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 the Securities Exchange Act of 1934
For the quarterly period ended May 3, 1997
[ ] Transition report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from __________ to __________
____________
Commission file number 1-2191
____________
BROWN GROUP, INC.
(Exact name of registrant as specified in its charter)
New York 43-0197190
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
8300 Maryland Avenue
St. Louis, Missouri 63105
(Address of principal executive offices) (Zip Code)
(314) 854-4000
(Registrant's telephone number, including area code)
NOT APPLICABLE
(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 [ ]
As of May 31, 1997, 18,032,477 shares of the registrant's common stock
were outstanding.
<PAGE>
BROWN GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands)
<TABLE>
<CAPTION>
(Unaudited)
----------------
May 3, May 4, February 1,
1997 1996 1997
------ ------ -----------
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and Cash Equivalents $ 28,168 $ 22,146 $ 38,686
Receivables, net of allowances of
$10,107 at May 3, 1997,
$10,916 at May 4, 1996, and
$10,203 at February 1, 1997 87,312 76,582 90,246
Inventories, net of adjustment to
last-in, first-out cost of
$17,578 at May 3, 1997,
$24,968 at May 4, 1996, and
$18,846 at February 1, 1997 401,123 374,272 398,803
Other Current Assets 39,257 42,340 37,040
--------- -------- ---------
Total Current Assets 555,860 515,340 564,775
Property and Equipment 205,886 198,374 202,229
Less allowances for depreciation
and amortization (121,660) (112,089) (116,849)
--------- --------- ---------
84,226 86,285 85,380
Other Assets 71,784 68,881 72,220
--------- --------- ---------
$ 711,870 $ 670,506 $ 722,375
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes Payable $ 53,000 $ 144,500 $ 62,000
Accounts Payable 122,431 95,847 124,697
Accrued Expenses 74,417 63,925 71,053
Income Taxes 5,891 4,400 4,005
Current Maturities of Long-Term Debt 2,000 2,000 2,000
--------- --------- ---------
Total Current Liabilities 257,739 310,672 263,755
Long-Term Debt and Capitalized
Lease Obligations 197,025 104,022 197,025
Other Liabilities 24,490 27,167 24,558
Shareholders' Equity
Common Stock 67,612 67,224 67,387
Additional Capital 47,047 45,892 46,310
Cumulative Translation Adjustment (6,514) (4,574) (4,433)
Unamortized Value of Restricted Stock (6,037) (7,056) (5,700)
Retained Earnings 130,508 127,159 133,473
--------- --------- ---------
232,616 228,645 237,037
--------- --------- ---------
$ 711,870 $ 670,506 $ 722,375
========= ========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
BROWN GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Thousands, except per share)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
---------------------
May 3, May 4,
1997 1996
-------- --------
<S> <C> <C>
Net Sales $391,815 $355,785
Cost of Goods Sold 245,982 219,908
-------- --------
Gross Profit 145,833 135,877
-------- --------
Selling and Administrative Expenses 138,007 130,684
Interest Expense 5,765 4,733
Other (Income) (436) (401)
-------- --------
Earnings Before Income Taxes 2,497 861
Income Tax Provision 955 334
-------- --------
NET EARNINGS $ 1,542 $ 527
======== ========
NET EARNINGS PER COMMON SHARE $ .09 $ .03
======== ========
Weighted Average Number of
Outstanding Shares
of Common Stock 17,746 17,615
DIVIDENDS PER COMMON SHARE $ .25 $ .25
======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
BROWN GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Thousands)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
---------------------
May 3, May 4,
1997 1996
--------- ---------
<S> <C> <C>
Net Cash Provided (Used) by Operating Activities $ 7,066 $ (36,119)
Investing Activities:
Capital expenditures (4,395) (4,185)
Other 318 824
--------- ---------
Net Cash Provided (Used) by Investing Activities (4,077) (3,361)
Financing Activities:
Increase (decrease) in short-term notes payable (9,000) 32,500
Principal payments of long-term debt - (1,450)
Dividends paid (4,507) (4,482)
--------- ---------
Net Cash Provided (Used) by Financing Activities (13,507) 26,568
--------- ---------
Increase (Decrease) in Cash and Cash Equivalents (10,518) (12,912)
Cash and Cash Equivalents at Beginning of Period 38,686 35,058
--------- ---------
Cash and Cash Equivalents at End of Period $ 28,168 $ 22,146
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
BROWN GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note A - Basis of Presentation
------------------------------
The accompanying condensed consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and reflect all adjustments
which management believes necessary (which include only normal recurring
accruals and the effect on LIFO inventory valuation of estimated annual
inflationary cost increases and year-end inventory levels) to present fairly
the results of operations. These statements, however, do not include all
information and footnotes necessary for a complete presentation of financial
position, results of operations and cash flow in conformity with generally
accepted accounting principles.
