-----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, NGynr87teSCcYpCk/Dooh38+1Dz1vHhQobSQXNM8WT2/rw/EkyIMLIcVh/LHo6vo qjhvbA0LknyiDE+RXHHAAQ== 0000950144-01-003500.txt : 20010314 0000950144-01-003500.hdr.sgml : 20010314 ACCESSION NUMBER: 0000950144-01-003500 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010101 ITEM INFORMATION: FILED AS OF DATE: 20010313 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SERVICE MERCHANDISE CO INC CENTRAL INDEX KEY: 0000089107 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISC GENERAL MERCHANDISE STORES [5399] IRS NUMBER: 620816060 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-09223 FILM NUMBER: 1567398 BUSINESS ADDRESS: STREET 1: 7100 SERVICE MERCHANDISE DR CITY: BRENTWOOD STATE: TN ZIP: 37027 BUSINESS PHONE: 6156606000 MAIL ADDRESS: STREET 1: PO BOX 24600 CITY: NASHVILLE STATE: TN ZIP: 37202 8-K 1 g67551e8-k.txt SERVICE MERCHANDISE COMPANY, INC. 1 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: January 1, 2001 SERVICE MERCHANDISE COMPANY, INC. (Debtor-in-Possession as of March 27, 1999) - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Tennessee 1-9223 62-0816060 - -------------------------------------------------- ------------------------ ------------------- (State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.) 7100 Service Merchandise Boulevard, Brentwood, TN 37027 - -------------------------------------------------- ------------------- (Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (615) 660-6000 Not Applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) 2 Item 5. Other Events Service Merchandise Company, Inc. (the "Company") has filed (i) the remaining portion of its monthly operating report for the period commencing January 1, 2001 and ending January 28, 2001 (the "Operating Report") with the United States Bankruptcy Court for the Middle District of Tennessee, copies of which are attached hereto as Exhibit 99 in connection with its voluntary petitions for reorganization under Chapter 11 of title 11 of the United States Bankruptcy Code in Case No. 399-02649. The Company cautions readers not to place undue reliance upon the information contained therein. The Operating Report contains unaudited information, and is in a format, prescribed by the applicable bankruptcy laws. There can be no assurance that the Operating Report is complete. The Operating Report also contains information for periods which may be shorter or otherwise different from those contained in the Company's reports pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such information may not be indicative of the Company's financial condition or operating results for the periods reflected in the Company's financial statements or in its reports pursuant to the Exchange Act and readers are cautioned to refer to the Exchange Act filings. Moreover, the Operating Report and other communications from the Company may include forward-looking statements subject to various assumptions regarding the Company's operating performance that may not be realized and are subject to significant business, economic and competitive uncertainties and contingencies, including those described in this report, many of which are beyond the Company's control. Consequently such matters should not be regarded as a representation or warranty by the Company that such matters will be realized or are indicative of the Company's financial condition or operating results for future periods or the periods covered in the Company's reports pursuant to the Exchange Act. Actual results for such periods may differ materially from the information contained in the Operating Report and the Company undertakes no obligation to update or revise the Operating Report. The Operating Report includes a Rolling Revised Cash Flow Forecast which is a forward-looking statement subject to various assumptions regarding the Company's business, operating performance and other factors including revenues, expenses, asset dispositions, trade terms and capital expenditures, and various risks and uncertainties including those set forth below. This information should be read in conjunction with the Company's reports filed pursuant to the Exchange Act. Readers are