N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
continued
The following table summarizes information about stock options outstanding and exercisable at December 31, 2000.
Options Outstanding
Options Exercisable
Number
Weighted
Number
Outstanding
Average
Weighted
Exercisable at
Weighted
December 31,
Remaining
Average
December 31,
Average
Range of Exercise Price
2000
Contractual Life
Exercise Price
2000
Exercise Price
$ 0.01 to $ 5.50
1,051,536
8.51 years
$ 3.56
137,626
$ 4.20
$ 7.06 to $19.38
71,325
7.66 years
8.38
46,450
8.77
$10.50 to $12.50
265,642
7.22 years
11.08
202,442
10.90
$16.38 to $18.31
250,000
9.28 years
17.74
20,378
16.83
$21.06 to $27.31
354,375
9.04 years
26.99
77,800
26.93
1,992,878
8.74 years
$10.68
484,696
$11.62
At December 31, 2000 and 1999, the number of options exercisable for each year was 484,696 and 338,284, respectively. The weighted
average exercise price of those options was $11.62 and $8.14, respectively.
N O T E 1 5 . S E V E R A N C E ( R E C O V E R Y ) R E L A T E D T O D I S T R I B U T I O N F A C I L I T Y R E L O C A T I O N
In accordance with the requirements of EITF 94-3, "Liability for Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)," during 1999, the Company recorded a $3.2 million charge for future severance costs
related to the relocation of its distribution operations from Los Angeles, California to Louisville, Kentucky. The Company originally expected
to terminate 460 employees. As a result of attrition, relocating and redeploying 228 employees, the Company recorded a $1.5 million
recovery during 2000.
N O T E 1 6 . R E S T R U C T U R I N G A N D I M P A I R M E N T C H A R G E S
In the fourth quarter of 2000, the Company recorded restructuring and impairment charges of $8.6 million. Of these charges $2.4 million
(impairment) and $6.2 million (restructuring and impairment) were recorded to the wholesale and retail segments, respectively. These
charges consisted of the following:
In connection with its ongoing review of its portfolio of marketable equity securities, the Company recorded a non-cash impairment charge
against earnings from operations of $2.4 million to write down the cost basis of a certain marketable equity security investment in an
internet company as the decline was determined to be other than temporary.
Additionally, in accordance with SFAS N0. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of" an impairment charge of $1.7 million was recorded in the fourth quarter of 2000 to write down the net book value of
property and equipment related to certain stores. These assets became impaired as the Company's new kid's line had some unprofitable
stores that performed below expectation. Estimated future cash flows related to these stores indicated that an impairment of the full
value had occurred.
In December 2000, Company management approved a plan to close certain under-performing stores in 2001 and cease construction on
certain stores that the Company has decided not to open. Included in the Company's operating results for the year ended December 31,
2000, are restructuring charges of $4.5 million consisting of lease exit costs, rent paid and to be paid on idle locations and construction
costs of stores abandoned during construction. This is inclusive of $0.8 million of asset impairments for under-performing stores that the
Company plans to close in 2001. Estimated future cash flows related to these stores indicated that an impairment of the full value had
occurred. As of December 31, 2000, a liability recorded in accordance with the requirements of EITF 94-3, "Liability for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)" of $1.7 million remains, consist-
ing primarily of estimated rent to be paid on idle leased facilities and lease exit costs. The Company anticipates paying the $1.7 million
and the completion of these activities during 2001.
GUESS?, Inc. and Subsidiaries
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