The Company's business is subject to seasonal influences, and interim results
may not necessarily be indicative of results which may be expected for any
other interim period or for the year as a whole.
For further information refer to the consolidated financial statements and
footnotes included in the Company's Annual Report and Form 10-K for the period
ended February 1, 1997.
Note B - Earnings Per Share
---------------------------
Net earnings per share of Common Stock is computed by dividing net earnings by
the weighted average number of shares outstanding. The dilutive effect of
stock options is not significant and is therefore excluded from the
calculation.
In February 1997, Statement of Financial Accounting Standards (SFAS) No. 128,
"Earnings per Share," was issued which the Company is required to adopt by the
end of fiscal 1997. At that time, the Company will be required to change the
method currently used to compute earnings per share and to restate all prior
interim and annual periods. The impact of the provisions of SFAS No. 128 on
the calculation of Basic and Diluted earnings per share for the quarters ended
May 3, 1997 and May 4, 1996 is not material.
Note C - Inventories
--------------------
During fiscal 1996, the remaining domestically manufactured footwear at Brown
Shoe Company was sold resulting in a liquidation of LIFO inventory layers. The
effect of this liquidation was to increase first quarter 1996 pretax earnings
by $3.1 million.
<PAGE>
Note D: Condensed Consolidating Financial Information
-----------------------------------------------------
Certain of the Company's debt is unconditionally and jointly and severally
guaranteed by certain wholly-owned domestic subsidiaries of the Company.
Accordingly, condensed consolidating balance sheets as of May 3, 1997 and
May 4, 1996, and the related condensed consolidating statements of earnings
and cash flows for the quarters ended May 3, 1997 and May 4, 1996, are
provided. These condensed consolidating financial statements have been
prepared using the equity method of accounting in accordance with the
requirements for presentation of such information. Management believes that
this information, presented in lieu of complete financial statements for each
of the guarantor subsidiaries, provides meaningful information to allow
investors to determine the nature of the assets held by, and the operations
and cash flows of, each of the consolidating groups.
Condensed Consolidating Balance Sheet
As of May 3, 1997
<TABLE>
<CAPTION>
Guarantor Non-Guarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Totals
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents . . . $ 54 $ 4,330 $ 23,784 $ - $ 28,168
Receivables, net. . . . . . . . 30,612 13,542 43,158 87,312
Inventory, net. . . . . . . . . 61,367 306,179 47,495 (13,918) 401,123
Other current assets . . . . . 9,160 16,820 7,997 5,280 39,257
-------- -------- -------- --------- --------
Total Current Assets . . . . . 101,193 340,871 122,434 (8,638) 555,860
Property and Equipment, net . . . 17,617 58,789 7,820 - 84,226
Other Assets . . . . . . . . . . 42,557 16,307 13,167 (247) 71,784
Investment in Subsidiaries . . . 261,715 57,624 7,364 (326,703) -
-------- -------- -------- --------- --------
Total Assets . . . . . . . . . $423,082 $473,591 $150,785 $(335,588) $711,870
======== ======== ======== ========= ========
Liabilities & Shareholders' Equity
Current Liabilities
Notes payable . . . . . . . . . $ 53,000 $ - $ - $ - $ 53,000
Accounts payable. . . . . . . . 5,906 88,195 28,330 - 122,431
Accrued expenses. . . . . . . . 22,171 38,210 14,249 (213) 74,417
Income taxes. . . . . . . . . . 1,159 4,539 280 (87) 5,891
Current maturities of
long-term debt . . . . . . . . 2,000 - - - 2,000
-------- -------- -------- --------- --------
Total Current Liabilities . 84,236 130,944 42,859 (300) 257,739
Long-Term Debt and Capitalized
