-----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, Vx0TfKjb6bWScFVHJZ0zB92tls35zQ7u9t2UUVkz8njeQIx7F/kqDNoPG9L5Cw1X oJ1PH/wsTzfLxVvPpoLK7w== 0000950152-97-006624.txt : 19970918 0000950152-97-006624.hdr.sgml : 19970918 ACCESSION NUMBER: 0000950152-97-006624 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970802 FILED AS OF DATE: 19970916 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FABRI CENTERS OF AMERICA INC CENTRAL INDEX KEY: 0000034151 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS SHOPPING GOODS STORES [5940] IRS NUMBER: 340720629 STATE OF INCORPORATION: OH FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06695 FILM NUMBER: 97681138 BUSINESS ADDRESS: STREET 1: 5555 DARROW RD CITY: HUDSON STATE: OH ZIP: 44236 BUSINESS PHONE: 2166562600 MAIL ADDRESS: STREET 1: 5555 DARROW ROAD CITY: HUDSON STATE: OH ZIP: 44236 FORMER COMPANY: FORMER CONFORMED NAME: CLEVELAND FABRIC SHOPS INC DATE OF NAME CHANGE: 19681216 FORMER COMPANY: FORMER CONFORMED NAME: CLEVELAND FABRIC SHOPS INC NUMBER THREE DATE OF NAME CHANGE: 19681216 10-Q 1 FABRI-CENTERS OF AMERICA, INC. 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 - -------------------------------------------------------------------------------- FORM 10 - Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 - -------------------------------------------------------------------------------- For the Quarter Ended August 2, 1997 Commission File No. 1-6695 - -------------------------------------- ----------------------------------- FABRI-CENTERS OF AMERICA, INC. - -------------------------------------------------------------------------------- (Exact name of Registrant as specified in its charter) Ohio 34-0720629 - ---------------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 5555 Darrow Road Hudson, Ohio 44236 - ---------------------------------------- ------------------------------------ (Address of principal executive offices) (Zip Code) (216) 656 - 2600 - ------------------------------------- (Registrant's telephone number) 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 ----------- ----------- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Shares of Class A Common Stock outstanding at August 29, 1997: 9,265,935 Shares of Class B Common Stock outstanding at August 29, 1997: 9,171,289 2 FABRI-CENTERS OF AMERICA, INC. Form 10-Q Index For the quarter ended August 2, 1997 - --------------------------------------------------------------------------------
PART I. FINANCIAL INFORMATION: PAGE NUMBERS Item 1 Financial Statements (Unaudited) Consolidated Balance Sheets as of August 2, 1997 and February 1, 1997 3 Consolidated Statements of Income for the Thirteen and Twenty-Six Weeks Ended August 2, 1997 and July 27, 1996 4 Consolidated Statements of Cash Flows for the Twenty-Six Weeks Ended August 2, 1997 and July 27, 1996 5 Notes to Consolidated Financial Statements 6-8 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 9-11 PART II. OTHER INFORMATION Item 4 Submission of Matters to a Vote of Security Holders 12 Item 5 Other Events 12 Item 6 Exhibits and Reports on Form 8-K 12 Signatures 13
Page 2 3
PART I FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) CONSOLIDATED BALANCE SHEETS (UNAUDITED) Fabri-Centers of America, Inc. (Thousands of dollars) August 2, February 1, 1997 1997 - ------------------------------------------------------------------------------------------------------------------------------ ASSETS Current assets: Cash and cash equivalents $ 12,603 $ 12,631 Merchandise inventories 315,377 296,104 Prepaid expenses and other current assets 9,769 9,532 Deferred income taxes 1,214 -- -------------- -------------- Total current assets 338,963 318,267 Property and equipment, at cost: Land 1,676 1,709 Buildings 24,917 23,905 Furniture and fixtures 116,308 108,684 Leasehold improvements 43,970 42,118 -------------- -------------- 186,871 176,416 Less accumulated depreciation and amortization 90,282 81,798 -------------- -------------- 96,589 94,618 Mortgage receivable 7,002 7,136 Other assets 9,821 9,159 -------------- -------------- Total assets $ 452,375 $ 429,180 ============== ============== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 119,697 $ 99,458 Accrued expenses 20,477 28,898 Accrued income taxes -- 10,697 Deferred