-----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, UYrUtsnGK9Gj4Isa9SG/eZ/SwgKjvCjtxjhX7lJFNKYmoyqEAsMTl60qTIn3whaO G7BK/oyiy82D1hYcA2Rd6g== 0000950123-03-003249.txt : 20030326 0000950123-03-003249.hdr.sgml : 20030325 20030326081745 ACCESSION NUMBER: 0000950123-03-003249 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030325 ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030326 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HANOVER DIRECT INC CENTRAL INDEX KEY: 0000320333 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-CATALOG & MAIL-ORDER HOUSES [5961] IRS NUMBER: 138053260 STATE OF INCORPORATION: DE FISCAL YEAR END: 1227 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08056 FILM NUMBER: 03616919 BUSINESS ADDRESS: STREET 1: 1500 HARBOR BLVD CITY: WEEHAWKEN STATE: NJ ZIP: 07087 BUSINESS PHONE: 2018653800 MAIL ADDRESS: STREET 1: 1500 HARBOR BLVD CITY: WEEHAWKEN STATE: NJ ZIP: 07087 FORMER COMPANY: FORMER CONFORMED NAME: HORN & HARDART CO /NV/ DATE OF NAME CHANGE: 19920703 8-K 1 y84838e8vk.txt HANOVER DIRECT, INC. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------------------------------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 25, 2003 -------------------------------------------------------------- HANOVER DIRECT, INC. ------------------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) 1-12082 ---------------------------------- (COMMISSION FILE NUMBER) DELAWARE 13-0853260 ----------------------------------- ----------------------------- (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER OF INCORPORATION) IDENTIFICATION NUMBER) 115 RIVER ROAD EDGEWATER, NEW JERSEY 07020 ----------------------------------- -------------- (ADDRESS OF PRINCIPAL (ZIP CODE) EXECUTIVE OFFICES) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (201) 863-7300 ------------------- - -------------------------------------------------------------------------------- ----- (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) ITEM 9. REGULATION FD DISCLOSURE. On March 25, 2003, Hanover Direct, Inc. (the "Company") issued a press release announcing operating results for the 52 weeks ended December 28, 2002. A copy of such press release is furnished under this Form 8-K pursuant to Regulation FD. EXHIBITS Exhibit 20.1 Press Release dated March 25, 2003, announcing operating results for the 52 weeks ended December 28, 2002. 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 hereunto duly authorized. HANOVER DIRECT, INC. -------------------------------------- (Registrant) March 25, 2003 By: /s/ Edward M. Lambert -------------------------------------- Name: Edward M. Lambert Title: Executive Vice President and Chief Financial Officer EX-99.20.1 3 y84838exv99w20w1.txt PRESS RELEASE EXHIBIT 20.1 [HANOVER DIRECT LOGO] FOR IMMEDIATE RELEASE CONTACT: Hanover Direct, Inc The MWW Group Edward M. Lambert Rich Tauberman E.V.P & Chief Financial Officer Tel: (201) 507-9500 Tel: (201) 272-3325 HANOVER DIRECT, INC. REPORTS IMPROVEMENT IN FISCAL 2002 RESULTS FROM OPERATIONS OF $23.6 MILLION OVER PRIOR YEAR EDGEWATER, NJ, March 25, 2003 - Hanover Direct, Inc. (AMEX:HNV) today announced operating results for the 52 weeks ended December 28, 2002. From operations, the Company reported a loss of $0.4 million for the year ended December 28, 2002 compared with a $24.0 million loss from operations for the year ended December 29, 2001. Hanover Direct achieved this nearly break-even operating result for fiscal 2002 despite recording $4.4 million in special charges related to the Company's previously announced strategic business realignment program and $3.5 million in unusual litigation costs. Overall, Hanover Direct reported a net loss of $9.1 million for the year ended December 28, 2002 compared with a net loss of $5.8 million for the year ended December 29, 2001. Fiscal year 2001 included the gains on sale of the Company's IMPROVEMENTS business and Kindig Lane facility of $24.8 million and fiscal year 2002 included a reduction to the carrying value of deferred tax assets of $3.7 million. Hanover Direct also reported a net loss applicable to common shareholders of $24.7 million or $0.18 per share for the year ended December 28, 2002 compared with a net loss to common shareholders of $16.6 million