-----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, dSJvLhz/OCem4JypBjYs9OlTC8PzZdUttmeyIxFKtSMnAH1QeQix3nDCeVM7SDe/ syKkRHU9JxyetfnZCbxtWw== 0000850090-95-000003.txt : 19950719 0000850090-95-000003.hdr.sgml : 19950719 ACCESSION NUMBER: 0000850090-95-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950429 FILED AS OF DATE: 19950613 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANNTAYLOR INC CENTRAL INDEX KEY: 0000850090 STANDARD INDUSTRIAL CLASSIFICATION: 5621 IRS NUMBER: 510297083 STATE OF INCORPORATION: DE FISCAL YEAR END: 0128 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11980 FILM NUMBER: 95546734 BUSINESS ADDRESS: STREET 1: 142 W 57TH ST CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2125413300 10-Q 1 ANNTAYLOR, INC. UNITED STATES 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 29, 1995 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-11980 ANNTAYLOR, INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 51-0297083 - - ------------------------------- -------------------------------------- (State of other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 142 West 57th Street, New York, NY 10019 - - --------------------------------------- --------- (Address of principal executive offices) (Zip Code) (212) 541-3300 -------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter 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 ____. Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Outstanding as of Class May 26, 1995 ------------------------------ ---------------- Common Stock, $1.00 par value 1 This registrant meets the conditions set forth in General Instruction H (1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format. ======================================================================= INDEX TO FORM 10-Q Page No. PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Statements of Operations for the Quarters Ended April 29, 1995 and April 30, 1994 3 Condensed Consolidated Balance Sheets at April 29, 1995 and January 28, 1995 4 Condensed Consolidated Statements of Cash Flows for the Quarters Ended April 29, 1995 and April 30, 1994 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Operations 8 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 9 ===================================================================== PART I. FINANCIAL INFORMATION Item 1. Financial Statements ANNTAYLOR, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the Quarters Ended April 29, 1995 and April 30, 1994 (unaudited) Quarters Ended --------------------------------- April 29, 1995 April 30, 1994 -------------- -------------- (in thousands) Net sales $168,306 $145,283 Cost of sales 91,355 76,403 ------- ------- Gross profit 76,951 68,880 Selling, general and administrative expenses 62,451 46,973 Amortization of goodwill 2,377 2,377 ------- ------- Operating income 12,123 19,530 Interest expense 4,498 3,456 Other expense, net 57 140 ------- ------- Income before income taxes 7,568 15,934 Income tax provision 4,077 7,874 ------- ------- Net income $ 3,491 $ 8,060 ======= ======= See accompanying notes to condensed consolidated financial statements. ==================================================================== ANNTAYLOR, INC. CONDENSED CONSOLIDATED BALANCE SHEETS April 29, 1995 and January 28, 1995 April 29, 1995 January 28, 1995 -------------- --------------- (unaudited) (in thousands) ASSETS Current assets Cash $ 1,132 $ 1,551 Accounts receivable, net of allowances of $750,000 and $931,000, respectively 69,021 61,211 Merchandise inventories 110,313 93,705 Prepaid expenses and other current assets 8,668 7,956 Deferred income taxes 3,650 3,650 ------- ------- Total current assets 192,784 168,073 Property and equipment Land 499 499 Leasehold improvements 46,392 43,370 Furniture and fixtures 62,782 59,105 Construction in progress 32,922 24,867 ------- ------- 142,595 127,841 Less accumulated depreciation and amortization 34,001 31,503 ------- ------- Net property and equipment 108,594 96,338 Goodwill, net of accumulated amortization of $59,596,000 and $57,219,000, respectively 320,654 323,031 Investment in CAT 4,039 3,792 Deferred income taxes 1,600 1,600 Deferred financing costs, net of accumulated amortization of $1,149,000 and $956,000, respectively 2,636 2,829 Other assets 2,423 2,591 ------- ------- Total assets $632,730 $598,254 ======= ======= LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities Accounts payable $39,403 $36,625 Accrued rent 5,326 5,243 Accrued expenses 26,600 24,024 ------- ------- Total current liabilities 71,329 65,892 