income taxes -- 2,167 -------------- -------------- Total current liabilities 140,174 141,220 Long-term debt 90,500 15,100 Convertible subordinated debentures -- 56,983 Deferred income taxes 13,768 13,357 Other long-term liabilities 3,667 3,110 Shareholders' equity: Common Stock: Class A 518 507 Class B 515 503 Additional paid-in capital 81,177 76,614 Other (1,574) (1,248) Retained earnings 141,866 141,397 -------------- -------------- 222,502 217,773 Treasury stock, at cost (18,236) (18,363) -------------- -------------- Total shareholders' equity 204,266 199,410 -------------- -------------- Total liabilities and shareholders' equity $ 452,375 $ 429,180 ============== ==============
See notes to consolidated financial statements Page 3 4 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) Fabri-Centers of America, Inc. (Thousands of dollars, except per share data)
Thirteen Weeks Ended Twenty-Six Weeks Ended ---------------------------------- ----------------------------------- August 2, July 27, August 2, July 27, 1997 1996 1997 1996 - ------------------------------------------------------------------------------------------------------------------------------ Net sales $ 197,474 $ 188,865 $ 416,300 $ 391,893 Costs and expenses: Cost of goods sold 109,218 106,764 231,906 221,405 Selling, general and administrative expenses 88,239 83,025 178,677 166,861 Interest expense, net 1,621 2,941 3,149 5,780 ------------ ------------ ------------ ------------ 199,078 192,730 413,732 394,046 ------------ ------------ ------------ ------------ Earnings (loss) before income taxes (1,604) (3,865) 2,568 (2,153) Income taxes (601) (1,449) 963 (807) ------------ ------------ ------------ ------------ Net earnings (loss) before extraordinary item (1,003) (2,416) 1,605 (1,346) Extraordinary loss on debt prepayment, net of tax benefit of $682 (1,136) -- (1,136) -- ------------ ------------ ------------ ------------ Net earnings (loss) $ (2,139) $ (2,416) $ 469 $ (1,346) ============ ============ ============ ============ Net earnings (loss) before extraordinary item per common share--primary $ (0.05) $ (0.13) $ 0.08 $ (0.07) Extraordinary loss on debt prepayment per common share--primary (0.06) -- (0.06) -- ------------ ------------ ------------ ------------ Net earnings (loss) per common share--primary $ (0.11) $ (0.13) $ 0.02 $ (0.07) ============ ============ ============ ============ Net earnings (loss) per common share--assuming full dilution $ (0.11) $ (0.13) $ 0.02 $ (0.07) ============ ============ ============ ============
See notes to consolidated financial statements Page 4 5 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Fabri-Centers of America, Inc. (Thousands of dollars)
August 2, July 27, Twenty-Six Weeks Ended 1997 1996 - ------------------------------------------------------------------------------------------------------------------------------ Operating activities: Net earnings (loss) $ 469 $ (1,346) Extraordinary loss on debt prepayment 1,136 -- -------------- ------------ Net earnings (loss) before extraordinary item 1,605 (1,346) Adjustments to reconcile net earnings (less) to net cash (used for) provided by operating activities: Cancellation of restricted stock awards (77) -- Depreciation, amortization and other non-cash expenses 10,572 10,557 Loss on disposal of fixed assets 117 323 Deferred income taxes (2,288) (1,945) Working capital changes: Merchandise inventories (19,273) (4,298) Prepaid expenses and other current assets (237) 2,106 Accounts payable 20,239 7,050 Accrued expenses (8,421) (1,939) Accrued income taxes (10,697) (370) -------------- ------------ Net cash (used for) provided by operating activities (8,460) 10,138 Investing activities: Capital expenditures (12,083) (6,268) Mortgage receivable 134 137 Other, net (1,002) 140 -------------- ------------ Net cash used for investing activities (12,951) (5,991) Financing activities: Proceeds from long-term debt 76,900 13,100 Repayment of long-term debt (1,500) (13,600) Redemption of convertible subordinated debentures (56,983) -- Debt prepayment premium and issuance costs (1,818) -- Other long-term liabilities 557 47 Issuance of common stock upon conversion of debentures 1,061 -- Proceeds from exercise of stock options 2,757 963 Issuance of treasury shares 409 -- Purchase of common stock -- (9,008) -------------- ------------ Net cash provided by (used for) financing activities 21,383 (8,498) Net decrease in cash (28) (4,351) Cash and cash equivalents at beginning of period 12,631 11,552 -------------- ------------ Cash and cash equivalents at end of period $ 12,603 $ 7,201 ============== ============ Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 4,306 $ 5,199 Income taxes $ 13,948 $ 1,508
