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
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended......July 30, 1995.........
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ...............to.............
Commission File Number...............0-16376.................
THE VALLEY FAIR CORPORATION
.............................................................
(Exact name of registrant as specified in its charter)
DELAWARE 22-1727148
.............................................................
(State or other jurisdiction of (I.R.S. Employer)
incorporation or organization) (Identification No.)
260 Bergen Turnpike, Little Ferry, New Jersey 07643
.............................................................
(Address of principal executive offices) Zip Code
(201) 440-4000
.............................................................
(Registrant's telephone number, including area code)
NONE
.............................................................
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the 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....
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports to be filed by Sections 12, 13 or 15(D) of the Securities Exchange Act
of 1934 subsequent to the distribution of the securities under a plan confirmed
by a court. Yes....No....
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
368,034 shares July 30, 1995
<PAGE>
The Valley Fair Corporation and Subsidiary
C O N T E N T S
Consolidated Condensed Balance Sheets
July 30, 1995 and January 29, 1995
Consolidated Condensed Statements of Income Thirteen
Weeks and Twenty-six Weeks Ended July 30, 1995 and
Thirteen Weeks and Twenty-six Weeks Ended July 31, 1994
Consolidated Statements of Cash Flows -
Twenty-six Weeks Ended July 30, 1995
Twenty-six Weeks Ended July 31, 1994
Notes to Consolidated Condensed Financial Statements
Management's Discussion and Analysis of the Consolidated
Condensed Statements of Income
Other Information and Signatures
<PAGE>
THE VALLEY FAIR CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
July 30, 1995 January 29, 1995
------------- ----------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 3,030,480 $ 3,652,566
Accounts and notes receivable-net 956,978 903,471
Inventories 27,691,478 25,436,852
Prepaid expenses 849,050 460,404
Deferred income taxes 479,000 455,000
----------- -----------
Total current assets 33,006,986 30,908,293
Property, plant, and equipment, net 4,473,481 4,579,333
Other assets 264,443 296,605
----------- -----------
37,744,910 35,784,231
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilites:
Current maturities of long-term debt 79,057 423,949
Note payable - bank 12,670,000 9,375,000
Account Payable -- Trade 3,073,685 4,025,734
Affiliate 271,211 362,102
Accrued expenses and other current
liabilites 2,276,360 1,876,157
----------- -----------
Total current liabilites 18,370,313 16,062,942
----------- -----------
Long-term debt, less current maturities 257,714 701,861
Deferred income and security deposits 76,708 105,435
Deferred income taxes 469,000 445,000
----------- -----------
Total liabilites 19,173,735 17,315,238
----------- -----------
Stockholders' equity
Common stock par value $.30 per share,
authorized 666,666 shares, issued
368,034 shares at July 30, 1995
368,053 shares at January 29, 1995 110,410 110,416
Additional paid in capital 804,065 804,553
Retained earnings 17,656,700 17,554,024
----------- -----------
Total stockholders' equity 18,571,175 18,468,993
----------- -----------
Total liabilities and stockholders
equity $37,744,910 $35,784,231
=========== ===========
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>
THE VALLEY FAIR CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Twenty-six Weeks
Ended Ended Ended Ended
July 30,1995 July 31,1994 July 30,1995 July 31,1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales
excluding licensee $16,010,843 $16,259,716 $31,883,427 $32,542,219
departments
Cost of Sales 10,445,310 11,559,342 21,318,706 22,594,433
----------- ----------- ----------- -----------
5,565,533 4,700,374 10,564,721 9,947,786
Tenant departments
licensee revenue
and other 1,256,385 1,200,160 2,401,430 2,292,346
----------- ----------- ------------ -----------
6,821,918 5,900,534 12,966,151 12,240,132
----------- ----------- ------------ -----------
Expenses:
Selling, general
and administrative 6,363,313 6,178,427 12,282,329 12,245,210
Interest expense 262,724 223,013 512,646 403,555
----------- ----------- ------------ -----------
6,626,037 6,401,440 12,794,975 12,648,765
----------- ----------- ------------ -----------
Income before income
taxes 195,881 (500,906) 171,176 (408,633)
Income taxes 78,380 (204,400) 68,500 (167,000)
------------ ----------- ----------- -----------
Net income / loss 117,501 (296,506) 102,676 $(241,633)
============ =========== =========== ===========
Earnings per common share $ .32 $(0.81) $ .28 $ (0.66)
Weighted average number
of shares outstanding 368,040 368,244 368,043 368,269
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements.
