-----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, DvA/6ZmsgoIaMLuXmAXTDZmqtbxdtVepmlT8XWcI8mSueGfduJTsOQEdjeJYhKal eoE8E0PRtd2X1ynyhIrDSg== 0000950123-04-004476.txt : 20040412 0000950123-04-004476.hdr.sgml : 20040412 20040409185721 ACCESSION NUMBER: 0000950123-04-004476 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040326 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20040412 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: 04727494 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 y95414k2e8vk.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): APRIL 9, 2004 -------------- HANOVER DIRECT, INC. ------------------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) 1-08056 ---------------------------------- (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 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits Exhibit 99.1 Press Release, dated April 9, 2004, announcing operating results for the fiscal year ended December 27, 2003. ITEM 9. REGULATION FD DISCLOSURE On April 9, 2004, Hanover Direct, Inc. (the "Company") issued a press release announcing operating results for the fiscal year ended December 27, 2003. A copy of such press release is furnished as an exhibit to this Form 8-K. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On April 9, 2004, the Company issued a press release announcing operating results for the fiscal year ended December 27, 2003. A copy of such press release is furnished as an exhibit to this Form 8-K. 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) April 9, 2004 By: /s/ Charles E. Blue -------------------------------------- Name: Charles E. Blue Title: Senior Vice President and Chief Financial Officer EX-99.1 3 y95414k2exv99w1.txt PRESS RELEASE EXHIBIT 99.1 (HANOVER DIRECT LOGO) FOR IMMEDIATE RELEASE CONTACT: Hanover Direct, Inc The MWW Group Charles Blue Rich Tauberman S.V.P. & Chief Financial Officer Tel: (201) 507-9500 Tel: (201) 272-3389 HANOVER DIRECT REPORTS IMPROVEMENT IN FISCAL 2003 RESULTS FROM OPERATIONS OF $ 6.5 MILLION OVER PRIOR YEAR AND THE RESTATEMENT OF ITS 2002 10-K EDGEWATER, NJ, April 9, 2004 -Hanover Direct, Inc. today announced operating results for the 52- weeks ended December 27, 2003. The Company reported income from operations of $6.1 million for the year ended December 27, 2003 compared with a $0.4 million loss for the year ended December 28, 2002. The improvement in income from operations was achieved through reductions in special charges, general and administrative expenses and depreciation and amortization. The Company reported that Internet sales continue to demonstrate strong growth over the prior year, reaching 27.9% of total revenues for the 52- week period ended December 27, 2003. Internet net revenues for the 52- week period ended December 27, 2003 were $108.6 million, or 24.2% above the comparable fiscal period in 2002. Total net revenues for the 52- weeks ended December 27, 2003 were $414.8 million, a decrease of $42.8 million (9.4%), from the comparable period in 2002. The decrease was due to a number of factors, including softness in the economy and demand for the Company's products during the first six months of the 2003 year. In addition, the Company's strategy of reducing unprofitable circulation also contributed to the decrease throughout the year. The Company reported a net loss of $15.4 million or $0.16 per share for the year ended December 27, 2003, compared with a net loss of $9.1 million or $0.18 per share for the comparable period in the 2002 fiscal year. The per share amounts were calculated after deducting preferred dividends and accretion of $7.9 million and $15.6 million in fiscal years 2003 and 2002, respectively. The weighted average number of shares of common stock outstanding was 144,387,672 and 138,280,196 for the fiscal years ended December 27, 2003 and December 28, 2002, respectively. The increase in weighted average number of shares was a result of the Chelsey Recapitalization consummated on November 30, 2003. The $6.3 million increase in net loss was primarily due to: (i) a $7.6 million deferred Federal income tax provision incurred during 2003 to increase the valuation allowance and fully reserve the remaining net deferred tax asset. Due to a number of factors, including the continued softness in the demand for the Company's products, management lowered its projections of future taxable income. As a result of lower projections of future taxable income, the future utilization of the Company's net operating losses were no longer "more-likely-than-not" to be achieved; (ii) $7.2 million of additional interest expense incurred on the Series B Preferred Stock as a result of the implementation of FAS 150. Effective June 29, 2003, FAS 150 required the Company to reclassify its Series B Preferred Stock as a liability and reflect the accretion of the preferred stock balance as interest expense; (iii) a $3.6 million decrease due to loss of variable contribution associated with declines in net revenues; (iv) a $3.3 million increase due to a favorable summary judgment ruling at the District Court level in the Kaul litigation, resulting in a