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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 5, 1996
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HANOVER DIRECT, INC.
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(Exact name of registrant as specified in its charter)
1-12082
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(Commission File Number)
Delaware 13-0853260
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(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
1500 Harbor Boulevard
Weehawken, New Jersey 07087
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(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (201) 863-7300
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On August 5, 1996, Hanover Direct, Inc., a Delaware corporation (the
"Company"), issued a press release reporting its 1996 second quarter results and
reference is made to a copy of such press release which is attached hereto as
Exhibit A and is incorporated herein by reference for all of its provisions.
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
A Press Release, dated August 5, 1996, issued by the Company
reporting its 1996 second quarter results.
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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 hereunto duly authorized.
HANOVER DIRECT, INC.
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(Registrant)
August 6, 1996 By: /s/Rakesh K. Kaul
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Name: Rakesh K. Kaul
Title: President & Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
99.A PRESS RELEASE, DATED AUGUST 5,1996,
ISSUED BY THE COMPANY REPORTING
ITS 1996 SECOND QUARTER RESULTS.
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FOR IMMEDIATE RELEASE Exhibit A
CONTACT: Debra A. Berliner
VP, Investor Relations and
Corporate Communications
(201) 319-3491
e-mail: [email protected]
HANOVER DIRECT REPORTS 1996 SECOND QUARTER RESULTS
WEEHAWKEN, NJ, August 5, 1996 -- Hanover Direct, Inc. (AMEX: HNV) today reported
financial results for the second quarter ended June 29, 1996.
For the second quarter ended June 29, 1996, Hanover Direct reported revenues of
$180.2 million, compared to revenues of $182.8 million for the second quarter of
1995. The net loss for the 1996 second quarter was ($12.5 million), or ($0.13)
per common share, compared to a net loss of ($7.5 million), or ($0.08) per
common share, in the second quarter of 1995.
For the six months ended June 29, 1996, Hanover Direct reported revenues of
$345.7 million, compared to revenues of $359.4 million for the six months ended
July 1, 1995. The net loss for the 1996 first half was ($22.0 million), or
($0.24) per common share, compared to a net loss of ($12.4 million), or ($0.13)
per common share, in the first half of 1995.
President and Chief Executive Officer Rakesh K. Kaul stated, "While second
quarter losses are unacceptably high, due primarily to continuing difficulties
in our Domestications business, we were pleased with the performance of most of
our other specialty catalog titles. In addition, a number of the strategies we
have put in place in the areas of cost reduction and productivity are showing
encouraging signs. On the demand side, we also saw improvements with second
quarter demand for continuing catalogs at $172.9 million, or 10.6% above the
comparable year-ago quarter. Further, the completion of the stock rights
offering is the first step to improving the liquidity of the Company. As we
execute our turnaround plan, we expect to see a favorable impact as early as the
fourth quarter of 1996."
Mr. Kaul further noted that the Company is close to announcing the addition of
several new senior managers in key positions, including president of
Domestications, vice president of operations for the home fashions distribution
center in Roanoke, VA and vice president of operations for the hardlines
distribution center in Hanover, PA. He said, "We are in the process of
significantly strengthening our management team with highly qualified personnel
who we believe represent the best in the business in their respective areas. Our
ability to attract these individuals is further testament to our overriding
confidence in the long-term opportunities that Hanover Direct offers."
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HNV 1996 Q2 Page 2
Commenting on the progress at the home fashions distribution center, Mr. Kaul
stated that the fixes have begun and reconfiguration of various aspects of the
facility is well underway. The Company expects to have the most important aspect
of the modification program, which is the installation and retrofitting of the
conveyer system, completed by October 1996. "We are on plan for completing the
conveyer modifications in time for the holiday selling season and we anticipate
further throughput improvements by the end of this year," Mr. Kaul said.
Mr. Kaul noted that the Company's $50 million shareholder rights offering, which
commenced on July 19, 1996, is continuing on plan and is expected to expire on
August 16, 1996 and close on August 23, 1996. Further, NAR, the Company's
majority shareholder, maintains its commitment to purchase any unsubscribed
common shares.
