Form 10 K Amendment
As the result of a review by the Securities and Exchange Commission, ZCMI
was requested to file an amendment to the Form 10 K for the period ended
January 30, 1999. Specifically, the review requested further disclosure
about the restructuring expense, more disclosure about cash sales returns,
a Schedule II which was missing from the original Form 10 K, and include
the signature and date for the audit report contained in the Form 10 K.
Those disclosures are contained in this amendment.
The SEC requested the Company to wait for their final approval of the
comments and disclosures before filing this amendment and an amendment to
the Form 10 Q for the period ended May 1, 1999 dealing with a
reclassification problem. Verbal approval from the SEC was given on
September 13, 1999 to file the two amendments.
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In the Notes to Financial Statements, under the heading "1. Summary of
Significant Accounting and Reporting Policies" in the subheading "Net Sales
and Other Income" the following statement should be added:
"As sales returns are typically exchanged for other merchandise, ZCMI does
not accrue for the cost of anticipated cash sales returns as refunds of
cash have historically been insignificant."
In the Notes to Financial Statements, under Note 6 - Employee Benefit
Plans, the following paragraph further explains the restructuring expense
mentioned in the Managements Discussion and Analysis section:
"During the year ended January 30, 1999 ZCMI offered a severance package to
employees who would elect for early retirement. In total, seven employees
opted for early retirement, accepting the option before the end of the
fiscal period. The cost to ZCMI for the employees electing early
retirement including employer payroll taxes amounted to $483,847 and is
included in the accompanying statement of operations for the year ended
January 30, 1999 as selling, general and administrative services.
An additional disclosure in the Management's Discussion and Analysis about
the restructuring expense was requested. Under the heading of Selling,
General and Administrative Expenses, the following paragraph further
discloses the restructuring expense:
"As part of "Project 2000", a decision was made to offer early option plans
to several employees. Seven employees accepted the plans before the end of
the fiscal year. The cost to ZCMI for these plans amounted to $483,847 and
was included in the financial statements for the year ended January 30,
1999 as selling, general and administrative expenses."
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ZIONS COOPERATIVE MERCANTILE INSTITUTION
VALUATION ACCOUNT
FOR THE YEARS ENDED JANUARY 30, 1999, JANUARY 31, 1998, AND FEBRUARY 1,
1997
Additions
Balance at Charged to Recoveries Deductions - Balance
Beginning Costs and on Accounts Accounts at End
of Year Expenses Charged Off Charged Off of Year
ALLOWANCE FOR
DOUBTFUL ACCOUNTS:
<S> <C> <C> <C> <C> <C>
1999 $1,285,622 $1,179,713 $174,814 $1,587,336 $1,052,813
1998 $1,334,154 $1,308,972 $180,928 $1,538,432 $1,285,622
1997 $1,307,360 $1,090,993 $181,843 $1,246,042 $1,334,154
</TABLE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Zions Cooperative Mercantile Institution:
We have audited the financial statements of Zions Cooperative Mercantile
Institution (ZCMI) as of January 30, 1999 and January 31, 1998, and for
each of the three years in the period ended January 30, 1999, and have
issued our report thereon dated April 19, 1999; such financial statements
and report are included in your 1998 Annual Report to Stockholders and are
incorporated herein by reference. Our audits also included the financial
statement schedule of ZCMI, listed in Item 14. This financial statement
schedule is the responsibility of the Corporation's management. Our
responsibility is to express an opinion based on our audits. In our
opinion, such financial statement schedule, when considered in relation to
the basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
DELOITTE & TOUCHE LLP
Salt Lake City, Utah
April 19, 1999
