-----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, L9tQo3gXIz5ogqO7bXza3Unc1jqJr4VsnZqtUYFpxxtLiJibgqEtxlH1dAyBKatq kfNa9f9VDdRNW7ATxdeUfg== 0000950144-99-008435.txt : 19990702 0000950144-99-008435.hdr.sgml : 19990702 ACCESSION NUMBER: 0000950144-99-008435 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990701 ITEM INFORMATION: FILED AS OF DATE: 19990701 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: 99658215 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 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: July 1, 1999 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 its monthly operating report for the period commencing May 3, 1999 and ending May 30, 1999 (the "Operating Report") with the United States Bankruptcy Court for the Middle District of Tennessee, a copy of which is 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 investors or potential investors 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, from the prospective of an investor or potential investor in the Company's securities, 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 investors and potential investors in the Company's securities 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 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 such 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. Investors and potential investors in the Company's securities 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 complied 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. 2 3 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 the DIP Facility; the ability of the Company to operate successfully under a Chapter 11 proceeding; approval of plans and activities by the Bankruptcy Court; risks associated with operating a business in Chapter 11; the ability of the Company to create and have approved a reorganization plan in the Chapter 11 Cases; adverse developments with respect to the Company's liquidity or results of operations; the ability of the Company to obtain shipments and negotiate terms with vendors and service providers for current orders; the ability to conduct inventory liquidation sales to improve liquidity; the ability to develop, fund and execute an operating plan for the Company; the ability of the Company to attract and retain key executives and associates; competitive pressures from other retailers, including specialty retailers and discount stores, which may affect the nature and viability of the Company's business strategy; 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 to maintain gross profit margins; the seasonal nature of the Company's business (including risks related to seasonal inventory increases) and the ability of the Company to predict consumer demand as a whole, as well as demand for specific goods; the ability of the Company to attract and retain customers; costs associated with the shipping, handling and control of inventory and the Company's ability to optimize its supply chain; potential adverse publicity; availability and cost of management and labor employed; real estate occupancy and development costs, including the substantial fixed investment costs associated with opening, maintaining or closing a Company store; the potential delisting of the Company's securities and the absence of an active public trading market; the ability of the Company to provide a private label credit card; and the ability to effect conversions to new technological systems, including becoming Year 2000 compliant. 