<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
--- OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended January 25, 1997
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________
Commission File No. 1-258
JG INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Illinois 36-1141010
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5630 West Belmont Avenue, 60634
Chicago, Illinois (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (773) 481-5410
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- -----------------------
Common Stock, No Par Value Chicago Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
_______________
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
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K ((S)229.405 of this chapter) is not contained
herein, and will not be contained, to the best of Registrant's knowledge,
in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of Common Stock held by nonaffiliates of
the Registrant on April 15, 1997 was approximately $1,142,265. On that date
there were 1,060,705 shares of Common Stock issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and III incorporate by reference certain information to be
included in Registrant's definitive Proxy Statement for the Annual Meeting
of Stockholders currently scheduled for June 9, 1997.
Index to Exhibits on Pages 30 through 34.
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<PAGE>
Item 1. Business
- ------- --------
General Information
JG Industries, Inc. ("JG") is an Illinois corporation organized on February 27,
1928. Effective July 23, 1985 the name of the Company was changed from Goldblatt
Bros., Inc. to JG Industries, Inc. JG and its subsidiaries are hereinafter
collectively referred to as the "Company." The Company's continuing operations
are comprised of nine discount department stores located in the Chicago,
Illinois vicinity and one in Indiana.
Acquisitions, Public Offering and Dispositions
At the Company's Annual Meeting of Shareholders on July 20, 1993, the share-
holders approved a 3,000,000 share increase to the Company's authorized capital
stock and an Agreement and Plan of Merger (the "Agreement") between the Company
and SGH, Inc. ("SGH") which was owned 80% by JG and 20% by Jupiter Industries,
Inc. ("Jupiter")(a shareholder of the Company). Under the terms of the
Agreement, SGH was merged with and into the Company, with the Company being the
surviving corporation. The shares of SGH owned by the Company were canceled and
the shares of SGH owned by Jupiter were converted into the right to receive
375,667 shares of the Company's common stock.
The merger was completed on July 27, 1993 and the 375,667 shares of the
Company's common stock were issued to Jupiter on August 4, 1993. As a result of
this stock issuance, Jupiter's ownership interest in JG was increased from
approximately 46.4% to 55.2%.
Effective as of October 29, 1993, the Company, Sussex Group Ltd. ("Sussex") (an
indirect majority owned subsidiary of JG) and Jupiter entered into a Stock
Purchase and Loan Agreement. Under the terms of the agreement, the Company,
through Sussex, borrowed $5,075,000 from Jupiter on October 29, 1993. The note
was repaid per the terms of the agreement on February 4, 1994 by the transfer of
700,000 shares of Huffman Koos Inc. ("H-K") (a majority owned subsidiary of
Sussex) common stock from Sussex to Jupiter, along with interest at the prime
rate.
Effective November 30, 1994, Sussex and Jupiter entered into a Stock Purchase
Agreement whereby Sussex sold an additional 100,000 shares of H-K common stock
to Jupiter for $800,000.
As a result of the transfer and sale of the 800,000 shares, the Company
recognized a gain of $1,540,000 in fiscal 1995. This gain was recorded as an
increase to paid-in capital and represented the difference between the amount of
the note retired and cash received and the amount of H-K net equity represented
by these shares.
Effective May 23, 1995, Sussex and Jupiter entered into a Stock Purchase
Agreement whereby Sussex sold an additional 150,000 shares of H-K common stock
to Jupiter for $1,125,000. As a result of the sale of these shares, the Company
recognized a gain of $176,000. This gain was recorded as an increase to paid-in
capital and represented the difference between cash received and the amount of
H-K net equity represented by these shares. The Company used $625,000 of the
proceeds to make payments on JG's $7,125,000 term loan.
The Stock Purchase and Loan Agreement and Stock Purchase Agreement (the
"Agreements") contained a provision which allowed Sussex to repurchase any or
all of the 950,000 H-K shares for a purchase price ranging from $7.25 to $8.00
per share plus interest on such amount. The Agreements also contained a
provision which required Jupiter to vote the 950,000 H-K shares for the election
of a majority of the Board of Directors of H-K as Sussex shall direct. As a
result of this voting provision the Company, through Sussex, retained effective
control of H-K. The Company and Jupiter collectively owned of record 2,200,000
of H-K shares, representing approximately 55.9% of the total issued and
outstanding H-K shares at October 27, 1995.
2
<PAGE>
Item 1. Business, continued
- ------- -------------------
Pursuant to an Agreement and Plan of Merger dated September 18, 1995,
stockholders of H-K stock received a tender offer from an unrelated third party
on September 25, 1995 to acquire all of the issued and outstanding H-K shares at
a per share purchase price of $9.375 in cash. Upon consumption of the tender
offer on October 27, 1995, Sussex sold the 1,250,000 H-K shares held directly by
it for an aggregate cash consideration of approximately $11,719,000. On October
27, 1995, pursuant to an agreement dated September 18, 1995 between Jupiter and
Sussex, Sussex also exercised its option to repurchase the 950,000 H-K shares
for the total purchase price of $7,000,000, plus interest of approximately
$641,000, and instructed Jupiter to tender the 950,000 H-K shares. As a result
of the repurchase, the Company recorded a $1,530,000 loss. This loss was
recorded as a decrease to paid-in capital and represented the difference between
the total cash due to Jupiter and the proportionate portion of H-K equity
represented by these shares. The Company also recorded a receivable from Jupiter
of approximately $1,265,000. This receivable represented the difference between
proceeds from the sale of $8,906,000 and $7,641,000 owed to Jupiter by Sussex.
The $6,295,000 gain on sale of discontinued operations for the quarter ending
October 28, 1995 is net of applicable income tax of $349,000 and includes
$42,000 of net income from discontinued operations during the phase-out period
from the measurement date of September 25, 1995, net of reversal of income taxes
provided in earlier quarters.
On July 11, 1996, Goldblatt's Department Stores, Inc. and Goldblatt Subsidiary,
Inc., wholly-owned subsidiaries of the Company (the "Subsidiaries"), closed the
transactions contemplated by an Agreement of Purchase and Sale by and between
the Subsidiaries and Delray Farms, Inc. (the "Purchaser"). Pursuant to the terms
of the agreement, the Subsidiaries sold to the Purchaser a parking lot located
at 91st Street and Exchange Avenue, Chicago, Illinois and the three properties
located at 1615 West Chicago Avenue, Chicago, Illinois; 3311 West 26th Street,
Chicago, Illinois; and 9100 South Commercial Avenue, Chicago, Illinois for an
aggregate consideration of $5,000,000 (exclusive of proceeds from inventory
liquidation and layaway receivables, net of closing costs). The stores located
on the three properties were closed within 90 days of July 11, 1996.
On December 12, 1996 the shareholders, by majority vote, amended the Company's
Articles of Incorporation to effect a one-for-three reverse stock split (the
"Reverse Stock Split") of the Company's issued and outstanding shares of Common
Stock. The Reverse Stock Split was effective December 27, 1996.
On December 13, 1996, JG Industries, Inc., pursuant to the terms of a certain
Stock Purchase Agreement, by and among Jupiter and the Company, purchased from
Jupiter, (i) 1,293,258 shares of the Company's Common Stock, and (ii) 445 shares
of the Company's Series A Preferred Stock, for an aggregate purchase price of
$5,510,864, of which $2,500,108 was paid in cash, $1,264,858 was paid by offset
against liabilities of Jupiter to the Company, and $1,745,898 was paid by
delivery of a promissory note. In connection with this transaction, Jupiter
waived accrued dividends of $1,164,000. The gain resulting from the waiver was
recorded as an increase to paid-in capital. Prior to the consummation of this
transaction, Jupiter was the Company's largest shareholder, holding 1,293,258 of
the Company's Common Stock (approximately 55.2% of the issued and outstanding
Common Stock) and all of the Company's issued and outstanding Series A Preferred
Stock.
