-----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, NyKhAFDEBv9LJNBzZuVuge49Tb4wLnYdvzCEMETnv28WZOoKokc7zbw+KDQ94BN+ 8A4qJ5KBu3Y7NIQAR5CJYA== 0000916641-96-000439.txt : 19960716 0000916641-96-000439.hdr.sgml : 19960716 ACCESSION NUMBER: 0000916641-96-000439 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960427 FILED AS OF DATE: 19960530 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: S&K FAMOUS BRANDS INC CENTRAL INDEX KEY: 0000723924 STANDARD INDUSTRIAL CLASSIFICATION: 5600 IRS NUMBER: 540845694 STATE OF INCORPORATION: VA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11682 FILM NUMBER: 96574377 BUSINESS ADDRESS: STREET 1: 11100 W BROAD ST STREET 2: PO BOX 31800 CITY: RICHMOND STATE: VA ZIP: 23294-1800 BUSINESS PHONE: 8043462500 MAIL ADDRESS: STREET 1: P O BOX 31800 CITY: RICHMOND STATE: VA ZIP: 23294-1800 10-Q 1 1ST QUARTER 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 27, 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 No. 0-11682 S & K FAMOUS BRANDS, INC. ...................................... (Exact name of registrant as specified in its charter) Virginia 54-0845694 ................................... ...................................... (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 11100 West Broad Street, P. O. Box 31800, Richmond, Virginia 23294-1800 ........................................................................ (Address of principal executive offices) Registrant's telephone number, including area code: (804) 346-2500 .................. Not Applicable ................................................................................ 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 _____ Indicate the number of shares outstanding of each of the Registrant's classes of common stock as of April 27, 1996. 5,066,371 shares of Common Stock, $0.50 par value PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS S & K FAMOUS BRANDS, INC. Statements of Income (unaudited)
Three Months Ended April 27, April 29, 1996 1995 ---- ---- Net income..................................................... $ 31,448,524 $ 28,746,079 Cost of sales ................................................. 17,049,746 15,854,622 -------------- -------------- Gross profit .................................................. 14,398,778 12,891,457 Other costs and expenses: Selling, general and administrative ........................ 12,287,874 11,103,416 Interest 128,058 202,985 Depreciation and amortization .............................. 564,416 533,369 Other, net ................................................. (55,723) (69,579) --------------- -------------- Income before income taxes .................................... 1,474,153 1,121,266 Provision for income taxes .................................... 560,200 426,100 --------------- -------------- Net income .................................................... $ 913,953 $ 695,166 ============== ============== Net income per common share ................................... $ 0.18 $ 0.14 ============== ============== Weighted average common shares outstanding .................... 5,062,969 4,840,454 ============== ============== See notes to financial statements.
S & K FAMOUS BRANDS, INC. Balance Sheets (unaudited)
April 27, April 29, January 27, 1996 1995 1996 --------- --------- ----------- Assets Current assets: Cash ................................................... $ 120,202 $ 317,712 $ 520,005 Accounts receivable...................................... 1,011,738 448,296 609,194 Merchandise inventories.................................. 46,428,610 45,443,902 39,701,702 Other current assets..................................... 2,322,112 2,195,985 2,299,519 -------------- -------------- -------------- Total current assets.................................. 49,882,662 48,405,895 43,130,420 Property and equipment, at cost: Land and corporate facility.............................. 5,125,041 5,130,826 5,125,041 Furniture, fixtures and equipment ....................... 10,990,633 10,489,624 10,934,539 Leasehold improvements................................... 11,875,562 10,286,751 11,651,414 -------------- -------------- -------------- 27,991,236 25,907,201 27,710,994 Less: Accumulated depreciation and amortization.......... 13,143,371 11,565,305 12,619,333 -------------- -------------- -------------- 14,847,865 14,341,896 15,091,661 Other assets ................................................ 2,475,015 2,098,980 2,376,115 -------------- -------------- -------------- $ 67,205,542 $ 64,846,771 $ 60,598,196 ============== ============== ============== Liabilities and Shareholders' Equity Current liabilities: Current maturities of long-term debt .................... $ 180,000 $ 180,000 $ 180,000 Accounts payable ........................................ 12,203,133 11,973,224 6,360,399 Accrued expenses: Compensation-related items............................ 1,089,932 640,499 1,273,585 Current and deferred income taxes..................... 1,026,799 933,673 1,010,152 Other current liabilities............................. 1,524,544 1,259,125 1,260,258 -------------- -------------- -------------- Total current liabilities.......................... 16,024,408 14,986,521 10,084,394 Industrial Development Revenue Bond.......................... 2,295,000 2,475,000 2,340,000 Long-term debt............................................... 6,327,425 7,959,193 6,601,276 Deferred income taxes........................................ 1,214,325 1,132,095 1,200,811 Commitments Shareholders' equity: Preferred stock, $1 par value; authorized shares, 500,000; issued and outstanding shares, none......... Common stock, $.50 par value, authorized shares, 10,000,000; issued and outstanding shares, 5,066,371 4,844,159 and 5,058,434, respectively................. 2,533,185 2,422,080 2,529,217 Capital in excess of par value........................... 7,836,571 6,402,428 7,795,215 Notes receivable--Stock Purchase Loan Plan .............. (1,445,072) 0 (1,458,464) Retained earnings........................................ 32,419,700 29,469,454 31,505,747 -------------- -------------- -------------- 41,344,384 38,293,962 40,371,715 ============== ============== ============== $ 67,205,542 $ 64,846,771 $ 60,598,196 ============== ============== ============== See notes to financial statements.