See notes to consolidated financial statements Page 5 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Fabri-Centers of America, Inc. August 2, 1997, February 1, 1997 and July 27, 1996 1. Basis of Presentation The accompanying consolidated financial statements include the accounts of Fabri-Centers of America, Inc., and its wholly owned subsidiaries (the "Company") and have been prepared without audit, pursuant to the rules of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although, the Company believes that the disclosures herein are adequate to make the information not misleading. The statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended February 1, 1997 (fiscal 1997). The Company's business is seasonal, therefore, earnings or losses for a particular interim period are not necessarily indicative of full year results. In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary for a fair statement of results for the interim periods. 2. Earnings Per Share Primary earnings per common share and earnings per common share assuming full dilution equal net earnings divided by the weighted average number of common shares outstanding, after giving effect for the assumed exercise of dilutive stock options under the treasury stock method. The Company's 6 1/4% Convertible Subordinated Debentures, which were redeemed on June 30, 1997, are considered a common share equivalent in calculating earnings per common share assuming full dilution; however, they are not included in the earnings per common share calculation assuming full dilution, because the effect of conversion is anti-dilutive. Page 6 7 The following table presents information necessary to calculate primary earnings per common share and earnings per common share assuming full dilution for the periods presented:
Thirteen Weeks Ended Twenty-Six Weeks Ended ------------------------------ ------------------------------ August 2, July 27, August 2, July 27, 1997 1996 1997 1996 ---------- ---------- ---------- ---------- Common shares outstanding-primary: Weighted average shares outstanding 18,336,452 17,775,272 18,180,378 18,022,119 Share equivalents--stock options 1,371,273 642,710 1,289,344 591,876 ---------- ---------- ---------- ---------- 19,707,725 18,417,982 19,469,722 18,613,995 ========== ========== ========== ========== Common shares outstanding-assuming full dilution: Weighted average shares outstanding 18,336,452 17,775,272 18,180,378 18,022,119 Share equivalents--stock options 1,404,443 670,868 1,344,700 670,868 ---------- ---------- ---------- ---------- 19,740,895 18,446,140 19,525,078 18,692,987 ========== ========== ========== ==========
The Financial Accounting Standards Board issued Statement of Financial Accounting Standard (SFAS) No. 128, "Earnings Per Share," in March 1997, which will revise the calculation methods and disclosures regarding earnings per share. As required by the Statement, the Company will adopt SFAS No. 128 in the fourth quarter of Fiscal 1998. The Company's pro forma earnings per common share that would have been reported had the new standard been previously in effect are as follows:
Thirteen Weeks Ended Twenty-Six Weeks Ended -------------------------------------- ----------------------------------- August 2, July 27, August 2, July 27, 1997 1996 1997 1996 ----------------- ---------------- ----------------- ------------- Basic (loss) earnings per common share (0.12) (0.14) 0.03 (0.07) Diluted (loss) earnings per common share (0.12) (0.14) 0.02 (0.07)
