-----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, NBChEGloBvAm8WjMGUZ5LjAI3iOO0QtPTFe0/cQwSs9yPZVlf2I89NVSD7qEAlUH NU1sVsbbABfCIsu0dprlrw== 0000819539-95-000021.txt : 19951213 0000819539-95-000021.hdr.sgml : 19951213 ACCESSION NUMBER: 0000819539-95-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951028 FILED AS OF DATE: 19951212 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEIMAN MARCUS GROUP INC CENTRAL INDEX KEY: 0000819539 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 954119509 STATE OF INCORPORATION: DE FISCAL YEAR END: 0801 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09659 FILM NUMBER: 95601027 BUSINESS ADDRESS: STREET 1: 27 BOYLSTON ST STREET 2: P O BOX 9187 CITY: CHESTNUT HILL STATE: MA ZIP: 02167 BUSINESS PHONE: 6172320760 MAIL ADDRESS: STREET 1: 27 BOYLSTON ST STREET 2: P O BOX 9187 CITY: CHESTNUT HILL STATE: MA ZIP: 02167 10-Q 1 NMG 10Q FOR QTR ENDED 10/28/95 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended October 28, 1995 Commission File Number 1-9659 THE NEIMAN MARCUS GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 95-4119509 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 27 Boylston Street, Chestnut Hill, MA 02167 (Address of principal executive offices) (Zip Code) (617) 232-0760 (Registrant's telephone number, including area code) 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 As of December 8, 1995, there were outstanding 38,002,131 shares of the issuer's common stock, $.01 par value. THE NEIMAN MARCUS GROUP, INC. I N D E X Part I. Financial Information Page Number Item 1. Condensed Consolidated Balance Sheets as of October 28, 1995, July 29, 1995 and October 29, 1994 1 Condensed Consolidated Statements of Earnings for the Thirteen Weeks ended October 28, 1995 and October 29, 1994 2 Condensed Consolidated Statements of Cash Flows for the Thirteen Weeks Ended October 28, 1995 and October 29, 1994 3 Notes to Condensed Consolidated Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5-6 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 7 Signatures 8 Exhibit 11.1 9 Exhibit 27.1 10
THE NEIMAN MARCUS GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands) October 28, July 29, October 29, 1995 1995 1994 Assets Current assets: Cash and equivalents $ 12,621 $ 13,695 $ 16,618 Accounts receivable, net 198,679 150,110 408,569 Merchandise inventories 477,132 359,092 429,846 Deferred income taxes 17,102 17,102 24,317 Other current assets 47,983 38,410 49,579 Total current assets 753,517 578,409 928,929 Property and equipment, net 436,418 423,583 417,580 Intangibles and other assets 105,924 106,445 110,093 Total assets $1,295,859 $1,108,437 $1,456,602 Liabilities and Shareholders' Equity Current liabilities: Notes payable and current maturities of long-term liabilities $ 105,753 $ 51,859 $ 198,209 Accounts payable 203,173 170,672 196,085 Accrued liabilities 162,205 152,049 163,290 Total current liabilities 471,131 374,580 557,584 Long-term liabilities: Notes and debentures 275,000 202,000 368,667 Other long-term liabilities 67,901 69,056 74,171 Total long-term liabilities 342,901 271,056 442,838 Deferred income taxes 30,812 30,812 37,768 Redeemable preferred stocks 405,938 405,442 403,963 Common stock 380 380 380 Additional paid-in capital 83,126 82,366 82,346 Accumulated deficit (38,429) (56,199) (68,277) Total liabilities and shareholders' equity $1,295,859 $1,108,437 $1,456,602 See Notes to Condensed Consolidated Financial Statements.
1
THE NEIMAN MARCUS GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (In thousands except for Thirteen Weeks Ended per share data) October 28, October 29, 1995 1994 Revenues $ 489,898 $ 462,322 Cost of goods sold, including buying and occupancy costs 318,083 297,360 Selling, general and administrative expenses 118,868 115,315 Corporate expenses 2,932 3,060 Operating earnings 50,015 46,587 Interest expense (6,832) (9,316) Earnings from continuing operations before income taxes 43,183 37,271 Income taxes (18,137) (15,654) Earnings from continuing operations 25,046 21,617 Loss from discontinued operations, net - (1,804) Net earnings 25,046 19,813 Dividends and accretion on redeemable preferred stocks (7,276) (7,270) Net earnings applicable to common shareholders $ 17,770 $ 12,543 Weighted average number of common and common equivalent shares outstanding 38,088 37,992 Amounts per share applicable to common shareholders: Earnings from continuing operations $ .47 $ .38 Loss from discontinued operations - (.05) Net earnings $ .47 $ .33 Dividends paid $ - $ .05 See Notes to Condensed Consolidated Financial Statements.