Lease Obligations. . . . . . . 197,025 - 75 (75) 197,025
Other Liabilities . . . . . . . . 21,756 2,244 594 (104) 24,490
Intercompany Payable (Receivable) (112,551) 100,982 14,836 (3,267) -
Shareholders' Equity. . . . . . . 232,616 239,421 92,421 (331,842) 232,616
-------- -------- -------- --------- --------
Total Liabilities and
Shareholders' Equity. . . $423,082 $473,591 $150,785 $(335,588) $711,870
======== ======== ======== ========= ========
</TABLE>
<PAGE>
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS
THIRTEEN WEEKS ENDED MAY 3, 1997
<TABLE>
<CAPTION>
Guarantor Non-Guarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Totals
------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Sales. . . . . . . . . . . $65,425 $289,541 $102,597 $(65,748) $391,815
Cost of goods sold . . . . . . 48,286 180,478 83,004 (65,786) 245,982
------- -------- -------- -------- --------
Gross profit. . . . . . . . 17,139 109,063 19,593 38 145,833
Selling and
administrative expenses. . . 20,075 100,402 17,902 (372) 138,007
Interest expense . . . . . . . 5,709 - 56 - 5,765
Intercompany interest
(income) expense. . . . . . (3,934) 3,933 1 - -
Other (income) expense . . . . (977) 16 115 410 (436)
Equity in (earnings)
of subsidiaries. . . . . . . (4,133) (1,522) - 5,655 -
------- ------- -------- -------- --------
Earnings (Loss) Before
Income Taxes . . . 399 6,234 1,519 (5,655) 2,497
Income tax provision (benefit) (1,143) 2,101 (3) - 955
------- ------- -------- -------- --------
Net Earnings . . . . . . . $ 1,542 $ 4,133 $ 1,522 $ (5,655) $ 1,542
======= ======= ======== ======== ========
</TABLE>
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
THIRTEEN WEEKS ENDED MAY 3, 1997
<TABLE>
<CAPTION>
Guarantor Non-Guarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Totals
------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Cash Provided (Used) by
Operating Activities. . . . $ 9,423 $ 4,312 $(13,541) $ 6,872 $ 7,066
Investing Activities:
Capital expenditures. . . . (514) (3,372) (509) - (4,395)
Other . . . . . . . . . . . 318 - - - 318
------- ------- -------- ------- --------
Net Cash (Used) by
Investing Activities. . . . (196) (3,372) (509) - (4,077)
-------- ------- --------
Financing Activities:
Increase (decrease) in
short-term notes payable . (9,000) - - - (9,000)
Dividends paid. . . . . . . (4,507) - - - (4,507)
Intercompany financing. . . 4,464 (2,920) 7,527 (9,071) -
------- ------- -------- ------- --------
Net Cash Provided (Used) by
Financing Activities. . . . (9,043) (2,920) 7,527 (9,071) (13,507)
Increase (Decrease) in Cash
and Cash Equivalents. . . . 184 (1,980) (6,523) (2,199) (10,518)
Cash and Cash Equivalents at
Beginning of Period . . . . (130) 6,310 30,307 2,199 38,686
------- ------- -------- ------- --------
Cash and Cash Equivalents at
End of Period . . . . . . . $ 54 $ 4,330 $ 23,784 $ - $ 28,168
======= ======= ======== ======= ========
</TABLE>
<PAGE>
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF MAY 4, 1996
<TABLE>
<CAPTION>
Guarantor Non-Guarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Totals
-------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Assets
Current Assets
Cash and cash equivalents. . . $ 1,287 $ 8,860 $ 11,999 $ - $ 22,146
Receivables, net . . . . . . . 28,522 11,053 37,007 - 76,582
Inventory, net . . . . . . . . 49,007 293,795 41,554 (10,084) 374,272
Other current assets . . . . . 16,851 15,061 7,510 2,918 42,340
--------- --------- -------- --------- --------
Total Current Assets. . . . . 95,667 328,769 98,070 (7,166) 515,340
Property and Equipment, net . . . 18,664 59,902 7,719 - 86,285
Other Assets. . . . . . . . . . . 40,225 16,236 12,842 (422) 68,881
Investment in Subsidiaries. . . . 242,752 46,709 3,811 (293,272) -
--------- -------- -------- --------- --------
Total Assets. . . . . . . . . $ 397,308 $451,616 $122,442 $(300,860) $670,506