or $0.08 per share for the year ended December 29, 2001. The net results applicable to common shareholders reflect preferred dividends and accretion of $15.6 million and $10.7 million in fiscal years 2002 and 2001, respectively. The weighted average number of shares outstanding was 138,280,196 and 210,535,959 for the fiscal years ended December 28, 2002 and December 29, 2001, respectively. The Company also announced that EBITDA (earnings before interest, taxes, depreciation and amortization) adjusted to add back stock option expense was $7.1 million for the year ended December 28, 2002. Since the results for fiscal years 2002, 2001 and 2000 contain certain unusual expenses and gains, management is releasing below in Attachment II a reconciliation of reported EBITDA and "comparative" EBITDA, exclusive of certain unusual expenses and gains, for all three years. Attachment II illustrates that comparative EBITDA for fiscal year 2002 increased by $17.9 million over fiscal year 2001 and by $44.4 million over fiscal year 2000. Management believes that EBITDA as outlined in Attachment II offers a useful additional tool for evaluating ongoing operating performance. Net revenues decreased $74.6 million or 14.0% for the year ended December 28, 2002 to $457.6 million from $532.2 million for the year ended December 29, 2001. This decrease was due in part to the sale of the IMPROVEMENTS business on June 29, 2001 which accounted for $34.1 million of the reduction. The discontinuance of the DOMESTICATIONS KITCHEN & GARDEN, KITCHEN & HOME, ENCORE and TURIYA catalogs contributed an additional $6.4 million to the reduction. Revenues for continuing businesses in fiscal year 2002 decreased by $34.1 million or 6.9%. Overall circulation for the continuing businesses decreased by 9.0% from the prior year with almost all of the decrease in continuing revenue stemming from reductions in unprofitable circulation. Net sales including postage and handling through the Internet improved by $20.4 million or 30.4% to $87.3 million from $66.9 million in 2001 excluding sales from the IMPROVEMENTS business that was sold during 2001. Internet sales for Hanover Direct amounted to 20.3% of Brand Sales (total revenues less third-party fulfillment sales and membership programs.) A conference call with the management of Hanover Direct, Inc. to review the Fiscal 2002 full year operating results and ongoing restructuring activities will be held on Wednesday, March 26, 2003 at 10 a.m. Eastern Standard Time. If you would like to participate in the call, please call 877-715-5321 (domestic) and 973-935-8506 (International) between 9:50 a.m. and 9:55 a.m. Eastern Time. The call will begin promptly at 10:00 a.m. Eastern Standard Time. A re-play of the conference will be available from 12:00 p.m. Eastern Standard Time on Wednesday, March 26, 2003 until 12:00 p.m. Eastern Standard Time on Thursday, March 27, 2003 and can be accessed by calling 877-519-4471 (domestic) and 973-341-3080 (International) and entering the Reservation No.: 3813423. The Hanover Direct, Inc. 2003 Annual Shareholders Meeting has been scheduled for Thursday, May 15, 2003. The meeting will be held at the Sheraton Suites on the Hudson, 500 Harbor Boulevard, Weehawken, New Jersey and will commence at 9:30 a.m. The Sheraton Suites on the Hudson are directly across the street from the Lincoln Harbor stop on the New York Waterway Ferry. The record date for voting at the annual meeting is April 2, 2003. ABOUT HANOVER DIRECT, INC. Hanover Direct, Inc. (AMEX: HNV) and its business units provide quality, branded merchandise through a portfolio of catalogs and e-commerce platforms to consumers, as well as a comprehensive range of Internet, e-commerce, and fulfillment services to businesses. The Company's catalog and Internet portfolio of home fashions, apparel and gift brands include DOMESTICATIONS, THE COMPANY STORE, COMPANY KIDS, SILHOUETTES, INTERNATIONAL MALE, SCANDIA DOWN, and GUMP'S BY MAIL. The Company owns GUMP'S, a retail store based in San Francisco. Each brand can be accessed on the Internet individually by name. Keystone Internet Services, LLC (www.keystoneinternet.com), the Company's third party fulfillment operation, also provides the logistical, IT and fulfillment needs of the Company's