2
THE NEIMAN MARCUS GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Thirteen Weeks Ended October 28, October 29, 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 25,046 $ 19,813 Adjustments to reconcile net earnings to net cash used by operations: Depreciation and amortization 13,114 12,556 Change in net assets of discontinued operation - (333) Other items 1,811 462 Changes in current assets and liabilities: Accounts receivable (48,569) (46,333) Merchandise inventories (118,040) (84,701) Other current assets (9,573) 2,162 Accounts payable and accrued liabilities 42,657 44,133 Net cash used by operating activities (93,554) (52,241) CASH FLOWS USED BY INVESTING ACTIVITIES Capital expenditures (24,825) (20,541) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 124,400 81,500 Repayment of debt (318) (115) Issuance of common stock 3 92 Dividends paid (6,780) (8,677) Net cash provided by financing activities 117,305 72,800 CASH AND EQUIVALENTS Increase (decrease) during the period (1,074) 18 Beginning balance 13,695 16,600 Ending balance $ 12,621 $ 16,618 See Notes to Condensed Consolidated Financial Statements.
3 THE NEIMAN MARCUS GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Basis of presentation The condensed consolidated financial statements of The Neiman Marcus Group, Inc. (the Company) are submitted in response to the requirements of Form 10-Q and should be read in conjunction with the consolidated financial statements included in the Company's Annual Report on Form 10-K. In the opinion of management, these statements contain all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the results for the interim periods presented. The retail industry is seasonal in nature, and the results of operations for these periods have historically not been indicative of the results for a full year. The condensed consolidated financial statements for fiscal 1995 have been restated to reflect Contempo Casuals as a discontinued operation. 2. Merchandise inventories Inventories are stated at the lower of cost or market. Substantially all of the Company's inventories are valued using the retail method on the last-in, first-out (LIFO) basis. While the Company believes that the LIFO method provides a better matching of costs and revenues, some specialty retailers use the first-in, first-out (FIFO) method. Accordingly, the Company has provided the following data for comparative purposes. If the FIFO method of inventory valuation had been used to value all inventories, merchandise inventories would have been higher than reported by $16.2 million at October 28, 1995, $14.2 million at July 29, 1995 and $27.7 million at October 29, 1994. The FIFO method would have increased net earnings by $1.2 million during the thirteen weeks ended October 28, 1995 and $1.8 million during the thirteen weeks ended October 29, 1994. 3. Discontinued operations On June 30, 1995, the Company sold its Contempo Casuals subsidiary to The Wet Seal, Inc. (Wet Seal) for $1.0 million of Wet Seal Class A common stock and $100,000 in cash. The loss from discontinued operations recorded in the quarter ended October 29, 1994 is net of applicable income tax benefits of $1.3 million. Revenues related to discontinued Contempo Casuals operations for the thirteen week period ended October 29, 1994 were $57.3 million. 4 THE NEIMAN MARCUS GROUP, INC MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations for the Thirteen Weeks Ended October 28, l995 Compared with the Thirteen Weeks Ended October 29, 1994 In June 1995, the Company sold its Contempo Casuals subsidiary to The Wet Seal, Inc. The Company's fiscal 1995 results have been restated to reflect Contempo Casuals as a discontinued operation. Revenues in the thirteen weeks ended October 28, 1995 increased 6.0% over revenues in the thirteen weeks ended October 29, 1994. Higher revenues at Neiman Marcus Stores more than offset slightly lower revenues at Bergdorf Goodman and NM Direct. The increase in revenues at Neiman Marcus Stores was due to both comparable store sales increases of 6.1% and the opening of a new store in Short Hills, New Jersey in August 1995. Cost of goods sold, including buying and occupancy costs, increased $20.7 million or 7.0% to $318.1 million compared to the same period last year. As a percentage of revenues, cost of goods sold, including buying and occupancy costs, increased slightly to 64.9% during the first quarter of fiscal 1996 compared to 64.3% in the first quarter of fiscal 1995. Selling, general and administrative expenses increased 3.1% to $118.9 million from $115.3 million in 1995. The increase resulted primarily from lower finance charge income and higher selling and volume related costs, partially offset by lower sales promotion costs. As a percentage of revenues, selling, general and administrative expenses decreased to 24.3% in 1996 from 24.9% in 1995. The lower percentage was due to lower sales promotion costs, partially offset by lower finance charge income. The reduction in finance charge income during the quarter resulted from the securitization of the Company's credit card receivables, which was completed in March of 1995. The securitization had the effect of reducing finance charge income by approximately $4.8 million during the quarter ended October 28, 1995. Interest expense decreased 26.7% to $6.8 million in the thirteen weeks ended October 28, 1995 mainly due to the use of the securitization proceeds to pay down outstanding bank debt. The effect of the lower bank borrowings during the quarter was partially offset by higher rates compared to the same quarter in the previous year. The Company's effective income tax rate was 42% in fiscal 1996, unchanged from fiscal 1995. 