-----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, N9qmREvHfTl7DQrDDHK19PdFERQn2qmvLkig9kWkmgdgXls214+QcT7OX0kXueK2 VKQm/bE3jHlmb6uSjm5fSA== 0000950110-02-000016.txt : 20020413 0000950110-02-000016.hdr.sgml : 20020413 ACCESSION NUMBER: 0000950110-02-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011201 FILED AS OF DATE: 20020114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYMS CORP CENTRAL INDEX KEY: 0000724742 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-FAMILY CLOTHING STORES [5651] IRS NUMBER: 222465228 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0301 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08546 FILM NUMBER: 2508562 BUSINESS ADDRESS: STREET 1: SYMS WAY CITY: SECAUCUS STATE: NJ ZIP: 07094 BUSINESS PHONE: 2019029600 MAIL ADDRESS: STREET 1: SYMS WAY CITY: SECAUCUS STATE: NJ ZIP: 07094 10-Q 1 e87696_10-q.txt QUARETLY REPORT ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 1, 2001 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 NUMBER 1-8546 SYMS CORP ------------------------------------------------------ (Exact Name of Registrant as Specified in Its Charter) NEW JERSEY 22-2465228 - -------------------------------- ------------------------------------ (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) SYMS WAY, SECAUCUS, NEW JERSEY 07094 ---------------------------------------- --------- (Address of Principal Executive Offices) (Zip Code) (201) 902-9600 ---------------------------------------------------- (Registrant's Telephone Number, Including Area Code) NOT APPLICABLE ---------------------------------------------------- (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) Indicate by check mark whether 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 periods 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 --- --- At January 3, 2002, the latest practicable date, there were 15,736,090 shares outstanding of Common Stock, par value $0.05 per share. ================================================================================ -------------------------- SYMS CORP AND SUBSIDIARIES -------------------------- INDEX PAGE NO. ------- PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Condensed Consolidated Balance Sheets as of December 1, 2001, March 3, 2001 and November 25, 2000 ........... 1 Condensed Consolidated Statements of Operations for the 13 Weeks and 39 Weeks Ended December 1, 2001 and November 25, 2000 ....... 2 Condensed Consolidated Statements of Cash Flows for the 39 Weeks Ended December 1, 2001 and November 25, 2000 .................... 3 Notes to Condensed Consolidated Financial Statements ............ 4-6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ....................................... 6-8 Item 3. Quantitative and Qualitative Disclosure about Market Risk ....... 9 PART II. Other Information Item 1. Legal Proceedings ...................................... 9 Item 2. Changes In Securities and Use of Proceeds .............. 9 Item 3. Defaults Upon Senior Securities ........................ 9 Item 4. Submission of Matters to a Vote of Security Holders .... 9 Item 5. Other Information ...................................... 9 Item 6. Exhibits and Reports on Form 8-K ....................... 9 SIGNATURES ............................................................... 10 -------------------------- SYMS CORP AND SUBSIDIARIES -------------------------- CONDENSED CONSOLIDATED BALANCE SHEETS - -------------------------------------------------------------------------------- (IN THOUSANDS)
DECEMBER 1, MARCH 3, NOVEMBER 25, 2001 2001 (1) 2000 ----------- -------- ------------ (UNAUDITED) (NOTE) (UNAUDITED) ASSETS CURRENT ASSETS: Cash and cash equivalents ................................... $ 14,550 $ 7,485 $ 3,081 Merchandise inventories ..................................... 116,943 99,186 133,976 Deferred income taxes ....................................... 5,857 6,252 7,775 Prepaid expenses and other current assets ................... 4,818 4,238 3,619 --------- --------- --------- TOTAL CURRENT ASSETS ...................................... 142,168 117,161 148,451 PROPERTY AND EQUIPMENT - Net ................................... 148,913 150,587 152,284 DEFERRED INCOME TAXES .......................................... 2,157 2,924 3,319 OTHER ASSETS ................................................... 8,338 6,195 6,331 --------- --------- --------- TOTAL ASSETS .............................................. $ 301,576 $ 276,867 $ 310,385 ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable ............................................ $ 42,763 $ 16,453 $ 47,875 Short term borrowings ....................................... -- -- 1,600 Accrued expenses ............................................ 12,761 11,160 13,121 Obligations to customers .................................... 2,576 2,910 2,575 --------- --------- --------- TOTAL CURRENT LIABILITIES ................................. 58,100 30,523 65,171 --------- --------- --------- 6 OTHER LONG TERM LIABILITIES .................................... 