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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 12b-25
Commission File Number 1-542
NOTIFICATION OF LATE FILING
(Check one): [X] Form 10-K and Form 10-KSB [ ] Form 20-F [ ] Form 11-k
[ ] Form 10-Q and Form 10-QSB [ ] Form N-SAR
For Period Ended: December 31, 1995
[ ] Transition Report on Form 10-K [ ] Transition Report on Form 10-Q
[ ] Transition Report on Form 20-F [ ] Transition Report on Form N-SAR
[ ] Transition Report on Form 11-K
For the Transition Period Ended: _________________________
Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates:
Part I - Registrant Information
Grossman's Inc.
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(Full name of registrant)
45 Dan Road, Canton, Massachusetts 02021
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(Address of principal executive office)
Part II - Rules 12b-25 (b) and (c)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be competed. (Check box if applicable)
[X] (a) The reasons described in reasonable detail in Part III of this form
could not be eliminated without unreasonable effort or expense.
[X] (b) The subject annual report, semi-annual report, transition report on
Form 1-K, 20-F, 11-K or From N-SAR, or portion thereof will be filed on or
before 15th calendar day following the prescribed due date; or the subject
quarterly report or transition report on Form 10-Q, or portion thereof
will be filed on or before the fifth calendar day following the prescribed
due date; and
[ ] (c) The accountant's statement or other exhibit required by Rule
12b-25(c) has been attached if applicable.
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Part III - Narrative
On March 28, 1996, the Company announced plans for a major restructuring and
refinancing of its business (the related press release and year end earnings
release are attached). Firm agreements have been reached for each significant
component of the restructuring and refinancing; however, the several
agreements related to these events and other documentation are still being
reviewed and finalized.
The Company's financial statements and other portions of its Form 10-K are in
the process of being revised to include the effects of these actions and the
provisions of these agreements. In addition, the Company's auditors are in
the process of considering this documentation and the related financial
statement disclosures in connection with the issuance of their opinion.
Accordingly, the Company is unable to file its Form 10-K by its due date
without unreasonable effort or expense.
The Company is confident that the necessary documentation will be available
and that the related disclosures and auditor review will be completed in the
immediate future, but in no event later than April 16, 1996.
Part IV - Other Information
(1) Name and telephone number of person to contact in regard to this
notification
Steven L. Shapiro 617 830-4020
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(Name) (Area Code) (Telephone number)
(2) Have all other periodic reports required under Section 13 or 15(d) of the
Securities Exchange Act of 1934 or Section 30 of the Investment Company Act of
1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If the answer is
no, identify report(s).
[X] Yes [ ] No
(3) It is anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected by
the earnings statements to be included in the subject report or portion
thereof?
[ ] Yes [X] No
Grossman's Inc.
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(Name of registrant as specified in charter)
Has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.
Date _____________________ By _____________________________________
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FOR IMMEDIATE RELEASE CONTACT: Steven L. Shapiro
Vice President - Controller
(617) 830-4020
GROSSMAN'S INC. ANNOUNCES RESTRUCTURING
AND REFINANCING PLAN
---------------------------------------
CANTON, MA (March 28, 1996) Sydney L. Katz, President and Chief Executive
Officer of Grossman's Inc. (NASDAQ-GROS) today announced a major restructuring
and refinancing plan, under which the Company's Grossman's Stores Division
will be closed with the improved liquidity used to continue expansion of
Contractors' Warehouse and Mr. 2nd's Bargain Outlet.
Under the program, the Company's 60 Grossman's stores, located in eight
Northeastern states, will be closed and inventories liquidated over an
estimated ten week period. Concurrent with the store closings, administrative
support functions in the Company's home office in Canton, Massachusetts will
be reduced. Simultaneously, expansion of Contractors' Warehouse and Mr. 2nd's
Bargain Outlet stores will continue, with the 16th Contractors' Warehouse
store, located in Lexington, Kentucky, scheduled to open in May 1996 and a
Cleveland, Ohio store planned for Fall 1996. Additional sites are being
explored for Contractors' Warehouse stores. The Mr. 2nd's Bargain Outlet
Division, which opened three stores in Massachusetts this month, is expected
to open four or more stores this summer, some of which will be conversions
from Grossman's stores being closed.