5 THE NEIMAN MARCUS GROUP, INC MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Changes in Financial Condition and Liquidity Since July 29, 1995 During the first quarter of fiscal 1996, the Company financed its working capital needs, new store and distribution center construction, and preferred dividend requirements primarily with cash from bank debt. The following discussion analyzes liquidity and capital resources by operating, investing and financing activities as presented in the Company's Condensed Consolidated Statements of Cash Flows. Net cash used in operating activities was $93.6 million during the first quarter of fiscal 1996, compared to $52.2 million during the same period last year. The cash outflow used to fund working capital requirements related principally to accounts receivable ($48.6 million) and merchandise inventories ($118.0 million) and was partially offset by increases in accounts payable and accrued liabilities ($42.7 million). The increase in accounts receivable was primarily due to the increase in revenues during the period. The increase in inventories and accounts payable during the period resulted primarily from the preparation for the holiday selling season. The Company's capital expenditures in fiscal 1996 will principally consist of construction on new stores and a new distribution center. Capital expenditures were $24.8 million during the first quarter of fiscal 1996 as compared to $20.5 million in the first quarter of fiscal 1995. In August 1995, the Company opened a new Neiman Marcus store in Short Hills, New Jersey. Additionally, the Company expects to open new stores in King of Prussia, Pennsylvania in the spring of 1996 and Paramus, New Jersey in the fall of 1996. Completion of a new distribution center is planned by the spring of 1996. Capital expenditures are expected to approximate $100.0 million during fiscal 1996. The Company increased its bank borrowings by $124.4 million since July 29, 1995. At October 28, 1995 the Company had $305.0 million available under its revolving credit facility. That availability will be sufficient to fund the Company's planned capital growth, operating and preferred dividend requirements, as well as the paydown of the Company s senior notes, of which $40.0 million, $52.0 million and $80.0 million become due in May, August and December 1996, respectively. The Company paid aggregate quarterly dividends of $6.8 million on its Preferred Stocks in the first quarter of fiscal 1996 and $8.7 million on its Common and Preferred Stocks during the first quarter of fiscal 1995. Beginning with the third quarter of fiscal 1995, the Company eliminated its quarterly cash dividend on its Common Stock (previously $.05 per share per quarter). Elimination of this dividend will conserve approximately $7.6 million of cash annually. 6 PART II Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. 11.1 Computation of weighted average number of shares outstanding used in determining primary and fully diluted earnings per share. 27.1 Financial data schedule. (b) Reports on Form 8-K. The Company did not file any reports on Form 8-K during the quarter ended October 28, 1995. 7 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE NEIMAN MARCUS GROUP, INC. Signature Title Date Principal Financial Senior Vice President and December 11, 1995 Officer: Chief Financial Officer /s/ John R. Cook John R. Cook Principal Accounting Vice President and December 11, 1995 Officer: Controller /s/ Stephen C. Richards Stephen C. Richards 8
EXHIBIT 11.1 THE NEIMAN MARCUS GROUP, INC. Computation of weighted average number of shares outstanding used in determining primary and fully diluted earnings per share: Thirteen Weeks Ended (Shares in 000's) October 28, October 29, 1995 1994 Primary 1. Weighted average number of common shares outstanding 37,984 37,954 2. Assumed exercise of certain stock options based on average market value 104 38 3. Weighted average number of shares used in primary per share computations 38,088 37,992 Fully diluted (A) 1. Weighted average number of common shares outstanding 37,984 37,954 2. Assumed exercise of all dilutive options based on higher of average or closing market value 135 38 3. Weighted average number of shares used in fully diluted per share computations 38,119 37,992 (A) This calculation is submitted in accordance with the Securities Exchange Act of 1934 Release No. 9083 although not required by Footnote 2 to Paragraph 14 of APB Opinion No. 15 because it results in dilution of less than 3%.
9 EX-27.1 2
5 This schedule contains a summary of financial information extracted from the Condensed Consolidated Balance Sheet and Condensed Consolidated Statement of Operations and is qualified in its entirety by reference to such financial statements. 1000 3-MOS AUG-03-1996 OCT-28-1995 12621 0 206492 7813 477132 753517 650409 213991 1295859 471131 275000 380 405938 0 44697 1295859 489898 489898 318083 439883 0 6977 6832 43183 18137 25046 0 0 0 25046 .47 .47
-----END PRIVACY-ENHANCED MESSAGE-----