-----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, DC174q/75lSd9J2dLZjCailNE5IpnY8hh3m5e2h4CZHGNRIHMQzd6cSE9XUkaARB Scoy1qNpC0IjOcWGo2BW8A== 0001157523-03-004677.txt : 20030909 0001157523-03-004677.hdr.sgml : 20030909 20030909080042 ACCESSION NUMBER: 0001157523-03-004677 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030909 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030909 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09659 FILM NUMBER: 03887042 BUSINESS ADDRESS: STREET 1: ONE MARCUS SQUARE STREET 2: 1618 MAIN STREET CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: 214-741-6911 MAIL ADDRESS: STREET 1: ONE MARCUS SQUARE STREET 2: 1618 MAIN STREET CITY: DALLAS STATE: TX ZIP: 75201 8-K 1 a4468369.txt NEIMAN MARCUS 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report September 9, 2003 Date of earliest event reported September 9, 2003 The Neiman Marcus Group, Inc. (Exact name of registrant as specified in its charter) Commission file no. 1-9659 Delaware 95-4119509 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Marcus Square 1618 Main Street Dallas, Texas 75201 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (214) 741-6911 ------------------------------------------------------------------ Not Applicable (Former name or former address, if changed since last report) ================================================================================ ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits. 99.1 Press release dated September 9, 2003 announcing financial results for the fiscal fourth quarter and fiscal year ended August 2, 2003. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION This information contained in this Item 12 and the exhibit thereto are being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Accordingly, this information will not be incorporated by reference into any registration statement filed by The Neiman Marcus Group, Inc. under the Securities Act of 1933, as amended, unless specifically identified as being incorporated therein by reference. On September 9, 2003, The Neiman Marcus Group, Inc. issued a press release announcing its results of operations and financial condition for the fiscal fourth quarter and fiscal year ended August 2, 2003. A copy of this press release is attached as Exhibit 99.1. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. THE NEIMAN MARCUS GROUP, INC. Date: September 9, 2003 By: /s/ T. Dale Stapleton -------------------------------- T. Dale Stapleton Vice President and Controller (principal accounting officer of the registrant) EX-99 3 a4468369ex99.txt NEIMAN MARCUS EXHIBIT 99.1 Exhibit 99.1 The Neiman Marcus Group Reports Fourth Quarter and Fiscal Year Earnings; Fourth Quarter Earnings Growth of 35% DALLAS--(BUSINESS WIRE)--Sept. 9, 2003--The Neiman Marcus Group, Inc. (NYSE:NMG.A)(NYSE:NMG.B) today reported financial results for the fourth quarter and fiscal year 2003. The fiscal year 2003 fourth quarter and fiscal year 2003 amounts are reported on a thirteen and fifty-two week basis, respectively. The Company's fiscal year 2002 included a fifty-third week. Unless otherwise stated, the fiscal year 2002 fourth quarter and fiscal year 2002 amounts are reported on a fourteen and fifty-three week basis, respectively. For the fourth quarter of fiscal year 2003, the Company reported total revenues of $703 million compared to $666 million in the prior year. Net earnings were $7 million, or $0.15 per diluted share, in the fourth quarter of fiscal year 2003 compared to $5 million, or $0.11 per diluted share, in the fourth quarter of fiscal year 2002, which is an increase of 35 percent. Excluding the impact of certain items as described below, adjusted earnings for the fourth quarter of fiscal year 2002 were $6 million, or $0.13 per diluted share. See the "Reconciliation of GAAP Net Earnings to Non-GAAP Adjusted Earnings" table below for the reconciliation of adjusted earnings and the Company's statements regarding the use of this non-GAAP financial measure. For fiscal year 2003, total revenues increased 5.1 percent to $3.10 billion compared to $2.95 billion in the prior year. Net earnings for fiscal year 2003 were $109 million, or $2.29 per diluted share, compared to $100 million, or $2.08 per diluted share, for fiscal year 2002, which represents an increase of 9.8 percent. Adjusted earnings for fiscal year 2003 were $124 million, or $2.60 per diluted share, compared to $97 million, or $2.02 per diluted share, for the prior year, which is an increase of 28 percent. Adjusted earnings for fiscal year 2003 and 2002 exclude the impact of certain items as described below. "Overall, I am very pleased with our fiscal year 2003 results," said Burton M. Tansky, President and Chief Executive Officer. "Our focus on sales growth, inventory management and expense control contributed to a successful year in a particularly challenging period." Mr. Tansky continued, "In the last few months, we have seen an improvement in the retail environment. While these recent trends are encouraging, we remain committed to improving the operational efficiencies of our business. The initiatives we began in fiscal 2003, combined with our 2004 plans, position us to benefit in an improving economy." Based on the current sales trends, the Company anticipates its comparable store revenues for the first quarter of fiscal year 2004 to increase in the