Effective December 13, 1996 the Company, pursuant to terms of a certain Series B
Convertible Preferred Stock Purchase Agreement (the "Series B Preferred Stock
Purchase Agreement"), by and among certain officers and a director
(collectively, the "Purchasers") and the Company, issued and sold to the
Purchasers, through a private placement, 1,500 shares of Series B Convertible
Preferred Stock of the Company, no par value per share (the "Series B Preferred
Shares"), for an aggregate purchase price of $1,500,000. The holders of Series B
Preferred Shares are entitled to vote with the holders of Common Stock on all
matters submitted to a vote of the Company's shareholders as a single class,
with each Series B Preferred Share having the number of votes equal to the
number of shares of Common Stock into which one share of Series B Preferred
Stock may be converted. Currently, each share of Series B Preferred Stock is
entitled to 444.44 votes.
3
<PAGE>
Item 1. Business, continued
- ------- -------------------
After giving effect to the repurchase from Jupiter and the issuance to the
Purchasers, the Purchasers control approximately 45.7% of the Company's voting
rights.
The holders of Series B Preferred Shares may convert all or any portion of such
shares into the number of shares of the Company's Common Stock computed by
dividing (i) the product of (a) the number of Series B Preferred Shares to be
converted, times 1,000 by (ii) the conversion price. The current conversion
price is $2.25. Accordingly, each Series B Share is presently convertible into
444.44 shares of Common Stock.
Dividends upon each Series B Preferred Share accrue daily at a rate equal to 9%
per annum. Additional information regarding the terms and financing relative to
acquisitions/dispositions is included in the notes to consolidated financial
statements.
The Company operates in one industry segment of the retail market which is
defined as Discount Department Stores. Goldblatt's Department Stores, Inc.
("Goldblatt's"), a wholly-owned subsidiary of the Company, offers customers a
diverse assortment of both nationally branded and private label merchandise,
emphasizing a full range of both soft and hard line goods. The stores frequently
feature special promotions of merchandise purchased on advantageous terms. Soft
line merchandise includes men's, women's, children's and infant's wearing
apparel and accessories. Hard line merchandise includes textiles and domestics,
televisions and electronics, small appliances and housewares, cosmetics and
notions, hardware, toys and sporting goods. Over the past five years, soft line
departments have provided between 52% and 54% of owned sales. Goldblatt's also
licenses jewelry, shoe, millinery and optical departments for operation at
certain of its stores.
The department stores maintain a centralized purchasing function, buying goods
direct from domestic and international manufacturers and through wholesalers. No
single vendor accounted for more than 4% of total department store purchases
during fiscal 1997. Supplier relationships are considered strong and Goldblatt's
continues to obtain favorable pricing and payment terms on many purchases.
The department store business is seasonal with approximately 29% of total sales
occurring in the fourth quarter.
<TABLE>
<CAPTION>
Balance at Opened/Purchased Closed/Sold Balance at
Description Beginning of Year Stores Stores End of Year
- ----------- ----------------- ---------------- ----------- -----------
<S> <C> <C> <C> <C>
Discount depart-
ment stores
Fiscal year 1995 14 14
Fiscal year 1996 14 14
Fiscal year 1997 14 4 10
</TABLE>
Competition
The Company's discount department stores are highly competitive. The Company
competes with national and local retail establishments, both large and small,
for the patronage of its customers. Some of the largest retail merchandise
companies with substantially greater resources than the Company have outlets
located in the same areas in which the Company's subsidiaries operate. The
Company's overall promotional strategy is to emphasize quality merchandise at
competitive prices.
4
<PAGE>
Item 1. Business, continued
- ------- -------------------
Employees
The Company employs 733 people, comprised of 4 employees of JG and 729 employees
of Goldblatt's. The Company believes that its relationship with its employees is
good.
Item 2. Properties
- ------- ----------
The Company owns and leases the retail merchandise stores, office and warehouse
locations described below. In the opinion of management, the properties are
suitable and adequate for the conduct of its business.
At April 29, 1997, Goldblatt's owns in fee one retail location in Chicago,
Illinois. This one property has gross square footage of 135,000. Goldblatt's
leases its other nine retail locations, aggregating 720,100 gross square feet,
with expirations, excluding renewal options, ranging from 1999 to 2008. Six
stores have renewal options of up to 25 years. Aggregate minimum rentals with
respect to the foregoing leasehold properties are approximately $1,727,000
annually.
Item 3. Legal Proceedings
- ------- -----------------
No material legal proceedings are currently pending against the Company.
Item 4. Submission of Matters to a Vote of Security Holders
- ------- ---------------------------------------------------
The following proposals were submitted to a vote of the Company's shareholders
during the fourth quarter of fiscal 1997 at The Annual Meeting of Shareholders
held on December 12, 1996.
Proposal 1: To approve the issuance in a private sale of 1,500 shares of the
Company's Series B Convertible Preferred Stock, for an aggregate
consideration of $1,500,000; approved with 5,311,335 votes for,
201,112 votes against, and 2,149 votes abstaining;
Proposal 2: To approve the purchase by the Company of 3,879,773 (prior to
giving effect to the proposed reverse stock split) shares of the
Company's Common Stock and 445 shares of the Company's Series A
Preferred Stock, from Jupiter Industries, Inc.; approved with
5,479,127 votes for, 33,703 votes against, and 1766 votes
abstaining;
Proposal 3: To approve an amendment to the Company's 1988 Stock Option Plan to
increase the number of Shares of Common Stock issuable under such
plan from 320,000 shares to 620,000 shares; approved with 5,472,635
votes for, 40,553 votes against, and 1408 votes abstaining;
Proposal 4: To approve the proposal to amend the Company's Articles of
Incorporation to effect a one-for-three reverse split of the
Company's issued and outstanding common stock; approved with
5,503,510 votes for, 9,417 votes against, and 1669 votes
abstaining;
Proposal 5: To elect seven persons to the Board of Directors; elected with no
Director receiving less than 5,479,454 votes;
Proposal 6: To approve appointment by the Board of Directors of Coopers &
Lybrand L.L.P. as auditors for the Company; approved with 5,511,966
votes for, 1,401 votes against, and 1229 votes abstaining.
5
<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity
- ------- -----------------------------------------
and Related Stockholder Matters
-------------------------------
Although the Company's Common Stock is listed on the Chicago Stock Exchange
("CSE"), the volume of shares traded on the CSE was limited during the years
ended January 25, 1997 (fiscal 1997) and January 27, 1996 (fiscal 1996). The
Common Stock is also listed on the NASD Automated Quotation System, with a
trading symbol of JGIN. The following table lists the reported high and low bid
quotations as quoted on the NASD Automated Quotation System for each quarterly
period during fiscal 1997 and 1996. Such over-the-counter market quotations
reflect interdealer prices, without retail markup, markdown or commission and
may not necessarily represent actual transactions. The Company has not paid
dividends in any of the last five years. There were approximately 2,422 holders
of record of Common Stock on April 15, 1997.
<TABLE>
<CAPTION>
Price Range
-----------
High Low
---- ---
<S> <C> <C>
Fiscal 1997
First Quarter $1.31 $ .94
Second Quarter 1.63 1.00
Third Quarter 1.23 .63
Fourth Quarter 2.63* 1.25*
Fiscal 1996
First Quarter $1.88 $1.44
Second Quarter 1.63 1.13
Third Quarter 2.25 1.13
Fourth Quarter 1.88 1.00
</TABLE>
*On December 12, 1996 the shareholders approved a proposal to amend the
Company's Articles of Incorporation to effect a one-for-three reverse stock
split of the Company's issued and outstanding Common Stock. The price range
shown above for the fourth quarter of fiscal 1997 reflects the per share effect
of this split.
6
<PAGE>
Item 6. Selected Financial Data
- ------- -----------------------
Following is selected financial data for the Company for each of the last five
fiscal years.
