SEC Filing | PVH Corp.

SECURITIES & EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 1999 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-724 PHILLIPS-VAN HEUSEN CORPORATION (Exact name of registrant as specified in its charter) Delaware 13-1166910 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 200 Madison Avenue New York, New York 10016 (Address of principal executive offices) Registrant's telephone number (212) 381-3500 Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes X No The number of outstanding shares of common stock, par value $1.00 per share, of Phillips-Van Heusen Corporation as of November 29, 1999: 27,289,869 shares.

PHILLIPS-VAN HEUSEN CORPORATION INDEX PART I -- FINANCIAL INFORMATION Item 1 - Financial Statements Independent Accountants Review Report................................. 1 Condensed Consolidated Balance Sheets as of October 31, 1999 and January 31, 1999...................................................... 2 Condensed Consolidated Statements of Income for the thirteen weeks and thirty-nine weeks ended October 31, 1999 and November 1, 1998.................................................. 3 Condensed Consolidated Statements of Cash Flows for the thirty-nine weeks ended October 31, 1999 and November 1, 1998......... 4 Notes to Condensed Consolidated Financial Statements.................. 5-7 Item 2 - Management's Discussion and Analysis of Results of Operations and Financial Condition............................................... 8-12 PART II -- OTHER INFORMATION ITEM 6 - Exhibits and Reports on Form 8-K............................. 13-14 Signatures............................................................ 15 Exhibit--Acknowledgment of Independent Accountants.................... 16 Exhibit--Financial Data Schedule...................................... 17

Independent Accountants Review Report Stockholders and Board of Directors Phillips-Van Heusen Corporation We have reviewed the accompanying condensed consolidated balance sheet of Phillips-Van Heusen Corporation as of October 31, 1999, and the related condensed consolidated statements of income for the thirteen and thirty-nine week periods ended October 31, 1999 and November 1, 1998, and the related condensed consolidated statements of cash flows for the thirty-nine week periods ended October 31, 1999 and November 1, 1998. These financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Phillips-Van Heusen Corporation as of January 31, 1999, and the related consolidated statements of operations, stockholders' equity, and cash flows for the year then ended (not presented herein) and in our report dated March 9, 1999, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of January 31, 1999, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. ERNST & YOUNG LLP New York, New York November 17, 1999 -1-

Phillips-Van Heusen Corporation Condensed Consolidated Balance Sheets (In thousands, except share data) UNAUDITED AUDITED October 31, January 31, 1999 1999 ASSETS Current Assets: Cash, including cash equivalents of $39,715 and $4,399 $ 41,276 $ 10,957 Trade receivables, less allowances of $1,881 and $1,367 119,038 88,038 Inventories 226,989 232,695 Other, including deferred taxes of $10,611 30,064 36,327 Total Current Assets 417,367 368,017 Property, Plant and Equipment 97,703 108,846 Goodwill 84,153 113,344 Other Assets, including deferred taxes of $41,807 and $52,167 68,702 84,106 $667,925 $674,313 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable $ 20,000 Accounts payable $ 27,594 44,851 Accrued expenses 89,970 67,835 Total Current Liabilities 117,564 132,686 Long-Term Debt 248,769 248,723 Other Liabilities 62,539 64,016 Stockholders' Equity: Preferred Stock, par value $100 per share; 150,000 shares authorized, no shares outstanding Common Stock, par value $1 per share; 100,000,000 shares authorized; shares issued 27,289,869 and 27,287,985 27,290 27,288 Additional Capital 117,697 117,683 Retained Earnings 94,066 83,917 Total Stockholders' Equity 239,053 228,888 $667,925 $674,313 See accompanying notes. -2-

