SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended August 1, 1998
[ ] 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: 1-1594
CROWLEY, MILNER AND COMPANY
(Exact name of registrant as specified in its charter)
Michigan 38-0454910
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
2301 West Lafayette Boulevard, Detroit, Michigan 48216
(Address of principal executive offices)(Zip Code)
(313) 962-2400
(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, and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
The number of shares outstanding of Registrant's common stock, as of
September 9, 1998, was 1,552,462
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CROWLEY, MILNER AND COMPANY AND CONSOLIDATED SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED QUARTER ENDED
---------------- -------------
<S> <C> <C> <C> <C>
August 1 August 2 August 1 August 2
1998 1997 1998 1997
---- ---- ---- ----
Revenues
Net sales--owned departments $ 73,292,768 $ 76,464,126 $ 34,493,566 $ 36,600,810
Net sales--leased departments 8,429,428 8,738,525 4,453,708 4,505,672
---------- ---------- ---------- ----------
Total net sales 81,722,196 85,202,651 38,947,274 41,106,482
Investment income 35,386 54,091 16,646 22,212
Other income (expense) (112,613) 318,022 (144,402) 7,812
---------- ---------- ----------- ----------
81,644,969 85,574,764 38,819,518 41,136,506
Costs and Expenses
Cost of merchandise and services sold 55,319,710 60,201,226 25,837,441 27,318,346
Operating expenses 30,890,194 29,300,794 15,180,760 14,321,019
Interest 1,976,846 1,318,038 1,031,970 738,564
---------- ---------- ---------- ----------
88,186,750 90,820,058 42,050,171 42,377,929
Earnings (Loss) Before Income Taxes (6,541,781) (5,245,294) (3,230,653) (1,241,423)
Federal income taxes - - - -
---------- ---------- ---------- ----------
Net Earnings (Loss) $ (6,541,781) $ (5,245,294) $ (3,230,653) $ (1,241,423)
========== ========== ========== ==========
Per Share Data:
Net earnings (loss) $ (4.23) $ (3.46) $ (2.08) $ (0.81)
Average number of common and common
equivalent shares outstanding for
earnings per share 1,547,650 1,517,187 1,552,462 1,523,796
</TABLE>
CROWLEY, MILNER AND COMPANY AND CONSOLIDATED SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
August 1 January 31 August 2
1998 1998 1997
---- ---- ----
Assets
Current Assets
Cash and cash equivalents
(cash equivalents of $501,569 at 8/1/98,
$275,494 at 1/31/98 and $390,161 at 8/2/97) $ 858,256 $ 563,615 $ 859,451
Accounts receivable, less allowances
($66,558 at 8/1/98, $66,558 at 1/31/98, and
$66,558 at 8/2/97) 2,572,485 2,778,501 2,586,206
Inventories at FIFO cost 47,891,163 46,089,589 41,350,640
Refundable Income taxes 310,028 310,028 -
Deferred property taxes - 315,610 992,459
Other current assets 1,996,111 1,530,506 1,169,110
---------- ---------- ----------
Total Current Assets 53,628,043 51,587,849 46,957,866
---------- ---------- ----------
Other Assets
Deposits under EDC financing arrangements 634,308 634,308 634,308
Deferred tax asset 1,040,000 1,040,000 1,580,000
Miscellaneous 3,146,988 3,211,797 2,892,712
---------- ---------- ----------
4,821,296 4,886,105 5,107,020
---------- ---------- ----------
Properties
Land 315,000 315,000 315,000
Buildings 13,367,426 13,274,700 13,291,910
Leasehold improvements 8,828,668 7,359,388 7,130,920
Furniture, fixtures and equipment 8,772,095 7,943,931 7,426,202
---------- ---------- ----------
31,283,189 28,893,019 28,164,032
Less: Allowance for depreciation and
amortization 16,220,233 15,159,544 15,909,560
---------- ---------- ----------
15,062,956 13,733,475 12,254,472
---------- ---------- ----------
Total Assets $73,512,295 $70,207,429 $64,319,358
========== ========== ==========
</TABLE>
CROWLEY, MILNER AND COMPANY AND CONSOLIDATED SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
August 1 January 31 August 2
1998 1998 1997
---- ---- ----
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $ 17,697,223 $ 14,992,802 $ 12,066,701
Notes payable short term 34,900,688 26,862,759 23,487,354