Hanover Direct, Inc. is a leading direct specialty retailer that markets, via a
portfolio of branded specialty catalogs, home fashions, general merchandise and
apparel, with 1995 total Company revenues of $750 million. Hanover Direct titles
include Domestications, a leading specialty home textiles catalog; The Company
Store, an upscale direct marketer of down comforters and other down and related
products for the home; Colonial Garden Kitchens, featuring work saving and
lifestyle enhancing items for the kitchen and home; International Male, offering
unique men's fashions with an international flair; Tweeds, the European-inspired
women's fashion catalog; Kitchen & Home, an upscale kitchen and home products
catalog; Gump's, a leading upscale catalog of exclusive gifts, which opened its
new retail store in downtown San Francisco in March 1995; The Safety Zone, a
direct marketer of safety, prevention and protection products; Silhouettes,
featuring everyday, workout, special occasion and career fashions for
larger-sized women; Undergear, a leader in activewear, workout wear and fashion
underwear for men; Austad's, a direct marketer of golf equipment, related
apparel and accessories; and Improvements, a leading do-it-yourself home
improvement catalog. The Company has a venture with Sears in which it mails
several of its catalogs under various names to Sears customers.
Cautionary Statements:
In accordance with the "Safe Harbor" provisions of the Private Securities
Litigation Reform Law of 1995, we have identified the following forward-looking
statements contained herein:
As we execute our turnaround plan, we expect to see a favorable impact
as early as the fourth quarter of 1996.
Mr. Kaul further noted that the Company is close to announcing the
addition of several new senior managers in key positions ...
The Company expects to have the most important aspect of the
modification program, which is the installation and retrofitting of the
conveyer system, completed by October 1996.
Further, the completion of the stock rights offering is the first step
to improving the liquidity of the Company.
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HNV 1996 Q2 Page 3
"We are on plan for completing the conveyer modifications in time for
the holiday selling season and we anticipate further throughput
improvements by the end of this year-"...
Mr. Kaul noted that the Company's $50 million shareholder rights
offering, which commenced on July 19, 1996, is continuing on plan and
is expected to expire on August 16, 1996 and close on August 23, 1996.
The following are important factors, among others, that could cause the
Company's actual results to differ materially from those expressed in any
forward-looking statements made by, or on behalf, of the Company:
A general deterioration in the economic conditions in the United States
leading to increased competitive activity including a business failure
of a substantial size company in the retail industry; and a reduction
in consumer spending generally or specifically with reference to the
types of merchandise that the Company offers in its catalogs;
an increase in the failure rate of consumer indebtedness generally; and
an increase in credit sales by the Company accompanied by an increase
in its bad debt experience with respect to consumer debt;
a delay in the implementation of the actions to be taken by the Company
to increase the efficiency of its operations; rapid increases and
decreases in the volume of merchandise that passes through the
Company's warehouse facilities;
incurring larger than anticipated losses in future interim periods;
the failure of the Company to stem the losses attributable to
Domestications;
the failure of the Rights Offering to be consummated on a timely basis;
the failure of the Company to achieve quarterly profitable operating
results by the end of fiscal 1996;
the failure of the Company to solve its operating problems at the new
Roanoke fulfillment center, including the installation and retrofitting
of the facility's conveyer system;
an increase in paper costs;
the inability of the Company to attract and retain high quality
executives to fill open management positions.
- table to follow -
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HANOVER DIRECT, INC.
CONSOLIDATED OPERATING SUMMARY
(In thousands except per share data and number of shares)
<TABLE>
<CAPTION>
13 Weeks Ended 26 Weeks Ended
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June 29, July 1, June 29, July 1,
1996 1995 1996 1996
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<S> <C> <C> <C> <C>
Operating costs and expenses $180,195 $182,774 $345,722 $359,365
Cost of sales and operating expenses 120,283 114,851 228,721 227,565
Write-down of inventory of discontinued catalogs -- 3,945 1,100 3,945
Provision for facility closings -- 214 -- 530
Selling expenses 52,026 51,198 97,417 101,832
General and administrative expenses 14,299 16,468 29,632 32,090
Depreciation and amortization 3,483 2,086 6,481 3,537
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Income (loss) from operations (9,896) (5,988) (17,629) (10,134)
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Interest expense, net (2,420) (1,386) (4,083) (2,138)
Interest income 46 197 215 283
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Income (loss) before income taxes (12,270) (7,177) (21,497) (11,989)
Income tax provision (250) (313) (500) (403)
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Net income (loss) (12,520) (7,490) (21,997) (12,392)
Preferred stock dividends (59) (59) (118) (105)
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Net income (loss) applicable to common shareholders ($12,579) ($7,549) ($22,115) ($12,497)
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Net income (loss) per share ($0.13) ($0.08) ($0.24) ($0.13)
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Weighted average shares outstanding 93,576,472 92,846,299 93,535,204 92,818,157
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</TABLE>