catalogs and web sites. Information on Hanover Direct, including each of its subsidiaries, can be accessed on the Internet at www.hanoverdirect.com. ================================================================================ ATTACHMENT I - HDI FY2002 FINANCIALS HANOVER DIRECT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AMOUNTS) DECEMBER 28, DECEMBER 29, 2002 2001 ------------ ------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $ 785 $ 1,121 Accounts receivable, net 16,945 19,456 Inventories 53,131 59,223 Prepaid catalog costs 13,459 14,620 Deferred tax asset, net -- 3,300 Other current assets 3,967 3,000 --------- --------- Total Current Assets 88,287 100,720 --------- --------- PROPERTY AND EQUIPMENT, AT COST: Land 4,395 4,509 Buildings and building improvements 18,205 18,205 Leasehold improvements 9,915 12,466 Furniture, fixtures and equipment 56,094 59,287 --------- --------- 88,609 94,467 Accumulated depreciation and amortization (59,376) (60,235) --------- --------- Property and equipment, net 29,333 34,232 --------- --------- Goodwill, net 9,278 9,278 Deferred tax asset, net 12,400 11,700 Other assets 902 1,731 --------- --------- Total Assets $ 140,100 $ 157,661 ========= ========= HANOVER DIRECT, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AMOUNTS) DECEMBER 28, DECEMBER 29, 2002 2001 ------------ ------------ LIABILITIES AND SHAREHOLDERS' DEFICIENCY CURRENT LIABILITIES: Current portion of long-term debt and capital lease obligations $ 3,802 $ 3,162 Accounts payable 42,873 46,348 Accrued liabilities 26,351 25,132 Customer prepayments and credits 4,722 5,143 Deferred tax liability 1,100 -- --------- --------- Total Current Liabilities 78,848 79,785 --------- --------- NON-CURRENT LIABILITIES: Long-term debt 21,327 26,548 Other 6,387 10,233 --------- --------- Total Non-current Liabilities 27,714 36,781 --------- --------- Total Liabilities 106,562 116,566 --------- --------- SERIES B PARTICIPATING PREFERRED STOCK, authorized, issued and outstanding, 1,622,111 shares at December 28, 2002 and December 29, 2001 92,379 76,823 SHAREHOLDERS' DEFICIENCY: Common Stock, $.66 2/3 par value, 300,000,000 shares authorized; 140,436,729 shares issued and outstanding at December 28, 2002 and 140,336,729 shares issued and outstanding at December 29, 2001 93,625 93,558 Capital in excess of par value 337,507 351,558 Accumulated deficit (486,627) (477,497) --------- --------- (55,495) (32,381) --------- --------- Less: Treasury stock, at cost (2,120,929 shares at December 28, 2002 and 2,100,929 shares at December 29, 2001) (2,996) (2,942) Notes receivable from sale of Common Stock (350) (405) --------- --------- Total Shareholders' Deficiency (58,841) (35,728) --------- --------- Total Liabilities and Shareholders' Deficiency $ 140,100 $ 157,661 ========= =========
HANOVER DIRECT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (LOSS) (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) FOR THE 13-WEEKS ENDED FOR THE 52-WEEKS ENDED ----------------------- ---------------------- DECEMBER DECEMBER DECEMBER DECEMBER 28, 2002 29, 2001 28, 2002 29, 2001 --------- --------- --------- --------- NET REVENUES $ 128,251 $ 136,933 $ 457,644 $ 532,165 --------- --------- --------- --------- OPERATING COSTS AND EXPENSES: Cost of sales and operating expenses 80,152 87,054 290,531 339,556 Special charges 2,702 5,196 4,398 11,277 Selling expenses 28,685 33,649 105,239 141,140 General and administrative expenses 15,452 12,377 52,258 56,727 Depreciation and amortization 1,274 1,751 5,650 7,430 --------- --------- --------- --------- 128,265 140,027 458,076 556,130 --------- --------- --------- --------- LOSS FROM OPERATIONS (14) (3,094) (432) (23,965) Gain on sale of Improvements (252) (422) (570) (23,240) Gain on sale of Kindig Lane -- -- -- (1,529) --------- --------- --------- --------- (LOSS) INCOME BEFORE INTEREST AND INCOME TAXES 238 (2,672) 138 804 Interest expense, net 1,461 1,427 5,477 6,529 --------- --------- --------- --------- (5,339) (5,725) LOSS BEFORE INCOME TAXES (1,223) (4,099) Income tax provision 3,701 30 3,791 120 --------- --------- --------- --------- NET LOSS AND COMPREHENSIVE LOSS (4,924) (4,129) (9,130) (5,845) Preferred stock dividends and accretion 4,964 1,789 15,556 10,745 --------- --------- --------- --------- NET LOSS APPLICABLE TO COMMON SHAREHOLDERS $ (9,888) $ (5,918) $ (24,686) $ (16,590) ========= ========= ========= ========= NET LOSS PER COMMON SHARE: Net loss per common share - basic and diluted $ (.07) $ (.03) $ (.18) $ (.08) ========= ========= ========= ========= Weighted average common shares outstanding - basic (thousands) 138,316 204,828 138,280 210,536 ========= ========= ========= ========= Weighted average common shares outstanding - diluted (thousands) 138,316 204,828 138,280 210,536 ========= ========= ========= =========