2,136 2,409 2,317 --------- --------- --------- SHAREHOLDERS' EQUITY Preferred stock, par value; $100 per share Authorized 1,000 shares; none outstanding ................... -- -- -- Common stock, par value $0.05 per share Authorized 30,000 shares; 15,736 shares (net of 2,152 treasury shares) outstanding on December 1, 2001, 15,760 shares outstanding (net of 2,128 treasury shares) as of March 3, 2001 and 15,960 shares outstanding (net of 1,928 treasury shares) outstanding as of November 25, 2000 ........................ 787 788 798 Additional paid-in capital .................................. 13,760 13,752 13,752 Treasury stock .............................................. (18,987) (18,821) (17,671) Retained earnings ........................................... 245,780 248,216 246,018 --------- --------- --------- TOTAL SHAREHOLDERS' EQUITY ................................ 241,340 243,935 242,897 --------- --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ................ $ 301,576 $ 276,867 $ 310,385 ========= ========= =========
- ------------- (1) The balance sheet at March 3, 2001 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. See notes to condensed consolidated financial statements 1 -------------------------- SYMS CORP AND SUBSIDIARIES -------------------------- CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - -------------------------------------------------------------------------------- (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
13 WEEKS ENDED 39 WEEKS ENDED ------------------------------- ---------------------------- DECEMBER 1, NOVEMBER 25, DECEMBER 1, NOVEMBER 25, 2001 2000 2001 2000 ------------ ------------- ----------- ------------ (UNAUDITED) (UNAUDITED) Net sales ............................ $ 75,043 $ 94,309 $ 211,918 $ 250,122 Cost of goods sold ................... 45,224 60,892 130,154 158,663 --------- --------- --------- --------- Gross profit ......................... 29,819 33,417 81,764 91,459 Expenses: Selling, general and administrative .. 18,630 21,187 58,589 62,820 Advertising .......................... 2,852 3,895 7,010 8,391 Occupancy ............................ 4,767 5,200 14,221 16,247 Depreciation and amortization ........ 2,918 2,855 8,788 8,605 Store closing cost ................... -- 12,935 -- 12,935 --------- --------- --------- --------- Income (loss) from operations ........ 652 (12,655) (6,844) (17,539) Income from insurance recovery ....... (3,000) Interest expense - net ............... 12 (34) (96) (275) --------- --------- --------- --------- Income (loss) before income taxes .... 640 (12,621) (3,748) (17,264) Provision benefit for income taxes ... 215 (4,922) (1,312) (6,733) --------- --------- --------- --------- Net income (loss) .................... $ 425 $ (7,699) $ (2,436) $ (10,531) ========= ========= ========= ========= Net income (loss) per share - basic .. $ 0.03 $ (0.48) $ (0.15) $ (0.66) ========= ========= ========= ========= Weighted average shares outstanding - basic ............ 15,741 15,960 15,741 15,960 ========= ========= ========= ========= Net income (loss) per share - diluted $ 0.03 $ (0.48) $ (0.15) $ (0.66) ========= ========= ========= ========= Weighted average shares outstanding - diluted .......... 15,741 15,960 15,741 15,960 ========= ========= ========= =========
See notes to condensed consolidated financial statements 2 -------------------------- SYMS CORP AND SUBSIDIARIES -------------------------- CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - -------------------------------------------------------------------------------- (IN THOUSANDS)
39 WEEKS ENDED ------------------------------ DECEMBER 1, NOVEMBER 25, 2001 2000 ----------- ------------ (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) ..................................................... $ (2,436) $(10,531) Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities: Depreciation and amortization .................................. 8,787 8,605 Deferred income taxes .......................................... 1,162 (6,957) (Gain) on sale of property and equipment ....................... (31) (336) Writeoff and impairment of property and equipment .............. 34 6,418 (Increase) decrease in operating assets: Merchandising inventories ................................. (17,757) (17,619) Prepaid expenses and other current assets ................. (580) (617) Other assets .............................................. (2,143) (1,681) Increase (decrease) in operating liabilities: Accounts payable ........................................... 26,310 20,501 Accrued expenses ........................................... 1,601 (1,222) Obligations to customers ................................... (334) (158) Other long term liabilities ................................ (273) (119) -------- -------- Net cash provided by (used in) operating activities .. 14,340 (3,716) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Expenditures for property and equipment ........................ (7,146) (4,866) Proceeds from sale of property and equipment ................... 31 381 -------- -------- Net cash (used in) investing activities .............. (7,115) (4,485) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Revolving line of credit borrowings - net ...................... -- 1,600 Exercise of stock options ...................................... 7 -- Stock repurchase ............................................... (167) -- -------- -------- Net cash provided by (used in) financing activities .. (160) 1,600 -------- -------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ................ 7,065 (6,601) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ...................... 7,485 9,682 -------- -------- CASH AND CASH EQUIVALENTS, END OF PERIOD ............................ $ 14,550 $ 3,081 ======== ======== SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid during the period for: Interest (net of amount capitalized) ...................... $ 299 $ 96 ======== ======== Income taxes paid (refunds received) ...................... $ (3,038) $ 1,570 ======== ========
See notes to condensed consolidated financial statements 3 -------------------------- SYMS CORP AND SUBSIDIARIES -------------------------- NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 13 AND 39 WEEKS ENDED DECEMBER 1, 2001 AND NOVEMBER 25, 2000 - -------------------------------------------------------------------------------- (UNAUDITED) NOTE 1 - THE COMPANY Syms Corp (the "Company") operates a chain of 44 "off-price" retail clothing stores located throughout the Northeastern and Middle Atlantic regions and in the Midwest, Southeast and Southwest. Each store offers a broad range of first quality, in season merchandise bearing nationally recognized designer or brand-name labels for men, women and children. NOTE 2 - BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principals for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the 13 and 39 week periods ended December 1, 2001 are not necessarily indicative of the results that may be expected for the entire fiscal year ending March 2, 2002. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the fiscal year ended March 3, 2001. NOTE 3 - ACCOUNTING PERIOD The Company maintains its records on the basis of a 52-53 week fiscal year ending the Saturday closest to the end of February. The fiscal year ending March 2, 2002 will be comprised of 52 weeks. The fiscal year ended March 3, 2001 was comprised of 53 weeks. NOTE 4 - MERCHANDISE INVENTORIES Merchandise inventories are stated at the lower of cost (first in, first out) or market, as determined by the retail inventory method. NOTE 5 - BANK CREDIT FACILITIES The Company has an unsecured revolving credit agreement with a bank for a line of credit not to exceed $30,000,000 through May 3, 2002. Interest on individual advances is payable quarterly at 1-1/2% per annum below the bank's base rate, except that at the time of advance, the Company has the option to select an interest rate based upon one of two other alternative calculations, with such rate to be fixed for a period not to exceed 90 days. The average daily unused portion is subject to a commitment fee of 3/8 of 1% per annum. The Company had outstanding borrowings of $0, $0 and $1,600,000 as of December 1, 2001, March 3, 2001 and November 25, 2000, respectively. The agreement contains financial covenants with respect to consolidated tangible net worth, as defined, working capital and maximum capital expenditures, including dividends, as well as other financial ratios. In addition, the Company has a separate $10,000,000 credit facility with another bank available for the issuance of letters of credit for the purchase of foreign merchandise. This agreement may be cancelled at any time by either party. At December 1, 2001, March 3, 2001 and November 25, 2000 the Company had $3,767,000 $2,593,000 and $2,093,000, respectively, in outstanding letters of credit. 4 -------------------------- SYMS CORP AND SUBSIDIARIES -------------------------- NOTE 6 - NET INCOME PER SHARE In accordance with SFAS 128, basic income per share has been computed based upon the weighted average common shares outstanding. Diluted net income per share gives effect to outstanding stock options. Net income per share has been computed as follows:
39 WEEKS ENDED 13 WEEKS ENDED ----------------------------- ----------------------------- DEC. 1, 2001 NOV. 25, 2000 DEC. 1, 2001 NOV. 25, 2000 ------------ ------------- ------------ ------------- BASIC NET INCOME PER SHARE: Net income (loss) ..................... $ 425 $ (7,699) $ (2,436) $(10,531) Average shares outstanding ............ 15,741 15,960 15,741 15,960 Basic net income (loss) per share ..... $ 0.03 $ (.48) $ (0.15) $ (.66) DILUTED NET INCOME PER SHARE: Net income (loss) ..................... $ 425 $ (7,699) $ (2,436) $ 10,531 Average shares outstanding ............ 15,741 15,960 15,741 15,960 Stock options ......................... 0 0 0 0 Total average equivalent shares ...... 15,741 15,960 15,741 15,960 Diluted net income (loss) per share ... $ 0.03 $ (.48) $ (0.15) $ (0.66)