3 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: July 1, 1999 By: /s/ C. Steven Moore ------------------------------ C. Steven Moore Vice President 4 5 EXHIBIT INDEX No. Exhibit - ---------- ------------------------------------------------------------- 99 Operating Report for the period ending May 30, 1999 EX-99 2 OPERATING REPORT 1 EXHIBIT 99 OPERATING REPORT The following is the text of the Operating Report filed with the Bankruptcy Court by Service Merchandise Company, Inc. for the period ending May 30, 1999. 2 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 May 30, 1999 --------------------------------------------- COMES NOW, SERVICE MERCHANDISE COMPANY, INC. ------------------------------------------------------------------------------------ Debtor-In-Possession, and hereby submits its Monthly Operating Report for the period commencing May 3, 1999 ---------------------------- and ending May 30, 1999 as shown by the report and exhibits consisting of 16 pages and ----------------- ---------- containing the following as indicated:
X 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. 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: 6/21/99 DEBTOR - IN - POSSESSION ----------------- Note: By: /S/ Tom Garrett -------------------------------------------------------------------------- Name and Title: TOM GARRETT, SENIOR VICE PRESIDENT & CFO ------------------------------------------------------------- Address: 7100 SERVICE MERCHANDISE DRIVE ------------------------------------------------- BRENTWOOD, TENNESSEE 37027 ------------------------------------------------- Telephone No: 660-3477 ------------------------------------------------- Note: Report subject to further verification and account reconciliation procedures
3 CHAPTER 11 Attachment 1 (Page 1) MONTHLY OPERATING REPORT MONTHLY REPORTING QUESTIONNAIRE CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al. CASE NUMBER: 399-02649 THROUGH 399-02680 PERIOD: MAY 3, 1999 THROUGH MAY 30, 1999 * 1. Payroll
WAGES TAXES OFFICERS TITLE GROSS NET DUE PAID SAM CUSANO CHIEF EXECUTIVE OFFICER 50,727.28 34,876.65 4,590.41 14,577.09 STEVE MOORE SENIOR VICE PRESIDENT, CHIEF ADMINISTRATIVE OFFICER, GENERAL COUNSEL & SECRETARY 27,929.50 18,215.40 2,047.22 6,534.57 TOM GARRETT SENIOR VICE PRESIDENT & CFO 25,942.11 18,599.93 1,682.46 5,310.83 STEVE MCCANN SENIOR VICE PRESIDENT, FINANCE 19,053.21 11,057.68 1,391.45 4,287.07 & CHIEF ACCOUNTING OFFICER GARY SEASE SENIOR VICE PRESIDENT, LOGISTICS 25,349.57 14,950.96 1,987.80 5,542.37 CHARLES SEPTER PRESIDENT & CHIEF OPERATING OFFICER 39,363.51 23,871.89 3,475.39 9,807.40 KENNETH BRAME SENIOR VICE PRESIDENT, INFORMATION SERVICES & CHIEF INFORMATION OFFICER 23,252.02 14,638.78 1,690.34 4,970.13 ROBERT J. PINDRED VICE PRESIDENT AND TREASURER 22,890.73 15,862.79 785.26 6,278.68 SANDRA CARY VICE PRESIDENT, ASST. TAX: FIN 7,709.37 5,523.82 524.69 1,555.80 J0E M. ELLIOTT AVP, PROPERTY ADMINISTRATION 8,180.28 5,081.67 505.47 1,431.74 ERIC KOVATS VICE PRESIDENT, REGIONAL: STORES. 15,487.59 12,990.01 1,167.99 3,444.45 The associate listed below received bonus and relocation assistance which is included in the amounts above ROBERT PINDRED 12,121.49
* Excludes drawings under prepetition letters of credit 4 CHAPTER 11 Attachment 1 (Page 1) MONTHLY OPERATING REPORT MONTHLY REPORTING QUESTIONNAIRE CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al. CASE NUMBER: 399-02649 THROUGH 399-02680 PERIOD: MAY 3, 1999 THROUGH MAY 30, 1999 2. INSURANCE
