-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, cKsgjKlLkLEr7VomosFcM2cJYjHZu9jKYx3spwyacDOlbj8nKQGfplIIIp6+/W3V EaOAMV3xxmkplm7knb4zBA== 0000950135-94-000382.txt : 19940621 0000950135-94-000382.hdr.sgml : 19940621 ACCESSION NUMBER: 0000950135-94-000382 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940430 FILED AS OF DATE: 19940610 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BAKER J INC CENTRAL INDEX KEY: 0000792570 STANDARD INDUSTRIAL CLASSIFICATION: 5661 IRS NUMBER: 042866591 STATE OF INCORPORATION: MA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14681 FILM NUMBER: 94533767 BUSINESS ADDRESS: STREET 1: 555 TURNPIKE ST CITY: CANTON STATE: MA ZIP: 02021 BUSINESS PHONE: 6178289300 MAIL ADDRESS: STREET 1: P O BOX 231 CITY: HYDE PARK STATE: MA ZIP: 02136 10-Q 1 J. BAKER, INC. FORM 10-Q 1 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 APRIL 30, 1994 -------------- 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 0-14681 J. BAKER, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MASSACHUSETTS 04-2866591 (STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 555 TURNPIKE STREET, CANTON, MASSACHUSETTS 02021 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (617) 828-9300 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) The registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such period that the registrant was required to file such reports), and (2) has been subject to filing such reports for the past 90 days. YES X NO _____ ----- The number of shares outstanding of the registrant's common stock as of April 30, 1994 was 13,833,147. 1 2 J. BAKER, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS APRIL 30, 1994 (UNAUDITED) AND JANUARY 29, 1994
April 30, January 29, ASSETS 1994 1994 ------ ---------- ----------- Current assets: Cash and cash equivalents $ 5,271,258 $ 3,584,032 Accounts receivable 37,488,424 31,903,690 Merchandise inventories 314,195,186 278,220,413 Prepaid expenses 6,195,833 6,672,008 Deferred income taxes 1,664,475 1,664,475 ----------- ----------- Total current assets 364,815,176 322,044,618 Property, plant and equipment, at cost: Land and buildings 24,209,721 24,114,820 Furniture, fixtures, machinery and equipment 95,223,911 87,993,608 Leasehold improvements 36,764,088 32,715,145 ----------- ----------- 156,197,720 144,823,573 Less accumulated depreciation 42,828,615 39,256,180 ----------- ----------- Net property, plant and equipment 113,369,105 105,567,393 Deferred income taxes 1,210,000 1,210,000 Other assets 72,548,456 73,674,470 ------------ ------------ $551,942,737 $502,496,481 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Current portion of long-term debt $ 2,636,300 $ 2,636,300 Accounts payable 102,643,700 108,262,923 Accrued expenses 22,285,557 24,050,766 Income taxes payable 1,272,504 - ------------ ------------ Total current liabilities 128,838,061 134,949,989 ----------- ----------- Other liabilities 12,674,362 12,794,652 Long-term debt, net of current portion 129,300,000 77,000,000 Senior subordinated debt 7,325,483 7,312,366 Convertible subordinated debt 70,353,000 70,353,000 Stockholders' equity 203,451,831 200,086,474 ----------- ----------- $551,942,737 $502,496,481 ============ ============
See accompanying notes to consolidated financial statements. 2 3 J. BAKER, INC. AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED EARNINGS FOR THE QUARTERS ENDED APRIL 30, 1994 AND MAY 1, 1993 (UNAUDITED)
Quarter Quarter Ended Ended April 30, 1994 May 1, 1993 -------------- ----------- Sales $221,338,460 $193,387,158 Cost of sales 124,119,268 105,622,419 ------------ ------------ Gross profit 97,219,192 87,764,739 Selling, administrative and general expenses 84,550,572 76,821,666 Depreciation and amortization 5,469,817 5,177,645 ------------ ------------ Operating income 7,198,803 5,765,428 Net interest expense 2,203,018 1,823,629 ------------ ------------ Earnings before income taxes 4,995,785 3,941,799 Taxes on earnings 1,798,000 1,459,000 ------------ ------------ Net earnings $ 3,197,785 $ 2,482,799 ============ ============ Net earnings per common share: Primary $ 0.23 $ 0.18 ============== ============== Fully diluted $ 0.22 $ 0.18 ============== ============== Number of shares used to compute net earnings per share: Primary 13,813,399 13,538,023 ========== =========== Fully diluted 18,467,411 18,225,684 ========== =========== Dividends declared per share $ 0.015 $ 0.015 ============== ==============
See accompanying notes to consolidated financial statements. 3 4 J. BAKER, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE QUARTERS ENDED APRIL 30, 1994 AND MAY 1, 1993 (UNAUDITED)
April 30, 1994 May 1, 1993 -------------- ----------- Cash flows from operating activities: Net earnings $ 3,197,785 $ 2,482,799 Adjustments to reconcile net earnings to net cash used in operating activities: Depreciation and amortization: Fixed assets 3,572,435 3,362,680 Deferred charges, intangible assets and deferred financing costs 1,910,499 1,826,599 Change in: Accounts receivable (6,277,665) (7,235,119) Merchandise inventories (35,974,773) (40,999,313) Prepaid expenses 476,175 (1,269,823) Accounts payable (5,619,223) 14,782,902 Accrued expenses (1,765,209) (2,588,959) Income taxes payable 1,965,435 734,296 Other liabilities (90,374) (2,481,895) ----------- ----------- Net cash used in operating activities (38,604,915) (31,385,833) ----------- ----------- Cash flows from investing activities: Capital expenditures for: Property, plant and equipment (11,374,147) (5,023,426) Other