Phillips-Van Heusen Corporation Condensed Consolidated Statements of Operations Unaudited (In thousands, except per share data) Thirteen Weeks Ended Thirty-Nine Weeks Ended October 31, November 1, October 31, November 1, 1999 1998 1999 1998 Net sales $368,041 $374,392 $974,530 $976,528 Cost of goods sold 239,239 246,329 633,136 636,894 Gross profit 128,802 128,063 341,394 339,634 Selling, general and administrative expenses 98,126 98,849 295,737 296,573 Year 2000 computer conversion costs 1,995 2,125 6,155 6,375 Income before interest, taxes and extraordinary item 28,681 27,089 39,502 36,686 Interest expense, net 5,686 7,374 17,867 19,494 Income before taxes and extraordinary item 22,995 19,715 21,635 17,192 Income tax expense 7,702 5,699 7,394 4,940 Income before extraordinary item 15,293 14,016 14,241 12,252 Extraordinary loss on debt retirement, net of tax benefit (1,060) Net income $ 15,293 $ 14,016 $ 14,241 $ 11,192 Basic and diluted net income per share: Income before extraordinary item $ 0.56 $ 0.51 $ 0.52 $ 0.45 Extraordinary loss (0.04) Net income per share $ 0.56 $ 0.51 $ 0.52 $ 0.41 See accompanying notes. -3-

Phillips-Van Heusen Corporation Condensed Consolidated Statements of Cash Flows Unaudited (In thousands) Thirty-Nine Weeks Ended October 31, November 1, 1999 1998 OPERATING ACTIVITIES: Income before extraordinary item $ 14,241 $ 12,252 Adjustments to reconcile net cash provided (used) by operating activities: Depreciation and amortization 14,521 19,199 Equity income (810) (864) Deferred income taxes 6,946 6 Changes in operating assets and liabilities: Receivables (31,000) (46,228) Inventories 22,918 (35,977) Accounts payable and accrued expenses (3,877) (10,182) Acquisition of inventory associated with license agreement (17,212) Other-net 1,834 1,004 Net Cash Provided (Used) By Operating Activities 7,561 (60,790) INVESTING ACTIVITIES: Sale of Gant trademark, net of related costs 67,000 Property, plant and equipment acquired (20,165) (15,092) Net Cash Provided (Used) By Investing Activities 46,835 (15,092) FINANCING ACTIVITIES: Net proceeds from issuance of 9.5% senior subordinated notes 145,104 Repayment of 7.75% senior notes (49,286) Extraordinary loss on debt retirement (1,631) Proceeds from revolving lines of credit 41,600 160,600 Payments on revolving lines of credit (61,600) (176,000) Exercise of stock options 16 498 Cash dividends (4,093) (4,081) Net Cash Provided (Used) By Financing Activities (24,077) 75,204 Increase (decrease) In Cash 30,319 (678) Cash at beginning of period 10,957 11,748 Cash at end of period $ 41,276 $ 11,070 See accompanying notes. -4-

PHILLIPS-VAN HEUSEN CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except per share data) GENERAL The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not contain all disclosures required by generally accepted accounting principles for complete financial statements. Reference should be made to the audited consolidated financial statements, including the footnotes thereto, included in the Company's Annual Report to Stockholders for the year ended January 31, 1999. The preparation of interim 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 the estimates. The results of operations for the thirty-nine weeks ended October 31, 1999 and November 1, 1998 are not necessarily indicative of those for a full fiscal year due, in part, to seasonal factors. The data contained in these financial statements are unaudited and are subject to year-end adjustments; however, in the opinion of management, all known adjustments (which consist only of normal recurring accruals) have been made to present fairly the consolidated operating results for the unaudited periods. Certain reclassifications have been made to the condensed consolidated financial statements for the thirty-nine weeks ended November 1, 1998 to present that information on a basis consistent with the thirty-nine weeks ended October 31, 1999. INVENTORIES Inventories are summarized as follows: October 31, January 31, 1999 1999 Raw materials $ 10,702 $ 8,529 Work in process 13,583 12,834 Finished goods 202,704 211,332 Total $226,989 $232,695 Inventories are stated at the lower of cost or market. Cost for apparel inventories are determined principally using the last-in, first-out method (LIFO). Cost for footwear inventories are determined using the first-in, first-out method (FIFO). Inventories would have been approximately $8,400 higher than reported at October 31, 1999 and January 31, 1999, if the FIFO method of inventory accounting had been used for all businesses. -5-