3. Amendment to Revolving Credit Facility The Company amended, on June 2, 1997, its unsecured $200,000,000 revolving credit facility (the "Credit Facility") with a group of eight banks. The amended Credit Facility expires on May 31, 2001. The Company pays a facility fee on the revolving commitment amount which as a result of the amendment now ranges from .10% to .375%, based on the achievement of certain financial covenants. Under the amendment, the Company no longer pays a commitment fee on the unused portion of the Credit Facility. Interest on borrowings under the Credit Facility is payable at an applicable margin over prime, federal funds or LIBOR rates. The applicable margin has been amended and now ranges between .25% and 1.00%, based on the achievement of certain financial covenants. Page 7 8 The amended Credit Facility contains financial covenants which limit the Company's capital expenditures and defined leverage ratio, as well as require the Company to maintain a minimum tangible net worth, fixed charge coverage ratio and current funded indebtedness ratio. As a result of the amendment, certain financial covenants were eliminated. 4. Convertible Subordinated Debentures On May 20, 1997, the Company announced that its Board of Directors authorized the redemption on June 30, 1997 of all outstanding 6 1/4% Convertible Subordinated Debentures due March 1, 2002 at a price of 101.785 percent of principal, and payment of accrued interest to the date of redemption. The debenture holders had the option up to the date of redemption to convert their debentures into common shares at a conversion price of 24.375 per share, or to accept redemption at the stated premium. Of the $56,983,000 of debentures outstanding on the date of the announcement of the redemption, $1,076,000 were converted, resulting in the issuance of 22,062 Class A and 22,062 Class B Common Shares. The remaining $55,907,000 of debentures were redeemed at the premium of 101.785 percent of principal. As a result of this transaction, the Company recorded an extraordinary loss, net of taxes, of $1,136,000, or $0.06 per share, consisting of the redemption premium, unamortized debenture issuance costs and other related expenses. 5. Capital Stock During the first quarter of fiscal year 1997, the Company purchased 407,525 Class A and 450,506 Class B Common Shares on the open market. The aggregate purchase price of these shares was approximately $9,000,000 which was funded through the Company's revolving credit facility. Page 8 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS THIRTEEN WEEKS ENDED AUGUST 2, 1997 VS. JULY 27, 1996 Net sales for the second quarter of fiscal 1998 increased 5 percent, or $8,609,000, compared to the second quarter of fiscal 1997. The sales growth continues to be well-distributed across all product lines, with certain product lines experiencing less rapid growth than in the second quarter of the prior year. Comparable store sales increased 3 percent for the second quarter of fiscal 1998 over the same quarter a year earlier in which comparable store sales increased 9 percent. Gross profit increased $6,155,000 in the second quarter of fiscal 1998 compared to the same quarter of fiscal 1997. As a percentage of net sales, fiscal 1998 second quarter gross profit was 44.7 percent, an increase of 1.2 percentage points from the same quarter a year earlier. The improvement in gross profit margin percentage resulted from smaller markdowns on seasonal merchandise as there was less clearance and carryover inventory during the second quarter of fiscal 1998 when compared to the same quarter a year earlier. Selling, general and administrative expenses as a percentage of net sales were 44.7 percent for the second quarter of fiscal 1998, an increase of 0.7 percentage points from the same quarter a year earlier. The increase, as a percent of sales, consisted primarily of higher store level payroll, occupancy, and corporate office expenses. The impact of an increase in hourly wage rates (resulting principally from the change in federal minimum hourly wage) was partially offset by improvements in store level payroll productivity. The Company's effective income tax rate was 37.5 percent for the second quarter of fiscal 1998 and fiscal 1997. The Company incurred a net loss for the second quarter of fiscal 1998, before an extraordinary loss, of $1,003,000, or $0.05 per share, compared to a net loss of $2,416,000, or $0.13 per share, for the same quarter a year earlier. During the second quarter of fiscal 1998, the Company incurred an extraordinary loss of $1,136,000, or $0.06 per share related to the early redemption of the 6 1/4% Convertible Subordinated Debentures due March 1, 2002. The redemption was funded through the use of the Company's long-term credit facilities. 