<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> APR-01-1995
<CASH> 24,736
<SECURITIES> 0
<RECEIVABLES> 766,268
<ALLOWANCES> 32,816
<INVENTORY> 619,162
<CURRENT-ASSETS> 1,523,579
<PP&E> 524,673
<DEPRECIATION> 158,199
<TOTAL-ASSETS> 2,229,622
<CURRENT-LIABILITIES> 661,901
<BONDS> 960,452
<COMMON> 107,780
0
0
<OTHER-SE> 447,132
<TOTAL-LIABILITY-AND-EQUITY> 2,229,622
<SALES> 580,861
<TOTAL-REVENUES> 679,627
<CGS> 413,629
<TOTAL-COSTS> 413,629
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (1,030)
<INTEREST-EXPENSE> 26,366
<INCOME-PRETAX> (16,705)
<INCOME-TAX> (7,290)
<INCOME-CONTINUING> (9,415)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,415)
<EPS-PRIMARY> (0.09)
<EPS-DILUTED> (0.09)
</TABLE>
<PAGE>
- ------------------------------------------------------------------------------
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UNITED STATES
SECURITIES AND EXCHANGE COMMMISSION
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 quarter ended April 1, 1995
or
/ / 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 0-16126
SPIEGEL, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-2593917
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3500 Lacey Road, Downers Grove, Illinois 60515-5432
(Address of principal executive offices) (Zip Code)
708-986-8800
(Registrant's telephone number, including area code)
(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 CORPORATE ISSUERS
The number of shares outstanding of each of the issuer's classes of common
stock, as of May 8, 1995 are as follows:
Class A non-voting common stock, $1.00 par value
14,568,544 shares
Class B voting common stock, $1.00 par value
93,141,654 shares.
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<PAGE>
SPIEGEL, INC. AND SUBSIDIARIES
Due to the seasonality of the registrant's business, the results for
the three month periods are not necessarily indicative of the results
for the year. The financial statements have been prepared from the
books and records of the registrant. They reflect all adjustments
which are, in the opinion of management, necessary to a fair
presentation of the results for the interim periods. These financial
statements should be read in conjunction with the consolidated
financial statements and the notes thereto included in the
registrant's Annual Report on Form 10-K, which includes financial
statements for the year ended December 31, 1994.
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheets, April 1, 1995 and December 31, 1994
Consolidated Statements of Earnings,
Three Months Ended April 1, 1995 and March 31, 1994
Consolidated Statements of Cash Flows,
Three Months Ended April 1, 1995 and March 31, 1994
Notes to Consolidated Financial Statements
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
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<PAGE>
Spiegel, Inc. and Subsidiaries
Consolidated Balance Sheets
($000s omitted, except per share amounts)
April 1, 1995 and December 31, 1994
<TABLE>
<CAPTION>
(unaudited)
April 1, December 31,
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 24,736 $ 33,439
Receivables, net 733,452 1,125,728
Inventories 619,162 597,781
Prepaid expenses:
Catalog advertising 47,004 51,524
Other 33,111 29,446
Refundable income taxes 20,532 24,904
Deferred income tax benefit 45,582 45,580
------------ ------------
Total current assets 1,523,579 1,908,402
Property and equipment, net 366,474 335,103
Intangibles, net 179,478 180,446
Other assets 160,091 136,336
------------ ------------
$ 2,229,622 $ 2,560,287
------------ ------------
------------ ------------
LIABILITIES and STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt,including current maturities $ 263,920 $ 80,320
Accounts payable 154,898 265,752
Accrued liabilities:
Salaries and wages 23,075 31,114
General taxes 109,059 118,266
Other accrued liabilities 110,949 132,894
------------ ------------
Total current liabilities 661,901 628,346
Long-term debt, excluding current maturities 960,452 1,300,364
Deferred income taxes 52,357 52,360
------------ ------------
Total liabilities 1,674,710 1,981,070
Stockholders' equity:
Class A non-voting common stock,
$1.00 par value; authorized 16,000,000
shares; issued 14,638,544 shares
at April 1, 1995 and 15,065,244 at
December 31, 1994 14,638 15,065
Class B voting common stock,
$1.00 par value; authorized 94,000,000
shares; issued 93,141,654 shares
at April 1, 1995 and December 31, 1994 93,142 93,142
Additional paid-in capital 212,142 215,800
Retained earnings 234,990 255,210
------------ ------------
Total stockholders' equity 554,912 579,217
------------ ------------
$ 2,229,622 $ 2,560,287
------------ ------------
------------ ------------
</TABLE>
[FN]
See accompanying notes to consolidated financial statements.
