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......Ocotber 29, 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.
368,019 shares October 29, 1995
<PAGE>
The Valley Fair Corporation and Subsidiary
C O N T E N T S
Consolidated Condensed Balance Sheets
October 29, 1995 and January 29, 1995
Consolidated Condensed Statements of Income Thirteen
Weeks and Thirty-nine Weeks Ended October 29, 1995 and
Thirteen Weeks and Thirty-nine Weeks Ended October 30, 1994
Consolidated Statements of Cash Flows -
Thirty-nine Weeks Ended October 29, 1995
Thirty-nine Weeks Ended October 30, 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>
October 29, January 29,
1995 1995
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash ......................................... $ 2,458,114 $ 3,652,566
Accounts and notes receivable-net ............ 947,452 903,471
Inventories .................................. 30,300,749 25,436,852
Prepaid expenses ............................. 765,462 460,404
Deferred income taxes ........................ 479,000 455,000
----------- -----------
Total current assets ...................... 34,950,777 30,908,293
Property, plant, and equipment, net ............ 4,371,489 4,579,333
Other assets ................................... 266,495 296,605
----------- -----------
39,588,761 35,784,231
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt ......... 73,050 423,949
Note payable - bank .......................... 13,064,000 9,375,000
Accounts payable Trade ....................... 5,535,733 4,025,734
Affiliate ................... 201,173 362,102
Accrued expenses and other current
liabilities ................................ 1,249,319 1,876,157
----------- -----------
Total current liabilities ................. 20,123,275 16,062,942
----------- -----------
Long-term debt, less current maturities ........ 245,838 701,861
Deferred income and security deposits .......... 152,322 105,435
Deferred income taxes .......................... 469,000 445,000
----------- -----------
Total liabilities ......................... 20,990,435 17,315,238
----------- -----------
Stockholder's equity
Common stock par value $.30 per share;
authorized 666,666 shares, issued
368,019 shares at October 29, 1995
368,053 shares at January 29, 1995 ........... 110,406 110,416
Additional paid-in capital ..................... 803,679 804,553
Retained earnings .............................. 17,684,241 17,554,024
Total stockholders' equity ..................... 18,598,326 18,468,993
----------- -----------
Total liabilities and stockholders equity ...... $39,588,761 $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 Thirty-nine Weeks
Ended Ended Ended Ended
Oct.29,1995 Oct.30,1994 Oct.29,1995 Oct.30,1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales
excluding licensee $ 15,999,305 $ 16,646,157 $ 47,882,732 $ 49,188,376
Cost of Sales ...... 10,639,307 11,239,317 31,958,013 33,833,750
------------ ------------ ------------ ------------
5,359,998 5,406,840 15,924,719 15,354,626
Tenant departments
licensee revenue .. 1,208,290 1,222,346 3,609,720 3,514,692
------------ ------------ ------------ ------------
6,568,288 6,629,186 19,534,439 18,869,318
------------ ------------ ------------ ------------
Expenses:
Selling, general .. 6,264,847 6,113,342 18,547,176 18,358,552
and administrative
Interest expense .. 257,589 234,086 770,235 637,641
------------ ------------ ------------ ------------
6,522,436 6,347,428 19,317,411 18,996,193
Income before income
taxes ............. 45,852 281,758 217,028 (126,875)
Income taxes ....... 18,311 116,000 86,811 (51,000)
------------ ------------ ------------ ------------
Net Income ......... $ 27,541 $ 165,758 $ 130,217 $ (75,875)
Earnings per
common share ...... $ 0.07 $ 0.45 $ 0.35 ($ .21)
Weighted average
number of shares
outstanding ....... 368,026 368,206 368,036 368,231
------------ ------------ ------------ ------------
</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
Thirty-nine Weeks Ended October 29, 1995 and
Thirty-nine Weeks Ended October 30, 1994
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net Income .................................. $ 130,217 $ (75,875)
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and amortization ........... 457,023 651,405
Increase in accounts and
notes receivable ....................... (43,981) (263,003)
Increase in inventories ................. (4,863,897) (3,577,545)
Increase in prepaid items ............... (305,058) (158,938)
Increase in deferred income and
security deposits ...................... 46,887 42,081
Decrease in deferred taxes .............. -0- (50,000)
Increase in accounts payable and
accrued expenses ....................... 722,232 1,806,450
Decrease in cash value life
insurance and other .................... 30,110 22,165
----------- -----------
Total adjustments ....................... (3,956,684) (1,527,385)
----------- -----------
Net cash provided (used) by