assets (801,284) (1,207,791) ----------- ----------- Net cash used in investing activities (12,175,431) (6,231,217) ----------- ----------- Cash flows from financing activities: Proceeds from long-term debt 52,300,000 31,024,400 Proceeds from issuance of common stock 375,012 2,339,457 Payment of dividends (207,440) (204,040) ----------- ------------ Net cash provided by financing activities 52,467,572 33,159,817 ----------- ------------ Net increase (decrease) in cash 1,687,226 (4,457,233) Cash and cash equivalents at beginning of year 3,584,032 6,385,467 ----------- ----------- Cash and cash equivalents at end of period $ 5,271,258 $ 1,928,234 =========== =========== Supplemental disclosure of cash flow information: Cash paid for interest $ 681,597 $ 729,708 ============ =========== Cash paid for income taxes, net $ 1,978,090 $ 723,704 ============ =========== Non-cash financing activity: Conversion of subordinated debt $ - $ 2,584,000 ============ ===========
See accompanying notes to consolidated financial statements 4 5 J. BAKER, INC. AND SUBSIDIARIES NOTES ----- 1] The accompanying unaudited consolidated financial statements, in the opinion of management, include all adjustments (which consist only of recurring accruals) necessary for a fair presentation of the Company's financial position and results of operations. The results for the interim periods are not necessarily indicative of results that may be expected for the entire fiscal year. 2] Primary earnings per share is based on the weighted average number of shares of Common Stock outstanding during such period. Stock options and warrants are excluded from the calculation since they have less than a 3% dilutive effect. Fully diluted earnings per share is based on the weighted average number of shares of Common Stock outstanding during such period. Included in this calculation is the dilutive effect of Common Stock issuable under the 7% convertible subordinated notes due 2002, stock options and warrants. 3] On November 19, 1993, the Company acquired 83% of the outstanding common stock and all of the outstanding preferred stock of Tishkoff Enterprises, Inc. of Columbus, Ohio ("TEI"), an operator of full-service, semi-service and self-service licensed shoe departments in department stores, specialty stores and discount stores. The 83% interest in the outstanding common stock was acquired from certain TEI stockholders in exchange for 68,197 shares of the Company's common stock (16,769 of which shares are being withheld from TEI stockholders for up to two years and are available as a set-off to satisfy any claims of the Company for indemnification that may arise) and the right to receive payments equal in the aggregate to 8.3% of the consolidated pre-tax earnings of TEI over a six year period commencing January 29, 1994, with a maximum aggregate payment of $4,980,000. The acquisition of all of the outstanding preferred stock of TEI was made for a payment of $650,000 in cash. On December 13, 1993, the stockholders of TEI approved the merger of JBAK Acquisition Corp., an Ohio corporation and a wholly owned subsidiary of the Company, with and into TEI (the "Merger") and TEI became a wholly owned subsidiary of the Company. In connection with the Merger, the Company paid cash consideration to the remaining TEI stockholders in the amount of $442,000, in payment for the remaining 17% interest in TEI common stock. Subsequent to the Merger, the corporate name of TEI was changed to Shoe Corporation of America, Inc. ("SCOA"). 4] On January 30, 1993, Morse Acquisition, Inc., a wholly-owned subsidiary of the Company ("Acquisition"), merged with and into Morse Shoe, Inc. ("Morse") pursuant to an Amended and Restated Agreement and Plan of Reorganization dated as of October 22, 1992 (the "Merger Agreement") by and among the Company, Acquisition and Morse, whereby Morse became a wholly-owned subsidiary of the Company. Pursuant to the acquisition of Morse, each share of Morse common stock was exchanged for .17091 of a share of J. Baker common stock. In connection with the acquisition, approximately 2,767,377 shares of J. Baker common stock were issuable to Morse stockholders, including holders of approximately $47 million, or 94%, of Morse convertible debentures which had been converted into Morse common stock prior to January 30, 1993. During the year ended January 29, 1994, holders of an additional $2.7 million of Morse convertible debentures converted their debt into 49,820 shares of J. Baker common stock. Approximately 6,500 additional shares of J. Baker common stock are reserved for future issuance upon conversions of the remaining outstanding Morse convertible debentures. 5] On July 8, 1993, July 19, 1993 and September 6, 1993 Fishers Big Wheel, Inc. ("Fishers"), Jamesway Corporation ("Jamesway") and Rose's Stores, Inc. ("Rose's), respectively, licensors of the Company, filed for protection under Chapter 11 of the Bankruptcy Code. At the time of the bankruptcy filings, the Company had outstanding accounts receivable of $6.0 million in the aggregate due from Fishers, Jamesway and Rose's. At April 30, 1994, carried on the balance sheet in Other Assets are deferred lease acquisition costs of $2.9 million attributable to the Rose's license agreement. The Company intends to continue to amortize the deferred lease acquisition costs of the Rose's license agreement through the license termination date of July 30, 1997, since the Company believes, based on its assessment of the likelihood and level of ongoing business with Rose's, that the value of the license agreement supports the historical carrying cost at April 30, 1994. During the first half of fiscal 1995, Jamesway and Rose's will close approximately 113 stores. On January 5, 1994, Fishers received bankruptcy court approval to conduct liquidation sales in all 54 of its stores. At the completion of the liquidation sales in the first quarter of fiscal 1995, Fishers ceased business operations. The Company does not expect these filings under the Bankruptcy Code, or the aforementioned store closings, to have a material adverse effect on future earnings. Combined sales in Jamesway and Rose's totaled $15.8 million for the quarter ended April 30, 1994. Sales in Fishers for the quarter ended April 30, 1994 were $1.6 million. 