<TABLE>
<CAPTION>
(in thousands, except share data)
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net sales from continuing operations $ 60,198 $ 72,964 $ 77,106 $ 76,900 $ 77,482
Operating (loss) income (2,195) (2,871) (68) (2,501) 156
Loss from continuing operations (2,101) (4,103) (1,121) (3,621) (901)
Income (loss) from discontinued operations (49) 6,856 1,608 2,276 (6,738)
Income (loss) before extraordinary items (2,150) 2,753 487 (1,346) (7,639)
Net income (loss) (2,150) 2,753 487 (1,346) (7,149)
Net income (loss) applicable to common
and common equivalent shares (2,577) 2,472 267 (1,527) (8,333)
Per share income (loss) applicable to common and common
equivalent shares:
Loss from continuing operations (1.15) (1.86) (.57) (1.75) (1.06)
Income (loss) before extraordinary items (1.17) 1.05 .11 (.70) (4.47)
Net income (loss) (1.17) 1.05 .11 (.70) (4.22)
Total assets 15,675 25,315 76,007 73,004 68,888
Long-term obligations 2,031 2,776 11,269 21,466 18,107
Redeemable preferred stock 3,937 3,657 3,183 5,005
Convertible preferred stock 1,500
Weighted average number of common and common
equivalent shares outstanding 2,194,085 2,353,445 2,351,702 2,168,413 1,972,753
</TABLE>
7
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
- ------ -----------------------------------------------------------------------
of Operations
-------------
Liquidity and Capital Resources
Approximately $3,687,000 of net cash was used in financing activities during the
year. The utilization of this cash, along with other cash proceeds discussed
below, reduced the total debt (including minority interest and preferred stock
mandatory redemption obligations) by $7,399,000 to $8,384,000 as compared to
$15,783,000 at the beginning of the year. Debt to equity improved to 1.1 to 1
from 1.7 to 1.
Working capital as stated by the current ratio remained stable at 1.7 to 1 as
compared to 1.7 to 1 for fiscal 1996.
As a percentage of equity, fixed assets decreased to 76% as compared to 98% at
the beginning of fiscal 1997.
On July 11, 1996 the Company sold three parcels of real estate housing Goldblatt
stores to Delray Farms, Inc. for a total of $5,000,000. The stores that formerly
operated in these locations were closed and the liquidation of the inventory
produced additional proceeds of approximately $1,600,000.
Effective December 13, 1996, certain officers and a director of the Company
purchased 1,500 shares of 9% Cumulative Series B Convertible Preferred Stock for
$1,500,000.
Pursuant to a stock purchase agreement dated December 13, 1996 the Company
purchased from Jupiter 445 shares of Series A Preferred Stock and 1,293,258
shares of the Company's Common Stock for an aggregate price of $5,510,864, of
which $2,500,108 was paid in cash, $1,264,858 was paid by offset against
liabilities of Jupiter to the Company and $1,745,898 was paid by delivery of a
promissory note.
Goldblatt's Department Stores, Inc. spent approximately $1,100,000 on capital
expenditures during fiscal 1997 related to normal capital maintenance and the
relocation and construction of new corporate offices on the upper level of the
store located at 5630 West Belmont Avenue, Chicago, Illinois. No new store
openings are planned for Goldblatt's during fiscal 1998.
Pursuant to the terms of a lease termination Agreement effective January 31,
1997, The Goldblatt's store located on Western Avenue was closed during the
year. Expenses related to the closing of the store and the expenses related to
the lease termination amounted to approximately $864,000.
The furniture, fixtures and computer equipment from the closed stores
(approximately $548,000) were retained and are currently in storage. It is
anticipated that these fixtures and equipment will be used in the opening of new
stores in future years and for replacement fixtures in store remodeling
projects. The utilization of these partially depreciated assets instead of the
purchase of new fixtures will result in a significant savings to the Company.
Effective April 23, 1997, Goldblatt's executed a new $2,000,000 line of credit
Agreement with a maturity date of May 1, 1998. The line of credit is
collateralized by the inventory of the Company. The Agreement requires that the
Company maintain an inventory of at least $5,500,000 and a tangible net worth of
$5,500,000. The Company believes that Goldblatt's working capital and line of
credit will be adequate to fund current operations through fiscal 1998.
8
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
- ------- -----------------------------------------------------------------------
of Operations, continued
------------------------
Results of Operations
Year Ended January 25, 1997 (fiscal 1997)
- -----------------------------------------
vs. Year Ended January 27, 1996 (fiscal 1996)
- ---------------------------------------------
The comparison of fiscal years 1997 and 1996 is materially distorted due to the
sale of three stores in July, 1996 and the closing of a fourth store in
November, 1996. Of the $12,700,000 loss in sales, $10,300,000 is directly
attributable to the store closings and $2,400,000 is attributable to net sales
decrease on a comparable store basis. This loss in sales from continuing
operations is attributable to a number of factors including but not limited to:
a. The store closing sales conducted by the liquidator which reduced the
sales of continuing stores, and
b. Adverse weather conditions which negatively impacted sales promotion
efforts.
Sales late in the fiscal year indicate a reversal of this trend. In addition,
Goldblatt's has experienced sales increases for four consecutive months
commencing in December, 1996 and continuing through March, 1997. The company
experienced a sizeable sales increase in March (10.1%) but this was partially
attributable to Easter falling in March as compared to April last year. It is
anticipated that, due to this calendar change, April, 1997 sales will fall short
of April, 1996 sales, but that sales for the first quarter of fiscal 1998 will
be above last year.
As a result of improved inventory controls and supervision, the gross profit
improved to 32.7% of sales as compared to 31.4% last year.
Expenses decreased by approximately $5,260,000 to $21,760,000 as compared to
$27,020,000 last year. This lower expense is attributable to the closing of four
Goldblatt's stores and a reduction in interest expense as a result of the
retirement of short-term and long-term debt.
The combined impact of the gross profit improvement and the expense reductions
noted above produced a 49% improvement in the loss from continuing operations to
$2,101,000 as compared to $4,103,000 in fiscal 1996.
9
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
- ------- -----------------------------------------------------------------------
of Operations, continued
------------------------
Year Ended January 27, 1996 (fiscal 1996)
- -----------------------------------------
vs. Year Ended January 28, 1995 (fiscal 1995)
- ---------------------------------------------
Net sales from continuing operations decreased 5.4% as compared to the prior
year. This decrease in sales is attributable to:
a. A sluggish retail environment marked by a lack of consumer confidence.
b. Adverse weather conditions.
c. Increased competition resulting in the dilution of available market
share.
The Company's gross profit percentage decreased to 31.4% of sales from 32.4% in
the prior year. This decline was primarily the result of aggressive promotional
activity designed to offset the sales decrease. Merchandise margin for the first
two months of fiscal year 1997 was 33.5% of sales as compared to 31.7% in the
prior year reflecting improved merchandise controls.
Selling, general, and administrative expenses ("SG&A") were slightly less than
the prior year but increased to 35.4% as a percentage of sales as compared to
32.4% in the prior year due to declining store sales. Expenses for the first two
months of fiscal year 1997 decreased significantly due to an expense reduction
program implemented in February which will result in an annual cost reduction of
over $1,000,000 at JG and Goldblatt's. The full impact of this program will be
realized during the course of fiscal year 1997.
Inventory, at cost, was approximately $1,000,000 below the comparable 1995 level
which was accomplished as a result of our merchandise control program. It has
also created a positive impact on cash flow.
10
<PAGE>
Item 8. Financial Statements and Supplementary Data
- ------- -------------------------------------------
The Company's consolidated financial statements are listed in Part IV, Item 14,
of this Report and begin on page 13.
Item 9. Changes in and Disagreements with Accountants
- ------- ---------------------------------------------
on Accounting and Financial Disclosure
--------------------------------------
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
- -------- --------------------------------------------------
The information required by this Item will be set forth in the Proxy Statement
and such information is incorporated herein by reference.
Item 11. Executive Compensation
- -------- ----------------------
The information required by this Item will be set forth in the Proxy Statement
and such information is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
- -------- --------------------------------------------------------------
The information required by this Item will be set forth in the Proxy Statement
and such information is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
- -------- ----------------------------------------------
The information required by this Item will be set forth in the Proxy Statement
and such information is incorporated herein by reference.
