-----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, AVi/cQBwVaBbyEGxFmTLWgKUAu9oz2mLSDsPg6FuZcESTk8LlcLdrO4lEoA3Q5lS AM9EhDzxiSQ6u5dqQYAi4A== 0001157523-06-002475.txt : 20060309 0001157523-06-002475.hdr.sgml : 20060309 20060309093025 ACCESSION NUMBER: 0001157523-06-002475 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060309 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060309 DATE AS OF CHANGE: 20060309 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: 0731 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09659 FILM NUMBER: 06674780 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 a5098251.txt THE NEIMAN MARCUS GROUP, INC. 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 March 9, 2006 Date of earliest event reported March 9, 2006 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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following information is being furnished, not filed, pursuant to Item 2.02. 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 March 9, 2006, The Neiman Marcus Group, Inc. issued a press release announcing its results of operations and financial condition for the fiscal second quarter ended January 28, 2006. A copy of this press release is attached as Exhibit 99.1. The press release contains information relating to adjusted operating earnings after excluding the matters indicated therein. Management has included this information because it believes it more accurately reflects results from core operating activities and is a better base from which to measure the company's future performance. 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. ITEM 9.01. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits. 99.1 Press release dated March 9, 2006 announcing financial results for the fiscal second quarter ended January 28, 2006. SIGNATURES THE NEIMAN MARCUS GROUP, INC. Date: March 9, 2006 By: /s/ T. Dale Stapleton -------------------------------- T. Dale Stapleton Vice President and Controller (principal accounting officer of the registrant) EX-99.1 2 a5098251ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 The Neiman Marcus Group Reports Second Quarter Earnings DALLAS--(BUSINESS WIRE)--March 9, 2006--The Neiman Marcus Group, Inc. today reported financial results for the second quarter of fiscal year 2006. On October 6, 2005, the Company announced the completion of the acquisition of Neiman Marcus by an investor group led by Texas Pacific Group and Warburg Pincus LLC. The accompanying consolidated statements of earnings and related information present the Company's results of operations for the period preceding the acquisition (Predecessor) and the period succeeding the acquisition (Successor). The results of operations for the fiscal year to date period has been prepared by comparing the mathematical combination of the Successor and Predecessor periods in the 26 weeks ended January 28, 2006 to the results of the Predecessor for the 26 weeks ended January 29, 2005. The presentation does not comply with generally accepted accounting principles, but the Company believes that it provides a more meaningful method of comparison. For further information related to the Company's financial results, refer to the Company's Form 10-Q and other information available from the Securities and Exchange Commission. The Neiman Marcus Group, Inc. believes reporting adjusted operating earnings is a more meaningful representation of the Company's on-going economic performance and therefore uses adjusted reporting internally to evaluate and manage the Company's operations. Adjusted operating earnings exclude the impact of certain items as described below under "Other Items". For the 13 weeks ended January 28, 2006, the Company reported total revenues of $1.23 billion compared to $1.13 billion in the prior year. Comparable revenues increased 6.4 percent. Operating earnings for the second quarter of fiscal 2006 were $73 million compared to $120 million for the second quarter of fiscal year 2005. Adjusted operating earnings were $122 million in the second quarter of fiscal year 2006 compared to $120 million in the second quarter of fiscal year 2005. For the 26 weeks ended January 28, 2006, the Company reported total revenues of $2.21 billion compared to $2.04 billion in the prior year. Comparable revenues increased 7.3 percent. Operating earnings for the 26 weeks ended January 28, 2006 were $177 million compared to $230 million for the comparable period a year ago. Adjusted operating earnings for the 26 weeks ended January 28, 2006 were $262 million compared to $245 million for the comparable period a year ago. See the attached schedule of "Other Operating Data" for the reconciliation of adjusted operating earnings and the Company's statements regarding the use of this non-GAAP financial measure. Other Items As a result of the acquisition, the Company recorded costs related to the amortization of customer lists and favorable lease commitments of approximately $18.9 million and $4.9 million in the