Compensation and amounts withheld therefrom 772,531 1,356,784 1,065,099
Property taxes - 61,379 1,120,639
Income and other taxes 295,390 255,142 318,908
Current maturities of long-term debt 1,009,481 1,001,228 605,855
Current maturities of capital lease obligations 298,834 288,882 202,495
---------- ---------- ----------
Total Current Liabilities 54,974,147 44,818,976 38,867,051
---------- ---------- ----------
Long-Term Liabilities
Long-term debt 4,916,720 4,998,772 4,750,000
Capital lease obligations 5,864,290 6,018,683 6,226,469
Other 2,116,910 2,215,572 1,973,445
---------- ---------- ----------
12,897,920 13,233,027 12,949,914
---------- ---------- ----------
Shareholders' Equity
Common stock, (authorized 4,000,000 shares,
outstanding 1,552,462 shares at 8/1/98,
1,544,462 shares at 1/31/98 and 1,523,796
shares at 8/2/97) 1,552,462 1,544,462 1,523,796
Other capital 3,415,460 3,396,877 3,368,420
Retained earnings 672,306 7,214,087 7,610,177
---------- ---------- ----------
5,640,228 12,155,426 12,502,393
---------- ---------- ----------
Total Liabilities and Shareholders' Equity $ 73,512,295 $ 70,207,429 $ 64,319,358
========== ========== ==========
</TABLE>
CROWLEY, MILNER AND COMPANY AND CONSOLIDATED SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
August 1 August 2
1998 1997
---- ----
<S> <C> <C>
Operating Activities
Net earnings (loss) $(6,541,781) $(5,245,294)
Adjustments to reconcile net earnings (loss)
to net cash provided by (used in) operating
activities
Depreciation and amortization 1,060,688 825,293
Amortization of restricted stock award 18,583 -
Changes in operating assets and liabilities
(Increase) decrease in net accounts
receivable 206,016 227,553
(Increase) decrease in inventories (1,801,574) 5,205,129
(Increase) decrease in prepaid expense
and other assets (70,930) 1,215,737
Increase (decrease) in accounts payable 2,690,165 (5,521,095)
(Increase) decrease in accrued compensation
and other liabilities (704,046) (986,794)
--------- ---------
Net Cash Provided By (Used In) Operating Activities (5,142,879) (4,279,471)
Investment Activities
Purchase of properties (2,390,169) (460,607)
---------- ----------
Net Cash Used in Investment Activities (2,390,169) (460,607)
Financing Activities
Proceeds from revolving line of credit 95,844,233 95,442,875
Principal payments on revolving line of credit (87,806,304) (90,048,315)
Principal payments on capital lease obligations (218,240) (111,615)
Proceeds from sale of common stock 8,000 101,268
---------- ----------
Net Cash Provided By (Used In) Financing Activities 7,827,689 5,384,213
---------- ----------
Increase (Decrease) in Cash and Cash Equivalents 294,641 644,135
Cash and Cash Equivalents at beginning of year 563,615 215,316
---------- ----------
Cash and Cash Equivalents at End of Period $ 858,256 $ 859,451
========== ==========
</TABLE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
August 1, 1998
Note A - Basis of Presentation
The accompanying condensed, consolidated, and unaudited financial statements
for the Company have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. As a result,
the financial statements do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments necessary for a
fair presentation of quarterly operating results are reflected herein, and
are of a normal, recurring nature. For purposes of this report the
"Company" refers to Crowley, Milner and Company ("Crowley's") and its
wholly-owned subsidiary, Steinbach Stores, Inc. ("Steinbach"), collectively.
Given the seasonal nature of the specialty department store business,
operating results for the six months ended August 1, 1998 are not
necessarily indicative of the results that may be expected for the year
ending January 30, 1999.
It is suggested that these condensed, consolidated and unaudited financial
statements be read in conjunction with the financial statements and notes to
financial statements included in the Company's Annual Report on Form 10-K
for the year ended January 31, 1998.