mid-single digit range. Business Segments During the fourth quarter of fiscal year 2002, the Company realigned its business segments to reflect its current operating strategies. All of the Company's online operations are now included in the Direct Marketing segment. Previously, certain online operations were included in the Other business segment. The Company's principal business segments are Specialty Retail Stores and Direct Marketing. All prior amounts have been restated based on this new alignment. Fourth quarter revenues for the Specialty Retail Stores segment, which consists of Neiman Marcus Stores and Bergdorf Goodman, were $576 million compared to $553 million in the previous year. Revenues for the fourth quarter of fiscal year 2003 compared to last year increased 3.7 percent and 8.1 percent at Neiman Marcus Stores and Bergdorf Goodman, respectively. Total revenues for the Company's fifty-third week of fiscal year 2002 were $37 million. On a thirteen-week basis, comparable store revenues increased 5.2 percent at Neiman Marcus Stores and 16.2 percent at Bergdorf Goodman. Fourth quarter operating earnings for the Specialty Retail Stores segment were $12 million compared to $14 million in the prior year. Neiman Marcus Direct, the Company's direct marketing division, reported fourth quarter fiscal year 2003 revenues of $105 million compared to $96 million in the previous year. Operating earnings for Neiman Marcus Direct were $10 million in the fourth quarter compared to $7 million a year ago. The Company's Other segment includes the operations of the Kate Spade and Laura Mercier brands and corporate expenses. Other Items In the first quarter of fiscal year 2003, the Company adopted the provisions of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets." Based upon the valuation results of its third party appraisal experts, the Company recorded a pretax charge of approximately $24 million in the first quarter of fiscal year 2003 as a result of implementing the fair value model of the new accounting standard. During the fourth quarter of fiscal 2002, the Company wrote-down the carrying values of the fixed assets of three Kate Spade retail stores to their estimated fair value. The write-down resulted in a pretax charge of $3 million. During the third quarter of fiscal year 2002, the Company terminated its prior vacation plan. Under the previous plan, eligible employees received an annual vacation grant at the beginning of each service year. Pursuant to the new vacation policy, eligible employees earn vacation pay ratably over the course of the year in which services are rendered. As a result of this change, the Company's previously recorded $17 million vacation accrual was no longer required and, therefore, the liability was eliminated and credited to operating results. Also in the third quarter of fiscal 2002, the Company recorded an $8 million pretax charge. This charge related to 1) the write-off of the net carrying value of the Company's investment in WeddingChannel.com, an Internet bridal registry service, 2) the write-down of the carrying values of the fixed assets of the two Neiman Marcus Galleries stores to estimated fair value and 3) the accrual of the estimated loss associated with the abandonment of excess warehouse space held by the Company pursuant to a long-term operating lease. During the second quarter of fiscal year 2002, the Company incurred expenses of approximately $2 million in connection with cost reduction strategies. These expenses consisted primarily of severance costs and lease termination expenses incurred in connection with the closing of the Neiman Marcus Galleries store in Seattle, Washington. A live webcast of the conference call on earnings can be accessed through the Investor Information section of the Neiman Marcus Group website at www.neimanmarcusgroup.com on Tuesday, September 9, 2003 beginning at 7:30 a.m. Central Daylight Time. Following the live broadcast, interested parties may replay the webcast by accessing this website. To access financial information that will be presented during the call, please visit the Investor Information section of the Neiman Marcus Group website at www.neimanmarcusgroup.com. This release contains forward-looking statements, including statements regarding the Company's objectives and expectations concerning, among other things, its productivity and profitability; merchandising and marketing strategies; inventory performance; store renovation and expansion plans; capital expenditures; liquidity; and development of management information systems. These forward-looking statements are made based on management's expectations and beliefs concerning future events, as well as on assumptions made by and data currently available to management. Therefore, these forward-looking statements involve a number of risks and uncertainties and are not guarantees of future performance. A variety of factors could cause the Company's actual results to differ materially from the anticipated or expected results expressed in these forward-looking statements. Factors that could affect future performance include, but are not limited to: current political and economic conditions; changes in political and economic conditions that may occur in the future; terrorist activities in the United States, as well as the potential escalation in the international war on