cautioned that such information is being reported publicly because it is being distributed to a large number of the Company's vendors for purposes of their credit analyses. The Company undertakes no obligation to update such information or to disclose similar information in future operating reports. The Rolling Revised Cash Flow Forecast was not examined, reviewed or compiled by the Company's independent public accountants. The Rolling Revised Cash Flow Forecast is subject to future adjustments, if any, that could materially affect such information. The Company's liquidity, capital resources and results of operations are subject to a number of risks and uncertainties including, but not limited to, the following: the ability of the Company to continue as a going concern; the ability of the Company to operate pursuant to the terms of, and access liquidity from, the DIP to Exit Facility and the vendor line of credit; the ability of the Company to 3 develop, prosecute, confirm and consummate on a timely basis one or more plans of reorganization with respect to the Chapter 11 Cases and to exit Chapter 11 on a timely basis; trends in the economy as a whole which may affect consumer confidence and consumer demand for the types of goods sold by the Company; the ability of the Company to successfully implement on a timely basis the 2001 Business Plan initiatives; risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the Company's cases to Chapter 7 cases; the ability of the Company to reduce its workforce and related expenses and to achieve anticipated cost savings; the ability of the Company to obtain trade credit, and shipments and terms with vendors and service providers for current orders; the ability of the Company to sublease successfully additional portions of its real estate; the successful consolidation of its distribution centers; the ability of the Company to access liquidity from the DIP to Exit Facility upon its anticipated emergence from Chapter 11; potential adverse developments with respect to the Company's liquidity or results of operations; competitive pressures from other retailers, including specialty retails and discount stores, which may affect the nature and viability of the Company's business strategy; the seasonal nature of the Company's business and the ability of the Company to predict consumer demand as a whole, as well as demand for specific goods; the ability to fund and execute its business plan; the ability of the Company to attract, retain and compensate key executives and associates; the ability of the Company to attract and retain customers; uncertainties with respect to continued public trading in the Company's securities; potential adverse publicity; and uncertainties regarding real estate occupancy and development costs, including the substantial fixed investment costs associated with opening, maintaining or closing a Company store. 4 SIGNATURES Pursuant to the requirements of Section 12 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. SERVICE MERCHANDISE COMPANY, INC. Date: March 12, 2001 By: /s/ C. Steven Moore ---------------------------------------------- C. Steven Moore Senior Vice President, Chief Administrative Officer, Secretary and General Counsel 5 EXHIBIT INDEX
No. Exhibit - ---- ----------------------------------------------------------------------- 99 Remaining Portion of Monthly Operating Report for the period ended January 28, 2001.
EX-99 2 g67551ex99.txt REMAINING PORTION OF MONTHLY OPERATING REPORT 1 EXHIBIT 99 UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF TENNESSEE In re: Case No.: 399-02649 THROUGH 399-02680 SERVICE MERCHANDISE COMPANY, INC. --------------------------- --------------------------------- Judge: PAINE --------------------------- Chapter 11 Debtor(s) MONTHLY OPERATING REPORT FOR PERIOD ENDING January 28, 2001 ---------------- COMES NOW, SERVICE MERCHANDISE COMPANY, INC. ----------------------------------------------------- Debtor-In-Possession, and hereby submits its Preliminary Monthly Operating Report for the period commencing January 1, 2001 and ending January 28, 2001 as shown by the report and exhibits consisting of 8 pages and containing the following as indicated: X Remaining