<PAGE>
THE VALLEY FAIR CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Twenty-six Weeks Ended July 30, 1995 and
Twenty-six Weeks Ended July 31, 1994
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income 102,676 (241,633)
---------- ----------
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Gain on sale of assets (3,591) 0
Depreciation and amortization 303,833 434,498
Increase in accounts and
notes receivable (53,507) (333,599)
Increase in inventories (2,254,626) 813,844
Increase in prepaid items (388,646) (305,982)
Decrease in deferred income and
security deposits (28,727) (25,613)
Decrease in deferred taxes 0 (34,000)
Decrease in accounts payable and
accrued expenses (642,737) (1,499,207)
Decrease in other assets 32,162 18,148
---------- ----------
Total adjustments (3,035,839) (931,911)
---------- ----------
Net cash used by operating
activities (2,933,163) (1,173,544)
---------- ----------
Cash flows from investing activities:
Capital expenditures (194,390) (241,287)
---------- ----------
Net cash used in investing
activities (194,390) (241,287)
---------- ----------
(continued)
<PAGE>
<CAPTION>
THE VALLEY FAIR CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Twenty-six Weeks Ended July 30, 1995 and
Twenty-six Weeks Ended July 31, 1995
1995 1994
---------- ----------
<S> <C> <C>
Cash flows from financing activities:
Proceeds from issuance of
debt 3,295,000 1,527,063
Principal payments of debt (789,039) (717,581)
Purchase of common stock (494) (2,430)
---------- ----------
Net cash provided by
financing activities 2,505,467 807,052
---------- ----------
Net increase (decrease)
in cash (622,086) (607,779)
Cash and cash equivalents at
beginning of period 3,652,566 4,977,454
---------- ----------
Cash and cash equivalents at
end of period 3,030,480 4,369,675
========== ==========
</TABLE>
<PAGE>
THE VALLEY FAIR CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE TWENTY-SIX WEEKS ENDED JULY 30, 1995
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The financial information included herein is unaudited. In addition,
the financial information does not include all disclosures required
under generally accepted accounting principles because certain note
information included in the company's annual report has been
omitted: however, such information reflects all adjustments
(consisting solely of normal recurring adjustments) which are, in
the opinion of management, necessary to a fair statement of the
result for the interim periods.
The results of operations for the twenty-six weeks ended July 30,
1995 and the twenty-six weeks ended July 31, 1994 are not
necessarily indicative of the results to be expected for the full
year.
NOTE 1(b)
Effective February 1, 1993, the Company adopted statement of
Financial Accounting Standards No. 109, Accounting For Income Taxes.
Statement 109 requires a charge for deferred taxes to an asset and
liability method of accounting for income taxes. Under the asset and
liability method, deferred tax assets and liabilities are recognized
for the future tax consequences. attributable to differences between
the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. The change in accounting
method for income taxes had no effect on consolidated earnings for
the period and prior financial statements were not restated.
NOTE 2 - EARNINGS PER SHARE
Earnings per share were computed by dividing net income by the
weighted average number of shares of common stock outstanding during
the periods. The Company has purchased and retired additional shares
during the current periods. The earnings per share calculation has
been adjusted to reflect these retirements during the periods.