5 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. All references herein to fiscal 1995 and fiscal 1994 relate to the years ending January 28, 1995 and January 29, 1994, respectively. Results of Operations FIRST QUARTER FISCAL 1995 VERSUS FIRST QUARTER FISCAL 1994 Net sales increased by $28.0 million to $221.3 million in the first quarter of fiscal 1995 from $193.4 million in the first quarter of fiscal 1994. Sales in the Company's footwear operations increased by $18.0 million primarily as a result of sales in the newly-acquired SCOA licensed shoe division coupled with an increase of $3.2 million in wholesale footwear sales. The sales increase in footwear operations was partially offset by a 2.9% decrease in comparable store sales. (Comparable retail footwear sales increases/decreases are based upon comparisons of weekly sales volume in licensed departments and Parade of Shoes and Fayva shoe stores which were open in corresponding weeks of the two comparison periods.) Sales in the company's specialty apparel operations increased by $10.0 million due to an increase in the number of Casual Male Big & Tall stores and Work 'n Gear stores in operation during the first quarter of fiscal 1995 over the first quarter of fiscal 1994, coupled with an 11.8% increase in comparable apparel store sales. (Comparable specialty apparel store sales increases/ decreases are based upon comparisons of weekly sales volume in Casual Male Big & Tall stores and Work 'n Gear stores which were open in corresponding weeks of the two comparison periods.) Cost of sales constituted 56.1% of sales in the first quarter of fiscal 1995 as compared to 54.6% of sales in the first quarter of fiscal 1994. This increase was due to an increase in markdowns as a percentage of sales coupled with a lower initial markup on merchandise purchases and an increase in wholesale sales, which have a higher cost of sales than retail sales. Cost of sales in the company's footwear operations was 57.1% of sales in the first quarter of fiscal 1995 as compared to 55.2% of sales in the first quarter of fiscal 1994 primarily due to an increase in markdowns as a percentage of sales (which increase was primarily attributable to the closing of 117 licensed departments during the quarter and the liquidation of those departments' inventory), a lower initial markup on merchandise purchases and an increase in wholesale sales. Cost of sales in the specialty apparel operations was 52.0% of sales the first quarter of fiscal 1995 as compared to 52.1% of sales in the first quarter of fiscal 1994 due to a higher initial markup on merchandise purchases partially offset by an increase in markdowns as a percentage of sales. Selling, administrative and general expenses increased $7.7 million or 10.1% in the first quarter of fiscal 1995 as compared to the first quarter of fiscal 1994 primarily due to the SCOA acquisition, coupled with an increase in the number of specialty apparel stores. As a percentage of sales, selling, administrative and general expenses were 38.2% in the first quarter of fiscal 1995 as compared to 39.7% in the first quarter of fiscal 1994 primarily due to lower fixed overhead costs as a percentage of sales. Selling, administrative and general expenses in the company's footwear operations were 37.1% of sales in the first quarter of fiscal 1995 as compared to 38.7% of sales in the first quarter of fiscal 1994 as result of a decrease in the number of Fayva stores, coupled with a relative increase in wholesale footwear sales and lower corporate overhead expenses as a percentage of sales. Selling, administrative and general expenses in the company's specialty apparel operations were 42.5% of sales in the first quarter of fiscal 1995 as compared to 44.7% in the first quarter of fiscal 1994 primarily due to a comparable store sales increase in apparel operations, which caused fixed selling, administrative and general expenses to be a lower percentage of sales than in the prior period. Depreciation and amortization expense increased by $292,000 in the first quarter of fiscal 1995 as compared to the first quarter of fiscal 1994 due to an increase in depreciable and amortizable assets. As a result of the above described effects, the company's operating income increased by 24.9% to $7.2 million in the first quarter of fiscal 1995 from $5.8 million in the first quarter of fiscal 1994. As a percentage of sales, operating income was 3.3% in the first quarter of fiscal 1995 as compared to 3.0% in the first quarter of fiscal 1994. Net interest expense increased $379,000 to $2.2 million in the first quarter of fiscal 1995 from $1.8 million in the first quarter of fiscal 1994 primarily due to higher levels of borrowings. 