reversal of a substantial portion of the loss reserve related to this litigation; (v) a $3.1 million increase due to the reduction of special charges recorded; (vi) a $2.8 million increase due to continued reductions in cost of sales and operating expenses, general and administrative expenses and a decrease in depreciation and amortization; (vii) an increase of $1.3 million due to the recognition of the deferred gain related to the June 29, 2001 sale of the Company's Improvements business; and (viii) a $1.6 million benefit due to the implementation of the Company's revised vacation and sick benefit policy. The Company filed an amendment to the Annual Report on Form 10-K for the year ended December 28, 2002 as well as an amendment to the Quarterly Report on Form 10-Q for the quarter ended September 27, 2003. The Company has re-examined the provisions of the Congress Credit Facility and, based on EITF Issue No. 95-22, "Balance Sheet Classification of Borrowings Outstanding under Revolving Credit Agreements that Include Both a Subjective Acceleration Clause and a Lock-Box Arrangement", and certain provisions in the credit agreement, the Company is required to reclassify its revolving credit facility from long-term to short-term debt, though the existing revolving loan facility does not mature until January 31, 2007. As a result, the Company has reclassified $8.8 million as of December 28, 2002 and $13.2 million as of September 27, 2003 from Long-term debt to Short-term debt and capital lease obligations that is classified as Current liabilities. A conference call with the management of Hanover Direct, Inc to review the Fiscal Year 2003 operating results will be held on Tuesday, April 13, 2004 at 2:00 p.m. Eastern Daylight Time. If you would like to participate in the call, please call 877-691-0878 (Domestic) and 973-582-2741 (International) between 1:50 p.m. and 1:55 p.m. Eastern Daylight Time. The call will begin promptly at 2:00 p.m. Eastern Daylight Time. A re-play of the conference will be available from 5:00 p.m. Eastern Daylight Time on Tuesday, April 13, 2004 until 5:00 p.m. Eastern Daylight Time on Wednesday, April 14, 2004 and can be accessed by calling 877-519-4471 (Domestic) and 973-341-3080 (International) and entering the Reservation No.: 4685907. The Hanover Direct, Inc. 2004 Annual Shareholders Meeting has been scheduled for Thursday, June 3, 2004. The meeting will be held at the Sheraton Suites on Hudson, located at 500 Harbor Boulevard, Weehawken, NJ, and will commence at 9:30 a.m. Eastern Daylight Time. The record date for shareholders entitled to vote at the Annual Meeting is the close of business on April 19, 2004. 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. HANOVER DIRECT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AMOUNTS)
AS RESTATED DECEMBER 27, DECEMBER 28, 2003 2002 --------- --------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 2,282 $ 785 Accounts receivable, net 14,335 16,945 Inventories 41,576 53,131 Prepaid catalog costs 11,808 13,459 Other current assets 3,951 3,967 --------- --------- Total Current Assets 73,952 88,287 --------- --------- PROPERTY AND EQUIPMENT, AT COST: Land 4,361 4,395 Buildings and building improvements 18,210 18,205 Leasehold improvements 10,108 9,915 Furniture, fixtures and equipment 53,212 56,094 --------- --------- 85,891 88,609 Accumulated depreciation and amortization (58,113) (59,376) --------- --------- Property and equipment, net 27,778 29,233 --------- --------- Goodwill, net 9,278 9,278 Deferred tax assets 2,213 12,400 Other non-current assets 1,575 902 --------- --------- Total Assets $ 114,796 $ 140,100 ========= =========
Continued on next page. HANOVER DIRECT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) (IN THOUSANDS OF DOLLARS, EXCEPT SHARE AMOUNTS)
AS RESTATED DECEMBER 27, DECEMBER 28, 2003 2002 --------- --------- LIABILITIES AND SHAREHOLDERS' DEFICIENCY CURRENT LIABILITIES: Short-term debt and capital lease obligations $ 13,468 $ 12,621 Accounts payable 41,880 42,873 Accrued liabilities 12,918 26,351 Customer prepayments and credits 5,485 4,722 Deferred tax liabilities 2,213 1,100 --------- --------- Total Current Liabilities 75,964 87,667 --------- --------- NON-CURRENT LIABILITIES: Long-term debt 9,042 12,508 Series C Participating Preferred Stock, authorized, issued and outstanding 564,819 shares at December 27, 2003; liquidation preference of $56,482 at December 27, 2003 72,689 -- Other 4,609 6,387 --------- --------- Total Non-current Liabilities 86,340 18,895 --------- --------- Total Liabilities 162,304 106,562 --------- --------- SERIES B PARTICIPATING PREFERRED STOCK, authorized, issued and outstanding 1,622,111 shares at December 28, 2002 -- 92,379 SHAREHOLDERS' DEFICIENCY: Common Stock, $.66 2/3 par value, authorized 300,000,000 shares; 222,294,562 shares issued and outstanding at December 27, 2003 and 140,336,729 shares issued and outstanding at December 28, 2002 148,197 93,625 Capital in excess of par value 302,432 337,507 Accumulated deficit (494,791) (486,627) --------- --------- (44,162) (55,495) --------- --------- Less: Treasury stock, at cost (2,120,929 shares at December 27, 2003 and December 28, 2002) (2,996) (2,996) Notes receivable from sale of Common Stock (350) (350) --------- --------- Total Shareholders' Deficiency (47,508) (58,841) --------- --------- Total Liabilities and Shareholders' Deficiency $ 114,796 $ 140,100 ========= =========