22,062 Class A and 22,062 Class B Common Shares were issued to holders of $1,076,000 par value of debentures who exercised their conversion rights. TWENTY-SIX WEEKS ENDED AUGUST 2, 1997 VS. JULY 27, 1996 Net sales for the first half of fiscal 1998 increased 6 percent, or $24,407,000, compared to the first half of fiscal 1997. The sales growth was well-distributed across all product lines, in both the Jo-Ann Fabrics and Crafts stores as well as Cloth World stores. Comparable store sales increased 5 percent in the first half of fiscal 1998 over the same period a year earlier in which comparable store sales increased 8 percent. Gross profit increased $13,906,000 in the first half of fiscal 1998 compared to the same period of fiscal 1997. As a percentage of net sales, fiscal 1998 first half gross profit was 44.3 percent, an increase of 0.8 percentage points from the same period a year earlier. The improvement in gross profit margin percentage resulted from smaller markdowns on seasonal merchandise as there was less clearance and carryover inventory during the first half of fiscal 1998 when compared to the same period a year earlier. Page 9 10 Selling, general and administrative expenses as a percentage of net sales were 42.9 percent in the first half of fiscal 1998, an increase of 0.3 percentage points from the same period a year earlier. The increase, as a percent of sales, consisted primarily of higher store level payroll and occupancy expenses. The Company's effective income tax rate was 37.5 percent for the first half of fiscal 1998 and fiscal 1997. Net earnings for the first half of fiscal 1998, before an extraordinary loss, were $1,605,000, or $0.08 per share, compared to a net loss of $1,346,000, or $0.07 per share, for the same period a year earlier, a $0.15 per share improvement. The Company's business exhibits seasonality that is typical for most retail companies, with much stronger sales in the second half of the year than the first half of the year. In general, net earnings are highest during the months of September through December, when sales volumes provide significant operating leverage. Conversely, net earnings are substantially lower during the relatively low-volume sales months of January through August. Capital requirements needed to finance the Company's operations fluctuate during the year and reach their highest levels during the second and third fiscal quarters as the Company increases its inventory in preparation for its peak selling season. LIQUIDITY AND CAPITAL RESOURCES Working capital was $198,789,000 at the end of the first half of fiscal 1998, a decrease of $28,945,000 from one year ago, as inventory was reduced by $26,895,000. Long-term debt to total capitalization improved to 31 percent at August 2, 1997 from 47 percent at July 27, 1996, as debt declined by $64,483,000. The Company used $8,460,000 of cash for operating activities in the first half of fiscal 1998 compared to generating $10,138,000 of cash from operating activities in the first half of the prior year. During the first half of fiscal 1998, cash used for operating activities included $13,948,000 of income tax payments and a $3,280,000 payment to settle a Securities and Exchange Commission enforcement proceeding. The cost of the Securities and Exchange Commission settlement was recognized in the fourth quarter of fiscal 1997. Capital expenditures were $12,083,000 for the first half of fiscal 1998 as compared to $6,268,000 for the same period of fiscal 1997. For the full year of fiscal 1998, capital expenditures are expected to be approximately $40,000,000 as compared to $13,191,000 in the prior year. The higher level of anticipated fiscal 1998 capital expenditures over fiscal 1997 is principally related to an increase in planned store openings when compared to the prior year. Expected capital expenditures for fiscal 1998 were increased $10,000,000 over previously disclosed expectations to include additional store openings in early fiscal 1999, additional improvements to the distribution service center and one additional Jo-Ann etc store in fiscal 1998. The Company