11
<PAGE>
PART IV
Item 14. Exhibits, Financial Statements,
-------------------------------
and Reports on Form 8-K
-----------------------
(a) The following documents are filed as part of this report:
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
(1) Consolidated Financial Statements:
----------------------------------
Report of Independent Accountants 13
Consolidated Balance Sheets, January 25, 1997 and
January 27, 1996 14
Consolidated Statements of Operations for the fiscal
years ended January 25, 1997, January 27, 1996 and
January 28, 1995 15
Consolidated Statements of Common Stock and Other
Shareholders' Equity for the fiscal years ended
January 25, 1997, January 27, 1996 and January 28, 1995 16
Consolidated Statements of Cash Flows for the fiscal
years ended January 25, 1997, January 27, 1996 and
January 28, 1995 17
Notes to Consolidated Financial Statements 18-28
(2) The Index to Exhibits is on pages 30 through 34.
------------------------------------------------
</TABLE>
(b) Reports on Form 8-K.
Form 8-K dated December 13, 1996 presenting a report on the issuance of
1,500 shares of Series B Preferred Stock and the purchase by the Company
from Jupiter Industries of 445 shares of Series A Preferred Stock and
3,879,773 (prior to giving effect to the one-for-three reverse stock split)
shares of Common Stock.
12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
of JG Industries, Inc.
We have audited the consolidated financial statements of JG Industries, Inc. and
Subsidiaries as listed in the index on page 12 of this Form 10-K. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of JG Industries,
Inc. and Subsidiaries as of January 25, 1997 and January 27, 1996, and the
consolidated results of their operations and their cash flows for each of the
three fiscal years in the period ended January 25, 1997 in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
May 9, 1997
13
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 25, 1997 and January 27, 1996
(in thousands, except share data)
__________
<TABLE>
<CAPTION>
January 25, January 27,
ASSETS 1997 1996
- ------ ----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,714 $ 3,792
Receivables, net 290 350
Merchandise inventories 6,305 8,734
Other assets 224 335
------- -------
Total current assets 8,533 13,211
------- -------
Land, buildings and equipment, at cost:
Land 478 2,466
Buildings 998 4,887
Leasehold improvements 5,621 8,542
Furniture and fixtures 7,811 7,755
------- -------
14,908 23,650
Less accumulated depreciation
and amortization 9,395 14,347
------- -------
5,513 9,303
------- -------
Leasehold rights, net 32 69
Due from Jupiter 1,265
Other assets 1,597 1,467
------- -------
$15,675 $25,315
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Notes Payable $ 200
Current portion of long-term debt $ 582 627
Accounts payable 1,999 3,875
Accrued liabilities 2,505 3,195
Accrued dividends 5
------- -------
Total current liabilities 5,091 7,897
------- -------
Long-term debt, less current portion 1,164 1,848
Other long-term liabilities 867 928
Minority interest 1,262 1,173
Redeemable preferred stock, including
accrued dividends of $754 3,937
Commitments and contingencies
Common stock and other shareholders' equity:
Common shares; no par value;
authorized 10,000,000 shares;
issued 2,405,770 shares 11,246 11,246
Paid-in capital 5,939 4,775
Convertible preferred stock; no par
value; authorized and issued 1,500 shares 1,500
Accumulated deficit (7,781) (5,204)
Treasury shares - 1,345,065 and 51,774
shares at cost, respectively (3,613) (1,285)
------- -------
Total common stock and other
shareholders' equity 7,291 9,532
------- -------
$15,675 $25,315
======= =======
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
14
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
for the fiscal years ended January 25, 1997,
January 27, 1996 and January 28, 1995
(in thousands, except per share data)
____________
<TABLE>
<CAPTION>
Fiscal Year
-----------------------------
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Net sales from continuing operations $60,198 $72,964 $77,106
Cost of sales 40,526 50,029 52,158
------- ------- -------
Gross profit 19,672 22,935 24,948
Selling, general and administrative
expenses 21,867 25,806 25,016
------- ------- -------
Operating loss from
continuing operations (2,195) (2,871) (68)
------- ------- -------
Other income (expense):
Interest income 313 169 108
Interest expense (161) (897) (971)
Gain/(loss) on sale of asset, net 44 (3)
Loss on subsidiary stock transactions, net (23) (6)
Minority interest in net income of
subsidiaries (89) (460) (164)
------- ------- -------
107 (1,214) (1,033)
------- ------- -------
Loss before income tax provision
and discontinued operations (2,088) (4,085) (1,101)
Income tax provision 13 18 20
------- ------- -------
Loss before discontinued operations (2,101) (4,103) (1,121)
Discontinued operations:
Income from operations, net of
applicable income taxes 561 1,608
Gain/(loss) on sale of discontinued
operations, including income during
phase-out period, less applicable income
taxes (49) 6,295
------- ------- -------
Income (loss) from discontinued operations (49) 6,856 1,608
------- ------- -------
Net income (loss) $(2,150) $ 2,753 $ 487
======= ======= =======
Net income (loss) applicable to common
and common equivalent shares $(2,577) $ 2,472 $ 267
======= ======= =======
Per share income (loss) applicable to
common and common equivalent shares:
Loss from continuing operations $ (1.15) $ (1.86) $ (.57)
======= ======= =======
Net income (loss) $ (1.17) $ 1.05 $ .11
======= ======= =======
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
15
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMMON STOCK AND OTHER SHAREHOLDERS' EQUITY
for the fiscal years ended January 25, 1997,
January 27, 1996 and January 28, 1995
(in thousands, except share data)
<TABLE>
<CAPTION>
Total
Common Paid-in Preferred Accumulated Treasury Shareholders'
Shares Capital Stock Deficit Stock Equity
-------- -------- --------- ------------ --------- --------------
<S> <C> <C> <C> <C> <C> <C>
Balances, January 29, 1994 $11,242 $4,589 $(7,943) $(1,278) $6,610
Net income, fiscal 1995 487 487
Gain on sale of H-K stock to Jupiter 1,540 1,540
Purchase of 95 common shares (1) (1)
Dividends accrued on redeemable preferred stock (220) (220)
------- ------ ------ ------- ------- ------
Balances, January 28, 1995 11,242 6,129 (7,676) (1,279) 8,416
Net income, fiscal 1996 2,753 2,753
Gain on sale of H-K stock to Jupiter 176 176
Loss on purchase of H-K stock from Jupiter (1,530) (1,530)
Exercise of stock options for 2,667 common shares 4 4
Purchase of 295 common shares (6) (6)
Dividends accrued on redeemable preferred stock (281) (281)
------- ------ ------ ------- ------- ------
Balances, January 27, 1996 11,246 4,775 (5,204) (1,285) 9,532
Net loss, fiscal 1997 (2,150) (2,150)
Forgiveness of preferred stock dividends by Jupiter 1,164 1,164
Issuance of 1,500 shares of Series B preferred stock $1,500 1,500
Purchase of 1,293,258 common shares (2,328) (2,328)
Dividends accrued on redeemable
and convertible preferred stock (427) (427)
------- ------ ------ ------- ------- ------
Balances, January 25, 1997 $11,246 $5,939 $1,500 $(7,781) $(3,613) $7,291
======= ====== ====== ======= ======= ======
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
16
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the fiscal years ended January 25, 1997,
January 27, 1996 and January 28, 1995
(in thousands)
------------
<TABLE>
<CAPTION>
Fiscal Year
--------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $(2,150) $ 2,753 $ 487
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization 1,229 2,557 2,568
Deferred income taxes 23 494
Loss (gain) on subsidiary stock
transactions, net 23 6
Minority interest in net income of subsidiaries 89 526 2,902
Gain on discontinued operations (6,619)
Net gain on sale of assets and store closings (44)
Changes in assets and liabilities:
Accounts receivable 17 4,238 (1,291)
Merchandise inventories (458) 351 (1,246)
Other assets (current) 111 177 (60)
Other assets (noncurrent) (130) (123) (87)
Accounts payable and accrued liabilities (2,566) (4,098) 2,378
Other liabilities (noncurrent) (61)
------- ------- -------
Net cash (used in) provided by
operating activities (3,963) (192) 6,151
------- ------- -------
Cash flows from investing activities:
Net proceeds from sale of assets and
discontinued operations 6,633 11,827 800
Capital expenditures (1,061) (1,533) (2,087)
Purchase of annuity contracts (32) (40)
------- ------- -------
Net cash provided by (used in)
investing activities 5,572 10,262 (1,327)
------- ------- -------
Cash flows from financing activities:
Borrowings under line of credit 8,950 9,094 6,075
Repayments under line of credit (9,150) (8,894) (6,075)
Principal payments of long-term debt (2,475) (8,537) (2,525)
Redemption of preferred stock from Jupiter (3,183)
Proceeds from Due from Jupiter 1,265
Proceeds from issuance of convertible
preferred stock 1,500
Net repayments under revolving credit loan (2,169)
Proceeds from exercise of stock options 4
Proceeds from exercise of stock
options at subsidiary 13 5
Dividends paid on convertible preferred stock (12)
Purchase of treasury shares (582) (6) (1)
------- ------- -------
Net cash used in financing activities (3,687) (8,326) (4,690)
------- ------- -------
Net (decrease) increase in cash and (2,078) 1,744 134
cash equivalents
Cash and cash equivalents at beginning of year 3,792 2,048 1,914
------- ------- -------
Cash and cash equivalents at end of year $ 1,714 $ 3,792 $ 2,048
======= ======= =======
Cash paid during the fiscal year for:
Interest $ 147 $ 1,073 $ 1,257
Income taxes 407 143 262
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
17
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------
1. Summary of Significant Accounting Policies
------------------------------------------
A) Principles of Consolidation - The consolidated financial statements
include the accounts of JG Industries, Inc. (the "Company" or "JG")
and subsidiary companies that are majority owned or effectively
controlled. The Company's majority owned subsidiaries include
Goldblatt's Department Stores, Inc. ("Goldblatt's") (the Company's
discount department store division) and Sussex Group Holding Company
which formerly through Sussex Group, Ltd. ("Sussex") (a majority owned
subsidiary) controlled 56.0% of the outstanding common stock of
Huffman Koos Inc. ("H-K") (the Company's discontinued furniture
division). H-K has been accounted for as a discontinued operation in
the accompanying consolidated financial statements through October 28,
1995 when an unrelated third party acquired all of the issued and
outstanding H-K shares. The Company is now engaged in retail
merchandising operations in one continuing business segment consisting
of ten discount department stores primarily located in the Chicago,
Illinois vicinity. Significant intercompany accounts and transactions
have been eliminated.