S & K FAMOUS BRANDS, INC. Statements of Cash Flows Increase (Decrease) in Cash (unaudited)
Three Months Ended April 27, April 29, 1996 1995 --------- --------- Cash flows from operating activities: Net income.................................. $ 913,953 $ 695,166 Adjustments to reconcile net income to net cash provided by (used for) operating activities: Depreciation and amortization............ 668,080 633,771 Loss on property dispositions, net ...... 8,251 5,375 Other 33,149 30,694 Changes in assets and liabilities: Accounts receivable................... (402,544) (128,097) Inventories........................... (6,726,908) (5,046,466) Other current assets.................. (22,593) 67,820 Other assets.......................... (98,900) (123,667) Accounts payable and accrued expenses.............................. 5,982,083 6,291,189 Income taxes and deferred income taxes................................. 30,161 (131,064) ------------- ------------ Net cash provided by operating activities 384,732 2,294,721 Cash flows from investing activities: Capital expenditures........................ (432,535) (181,897) Proceeds from property dispositions......... 0 0 ------------- ------------ Net cash used for investing activities...... (432,535) (181,897) ------------- ------------ Cash flows from financing activities: Net paydowns under revolving bank lines (307,000) (2,334,999) of credit Reduction of long-term debt................. (45,000) (45,000) ------------- ------------ Net cash used for financing activities...... (352,000) (2,379,999) ------------- ------------ Net decrease in cash (399,803) (267,175) Cash at beginning of period...................................... 520,005 584,887 ------------- ------------ Cash at end of period............................................ $ 120,202 $ 317,712 ============ ============ Supplemental cash flow information: Cash paid during the period for: Interest................................. $ 124,000 $ 191,500 Income taxes............................. 534,000 560,500
See notes to financial statements. S & K FAMOUS BRANDS, INC. Notes to Financial Statements (unaudited) A. Accounting Policies The accompanying unaudited interim financial statements have been prepared by the Company in accordance with the regulations of the Securities and Exchange Commission in regard to quarterly reporting. In the opinion of the Company, the statements include all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair representation of the financial position and results of operations for interim periods. B. Interim Results of Operations The Company's business is highly seasonal, with peak sales periods occurring during its fourth fiscal quarter which includes the Christmas season. The net earnings of any interim quarter are seasonally disproportionate to net sales since administrative and certain operating expenses remain relatively constant during the year. Consequently, interim results should not be considered necessarily indicative of the results for the entire fiscal year. C. Expansion Since the beginning of the year the Company has opened four new stores totaling 19,550 square feet. S & K Store Locations Date Opened Square Footage --------------------------------- --------------------------- -------------------------- Michigan: Walker April 20, 1996 4,400 Ohio: Columbus April 16, 1996 5,350 Pennsylvania: Harrisburg April 29, 1996 4,400 Tennessee: Brentwood April 20, 1996 5,400
The Company also converted the existing Columbus, Ohio store (Newmarket Mall) into a superstore, adding 3,200 square feet. Item 2. MANAGEMENT'S DISCUSSION AND FINANCIAL REVIEW Three Months Ended April 27, 1996, Compared to Three Months Ended April 29, 1995 RESULTS OF OPERATIONS The following table sets forth certain items in the Statements of Income as a percentage of net sales for the three months ended April 27, 1996 and April 29, 1995. Percentage of Net Sales Three Months Ended -------------------------------- 4/27/96 4/29/95 Net sales ................................... 100.0% 100.0% Cost of sales ............................... 54.2 55.2 ----- ----- Gross profit ................................ 45.8 44.8 Other costs and expenses: Selling, general and administrative ...... 39.1 38.6 Interest ................................. .4 .7 Depreciation and amortization ............. 1.8 1.8 Other, net ................................ (.2) (.2) ----- ----- Income before income taxes .................. 4.7 3.9 Provision for income taxes ................. 1.8 1.5 ----- ----- Net income .................................. 