These actions have enabled Grossman's to obtain a committment for a $33
million secured mortgage loan, $4 million of which is convertible at the
option of the lender into common stock. Repayment of the loan will be
financed by the sale of 55 owned properties in the Northeast, including 40 of
the stores being closed. The Company also announced it has reached an
agreement in principle with the holders of the Company's 14% Debentures,
curing the current default. Cash payments of approximately $12 million will
be made and notes will be issued for the balance owed, half of which are also
convertible at the option of the lender into common stock. Further, the
Company's $15.8 million note receivable from Kmart Corporation, which was due
in two installments in 1997, has been sold for $13 million, its approximate
discounted book value.
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Mr. Katz said, "The decision to close the Grossman's stores was extremely
difficult, given the Company's history of service to customers and the many
dedicated associates affected by this decision. The extremely competitive
business environment, however, along with the division's inability to provide
acceptable financial returns, forced us to take decisive action to position
the Company for future growth for the benefit of all its shareholders.
Obtaining financing during the period in which we will be divesting of non-
strategic real estate will create the liquidity necessary for us to once again
grow our business.
He added, "We are committed to pay in full, and in a timely manner, all
outstanding and future obligations to our vendors. We thank all our vendors
for their cooperation and support and, as we reposition and grow, we look
forward to strong and mutually beneficial relationships with suppliers to our
Contractors' Warehouse and Mr. 2nd's Bargain Outlet stores."
The Company expects to reflect a restructuring charge, estimated to be
approximately $40 million, in the current financial quarter which ends March
31, 1996. The Company also expects a significant improvement in liquidity
following completion of all financing transactions. Financial statements for
the year ended 1995, containing details of the financing arrangements, will be
filed with the Securities and Exchange Commission and available for public
distribution on April 1, 1996.
Upon completion of the store closings, the Company's total workforce will have
been reduced from approximately 3,400 to approximately 1,800 employees.
Grossman's operates 15 Contractors' Warehouse stores in California, Nevada,
Indiana and Ohio and 24 Mr. 2nd's Bargain Outlet stores in Massachusetts,
Rhode Island and New York State.
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FOR IMMEDIATE RELEASE CONTACT: Steven L. Shapiro
Vice President - Controller
(617) 830-4020
GROSSMAN'S INC. RELEASES YEAR END RESULTS
AND BALANCE SHEETS
-----------------------------------------
CANTON, MA (April 1, 1996) - Grossman's Inc. (NASDAQ-GROS)
today announced results for the quarter and year ended
December 31, 1995. The Company reported a loss of $198 thousand,
or 1 cent per share, for the year on sales of $670 million, as
compared with a loss of $1.9 million, or 7 cents per share, for
the year ended December 31, 1994. For the fourth quarter of 1995,
the Company reported a loss of $5.9 million, or 23 cents per
share, versus a loss of $1.0 million, or 4 cents per share, for
the same quarter a year ago.
The 1995 results include a pre-tax gain on the sale of the
Company's former headquarters site of $18.1 million and a
provision for the closing of 11 Eastern Division stores of $4.5
million. The 1994 results include a provision of $6.5 million for
the closing of 18 Eastern Division stores.
Last week the Company announced a major restructuring and
refinancing plan. The remaining 60 Grossman's stores in eight
Northeastern states are being closed and inventories are being
liquidated over an estimated eight to ten week period. Expansion
of the Company's Contractors' Warehouse Division in the West and
Midwest and the Mr. 2nd's Bargain Outlet Division in the East will
continue in 1996 and future years. The Company indicated that it
plans to convert a limited number of the former leased Grossman's
stores into Mr. 2nd's Bargain Outlet stores during 1996.