The final determination of cost of sales and inventories under the LIFO method can only be made at the end of each fiscal year based on inventory cost and quantities on hand. Interim LIFO determinations are based on management's estimates of expected year-end inventory levels and costs. Such estimates are subject to revision at the end of each quarter. Since estimates of future inventory levels and costs are subject to external factors, interim financial results are subject to year-end LIFO inventory adjustments. EXTRAORDINARY LOSS On April 22, 1998, the Company issued $150,000 of 9.5% senior subordinated notes due May 1, 2008 and used the net proceeds to retire its intermediate term 7.75% senior notes and to repay a portion of the borrowings under its prior revolving credit facility. On the same day, the Company refinanced its revolving credit facility by entering into a new $325,000 senior secured credit facility. In connection therewith, the Company paid a yield maintenance premium of $1,446 and wrote off certain debt issue costs of $185. These items have been classified as an extraordinary loss, net of tax benefit of $571, in the first quarter of 1998. ACQUISITION AND DISPOSITION OF BUSINESSES On March 12, 1999, the Company entered into a license agreement to market dress shirts under the John Henry and Manhattan brands. In connection therewith, the Company acquired $17,212 of inventory from the licensor. On February 26, 1999, the Company sold the Gant trademark and certain related assets associated with the Company's Gant operations for $71,000 in cash to Pyramid Sportswear AB ("Pyramid"), which was the brand's international licensee. Pyramid is a wholly-owned subsidiary of Pyramid Partners AB, in which the Company has a minority interest. Subsequent to February 26, 1999, the Company has been winding down its Gant operations in order to liquidate Gant's working capital and close the Gant division. The Company anticipates completing this process in the fourth quarter of 1999. On November 3, 1999, the Company announced it had entered into agreements with Oxford Industries, Inc. to license the Izod Club trademark and sell substantially all of the related assets of the Company's Izod Club division. Upon finalization of the agreements, the Company will close its Izod Club division in the fourth quarter of 1999. The finalization of the Gant and Izod Club transactions in the fourth quarter of 1999 is not expected to have a material impact on the Company's financial statements. FACILITY CLOSING During 1997, the Company recorded pre-tax charges of $132,700, related principally to a series of actions the Company has taken to accelerate the execution of its ongoing strategies to build its brands. One of the actions contemplated in that plan was the closing of a designated footwear facility. -6-

In the current year's second quarter, the Company announced the closing of its footwear manufacturing and warehousing operations in the Caribbean. As a result of this closure, the footwear facility originally designated for closure is now operationally required, and so the Company will not close this facility. The cost of closing the Caribbean facilities of approximately $5,000 approximates the cost to close the footwear facility designated in the Company's original plan. As such, there was no net effect on net income. SEGMENT DATA The Company manages and analyzes its operating results by its two vertically integrated business segments: (i) Apparel and (ii) Footwear and Related Products. In identifying its reportable segments, the Company evaluated its operating divisions and product offerings. The Company aggregates the results of its apparel divisions into the Apparel segment. This segment derives revenues from marketing dresswear, sportswear and accessories, principally under the brand names Van Heusen, Izod, Izod Club, Geoffrey Beene, John Henry, Manhattan, DKNY, and until February 26, 1999, Gant. The Company's footwear business has been identified as the Footwear and Related Products segment. This segment derives revenues from marketing casual footwear, apparel and accessories under the Bass brand name. Sales for both segments occur principally in the United States. (In thousands) Segment Data Thirteen Weeks Ended Thirty-Nine Weeks Ended 10/31/99 11/1/98 10/31/99 11/1/98 Net sales-apparel $262,568 $256,252 $677,291 $665,238 Net sales-footwear and related products 105,473 118,140 297,239 311,290 Total net sales $368,041 $374,392 $974,530 $976,528 Operating income - apparel $ 26,807 $ 25,090 $ 40,177 $ 37,374 Operating income-footwear and related products 8,189 8,095 16,792 15,813 Total operating income 34,996 33,185 56,969 53,187 Corporate expenses 6,315 6,096 17,467 16,501 Income before interest, taxes and extraordinary item $ 28,681 $ 27,089 $ 39,502 $ 36,686 Corporate expenses include Year 2000 computer conversion costs of $1,995 and $6,155 for the thirteen and thirty-nine weeks ended October 31, 1999, respectively, compared with $2,125 and $6,375 for the thirteen and thirty-nine weeks ended November 1, 1998, respectively. -7-

