-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V8YMf0kmpdtGupHRZmmi2k/OzJRAMooJDxjwHZtUjlE8V1Zy7O9kMKxkNdhaENMG xJ+D5/sojLVfgV//OfCdeQ== 0000276641-96-000002.txt : 19960515 0000276641-96-000002.hdr.sgml : 19960515 ACCESSION NUMBER: 0000276641-96-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960330 FILED AS OF DATE: 19960514 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPIEGEL INC CENTRAL INDEX KEY: 0000276641 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-CATALOG & MAIL-ORDER HOUSES [5961] IRS NUMBER: 362593917 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16126 FILM NUMBER: 96564257 BUSINESS ADDRESS: STREET 1: 3500 LACEY RD CITY: DOWNERS GROVE STATE: IL ZIP: 60515-5432 BUSINESS PHONE: 7089868800 MAIL ADDRESS: STREET 1: 3500 LACEY ROAD CITY: DOWNERS GROVE STATE: IL ZIP: 60515-5432 EX-27 1 ART. 5 FDS FOR 1ST QUARTER 10-Q
5 1,000 3-MOS DEC-28-1996 MAR-30-1996 59,159 0 616,390 32,247 555,063 1,364,117 592,593 183,946 2,113,017 521,089 1,013,424 107,747 0 0 413,504 2,113,017 589,461 634,681 403,892 403,892 0 0 21,506 (25,348) (11,027) (14,321) 0 0 0 (14,321) (0.13) (0.13)
10-Q 2 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) /X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarter ended March 30, 1996 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 0-16126 SPIEGEL, INC. (Exact name of registrant as specified in its charter) Delaware 36-2593917 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3500 Lacey Road, Downers Grove, Illinois 60515-5432 (Address of principal executive offices) (Zip Code) 708-986-8800 (Registrant's telephone number, including area code) (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 period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] APPLICABLE ONLY TO CORPORATE ISSUERS The number of shares outstanding of each of the issuer's classes of common stock, as of May 14,1996 are as follows: Class A non-voting common stock, $1.00 par value 14,604,844 shares Class B voting common stock, $1.00 par value 93,141,654 shares. - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ SPIEGEL, INC. Due to the seasonality of the registrant's business, the results for the three month period are not necessarily indicative of the results for the year. The financial statements have been prepared from the books and records of the registrant. They reflect all adjustments which are, in the opinion of management, necessary to a fair presentation of the results for the interim periods. These financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the registrant's Annual Report on Form 10-K, which includes financial statements for the year ended December 30, 1995. PART I - FINANCIAL INFORMATION Item 1 - Financial Statements Consolidated Balance Sheets, March 30, 1996 and December 30, 1995 Consolidated Statements of Earnings, Three Months Ended March 30, 1996 and April 1, 1995 Consolidated Statements of Cash Flows, Three Months Ended March 30, 1996 and April 1, 1995 Notes to Consolidated Financial Statements Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ Consolidated Balance Sheets ($000s omitted, except per share amounts) March 30, 1996 and December 30, 1995
(unaudited) March 30, December 30, 1996 1995 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 59,159 $ 42,302 Receivables, net 584,143 742,480 Inventories 555,063 572,377 Prepaid expenses 82,751 101,324 Refundable income taxes 40,865 29,560 Deferred income tax benefit 42,136 42,234 ------------ ------------ Total current assets 1,364,117 1,530,277 Property and equipment, net 408,647 412,934 Intangible assets, net 172,946 173,088 Other assets 167,307 157,683 ------------ ------------ Total Assets $ 2,113,017 $ 2,273,982 ------------ ------------ ------------ ------------ LIABILITIES and STOCKHOLDERS' EQUITY Current liabilities: Current maturities of debt $ 110,423 $ 111,672 Accounts payable 156,802 256,527 Accrued liabilities: Salaries and wages 20,864 32,370 General taxes 118,277 125,504 Other accrued liabilities 114,723 140,375 ------------ ------------ Total current liabilities 521,089 666,448 Long-term debt, excluding current maturities 973,424 994,692 Indebtedness to related parties 40,000 20,000 Deferred income taxes 57,253 57,269 ------------ ------------ Total liabilities 1,591,766 1,738,409 Stockholders' equity: Class A non-voting common stock, $1.00 par value; authorized 16,000,000 shares; 14,604,844 shares issued and outstanding at March 30, 1996 and December 30, 1995 14,605 14,605 Class B voting common stock, $1.00 par value; authorized 94,000,000 shares; 93,141,654 shares issued and outstanding at March 30, 1996 and December 30, 1995 93,142 93,142 Additional paid-in capital 211,761 211,761 Minimum pension liability (8,650) (8,650) Retained earnings 210,393 224,715 ------------ ------------ Total stockholders' equity 521,251 535,573 ------------ ------------- $ 2,113,017 $ 2,273,982 ------------ ------------ ------------ ------------
[FN] See accompanying notes to consolidated financial statements. - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Consolidated Statements of Earnings ($000s omitted, except per share amounts) Fiscal Periods Ended March 30, 1996 and April 1, 1995 (unaudited)