Long-term debt 225,300 200,000 Other liabilities 6,392 6,250 Commitments and contingencies Stockholder's equity Common stock, $1.00 par value; 1,000 shares authorized;1 share issued and outstanding 1 1 Additional paid-in capital 311,221 311,115 Retained earnings 18,487 14,996 ------- ------- Total stockholder's equity 329,709 326,112 ------- ------- Total liabilities and stockholder's equity $632,730 $598,254 ======= ======= See accompanying notes to condensed consolidated financial statements. =========================================================================== ANNTAYLOR, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Quarters Ended April 29, 1995 and April 30, 1994 (unaudited) Quarters Ended --------------------------------- April 29, 1995 April 30, 1994 --------------- -------------- (in thousands) Operating activities: Net income $3,491 $8,060 Adjustments to reconcile net income to net cash (used by) provided by operating activities: Equity earnings in CAT (247) (150) Provision for loss on accounts receivable 122 298 Depreciation and amortization 3,566 2,583 Amortization of goodwill 2,377 2,377 Amortization of deferred financing costs 193 348 Amortization of deferred compensation 26 45 Loss on disposal of property and equipment 277 46 (Increase) decrease in: Receivables (7,932) (8,986) Merchandise inventories (16,608) (11,713) Prepaid expenses and other current assets (401) 2,270 Increase in: Accounts payable 2,778 601 Accrued expenses 1,274 7,489 Other non-current assets and liabilities, net 312 244 ------- ------- Net cash (used by) provided by operating activities (10,772) 3,512 Investing activities: Purchases of property and equipment (16,412) (4,883) ------- ------- Net cash used by investing activities (16,412) (4,883) Financing activities: Increase in bank overdrafts 1,385 1,598 Borrowing under line of credit agreement 27,000 1,000 Parent company contribution 80 1,677 Net repayments of receivables facility (1,700) (2,434) Payment of financing costs --- (122) ------- ------- Net cash provided by financing activities 26,765 1,719 ------- ------- Net (decrease) increase in cash (419) 348 Cash, beginning of period 1,551 292 ------- ------- Cash, end of period $1,132 $ 640 ======= ======= Supplemental Disclosures of Cash Flow Information: Cash paid during the period for interest $1,489 $ 973 ======= ======= Cash paid during the period for income taxes $1,587 $ 631 ======= ======= See accompanying notes to condensed consolidated financial statements. ============================================================================ ANNTAYLOR, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Basis of Presentation - - ------------------------- The condensed consolidated financial statements are unaudited but, in the opinion of management, contain all adjustments (which are of a normal recurring nature) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. All significant intercompany accounts and transactions have been eliminated. The results of operations for the 1995 interim period shown in this report are not necessarily indicative of results to be expected for the fiscal year. The January 28, 1995 condensed consolidated balance sheet amounts have been derived from the previously audited consolidated balance sheet of AnnTaylor, Inc.. Certain fiscal 1994 amounts have been reclassified to conform to the 1995 presentation. It is not considered necessary to include detailed footnote information as of April 29, 1995 and April 30, 1994. The financial information set forth herein should be read in conjunction with the Notes to the Company's Consolidated Financial Statements contained in the AnnTaylor, Inc. 1994 Annual Report on Form 10-K. 2. Long-term Debt - - ------------------- The following summarizes long-term debt outstanding at April 29, 1995: (in thousands) Revolving Credit Agreement $ 91,000 8-3/4% Notes 100,000 Revolving Receivables Facility 34,300 ------- Total long-term debt $225,300 ======== At April 29, 1995, the Company and AnnTaylor Funding, Inc. were not in compliance with one financial covenant under the revolving credit agreement and the receivables financing agreement relating to the Company's fixed charge coverage ratio, which event of noncompliance was waived by Bank of America, NT & SA, as agent for the lenders under the revolving credit agreement, and by the parties to the receivables financing agreement. Item 2. Management's Discussion and Analysis of Operations - - ----------------------------------------------------------- Results of Operations Quarters Ended -------------------- April 29, April 30, 1995 1994 --------- --------- Number of Stores: Open at beginning of period 262 231 Opened during period 15 5 Expanded during period* 12 2 Closed during period (2) (2) Open at end of period 275 234 Type of Stores Open at End of Period: AnnTaylor Stores 240 223 AnnTaylor Factory Stores 23 11 Ann Taylor Loft stores 6 --- AnnTaylor Studio stores 6 --- ------------ * Expanded stores are excluded from comparable store sales for the first year following expansion. Quarter Ended April 29, 1995 Compared to Quarter Ended April 30, 1994 - - ---------------------------------------------------------------------- The Company's net sales in the first quarter of 1995 increased to $168,306,000 from $145,283,000 in the first quarter of 1994, an increase of $23,023,000 or 15.8%. The increase in net sales was attributable to the opening of new stores and the expansion of existing stores, offset by the closing of two stores and a 0.7% decrease in comparable store sales in the first quarter of 1995. The decrease in comparable store sales was due primarily to negative comparable sales in the dress department. Gross profit as a percentage of net sales decreased to 45.7% in the first quarter of 1995 from 47.4% in the first quarter of 1994. This decrease was attributable to increased cost of goods sold as a percentage of net sales resulting from markdowns associated with increased promotional activities. Selling, general and administrative expenses represented 37.1% of net sales in the first quarter of 1995 compared to 32.3% of net sales in the first quarter of 1994. The 4.8% increase is primarily attributable to higher tenancy, store maintenance and store selling costs as a percentage of sales (approximately 70% of the increase), additional catalog expense relating to the Company's test of its catalog as a mail order vehicle (approximately 15% of the increase) and higher merchandising and design expense (approximately 15% of the increase). The Company has decided to return its catalog format to principally an advertising vehicle, rather than a mail order business, commencing Fall 1995. As a result of the foregoing, operating income decreased to $12,123,000, or 7.2% of net sales, in the first quarter of 1995 from $19,530,000, or 13.4% of net sales, in the first quarter of 1994. Amortization of goodwill was $2,377,000 in the first quarter of 1995 and 1994. Operating income, without giving effect to such amortization in either year, was $14,500,000, or 8.6% of net sales, in the 1995 period and $21,907,000, or 15.1% of net sales, in the 1994 period. Interest expense was $4,498,000, including $193,000 of non- cash interest expense, in the first quarter of 1995, and $3,456,000, including $348,000 of non-cash interest expense, in the first quarter of 1994. The increase in interest expense is primarily attributable to higher interest rates and higher outstanding indebtedness in 1995. The income tax provision was $4,077,000, or 53.9% of income before income taxes, in the first quarter of 1995 compared to $7,874,000, or 49.4% of income before income taxes, in the first quarter of 1994. The effective income tax rate for both periods was higher than the statutory rate primarily because of non- deductible goodwill amortization. As a result of the foregoing factors, the Company had net income of $3,491,000, or 2.1% of net sales, for the first quarter of 1995 compared to $8,060,000, or 5.5% of net sales, for the first quarter of 1994. =================================================================== PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: None (b) Reports on Form 8-K: None ================================================================= SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AnnTaylor, Inc. Date: June 13, 1995 By: /s/ Paul E. Francis -------------------------- Paul E. Francis Executive Vice President - Finance and Administration (Chief Financial Officer) Date: June 13, 1995 By: /s/ Walter J. Parks ---------------------------- Walter J. Parks Senior Vice President - Finance (Principal Accounting Officer) EX-27 2 EXHIBIT 27 FDS
5 THIS SCHEDULE CONTAINS SUMMARY OF FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND CONDENSED CONSOLIDATED BALANCE SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000850090 ANNTAYLOR INC. 1,000 3-MOS FEB-03-1996 APR-29-1995 1,132 0 69,771 750 110,313 192,784 142,595 34,001 632,730 71,329 0 1 0 0 329,708 632,730 168,306 168,306 91,355 91,355 64,885 0 4,498 7,568 4,077 0 0 0 0 3,491 0 0
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