operating activities ................... (3,826,467) (1,603,260)
----------- -----------
Cash flows from investing activities:
Capital expenditures .................... (249,178) (384,863)
----------- -----------
Net cash used in investing
activities ............................. (249,178) (384,863)
----------- -----------
</TABLE>
(continued)
<PAGE>
THE VALLEY FAIR CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Thirty-nine Weeks Ended October 29, 1995
Thirty-nine Weeks Ended October 30, 1994
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Cash flows from financing activities:
Proceeds from issuance
of debt ................................ 3,689,000 2,925,584
Principal payments of debt .............. (806,923) (2,223,624)
Purchase of common stock ................ (884) (2,510)
----------- -----------
Net cash provided by
financing activities ................... 2,881,793 669,450
----------- -----------
Net increase (decrease)
in cash ................................ (1,194,452) (1,288,673)
Cash and cash equivalents at
beginning of period .................... 3,652,566 4,977,454
----------- -----------
Cash and cash equivalents at
end of period .......................... $ 2,458,114 $ 3,688,781
=========== ===========
</TABLE>
<PAGE>
THE VALLEY FAIR CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
For the Thirty-nine Weeks Ended October 29, 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 Thirty-nine Weeks Ended October
29, 1995 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 $1,306,000 or 2.6% for the
thirty-nine week period ended October 29, 1995, as compared to the thirty-nine
weeks ended October 30, 1994. Consolidated net sales decreased $647,000 or 3.9%
for the thirteen week period ended October 29, 1995, as compared to the same
prior year period. Same store sales decreased approximately $2,047,000 or 4.3 %
for the thirty-nine 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 $95,000 or 2.7 % for the
thirty-nine week period ended October 29, 1995 as compared to the thirty-nine
weeks ended October 30, 1994. Tenant licensee revenue and other decreased
$14,056 or 1.1% for the thirteen week period ended October 29, 1995 as compared
to the same prior year period.
The gross margins for the thirty-nine and thirteen week periods ended October
29, 1995 were 33.2% and 33.5% respectively as compared to 31.2%, and 32.5%
respectively, for both the periods a year ago. The increase is attributed to the
sale of merchandise which had been purchased on terms favorable to the
Corporation and the change in mix of sales from stores with expected higher
margins.
Selling, general and administrative expenses increased approximately $189,000 or
1.0% compared to the thirty-nine weeks ended October 30, 1994. For the thirteen
week period, selling, general and administrative expenses increased $151,000 or
2.5 % compared to the prior year period. The relationship of selling, general
and administrative expenses to net sales was 38.7% and 39.1 % respectively, for
the thirty-nine and thirteen week periods ended October 29, 1995 compared to
37.3% and 36.7% for the thirty-nine and thirteen week periods, respectively,
ended October 30, 1994.
Interest expense for the thirty-nine weeks ended October 29, 1995 increased
approximately $132,500 or 20.8% as compared to the 1994 period. For the thirteen
week period ended October 29, 1995, interest expense increased $23,000 or 10.0%.
These increases are a result of higher interest rates and increased borrowings
in the current year .
The Corporation's effective income tax rate for the thirty-nine weeks ended
October 29, 1995 was 40.0%. For the thirty-nine week period ended October 30,
1994 there was a tax benefit of $51,000.
Liquidity and Capital Resources
As of October 29, 1995, the Corporation's cash and short-term investment
balances amounted to $2,458,114. 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 October 29, 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: December 11, 1995 /S/ ERWIN LEHR
- ------------------------ -----------------------------------
Erwin Lehr - President
Date: December 11, 1995 /S/ ROSS N. ALFIERI
- ------------------------ -----------------------------------
Ross N. Alfieri - Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-29-1996
<PERIOD-END> OCT-29-1995
<CASH> 2,458,114
<SECURITIES> 0
<RECEIVABLES> 987,278
<ALLOWANCES> 39,826
<INVENTORY> 30,300,749
<CURRENT-ASSETS> 34,950,777
<PP&E> 11,244,094
<DEPRECIATION> 6,872,605
<TOTAL-ASSETS> 39,588,761
<CURRENT-LIABILITIES> 20,123,275
<BONDS> 245,838
<COMMON> 110,406
0
0
<OTHER-SE> 18,487,920
<TOTAL-LIABILITY-AND-EQUITY> 39,588,761
<SALES> 47,882,732
<TOTAL-REVENUES> 51,492,452
<CGS> 31,958,013
<TOTAL-COSTS> 18,547,176
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 770,235
<INCOME-PRETAX> 217,028
<INCOME-TAX> 86,811
<INCOME-CONTINUING> 130,217
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 130,217
<EPS-PRIMARY> 0.35
<EPS-DILUTED> 0
</TABLE>