COVERAGE POLICY EXPIRATION PREMIUM DATE COVERAGE TYPE NAME OF CARRIER AMOUNT NUMBER DATE AMOUNT PAID THRU - ------------------------------------------------------------------------------------------------------------------------------------ Property Security Ins Co of Hartford $5 Million CCIPW12011 5/1/00 $921,750 5/1/00 Commonwealth $5 Million US2387 5/1/00 $92,419 5/1/00 Westchester Fire $15 Million 1XA394310 5/1/00 $75,000 5/1/00 Allianz Insurance Co $12 Million CLP1034720 5/1/00 $30,000 5/1/00 TIG Insurance Co $13 Million XPT38797554 5/1/00 $32,500 5/1/00 Westchester Fire $30 Million 1XA394311 5/1/00 $15,000 5/1/00 Allianz Insurance Co $12 Million CLP1034720 5/1/00 $22,500 5/1/00 Allianz Insurance Co $25 Million CLP1034720 5/1/00 $10,000 5/1/00 Boiler & Machinery Hartford Steam Boiler $10 Million BMTBD 5/1/00 $11,900 5/1/00 Transit Security Ins Co of Hartford $1 Million CCIMG72820 5/1/00 $10,000 5/1/00 Ocean Cargo Phoenix Assurance Co of NY $10 Million CR37211 5/1/00 $40,000 5/1/00 Special Crime Reliance Insurance Co $25 Million NFK1951937 5/1/02 $13,458 5/1/02 Crime National Union Fire Ins Co $10 Million 858-0797 3/1/00 $56,505 3/1/00 Fiduciary National Union Fire Ins Co $10 Million 267-81-30 3/1/00 $19,462 3/1/00 Employment Practices Chubb Insurance Co $10 Million 81278901A 3/1/00 $221,575 3/1/00 Liability Royal Insurance Co $10 Million PSF000010 3/1/00 $88,200 3/1/00 Directors & Officers Continental Insurance Co $10 Million 300714943 3/1/01 $453,500 3/1/01 Chubb Insurance Co $10 Million 81278902-A 3/1/01 $266,666 3/1/01 Royal Insurance Co $10 Million PSF000009 3/1/01 $133,000 3/1/01 Umbrella Federal Insurance Co $50 Million 79763295 1/1/02 $79,196 1/1/02 Excess Liability American Guarantee & Liab $50 Million EUO2876107-01 1/1/02 $25,000 1/1/02 International Cigna Insurance Co $1 Million PHFTBD 1/1/00 $2,500 1/1/00 Punitive Damages Chubb Atlantic Indemnity $50 Million PUNTBD1 1/1/00 $17,160 1/1/00 Punitive Damages - Excess Zurich International Bermuda $50 Million PUNTBD2 1/1/00 $5,000 1/1/00 General Liability - Va. Beach Hartford Fire Insurance Co $2 Million 20UENTBD 1/1/00 $8,020 1/1/00 General Liability Cigna Insurance Co $5 Million XSLG19307931 1/1/00 $13,225 6/30/99 Workers' Compensation Pacific Employers Ins Co Statutory WLRC42316830 1/1/00 $17,797 6/30/99 WC Excess Cigna Insurance Co Statutory XWCO11865 1/1/00 $1,748 6/30/99 WC Contractual Indemnity Illinois Union Insurance Co Statutory CTPG19307992 1/1/00 $4,990 6/30/99 Auto Pacific Employers Ins Co $1 Million ISAHO7569488 1/1/00 $2,742 6/30/99
5 CHAPTER 11 Attachment 1 (Page 2) MONTHLY OPERATING REPORT MONTHLY REPORTING QUESTIONNAIRE CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al. CASE NUMBER: 399-02649 THROUGH 399-02680 PERIOD: MAY 3, 1999 THROUGH MAY 30, 1999 3. BANK ACCOUNTS TOTAL CASH AND CASH EQUIVALENTS CASH IN STORES AND HOME OFFICE HOME OFFICE $ 14,750 RETAIL SAFE FUNDS $ 2,314,964 CORPORATE ACCOUNTS TOTAL $ 1,631,893 STORE DEPOSITORY ACCOUNTS SOCIETY NATIONAL BANK $ 304,983 BANK OF BOSTON $ 954,244 BANK OF BOSTON CONNECTICUT $ 258,415 MERCANTILE BANK $ 21,414 FIRST UNION $ 3,740,333 HARRIS TRUST $ 1,240,357 BANK ONE LOUISIANA $ 1,072,538 FLEET BANK $ 5,338 ABN - AMRO BANK $ 805,771 COMERICA BANK $ 265,618 AM SOUTH $ 1,280,206 BANK OF AMERICA CALIFORNIA $ 1,146,102 NORWEST BANK $ 638,131 FIRST AMERICAN NATIONAL BANK $ 1,810,244 BANK OF OKLAHOMA $ 185,014 CHASE BANK OF TEXAS $ 1,235,219 HIBERNIA $ 149,333 SINGLE STORE DEPOSITORY ACCOUNTS $ 4,307,614 FIRST NATIONAL BANK OF MARYLAND $ 153,587 FIFTH THIRD BANK $ 74,495 WELLS FARGO BANK $ 1,646,038 NATIONSBANK $ 1,092,518 NBD $ 490,850 PNC BANK $ 646,795 CREDIT CARD CASH ACCOUNTS (SALES PROCESSED BY CREDIT CARD COMPANY) TOTAL $15,269,084 OTHER DEPOSITORY ACCOUNTS MUSCULAR DYSTROPHY ASSOCIATION $ 657,997 OTHER CASH ACCOUNTS $ 99,590 TOTAL CASH & CASH EQUIVALENTS PER GENERAL LEDGER $43,513,435