6 7 Taxes on earnings for the first quarter of fiscal 1995 were $1.8 million, yielding an effective tax rate of 36.0%, as compared to taxes of $1.5 million, yielding an effective tax rate of 37.0% in the first quarter of fiscal 1994. Net earnings for the first quarter of fiscal 1995 were $3.2 million as compared to earnings of $2.5 million in the first quarter of 1994, an increase of 28.8%. Financial Condition APRIL 30, 1994 VERSUS JANUARY 29, 1994 The increase in accounts receivable at April 30, 1994 from January 29, 1994 is primarily due to seasonal factors, licensed sales in April being higher than licensed sales in January. Merchandise inventories at April 30, 1994 were higher than at January 29, 1994 primarily due to a seasonal increase in the average inventory level per location and an increase in the number of licensed shoe departments in operation. The increase in net property, plant and equipment is the result of the company incurring capital expenditures of approximately $11.4 million in the first quarter of fiscal 1995 primarily for the opening of new stores and the renovation of existing units. The ratio of accounts payable to merchandise inventory was 32.7% at April 30, 1994 as compared to 38.9% at January 29, 1994. This decrease is primarily the result of the company's decision to reduce the average financing terms of its foreign purchases. Debt increased to $207.0 million at April 30, 1994 from $154.7 million at January 29, 1994 primarily due to additional borrowings under the company's revolving line of credit to meet seasonal working capital needs and to fund capital expenditures. Liquidity and Capital Resources As a result of an amendment dated April 29, 1994 increasing the aggregate commitment amount from $215 million (the "Amendment"), the Company has a $250 million revolving credit facility on an unsecured basis with Shawmut Bank, N.A., The First National Bank of Boston, Fleet Bank of Massachusetts, N.A., Citizens Savings Bank, National Westminster Bank USA, Fuji Bank, Ltd., The Yasuda Trust and Banking Company, Ltd. and Standard Chartered Bank (the "Banks"). Pursuant to the Amendment, the aggregate commitment amount will be reduced by $10 million on each December 29th of 1994, 1995 and 1996. Borrowings under the revolving credit facility bear interest at variable rates and, at the discretion of the Company, can be in the form of loans, bankers' acceptances and letters of credit. This facility expires in June, 1997. As of April 30, 1994, the Company had outstanding obligations under the revolving credit facility of $205.2 million, consisting of loans, obligations under bankers' acceptances and letters of credit. Following is a table showing actual and planned store openings by division for fiscal 1995:
Actual Openings Planned Openings Total First Second - Fourth Actual/Planned Division Quarter Fiscal 1995 Quarter Fiscal 1995 Openings -------- ------------------- ------------------- -------- Licensed/Wholesale 63 219 282 Parade of Shoes 14 31 45 Fayva 2 0 2 Casual Male 14 36 50 Work 'n Gear 2 8 10
7 8 The majority of the licensed department openings are in the Company's SCOA subsidiary, and are primarily a result of the acquisition of licensed shoe departments previously operated by Wohl Shoe Company ("Wohl"), a subsidiary of Brown Group Retail, Inc. Wohl had previously announced that it is discontinuing its licensed footwear operations. Offsetting the above store openings, the Company has closed 117 licensed/wholesale departments (including aforementioned Jamesway, Rose's and Fishers licensed departments), and 7 Fayva stores during the first quarter of fiscal 1995, and has plans to close approximately an additional 208 licensed/wholesale departments (including 149 wholesale footwear departments in the Caldor chain, to which the Company will cease supplying shoes), 29 Fayva stores and 8 Parade of Shoes stores during the second through fourth quarters of fiscal 1995. The information on store openings and closings reflects management's current plans and should not be interpreted as an assurance of actual future developments. The Company believes that amounts available under its revolving credit facility, along with internally generated funds, will be sufficient to meet its operating and capital requirements under ordinary circumstances through the end of the current fiscal year. 8 9 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) The Exhibits in the Exhibit Index are filed as part of this report. (b) No reports on Form 8-K were filed by the registrant during the quarter for which this report is filed. 9 10 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. J. BAKER, INC. By: /s/ Alan I. Weinstein ---------------------------------- Alan I. Weinstein Senior Executive Vice President and Principal Financial Officer Date: Canton, Massachusetts June 10, 1994 By: /s/ Philip G. Rosenberg ---------------------------------- Philip G. Rosenberg First Senior Vice President and Treasurer (Chief Accounting Officer) Date: Canton, Massachusetts June 10, 1994 10 11 EXHIBIT INDEX -------------
EXHIBIT PAGE NO. - - ------- -------- 4. INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES ------------------------------------------------------------------------- (.01) Second Amendment Agreement by and among JBI, Inc., J. Baker, Inc. and * Shawmut Bank, N.A. et. al. dated as of April 29, 1994. 11. COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE * ----------------------------------------------------------- - - ------------------- * Included herein.