plans to open 60 to 65 new stores and close 65 to 70 smaller stores during fiscal 1998. The planned openings include seven Jo-Ann etc stores, a new 45,000 square foot megastore format. During the first quarter of fiscal 1997, the Company purchased 407,525 Class A and 450,506 Class B Common Shares on the open market at an aggregate purchase price of approximately $9,000,000. As of August 2, 1997, the remaining number of shares that can be acquired pursuant to prior authorization by the Board of Directors is 597,025 Class A and 557,025 Class B Common Shares. The Company amended, on June 2, 1997, its $200,000,000 revolving credit facility (the "Credit Facility") with a group of eight banks. The amendment extended the expiration to May 31, 2001 and made various changes to simplify the administration and to clarify certain terms of the Credit Facility. The Company may borrow up to a maximum of $220,000,000, subject to further limitations during specified time frames, by utilizing funds available under the Credit Facility and other lines of credit. As of August 2, 1997, the Company had borrowings of $90,500,000 under the Credit Facility and other lines of credit. The Company continues to maintain excellent vendor and banking relationships and has sufficient resources, including unused credit facilities, to meet its operating needs and to fund its capital expenditures for fiscal 1998. Page 10 11 During the first half of fiscal 1998, the Company opened 24 stores and closed 30 smaller or under-performing stores. The openings include two Jo-Ann etc stores, bringing the total of these stores opened to three. As of August 2, 1997, the Company operated 908 stores in 48 states primarily under the names Jo-Ann Fabrics and Crafts, Cloth World, New York Fabrics and Crafts and Jo-Ann etc. FORWARD-LOOKING STATEMENTS Certain statements contained in this report that are not historical facts are forward-looking statements that are subject to certain risks and uncertainties. When used herein, the terms "anticipates," "plans," "expects," "believes," and similar expressions as they relate to the Company or its management are intended to identify such forward-looking statements. The Company's actual results, performance or achievements may materially differ from those expressed or implied in the forward-looking statements. Risks and uncertainties that could cause or contribute to such material differences include, but are not limited to, changes in customer demand, changes in trends in the fabric and craft industry, changes in the competitive pricing for products, the impact of competitor store openings and closings, the availability of acceptable store locations, the availability of merchandise and general economic conditions. Page 11 12 PART II OTHER INFORMATION Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS a) An Annual Meeting of Shareholders of Fabri-Centers of America, Inc. was held June 5, 1997 for the purpose of electing three members to the class whose three-year term of office expires in 2000. b) Alan Rosskamm, Scott Cowen and Gregg Searle were elected to the Board of Directors in the class whose term of office expires in 2000. Betty Rosskamm and Frank Newman continued as Directors in the class whose term of office expires in 1999, and Alma Zimmerman and Ira Gumberg continued as Directors in the class whose term of office expires in 1998. Samuel Krasney, whose term of office was to expire in 1999, resigned from the Board of Directors and his position remains vacant. c) The nominees for Directors as listed in the proxy statement were elected with the following vote:
Nominee Votes For Votes Withheld ---------------- ---------------- -------------- Alan Rosskamm 8,054,972 4,486 Scott Cowen 8,054,995 4,463 Gregg Searle 8,054,995 4,463
Item 5. OTHER EVENTS On September 15, 1997, Samuel R. Gaston announced his resignation as Chief Financial Officer effective October 7, 1997. Mr. Gaston is leaving the Company to attend to family issues. Item 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits See the Exhibit Index on page 14 of this report. b) Reports on Form 8-K No reports on Form 8-K were filed during the 13-week period ended August 2, 1997. Page 12 13 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. FABRI-CENTERS OF AMERICA, INC.