Note B - Earnings Per Share
On January 31, 1998, the Company adopted SFAS No. 128 which establishes
standards for computing and presenting earnings per share ("EPS"), and
attempts to simplify the approach for computing EPS previously required in
APB Opinion No. 15. The computation of EPS is shown below:
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
<S> <C> <C> <C> <C>
August 1, August 2, August 1, August 2,
1998 1997 1998 1997
---- ---- ---- ----
Numerator
Net earnings (loss) $(6,541,781) $(5,245,294) $(3,230,653) $(1,241,423)
Denominator
Weighted average shares--basic 1,547,650 1,517,187 1,552,462 1,523,796
Effect of nonvested restricted shares
Dilutive weighted average shares 1,547,650 1,517,187 1,552,462 1,523,796
Dilutive earnings (loss) per share $(4.23) $(3.46) $(2.08) $(0.81)
</TABLE>
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
STATEMENT ON FORWARD-LOOKING INFORMATION
This report includes various "forward-looking statements" within the meaning
of the Private Securities Reform Act of 1995 that represent the Company's
expectations or beliefs concerning future events and involve risks and
uncertainties. Expressions such as "believes", "anticipates", "intends",
"plans" or "expects" are intended to identify these forward-looking
statements. Although the Company believes its expectations are based upon
reasonable assumptions, the Company cautions that such forward-looking
statements are subject to important factors that could cause actual results
to differ materially from those anticipated. There can be no assurances
that actual results will not materially differ from expected results. These
factors include, but are not limited to, increasing competition in existing
markets; adverse economic conditions either nationally or in existing
markets; unexpected or severe weather conditions, and possible
unavailability of merchandise from existing vendors. The Company is under no
obligation to update such forward-looking statements to reflect events or
circumstances after the date hereof.
RESULTS OF OPERATIONS
Quarter Ended August 1, 1998 Compared To Quarter Ended August 2, 1997
While management acknowledges that results for the quarter were
disappointing, there are also reasons for optimism for the remainder of the
year. Several critical investments were made that in the short run hurt
results but were needed to position the Company to compete in the future.
These investments included the expansion and renovation of two of the
Company's best performing stores in Brick, New Jersey, and Macomb Mall in
Roseville, Michigan, which management believes will enable the Company to
better serve its customers. These flagship stores will serve as models for
future renovation plans throughout the Company. Another critical investment
was a $2.5 million investment made to replace antiquated merchandising,
distribution, payroll, and back office hardware, software and collateral
support systems. An October 1998 conversion date is nearing. This
conversion will allow the Company to achieve year 2000 compliance and allow
the Company to track merchandise inventory and trends to better position
merchandise to the needs of the customer as well as cut costs associated
with the merchandise procurement process.
The Company's net comparable store sales decrease for the quarter was caused
by disappointing Father's Day sales, delays in restocking key commodity
items and lower sales in the two stores in the chain that were undergoing
complete renovations during the quarter. Comparable store sales results for
the quarter ended August 1, 1998 decreased 10.2%, to $36.9 million, from
$41.1 million for the quarter ended August 2, 1997. The Company anticipates
that sales for the remainder of the year will benefit from an increased
emphasis on the timely tracking and flow management of key commodity items
and improved sales at the two renovated stores.
As a percentage of net sales, gross profit increased to 33.7% for the
quarter ended August 1, 1998 from 33.5% for the comparable period in 1997.
The Company's gross profit dollars for the quarter ended August 1, 1998
decreased 4.4%, to $13.1 million, from the $13.7 million of gross profit for
the quarter ended August 2, 1997. The decrease in gross profit dollars is
primarily a function of the decrease in sales as mentioned above.
The Company's operating expenses for the quarter ended August 1, 1998
increased primarily due to additional operating expenses of $960,000 incurred
in the operation of two new Steinbach stores opened during the fall of 1997.
Operating expenses increased 6.3%, to $15.2 million, from $14.3 million for
the quarter ended August 2, 1997. Operating expenses expressed as a
percentage of net sales increased to 39.0% in the second quarter of 1998
from 34.8% for the comparable period last year due in part to the decrease
in sales as mentioned above.
