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 28, 1996...........
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 [X] 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.
367,956 shares July 28, 1996
<PAGE>
The Valley Fair Corporation and Subsidiary
C O N T E N T S
Consolidated Condensed Balance Sheets
July 28, 1996 and January 28, 1996
Consolidated Condensed Statements of Income Thirteen
Weeks and Twenty-six Weeks Ended July 28, 1996 and
Thirteen Weeks and Twenty-six Weeks Ended July 30, 1995
Consolidated Statements of Cash Flows -
Twenty-six Weeks Ended July 28, 1996
Twenty-six Weeks Ended July 30, 1995
Notes to Consolidated Condensed Financial Statements
Management's Discussion and Analysis of the Consolidated
Condensed Statements of Income
Other Information and Signatures
<PAGE>
<TABLE>
<CAPTION>
THE VALLEY FAIR CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
July 28, January 28,
1996 1996
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash ......................................... $ 3,607,782 $ 3,608,605
Accounts receivable - trade .................. 593,716 711,188
affiliates ............. 449,294 128,912
Inventories .................................. 22,418,932 23,955,006
Prepaid expenses ............................. 589,737 582,341
Deferred income taxes ........................ 418,000 443,000
----------- -----------
Total current assets ...................... 28,077,461 29,429,052
Property, plant, and equipment, net ............ 4,189,849 4,265,859
Other assets ................................... 309,567 336,174
----------- -----------
32,576,877 34,031,085
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilites:
Note payable - bank .......................... 9,623,000 9,710,300
Current maturities of long-term debt ......... 48,217 65,010
Account Payable -- Trade ..................... 2,891,885 2,911,974
Affiliate ................. 306,708 405,764
Accrued expenses and other current
liabilites ................................. 1,282,381 1,626,208
----------- -----------
Total current liabilities ................. 14,152,191 14,719,256
----------- -----------
Long-term debt, less current maturities ........ 208,889 233,569
Deferred income and security deposits .......... 118,090 113,081
Deferred income taxes .......................... 472,000 497,000
----------- -----------
Total liabilites .......................... 14,951,170 15,562,906
----------- -----------
Stockholders' equity
Common stock par value $.30 per share,
authorized 666,666 shares, issued
367,956 shares at July 28, 1996
367,983 shares at January 28, 1996 ........... 110,357 110,395
Additional paid in capital ..................... 799,490 802,754
Retained earnings .............................. 16,715,860 17,555,030
----------- -----------
Total stockholders' equity ..................... 17,625,707 18,468,179
----------- -----------
Total liabilities and stockholders ............. $32,576,877 $34,031,085
equity ....................................... =========== ===========
The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE VALLEY FAIR CORPORATION AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
Thirteen Weeks Twenty-six Weeks
Ended Ended Ended Ended
July 28,1996 July 30,1995 July 28,1996 July 30,1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales
excluding licensee .............. $ 14,539,677 $ 16,010,843 $ 29,219,446 $ 31,883,427
departments
Cost of Sales .................... 10,358,591 10,445,310 20,370,667 21,318,706
------------ ------------ ------------ ------------
4,181,086 5,565,533 8,848,779 10,564,721
Tenant departments
licensee revenue
and other ....................... 1,376,618 1,256,385 2,775,147 2,401,430
------------ ------------ ------------ ------------
5,557,704 6,821,918 11,623,926 12,966,151
------------ ------------ ------------ ------------
Expenses:
Selling, general
and administrative .............. 5,845,280 6,363,313 12,649,165 12,282,329,
Interest expense ................ 181,847 262,724 373,330 512,646
------------ ------------ ------------ ------------
6,027,127 6,626,037 13,022,495 12,794,975
------------ ------------ ------------ ------------
Income (loss) before
income taxes .................... (469,423) 195,881 (1,398,569) 171,176
Income taxes (benefit) ........... (88,933) 78,380 (559,400) 68,500
------------ ------------ ------------ ------------
Net income / (loss) .............. (380,490) 117,501 (839,169) $ 102,676
============ ============ ============ ============
Earnings per common share......... $ (1.03) $ .32 $ (2.28) $ .28
Weighted average number
of shares outstanding ............ 367,973 368,040 367,969 368,043
The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE VALLEY FAIR CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Twenty-six Weeks Ended July 28, 1996 and
Twenty-six Weeks Ended July 30, 1995
1996 1995
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) ............................. (839,169) 102,676
---------- ----------
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Gain on sale of assets .................... -0- (3,591)
Depreciation and amortization ............. 288,314 303,833
Increase in accounts and
notes receivable ......................... (202,910) (53,507)
Decrease (increase) in inventories ........ 1,536,074 (2,254,626)
Increase in prepaid items ................. (7,396) (388,646)
Increase (decrease) in deferred
income and security deposits ............. 5,009 (28,727)
Decrease in accounts payable and
accrued expenses ......................... (462,972) (642,737)
Decrease in other assets .................. 26,607 32,162
---------- ----------
Total adjustments ......................... 1,182,726 (3,035,839)
---------- ----------
Net cash provided (used) by
operating activities ..................... 343,557 (2,933,163)
---------- ----------
Cash flows from investing activities:
Capital expenditures ...................... (212,305) (194,390)
---------- ----------
Net cash used in investing
activities ............................... (212,305) (194,390)
---------- ----------
<PAGE>
<CAPTION>
THE VALLEY FAIR CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Twenty-six Weeks Ended July 28, 1996 and
Twenty-six Weeks Ended July 30, 1995
(continued)
1996 1995
---------- ----------
<S> <C> <C>
Cash flows from financing activities:
Proceeds from issuance of
debt ................................... -0- 3,295,000
Principal payments of debt .............. (128,773) (789,039)
Purchase of common stock ................ (3,302) (494)
---------- ----------
Net cash provided by
financing activities ................... (132,075) 2,505,467
---------- ----------
Net increase (decrease)
in cash ................................ (823) (622,086)
Cash and cash equivalents at
beginning of period .................... 3,608,605 3,652,566
---------- ----------
Cash and cash equivalents at
end of period .......................... 3,607,782 3,030,480
========== ==========
</TABLE>
<PAGE>
THE VALLEY FAIR CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE TWENTY-SIX WEEKS ENDED JULY 28, 1996
(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 28,
1996 and the twenty-six weeks ended July 30, 1995 are not
necessarily indicative of the results to be expected for the full
year.