Prior to December 13, 1996, Jupiter Industries, Inc. ("Jupiter") was
the Company's largest shareholder. Jupiter held 1,293,258 shares of
the Company's Common Stock (approximately 55.2% of issued and
outstanding Common Stock) and all of the Company's issued and
outstanding Series A Preferred Stock. Accordingly, the consolidated
financial statements of Jupiter included operations of the Company.
B) Statement of Cash Flows - For purposes of the consolidated statement
of cash flows the Company considers all highly liquid investments
purchased with an original maturity of three months or less to be cash
equivalents. As of January 25, 1997 and January 27, 1996, cash and
cash equivalents are concentrated with banks located in the Midwest
region of the United States.
C) Merchandise Inventories - Merchandise inventories are stated at the
lower of cost or market. Cost is determined on the last-in, first-out
(LIFO) basis for approximately 87% of the inventory using the retail
method. The remaining inventory is valued on the first-in, first-out
(FIFO) basis using the retail method. If the FIFO method had been used
to value all inventories, cost would have been $430,000 and $406,000
higher at January 25, 1997 and January 27, 1996, respectively. During
fiscal 1997 certain LIFO inventory levels were reduced which increased
net income by approximately $176,000 due to the matching of older
historical inventory cost with current sales dollars.
D) Land, Buildings and Equipment - Depreciation is computed using the
straight-line method over the following estimated useful lives of the
assets: buildings - 25 to 30 years; leasehold improvements - up to 25
years, depending on the applicable lease term; furniture, fixtures and
equipment - 3 to 12-1/2 years. Asset costs and related accumulated
depreciation are eliminated from the accounts when the asset is
disposed of or at the end of its estimated useful life. Expenditures
for renewals and betterments are capitalized, while costs of
maintenance and repairs are charged to operations when incurred.
E) Leasehold Rights - Leasehold rights represent the value or cost of
leases acquired and improvements. Amortization of the rights is
computed using the straight-line method over the terms of the related
leases. Leasehold rights are shown net of accumulated amortization of
$18,000 at January 25, 1997 and $31,000 at January 27, 1996.
F) Store Pre-Opening Costs - Noncapital expenditures incurred prior to
the opening of a new store are charged to expense in the year the
store is opened.
18
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------
1. Summary of Significant Accounting Policies, continued
-----------------------------------------------------
G) Per Share Data - For fiscal 1997, 1996 and 1995, loss from continuing
operations and net income (loss) per common and common equivalent
share are computed based on the weighted average number of common
shares outstanding (after giving effect to the one-for-three reverse
stock split in fiscal 1997) of 2,194,085, 2,353,445, and 2,351,702,
respectively. Common equivalent shares of 14,360, 21,759, and 24,998
in fiscal 1997, 1996 and 1995, respectively, are not included as they
would be anti-dilutive.
Income (loss) per share applicable to common shares for fiscal 1997,
1996 and 1995 is computed after recognition of the dividend
requirements of $427,000, $281,000, and $220,000, respectively, on the
redeemable and convertible preferred stock.
H) Income Taxes - The Company files a consolidated federal income tax
return with subsidiaries in which its ownership interest is 80% or
greater.
The Company provides for income taxes in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes". SFAS No. 109 requires the use of the liability method
of accounting for taxes, under which deferred tax assets and
liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the
tax rates in effect when these differences are expected to reverse.
The principal assets and liabilities giving rise to such differences
are the different methods of accounting for inventory, depreciation
and certain accrued liabilities for tax and financial statement
purposes and net operating loss carryforwards. Deferred tax assets are
reduced where appropriate by a valuation allowance which reflects
expectations of the extent to which such assets will be realized.
I) Financial Instruments - The fair value of cash and cash equivalents is
assumed to approximate the carrying value of these assets due to the
short maturity of these instruments. The fair value of the Company's
long-term debt is estimated to approximate the carrying value based
upon borrowing rates currently available to the Company for borrowings
with similar terms. The fair value of the note payable to Jupiter
cannot be determined since it was a transaction with a related party.
J) Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at January 25, 1997 and January 27, 1996 and the
reported amounts of revenues and expenses during the three years ended
January 25, 1997. Actual results could differ from those estimates.
K) Reclassifications - Certain reclassifications have been made to
January 28, 1995 amounts in order to conform to classifications at
January 27, 1996.
L) New Pronouncements - During 1996, the Financial Accounting Standards
Board issued a new pronouncement, SFAS No. 128, "Earnings per Share",
which is relevant to the Company's operations. The pronouncement is
effective for financial statements for both interim and annual periods
ending after December 15, 1997. The Company intends to adopt SFAS No.
128 during fiscal year 1998. Its effect on earnings per share has not
been determined, but is not expected to have a material impact.
19
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------
2. Stock Transactions
------------------
During fiscal 1995, Sussex transferred or sold a total of 800,000 shares of
H-K common stock to Jupiter. The transfer of 700,000 shares of this stock
on February 3, 1996 was used to repay a $5,075,000 note payable to Jupiter.
The remaining 100,000 shares of H-K common stock was sold to Jupiter on
November 30, 1994 for $800,000. As a result of the transfer and sale of the
800,000 shares, the Company recognized a gain of $1,540,000 in fiscal 1995.
This gain was recorded as an increase to paid-in capital and represents the
difference between the amount of the note retired and cash received and the
amount of H-K net equity represented by these shares.
Effective May 23, 1995, the Company through Sussex sold an additional
150,000 shares of H-K common stock to Jupiter for $1,125,000. As a result
of the sale of these shares, the Company recognized a gain of $176,000.
This gain was recorded as an increase to paid-in capital and represents the
difference between cash received and the amount of H-K net equity
represented by these shares. The Company used $625,000 of the proceeds from
the May 23, 1995 stock sale to make payments on JG's $7,125,000 term loan.