The increase in interest expense over the prior year is due to increased
borrowing levels resulting primarily from three factors. Higher inventory
levels were caused primarily by the addition and stocking of two new
Steinbach stores in the fall of 1997. Short term financing of $3.5 million
was used to renovate two existing stores in the chain this year, and the
Company's purchase of and conversion to a new computer system to assure the
Company is year 2000 compliant was financed through borrowings on the
Company's line of credit. As a result of the Company's investments as
detailed above, interest expense for the quarter ended August 1, 1998
increased to $1,032,000, from $739,000 of interest expense incurred for the
quarter ended August 2, 1997. The Company's interest expense expressed as a
percentage of net sales was 2.7% in the second quarter of 1998 compared to
1.8% for the comparable period last year.
The Company reported a net loss of $3,230,653, or $2.08 per share, for the
second quarter of 1998 compared to a net loss of $1,241,423 or $0.81 per
share, for the second quarter of 1997. Since the Company has fully
exhausted all tax loss carry backs and is in a net operating loss carry
forward position, it was unable to tax effect the losses in either year's
second quarter, thus pre-tax and after-tax results are the same.
Six Months Ended August 1, 1998 Compared To Six Months Ended August 2, 1997
As indicated in the analysis of the Company's quarterly performance
mentioned previously, management acknowledges that results for the six
months were disappointing as well. Management believes however, there are
reasons to be encouraged. As more fully explained below, perhaps the
Company's most encouraging sign is the six-month results for gross profit.
Increases in both gross profit dollars and percentage with lower sales
volumes validates the Company's decision to reduce the number of promotional
sales to achieve higher gross profits.
The Company's net comparable store sales for the six months ended August 1,
1998, decreased 7.3%, to $77.7 million, from the $83.8 million of comparable
net store sales for the six months ended August 2, 1997. As was disclosed
in the Company's Quarterly Report on form 10-Q filed for the quarter ended
May 2, 1998, the decrease in sales was partially a result of a restructured
and downsized promotional calendar. The restructured and downsized
promotional calendar was in response to management's belief that the Company
had become too heavily promotional as evidenced by dramatic gross margin
declines in the six months ended August 2, 1997. Also, as noted
previously, the decrease in sales for the first six months of this year was
partially due to disappointing Father's Day sales, delays in restocking key
commodity items and lower sales in two primary stores affected by major
remodel and renovation.
Management believes the restructured approach to promoting the business and
the completion of major remodels at the Steinbach store in Brick, New
Jersey, in July and the Crowley's store in Roseville, Michigan, in August
will help to restore consumer interest and stimulate sales for the remainder
of the year.
The Company's gross profit for the six months ended August 1, 1998 increased
6.0%, to $26.4 million, from $25.0 million of gross profit for the six
months ended August 2, 1997. As a percentage of sales, gross margin
increased to 32.3% from 29.3%. As noted above, the improvement in margin
was due to the change in promotional calendar strategy and a favorable
shrink result of 0.9% for the mid-year physical inventory. Management
believes that a continuation of the restructured and downsized promotional
calendar will continue to improve profit margins in the fall season.
The Company's operating expenses for the six months ended August 1, 1998
increased to $30.9 million from the $29.3 million of operating expenses
incurred for the six months ended August 2, 1997. Operating expenses as a
percentage of net sales were 37.8% for the first six months of 1998 and
34.4% for the same period last year. The change is primarily attributable to
additional operating expenses of $1.9 million incurred in the operation of
two new Steinbach stores added during the fall of 1997. Partially offsetting
the change were expense reductions resulting from the closing of the
Eatontown distribution facility and consolidation of all distribution
activities to the Detroit distribution facility. The sales decrease, as
mentioned above, also gave rise to the increase in operating expenses as a
percentage of sales.
The three factors previously mentioned in the discussion of quarterly
interest expense were primarily responsible for increased interest expense
for the six months ended August 1, 1998. The Company's interest expense for
the six months increased to approximately $1,976,000 from $1,318,000 of
interest expense incurred for the first six months of 1997. The Company's
interest expense expressed as a percentage of net sales increased to 2.4%
for the first six months of 1998 from 1.6% for the comparable period a year
ago.
For the six months ended August 1, 1998 the Company reported a net loss of
$6,541,781, or $4.23 per share, compared to a net loss of $5,245,294, or
$3.46 per share, for the comparable period last year.
Since the Company has fully exhausted all tax loss carrybacks and is in a
net operating loss carryforward position, it was unable to tax effect the
losses in the first six months of either year, therefore pre-tax and after-
tax results are the same.