Three Months Ended March 30, April 1, 1996 1995 ----------- ----------- Net sales and other revenues: Net sales $ 589,461 $ 580,861 Finance revenue 28,341 64,006 Other revenue 16,879 34,760 ----------- ----------- 634,681 679,627 Cost of sales and operating expenses: Cost of sales, including buying and occupancy expenses 403,892 413,629 Selling, general and administrative expenses 234,631 256,337 ---------- ---------- 638,523 669,966 ----------- ----------- Operating income (loss) (3,842) 9,661 Interest expense 21,506 26,366 ----------- ----------- Earnings (loss) before income taxes (25,348) (16,705) Income tax benefit (11,027) (7,290) ----------- ----------- Net earnings (loss) $ (14,321) $ (9,415) ------------ ---------- Net earnings (loss) per common share $ (0.13) $ (0.09) ----------- ------------ ----------- ------------ Weighted average number of common shares outstanding 107,746,498 108,152,162 ----------- ----------- ----------- -----------
See accompanying notes to consolidated financial statements. - ---------------------------------------------------------------------------- - ---------------------------------------------------------------------------- Consolidated Statements of Cash Flows ($000s omitted) Three months ended March 30, 1996 and April 1, 1995 (unaudited)
Three Months Ended March 30, April 1, 1996 1995 ------------ ------------ Net cash provided by operating activities $ 43,401 $ 213,046 ------------ ------------ Cash flows from investing activities: Net additions to property and equipment (9,052) (42,867) Net additions to other assets (14,974) (7,679) ------------ ------------ Net cash used in investing activities (24,026) (50,546) ------------ ------------ Cash flows from financing activities: Issuance of debt 310,000 205,000 Payment of debt (312,518) (361,313) Dividends paid 0 (10,805) Repurchase of common stock 0 (4,103) Exercise of stock options 0 18 ------------ ------------ Net cash used in financing activities (2,518) (171,203) ------------ ------------ Net change in cash and cash equivalent 16,857 (8,703) Cash and cash equivalents at beginning of period 42,302 33,439 ----------- ------------ Cash and cash equivalents at end of period $ 59,159 $ 24,736 ------------ ------------ ------------ ------------ Supplemental cash flow information: Cash paid during the year for: Interest $ 23,596 $ 19,612 Income taxes $ 1,070 $ 1,345 ------------ ------------ ------------ ------------
See accompanying notes to consolidated financial statements. - ------------------------------------------------------------------------- - ------------------------------------------------------------------------- Notes to Consolidated Financial Statements ($000s omitted, except share amounts) (unaudited) (1) Adjustments The financial statements reflect all adjustments, consisting only of normal accruals, which are, in the opinion of management, necessary to a fair presentation of the results for the periods presented. (2) Reclassifications Certain prior year amounts have been reclassified to conform to the current presentation. (3) Long-term debt In March 1996, the Company replaced certain of its existing credit arrangements with new credit facilities and modified certain conditions of other senior and subordinated term indebtedness. These changes were made to strengthen the Company's liquidity and provide for future growth. The Company established a new $600 million revolving credit agreement with a group of 23 banks. The Company also increased its existing asset backed commericial paper program to $600 million from $400 million with a corresponding increase in the back-up credit agreement with the same group of 23 banks. The $400 million asset backed commercial paper program had been established in December 1995, as a prelude to these financing modifications. Simultaneously with the establishment of these new credit facilities,the Company canceled a $600 million commercial paper facility and a $300 million revolving credit facility. The Company also sold $70,000 of customer receivables. (4) Indebtedness to related parties In addition to the loan from the Company's majority shareholder, Spiegel Holdings, Inc. which existed as of December 30, 1995, in the first quarter of 1996, the Company received a term loan from 3 Suisses BVG (a wholly owned subsidiary of Otto Versand) for $25,000. This loan will be repaid $5,000 in 1996, $5,000 in 1997 and $15,000 in 1998 and bears interest at a rate of 5.92%. The amount to be repaid in 1996 is included in the Company's balance sheet under "Current maturities of debt". - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (000's omitted except per share amounts) Results of Operations Three Months Ended March 30, 1996 As Compared To Three Months Ended April 1, 1995 - ------------------------------------------- Net sales for the three months ended March 30, 1996, increased 1.5% to $589,461 compared to $580,861 for the three months ended April 1, 1995. This increase is primarily the result of higher retail sales. Eddie Bauer's comparable store sales increased 5%. Catalog sales declined 2% for the quarter. Finance revenue for the first quarter of 1996 was $28,341 as compared to $64,006 for the same period in 1995. This decrease was the result of a significantly lower level of average owned customer receivables in the first quarter of 1996 compared to 1995 due to sales of customer receivables to support the Company's financing arrangements. Other revenue for the first quarter of 1996 decreased $17,881 as compared to the first quarter of 1995. This was mainly the result of a gain of $18,637 recognized on the sale of customer receivables in the first quarter of 1995. There was no comparable gain in the first quarter of 1996. The gross profit margin on net sales increased to 31.5% for the three months ended March 30, 1996 compared to 28.8% for the comparable 1995 period. Clearance activity in the first quarter of 1996 was much lower than the same period in 1995. The Company took aggressive markdowns in the