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Results of Operations Thirteen Weeks Ended October 31, 1999 Compared With Thirteen Weeks Ended November 1, 1998 APPAREL SEGMENT Net sales of the Company's apparel segment in the third quarter were $262.6 million in 1999 compared with $256.3 million last year, a 2.5% increase. During 1999, the Company will close two of its apparel divisions: Gant, which the Company has been winding down since selling the Gant trademark in February, 1999, and Izod Club, due to entering into a license agreement which will be consummated in the fourth quarter. Excluding net sales of these businesses, net sales of the Company's apparel segment in the third quarter increased to $241.8 million in 1999 compared with $219.1 million last year, a 10.4% increase. This increase resulted principally from strong sales of both sportswear and dress shirts, with dress shirt sales including the John Henry and Manhattan brands which the Company began selling late in the current year's first quarter under a new licensing agreement. Gross profit on apparel sales was 33.2% in the third quarter compared with 33.5% last year. This decrease relates to lower gross margins related to winding down the Company's Gant operations in connection with the sale of the Gant trademark in February 1999. Selling, general and administrative expenses as a percentage of apparel sales were 23.0% in the third quarter compared with 23.7% last year. The improved expense level relates principally to reduced operating expenses relating to the closing of the Gant division. FOOTWEAR AND RELATED PRODUCTS SEGMENT Net sales of the Company's footwear and related products segment in the third quarter were $105.5 million in 1999 compared with $118.1 million last year, a decrease of 10.7%. This decrease is due to significantly less promotional selling of clearance merchandise than occurred in the same period last year. Gross profit on footwear and related products sales was 39.3% in the third quarter of 1999 compared with 35.5% last year. As noted above, the current quarter had significantly less promotional selling of clearance merchandise as compared with the same period last year. Selling, general and administrative expenses as a percentage of footwear and related products sales in the third quarter were 31.6% in 1999 compared with 28.6% in 1998. This increase resulted from the third quarter's sales decrease, which increased Bass' expenses as a percentage of sales. -8-

INTEREST EXPENSE Interest expense in the third quarter was $5.7 million in 1999 compared with $7.4 million last year. Interest expense decreased due to improved cash flow, resulting principally because of the cash proceeds received from the sale of the Gant trademark and tight management of assets. INCOME TAXES The effective income tax rate in the third quarter of 1999 was 33.5% compared with the 1998 full year rate of 25.8%. The increased rate in the current year results principally from closing the Company's manufacturing operations in Puerto Rico in the current year, resulting in a higher percentage of pre-tax income being subject to U.S. tax. CORPORATE EXPENSES Corporate expenses in the third quarter were $6.3 million in 1999 compared with $6.1 million in 1998. This increase relates to increased information technology costs. Thirty-Nine Weeks Ended October 31, 1999 Compared With Thirty-Nine Weeks Ended November 1, 1998 APPAREL SEGMENT Net sales of the Company's apparel segment in the first nine months were $677.3 million in 1999 compared with $665.2 million last year, an increase of 1.8%. Excluding net sales of Gant and Izod Club which are closing in 1999 as described above, net sales of the Company's apparel segment in the first nine months were $599.5 million in 1999, an increase of 4.9% from the prior year's $571.3 million. This increase resulted principally from strong sales of both sportswear and dress shirts, with dress shirt sales including the John Henry and Manhattan brands which the Company began selling late in the current year's first quarter under a new licensing agreement. Gross profit on apparel sales was 33.4% in the first nine months of 1999 compared with 33.7% last year. This decrease is due to lower gross margins related to winding down the Company's Gant operations. Selling, general and administrative expenses as a percentage of apparel sales in the first nine months were 27.4% in 1999 compared with 28.1% in 1998. The improved expense level relates principally to reduced operating expenses relating to the closing of the Gant division. FOOTWEAR AND RELATED PRODUCTS SEGMENT Net sales of the Company's footwear and related products segment in the first nine months were $297.2 million in 1999 compared with $311.3 million last year, a decrease of 4.5%. This decrease is due to significantly less promotional selling of clearance merchandise than occurred in the same period last year. -9-