HANOVER DIRECT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
FOR THE 13- WEEKS ENDED FOR THE 52- WEEKS ENDED ----------------------- ----------------------- DECEMBER 27, DECEMBER 28, DECEMBER 27, DECEMBER 28, 2003 2002 2003 2002 --------- --------- --------- --------- NET REVENUES $ 110,002 $ 128,251 $ 414,874 $ 457,644 --------- --------- --------- --------- OPERATING COSTS AND EXPENSES: Cost of sales and operating expenses 66,757 80,152 261,118 290,531 Special charges 627 2,702 1,308 4,398 Selling expenses 25,444 28,685 99,543 105,239 General and administrative expenses 11,223 15,452 42,080 52,258 Depreciation and amortization 1,330 1,274 4,719 5,650 --------- --------- --------- --------- 105,381 128,265 408,768 458,076 --------- --------- --------- --------- INCOME (LOSS) FROM OPERATIONS 4,621 (14) 6,106 (432) Gain on sale of Improvements -- (252) (1,911) (570) --------- --------- --------- --------- INCOME (LOSS) BEFORE INTEREST AND INCOME TAXES 4,621 238 8,017 138 Interest expense, net 4,246 1,461 12,088 5,477 --------- --------- --------- --------- INCOME (LOSS) BEFORE INCOME TAXES 375 (1,223) (4,071) (5,339) Provision for deferred Federal income taxes -- 3,700 11,300 3,700 Provision for state income taxes 11 1 28 91 --------- --------- --------- --------- NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) 364 (4,924) (15,399) (9,130) Preferred stock dividends and accretion -- 4,964 7,922 15,556 --------- --------- --------- --------- NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS $ 364 $ (9,888) $ (23,321) $ (24,686) ========= ========= ========= ========= NET INCOME (LOSS) PER COMMON SHARE: Net income (loss) per common share - basic and diluted $ .00 $ (.07) $ (.16) $ (.18) ========= ========= ========= ========= Weighted average common shares outstanding - basic and diluted (thousands) 162,603 138,316 144,388 138,280 ========= ========= ========= =========
HANOVER DIRECT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS OF DOLLARS)
FOR THE 52- WEEKS ENDED DECEMBER 27, DECEMBER 28, 2003 2002 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (15,399) $ (9,130) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization, including deferred fees 5,715 7,203 Provision for doubtful accounts 378 304 Special charges 16 18 Deferred tax asset 11,300 3,700 Gain on the sale of Improvements (1,911) (570) Gain on the sale of property and equipment (4) (167) Interest expense related to Series B Participating Preferred Stock redemption price increase 7,235 -- Compensation expense related to stock options 1,141 1,332 Changes in assets and liabilities: Accounts receivable 2,232 2,207 Inventories 11,555 6,092 Prepaid catalog costs 1,651 1,161 Accounts payable (993) (3,475) Accrued liabilities (13,433) 1,219 Customer prepayments and credits 763 (421) Other, net (2,173) (4,814) --------- --------- Net cash provided by operating activities 8,073 4,659 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions of property and equipment (1,895) (639) Proceeds from sale of Improvements 2,000 570 Costs related to the early release of escrow funds (89) -- Proceeds from disposal of property and equipment 78 169 --------- --------- Net cash provided by investing activities 94 100 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Net borrowings (payments) under Congress revolving loan facility 179 (4,704) Borrowings under Congress Tranche B term loan facility -- 3,500 Payments under Congress Tranche A term loan facility (1,991) (1,991) Payments under Congress Tranche B term loan facility (1,800) (1,314) Payments of capital lease obligations (466) (104) Payments of debt issuance costs (910) (722) Payment of Series C Participating Preferred Stock issuance costs (1,334) Proceeds from issuance of common stock -- 25 Series B Participating Preferred Stock Transaction Cost Adjustment -- 215 Payment of estimated Richemont tax obligation on Series B Participating Preferred Stock accretion (347) -- Other, net (1) --------- --------- Net cash used by financing activities (6,670) (5,095) --------- --------- Net increase (decrease) in cash and cash equivalents 1,497 (336) Cash and cash equivalents at the beginning of the year 785 1,121 --------- --------- Cash and cash equivalents at the end of the period $ 2,282 $ 785 ========= =========
Continued on next page. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for: Interest $ 3,325 $ 3,405 Income taxes 705 193 Non-cash investing and financing activities: Series B Participating Preferred Stock redemption price increase $ 7,575 $ 15,556 Redemption of Series B Participating Preferred Stock 107,536 Issuance of Series C Participating Preferred Stock 72,689 Gain on issuance of Series C Participating Preferred Stock 13,867 Tandem share expirations 55 Capital lease obligations 1,459 32
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