DATE: September 16, 1997 /s/ Alan Rosskamm -------------------------------------------------------------- BY: Alan Rosskamm Chairman, President and Chief Executive Officer /s/ Samuel R. Gaston -------------------------------------------------------------- BY: Samuel R. Gaston Executive Vice President and Chief Financial Officer /s/ Robert R. Gerber -------------------------------------------------------------- BY: Robert R. Gerber Senior Vice President, Controller and Chief Accounting Officer
Page 13 14 FABRI-CENTERS OF AMERICA, INC. FORM 10-Q FOR THE THIRTEEN AND TWENTY-SIX WEEK PERIODS ENDED AUGUST 2, 1997 EXHIBIT INDEX
Sequential EXHIBIT NO. Description Page No. - ---------------------- -------------------------------------------------------------- ---------------------- 11 Statement re Computation of Earnings per Common 15 Share
Page 14 EX-11 2 EXHIBIT 11 1 EXHIBIT NO. 11 COMPUTATION OF EARNINGS PER COMMON SHARE Fabri-Centers of America, Inc. (Thousands of dollars, except share and per share data)
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED --------------------------------- --------------------------------- AUGUST 2, JULY 27, AUGUST 2, JULY 27, 1997 1996 1997 1996 - ------------------------------------------------------------------------------------------------------------------------------------ PRIMARY EARNINGS (LOSS) PER COMMON SHARE: Net earnings (loss) before extraordinary item $ (1,003) $ (2,416) $ 1,605 $ (1,346) Extraordinary loss on debt prepayment (1,136) -- (1,136) -- ------------ ------------ ------------ ------------ Net earnings (loss) $ (2,139) $ (2,416) $ 469 $ (1,346) ============ ============ ============ ============ Weighted average shares of common stock outstanding during the period 18,336,452 17,775,272 18,180,378 18,022,119 Incremental shares from assumed exercise of stock options - primary 1,371,273 642,710 1,289,344 591,876 ------------ ------------ ------------ ------------ 19,707,725 18,417,982 19,469,722 18,613,995 ============ ============ ============ ============ Net earnings (loss) before extraordinary item per common share $ (0.05) $ (0.13) $ 0.08 $ (0.07) Extraordinary loss on debt prepayment per common share (0.06) -- (0.06) -- ------------ ------------ ------------ ------------ Net earnings (loss) per common share--primary $ (0.11) $ (0.13) $ 0.02 $ (0.07) ============ ============ ============ ============ EARNINGS (LOSS) PER COMMON SHARE ASSUMING FULL DILUTION (a): Net earnings (loss) before extraordinary item $ (1,003) $ (2,416) $ 1,605 $ (1,346) Interest expense applicable to 6 1/4% convertible subordinated debentures, net of tax 337 556 893 1,113 ------------ ------------ ------------ ------------ Net earnings (loss) before extraordinary item and debenture interest (666) (1,860) 2,498 (233) Extraordinary loss on debt prepayment (1,136) -- (1,136) -- ------------ ------------ ------------ ------------ Net earnings (loss) before debenture interest $ (1,802) $ (1,860) $ 1,362 $ (233) ============ ============ ============ ============ Weighted average shares of common stock outstanding during the period 18,336,452 17,775,272 18,180,378 18,022,119 Incremental shares from assumed exercise of stock options - fully diluted 1,404,443 670,868 1,344,700 670,868 Incremental shares from assumed conversion of 6 1/4% convertible subordinated debentures 1,558,509 2,337,904 1,948,137 2,337,764 ------------ ------------ ------------ ------------ 21,299,404 20,783,904 21,473,215 21,030,751 ============ ============ ============ ============ Net earnings (loss) before extraordinary item per share assuming full dilution $ (0.03) $ (0.09) $ 0.12 $ (0.01) Extraordinary loss on debt prepayment per share (0.05) -- (0.05) -- ------------ ------------ ------------ ------------ Net earnings (loss) per common share assuming full dilution $ (0.08)(a) $ (0.09)(a) $ 0.06(a) $ (0.01)(a) ============ ============ ============ ============ (a) This calculation is submitted in accordance with Regulation S-K Item 601(b) (11) although it is contrary to paragraph 40 of APB Opinion No. 15, because it produces an anti-dilutive result.
EX-27 3 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET OF FABRI-CENTERS OF AMERICA, INC. AS OF AUGUST 2, 1997 AND THE CONSOLIDATED STATEMENT OF INCOME FOR THE TWENTY-SIX WEEKS THEN ENDED. 6-MOS JAN-31-1998 FEB-02-1997 AUG-02-1997 12,603 0 0 0 315,377 338,963 186,871 90,282 452,375 140,174 90,500 1,033 0 0 203,233 452,375 416,300 416,300 231,906 410,583 0 0 3,149 2,568 963 1,605 0 (1,136) 0 469 .02 .02
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