Gross profit on footwear and related products sales was 38.5% in the first nine months of 1999 compared with 36.9% last year. As noted above, the current period had significantly less promotional selling of clearance merchandise than occurred in the same period last year. Selling, general and administrative expenses as a percentage of footwear and related products sales in the first nine months were 32.9% in 1999 and 31.8% in 1998. This increase resulted from the current period's sales decrease, which increased Bass' expenses as a percentage of sales. INTEREST EXPENSE Interest expense in the first nine months was $17.9 million in 1999 compared with $19.5 million last year. Interest expense decreased due to improved cash flow, principally because of the cash proceeds received from the sale of the Gant trademark and tight management of assets. INCOME TAXES The effective income tax rate for the first nine months of 1999 was 34.2% compared with the 1998 full year rate of 25.8%. The increased rate in the current year results principally from closing the Company's manufacturing operations in Puerto Rico in the current year, resulting in a higher percentage of pre-tax income being subject to U.S. tax. CORPORATE EXPENSES Corporate expenses in the first nine months were $17.5 million in 1999 compared with $16.5 million in 1998. This increase relates to increased information technology costs. YEAR 2000 The Year 2000 (Y2K) issue is the result of computer programs using two digits rather than four to define the applicable year. Such computer systems will be unable to interpret dates beyond the year 1999, which could cause a system failure or other computer errors, leading to disruptions in operations. The Company has initiated a comprehensive Y2K Project to address this issue and is utilizing both internal and external resources to complete it. The Company completed an assessment of Y2K requirements for the systems supported by its Information Technology Department which included contacting its software suppliers. The impacted systems, including those that are part of the Company's data processing infrastructure, are now Y2K compliant as a result of modification or replacement. The Company completed remediation, testing and rollout of all of its mainstream business systems in June 1999. The work on end-user computing applications was completed in October 1999. -10-

The Company has communicated with suppliers, equipment vendors, service providers and customers to determine the extent to which it is vulnerable to the failure of these parties to remedy any Y2K issues. Most of these parties have stated that they intend to be Y2K compliant by 2000. In conjunction with this, the Company has developed contingency plans for its major suppliers and merchandise carriers, where feasible, to mitigate Y2K risks. The Company's electronic commerce systems, used by many of its major customers, are Y2K compliant and have been installed. The total cost of the Y2K Project is estimated to be $20 million and is being funded through operating cash flows. Of the total Project cost, approximately $3 million is attributable to the purchase of new software, which has been capitalized, with the remaining cost expensed as incurred. Expenses incurred through October 31, 1999 were $15 million. Future expenses for the Y2K project include testing with customers and suppliers, as well as additional contingency planning and testing, and includes consulting fees and other administrative costs. The Company presently believes that the Y2K issue will not pose significant operational problems for its computer systems. However, no assurance can be given that this issue, as it relates to the Company's internal systems or those of other companies on which it relies, will not have a material adverse impact on the Company's operations. SEASONALITY The Company's business is seasonal, with higher sales and income during its third and fourth quarters, which coincide with the Company's two peak retail selling seasons: the first running from the start of the back to school and Fall selling seasons beginning in August and continuing through September; the second being the Christmas selling season beginning with the weekend following Thanksgiving and continuing through the week after Christmas. Also contributing to the strength of the third quarter is the high volume of Fall shipments to wholesale customers which are generally more profitable than Spring shipments. The slower Spring selling season at wholesale combines with retail seasonality to make the first quarter particularly weak. LIQUIDITY AND CAPITAL RESOURCES The seasonal nature of the Company's business typically requires the use of cash to fund a build-up in the Company's inventory in the first half of each fiscal year. During the third and fourth quarters, the Company's higher level of sales tends to reduce its inventory and generate cash from operations. Net cash provided by operations in the first nine months was $7.6 million in 1999 as compared with net cash used by operations of $60.8 million in the prior year. The increase in cash provided by operations is due principally to tight management of working capital, particularly significantly lower inventory levels. -11-