Pursuant to the terms of the various stock purchase agreements (the
"Agreements"), Sussex had been granted an option to repurchase any or all
of the 950,000 H-K shares for a purchase price ranging from $7.25 to $8.00
per share plus interest on such amount. The Agreements also contained a
provision which required Jupiter to vote the 950,000 H-K shares for the
election of a majority of the Board of Directors of H-K as Sussex shall
direct. As a result of this voting provision, the Company through Sussex,
retained effective control of H-K. Jupiter and Sussex collectively owned of
record 2,200,000 H-K shares, representing approximately 55.9% of the total
issued and outstanding H-K shares at October 27, 1995.
Pursuant to an Agreement and Plan of Merger dated September 18, 1995,
stockholders of H-K stock received a tender offer from an unrelated third
party on September 25, 1995 to acquire all of the issued and outstanding H-
K shares at a per share purchase price of $9.375 in cash. Upon consumption
of the tender offer on October 27, 1995, Sussex sold the 1,250,000 H-K
shares held directly by it for an aggregate cash consideration of
approximately $11,719,000. On October 27, 1995, pursuant to an agreement
dated September 18, 1995 between Jupiter and Sussex, Sussex also exercised
its option to repurchase the 950,000 H-K shares for the total purchase
price of $7,000,000 plus interest of approximately $641,000, and instructed
Jupiter to tender the 950,000 H-K shares. As a result of the repurchase,
the Company recorded a $1,530,000 loss as a decrease to paid-in capital.
This loss represented the difference between the total cash due to Jupiter
and the amount of H-K equity represented by these shares. The Company also
recorded a receivable from Jupiter of approximately $1,265,000. This
receivable represented the difference between proceeds from the sale of
$8,906,000 and $7,641,000 owed to Jupiter by Sussex. The $6,295,000 gain on
sale of discontinued operations for the year ended January 27, 1996 is net
of applicable income tax of $349,000 and includes $42,000 of net income
from discontinued operations during the phase-out period from the
measurement date of September 25, 1995, net of reversal of income taxes
provided in earlier quarters.
On October 30, 1995, the Company used proceeds received by Sussex from the
transaction to repay all debt outstanding under the Company's term loan of
approximately $6,250,000 plus interest, and to deposit $3,500,000 as
collateral on the Goldblatt's line of credit.
During fiscal 1996, options to purchase 13,400 shares of common stock of
H-K were exercised. A loss of $23,000 on the issuance of these shares was
recorded by the Company with an increase to minority interest as H-K's net
book value per share exceeded the option price. During fiscal 1995, options
to purchase 4,400 shares of common stock of H-K were exercised. A loss of
$6,000 was recorded by the Company.
20
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------
2. Stock Transactions, continued
-----------------------------
On December 13, 1996, the Company, pursuant to the terms of a certain Stock
Purchase Agreement, by and among Jupiter and the Company, purchased from
Jupiter, (i) 1,293,258 shares of the Company's Common Stock, and (ii) 445
shares of the Company's Series A Preferred Stock, for an aggregate purchase
price of $5,510,864 of which $2,500,108 was paid in cash, $1,264,858 was
paid by offset against liabilities of Jupiter to the Company, and
$1,745,898 was paid by delivery of a promissory note payable in three
annual installments ending December 13, 1999.
On December 13, 1996, the Company also declared a one-for-three reverse
stock split. Accordingly, all references in this report to number of
shares, prices per share and per share amounts have been retroactively
restated to reflect the reduced number of common shares outstanding, unless
otherwise noted.
3. Receivables
-----------
Receivables in the consolidated balance sheets are shown net of the
allowances for doubtful accounts and consist of the following at January
25, 1997 and January 27, 1996:
<TABLE>
<CAPTION>
Fiscal Year
---------------
1997 1996
---- ----
<S> <C> <C>
(in thousands)
Accounts receivable - trade $ 87 $100
Accounts receivable - other 245 292
----- ----
332 392
Less allowance for
doubtful accounts 42 42
----- ----
$ 290 $350
===== ====
</TABLE>
An analysis of the allowance for doubtful accounts and the net provision
charged to operations for fiscal 1997, 1996 and 1995 is as follows:
<TABLE>
<CAPTION>
Fiscal Year
------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
(in thousands)
Allowance for doubtful accounts,
beginning of year $42 $ 384 $452
Accounts receivable written off (45) (68)
Reduction from sale of H-K (297)
--- ----- ----
Allowance for doubtful accounts,
end of year $42 $ 42 $384
=== ===== ====
</TABLE>
21
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
______________
4. Notes Payable and Long-Term Debt
--------------------------------
Long-term debt at January 25, 1997 and January 27, 1996 is summarized as
follows (in thousands):
<TABLE>
<CAPTION>
Balance Interest
Description 1/25/97 1/27/96 Rate
----------- ------- ------- --------
<S> <C> <C> <C>
Goldblatt's:
Mortgage loan $2,475 9%
JG:
Jupiter promissory note $1,746 6%
------ ------
1,746 2,475
Less current maturities 582 627
------ ------
$1,164 $1,848
====== ======
</TABLE>
Long-term debt maturing within each of the five fiscal years subsequent to
January 25, 1997 is as follows (in thousands):
<TABLE>
<CAPTION>
<S> <C>
1998 $582
1999 582
2000 582
</TABLE>
Under certain circumstances, at the option of the holder, the outstanding
principal amount plus all accrued but unpaid interest may be converted into
Common Stock of the Company. The note is subordinated to any future Senior
Debt of the Company and is payable in full upon change of ownership or
control. The payment of dividends and the purchase of Common Stock is
restricted by terms of the Agreement.
As of January 27, 1996, Goldblatt's had a $3,500,000 revolving line of
credit and was, as of that date, in violation of a certain financial
covenant. Subsequent to year-end, the financial institution has granted
Goldblatt's a waiver of this covenant effective January 27, 1996.
Furthermore, the financial institution extended the line of credit through
May 1, 1997 and removed the financial covenants. Interest was payable at
the certificate of deposit rate plus 1%. The line was guaranteed by JG and
was collateralized by a certificate of deposit and commercial paper,
totalling $3,500,000 as of January 27, 1996, and $1,500,000 as of January
25, 1997. The amount of the collateral was restricted to the extent of
outstanding borrowings on the line, which was $200,000 at January 27, 1996,
and $0 at January 25, 1997.
As of April 23, 1997 a new Revolving Credit Agreement was executed. The
agreement provides a line of credit of up to $2,000,000 through May 1, 1998
based on availability of a borrowing base equal to 45% of merchandise
inventory. The line is collateralized by Goldblatt's inventory and cash and
cash equivalents. The line of credit agreement requires that Goldblatt's
maintain a tangible net worth of $5,500,000 and an inventory level of
$5,500,000. Interest is payable at the prime rate plus 1%.
The weighted average interest rate on short-term borrowings for fiscal
1997, 1996, and 1995 was 6.44%, 9.30% and 7.14%, respectively.
22
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
______________
5. Preferred Stock
---------------
The Redeemable Preferred Stock consisting of 445 shares of Series "A" 9%
Cumulative Preferred Stock with a face and liquidation value of $3,183,000
were acquired by the Company and canceled on December 13, 1996. In
connection with this acquisition, Jupiter also waived accrued dividends of
$1,164,000. The gain related to the waiver was recorded as an increase to
paid-in capital.
On December 13, 1996, the Company, pursuant to the terms of a certain
Series B Convertible Preferred Purchase Agreement (the "Series B Preferred
Stock Purchase Agreement"), by and among certain officers and a director of
the Company (collectively, the "Purchasers") and the Company, issued and
sold to the Purchasers, through a private placement, 1,500 shares of Series
B Convertible Preferred Stock of the Company, no par value per share (the
"Series B Preferred Shares"), for an aggregate purchase price of
$1,500,000. Holders of Series B Preferred Shares are entitled to vote with
the holders of Common Stock on all matters submitted to a vote of the
Company's shareholders as a single class. Currently, each share of Series B
Preferred Stock is entitled to 444.44 votes. After giving effect to the
purchase of the Jupiter shares previously described, the Purchasers control
approximately 45.7% of the Company's voting rights.