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<PAGE>
Spiegel, Inc. and Subsidiaries
Consolidated Statements of Earnings
($000s omitted, except per share amounts)
Three Months Ended April 1, 1995 and March 31, 1994
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
April 1, March 31,
1995 1994
----------- -----------
<S> <C> <C>
Net sales and other revenues:
Net sales $ 580,861 $ 548,723
Finance revenue 64,006 58,232
Other revenue 34,760 15,179
----------- -----------
679,627 622,134
Cost of sales and operating expenses:
Cost of sales, including buying and
occupancy expenses 413,629 368,613
Selling, general and administrative
expenses 256,337 224,171
----------- -----------
669,966 592,784
----------- -----------
Operating income 9,661 29,350
Interest expense 26,366 17,706
----------- -----------
Earnings (loss) before income taxes (16,705) 11,644
Income tax provision (benefit) (7,290) 5,100
----------- -----------
Net earnings (loss) $ (9,415) $ 6,544
----------- -----------
----------- -----------
Net earnings (loss) per common share $ (0.09) $ 0.06
----------- -----------
----------- -----------
Weighted average number of common
shares outstanding 108,152,162 108,152,215
----------- -----------
----------- -----------
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE>
Spiegel, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
($000s omitted)
Three Months Ended April 1, 1995 and March 31, 1994
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
April 1, March 31,
1995 1994
------------ ------------
<S> <C> <C>
Net cash provided by (used in) operating activities $ 229,122 $ (98,724)
------------ ------------
Cash flows from investing activities:
Net additions to property and equipment (42,867) (15,386)
Net additions to other assets (23,755) (10,604)
------------ ------------
Net cash used in investing activities (66,622) (25,990)
------------ ------------
Cash flows from financing activities:
Borrowings of debt 205,000 158,500
Payments of debt (361,313) (23,916)
Dividends paid (10,805) (10,818)
Issuance of common stock -- 6,894
Repurchase of common stock (4,103) --
Exercise of stock options 18 247
------------ ------------
Net cash provided by (used in) financing activities (171,203) 130,907
------------ ------------
Net change in cash and cash equivalents (8,703) 6,193
Cash and cash equivalents at beginning of period 33,439 47,389
------------ ------------
Cash and cash equivalents at end of period $ 24,736 $ 53,582
------------ ------------
------------ ------------
Supplemental cash flow information:
Cash paid during the year for:
Interest $ 19,612 $ 14,802
Income taxes $ 1,345 $ 41,843
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE>
Spiegel, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
($000s omitted, except share amounts)
(unaudited)
(1) Adjustments
The financial statements reflect all adjustments, consisting only
of normal accruals, which are, in the opinion of management, necessary
to a fair presentation of the results for the periods presented.
(2) Receivables
During the first quarter of 1995, the Company transferred portions of its
customer receivables to a trust which, in turn, sold certificates
representing undivided interests in the trust to investors. Certificates sold
were $350,000. This transaction increased other revenue by $18,637 in the
first quarter. The Company owns the remaining undivided interest in the trust
not represented by the certificates and will continue to service all
receivables for the trust.
(3) Treasury Stock
During the first quarter of 1995, the Company purchased and retired 430,000
shares of Class A Non-Voting Common Stock at market value for a total cost
of $4,103. As discussed in the 1994 Annual Report on Form 10-K, the
Executive Committee of the Board of Directors approved the purchase of up
to 500,000 shares.
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<PAGE>
Item 2.