11 EX-4 2 SECOND AMENDMENT AGREEMENT 1 Exhibit 4 SECOND AMENDMENT AGREEMENT SECOND AMENDMENT AGREEMENT dated as of April 29, 1994, among JBI, INC., a Massachusetts corporation (the "Borrower"); J. BAKER, INC., a Massachusetts corporation ("Baker"); each of the banks that is a signatory hereto (individually, a "Bank" and, collectively, the "Banks"); and SHAWMUT BANK, N.A., a national banking association, as agent for the Banks (in such capacity, together with its successors in such capacity, the "Agent"). The Borrower, Baker, the Banks and the Agent are parties to a Revolving Credit and Loan Agreement dated as of February 1, 1993 (as amended by the First Amendment and Waiver Agreement relating thereto dated as of November 19, 1993 (the "FIRST AMENDMENT TO CREDIT AGREEMENT") and in effect on the date hereof, the "CREDIT AGREEMENT"). The Borrower and Baker have requested that the Credit Agreement be amended to, among other things, (i) increase the Aggregate Commitment Amount and extend the Termination Date under the Credit Agreement, (ii) reduce the Prime Margin, the LIBO Margin and the Commission Rate and (iii) amend certain covenants thereunder, and the Banks and the Agent have agreed to such amendments upon the terms and conditions hereof. Accordingly, the parties hereto hereby agree as follows: Section 1. DEFINITIONS. Except as otherwise defined in this Agreement, terms defined in the Credit Agreement are used herein as defined therein. Section 2. AMENDMENTS. Effective as of May 1, 1994 but subject to the satisfaction of all of the conditions precedent set forth in Section 4 hereof, the Credit Agreement and other Operative Documents and Financing Agreements shall be amended as follows: A. The fourth Whereas clause of the Credit Agreement is hereby amended by changing "$215,000,000" to read "$250,000,000". B. Article I of the Credit Agreement is amended as follows: (1) The definition of "COMMISSION RATE" is amended by changing "2.5%" to read "1.5%". (2) The definition of "LIBO MARGIN" is amended by changing "3%" to read "1.5%". (3) The definition of "MAJORITY BANKS" is amended by changing "55%" to read "70%". 2 (4) The definition of "PRIME MARGIN" is amended by changing ".5%" to read "0%". (5) The definition of "TERMINATION DATE" is amended by changing "June 30, 1996" to read "June 30, 1997". C. The definition of "AGGREGATE COMMITMENT AMOUNT" is amended by changing "Two Hundred Fifteen Million Dollars ($215,000,000.00)" to read "Two Hundred Fifty Million Dollars ($250,000,000.00)." D. The definition of "COMMITMENT REDUCTION DATE" is amended by changing "December 29 of each of calendar years 1994 and 1995" to read "December 30 of each of calendar years 1994, 1995 and 1996". E. Section 6.01 of the Credit Agreement is amended to read in its entirety as follows: "6.01 The COMMITMENT PERCENTAGE of each BANK shall be:
COMMITMENT BANK PERCENTAGE ---- ---------- SHAWMUT 30% FNB 22% FLEET-MASS 16% NATWEST 12% STANDARD CHARTERED 6% CITIZENS 5% YASUDA 5% FUJI 4% ---- TOTAL: 100.0%".
F. Section 6.02.1 of the Credit Agreement is amended in its entirety to read as follows: "6.02.1 So long as the AGGREGATE COMMITMENT AMOUNT shall be Two Hundred Fifty Million Dollars ($250,000,000.00), the COMMITMENT AMOUNT of each BANK shall be: -2- 3
COMMITMENT BANK AMOUNT ---- ------ SHAWMUT $ 75,000,000 FNB 55,000,000 FLEET-MASS 40,000,000 NATWEST 30,000,000 STANDARD CHARTERED 15,000,000 CITIZENS 12,500,000 YASUDA 12,500,000 FUJI 10,000,000 ------------- TOTAL: $250,000,000".