Dividends on Series B Preferred Stock accrue daily at a rate equal to 9%
per annum. Dividends accumulate until paid, and are paid when and as
declared by the Board of Directors. At any time prior to the fifth
anniversary of issuance (automatic conversion), holders of Series B
Preferred Stock may convert such shares into a number of shares of the
Company's Common Stock. The current conversion price is $2.25 per share.
6. Income Taxes
------------
The income tax provisions before minority interest are comprised of the
following:
<TABLE>
<CAPTION>
Fiscal Year
--------------------
1997 1996 1995
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Current: Federal $ 99
State $ 13 $ 18 73
Deferred 494
---- ---- ----
$ 13 $ 18 $666
==== ==== ====
</TABLE>
The Company has net operating loss carryforwards which are used to offset
taxable income for federal purposes, excluding income of H-K which was
reported on a separate entity basis and a portion of taxable income subject
to alternative minimum tax. H-K had its own net operating loss
carryforwards which were used to offset its separate company taxable
income. A portion of taxable income for state tax purposes was also offset
by net operating loss carryforwards. For fiscal 1995, the realization of
the tax benefit of net operating loss carryforwards of $1,889,000 was
treated as a reduction of the income tax provision.
23
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
______________
6. Income Taxes, continued
-----------------------
Following is a reconciliation of the difference between the statutory
federal income tax rate and the effective income tax rate on income from
continuing operations before minority interest as reflected in the
accompanying consolidated statements of operations:
<TABLE>
<CAPTION>
Fiscal Year
-----------------------
1997 1996 1995
------ ------ -----
<S> <C> <C> <C>
Provision at the
statutory tax rate (34.0%) (34.0%) 34.0%
State income taxes, net .6 .5 5.6
Utilization of net operating
loss carryforwards (48.4)
Change in valuation allowance 34.0 34.0 25.2
---- ---- ----
.6% .5% 16.4%
==== ==== ====
</TABLE>
At January 25, 1997, the Company has net operating loss carryforwards of
approximately $23,517,000 available to offset future taxable income for
federal income tax purposes. These carryforwards expire principally in
fiscal 1998 through 2012. The amount of carryforwards which expired in
fiscal 1997 was $9,000,779.
The components of the net deferred tax assets and liabilities as of January
25, 1997 and January 27, 1996 are as follows:
<TABLE>
<CAPTION>
1997 1996
-------- ---------
(in thousands)
<S> <C> <C>
Deferred tax assets:
Inventory $ 214 $ 214
Accruals and other liabilities 287 311
Alternative Minimum Tax credit 398 349
Net operating loss carryforwards 9,172 11,937
------- --------
10,071 12,811
Valuation allowance (9,275) (11,954)
------- --------
796 857
------- --------
Deferred tax liabilities:
Property, plant and equipment 796 857
------- --------
796 857
------- --------
Net deferred tax liabilities $ - $ -
======= ========
</TABLE>
24
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
______________
7. Lease Commitments
-----------------
The following table presents the future minimum lease commitments for all
operating leases that have initial or remaining noncancelable terms in
excess of one year. The leases expire in fiscal 1999 to 2008 and have
various renewal options.
<TABLE>
<CAPTION>
Fiscal Operating
Year Leases
------ ---------
(in thousands)
<S> <C>
1998 $ 1,727
1999 1,849
2000 1,764
2001 1,776
2002 1,702
Thereafter 5,309
-------
Total minimum lease payments $14,127
=======
</TABLE>
Certain store leases contain contingent rental provisions based on retail
sales. Rent expense, net of insignificant sublease income, for fiscal years
1997, 1996 and 1995 was $1,962,000, $2,368,000, and $6,493,000,
respectively, including contingent rentals of $209,000, $174,000, and
$149,000, respectively.
8. Discontinued Operations, Sale of Assets and Store Closings
----------------------------------------------------------
As a result of the sale of H-K, as described in Note 2, previously issued
consolidated statements of operations were restated to reflect H-K as a
discontinued operation.
Summarized results of the H-K business prior to the sale were as follows
(excluding the impact of minority interest and management fees allocated to
H-K on the Company's financial statements) for all of fiscal year 1995 and
the first nine months of fiscal year 1996:
<TABLE>
<CAPTION>
Fiscal Year
-------------------
1996 1995
------- --------
<S> <C> <C>
(in thousands)
Net sales $84,807 $119,089
Cost and expenses $84,675 114,097
------- --------
Income before
income taxes 132 4,992
Income taxes 53 646
------- --------
Net income $ 79 $ 4,346
======= ========
</TABLE>
25
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
______________
8. Discontinued Operations, Sale of Assets and Store Closings, continued
---------------------------------------------------------------------
Net assets of the discontinued business were as follows:
<TABLE>
<CAPTION>
October 28, January 28,
1995 1995
----------- -----------
(in thousands)
<S> <C> <C>
Cash and cash equivalents $ 1,017 $ 1,630
Receivables, net 19,395 23,728
Merchandise, inventories 19,906 19,325
Land, buildings and equipment
net of accumulated depreciation 5,634 5,566
Other assets 2,355 2,669
Current Liabilities (21,101) (26,513)
Long-term debt,
net of current portion (2,271) (1,562)
-------- --------
Net assets of the discontinued
business $ 24,935 $ 24,843
======== ========
</TABLE>
During fiscal 1997, the Company sold three stores and recorded a gain of
$908,000. The gain was offset by a loss of $864,000 resulting from a store
closing.
9. Pension, Profit-Sharing and Employee Benefit Plans
--------------------------------------------------
The Company and its subsidiary have defined contribution plans which
substantially all non-union employees may join after completing one year
and 1,000 hours of service. Annually, the companies contribute a
discretionary amount determined by their respective Boards of Directors and
participants may voluntarily contribute varying percentages of their
compensation.
Approximately $134,000, $137,000 and $325,000 of expenses relating to these
plans are included in the consolidated statements of operations in fiscal
1997, 1996, and 1995, respectively. All plans are qualified under
provisions of the Internal Revenue Code.
10. Stock Option Plan
-----------------
Effective fiscal 1997, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation". As provided by SFAS No. 123, the Company has elected to
continue to account for its stock-based compensation programs according to
the provisions of Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees".
26
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
_____________
10. Stock Option Plan, continued
----------------------------
Information for the fiscal years ended January 28, 1995, January 27, 1996
and January 25, 1997 with respect to options under the Company's Plans is
as follows:
<TABLE>
<CAPTION>
Weighted-Average
Number of Exercise Exercise
Shares under Option: Shares Price per Share Price per Share
--------- --------------- ----------------
<S> <C> <C> <C>
January 29, 1994 37,167 $1.50 to $6.75 $1.74
Granted 19,333 3.94 to 4.88 4.83
Expired/Canceled (2,000) 1.50 to 6.75 5.88
-------
January 28, 1995 54,500 1.50 to 4.88 2.68
Exercised (2,667) 1.50 1.50
Expired/Canceled (2,333) 1.50 to 3.94 2.54
-------
January 27, 1996 49,500 1.50 to 4.88 2.75
Granted 58,000 1.38 1.38
Expired/Canceled (18,333) 4.88 4.88
-------
January 25, 1997 89,167 1.38 to 1.50 1.42
=======
</TABLE>
All options are exercisable for a 10-year period beginning on the date of
the grant. The weighted-average remaining contractual life of options
outstanding at January 25, 1997 is 3.75 years.
No compensation expense has been recognized by the Company as all options
were granted at the market price of the stock on the date of the grants.
Had the company elected to apply the provisions of SFAS No. 123 regarding
recognition of compensation expense to the extent of the calculated fair
value of stock options granted in fiscal 1997, the effect on reported net
income and earnings per share would have been immaterial.
11. Fourth Quarter Adjustments
--------------------------
Results of continuing operations in the fourth quarter of fiscal 1997, 1996
and 1995 were increased by year-end adjustments of approximately $170,000,
$666,000 and $716,000, respectively, which related primarily to adjustments
to inventory and certain miscellaneous accruals.
