-----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, Hv53Q+iStnT8fxP+eJMxLi0rqz5SH6mtClKyUvXfTjtix4a9lsSIUFUqY+LIbgKr WOSbWboMRjl/PnhPLmT3KA== 0000950124-96-001229.txt : 19960322 0000950124-96-001229.hdr.sgml : 19960322 ACCESSION NUMBER: 0000950124-96-001229 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960321 ITEM INFORMATION: Other events FILED AS OF DATE: 19960321 SROS: CSX SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KMART CORP CENTRAL INDEX KEY: 0000056824 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-VARIETY STORES [5331] IRS NUMBER: 380729500 STATE OF INCORPORATION: MI FISCAL YEAR END: 0129 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00327 FILM NUMBER: 96537167 BUSINESS ADDRESS: STREET 1: 3100 W BIG BEAVER RD CITY: TROY STATE: MI ZIP: 48084 BUSINESS PHONE: 8106431000 MAIL ADDRESS: STREET 1: 3100 W BIG BEAVER ROAD CITY: TROY STATE: MI ZIP: 48084 FORMER COMPANY: FORMER CONFORMED NAME: KRESGE S S CO DATE OF NAME CHANGE: 19770921 8-K 1 FORM 8-K 1 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 21, 1996 -------------------- KMART CORPORATION (Exact Name of Registrant as Specified in its Charter) MICHIGAN (State or Other Jurisdiction of Incorporation) 1-327 38-0729500 (Commission File Number) (I.R.S. Employer Identification No.) 3100 WEST BIG BEAVER ROAD, TROY, MICHIGAN 48084 (Address of Principal Executive Offices)(Zip Code) (810) 643-1000 (Registrant's Telephone Number, Including Area Code) N/A (Former Name or Former Address, if Changed Since Last Report) 2 ITEM 5. OTHER EVENTS On March 7, 1996, Kmart Corporation issued a press release announcing 1995 year-end and fourth quarter results attached hereto as Exhibit 99. Certain amounts in this exhibit in the Consolidated Condensed Statements of Cash Flows have been reclassified to reflect the final audited balances of the statements. 3 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. KMART CORPORATION (Registrant) By: /s/ Martin E. Welch III -------------------------------- Martin E. Welch III Senior Vice President and Chief Financial Officer Date: March 21, 1996 4 EXHIBIT INDEX
Exhibit No. Description - ----------- ----------- 99 Press Release dated March 7, 1996
EX-99 2 EXHIBIT 99 1 EXHIBIT 99 March 7, 1996 Robert M. Burton Director, Investor Relations (810) 643-1040 Shawn M. Kahle Vice President, Corporate Affairs (810) 637-4201 FOR IMMEDIATE RELEASE KMART CORPORATION ANNOUNCES 1995 YEAR-END, FOURTH QUARTER RESULTS TROY, Mich., March 7, 1996--Kmart Corporation (NYSE:KM) today reported net income from continuing retail operations of $21 million, or $0.05 per share, for the fourth quarter of 1995. These results exclude a non-cash charge of $390 million, net of tax, or $0.85 per share, taken in the quarter for the adoption of Statement of Financial Accounting Standard No. 121 ("FAS 121"), reflecting management's assessment of the impairment of the Company's investment in Builders Square, and certain International operations. Including the FAS 121 charge, the net loss from continuing operations for the quarter was $369 million, or $0.80 per share. This compares to a net loss from continuing retail operations of $16 million, or $0.04 per share, for the fourth quarter of 1994. In addition, during the fourth quarter of 1995, the Company recorded an extraordinary charge of $51 million, net of tax, or $0.11 per share, for a previously announced restructuring of its real estate and bank debt. After these charges and including income and gains from discontinued operations in the prior year, Kmart reported a net loss of $420 million, or $0.91 per share, for the fourth quarter of 1995, compared with net income of $145 million, or $0.31 per share, for the fourth quarter of 1994. For the full year ended January 31, 1996, Kmart reported a net loss of $571 million, or $1.25 per share, compared to net income of $296 million, or $0.63 per share, in 1994. Before the FAS 121 charge, the net loss from continuing retail operations for 1995 was $100 million, or $0.23 per share. 2 KMART CORPORATION REPORTS FOURTH QUARTER AND FULL YEAR 1995 RESULTS 2-2-2 The following table recaps these key elements of net earnings for the fourth quarter and full year:
(Amounts in millions) FY 1995 FY 1994 4Q 1995 4Q 1994 ------- ------- ------- ------- Net Income (Loss) from Continuing Retail Operations ($100) $104 $ 21 ($16) Asset Impairment Charges, net of income taxes ($390) ($390) "Put" Debt-related charge, net of income taxes ($ 51) ($ 51) Gain (Loss) from Discontinued Operations, net ($ 30) $192 $161 ------- ---- ----- ---- Net Income (Loss) as Reported ($571) $296 ($420) $145
Commenting on 1995 results, Floyd Hall, Chairman, President and CEO said: "Kmart's poor financial performance reflects a major financial and strategic restructuring of the Company. These results represent the bottoming out of Kmart's financial decline. In 1995, Kmart bit the bullet by closing underperforming stores, clearing out discontinued inventory, and divesting non-core assets. "We resolved the puttable real estate debt and took the one-time writedown related to Builders Square and our international operations, and continued to make good progress in restructuring and strengthening our financial flexibility and stability. "We will build on last year's cost-cutting efforts by reducing SG&A expense by an additional $400 million. In 1996, merchandising and operational initiatives already underway will result in improved assortments, better in-stock positions, cleaner and more orderly stores, and dramatic gains in customer service. We are confident that our 1995 actions, our new management team, and an intense customer focus will produce a return to profitability in 1996 and longer term." FOURTH QUARTER 1995 RESULTS OF OPERATIONS Total sales in the fourth quarter of 1995 were $10.531 billion, an increase of 6.6% from $9.876 billion for the fourth quarter of 1994. On a comparable store basis, excluding the fifty-third week in 1995, consolidated sales were up 4.7%. Sales in U.S. Kmart stores increased 5.9% on the same basis. Gross margin for the fourth quarter of 1995 was 20.4% of sales versus 20.3% in the prior year. The fourth quarter gross margin was favorably impacted by the implementation of a previously- 3 KMART CORPORATION REPORTS FOURTH QUARTER AND FULL YEAR 1995 RESULTS 3-3-3 announced inventory accounting change made in the first quarter of 1995. Pretax LIFO credits of $43 million and $57 million were recorded during the fourth quarters of 1995 and 1994, respectively. Selling, general and administrative expenses, as a percentage of sales, for the fourth quarter were 20.2% in 1995 versus 20.8% in 1994. FULL YEAR 1995 RESULTS OF OPERATIONS Total sales during 1995 were $34.389 billion, an increase of 5.8% from $32.514 billion in the preceding year. On a comparable store basis, and excluding the fifty-third week in 1995, consolidated sales were up 4.3%. Sales in U.S. Kmart stores increased 5.6% on that same basis. Gross margin for the year was 21.5% of sales versus 23.5% during 1994. Pretax LIFO credits of $36 million and $57 million were recorded during 1995 and 1994, respectively, reflecting lower inventory and inflation levels. Selling, general and administrative expenses, as a percentage of sales, were 22.0% during 1995 versus 22.7% during 1994. Kmart Corporation serves America with 2,168 Kmart plus 167 Builders Square retail outlets and 147 stores internationally. Kmart Corporation common stock is listed on the New York, Pacific, and Chicago Stock Exchanges. 4 KMART CORPORATION REPORTS FOURTH QUARTER AND FULL YEAR 1995 RESULTS 4-4-4 KMART CORPORATION SALES AND OPERATING RESULTS BY BUSINESS 14 WEEKS ENDED JANUARY 31, 1996 AND 13 WEEKS ENDED JANUARY 25, 1995 SALES
% Change All Comparable (Millions U.S. $) 1-31-96 1-25-95 Stores Stores (b) General Merchandise- United States $ 9,467 $ 8,793 7.7 5.9 International 434 404 7.2 3.7 (a) Total General Merchandise 9,901 9,197 7.6 5.8 Specialty Retail- Builders Square 630 679 (7.2) (10.7) Total Kmart $ 10,531 $ 9,876 6.6 4.7