G. Section 6.03 of the Credit Agreement is amended to read in its entirety as follows: "6.03 The AGGREGATE COMMITMENT AMOUNT shall automatically be reduced, as of the close of business Boston time on each COMMITMENT REDUCTION DATE, to the following respective amounts:
COMMITMENT REDUCTION AGGREGATE COMMITMENT DATE IN: AMOUNT REDUCED TO: December, 1994 $240,000,000 December, 1995 $230,000,000 December, 1996 $220,000,000
The AGGREGATE COMMITMENT AMOUNT shall automatically be reduced to zero on the TERMINATION DATE." H. Section 9.01(a) of the Credit Agreement is amended by changing "30 days" to read "45 days". I. Section 9.03 of the Credit Agreement is amended by deleting subsection (f) thereof. J. Section 9.15 of the Credit Agreement is amended to read in its entirety as follows: "9.15 Keep in effect at all times one or more interest rate protection agreements with one or more BANKS with a maturity of not less than one year and covering a notional principal amount of not less than $75,000,000, such agreements to be in form and substance reasonably satisfactory to the MAJORITY BANKS." - 3 - 4 K. Section 10.01.4(a) of the Credit Agreement is amended by changing "February 1, 1994" to read "February 1, 1995" and "February 1, 1995" to read "February 1, 1996". L. Section 10.01.4(b) of the Credit Agreement is amended to read in its entirety as follows: "(b) Permit LEVERAGE to exceed, on each date specified below, the percentage set forth opposite the reference to such date:
Date Maximum Leverage ---- ---------------- the last day of the fiscal quarter ending on or about February 1, 1994 115% the last day of the fiscal quarter ending on or about February 1, 1995 100% the last day of the fiscal quarter ending on or about February 1, 1996 90% the last day of the fiscal quarter ending on or about February 1, 1997 85%"
M. Section 10.01.5(c) of the Credit Agreement is amended to read in its entirety as follows: "(c) The applicable percentages to be used in Section 10.01.5(a) shall be as follows for each of the following respective periods:
Period Minimum Percentage ------ ------------------ From the CLOSING DATE to and including the last day of the FISCAL YEAR ending on or about February 1, 1994 120%
- 4 - 5 From the first day of the FISCAL YEAR beginning on or about February 1, 1994 to and including the last day of the FISCAL YEAR ending on or about February 1, 1995 125% From the first day of the FISCAL YEAR beginning on or about February 1, 1995 to and including the last day of the FISCAL YEAR ending on or about February 1, 1996 130% At all times thereafter 140%"
N. Section 10.01.6 of the Credit Agreement is amended by changing (x) "$28,000,000" in clause (i) thereof to read "$40,000,000" and (y) "$20,000,000" in clause (ii) thereof to read "$35,000,000." O. Section 10.01.7 of the Credit Agreement is amended by inserting immediately after "net loss" on the second line thereof the following: "(other than any non-cash losses arising from the write-offs of certain licensing premium payments in connection with the closing of Ames Department Stores)". P. Section 10.01.8 of the Credit Agreement is amended to read in its entirety as follows: "10.01.8 In any one FISCAL YEAR, sell or dispose of any real or personal property, other than in the ordinary course of business and other than such sale or disposition as may be approved in writing by the MAJORITY BANKS, which property has a fair market value in excess of $1,000,000 on a consolidated basis." Q. Section 10.01.10(b) of the Credit Agreement is amended to read in its entirety as follows: "(b) The applicable percentage to be used in Section 10.01.10(a) shall be as follows for each of the following respective periods: - 5 - 6
Period Minimum Percentage ------ ------------------ From the CLOSING DATE to and including January 31, 1994 250% From February 1, 1994 to and including January 31, 1995 300% From February 1, 1995 to and including January 31, 1996 325% At all times thereafter 350%"
R. Section 10.02.2 of the Credit Agreement is amended to read in its entirety as follows: "10.02.2 Purchase assets other than in the ordinary course of business (except, in the case of BAKER, the BORROWER or the SUBSIDIARIES, such purchases up to an aggregate amount of $1,000,000 and except such other purchases as may be approved in writing by the MAJORITY BANKS)." S. Section 10.05(d)(ii) of the Credit Agreement is amended by changing "$5,000,000" to read "$15,000,000". T. Section 10.05(d)(iv) of the Credit Agreement is amended to read in its entirety as follows: "(iv) The aggregate of (x) all LETTERS OF CREDIT and STANDBY L/C'S issued for the account of TCM, WGS and SHOE CORPORATION and (y) all BANKER'S ACCEPTANCES accepted for the account of TCM, WGS and SHOE CORPORATION shall not exceed $25,000,000 at any one time outstanding, and TCM, WGS and SHOE CORPORATION shall be jointly and severally liable in respect thereof." U. Section 10.10 is amended by inserting immediately before the period at the end thereof the following: "; and provided