first quarter of 1995 to liquidate overstock merchandise left over from December 1994. Such markdowns were not required in the same period of 1996 as the Company had lower inventory levels in general and more favorable response to the merchandise offerings. Selling, general and administrative expenses as a percentage of total revenues for the three months ended March 30, 1996 and April 1, 1995 were 37.0% and 37.7%, respectively. This decrease reflected reductions achieved in several operating units' selling, general and administrative expenses. These reductions included improvements from the Company's new fulfillment and distribution facilities and more tightly controlled advertising expenditures, including catalog production costs. Negatively impacting the 1996 ratio was an increased level of charge-offs on customer receivables. The 1996 ratio was also favorably impacted by 1.8% for the gain ofapproximately $8,000 realized on the sale of the Company's information technology subsidiary in the first quarter and for a $4 million reversal of the provision for doubtful accounts on $70,000 of customer receivables sold in March 1996. The 1995 ratio was favorably impacted by 3.3% for the effects of a sale of $350,000 of customer receivables in March 1995 including an $18,637 gain recognized and a reversal of approximately $15,000 of the provision for doubtful accounts on the receivables. Interest expense for the three months ended March 30, 1996 decreased 18.4% to $21,506 compared to $26,366 for the three months ended April 1, 1995. This increase was due to lower average debt levels resulting from the higher level of customer receivables sold. - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- Seasonality and Quarterly Fluctuations: The Company, like other retailers, experiences seasonal fluctuations in its merchandise sales and net earnings. Historically, a disproportionate amount of the Company's net sales and a majority of its net earnings have been realized during the fourth quarter. Accordingly, the results for the individual quarters are not necessarily indicative of the results to be expected for the entire year. Liquidity and Capital Resources: The Company has historically met its operating and cash requirements through funds generated from operations, the issuance of debt and the sale of customer accounts receivable. Total customer receivables sold were $1,170,000 at March 30, 1996, $1,100,000 at December 30, 1995 and $750,000 at April 1, 1995. In March 1996, the Company replaced certain of its existing credit arrangements with new credit facilities and modified certain conditions of other senior and subordinated term indebtedness. These changes were made to strengthen the Company's liquidity and provide for future growth. The Company established a new $600 million revolving credit agreement with a group of 23 banks. The Company also increased its existing asset backed commercial paper program to $600 million from $400 million with a corresponding increase in the back-up credit line with the same group of 23 banks. The $400 million asset backed commercial paper program had been established in December 1995, as a prelude to these financing modifications. Simultaneously with the establishment of these new credit facilities, the Company canceled a $600 million commercial paper facility and a $300 million revolving credit facility. The Company also sold $70,000 of customer receivables. Net cash provided by operating activities was $43,401 for the three month period ended March 30, 1996 as compared to net cash provided of $213,046 for the three month period ended April 1, 1995. The net cash proceeds from the sale of $70,000 and $350,000 of customer receivables were reported as operating cash flows in the three months ended March 30, 1996 and April 1, 1995, respectively. Without the effects of the sale of customer receivables, net cash used by operating activities would have been $26,599 and $136,954 for the three month period ended March 30, 1996 and April 1, 1995, respectively. Other working capital items including decreases in accounts payable and other accrued liabilities represented significant uses of cash during the first quarters of 1996 and 1995. Net additions to property and equipment for the three months ended March 30, 1996 were $9,052 compared to $42,867 for the first quarter of 1995. The capital spending in 1996 was primarily related to the new addition to Eddie Bauer's headquarters, continued Eddie Bauer retail store expansion, and improvements to the recently purchased retail distribution facility in Columbus, OH. During the three months ended March 30, 1996, the Company incurred approximately $1,135 of expenditures related to the nonrecurring charge taken in 1993. The charge provided for the estimated impact of closing certain of the Company's existing catalog distribution facilities. Expenditures incurred during the first quarter of 1996 were primarily for closing costs incurred relating to the warehouse buildings. The Company believes that its cash on hand, together with cash flows anticipated to be generated from operations, and borrowings under its existing credit facilities and other available sources of funds, will be adequate to fund the Company's capital and operating requirements for the foreseeable future. - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SPIEGEL, INC.
Signature Title Date - ------------------------- ------------------------ ---------------- /s/ James W. Sievers Senior Vice President May 14, 1996 James W. Sievers (Chief Financial Officer)
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