second and first quarters of fiscal year 2006, respectively. The Company recorded non-cash charges included in cost of goods sold related to various valuation adjustments of approximately $30.6 million and $7.8 million in the second and first quarters of fiscal year 2006, respectively. Also, prior to consummation of the acquisition, the Company recorded in the first quarter of fiscal year 2006 transaction and other costs of approximately $23.5 million. The Company sold its Chef's Catalog direct marketing business in November 2004 and recorded a loss in connection with the sale of approximately $15.3 million in the first quarter of fiscal year 2005. Comparable revenues have been adjusted to exclude the sales of Chef's Catalog prior to its disposition. 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 Thursday, March 9, 2006 beginning at 10:00 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. From time to time, the Company may make statements that predict or forecast future events or results, depend on future events for their accuracy or otherwise contain "forward-looking information." These statements are made based on management's expectations and beliefs concerning future events and are not guarantees of future performance. The Company cautions readers that actual results may differ materially as a result of various factors, some of which are beyond its control, including but not limited to: political or economic conditions; terrorist activities in the United States or escalation in the international war on terrorism; disruptions 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; changes in the Company's relationships with key customers; delays in the receipt of 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 Company's financial results or reputation; 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; the design and implementation of new information systems or enhancement of existing systems; 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 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. These and other factors that may adversely effect the Company's future performance or financial condition are contained in its Annual Report in Form 10-K and other reports filed with and available from the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information or future circumstances. THE NEIMAN MARCUS GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) January 28, January 29, (in thousands) 2006 2005 ----------- ------------- (Successor) (Predecessor) ASSETS - ------ Current assets: Cash and cash equivalents $91,523 $ $377,857 Accounts receivable, net of allowance 34,446 659,015 Merchandise inventories 789,998 726,169 Other current assets 116,324 79,679 ----------- ------------- Total current assets 1,032,291 1,842,720 ----------- ------------- Property and equipment, net 1,042,989 793,715 Goodwill and intangibles, net 4,414,116 71,514 Other assets 121,253 47,813 ----------- ------------- Total assets $6,610,649 $2,755,762 =========== ============= LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Current liabilities: Accounts payable $283,251 $241,946 Accrued liabilities 374,745 327,435 Notes payable and current maturities of long-term liabilities 8,207 2,200 Borrowings under Credit Card Facility - 225,000 ----------- ------------- Total current liabilities 666,203 796,581 ----------- ------------- Long-term liabilities: Asset-based revolving credit facility - - Notes and debentures 3,195,614 249,768 Deferred income taxes 1,130,379 21,487 Other long-term liabilities 189,202 166,651 ----------- ------------- Total long-term liabilities 4,515,195 437,906 ----------- ------------- Minority interest 13,024 11,664 Total shareholders' equity 1,416,227 1,509,611 ----------- ------------- Total liabilities and shareholders' equity $6,610,649 $2,755,762 =========== ============= THE NEIMAN MARCUS GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) Thirteen Weeks Ended ---------------------------- (in thousands, except per share data) January 28, January 29, 2006 2005 ------------ --------------- (Successor) (Predecessor) Revenues $ 1,231,416 $ 1,129,225 Cost of goods sold including buying and occupancy costs 835,938 735,677 Selling, general and administrative expenses 285,610 264,591 Income from credit card operations, net (16,972) (18,041) Depreciation expense 35,435 27,338 Amortization of intangible assets 14,559 - Amortization of favorable lease commitments 4,328 - Transaction and other costs - - Loss on disposition of Chef's Catalog - - ------------ --------------- Operating earnings 72,518 119,660 Interest expense, net 66,125 3,978 ------------ -------------- Earnings before income taxes and minority interest 6,393 115,682 Income taxes 2,568 44,326 ------------ --------------- Earnings before minority interest 3,825 71,356 Minority interest in net (loss) earnings of Subsidiaries (781) (769) ------------ --------------- Net earnings $ 3,044 $ 70,587 ============ =============== Twenty-Six Weeks Ended ---------------------------- (in thousands, except per share data) January 28, January 29, 2006 2005 ------------ --------------- (Combined) (Predecessor) Revenues $ 2,207,854 $ 2,037,161 Cost of goods sold including buying and occupancy costs 1,409,996 1,266,861 Selling, general and administrative expenses 537,446 507,037 Income from credit card operations, net (28,575) (33,384) Depreciation expense 65,024 51,724 Amortization of intangible assets 17,937 - Amortization of favorable lease commitments 5,887 - Transaction and other costs 23,544 - Loss on disposition of Chef's Catalog - 15,348 ------------ --------------- Operating earnings 176,595 229,575 Interest expense, net 82,544 8,015 ------------ -------------- Earnings before income taxes and minority interest 94,051 221,560 Income taxes 35,445 85,301 ------------ --------------- Earnings before minority interest 58,606 136,259 Minority interest in net (loss) earnings of Subsidiaries (560) (1,556) ------------ --------------- Net earnings $ 58,046 $ 134,703 ============ =============== The results of operations have been prepared by comparing the mathematical combination of the Successor and Predecessor periods in the twenty-six weeks ended January 28, 2006 to the twenty-six weeks ended January 29, 2005. The presentation does not comply with generally accepted accounting principles, but the Company believes that it provides a more meaningful method of comparison. THE NEIMAN MARCUS GROUP, INC. OTHER OPERATING DATA (UNAUDITED) SEGMENTS: Thirteen Weeks Ended ---------------------------- (dollars in millions) January 28, January 29, 2006 2005 ------------ --------------- (Successor) (Predecessor) REVENUES: Specialty Retail Stores $ 981.5 $ 912.0 Direct Marketing 213.0 188.2 Other (1) 36.9 29.0 ------------ --------------- Total $ 1,231.4 $ 1,129.2 ============ =============== OPERATING EARNINGS: Specialty Retail Stores $ 94.3 $ 98.7 Direct Marketing 37.9 27.9 Other (1) 3.0 2.8 Corporate expenses (13.2) (9.7) ------------ --------------- ADJUSTED OPERATING EARNINGS $ 122.0 $ 119.7 Amortization of intangible assets (18.9) - Non-cash charges related to other valuation adjustments made in connection with the acquisition (30.6) - Transaction and other costs - - Loss on disposition of Chef's Catalog - - ------------ --------------- OPERATING EARNINGS $ 72.5 $ 119.7 ============ =============== SEGMENTS: Twenty-Six Weeks Ended ---------------------------- (dollars in millions) January 28, January 29, 2006 2005 ------------ --------------- (Combined) (Predecessor) REVENUES: Specialty Retail Stores $ 1,788.8 $ 1,648.9 Direct Marketing 351.9 328.0 Other (1) 67.2 60.3 ------------ --------------- Total $ 2,207.9 $ 2,037.2 ============ =============== OPERATING EARNINGS: Specialty Retail Stores $ 229.8 $ 218.9 Direct Marketing 52.5 39.3 Other (1) 2.2 5.7 Corporate expenses (22.1) (19.0) ------------ --------------- ADJUSTED OPERATING EARNINGS $ 262.4 $ 244.9 Amortization of intangible assets (23.8) - Non-cash charges related to other valuation adjustments made in connection with the acquisition (38.5) - Transaction and other costs (23.5) - Loss on disposition of Chef's Catalog - (15.3) ------------ --------------- OPERATING EARNINGS $ 176.6 $ 229.6 ============ =============== (1) Other includes the results of operations of Kate Spade LLC and Gurwitch Products, LLC. The results of operations have been prepared by comparing the mathematical combination of the Successor and Predecessor periods in the twenty-six weeks ended January 28, 2006 to the twenty-six weeks ended January 29, 2005. The presentation does not comply with generally accepted accounting principles, but the Company believes that it provides a more meaningful method of comparison. Adjusted operating earnings represents operating earnings excluding amortization of customer lists and favorable lease commitments, purchase accounting adjustments, transaction and other costs and the loss on disposition of Chef's Catalog. The Neiman Marcus Group, Inc. believes reporting adjusted operating earnings is a more meaningful 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 operating earnings is not a recognized term under generally accepted accounting principles (GAAP). 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. Adjusted operating earnings as presented herein are not necessarily comparable to similarly titled measures. THE NEIMAN MARCUS GROUP, INC. OTHER OPERATING DATA (UNAUDITED) OTHER DATA: Thirteen Weeks Ended Twenty-Six Weeks Ended ---------------------------- -------------------------- (dollars in January 28, January 29, January 28, January 29, millions) 2006 2005 2006 2005 ------------ --------------- ----------- -------------- (Successor) (Predecessor) (Combined) (Predecessor) Capital Expenditures $ 49 $ 45 $ 99 $ 95 Depreciation $ 35 $ 27 $ 65 $ 52 Amortization $ 19 $ - $ 24 $ - Rent Expense $ 23 $ 21 $ 43 $ 39 CONTACT: The Neiman Marcus Group, Dallas James E. Skinner, 214-757-2954 or Stacie Shirley, 214-757-2967 -----END PRIVACY-ENHANCED MESSAGE-----