In periods with losses, options were excluded from the computation of diluted net income per share because the effect would be anti-dilutive. Options to purchase 1,068,750 and 1,109,650 shares of common stock at prices ranging from $5.63 to $12.00 per share were outstanding as of December 1, 2001 and November 25, 2000, respectively, but were not included in the computation of diluted net income per share because the exercise price of the option exceeded our market price and would have been anti-dilutive. NOTE 7 Comprehensive income is equivalent to the Company's net income (loss) for the 13 and 39 weeks ended December 1, 2001 and November 25, 2000, respectively. NOTE 8 - SPECIAL CHARGE During the third quarter ended November 25, 2000, the Company recorded a store closing cost of $12.9 million relating to a plan to close five stores, including its Boston, Massachusetts store and an additional lease commitment cost associated with a previously closed store. The action was taken by the Company to enhance the Company's competitiveness, to reduce expenses and to improve efficiencies. NOTE 9 - NEW ACCOUNTING PRONOUNCEMENTS In June 2001, the Financial Accounting Standards Board ("FASB") issued two new pronouncements: Statement of Financial Accounting Standards ("SFAS") No. 141, "Business Combinations", and SFAS No. 142, "Goodwill and Other Intangible Assets". SFAS No. 141 addresses financial accounting and reporting for business combinations and supersedes APB No. 15, "Business Combinations" and FASB Statement No. 38, "Accounting for Preacquisition Contingencies of Purchased Enterprises". All business combinations in the scope of this Statement are to be accounted for using one method, the purchase method. SFAS 141 is effective as follows: a) use of the pooling-of-interest method is prohibited for business combinations initiated after June 30, 2001; and b) the provisions of SFAS 141 also apply to all business combinations accounted for by the purchase method that are completed after June 5 -------------------------- SYMS CORP AND SUBSIDIARIES -------------------------- 30, 2001 (that is, the date of acquisition is July 2001 or later). The Company has determined that the adoption of this statement will not have any impact on the consolidated financial statements. SFAS No. 142 addresses financial accounting and reporting for acquired goodwill and other intangible assets and supersedes APB No. 17 "Intangible Assets". It changes the accounting for goodwill from an amortization method to an impairment only approach. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001 to all goodwill and other intangible assets recognized in an entity's statement of financial position at that date, regardless of when those assets were initially recognized. The Company has determined that the adoption of this statement will not have any impact on the consolidated financial statements. In October 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations," which requires companies to record the fair value of a liability for asset retirement obligations in the period in which they are incurred. The statement applies to a company's legal obligations associated with the retirement of a tangible long-lived asset that results from the acquisition, construction and development or through the normal operation of a long-lived asset. When a liability is initially recorded, the company would capitalize the cost, thereby increasing the carrying amount of the related asset. The capitalized asset retirement cost is depreciated over the life of the respective asset while the liability is accreted to its present value. Upon settlement of the liability, the obligation is settled at its recorded amount or the company incurs a gain or loss. The statement is effective for fiscal years beginning after June 30, 2002. The Company does not expect that the adoption of SFAS No. 143 will have a material impact on the Company's financial position or results of operations. In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 addresses the accounting and reporting for the impairment or disposal of long-lived assets. The statement provides a single accounting model for long-lived assets to be disposed of. New criteria must be met to classify the asset as an asset held-for-sale. This statement also focuses on reporting the effects of a disposal of a segment of a business. This statement is effective for fiscal years beginning after December 15, 2001. The Company is currently evaluating the impact of adopting this pronouncement on its current financial statements. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - -------------------------------------------------------------------------------- SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS The Quarterly Report includes forward-looking statements (as such term is defined in the Private Securities Litigation Reform of Act of 1995) and information relating to the Company that are based on the beliefs of the management of the Company as well as assumptions made by and information currently available to the management of the Company. When used in this Quarterly Report, the words "anticipate," "believe," "estimate," "expect," "intend," "plan," and similar expressions, as they relate to the Company or the management of the Company, identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events, the outcome of which is subject to certain risks, including among others general economic and market conditions, decreased consumer demand for the Company's products, possible disruptions in the Company's computer or telephone systems, possible work stoppages, or increases in labor costs, effects of competition, possible disruptions or delays in the opening of new stores or inability to obtain suitable sites for new stores, higher than anticipated store closings or relocation costs, higher interest rates, unanticipated increases in merchandise or occupancy costs and other factors which may be outside the Company's control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described therein as anticipated, believed, estimated, expected, intended or planned. Subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements in this paragraph. 6 -------------------------- SYMS CORP AND SUBSIDIARIES -------------------------- RESULTS OF OPERATIONS 13 and 39 Weeks Ended December 1, 2001 Compared to 13 and 39 Weeks Ended November 25, 2000 Net sales of $75,043,000 for the 13 weeks ended December 1, 2001 decreased $19,266,000 (20.4%) as compared to net sales of $94,309,000 for the 13 weeks ended November 25, 2000. For the 39 weeks ended December 1, 2001 net sales decreased 15.3% to $211,918,000 as compared to net sales of $250,122,000 for the 39 weeks ended November 25, 2000. Comparable store net sales decreased 17.5% for the 13 weeks and decreased 12.3% for the 39 weeks ended December 1, 2001 from the same periods in the last fiscal year. The closing of three stores located in Boston, Massachusetts, Gurnee, Illinois and Sharonville, Ohio, the tragic events of September 11, 2001 and the continuing difficult economic environment that the Company and other retailers are experiencing attributed significantly to this sales decrease in the 13 and 39 week periods ended December 1, 2001. Gross profit for the 13 weeks ended December 1, 2001 was $29,819,000 a decrease of $3,598,000 (10.8%) as compared to $33,417,000 for the 13 weeks ended November 25, 2000. Gross profit for the 39 weeks ended December 1, 2001 was $81,764,000, a decrease of $9,695,000 (10.6%) as compared to $91,459,000 for the 39 weeks ended November 25, 2000. The decline in gross profit in the 13 and 39 week periods is largely attributable to lower sales compared to the same periods in the prior fiscal year. In the third quarter ended November 25, 2000, approximately $2,600,000 in markdowns were taken to cover an increased amount of aged inventory and inventory in closed stores. Selling, general and administrative expense decreased $2,557,000 to $18,630,000 (24.8% as a percentage of total net sales) for the 13 weeks ended December 1, 2001 as compared to $21,187,000 (22.5% as a percentage of total net sales) for the 13 weeks ended November 25, 2000. Selling, general and administrative expense decreased $4,231,000 to $58,589,000 (27.6% as a percentage of total net sales) for the 39 weeks ended December 1, 2001 as compared to $62,820,000 (25.1% as a percentage of total net sales) for the 39 weeks ended November 25, 2000. The decrease in both the 13 and 39 week periods results primarily from the closing of three stores during the same periods in the prior fiscal year (Boston, Massachusetts, Gurnee, Illinois and Sharonville, Ohio) and a continued focus on further expense reductions in all areas of the Company. The increase in SG&A expenses, as a percent of net sales, is primarily due to a lack of sales leverage. Advertising expense for the 13 weeks ended December 1, 2001 decreased to $2,852,000 (3.8% as a percent of total net sales), as compared to $3,895,000 (4.1% as a percent of total net sales) in the 13 week period ended November 25, 2000. Advertising expense for the 39 weeks ended December 1, 2001 decreased to $7,010,000 (3.3% as a percent of total net sales) as compared to $8,391,000 (3.4% as a percent of total net sales) in the 39 week period ended November 25, 2000. Occupancy costs were $4,767,000 (6.4% as a percentage of total net sales) for the 13 week period ended December 1, 2001 as compared to $5,200,000 (5.5% as a percentage of total net sales) for the 13 week period ended November 25, 2000. Occupancy costs were $14,221,000 (6.7% as a percentage of total net sales) for the 39 week period ended December 1, 2001 as compared to $16,247,000 (6.5% as a percentage of total net sales) for the 39 week period ended November 25, 2000. The decreased expenses in both the 13 and 39 week periods is largely attributable to the closing of three stores (Boston, Massachusetts, Gurnee, Illinois and Sharonville, Ohio). Depreciation and amortization was $2,918,000 (3.9% as a percentage of total net sales) for the 13 week period ended December 1, 2001, as compared to $2,855,000 (3.0% as a percentage of total net sales) for the 13 weeks ended November 25, 2000. Depreciation and amortization for the 39 week period ended December 1, 2001 was $8,788,000 (4.1% as a percentage of total net sales), as compared to $8,605,000 (3.4% as a percentage of total net sales) for the 39 weeks ended November 25, 2000. 