FINANCIAL CONDITION
Cash and cash equivalents for the Company increased to $858,000 at August 1,
1998 from $564,000 at January 31, 1998 and was virtually unchanged from
August 2, 1997.
Net cash used in operating activities was $5.1 million for the first six
months of 1998, compared with net cash used in operating activities of $4.3
million reported during the first six months of 1997. This difference is
due to the $6.5 million loss reported during the period versus a loss of
$5.2 million in 1997 and an increase in non-cash depreciation and
amortization expense of $.3 million.
Investing activities used cash of $2,400,000 during the first six months of
1998, compared to $461,000 of cash used in investing activities for the
first six months of 1997. Investing activities included capital
expenditures for the remodel and re-fixturing of two existing stores, and
upgrades to the Company's information systems.
Financing activities provided cash of $7.8 million during the first six
months of 1998, compared to $5.4 million of cash provided last year. This
increase is attributable to increased borrowings on the Company's revolving
line of credit to fund the renovation of two stores as more fully explained
in "Other Developments" below. As a result the repayments of the line
proceeds were less than a year ago by $2.4 million. On June 10, 1998, the
Company amended its revolving line of credit to increase its borrowing
capacity to $43 million from $35 million, with an additional borrowing
capacity up to $50 million during the peak borrowing periods. For
additional information related to the amended revolving line of credit, see
"Other Developments" below.
On August 1, 1998, the Company's working capital position was $(1.3) million
compared to $8.1 million of working capital available at August 2, 1997. At
August 1, 1998, the Company's working capital ratio was 0.97, as compared to
1.21 reported at August 2, 1997. Accounts payable and notes payable short
term increased as a result of higher inventories (primarily for two new
stores), investments in long term assets (two new stores, two remodels and
the conversion to the Year 2000 compliant computer system), and the funding
of losses for the period. As a result there was a decrease in working
capital and working capital ratio.
During the six-month periods ended August 1, 1998 and August 2, 1997, the
Company did not pay or declare any cash dividends with respect to its stock.
OTHER DEVELOPMENTS
As disclosed in its Current Report on Form 8-K filed on July 10, 1998, the
Company amended its Loan and Security Agreement with Congress Financial
Corporation (Central) to increase its revolving line of credit to $43
million from $35 million, with an additional borrowing capacity up to $50
million during the peak borrowing periods of September 1 through November 30
of each year. In addition, the borrowing base has been increased to 34% of
eligible retail inventory from 30% and a LIBOR pricing option was added.
Management believes this LIBOR option will significantly lower the borrowing
rate on a significant portion of the loan facility. Currently the LIBOR
rate is less than the previously existing rate in the agreement by
approximately 3/4%. The Loan and Security Agreement was amended effective
June 10, 1998 to reflect these terms. The Company believes that this
expanded facility, together with cash provided by operating activities, will
be sufficient to meet the current funding needs, as well as the needs for
planned expansion, renovation of its current stores, and funding of the
Company's "Year 2000" solution.
The Company initiated a year 2000 conversion project in the first quarter of
1998 based on an extensive study completed in August 1997, with a $2.5
million budget. The objective of phase I of the project was to replace
antiquated merchandising, distribution, payroll, and back office hardware,
as well as, achieve year 2000 compliance through all hardware, software and
collateral support systems. The Company financed the project through a third
party, and has a $1.3 million letter of credit issued as collateral.
The Company's timetable for conversion to phase I from current software and
hardware systems is October 3, 1998. Phase II of the conversion program, to
be initiated in the fourth quarter, will focus on establishing a data
warehouse capability and upgrade of the existing financial and point of sale
systems to further improve supply chain management processes, inventory
controls and reporting capabilities.
A settlement of $357,000 was reached between the Company and the landlord
for a store located in Wilton, New York. The Company decided not to commence
operations at this location. The landlord and the Company were jointly
obligated, through a stipulation in the lease, to mitigate damages. The
Company negotiated for a full and unconditional release from all lease
contractual obligations involving this site. The landlord accepted all
Company conditions including a one-time payment equivalent to rent for one
year.