further that the Borrower or Baker may create or acquire any SUBSIDIARIES with the prior written approval of the MAJORITY BANKS". V. Section 10.12.2 of the Credit Agreement is amended to read in its entirety as follows: "10.12.2 (Intentionally omitted.)". - 6 - 7 W. Section 19.01 of the Credit Agreement is amended by deleting "(except that no such approval shall be required in order for SHAWMUT or FNB to sell participating interests of up to $10,000,000 in the aggregate for each such BANK or for FNB to sell participating interests to any affiliate thereof)". X. Section 21.02 of the Credit Agreement is amended by deleting "(except that no such approval shall be required in order for SHAWMUT or FNB to make assignments of up to $10,000,000 in the aggregate for each such BANK)". Y. Section 26.01 of the Credit Agreement is amended to read in its entirety as follows: "26.01 (Intentionally omitted.)". Z. Exhibit D to the Credit Agreement is amended by changing "June 30, 1996" to read "June 30, 1997". AA. References in each of the Operative Documents and Financing Agreements to the Credit Agreement or words of like import (including indirect references thereto) shall be deemed to be references to the Credit Agreement as amended hereby. Section 3. Representations and Warranties; Covenants. ----------------------------------------- Each of the Borrower and Baker hereby represents and warrants to the Banks and the Agent that, as of the date hereof, after giving effect to the amendments contemplated by Section 2 hereof: (a) no Default has occurred and is continuing, (b) the representations and warranties set forth in Article VIII of the Credit Agreement are true and complete on the date hereof as if made on and as of the date hereof and as if each reference in said Article VIII to "this Agreement" included reference to this Agreement (provided that the representation and warranty set forth herein shall not be deemed to be inaccurate solely by reason of the failure of any information contained in any of Exhibits G (solely as the information therein relates to Section 8.04 or 8.05 of the Credit Agreement), N, O, P, Q and R to the Credit Agreement to remain true) and (c) the amendments contemplated by Section 2 hereof do not require any consent under any agreement, instrument or other document (including without limitation the Convertible Subordinated Notes, the Senior Subordinated Notes and the Subordinated Convertible Debentures) including without limitation any consent necessary to cause the Loans and the Revolving Notes to be Obligations to which the Subordinated Indebtedness shall be subordinated under the subordination agreement(s) referred to in Section 1.110 of the Credit Agreement (and the foregoing shall be deemed to be - 7 - 8 representations and warranties made in an Operative Document for purposes of Section 11.01(d) of the Credit Agreement). Section 4. CONDITIONS PRECEDENT. As provided in Sections 2 above, this Agreement shall become effective as of May 1, 1994 upon the receipt by the Agent of the following documents, each of which shall be satisfactory to the Agent in form and substance: (a) Counterparts of this Agreement duly executed and delivered by each of the parties hereto; (b) New Revolving Notes duly executed and delivered by the Borrower payable to the order of the Banks in the respective amounts equal to the respective Commitment Amounts of the Banks; (c) Certified copies of the charter and by-laws (or equivalent documents) of each Obligor (or, in the alternative, a certification to the effect that none of such documents has been modified since delivery thereof on the Closing Date pursuant to the Credit Agreement or (in the case of Shoe Corporation) since delivery thereof on the date of the First Amendment to Credit Agreement) and of all corporate authority for each Obligor, including, without limitation, board of director resolutions and evidence of the incumbency of officers for each Obligor, with respect to the execution, delivery and performance of (i) this Agreement and the Credit Agreement as amended hereby (in the case of the Borrower and Baker), (ii) the Guarantee (in the case of each Obligor other than the Borrower) and the Pledge Agreement (in the case of each Obligor party to the Pledge Agreement), in each case after giving effect to the amendments contemplated by Section 2 of this Second Amendment Agreement, and each other document to be delivered by each of the Obligors from time to time in connection with the Credit Agreement as amended hereby (and the Agent and each Bank may conclusively rely on such certificate until it receives notice in writing from each of the Obligors to the contrary); (d) An opinion of Goodwin, Procter & Hoar, counsel to the Obligors with respect to the transactions contemplated by this Agreement and the Credit Agreement and all other Operative Documents and Financing Agreements as amended hereby; and (e) Such other documents relating to the transactions contemplated by this Agreement as the Agent or any Bank or special New York counsel to the Agent may reasonably request. - 8 - 9 Section 5. MISCELLANEOUS. Except as expressly herein provided, the Credit Agreement and all other Operative Documents and Financing Agreements shall remain unchanged and in full force and effect. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same amendatory instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be governed by, and construed in accordance with, the law of the Commonwealth of Massachusetts. - 9 - 10 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. JBI, INC. By /s/ ALAN I. WEINSTEIN --------------------------- Title: Senior Executive Vice President J. BAKER, INC. By /s/ ALAN I. WEINSTEIN --------------------------- Title: Senior Executive Vice President SHAWMUT BANK, N.A. By /s/ ROGER A. STONE --------------------------- Title: Director THE FIRST NATIONAL BANK OF BOSTON By /s/ MITCHELL B. FELDMAN --------------------------- Title: Director FLEET BANK OF MASSACHUSETTS, N.A. By /s/ BARRIE KING --------------------------- Title: Vice President NATIONAL WESTMINSTER BANK USA By /s/ PAUL CHAU --------------------------- Title: Assistant Vice President CITIZENS SAVINGS BANK By /s/ MARIAN L. BARRETTE --------------------------- Title: Vice President - 10 - 11 STANDARD CHARTERED BANK By /s/ BRIAN TAYLOR ---------------------------- Title: Assistant Vice President By /s/ GERARD LOB ---------------------------- Title: Vice President THE YASUDA TRUST & BANKING CO., LTD. By /s/ NEIL CHAU ---------------------------- Title: Vice President FUJI BANK, LIMITED By /s/ KATSUNORI NOZAWA ---------------------------- Title: Vice President and Manager SHAWMUT BANK, N.A., as Agent By /s/ ROGER A. STONE ---------------------------- Title: Director We hereby acknowledge, consent and agree to the terms of the foregoing Second Amendment Agreement and confirm that our obligations under the Guarantee and the Pledge Agreement shall remain unchanged and in full force and effect. Dated: April 29, 1994 SPENCER COMPANIES, INC. By /s/ ALAN I. WEINSTEIN - - ------------------------------ Title: Senior Executive Vice President - 11 - 12 SPENCER NO. 301 CORP. By /s/ ALAN I. WEINSTEIN - - ------------------------------- Title: Senior Executive Vice President JBI HOLDING CO., INC. By /s/ ALAN I. WEINSTEIN - - ------------------------------- Title: President THE CASUAL MALE, INC. By /s/ ALAN I. WEINSTEIN - - ------------------------------- Title: Senior Executive Vice President WGS CORP. By /s/ ALAN I. WEINSTEIN - - ------------------------------- Title: Senior Executive Vice President TCM HOLDING COMPANY, INC. By /s/ ALAN I. WEINSTEIN - - ------------------------------- Title: President MORSE SHOE, INC. By /s/ ALAN I. WEINSTEIN - - ------------------------------- Title: Senior Executive Vice President BUCKMIN, INC. By /s/ ALAN I. WEINSTEIN - - ------------------------------- Title: Senior Executive Vice President - 12 - 13 ELM EQUIPMENT CORP. By /s/ ALAN I. WEINSTEIN - - ------------------------------ Title: Senior Executive Vice President JARED CORPORATION By /s/ ALAN I. WEINSTEIN - - ------------------------------ Title: Senior Executive Vice President MORSE SHOE (CANADA) LTD. By /s/ ALAN I. WEINSTEIN - - ------------------------------ Title: Senior Executive Vice President MORSE SHOE INTERNATIONAL, INC. By /s/ ALAN I. WEINSTEIN - - ------------------------------ Title: Senior Executive Vice President ISAB, INC. By /s/ ALAN I. WEINSTEIN - - ------------------------------ Title: Senior Executive Vice President WHITE CAP FOOTWEAR, INC. By /s/ ALAN I. WEINSTEIN - - ------------------------------ Title: Senior Executive Vice President SHOE CORPORATION OF AMERICA, INC. By /s/ ALAN I. WEINSTEIN - - ------------------------------ Title: Senior Executive Vice President - 13 - EX-11 3 COMPUTATION OF PRIMARY & FULLY DILUTED EARNINGS 1 EXHIBIT 11 J. BAKER, INC. AND SUBSIDIARIES COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE* (UNAUDITED)
Quarter Ended April 30, May 1, 1994 1993 -------- -------- PRIMARY: Net Earnings $ 3,197,785 $2,482,799 =========== ========== Weighted average number of common shares outstanding 13,813,399 13,538,023 =========== ========== Earnings Per Share $0.231 $0.183 =========== ========== ASSUMING FULL DILUTION: Net Earnings1 $ 3,981,785 $3,254,549 =========== ========== Weighted average number of common shares outstanding 13,813,399 13,538,023 Dilutive effect of outstanding stock options 312,927 346,576 Dilutive effect of convertible subordinated debt 4,341,085 4,341,085 ----------- ---------- Weighted average number of common shares as adjusted 18,467,411 18,225,684 =========== ========== Earnings per share $0.216 $0.179 =========== ========== - - -------------- 1 For the purpose of calculating fully diluted earnings per share the conversion of the 7% convertible debt results in an after tax benefit from reduced interest expense. * This calculation is submitted in accordance with Item 601(b)(11) of Regulation S-K.
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