========= ======== ======== ========= ========
Liabilities & Shareholders' Equity
Current Liabilities
Notes payable. . . . . . . . . $ 144,500 $ - $ - $ - $144,500
Accounts payable . . . . . . . 4,920 69,395 21,532 - 95,847
Accrued expenses . . . . . . . 29,595 32,923 10,733 (9,326) 63,925
Income taxes . . . . . . . . . 3,112 (670) 2,310 (352) 4,400
Current maturities of
long-term debt. . . . . . . . 2,000 - - - 2,000
--------- -------- -------- --------- --------
Total Current Liabilities. 184,127 101,648 34,575 (9,678) 310,672
Long-Term Debt and Capitalized
Lease Obligations . . . . . . 104,022 - 125 (125) 104,022
Other Liabilities . . . . . . . . 22,246 2,941 632 1,348 27,167
Intercompany Payable (Receivable) (141,732) 132,061 3,667 6,004 -
Shareholders' Equity. . . . . . . 228,645 214,966 83,443 (298,409) 228,645
--------- -------- -------- --------- --------
Total Liabilities and
Shareholders' Equity. . $ 397,308 $451,616 $122,442 $(300,860) $670,506
========= ======== ======== ========= ========
</TABLE>
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS
THIRTEEN WEEKS ENDED MAY 4, 1996
<TABLE>
<CAPTION>
Guarantor Non-Guarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Totals
------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Sales. . . . . . . . . . . $62,803 $272,324 $89,669 $(69,011) $355,785
Cost of goods sold . . . . . . 45,083 171,573 72,317 (69,065) 219,908
------- -------- ------- -------- --------
Gross profit. . . . . . . . 17,720 100,751 17,352 54 135,877
Selling and
administrative expenses. . . 18,144 95,009 17,782 (251) 130,684
Interest expense . . . 4,524 191 18 - 4,733
Intercompany interest
(income) expense. . . . . . (3,666) 3,673 (7) - -
Other (income) expense . . . . (1,259) 57 496 305 (401)
Equity in (earnings) loss
of subsidiaries . . . . . . (301) 837 - (536) -
------- -------- ------- -------- --------
Earnings (Loss) Before
Income Taxes . . . . . . . 278 984 (937) 536 861
Income tax provision (benefit) (249) 683 (100) - 334
------- -------- ------- -------- --------
Net Earnings . . . . . . . $ 527 $ 301 $ (837) $ 536 $ 527
======= ======== ======= ======== ========
</TABLE>
<PAGE>
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
THIRTEEN WEEKS ENDED MAY 4, 1996
<TABLE>
<CAPTION>
Guarantor Non-Guarantor Consolidated
Parent Subsidiaries Subsidiaries Eliminations Totals
------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Cash Used by
Operating Activities . $(5,662) $(12,435) $(11,522) $(6,500) $(36,119)
Investing Activities:
Capital expenditures . (189) (3,315) (681) - (4,185)
Other . . . . . . . 820 4 - - 824
------- -------- -------- ------- --------
Net Cash Provided (Used) by
Investing Activities . 631 (3,311) (681) - (3,361)
Financing Activities:
Increase (decrease) in
short-term notes payable . 32,500 - - - 32,500
Repurchase of long-term debt (1,450) - - - (1,450)
Dividends paid. . . (4,482) - - - (4,482)
Intercompany financing (19,959) 15,640 (2,181) 6,500 -
------- -------- -------- ------- --------
Net Cash Provided (Used) by
Financing Activities . 6,609 15,640 (2,181) 6,500 26,568
Increase (Decrease) in Cash
and Cash Equivalents. . 1,578 (106) (14,384) - (12,912)
Cash and Cash Equivalents at
Beginning of Period (291) 8,966 26,383 - 35,058
------- -------- -------- ------- --------
Cash and Cash Equivalents at
End of Period . . . . . . . .$ 1,287 $ 8,860 $ 11,999 $ - $ 22,146
======= ======== ======== ======= ========
</TABLE>
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
--------------------------------------------------------------------
Results of Operations
---------------------
Quarter ended May 3, 1997 compared to the Quarter ended May 4, 1996
-------------------------------------------------------------------
Consolidated net sales for the fiscal quarter ended May 3, 1997, were $391.8
million, compared to $355.8 million in the quarter ended May 4, 1996.