For several years, the Company has attempted to reach an agreement with a
landlord involving a Crowley's store in Detroit, Michigan addressing various
default conditions determined by an audit of lease terms and conditions
which discovered lease violations by the landlord over several past years.
The Company deferred the payment of these obligations pending reaching a
negotiated settlement with the landlord. A settlement was reached with the
landlord to amend the terms and conditions of the current lease and to
"forgive" the payment of approximately $400,000. The Company recognized this
settlement by reversing all associated accruals to income in the second
quarter of 1998.
In January 1998, the Company ceased operations at the Eatontown, New Jersey
distribution center and consolidated all receiving and distribution
operations at the Company's distribution center in Detroit, Michigan.
Eatontown receiving, distribution and delivery operations for the Steinbach
chain were outsourced to a contract third party. The objective of the
consolidation was to improve supply chain management capabilities and to
reduce distribution - operating expenses by $1 million. Year-to-date
through the second quarter the Company is on target for achieving both
objectives and by year end management anticipates achieving a minimum
savings of $1 million.
John R. Dallacqua, Vice President - Finance, Chief Financial Officer,
Secretary and Treasurer resigned in June 1998. Ray Attebery, Senior Vice
President - Operations and Chief Information Officer accepted the position
of Senior Vice President - Director of Finance and Chief Information
Officer. Mr. Attebery has over 26 years retail experience and joined Crowley
Milner & Co., in 1996. Mr. Attebery was Vice President and Controller for a
Division of the Dayton Hudson Corporation for several years.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
None.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings in which the Company is a
party to which its assets are subject.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Shareholders was held on May 19, 1998.
Proxies for the Annual Meeting were solicited pursuant to Regulation 14A of
the Securities Exchange Act of 1934, as amended, and there was no
solicitation in opposition to the Board's nominees for election to the Board
of Directors and all such nominees were elected. The matters voted on at the
meeting (as more fully described in the Proxy Statement, dated April 29,
1998), and the results of the shareholder voting, were as follows:
1. Election of directors to hold office until Annual Meeting of
Shareholders in 2001.
Dennis P. Callahan For 1,418,201; Withheld 4,160
JoAnn S. Cousino For 1,419,509; Withheld 2,852
Alfred M. Entenman, Jr. For 1,419,949; Withheld 2,412
Benton E. Kraner For 1,418,409; Withheld 3,952
2. Appointment of Ernst & Young LLP as auditors for fiscal year ended
January 31, 1999:
For 1,417,048
Against 4,714
Abstain 598
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule (EDGAR filing only).
(b) Reports on Form 8-K
On July 10, 1998, the Company filed a Current Report on Form 8-K, dated June
10, 1998, pursuant to which it reported under Item 5 on the consummation of
Amendment No. 2 to the Amended and Restated Loan and Security Agreement,
effective as of June 10, 1998, among Crowley, Milner and Company, Steinbach
Stores, Inc. and Congress Financial Corporation (Central) and the
resignation of John R. Dallacqua effective as of July 10, 1998, from the
positions of Vice President of Finance, Chief Financial Officer, Secretary
and Treasurer of the Company.
SIGNATURES
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.
CROWLEY, MILNER AND COMPANY
(Registrant)
DATE: September 14, 1998 By: /S/ RAY ATTEBERY
Ray Attebery
Senior Vice President (principal financial
and duly authorized officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-END> AUG-01-1998
<CASH> 858,256
<SECURITIES> 0
<RECEIVABLES> 2,639,043
<ALLOWANCES> 66,558
<INVENTORY> 47,891,163
<CURRENT-ASSETS> 53,628,043
<PP&E> 31,283,189
<DEPRECIATION> 16,220,233
<TOTAL-ASSETS> 73,512,295
<CURRENT-LIABILITIES> 54,974,147
<BONDS> 4,750,000
<COMMON> 1,552,462
0
0
<OTHER-SE> 3,415,460
<TOTAL-LIABILITY-AND-EQUITY> 73,512,295
<SALES> 81,722,196
<TOTAL-REVENUES> 81,644,969
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<INTEREST-EXPENSE> 1,976,846
<INCOME-PRETAX> (6,541,781)
<INCOME-TAX> 0
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,541,781)
<EPS-PRIMARY> (4.23)
<EPS-DILUTED> (4.23)
</TABLE>
