion and $5.00,
respectively;
- Williamson-Dickie expected to add more
than $1 billion of revenue by 2021*;
- Acquisition provides immediate
accretion to EPS* and free cash flow in 2017; and,
- Acquisition is consistent with VF’s
commitment to active portfolio management and expanding its growing
Workwear platform.* Excludes transaction and deal-related expenses;
2021 references in this release are based on VF’s new fiscal year
end.
VF Corporation (NYSE: VFC), a global leader in branded lifestyle
apparel, footwear and accessories, and Williamson-Dickie Mfg. Co.,
a family-owned, private global workwear company, today jointly
announced that they have signed a definitive merger agreement.
The transaction is expected to be completed early in the fourth
quarter of this year and VF will pay Williamson-Dickie shareholders
approximately $820 million in cash. On a trailing 12-month basis,
Williamson-Dickie generated approximately $875 million of revenue.
Additional details regarding the transaction and the strategic
rationale supporting it will be reviewed during a VF conference
call held at 8:30 a.m. Eastern Time today. The conference call will
be broadcast live via the internet, accessible at
ir.vfc.com. An investor presentation is also available for
download at the same location.
Well-known Williamson-Dickie brands include: Dickies®,
Workrite®, Kodiak®, Terra®, and Walls®. These brands will join VF’s
current workwear offerings including: Wrangler® RIGGS Workwear®,
Timberland PRO®, Red Kap®, Bulwark®, and Horace Small®. Upon
closing, Williamson-Dickie will become part of VF’s Imagewear
coalition. Philip Williamson, Chief Executive Officer of
Williamson-Dickie will remain with the company, headquartered in
Fort Worth, Texas.
“When we introduced our 2021 global business strategy earlier
this year, reshaping our portfolio to accelerate growth was our
highest priority,” said Steve Rendle, President and Chief Executive
Officer of VF. “The acquisition of Williamson-Dickie is another
meaningful step that delivers on that commitment and further
demonstrates our focus on being an active portfolio manager to
drive transformative growth for VF and value creation for our
shareholders.”
“For nearly a century we’ve worked hard to judiciously grow our
company and portfolio of strong brands to maintain our leadership
in the global workwear marketplace,” said Philip Williamson.
“Today’s announcement is an authentic and natural next step as we
look to combine the strengths of our two companies to create
significant opportunities for our employees, vendors, retail
partners and ultimately our customers. We expect that under VF’s
leadership, we’ll be able to experience the next wave of growth and
better meet the needs of workers everywhere.”
“This acquisition combines two great companies and a group of
iconic brands to create a global leader in workwear with
approximately $1.7 billion in annual revenue,” Rendle continued.
“Williamson-Dickie has a proud history and heritage, and has served
a loyal consumer base for nearly 100 years. VF is the ideal steward
to honor that heritage while providing a platform for growth that
ensures continued success for another century. We look forward to
welcoming Williamson-Dickie and its 7,000 dedicated employees to
the VF family.”
2017 Outlook Raised
The following outlook for 2017 has been updated to include the
impact of the Williamson-Dickie acquisition, excluding transaction
and other deal-related expenses, and now includes the
following:
- Revenue is now expected to reach
$11.85 billion, up 3.5 percent on a reported basis (up 4.5 percent
currency neutral), and includes about a $200 million contribution
from Williamson-Dickie. This compares to the previous expectation
of $11.65 billion, a 2 percent increase on a reported basis (up 3
percent currency neutral).
- Gross margin is now expected to
reach 49.5 percent, versus the previous expectation of 49.8
percent, and includes the impact of Williamson-Dickie. Excluding
the impact of Williamson-Dickie, gross margin is still expected to
be 49.8 percent and includes about a 70 basis point negative impact
from changes in foreign currency.
- Operating margin is now expected
to approximate 13.7 percent, versus the previous expectation of
about 14 percent, and includes the impact of Williamson-Dickie.
Excluding the impact of Williamson-Dickie, operating margin is
still expected to be about 14 percent and includes about a 60 basis
point negative impact from changes in foreign currency.
- Earnings per share is now
expected to be $2.96, versus the previous expectation of $2.94, and
includes about a $0.02 contribution from Williamson-Dickie.
Accordingly, EPS is expected to decline approximately 1 percent on
a reported basis (up at a mid-single-digit percentage rate currency
neutral) compared to 2016 adjusted EPS of $2.98. A reconciliation
of 2016 GAAP earnings per share to adjusted earnings per share is
presented in the supplemental financial information included with
the press release dated February 17, 2017.
- Transaction and deal-related expenses
are estimated to approximate $0.04 per share.
2021 Financial Targets Increased
The following outlook for 2021 has been updated to include the
impact of the Williamson-Dickie acquisition, excluding transaction
and other deal-related expenses, and includes the following:
- Revenue through 2021 is now
expected to grow at a five-year compounded annual growth rate
(CAGR) between 5 percent and 7 percent to more than $15 billion,
versus the previous expectation of a 4 percent to 6 percent
five-year CAGR. Williamson-Dickie is expected to contribute more
than $1 billion of revenue by 2021.