(a) International comparable store sales change is calculated on sales in the applicable local currency. (b) Comparable store sales are based on the 13 week period ended 1-24-96. OPERATING RESULTS
(Millions U.S. $) 1-31-96 1-25-95 % Change General Merchandise- United States $ 124 $ 29 - International (a) (7) 14 (150.0) Total General Merchandise 117 43 172.1 Specialty Retail- Builders Square (a) (12) (2) - Total Kmart (a) $ 105 $ 41 156.1
(a) Excludes $532 million total charges for FAS 121 in the fourth quarter of 1995. 5 KMART CORPORATION REPORTS FOURTH QUARTER AND FULL YEAR 1995 RESULTS 5-5-5 KMART CORPORATION SALES AND OPERATING RESULTS BY BUSINESS 53 WEEKS ENDED JANUARY 31, 1996 AND 52 WEEKS ENDED JANUARY 25, 1995 SALES
% Change All Comparable (Millions U.S. $) 1-31-96 1-25-95 Stores Stores (b) General Merchandise- United States $ 30,429 $ 28,386 7.2 5.6 International 1,284 1,177 9.1 3.0 (a) Total General Merchandise 31,713 29,563 7.3 5.5 Specialty Retail- Builders Square 2,676 2,951 (9.3) (8.7) Total Kmart $ 34,389 $ 32,514 5.8 4.3
(a) International comparable store sales change is calculated on sales in the applicable local currency. (b) Comparable store sales are based on the 52 week period ended 1-24-96. OPERATING RESULTS
(Millions U.S. $) 1-31-96 1-25-95 % Change General Merchandise- United States $ 262 $ 505 (48.1) International (a) (17) 23 (173.9) Total General Merchandise 245 528 (53.6) Specialty Retail- Builders Square (a) (17) 28 (160.7) Total Kmart (a) $ 228 $ 556 (59.0)
(a) Excludes $532 million total charges for FAS 121 in the fourth quarter of 1995. 6 KMART CORPORATION REPORTS FOURTH QUARTER AND FULL YEAR 1995 RESULTS 6-6-6 KMART CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
14 Weeks 13 Weeks Ended Ended (Amounts in millions, except per share data) 1-31-96 1-25-95 Sales $ 10,531 $ 9,876 Licensee fees and other income 78 91 10,609 9,967 Cost of merchandise sold 8,378 7,869 Selling, general and administrative expenses 2,126 2,057 Asset impairment charges 532 - Interest expense, net 127 120 Loss from continuing retail operations before income taxes and equity income (554) (79) Equity in net income of unconsolidated companies 15 20 Income tax credit (170) (43) Net loss from continuing retail operations before extraordinary item (369) (16) Income from discontinued operations, net of income taxes 1 44 Gain on disposal of discontinued operations, net of income taxes (1) 117 Extraordinary debt restructuring charges, net of income taxes (51) - Net income (loss) ($ 420) $ 145 Earnings (loss) per common share: Continuing retail operations before asset impairment charges $ 0.05 ($ 0.04) Asset impairment charges ($ 0.85) - Continuing retail operations ($ 0.80) ($ 0.04) Income from discontinued operations - $ 0.09 Gain on disposal of discontinued operations - $ 0.26 Extraordinary debt restructuring charges ($ 0.11) - Net income (loss) ($ 0.91) $ 0.31 Weighted average shares outstanding 461.6 457.9
* The consolidated statement of operations for the prior period has been restated for discontinued operations. 7 KMART CORPORATION REPORTS FOURTH QUARTER AND FULL YEAR 1995 RESULTS 7-7-7 KMART CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
53 Weeks 52 Weeks Ended Ended (Amounts in millions, except per share data) 1-31-96 1-25-95 Sales $ 34,389 $ 32,514 Licensee fees and other income 265 286 34,654 32,800 Cost of merchandise sold 26,996 24,868 Selling, general and administrative expenses 7,554 7,376 Asset impairment charges 532 - Gain on pension curtailment (124) - Interest expense, net 446 493 Loss from continuing retail operations before income taxes and equity income (750) 63 Equity in net income of unconsolidated companies 38 52 Income tax provision (credit) (222) 11 Net income (loss) from continuing retail operations before extraordinary item (490) 104 Income from discontinued operations, net of income taxes - 75 Gain (loss) on disposal of discontinued operations, net of income taxes (30) 117 Extraordinary debt restructuring charges, net of income taxes (51) - Net income (loss) ($571) $ 296 Earnings (loss) per common share: Continuing retail operations before asset impairment charges ($0.23) $ 0.21 Asset impairment charges ($0.85) - Continuing retail operations ($1.08) $ 0.21 Income from discontinued operations - $ 0.16 Gain (loss) on disposal of discontinued operations ($0.06) $ 0.26 Extraordinary debt restructuring charges ($0.11) - Net income (loss) ($1.25) $ 0.63 Weighted average shares outstanding 459.9 456.6