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Three Months Ended April 1, 1995 Compared With Three Months Ended
March 31, 1994
Net sales for the three months ended April 1, 1995, increased
5.9% to $580,861 compared to $548,723 for the three months ended
March 31, 1994. This increase is primarily the result of growth
in certain categories of women's and men's apparel as well as an
increase in the total number of Eddie Bauer retail stores to 356
at April 1, 1995 from 299 at March 31, 1994. Eddie Bauer's
comparable store sales decreased 5%. The Company took
aggressive markdowns in the first quarter to liquidate excess
inventories remaining from 1994, particularly cold weather
apparel.
Finance revenue increased 9.9% to $64,006 during the quarter due
primarily to increased average levels of Preferred Card
receivables before consideration of the sale of $350,000 of such
receivables that was completed in March 1995. Other revenue for
the first quarter of this year includes a gain of $18,637
recognized on this sale.
The gross profit margin on net sales decreased to 28.8% for the
three months ended April 1, 1995 compared to 32.8% for the
comparable 1994 period due to the aggressive markdowns mentioned
previously.
Selling, general and administrative expenses as a percentage of
total revenues for the three months ended April 1, 1995 and
March 31, 1994 were 37.7% and 36.0%, respectively. This
increase is due to higher paper and postal costs as well as
incremental expenses incurred as a result of the final
transition of Spiegel catalog operations to the new distribution
facility.
Interest expense for the three months ended April 1, 1995
increased 48.9% to $26,366 compared to $17,706 for the three
months ended March 31, 1994. This increase is due to higher
average debt levels and interest rates. The additional debt is
primarily used to finance working capital requirements including
higher average levels of customer accounts receivable and
inventory. The proceeds from the $350,000 sale of accounts
receivable were used to pay down debt.
Seasonality and Quarterly Fluctuations:
The Company, like other retailers, experiences seasonal
fluctuations in its merchandise sales and net income.
Historically, a disproportionate amount of the Company's net
sales and a majority of its net earnings have been realized
during the fourth quarter. Accordingly, the results for the
individual quarters are not necessarily indicative of the
results to be expected for the entire year.
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<PAGE>
Liquidity and Capital Resources:
The Company has historically met its operating and cash
requirements through funds generated from operations, the
issuance of debt and the sale of customer accounts receivable.
Total customer receivables sold were $830,000 at April 1, 1995
and $480,000 at December 31, 1994.
Net cash provided by operating activities was $229,122 for the
three month period ended April 1, 1995 as compared to net cash
used of $98,724 for the three month period ended March 31,
1994. The net cash proceeds from the sale of $350,000 of
accounts receivable were reported as operating cash flows in the
three months ended April 1, 1995. Other working capital items
including decreases in accounts payable and other accrued
liabilities represented significant uses of cash during the
first quarter of 1995.
Net additions to property and equipment for the three months
ended April 1, 1995 were $42,867 million consisting primarily of
capital spending related to the new retail distribution facility
in Columbus, OH, continued Eddie Bauer retail store expansion,
and the construction of a headquarters addition at Eddie Bauer.
The Company purchased and retired 430,000 shares of Class A
Non-Voting Common Stock at a total cost of $4,103 during the
first quarter of 1995. The shares were purchased at market
value, and they represent less than one percent of the Company's
total shares outstanding.
During the three months ended April 1, 1995, the Company
incurred approximately $4,700 of expenditures related to the
$39,000 nonrecurring charge taken in 1993. The charge provided
for the estimated impact of closing certain of the Company's
existing catalog distribution facilities. Expenditures incurred
during the first quarter of 1995 were for certain employee
termination benefits and for inventory transfers from Spiegel
warehouse operations in Chicago to the new facility in
Groveport, Ohio. The remaining balance of the reserve at April
1, 1995, was $11,200.
The Company believes that its cash on hand, together with cash
flows anticipated to be generated from operations, and
borrowings under its existing credit facilities and other
available sources of funds, will be adequate to fund the
Company's capital and operating requirements for the foreseeable
future, including expenditures related to distribution
facilities and new store openings.
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<PAGE>
SIGNATURE
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.
SPIEGEL, INC.
<TABLE>
<CAPTION>
Signature Title Date
- ------------------------- ------------------------ --------------
<C> <S> <C>
/s/ James W. Sievers Vice President May 12, 1994
James W. Sievers (Chief Financial Officer)
</TABLE>