6 CHAPTER 11 Attachment 1 (Page 2) MONTHLY OPERATING REPORT MONTHLY REPORTING QUESTIONNAIRE CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al. CASE NUMBER: 399-02649 THROUGH 399-02680 PERIOD: MAY 3, 1999 THROUGH MAY 30, 1999 4. Payments to Professionals May 3, 1999 through May 30, 1999
Vendor # Vendor Name Check Amt. Check Date Check # - --------------------------------------------------------------------------------------------------------------------------- 99329 Aegis Property Tax $11,319.31 5/21/99 30001959 3323 AvTax $7,676.25 5/7/99 13005165 99104 Deloitte & Touche $75,209.00 5/28/99 B0017555 57117 Jay Alix & Associates $57,886.27 5/27/99 30003450 98818 Resources Connection LLC $1,950.00 5/19/99 30000595 40443 Robert J. Bard, Esq. $500.00 5/3/99 13004736 99459 Robert L. Berger & Associates $23,598.48 5/11/99 B0017145 99459 Robert L. Berger & Associates $44,612.91 5/19/99 B0017351 99277 Rosemont & Associates $21,137.50 5/7/99 13005179 99445 SGO Joint Venture $99,962.05 5/3/99 13004744 99445 SGO Joint Venture $8,978.11 5/4/99 13004798 99445 SGO Joint Venture $15,068.33 5/5/99 13004903 99445 SGO Joint Venture $12,511.84 5/6/99 13004988 99445 SGO Joint Venture $34,693.16 5/10/99 13005351 98378 Skadden Arps, Slate, Meagher & Flom $95,711.00 5/28/99 B0017554
7 CHAPTER 11 Attachment Attachment 1 (Page 3 & 4) MONTHLY OPERATING REPORT MONTHLY REPORTING QUESTIONNAIRE CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al. CASE NUMBER: 399-02649 THROUGH 399-02680 MONTH OF: MAY 3, 1999 THROUGH MAY 30, 1999 RECEIPTS AND DISBURSEMENTS May 3, 1999 - May 30, 1999 (Dollars in Thousands)
Actual Actual Actual Actual Total Monday 5/3/99 5/10/99 5/17/99 5/24/99 5/3/99 Sunday 5/9/99 5/16/99 5/23/99 5/30/99 5/30/99 ------------------------------------------------------------- Receipts: Sales Receipts 49,606 53,223 36,933 37,989 177,751 Miscellaneous Receipts -- 6,139 -- -- 6,139 ------------------------------------------------------------- Total Available collections $49,606 $59,362 $36,933 $37,989 $183,890 Disbursements: Merchandise disbursements $ 7,065 $12,446 $14,350 $18,483 52,344 Non-merchandise disbursements 20,829 14,431 15,886 17,502 68,648 ------------------------------------------------------------- Total Disbursements: $27,894 $26,877 $30,236 $35,985 $120,992 ------------------------------------------------------------- Change in cash $21,712 $32,485 $ 6,697 $ 2,004 $ 62,898 -------------------------------------------------------------
8 CHAPTER 11 MONTHLY OPERATING REPORT MONTHLY REPORTING QUESTIONNAIRE CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al. CASE NUMBER: 399-02649 THROUGH 399-02680 MONTH OF: MAY 3, 1999 THROUGH MAY 30, 1999 Rolling Revised Cash Flow Forecast (Dollars in Thousands) Note: This forecast is based on a number of assumptions and is subject to a number of risk factors, which are set forth in the Company's filings with the Securities and Exchange Commission. This forecast should be read in conjunction with such assumptions and risk factors.