portion of the Monthly Reporting Questionnaire (Attachment 1) ----- X Comparative Balance Sheets (Forms OPR-1 & OPR-2) ----- N/A Summary of Accounts Receivable (Form OPR-3) ----- X Schedule of Postpetition Liabilities (Form OPR-4) ----- X Statement of Income (Loss) (Form OPR-5) ----- I declare under penalty of perjury that this report and all the attachments are true and correct to the best of my knowledge and belief. This report is based on preliminary unaudited results, and includes those reports agreed upon as appropriate at this time between the Debtor and the U.S. Trustee. The Debtor has filed with the U. S. Trustee on February 16, 2001, the preliminary January 28, 2001, Monthly Operating Report, which included certain schedules, including payroll, insurance, receipts and disbursements, payment to professionals and bank accounts. I also hereby certify that the original Monthly Operating Report was filed with the Bankruptcy Court Clerk and a copy delivered to the U.S. Trustee. Date: 3/5/01 DEBTOR - IN - POSSESSION -------- By: /s/ KENNETH A. CONWAY ------------------------------------------------ Name and Title: KENNETH A. CONWAY, VICE PRESIDENT AND CONTROLLER ------------------------------------------------ Address: 7100 SERVICE MERCHANDISE DRIVE ------------------------------------------------ BRENTWOOD, TENNESSEE 37027 ------------------------------------------------ Telephone No: (615) 660-3340 ------------------------------------------------ Note: Report subject to further verification and account reconciliation procedures Page 1 2 CHAPTER 11 MONTHLY OPERATING REPORT MONTHLY REPORTING QUESTIONNAIRE CASE NAME: SERVICE MERCHANDISE COMPANY, INC. ET. AL. CASE NUMBER: 399-02649 THROUGH 399-02680 PERIOD: JANUARY 1, 2001 THROUGH JANUARY 28, 2001 ROLLING REVISED CASH FLOW FORECAST (DOLLARS IN THOUSANDS)
ACTUAL ACTUAL FORECAST FORECAST FORECAST 01/28/01 02/25/01 03/04/01 04/01/01 04/29/01 --------- --------- --------- --------- --------- Ending total revolver balance $ 141,748 $ 155,713 $ 154,514 $ 175,699 $ 213,559 Term loan 60,000 60,000 60,000 60,000 60,000 Standby letters of credit 24,934 23,895 23,895 23,895 23,895 Trade letters of credit 20,912 23,538 24,816 20,196 19,979 --------- --------- --------- --------- --------- Total extensions of credit 247,594 263,146 263,225 279,790 317,433 -- Borrowing base 393,983 409,138 400,087 401,644 422,615 --------- --------- --------- --------- --------- Availability $ 146,389 $ 145,992 $ 136,862 $ 121,854 $ 105,182 ========= ========= ========= ========= =========
Page 2 3 FORM OPR- 1 AND 2 SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (DEBTOR-IN-POSSESSION) (DOLLARS IN THOUSANDS)
JANUARY 28, DECEMBER 31, 2001 2000 ----------- ------------ ASSETS Current Assets: Cash and cash equivalents $ 19,426 $ 31,838 Accounts receivable 5,641 7,061 Inventories 452,277 440,324 Prepaid expenses and other assets 17,564 11,025 --------- --------- TOTAL CURRENT ASSETS 494,908 490,248 --------- --------- PROPERTY AND EQUIPMENT Owned assets, net of accumulated depreciation 362,410 364,898 Capitalized leases, net of accumulated amortization 12,138 12,330 --------- --------- TOTAL PROPERTY AND EQUIPMENT 374,548 377,228 --------- --------- Other assets and deferred charges 56,942 58,376 --------- --------- TOTAL ASSETS $ 926,398 $ 925,852 ========= ========= LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY Liabilities Not Subject To Compromise Current Liabilities: Notes payable to banks $ 141,747 $ 89,143 Accounts payable 37,060 48,570 Accrued expenses 151,114 158,843 State & local sales tax 6,299 16,300 Current maturities capitalized leases 94 93 --------- --------- TOTAL CURRENT LIABILITIES 336,314 312,949 --------- ---------
Page 3 4 FORM OPR- 1 AND 2 SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (DEBTOR-IN-POSSESSION) (DOLLARS IN THOUSANDS) Long-Term Liabilities: Long-term debt $ 60,000 $ 60,000 Capitalized lease obligations 2,388 2,396 Liabilities Subject To Compromise: Accrued restructuring costs 42,188 42,189 Capitalized lease obligations 21,968 22,288 Long-term debt 416,041 416,709 Accounts payable 197,839 197,830 Accrued expenses 69,115 68,235 --------- --------- Total Liabilities Subject To Compromise 747,151 747,251 TOTAL LIABILITIES 1,145,853 1,122,596 --------- --------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' (DEFICIT) EQUITY Common stock 49,936 49,935 Additional paid-in-capital 5,881 5,881 Deferred compensation (212) (221) Retained (deficit) earnings (275,060) (252,339) --------- --------- TOTAL SHAREHOLDERS' (DEFICIT) EQUITY (219,455) (196,744) TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY $ 926,398 $ 925,852 ========= =========