- Earnings per share is now
expected to grow at a five-year CAGR between 11 percent and 13
percent to more than $5.00, versus the previous expectation of a
five-year CAGR between 10 percent and 12 percent. Williamson-Dickie
is expected to contribute more than $0.25 by 2021.
Barclays is acting as financial advisor to VF Corporation and
Davis Polk and Wardwell LLP is acting as legal advisor.
Currency Neutral – Excluding the Impact of Foreign
Currency
This release refers to “reported” amounts in accordance with
U.S. generally accepted accounting principles (“GAAP”), which
include translation and transactional
impacts from foreign currency exchange rates. This release also
refers to “currency neutral” amounts, which exclude both the impact of translating foreign
currencies into U.S. dollars and the impact of currency rate
changes on foreign currency denominated transactions.
Webcast Information
VF will host a conference call to discuss the transaction at
approximately 8:30 a.m. Eastern Time today. The conference call
will be broadcast live via the internet, accessible at ir.vfc.com.
An investor presentation is also available for download on VF’s
Investor Relations website. For those unable to listen to the live
broadcast, an archived version will be available at the same
location.
About VF
VF Corporation (NYSE: VFC) outfits consumers around the world
with its diverse portfolio of iconic lifestyle brands, including
Vans®, The North Face®, Timberland®, Wrangler® and Lee®.
Founded in 1899, VF is one of the world’s largest apparel, footwear
and accessories companies with socially and environmentally
responsible operations spanning numerous geographies, product
categories and distribution channels. VF is committed to delivering
innovative products to consumers and creating long-term value for
its customers and shareholders. For more information,
visit www.vfc.com.
About Williamson-Dickie Mfg. Co.
Williamson-Dickie Mfg. Co. is the world’s leading provider of
professional grade performance workwear - designing, manufacturing
and delivering innovative work apparel for generations. Based in
Fort Worth, Texas, the company’s collection of brands offers
superior quality products at an unmatched value across an
assortment of apparel, footwear and accessories in more than 100
countries, spanning six continents. Williamson-Dickie employs over
7,000 individuals worldwide and its products are sold through a
network of owned retail stores, franchisees, volume retailers,
department stores, independent stores and online sites under the
Dickies®, Workrite®, Kodiak®, Terra®, Walls®, Big Smith®, Liberty®
and Duxbak® brands. For more information,
visit WilliamsonDickie.com.
Forward-looking Statements
Certain statements included in this release and attachments are
“forward-looking statements” within the meaning of the federal
securities laws. Forward-looking statements are made based on our
expectations and beliefs concerning future events impacting VF and
therefore involve several risks and uncertainties. You can identify
these statements by the fact that they use words such as “will,”
“anticipate,” “estimate,” “expect,” “should,” and “may” and other
words and terms of similar meaning or use of future dates. We
caution that forward-looking statements are not guarantees and that
actual results could differ materially from those expressed or
implied in the forward-looking statements. Potential risks and
uncertainties that could cause the actual results of operations or
financial condition of VF to differ materially from those expressed
or implied by forward-looking statements in this release include,
but are not limited to: foreign currency fluctuations; the level of
consumer demand for apparel, footwear and accessories; disruption
to VF’s distribution system; VF’s reliance on a small number of
large customers; the financial strength of VF’s customers;
fluctuations in the price, availability and quality of raw
materials and contracted products; disruption and volatility in the
global capital and credit markets; VF’s response to changing
fashion trends, evolving consumer preferences and changing patterns
of consumer behavior, intense competition from online retailers,
manufacturing and product innovation; increasing pressure on
margins; VF’s ability to implement its business strategy; VF’s
ability to grow its international and direct-to-consumer
businesses; VF’s and its customers’ and vendors’ ability to
maintain the strength and security of information technology
systems; stability of VF’s manufacturing facilities and foreign
suppliers; continued use by VF’s suppliers of ethical business
practices; VF’s ability to accurately forecast demand for products;
continuity of members of VF’s management; VF’s ability to protect
trademarks and other intellectual property rights; possible
goodwill and other asset impairment; maintenance by VF’s licensees
and distributors of the value of VF’s brands; changes in tax
liabilities; legal, regulatory, political and economic risks; and
adverse or unexpected weather conditions. More information on
potential factors that could affect VF’s financial results is
included from time to time in VF’s public reports filed with the
Securities and Exchange Commission, including VF’s Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170814005083/en/
VF CorporationJoe Alkire, 336-424-7711VP, Investor Relations and
Financial Planning & Analysisjoe_alkire@vfc.comorVanessa
McCutchen, 336-424-7776Director, Corporate
Communicationsvanessa_mccutchen@vfc.comorWilliamson-Dickie Mfg.
Co.Rachel Courts, 817-810-4461Director, Public
Relationsrcourts@dickies.com
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