The Company has a $325 million credit agreement which includes a revolving credit facility under which the Company may, at its option, borrow and repay amounts within certain limits. The agreement also includes a letter of credit facility with a sub-limit of $250 million, provided, however, that the aggregate maximum amount outstanding under both the revolving credit facility and the letter of credit facility is $325 million. The Company believes that its borrowing capacity under these facilities is adequate for its peak seasonal needs for the foreseeable future. * * * ****************************************************************************** * Safe Harbor Statement Under the Private Securities Litigation Reform Act * * of 1995 * * * * Forward-looking statements in this Form 10-Q report including, * * without limitation, statements relating to the Company's plans, * * strategies, objectives, expectations and intentions, are made pursuant to * * the safe harbor provisions of the Private Securities Litigation Reform * * Act of 1995. Investors are cautioned that such forward-looking * * statements are inherently subject to risks and uncertainties, many of * * which cannot be predicted with accuracy, and some of which might not be * * anticipated, 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 * * levels of sales of the Company's apparel and footwear products, both to * * its wholesale customers and in its retail stores, and the extent of * * discounts and promotional pricing in which the Company is required to * * engage, all of which can be affected by weather conditions, changes in * * the economy, fashion trends and other factors; (iii) the Company's plans * * and results of operations will be affected by the Company's ability to * * manage its growth and inventory; (iv) the timing and effectiveness of * * programs dealing with the Year 2000 issue; and (v) other risks and * * uncertainties indicated from time to time in the Company's filings with * * the Securities and Exchange Commission. * ****************************************************************************** * * * -12-

Part II - OTHER INFORMATION ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K (a) The following exhibits are included herein: 3.1 Certificate of Incorporation (incorporated by reference to Exhibit 5 to the Company's Annual Report on Form 10-K for the fiscal year ended January 29, 1977). 3.2 Amendment to Certificate of Incorporation, filed June 27, 1984 (incorporated by reference to Exhibit 3B to the Company's Annual Report on Form 10-K for the fiscal year ended February 3, 1985). 3.3 Certificate of Designation of Series A Cumulative Participating Preferred Stock, filed June 10, 1986 (incorporated by reference to Exhibit A of the document filed as Exhibit 3 to the Company's Quarterly Report as filed on Form 10-Q for the period ended May 4, 1986). 3.4 Amendment to Certificate of Incorporation, filed June 2, 1987 (incorporated by reference to Exhibit 3(c) to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1988). 3.5 Amendment to Certificate of Incorporation, filed June 1, 1993 (incorporated by reference to Exhibit 3.5 to the Company's Annual Report on Form 10-K for the fiscal year ended January 30, 1994). 3.6 Amendment to Certificate of Incorporation, filed June 20, 1996 (incorporated by reference to Exhibit 3.1 to the Company's Report on Form 10-Q for the period ended July 28, 1996). 3.7 By-Laws of Phillips-Van Heusen Corporation, as amended through June 18, 1996 (incorporated by reference to Exhibit 3.2 to the Company's Report on Form 10-Q for the period ended July 28, 1996). 4.1 Specimen of Common Stock certificate (incorporated by reference to Exhibit 4 to the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1981). 4.2 Preferred Stock Purchase Rights Agreement (the "Rights Agreement"), dated June 10, 1986 between PVH and The Chase Manhattan Bank, N.A. (incorporated by reference to Exhibit 3 to the Company's Quarterly Report as filed on Form 10-Q for the period ended May 4, 1986). 4.3 Amendment to the Rights Agreement, dated March 31, 1987 between PVH and The Chase Manhattan Bank, N.A. (incorporated by reference to Exhibit 4(c) to the Company's Annual Report on Form 10-K for the year ended February 2, 1987). 4.4 Supplemental Rights Agreement and Second Amendment to the Rights Agreement, dated as of July 30, 1987, between PVH and The Chase Manhattan Bank, N.A. (incorporated by reference to Exhibit (c)(4) to the Company's Schedule 13E-4, Issuer Tender Offer Statement, dated July 31, 1987). -13-