Actual Forecast Forecast Forecast Forecast Week 1 Week 1 Week 1 Week 1 Monday 6/7/99 6/14/99 7/12/99 8/9/99 9/6/99 Sunday 6/13/99 6/20/99 7/18/99 8/15/99 9/12/99 ---------------------------------------------------------------- Ending Total Revolver Balance $ 45,420 $ 49,181 $ 52,331 $ 98,035 $154,738 ---------------------------------------------------------------- Term Loan 100,000 100,000 99,750 99,750 99,750 Standby Letters of Credit 30,167 30,167 30,167 30,167 30,167 Trade Letters of Credit 33,725 36,000 50,000 55,000 55,000 ---------------------------------------------------------------- Total Extensions of Credit $209,312 $215,348 $232,248 $282,952 $339,655 ---------------------------------------------------------------- ---------------------------------------------------------------- Borrowing Base (Net of Interim Reserve) $436,828 $454,648 $461,120 $485,954 $515,584 ---------------------------------------------------------------- Availability (Net of Interim Reserve) $227,516 $239,300 $228,872 $203,002 $175,929 ---------------------------------------------------------------- Borrowing Base (Before Interim Reserve) $486,828 $504,648 $511,120 $535,954 $565,584 ---------------------------------------------------------------- Availability (Before Interim Reserve) $277,516 $289,300 $278,872 $253,002 $225,929
Note: The anticipated increase in revolver borrowings and decrease in availability in August and September reflects, among other things, seasonal inventory increases relating to the Fall Selling Season 9 FORM OPR -- 1 AND 2 SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (DEBTOR-IN-POSSESSION) (IN THOUSANDS)
MAY 2, MAY 30, 1999 1999 ----------- ----------- ASSETS Current Assets: Cash and cash equivalents $ 67,699 $ 43,513 {A} Accounts receivable 31,344 32,813 Inventories 649,836 598,834 Prepaid expenses and other assets 44,471 39,972 {B} ----------- ----------- TOTAL CURRENT ASSETS 793,350 715,132 Net property and equipment - owned 404,513 401,987 Net property and equipment - leased 19,620 19,230 Other assets and deferred charges 48,928 49,660 ----------- ----------- TOTAL ASSETS $ 1,266,411 $ 1,186,009 =========== =========== LIABILITIES AND SHAREHOLDER'S EQUITY Liabilities Not Subject To Compromise Current Liabilities: Notes payable $ 132,994 $ 65,303 {C} Accounts payable 9,504 12,925 {D} Accrued expenses 131,960 135,010 Sales & Local Sales Tax 16,704 13,410 Income taxes 7,631 7,625 Current maturities long-term debt 1,000 1,000 ----------- ----------- TOTAL CURRENT LIABILITIES 299,794 235,273
10 FORM OPR -- 1 AND 2 SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (DEBTOR-IN-POSSESSION) (IN THOUSANDS) Long Term Liabilities: Long-term debt 99,000 99,000 Liabilities Subject To Compromise: Restructure 93,834 89,559 Capital Lease Obligations 47,433 46,924 Long Term Debt 465,317 465,317 Accounts Payable 190,580 195,125 Accrued Expense 71,509 70,896 ----------- ----------- Liabilities Subject To Compromise 868,673 867,821 TOTAL LIABILITIES 1,267,467 1,205,093 ----------- ----------- COMMITMENTS AND CONTINGENCIES SHAREHOLDER'S EQUITY Common Stock 50,084 50,084 Additional paid-in-capital 7,027 7,027 Deferred Compensation (1,353) (1,322) Accumulated other comprehensive income (869) (869) Retained Earnings (55,945) (71,006) ----------- ----------- Shareholders' equity (1,056) (16,086) TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 1,266,411 $ 1,186,009 =========== ===========
{A} Reduction in cash is primarily a result of Note payable paydowns from high cash in transit at May 2, 1999 {B} Prepaid rent of approximately $6,000 was included in the May 2 balance due to payment timing {C} Cash generated from store closing sales was used to pay down Notes payable {D} While the Company has received credit terms from some of its vendors, the lead time involved in ordering goods has not yet resulted in a material increase in accounts payable 11 CHAPTER 11 MONTHLY OPERATING REPORT MONTHLY REPORTING QUESTIONNAIRE CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al. CASE NUMBER: 399-02649 THROUGH 399-02680 PERIOD: MAY 3, 1999 THROUGH MAY 30, 1999 SUMMARY OF ACCOUNTS RECEIVABLE Month Ended: 05/30/99 FORM OPR-3 NOT APPLICABLE 12 CHAPTER 11 MONTHLY OPERATING REPORT MONTHLY REPORTING QUESTIONNAIRE CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al. CASE NUMBER: 399-02649 THROUGH 399-02680 PERIOD: MAY 3, 1999 THROUGH MAY 30, 1999 SCHEDULE OF POST PETITION LIABILITIES-ACCOUNTS PAYABLE Month Ended: 05/30/99 FORM OPR-4