<PAGE>
THE VALLEY FAIR CORPORATION AND SUBSIDIARY
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
Consolidated net sales decreased approximately $ 659,000 or 2.0% for the
twenty-six week period ended July 30, 1995 as compared to the twenty-six weeks
ended July 31, 1994. Consolidated net sales decreased $249,000 or 1.5% for the
thirteen week period ended July 30, 1995, as compared to the same prior year
period. Same store sales decreased approximately $1,253,000 or 3.9% for the
twenty-six week period as compared with the prior year period as competition and
economic uncertainties continue to effect consumer buying patterns. Tenant
licensee revenue and other increased $109,000 to 4.5% for the twenty-six week
period ended July 30, 1995, as compared to the twenty-six weeks ended July 31,
1994. Tenant licensee revenue and other increased $56,000 or 4.5% for the
thirteen week period ended July 30, 1995 as compared to the same prior year
period.
The gross margins for the twenty-six and thirteen week periods ended July 30,
1995 were 33.1% and 34.8% respectively as compared to 30.6% and 29.0%
respectively, for both the periods a year ago. The increase in merchandise which
had been purchased on terms favorable to the Corporation and the change in mix
of sales from stores generated these higher margins.
Selling, general and administrative expenses increased approximately $37,000 or
.3% compared to the twenty-six weeks ended July 31, 1994 For the thirteen week
period, selling, general and administrative expenses increased $185,000 or 2.9%
compared to the prior year period. Salary expense accounted for $127,000 or 2.0%
of this increase. The relationship of selling, general and administrative
expenses to net sales was 38.5% and 39.7% respectively, for the twenty-six and
thirteen week periods ended July 30, 1995 compared to 37.6% and 38.0% for the
twenty-six and thirteen week periods, respectively ended July 31, 1994.
Interest expense for the twenty-six weeks ended July 30, 1995 increased
approximately $109,000 or 21.3% as compared to the 1994 period. For the thirteen
week period ended July 30, 1995, interest expense increased $39,000 or 15.1%
These increases are a result of higher interest rates and increased borrowings
in fiscal 1996 as compared to 1995.
The Corporation's income tax for the twenty-six week period ended July 30, 1995
was $68,000 or 40.0%. For the twenty-six week period ended July 31, 1994 there
was a tax benefit of $167,000.
Liquidity and Capital Resources
As of July 30, 1995, the Corporation's cash and short-term investment balances
amounted to $3,030,000. The Corporation's principal sources of liquidity are its
available cash balances and funds available through its line of credit.
The Corporation believes that its cash and investment balances will be
sufficient to meet its anticipated needs throughout the remainder of the fiscal
year 1996.
<PAGE>
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(b) Reports from 8-K - There were no reports on form 8-K filed for
the quarter ended July 30, 1995.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned there unto duly authorized.
THE VALLEY FAIR CORPORATION
-----------------------------------------
(Registrant)
Date: September 11, 1995 /S/ ERWIN LEHR
------------------------- -----------------------------------------
Erwin Lehr - President
Date: September 11, 1995 /S/ ROSS N. ALFIERI
------------------------- -----------------------------------------
Ross N. Alfieri - Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-29-1996
<PERIOD-END> JUL-30-1995
<CASH> 3,030,480
<SECURITIES> 0
<RECEIVABLES> 956,978
<ALLOWANCES> 0
<INVENTORY> 27,691,478
<CURRENT-ASSETS> 33,006,986
<PP&E> 11,203,580
<DEPRECIATION> 6,730,099
<TOTAL-ASSETS> 37,744,910
<CURRENT-LIABILITIES> 18,370,313
<BONDS> 803,422
<COMMON> 110,410
0
0
<OTHER-SE> 18,460,765
<TOTAL-LIABILITY-AND-EQUITY> 37,744,910
<SALES> 31,883,427
<TOTAL-REVENUES> 34,284,857
<CGS> 21,318,706
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 12,282,329
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 512,646
<INCOME-PRETAX> 171,176
<INCOME-TAX> 68,500
<INCOME-CONTINUING> 102,676
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 102,676
<EPS-PRIMARY> 0.28
<EPS-DILUTED> 0
</TABLE>