First quarter 1997 sales from the footwear retailing operations increased 6.6%
from the first quarter of 1996. Famous Footwear's total sales of $199.9
million increased 8.8% from last year reflecting a same-store sales increase
of 3.5% and 14 more stores. The Canadian retailing operation's sales increased
7.1% with a same-store sales increase of 4.0% and five more units than the
prior year. The Naturalizer Retail division's total sales decreased 6.2% in
the 1997 quarter to $31.0 million and declined 5.5% on a same-store basis,
reflecting eight fewer stores and continuing slower dress shoe sales and a
reduction in promotional merchandise.
Sales at Brown Shoe Company's combined wholesale operations - Brown Branded
Marketing and Pagoda - increased 17.2% to $142.3 million compared to $121.4
million in last year's first quarter. The sales gain was driven by higher
sales of the Naturalizer and NaturalSPORT brands, strong performance by the
Original Dr. Scholl's Exercise Sandal line and higher shipments by Pagoda
U.S.A. Sales at the Canadian Wholesale division increased 2.9% in the quarter.
Gross profit as a percent of sales decreased to 37.2% from 38.2% for the same
period last year. This decline was almost entirely due to the nonrecurring
pretax gain of $3.1 million from the liquidation of LIFO inventories in last
year's first quarter.
Selling and administrative expenses as a percent of sales decreased to 35.2%
from 36.7% for the same period last year. This improvement was due to higher
sales and the continued improved leveraging of the expense base at Famous
Footwear.
As a result of the higher sales and lower expense rate, net earnings of $1.5
million for the first quarter of 1997 improved over the $.5 million of net
earnings in the first quarter of 1996, which included an aftertax nonrecurring
gain of $2.0 million from the liquidation of LIFO inventories.
<PAGE>
Financial Condition
-------------------
A summary of key financial data and ratios at the dates indicated is as
follows:
May 3, May 4, February 1,
1997 1996 1997
------- ------- -----------
Working Capital (millions) $298.1 $204.7 $301.0
Current Ratio 2.2:1 1.7:1 2.1:1
Total Debt as a Percentage of
Total Capitalization 52.0% 52.3% 52.4%
Net Debt (Total Debt less Cash and
Cash Equivalents) as a Percentage
of Total Capitalization 49.0% 50.0% 48.4%
Cash flow from operating activities for the first quarter of fiscal 1997 was
a net generation of $7.1 million versus a net use of $36.1 million last year.
The 1996 usage primarily reflects an increase in inventory at Famous Footwear
(due to 77 more stores) and lower accounts payable (due to the timing of
purchases). In 1997's first quarter, cash was generated by better management
of inventory and accounts payable.
The improvement in the current ratio at May 3, 1997, compared to May 4, 1996,
is due to the debt repositioning that the Company completed in the fourth
quarter of 1996, which included the issuance of $100 million of long-term debt
and a reduction in short-term notes payable.
The decrease in the ratio of total debt as a percentage of total capitalization
at May 3, 1997, compared to the end of fiscal 1996, is due primarily to the
Company's lower level of short-term notes payable. At May 3, 1997, $53.0
million was borrowed and $14.5 million of letters of credit were outstanding
under the Company's $155 million revolving bank Credit Agreement. In
addition, at May 3, 1997, the Company had letters of credit of
approximately $6.5 million outstanding through other banking
institutions under uncommitted facilities.
Forward Looking Statements
--------------------------
The preceding Management's Discussion and Analysis contains certain forward-
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Actual results could differ materially. In Exhibit 99 to
the Company's fiscal 1996 Annual Report on Form 10-K, detailed factors that
could cause variations in results to occur are listed and discussed. Such
Exhibit is incorporated herein by reference.
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
--------------------------
There have been no material developments during the quarter ended May 3,
1997, in the legal proceedings described in the Corporation's Form 10-K for
the period ended February 1, 1997.