Total current ------------ ------------ Trade Accounts Payable (Merchandise) $ 12,924,916 $ 12,924,916 Total current ------------ ------------ Expense & other payables $135,010,586 $135,010,586
13 CHAPTER 11 MONTHLY OPERATING REPORT MONTHLY REPORTING QUESTIONNAIRE CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al. CASE NUMBER: 399-02649 THROUGH 399-02680 PERIOD: MAY 3, 1999 THROUGH MAY 30, 1999 SCHEDULE OF POST PETITION LIABILITIES FORM OPR-4
Date Date Total 0-30 TAXES PAYABLE Incurred Due Due Days ------------------------------------------------------ Federal Income Tax ** Various Various 7,700,791 7,700,791 State Income Tax Various Various (76,425) (76,425) -------------------------------- SUBTOTAL 7,624,366 7,624,366 -------------------------------- Sales/Use Tax Various Various 13,409,530 13,409,530 -------------------------------- Personal Property Tax * Various Various 418,628 418,628 Real Estate Taxes * Various Various 4,483,049 4,483,049 Inventory Taxes * Various Various 840,491 840,491 Gross Receipts/Bus Licenses * Various Various 33,100 33,100 Franchise Taxes * Various Various 41,414 41,414 -------------------------------- SUBTOTAL 5,816,682 5,816,682 -------------------------------- -------------------------------- TOTAL TAXES PAYABLE 26,850,578 26,850,578 ================================
* liability included in accrued expenses on OPR-2 ** tax reserve 14 CHAPTER 11 MONTHLY OPERATING REPORT MONTHLY REPORTING QUESTIONNAIRE CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al. CASE NUMBER: 399-02649 THROUGH 399-02680 PERIOD: MAY 3, 1999 THROUGH MAY 30, 1999 SCHEDULE OF POST PETITION LIABILITIES Month Ended: 05/30/99 FORM OPR-4 (In thousands)
TOTAL DUE DATE (5/30/99 INCURRED DATE DUE Balance) 0 - 30 DAYS POSTPETITION SECURED DEBT Revolver Borrowings 3/27/99 6/30/01 $ 65,303 $ 65,303 Facility Standby by L/C's 3/27/99 6/30/01 30,167 - Facility Trade L/C's 3/27/99 6/30/01 23,769 - Term Loans 3/27/99 6/30/01 100,000 100,000 --------- TOTAL EXTENSIONS OF CREDIT 219,239 POST PETITION UNSECURED DEBT - ACCRUED INTEREST PAYABLE 425
15 FORM OPR-5 SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (DEBTOR-IN-POSSESSION) (IN THOUSANDS)
ACTIVITY MAY 3, 1999 THROUGH MAY 30, 1999 ------------- Net Sales $ 157,206 Costs of merchandise sold and buying and occupancy expense 124,575 --------- Gross margin after cost of merchandise sold and buying and occupancy expenses 32,631 Selling, General and Administrative Expenses: Net Employment Expense 23,468 Net Advertising 4,103 Banking and Other Fees 1,754 Real Estate and Other Taxes 1,870 Supplies 1,071 Communication and Equipment 773 Travel 385 Security and Other Services 251 Legal and Professional 853
16 FORM OPR-5 SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (DEBTOR-IN-POSSESSION) (IN THOUSANDS) Insurance 826 Miscellaneous 2,441 Credit Card Services 967 --------- Total Selling, General and Administrative Expenses 38,763 Other income, net 4 Depreciation and amortization 3,366 --------- Earnings (loss) before interest, reorganization items, and income tax (9,502) Interest expense - debt 3,341 Interest expense - capitalized leases 363 --------- Earnings (loss) before reorganization items, and income tax (13,206) Reorganization Items: Legal and Professional 1,853 --------- Earnings (loss) before income tax (15,060) Income tax benefit -- --------- Net earnings (loss) $ (15,060) =========
Note: The Consolidated Statement of Operations reflects results of continuing stores and 121 stores closed by May 1999. The Company recorded net earnings of $5,320 on Net Sales of $154,592 from continuing operations. -----END PRIVACY-ENHANCED MESSAGE-----