terrorism; political, social, economic or other events resulting in the short or long-term disruption in business at the Company's stores, distribution centers or offices; changes in consumer confidence resulting in a reduction of discretionary spending on goods that are, or are perceived to be, "luxuries;" changes in demographic or retail environments; changes in consumer preferences or fashion trends; competitive responses to the Company's marketing, merchandising and promotional efforts and/or inventory liquidations by vendors or other retailers; delays in the receipt of merchandise ordered by the Company due to work stoppages and/or other causes of delay in connection with either the manufacture or shipment of such merchandise; seasonality of the retail business; adverse weather conditions, particularly during peak selling seasons; delays in anticipated store openings; natural disasters; significant increases in paper, printing and postage costs; litigation that may have an adverse effect on the financial results or reputation of the Company; changes in the Company's relationships with designers, vendors and other sources of merchandise; the financial viability of the Company's designers, vendors and other sources of merchandise; changes in foreign currency exchange rates; impact of funding requirements related to the Company's noncontributory defined benefit pension plan; changes in the Company's relationships with certain of its key sales associates; changes in key management personnel; changes in the Company's proprietary credit card arrangement that adversely impact its ability to provide consumer credit; or changes in government or regulatory requirements increasing the Company's cost of operations. The Company undertakes no obligation to update or revise (publicly or otherwise) any forward-looking statements to reflect subsequent events, new information or future circumstances. THE NEIMAN MARCUS GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) August 2, August 3, 2003 2002 ----------- ----------- ASSETS - ------ Current assets: Cash and cash equivalents $206,950 $178,638 Undivided interests in NMG Credit Card Master Trust 243,145 208,602 Accounts receivable 22,595 19,778 Merchandise inventories 687,062 656,844 Other current assets 86,369 63,764 ----------- ----------- Total current assets 1,246,121 1,127,626 ----------- ----------- Property and equipment, net 674,185 653,166 Other assets 114,124 126,754 ----------- ----------- Total assets $2,034,430 $1,907,546 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Current liabilities: Notes payable and current maturities of long-term liabilities $1,241 $1,098 Accounts payable 262,909 257,560 Accrued liabilities 266,259 259,800 ----------- ----------- Total current liabilities 530,409 518,458 ----------- ----------- Long-term liabilities: Notes and debentures 249,733 249,710 Other long-term liabilities 108,234 77,473 ----------- ----------- Total long-term liabilities 357,967 327,183 ----------- ----------- Minority interest 8,206 6,592 Total shareholders' equity 1,137,848 1,055,313 ----------- ----------- Total liabilities and shareholders' equity $2,034,430 $1,907,546 =========== =========== THE NEIMAN MARCUS GROUP, INC. CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) Fourth Quarter Fiscal Year Ended Ended ------------------- ----------------------- (in thousands, except per August 2, August 3, August 2, August 3, share data) 2003 2002 2003 2002 --------- --------- ----------- ----------- Revenues $702,656 $666,356 $3,098,124 $2,948,332 Cost of goods sold including buying and occupancy costs 501,357 474,310 2,073,579 1,997,378 Selling, general and administrative expenses 184,670 178,865 802,435 776,647 Effect of change in vacation policy -- -- -- (16,576) Impairment and other charges (1) -- 3,070 -- 13,233 --------- --------- ----------- ----------- Operating earnings 16,629 10,111 222,110 177,650 Interest expense, net 4,087 3,246 16,270 15,406 --------- --------- ----------- ----------- Earnings before income taxes, minority interest and change in accounting principle 12,542 6,865 205,840 162,244 Income taxes 4,828 2,609 79,248 61,653 --------- --------- ----------- ----------- Earnings before minority interest and change in accounting principle 7,714 4,256 126,592 100,591 Minority interest in net earnings of subsidiaries (542) 1,060 (2,488) (1,017) --------- --------- ----------- ----------- Earnings before change in accounting principle 7,172 5,316 124,104 99,574 Change in accounting principle -- write-down of intangible assets, net of taxes -- -- (14,801) -- --------- --------- ----------- ----------- Net earnings $7,172 $5,316 $109,303 $99,574 ========= ========= =========== =========== Weighted average number of common and common equivalent shares outstanding: Basic 47,355 47,692 47,462 47,444 ========= ========= =========== =========== Diluted 47,862 48,129 47,795 47,835 ========= ========= =========== =========== Basic earnings per share: Earnings before effect of change in accounting principle $0.15 $0.11 $2.61 $2.10 Change in accounting principle -- -- (0.31) -- --------- --------- ----------- ----------- Basic earnings per share $0.15 $0.11 $2.30 $2.10 ========= ========= =========== =========== Diluted earnings per share: Earnings before effect of change in accounting principle $0.15 $0.11 $2.60 $2.08 Change in accounting principle -- -- (0.31) -- --------- --------- ----------- ----------- Diluted earnings per share $0.15 $0.11 $2.29 $2.08 ========= ========= =========== =========== (1) Impairment and other charges for the fiscal year ended August 3, 2002 include: severance costs and lease termination expenses incurred in connection with the closing of the Neiman Marcus Galleries store in Seattle recorded in the second fiscal quarter; the following impairment and other charges recorded in the third fiscal quarter: a) the write-off of the net carrying value of the Company's investment in WeddingChannel.com, an Internet bridal registry service, b) the write-down of the carrying values of the fixed assets of the two Neiman Marcus Galleries stores to estimated fair value and c) the accrual of the estimated loss associated with the abandonment of excess warehouse space held by the Company pursuant to a long-term operating lease; and the write-down of the carrying values of the fixed assets of three Kate Spade retail stores to their estimated fair value recorded in the fourth fiscal quarter. THE NEIMAN MARCUS GROUP, INC. OTHER OPERATING DATA (UNAUDITED) SEGMENTS: Fourth Quarter Ended Fiscal Year Ended -------------------- ------------------- August 2, August 3, August 2, August 3, (in millions) 2003 2002 2003 2002 ---------- --------- --------- --------- REVENUES: Specialty Retail Stores $576.3 $553.2 $2,524.8 $2,433.2 Direct Marketing 105.1 96.1 493.5 444.0 Other (1) 21.3 17.1 79.8 71.1 ---------- --------- --------- --------- Total $702.7 $666.4 $3,098.1 $2,948.3 ========== ========= ========= ========= OPERATING EARNINGS: Specialty Retail Stores $12.2 $14.0 $198.2 $170.5 Direct Marketing 10.0 6.5 45.8 22.8 Other (1) (5.6) (7.3) (21.9) (19.0) Effect of change in vacation policy -- -- -- 16.6 Impairment and other charges -- (3.1) -- (13.2) ---------- --------- --------- --------- Total $16.6 $10.1 $222.1 $177.7 ========== ========= ========= ========= OTHER DATA: Fourth Quarter Ended Fiscal Year Ended -------------------- ------------------- August 2, August 3, August 2, August 3, (in millions) 2003 2002 2003 2002 ---------- --------- --------- --------- Capital Expenditures $19 $27 $100 $149 Depreciation and Amortization 21 18 79 82 (1) Other includes the results of operations of Kate Spade, LLC, Gurwitch Products, LLC and corporate expenses. All of the Company's online operations are now included in the Direct Marketing segment. Previously, certain online operations were included in the Other business segment. Prior year amounts have been reclassified to conform to the current year presentation. THE NEIMAN MARCUS GROUP, INC. RECONCILIATION OF GAAP NET EARNINGS TO NON-GAAP ADJUSTED EARNINGS (UNAUDITED) Fourth Quarter Ended Fiscal Year Ended -------------------- ------------------- (in thousands, except per August 2, August 3, August 2, August 3, share data) 2003 2002 2003 2002 ---------- --------- --------- --------- Net earnings (GAAP) $7,172 $5,316 $109,303 $99,574 Effect of change in vacation policy, net of taxes -- -- -- (10,277) Impairment and other charges, net of taxes (1) -- 1,066 -- 7,368 Change in accounting principle -- -- 14,801 -- ---------- --------- --------- --------- Adjusted earnings (Non-GAAP) $7,172 $6,382 $124,104 $96,665 ========== ========= ========= ========= Diluted earnings per share (GAAP) $0.15 $0.11 $2.29 $2.08 Effect of change in vacation policy, net of taxes -- -- -- (0.21) Impairment and other charges, net of taxes (1) -- 0.02 -- 0.15 Change in accounting principle -- -- 0.31 -- ---------- --------- --------- --------- Adjusted earnings per share (Non-GAAP) $0.15 $0.13 $2.60 $2.02 ========== ========= ========= ========= The Neiman Marcus Group, Inc. believes reporting adjusted earnings is a more accurate representation of the Company's on-going economic performance and therefore uses adjusted reporting internally to evaluate and manage the Company's operations. The Neiman Marcus Group, Inc. has chosen to provide this information to investors to enable them to perform more meaningful comparisons of operating results and as a means to emphasize the results of on-going operations. Adjusted earnings should be considered in addition to, not as a substitute for, the Company's other measures of financial performance reported in accordance with generally accepted accounting principles. (1) Impairment and other charges for the fiscal year ended August 3, 2002 include: severance costs and lease termination expenses incurred in connection with the closing of the Neiman Marcus Galleries store in Seattle recorded in the second fiscal quarter; the following impairment and other charges recorded in the third fiscal quarter: a) the write-off of the net carrying value of the Company's investment in the WeddingChannel.com, an Internet bridal registry service, b) the write-down of the carrying values of the fixed assets of the two Neiman Marcus Galleries stores to estimated fair value and c) the accrual of the estimated loss associated with the abandonment of the excess warehouse space held by the Company pursuant to a long-term operating lease; and the write-down of the carrying values of the fixed assets of three Kate Spade retail stores to their estimated fair value recorded in the fourth fiscal quarter. CONTACT: The Neiman Marcus Group, Inc., Dallas James E. Skinner, 214-743-7625 or Stacie Shirley, 214-757-2967 -----END PRIVACY-ENHANCED MESSAGE-----