* The consolidated statement of operations for the prior period has been restated for discontinued operations. 8 KMART CORPORATION REPORTS FOURTH QUARTER AND FULL YEAR 1995 RESULTS 8-8-8 KMART CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
53 Weeks 52 Weeks Ended Ended (Amounts in millions) 1-31-96 1-25-95 Cash Provided by (Used for) Operations: Income (loss) from continuing retail operations $ (490) $ 104 Adjustments to reconcile net income to net cash provided by (used for) operations Extraordinary item (51) - Asset impairment charges 532 - Depreciation and amortization 729 680 Cash used for store restructuring and other charges (231) (133) Deferred income taxes (9) 40 Decrease (increase) in inventories 236 (628) Increase (decrease) in accounts payable (645) 420 Other, net (301) 227 Net cash provided by (used for) continuing retail operations (230) 710 Discontinued operations: Gain (loss) on disposal and income from discontinued operations (30) 192 Cash used for discontinued operations (22) (362) Items not affecting cash, net 178 (636) Total from discontinued operations 126 (806) Net cash used for operations (104) (96) Investing: Capital additions (578) (1,125) Proceeds from asset sales and subsidiary public offerings 1,245 2,431 Other, net (346) (229) Net cash provided by investing 321 1,077 Financing: Net proceeds from (repayments of ) long-term debt and notes payable 963 (453) Dividends paid (283) (474) Reduction in capital lease obligations and other (155) (80) Net cash provided by (used for) financing 525 (1,007) Net increase (decrease) in cash 742 (26) Cash at beginning of year 353 379 Cash at end of year $1,095 $ 353
* The consolidated cash flow statement for the prior period has been restated for discontinued operations. 9 KMART CORPORATION REPORTS FOURTH QUARTER AND FULL YEAR 1995 RESULTS 9-9-9 KMART CORPORATION CONSOLIDATED BALANCE SHEETS
(Amounts in millions) 1-31-96 1-25-95 ASSETS Current Assets: Cash (including temporary investments of $637 and $32, respectively) $ 1,095 $ 353 Merchandise inventories 6,635 6,853 Other current assets 1,092 1,290 Net current assets of discontinued operations - 369 Total current assets 8,822 8,865 Investments in affiliated retail companies 94 108 Property and equipment - net 5,301 6,011 Other assets and deferred charges 1,180 913 Net long-term assets of discontinued operations - 745 TOTAL ASSETS $15,397 $16,642 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Long-Term debt due within one year $ 7 $ 235 Notes payable - 748 Accounts payable - trade 1,993 2,638 Accrued payrolls and other liabilities 1,076 1,158 Taxes other than income taxes 188 268 Income taxes - 256 Total current liabilities 3,264 5,303 Capital lease obligations 1,629 1,777 Long-term debt and notes payable 3,935 2,003 Other long-term liabilities 1,289 1,527 Shareholders' Equity: Preferred stock, 10,000,000 shares authorized; Series C, 790,287 shares authorized; 658,315 shares issued at January 25, 1995 - 132 Common stock, 1,500,000,000 shares authorized; shares issued 486,511,184, and 464,549,561, respectively 486 465 Capital in excess of par value 1,624 1,505 Retained earnings 3,326 4,074 Treasury shares and restricted stock (92) (86) Foreign currency translation adjustment (64) (58) Total shareholders' equity 5,280 6,032 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $15,397 $16,642
* The consolidated balance sheet for the prior period has been restated for discontinued operations. NNNN -----END PRIVACY-ENHANCED MESSAGE-----