2.9% 2.4% ===== ===== Net sales in the first quarter of fiscal 1997 increased 9.4%, or $2.7 million, over the same period last year, and reflects the net addition of 12 new stores. Comparable store sales were up approximately 3%. These increases were primarily attributable to strong sales in the suit and sportcoat categories. During the first quarter the Company opened three stores and converted one existing store to its larger superstore format. There were 184 stores in operation as of April 27,1996, compared to 172 stores at April 29, 1995. Cost of sales in the first quarter of fiscal 1997 decreased by 1.0% of net sales to 54.2% of net sales from 55.2% of net sales for the same period last year. This decrease was primarily the result of improved initial markup on inventory purchased and, to a lesser degree, increased capitalization of buying and occupancy costs to inventory due to increased growth in quarter over quarter inventory levels. Selling, general and administrative expenses in the first quarter of fiscal 1997 were 39.1% of net sales compared to 38.6% of net sales in the previous year. This .5% of net sales increase was primarily attributable to this quarter's level of medical claims compared to last year under the Company's group health plan. Interest expense was .4% of net sales in the first quarter of fiscal 1997 compared with .7% of net sales last year. This .3% of net sales improvement is primarily attributable to reductions in average borrowing levels from $8.9 million in fiscal 1996 to $5.9 million this year. LIQUIDITY AND CAPITAL RESOURCES The Company has funded its operating activities, including capital expenditures for the opening of new stores, from internally generated funds and from bank borrowings. Through the first three months of fiscal 1997, the Company opened three new S & K stores and converted an existing store to its superstore format. The Company plans to open a number of new stores in fiscal 1997, while also remodeling several others. The Company believes that its sources of liquidity and capital resources will continue to be sufficient to fund its operations. Operating activities provided net cash of $.4 million and $2.3 million during the first quarters of fiscal 1997 and 1996 periods, respectively. This decrease is primarily due to increased inventory levels this year versus last year as a result of twelve net new stores as well as an increased number of superstores carrying higher inventory levels. Net cash used in investing activities is primarily for the purpose of store openings and remodelings. Capital expenditures for the first quarter of fiscal 1997 and 1996 approximated $.4 million and $.2 million, respectively. The Company opened three new stores and remodeled another in the first quarter of fiscal 1997 compared with opening one new store last year. Financing activities used net cash of approximately $.4 million and $2.4 million in the first quarter of fiscal 1997 and 1996, respectively. Financing activities primarily relate to fluctuations in the borrowing levels under the Company's revolving credit agreements. The Company's revolving credit agreements with two banks aggregate $24.0 million. As of April 27, 1996, the Company had net unused commitments of approximately $18.6 million under the agreements. PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders (a) The annual meeting of the Company's shareholders was held on May 30, 1996. (b) & (c) At the annual meeting, the shareholders elected eight directors and ratified the selection of independent accountants. The results of the voting were as follows: Election of Directors Director For Withheld Abstain ---------------------------- ------------- -------- ------- Stuart C. Siegel 4,746,777 12,805 0 Robert L. Burrus, Jr. 4,746,388 13,194 0 Donald W. Colbert 4,746,777 12,805 0 Selwyn S. Herson 4,744,382 15,200 0 Andrew M. Lewis 4,745,777 13,805 0 Steven A. Markel 4,747,582 12,000 0 Troy A. Peery 4,745,282 14,300 0 Marshall B. Wishnack 4,747,282 12,300 0 Ratification of Price Waterhouse LLP as Independent Accountants For Against Abstain 4,754,262 4,150 1,170 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (27) Financial Data Schedule (b) There were no reports filed on Form 8-K during the three months ended April 27, 1996 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. S & K FAMOUS BRANDS, INC. (Registrant) Date: May 30, 1996 /s/ Robert E. Knowles --------------------- Robert E. Knowles Executive Vice President, Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer) Date: May 30, 1996 /s/ Janet L. Jorgensen ---------------------- Janet L. Jorgensen Vice President and Controller (Principal Accounting Officer) EX-27 2 FINANCIAL DATA SCHEDULE
5 1 3-MOS JAN-27-1996 JAN-28-1996 APR-27-1996 120,202 0 1,011,738 0 46,428,610 49,882,662 27,991,236 13,143,371 67,205,542 16,024,408 0 2,533,185 0 0 38,811,199 67,205,542 31,448,524 31,448,524 17,049,746 17,049,746 12,796,567 0 128,058 1,474,153 560,200 913,953 0 0 0 913,953 0.18 0.18
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