7 -------------------------- SYMS CORP AND SUBSIDIARIES -------------------------- During the quarter ended November 25, 2000, the Company recorded a store closing cost of $12.9 million relating to a plan to close five stores, including its store in Boston, Massachusetts (which closed October 29, 2000), and an additional lease commitment cost associated with a previously closed store. In the 39 week period ended December 1, 2001, the Company has recovered $3,000,000 from its insurance carrier relating to an employee theft in prior periods. For the 39 weeks ended December 1, 2001, the effective income tax rate was 35.0% as compared to 39.0% for the comparable period a year ago. The reduced income tax rate is due to the non-deductibility of officer's life insurance premiums. LIQUIDITY AND CAPITAL RESOURCES Working capital at December 1, 2001 was $84,068,000, an increase of $562,000 from $83,280,000 as of November 25, 2000, and the ratio of current assets to current liabilities was 2.41 to 1 at December 1, 2001 as compared to 2.28 to 1 at November 25, 2000. Net cash provided by operating activities totaled $14,340,000 for the 39 weeks ended December 1, 2001, as compared to $3,716,000 of cash used in operating activities for the 39 weeks ended November 25, 2000. This variance primarily resulted from a lower net loss caused by an insurance recovery and an income tax refund. Net cash used in investing activities was $7,115,000 for the 39 weeks ended December 1, 2001 as compared to $4,485,000 for the 39 weeks ended November 25, 2000. Net cash used in financing activities was $160,000 for the 39 weeks ended December 1, 2001 as compared to $1,600,000 for the 39 weeks ended November 25, 2000. The Company has a revolving credit agreement with a bank for a line of credit not to exceed $30,000,000 through May 3, 2002. Except for funds provided from this credit agreement, the Company has satisfied its operating and capital expenditure requirements from internally generated funds. For the 39 weeks ended December 1, 2001, the Company did not have any borrowings under the revolving credit agreement, and for the 39 weeks ended November 25, 2000, average borrowings under the revolving credit agreement were $652,000 with a weighted average interest rate of 8.0%. The Company has planned capital expenditures of approximately $5,000,000 for the fiscal year ended March 2, 2002 (exclusive of the West Palm Beach shopping center). Through the 39 week period ended December 1, 2001, the Company has incurred $1,446,000 of capital expenditures not including the purchase of the West Palm Beach shopping center for $5,700,000. The Company's Board of Directors' authorization of the repurchase of up to 15% of its outstanding shares of common stock at prevailing market prices expired on October 12, 2001. During the 39 week period ended December 1, 2001, the company purchased 23,700 shares, which represented 0.2% of its outstanding shares, at a total cost of $167,048. Management believes that existing cash, internally generated funds, trade credit and funds available from the revolving credit agreement will be sufficient for working capital and capital expenditure requirements for the fiscal year ending March 2, 2002. IMPACT OF INFLATION AND CHANGING PRICES Although the Company cannot accurately determine the precise effect of inflation on its operations, it does not believe inflation has had a material effect on sales or results of operations. 8 -------------------------- SYMS CORP AND SUBSIDIARIES -------------------------- ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company's operations are not currently subject to material market risks for interest rates, foreign currency rates or other market price risks. PART II. OTHER INFORMATION - -------------------------------------------------------------------------------- Item 1. LEGAL PROCEEDINGS - None Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS - None Item 3. DEFAULTS UPON SENIOR SECURITIES - None Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None Item 5. OTHER INFORMATION - None Item 6. EXHIBITS AND REPORTS ON FORM 8-K - None 9 -------------------------- SYMS CORP AND SUBSIDIARIES -------------------------- 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. SYMS CORP DATE: January 15, 2002 By ________________________________________ MARCY SYMS CHIEF EXECUTIVE OFFICER DATE: January 15, 2002 By ________________________________________ ANTONE F. MOREIRA VICE PRESIDENT, CHIEF FINANCIAL OFFICER (Principal Financial and Chief Accounting Officer) 10 -----END PRIVACY-ENHANCED MESSAGE-----