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 $2,664,000 or 8.4% for the
twenty-six week period ended July 28, 1996 as compared to the twenty-six weeks
ended July 30, 1995. Consolidated net sales decreased $1,471,000 or 9.2% for the
thirteen week period ended July 28, 1996, as compared to the same prior year
period. Same store sales decreased approximately $2,356,000 or 8.0% 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 $374,000 or 15.6% for the twenty-six week
period ended July 28, 1996, as compared to the twenty-six weeks ended July 30,
1995. Tenant licensee revenue and other increased $120,000 or 6.6% for the
thirteen week period ended July 28, 1996 as compared to the same prior year
period.
The gross margins for the twenty-six and thirteen week periods ended July 28,
1996 were 30.3% and 28.8% respectively as compared to 33.1% and 34.8%
respectively, for the comparable periods a year ago. The decrease in merchandise
which had been purchased on terms favorable to the Corporation and the change in
mix of sales from stores generated these lower margins.
Selling, general and administrative expenses increased approximately $367,000 or
3.0% compared to the twenty-six weeks ended July 30, 1995 For the thirteen week
period, selling, general and administrative expenses decreased $518,000 or 8.1%
compared to the prior year period. For the twenty-six weeks ended July 28, 1996
the increase is due primarily to a provision made in the first quarter for
losses incurred by the closing of sixteen unprofitable stores. For the thirteen
weeks ended July 28, 1996 the decrease was due to expenses directly attributable
to the sales decrease. The relationship of selling, general and administrative
expenses to net sales was 43.2% and 40.2% respectively, for the twenty-six and
thirteen week periods ended July 28, 1996 compared to 38.5% and 39.7% for the
twenty-six and thirteen week periods, respectively ended July 30, 1995.
Interest expense for the twenty-six weeks ended July 28, 1996 decreased
approximately $139,000 or 27.1% as compared to the 1995 period. For the thirteen
week period ended July 28, 1996, interest expense decreased $81,000 or 30.8%
These decreases are a result of decreased borrowings in fiscal 1997 as compared
to 1996.
The Corporation's tax benefit for the twenty-six week period ended July 28, 1996
was $504,400 or 40.0%, and for the twenty-six week period ended July 30, 1995,
the tax rate was $68.500 or 40.0%.
Liquidity and Capital Resources
As of July 28, 1996, the Corporation's cash and short-term investment balances
amounted to $3,607,000. 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 28, 1996.
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 9, 1996 /S/ ERWIN LEHR
----------------------
Erwin Lehr - President
Date: September 9, 1996 /S/ ROSS N. ALFIERI
----------------------
Ross N. Alfieri - Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-28-1997
<PERIOD-END> JUL-28-1996
<CASH> 3,607,782
<SECURITIES> 0
<RECEIVABLES> 593,716
<ALLOWANCES> 0
<INVENTORY> 22,418,932
<CURRENT-ASSETS> 28,077,461
<PP&E> 4,189,849
<DEPRECIATION> 0
<TOTAL-ASSETS> 32,576,877
<CURRENT-LIABILITIES> 14,152,191
<BONDS> 208,889
0
0
<COMMON> 110,357
<OTHER-SE> 17,515,350
<TOTAL-LIABILITY-AND-EQUITY> 32,576,877
<SALES> 29,219,446
<TOTAL-REVENUES> 31,994,593
<CGS> 20,370,667
<TOTAL-COSTS> 12,649,165
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 373,330
<INCOME-PRETAX> (1,398,569)
<INCOME-TAX> (559,400)
<INCOME-CONTINUING> (839,169)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (839,169)
<EPS-PRIMARY> (2.28)
<EPS-DILUTED> 0
</TABLE>