HANOVER DIRECT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS OF DOLLARS) FOR THE 52- WEEKS ENDED ------------------------ DECEMBER 28, DECEMBER 29, 2002 2001 -------------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: $ $ Net loss (9,130) (5,845) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization, including deferred fees 7,203 8,112 Special charges 323 3,345 Deferred tax asset 3,700 -- Gain on sale of Improvements (570) (23,240) Gain on sale of Kindig Lane -- (1,529) Gain on sale of property & equipment (167) -- Compensation expense related to stock options 1,332 1,841 Changes in assets and liabilities, net of sale of business: Accounts receivable, net 2,207 7,398 Inventories 6,092 7,077 Prepaid catalog costs 1,161 4,456 Accounts payable (3,475) (12,818) Accrued liabilities 1,219 (11,117) Customer prepayments and credits (421) (300) Other, net (4,814) 1,400 -------- -------- Net cash used in operating activities 4,659 (21,220) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions of property and equipment (639) (1,627) Proceeds from sale of Improvements 570 30,036 Proceeds from sale of Kindig Lane -- 4,671 Proceeds from disposal of property & equipment 169 -- -------- -------- Net cash (used) provided by investing activities 100 33,080 -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings under Congress revolving loan facility (4,704) (2,189) Borrowings under Congress Tranche B term loan facility 3,500 -- Payments under Congress Tranche A term loan facility (1,991) (5,208) Payments under Congress Tranche B term loan facility (1,314) (1,069) Payments of long-term debt and capital lease obligations (104) (90) Payment of debt issuance cost (722) (3,095) Series B Preferred Stock Transaction Cost Adjustment 215 -- Redemption of 7.5% Convertible Debentures -- (751) Other, net 25 (28) -------- -------- Net cash provided (used) by financing activities (5,095) (12,430) -------- -------- Net decrease in cash and cash equivalents (336) (570) Cash and cash equivalents at the beginning of the year 1,121 1,691 -------- -------- Cash and cash equivalents at the end of the period $ $ 785 1,121 ======== ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for: $ $ Interest 3,405 5,286 Income taxes 193 150 Non-cash investing and financing activities: $ $ Series B Participating Preferred Stock redemption price increase 15,556 -- Stock dividend and accretion of Series A Cumulative Participating Preferred Stock -- 10,745 Redemption of Series A Cumulative Participating Preferred Stock and Accrued Stock -- 82,390 Issuance of Series B Preferred Stock -- 76,823 Tandem share expirations 55 719 Capital lease obligations 32 9
ATTACHMENT II - HDI EBITDA COMPARISON SCHEDULE ------------------------------ (IN THOUSANDS OF DOLLARS) FY 2002 FY 2001 FY2000 --------- --------- --------- NET REVENUES $ 457,644 $ 532,165 $ 603,014 INCOME (LOSS) BEFORE INTEREST & TAXES $ 138 $ 804 $ (70,552) Add: Depreciation and amortization 5,650 7,430 9,090 --------- --------- --------- EARNINGS, BEFORE INTEREST, TAXES DEPRECIATION & $ 5,788 $ 8,234 $ (61,462) AMORTIZATION (EBITDA) Add: Stock option expense 1,332 1,841 5,175 --------- --------- --------- EBITDA AS DEFINED FOR DEBT COVENANTS $ 7,120 $ 10,075 $ (56,287) Less: Gain on sale of IMPROVEMENTS business (570) (23,240) Less: Gain on sale of Kindig Lane facility (1,529) Add: special charges 4,398 11,277 19,126 Add: write-down of inventory 2,048 Add: unusual litigation (Kaul & Schupak) 3,507 -- 5,212 --------- --------- --------- COMPARATIVE EBITDA $ 14,455 $ (3,417) $ (29,901) FY2002 INCREASE OVER FY2001 $ 17,872 FY2002 INCREASE OVER FY2000 $ 44,356
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