Item 4 - Submission of Matters to a Vote of Security Holders
------------------------------------------------------------
At the Annual Meeting of Shareholders held on May 22, 1997, one proposal
described in the Notice of Annual Meeting of Shareholders dated April 16,
1997, was voted upon.
1. The shareholders elected four directors, Mr. Joseph L. Bower, Mr.
Harry E. Rich, Mr. Jerry E. Ritter, and Mr. Thomas A. Williams, and for
terms of three years each. The voting for each director was as
follows:
Directors For Withheld
--------- ---------- --------
Joseph L. Bower 15,508,557 300,212
Harry E. Rich 15,533,842 274,927
Jerry E. Ritter 15,526,142 282,627
Thomas A. Williams 15,613,846 194,923
Item 6 - Exhibits and Reports on Form 8-K
-----------------------------------------
(a) Listing of Exhibits
(3) (i) (a) Certificate of Incorporation of the
Corporation as amended through
February 16, 1984, incorporated
herein by reference to Exhibit 3 to
the Company's Report on Form 10-K for
the fiscal year ended November 1,
1986.
(i) (b) Amendment of Certificate of
Incorporation of the Corporation
filed February 20, 1987, incorporated
herein by reference to Exhibit 3 to
the Company's Report on Form 10-K for
the fiscal year ended January 30,
1988.
(ii) Bylaws of the Corporation as amended
through February 1, 1997,
incorporated herein by reference to
Exhibit 3 to the Company's Report on
Form 10-K for the fiscal year ended
February 1, 1997.
(11) Computation of Earnings Per Share
(Page 14)
(27) Financial Data Schedule (Page 15)
<PAGE>
(99.1) Discussion of Certain Risk Factors
That Could Affect the Company's
Operating Results as incorporated
herein by reference to the Company's
Report on Form 10-K for the fiscal
year ended February 1, 1997.
(b) Reports on Form 8-K:
The Corporation filed no reports on Form 8-K during the
quarter ended May 3, 1997.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BROWN GROUP, INC.
Date: June , 1997 /s/ Harry E. Rich
--------------------------------
Executive Vice President
and Chief Financial Officer and
On Behalf of the Corporation as
the Principal Financial Officer
<PAGE>
EXHIBIT 11
COMPUTATION OF EARNINGS PER SHARE
BROWN GROUP, INC.
(Thousands, except per share)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
--------------------
May 3, May 4,
1997 1996
------- -------
<S> <C> <C>
PRIMARY
Weighted average shares outstanding 17,746 17,615
Net effect of dilutive stock options based on
the treasury stock method using average market price 32 -
-------- -------
TOTAL 17,778 17,615
======== =======
Net earnings $ 1,542 $ 527
======== =======
Net earnings per share (1) $ .09 $ .03
======== =======
FULLY DILUTED
Weighted average shares outstanding 17,746 17,615
Net effect of dilutive stock options based on
the treasury stock method using the period-end market
price, if higher than the average market price 33 21
-------- -------
TOTAL 17,779 17,636
======== =======
Net earnings $ 1,542 $ 527
======== =======
Net earnings per share (1) $ .09 $ .03
======== =======
</TABLE>
(1) The dilutive effect of stock options was not
included in weighted average shares outstanding
for purposes of calculating earnings per share
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-END> MAY-03-1997
<CASH> 28,168
<SECURITIES> 0
<RECEIVABLES> 87,312
<ALLOWANCES> (10,107)
<INVENTORY> 401,123
<CURRENT-ASSETS> 555,860
<PP&E> 205,886
<DEPRECIATION> (121,660)
<TOTAL-ASSETS> 711,870
<CURRENT-LIABILITIES> 257,739
<BONDS> 197,025
0
0
<COMMON> 67,612
<OTHER-SE> 165,004
<TOTAL-LIABILITY-AND-EQUITY> 711,870
<SALES> 391,815
<TOTAL-REVENUES> 391,815
<CGS> 245,982
<TOTAL-COSTS> 383,989
<OTHER-EXPENSES> (436)
<LOSS-PROVISION> 603
<INTEREST-EXPENSE> 5,765
<INCOME-PRETAX> 2,497
<INCOME-TAX> 955
<INCOME-CONTINUING> 1,542
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,542
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