The actions enabled the Company to obtain a commitment for a
mortgage loan to be repaid from the proceeds from the sale of 55
owned properties in the Northeast, including 40 of the stores
being closed. The Company also announced that it had reached an
agreement with the holders of the Company's 14% Debentures, curing
a January default. Lastly, the Company stated that it had sold a
$15.8 million note receivable from Kmart Corporation for $13
million, its approximate book value. The Company expects to reflect
a restructuring charge of approximately $40 million in the first
quarter of 1996.
Grossman's operates 39 stores in four Northeastern states, California,
Indiana, Nevada and Ohio under the names Contractors' Warehouse
and Mr. 2nd's Bargain Outlet.
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<TABLE>
Grossman's Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
<CAPTION>
Three Months Ended Year Ended
December 31, December 31,
------------------ ------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
SALES $155,161 $177,824 $669,899 $759,156
COST OF SALES 118,407 134,401 510,220 572,095
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Gross Profit 36,754 43,423 159,679 187,061
OPERATING EXPENSES
Selling and
administrative 40,078 39,614 156,995 164,495
Depreciation and
amortization 2,571 3,041 11,221 12,625
Store closing - - 4,500 6,500
Preopening expense 262 643 724 1,378
--------- --------- --------- ---------
42,911 43,248 173,440 184,998
--------- --------- --------- ---------
OPERATING INCOME
(LOSS) (6,157) 125 (13,761) 2,063
OTHER EXPENSES
(INCOME)
Interest expense 1,773 1,755 8,211 7,376
Net gain on disposals
of property (32) (11) (18,345) (364)
Other (1,545) (719) (4,095) (3,322)
--------- --------- --------- ---------
196 1,025 (14,229) 3,690
EQUITY IN NET LOSS
OF UNCONSOLIDATED
AFFILIATE 183 252 666 490
--------- --------- --------- ---------
(LOSS) BEFORE INCOME
TAXES (6,536) (1,152) (198) (2,117)
(CREDIT) FOR INCOME
TAXES (634) (115) - (212)
--------- --------- --------- ---------
NET INCOME (LOSS) $ (5,902) $ (1,037) $ (198) $ (1,905)
========= ========= ========= =========
NET INCOME (LOSS)
PER COMMON SHARE
(Primary and Fully
Diluted) $ (0.23) $ (0.04) $ (0.01) $ (0.07)
========= ========= ========= =========
WEIGHTED AVERAGE
SHARES AND
EQUIVALENT SHARES
OUTSTANDING
(Primary and
Fully Diluted) 26,028 25,762 25,946 25,752
========= ========= ========= =========
</TABLE>
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<TABLE>
Grossman's Inc.
Consolidated Balance Sheets
(in thousands)
(Unaudited)
<CAPTION>
December 31, December 31,
1995 1994
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<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,536 $ 3,034
Receivables, net 23,940 19,449
Inventories 102,009 116,602
Note receivable, net 13,000 -
Other current assets 6,512 9,048
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Total current assets 147,997 148,133
PROPERTY, PLANT AND
EQUIPMENT, NET 94,256 114,897
OTHER ASSETS 1,276 3,590
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TOTAL ASSETS $243,529 $266,620
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LIABILITIES AND STOCKHOLDERS'
INVESTMENT
CURRENT LIABILITIES
Accounts payable and
accrued liabilities $ 91,308 $ 89,816
Accrued interest 1,403 1,555
Current portion of
long-term debt and
capital lease obligations 20,445 13,278
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Total current liabilities 113,156 104,649
REVOLVING TERM NOTE
PAYABLE 32,844 29,888
LONG-TERM DEBT AND CAPITAL
LEASE OBLIGATIONS 5,668 30,039
PENSION LIABILITY 8,270 4,348
OTHER LIABILITIES 9,796 17,051
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Total Liabilities 169,734 185,975
STOCKHOLDERS' INVESTMENT 73,795 80,645
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TOTAL LIABILITIES AND
STOCKHOLDERS' INVESTMENT $243,529 $266,620
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</TABLE>
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