4.5 Notice of extension of the Rights Agreement, dated June 5, 1996, from Phillips-Van Heusen Corporation to The Bank of New York (incorporated by reference to Exhibit 4.13 to the Company's report on Form 10-Q for the period ended April 28, 1996). 4.6 Credit Agreement, dated as of April 22, 1998, among PVH, the group of lenders party hereto, The Chase Manhattan Bank, as Administrative Agent and Collateral Agent, and Citicorp USA, Inc., as Documentation Agent (incorporated by reference to Exhibit 4.6 to the Company's report on Form 10-Q for the period ended May 3, 1998). 4.7 Amendment No. 1, dated as of November 17, 1998, to the Credit Agreement, dated as of April 22, 1998, among PVH, the group of lenders party hereto, The Chase Manhattan Bank, as Administrative Agent and Collateral Agent, and Citicorp USA, Inc., as Documentation Agent (incorporated by reference to Exhibit 4.7 to the Company's report on Form 10-K for the period ended January 31, 1999). 4.8 Consent, Waiver and Amendment No. 2, dated as of February 23, 1999, to the Credit Agreement, dated as of April 22, 1998, among PVH, the group of lenders party hereto, The Chase Manhattan Bank, as Administrative Agent and Collateral Agent, and Citicorp USA, Inc., as Documentation Agent (incorporated by reference to Exhibit 4.8 to the Company's report on Form 10-K for the period ended January 31, 1999). 4.9 Indenture, dated as of April 22, 1998, with PVH as issuer and Union Bank of California, N.A., as Trustee (incorporated by reference to Exhibit 4.7 to the Company's report on Form 10-Q for the period ended May 3, 1998). 4.10 Indenture, dated as of November 1, 1993, between PVH and The Bank of New York, as Trustee (incorporated by reference to Exhibit 4.01 to the Company's Registration Statement on Form S-3 (Reg. No. 33- 50751) filed on October 26, 1993). 15. Acknowledgement of Independent Accountants 27. Financial Data Schedule (b) Reports on Form 8-K filed during the quarter ended October 31, 1999. No reports have been filed on Form 8-K during the quarter covered by this report. -14-

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PHILLIPS-VAN HEUSEN CORPORATION Registrant December 10, 1999 /s/ Vincent A. Russo Vincent A. Russo Vice President and Controller -15-

Exhibit 15 November 17, 1999 Stockholders and Board of Directors Phillips-Van Heusen Corporation We are aware of the incorporation by reference in (i) Post-Effective Amendment No. 2 to the Registration Statement (Form S-8, No. 2-73803), which relates to the Phillips-Van Heusen Corporation Employee Savings and Retirement Plan, (ii) Registration Statement (Form S-8, No. 33-50841) and Registration Statement (Form S-8, No. 33-59602), each of which relate to the Phillips-Van Heusen Corporation Associates Investment Plan for Residents of the Commonwealth of Puerto Rico, (iii) Registration Statement (Form S-8, No. 33-59101), which relates to the Voluntary Investment Plan of Phillips-Van Heusen Corporation (Crystal Brands Division), (iv) Registration Statement (Form S-8, No. 33-38698), Post-Effective Amendment No. 1 to Registration Statement (Form S-8, No. 33-24057) and Registration Statement (Form S-8, No. 33-60793), each of which relate to the Phillips-Van Heusen Corporation 1987 Stock Option Plan, (v) Registration Statement (Form S-8, No. 333-29765) which relates to the Phillips-Van Heusen Corporation 1997 Stock Option Plan. of our reports dated November 17, 1999, August 23, 1999 and May 21, 1999 relating to the unaudited condensed consolidated interim financial statements of Phillips-Van Heusen Corporation that are included in its Forms 10-Q for the thirteen week periods ended October 31, 1999, August 1, 1999 and May 2, 1999. Pursuant to Rule 436(c) of the Securities Act of 1933, our reports are not a part of the registration statements or post-effective amendments prepared or certified by accountants within the meaning of Section 7 or 11 of the Securities Act of 1933. ERNST & YOUNG LLP New York, New York -16-

5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE PHILLIPS-VAN HEUSEN CORPORATION FINANCIAL STATEMENTS INCLUDED IN ITS 10-Q REPORT FOR THE QUARTER ENDED OCTOBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS JAN-30-2000 OCT-31-1999 $ 41,276 0 120,919 1,881 226,989 417,367 97,703 0

667,925 117,564 248,769 0 0 27,290 211,763 667,925 974,530 974,530 633,136 633,136 301,892 0

17,867 21,635 7,394 14,241 0 0 0 14,241 0.52 0.52 Property, plant and equipment is presented net of accumulated depreciation. Provision for doubtful accounts is included in other costs and expenses.