Page 4 5 CHAPTER 11 MONTHLY OPERATING REPORT MONTHLY REPORTING QUESTIONNAIRE CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al. CASE NUMBER: 399-02649 THROUGH 399-02680 PERIOD: JANUARY 1, 2001 THROUGH JANUARY 28, 2001 SCHEDULE OF POST PETITION LIABILITIES-ACCOUNTS PAYABLE MONTH ENDED: 01/28/2001 FORM OPR-4 (DOLLAR IN THOUSANDS)
TOTAL --------- Trade Accounts Payable (Merchandise) $ 37,060
TOTAL --------- Expense & other payables $ 151,114
Page 5 6 CHAPTER 11 MONTHLY OPERATING REPORT MONTHLY REPORTING QUESTIONNAIRE CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al. CASE NUMBER: 399-02649 THROUGH 399-02680 PERIOD: JANUARY 1, 2001 THROUGH JANUARY 28, 2001 SCHEDULE OF POST PETITION LIABILITIES FORM OPR-4 (DOLLARS IN THOUSANDS)
DATE DATE TOTAL TAXES PAYABLE INCURRED DUE DUE ------------------------------------------ Federal income tax ** Various Various $ 7,342 State income tax Various Various $ (1) --------- SUBTOTAL $ 7,341 --------- Sales/use tax SUBTOTAL * Various Various $ 6,437 --------- Personal property tax * Various Various $ 1,657 Real estate taxes * Various Various $ 10,633 Inventory taxes * Various Various $ -- Gross receipts/bus licenses * Various Various $ 222 Franchise taxes * Various Various $ 375 --------- SUBTOTAL $ 12,887 --------- --------- TOTAL TAXES PAYABLE $ 26,665 =========
* liability included in accrued expenses on OPR-2 ** tax reserve Page 6 7 CHAPTER 11 MONTHLY OPERATING REPORT MONTHLY REPORTING QUESTIONNAIRE CASE NAME: SERVICE MERCHANDISE COMPANY, INC. ET. AL. CASE NUMBER: 399-02649 THROUGH 399-02680 PERIOD: JANUARY 1, 2001 THROUGH JANUARY 28, 2001 SCHEDULE OF POST PETITION LIABILITIES FORM OPR-4 (DOLLARS IN THOUSANDS)
DATE TOTAL DUE INCURRED DATE DUE (1/28/01 BALANCE) ----------------------------------------------- POST PETITION SECURED DEBT Revolver borrowings 04/14/00 04/14/04 $ 141,747 Facility standby letters of credit 04/14/00 04/14/04 24,934 Facility trade letters of credit 04/14/00 04/14/04 20,912 Term loans 04/14/00 04/14/04 60,000 --------- TOTAL EXTENSIONS OF CREDIT $ 247,593 ========= ACCRUED INTEREST PAYABLE $ 1,337 =========
Page 7 8 FORM OPR-5 SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (DEBTOR-IN-POSSESSION) (DOLLARS IN THOUSANDS)
ACTIVITY JANUARY 1, 2001 THROUGH JANUARY 28, 2001 ---------------- Net Sales $ 41,127 Costs of merchandise sold and buying and occupancy expense 34,120 ---------- Gross margin after cost of merchandise sold and buying and occupancy expenses 7,007 Selling, General and Administrative Expenses: Net Employment Expense 16,995 Net Advertising 768 Banking and Other Fees 637 Real Estate and Other Taxes 1,954 Supplies 492 Communication and Equipment 341 Travel 249 UCC and Other Services (873) Legal and Professional 393 Sales and Shipping 24 Insurance 486 Miscellaneous 29 Credit Card Services (56) ---------- Total Selling, General and Administrative Expenses 21,439 Other expense/(income), net (14)
Page 8 9 FORM OPR-5 SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (DEBTOR-IN-POSSESSION) (DOLLARS IN THOUSANDS) Restructuring charge (credit) $ -- Depreciation and amortization 3,179 ---------- Earnings (loss) before interest, reorganization items, and income tax (17,597) Interest expense - debt 2,732 Interest expense - capitalized leases 275 Earnings (loss) before reorganization items, and income tax (20,604) ---------- Reorganization Items: Legal and Professional 1,949 Miscellaneous fees 209 Loss (Gain) on Disposal of Assets (62) Close Store Charges 21 ---------- Total Reorganization Items 2,117 Earnings (loss) before income tax (22,721) Income tax benefit -- Cumulative Effect of Change in Accounting Principles -- ---------- Net earnings (loss) $ (22,721) ==========
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