12. Supplementary Information
-------------------------
Charges to selling, general and administrative expenses for fiscal 1997,
1996 and 1995, include the following:
<TABLE>
<CAPTION>
Fiscal Year
--------------------------
1997 1996 1995
------ ------ ------
(in thousands)
<S> <C> <C> <C>
Advertising costs $1,252 $1,571 $1,647
Real estate and personal
property taxes 1,106 1,282 1,303
</TABLE>
Advertising costs are expensed when incurred.
27
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
_____________
13. Related Party Transactions
--------------------------
The Company owns annuity contracts which were purchased in fiscal 1996 and
1995 from an affiliate. The total value of the contracts of $1,420,000 and
$1,301,000 is included in other assets at January 25, 1997 and January 27,
1996, respectively. The annuity contract was purchased to secure payments
under certain contractual obligations for future services to the chief
executive officer of the Company. In addition, the Company earned interest
of $118,000, $90,000 and $82,000 on these annuity contracts during fiscal
1997, 1996 and 1995, respectively.
28
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
JG INDUSTRIES, INC.
Dated: May 12, 1997 By /s/William Hellman
------------ --------------------
William Hellman
Chairman and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Chief Executive Officer:
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ William Hellman Chairman and Chief Date: May 12, 1997
- ------------------------ Executive Officer ------------
William Hellman
Directors:
/s/ Sheldon Collen Director Date: May 12, 1997
- ------------------------ ------------
Sheldon Collen
/s/ Clarence Farrar Director, and Chief Date: May 12, 1997
- ------------------------ Operating Officer ------------
Clarence Farrar
/s/ Lionel Goldblatt Director Date: May 12, 1997
- ------------------------ ------------
Lionel Goldblatt
/s/ Sheldon Harris Director Date: May 12, 1997
- ------------------------ ------------
Sheldon Harris
/s/ William Hellman Director Date: May 12, 1997
- ------------------------ ------------
William Hellman
/s/ Philip Rootberg Director Date: May 12, 1997
- ------------------------ ------------
Philip Rootberg
/s/ Wallace W. Schroeder Director Date: May 12, 1997
- ------------------------ ------------
Wallace W. Schroeder
</TABLE>
29
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit No.
- -----------
Description
-----------
2.1 Disclosure Statement of the Company, dated July 6, 1983, filed by the
Company with the Bankruptcy Court and delivered to the Company's
creditors and shareholders, which describes the Plan of Reorganization
as an Exhibit. (Previously filed as Exhibit 2.1 to the Current Report
on Form 8-K dated October 14, 1983 and is incorporated herein by
reference.)
2.2 Stock Purchase Agreement, dated as of October 1, 1984, among Goldblatt
Bros., Inc., The Jupiter Corporation and JGM Holdings, Inc., and
Marvin Kagan, Robert D. Berk, Dennis R. McGarvy, Theodore Lazaraton
and Paul Homer, as Trustee of the Marvin Kagan Irrevocable Trust
Agreement U/T/A, dated May 20, 1983, relating to the stock purchase of
all of the outstanding stock of Milgram-Kagan Corporation by the
Company. (Previously filed as Exhibit 2.1 to the Current Report on
Form 8-K dated November 7, 1984, and is incorporated herein by
reference.)
2.3 First Amendment to Stock Purchase Agreement, dated as of February 28,
1985. (Previously filed as Exhibit 2.3 to the 1986 10-K and is
incorporated herein by reference.)
2.4 Purchase and Sale Agreement, dated as of September 29, 1984 (the
"Purchase and Sale Agreement"), by and between Jay Sixteen Corporation
(now known as Sussex Group, Ltd. after name change) and Household
Merchandising, Inc. and Huffman Koos Company. (Previously filed as
Exhibit 2.1 to the Current Report on Form 8-K, dated January 10, 1985
(the "1985 8-K"), and is incorporated herein by reference.)
2.5 First Amendment to Purchase and Sale Agreement, dated as of January 4,
1985. (Previously filed as Exhibit 2.2 to the 1985 8-K and is
incorporated herein by reference.)
2.6 Second Amendment to Purchase and Sale Agreement, dated as of January
9, 1985. (Previously filed as Exhibit 2.3 to the 1985 8-K and is
incorporated herein by reference.)
2.7 Purchase and Sale Agreement, dated as of March 8, 1985, by and between
Sussex Group, Ltd. and McMahan's Valley Stores. (Previously filed as
Exhibit 2.6 to the 1986 10-K and is incorporated herein by reference.)
2.8 First Amendment to Purchase and Sale Agreement, dated April 1, 1985.
(Previously filed as Exhibit 2.7 to the 1986 10-K and is incorporated
herein by reference.)
2.9 Agreement for the Purchase and Sale of Assets, dated April 15, 1987,
by and between Sussex Group, Ltd. and RBK Furniture, Inc. (Previously
filed as Exhibit 2.9 to the 1987 10-K and is incorporated herein by
reference.)
2.10 Stock Purchase Agreement, dated September 30, 1985, by and among
Milgram-Kagan Corporation, a Delaware Corporation, and William A. Wiss
individually, and as Trustee under Living Trust of William A. Wiss,
and Alvin Steinman and Marvin Talan. (Previously filed as Exhibit 2.8
to the 1986 10-K and is incorporated herein by reference.)
2.11 Agreement and Plan of Reorganization, dated October 10, 1986, by and
between JG Industries, Inc. and Goldblatt's Department Stores, Inc.
(Previously filed as Exhibit 2.11 to the 1987 10-K and is incorporated
herein by reference. )
2.12 Agreement and Plan of Reorganization, dated September 25, 1987 by and
among the following: JG Industries, Inc., an Illinois corporation; JGM
Holdings, Inc., a Delaware corporation; The Jupiter Corporation, a
Delaware corporation; Milgram-Kagan Corporation, a Delaware
corporation; and the following individuals: Marvin Kagan, Dennis R.
McGarvy, Theodore Lazaraton, Paul Homer, as Trustee of the Marvin
Kagan Irrevocable Trust Agreement U/T/A dated May 20, 1983 and Marvin
Kagan, as Trustee. (Previously filed as Exhibit 2.12 to the 1988 10-K
and is incorporated herein by reference.)
30
<PAGE>
INDEX TO EXHIBITS, Continued
-----------------
Exhibit No.
- -----------
Description
-----------
2.13 Stock Purchase Agreement, dated February 15, 1988, by and among Sussex
Group Holding Company and Michael L. Silverman and Sydney Selati.
(Previously filed as Exhibit 2.13 to the 1988 10-K and is incorporated
herein by reference.)
2.14 Purchase Agreement, dated as of March 16, 1988 by and between Ward
White U.S.A. Holdings, Inc., a Delaware corporation, Charles Kushins,
Inc., a Delaware corporation, Milgram-Kagan Corporation, a Delaware
corporation and Kushins Acquisition, Inc., a Delaware corporation.
(Previously filed as Exhibit 2.14 to the April 30, 1988 10-Q and is
incorporated herein by reference.)
2.15 Purchase and Sale Agreement, dated as of June 29, 1989 by and between
BBD Acquisition Corporation, a Delaware corporation, Sussex Group,
Ltd., a Delaware corporation and JG Industries, Inc., an Illinois
corporation. (Previously filed as Exhibit 2.1 to the August 10, 1989
8-K and is incorporated herein by reference.)
2.16 First Amendment to Purchase and Sale Agreement, dated as of August 1,
1989. (Previously filed as Exhibit 2.2 to the August 10, 1989 8-K and
is incorporated herein by reference.)
2.17 Termination Agreement, dated September 7, 1990 by and among Marvin
Kagan, Milgram-Kagan Corporation, a Delaware corporation, The Jupiter
Corporation, an Illinois corporation, JG Industries, Inc., an Illinois
corporation, J. Kagan Corporation, an Illinois corporation, JJJ Shoe
Corp., an Illinois corporation, Gold Shoes, Inc., an Illinois
corporation, and JGM Holdings, Inc., a Delaware corporation.
(Previously filed as Exhibit 2.17 to the 1991 10-K and is incorporated
herein by reference.)
2.18 Purchase and Sale Agreement, dated as of October 13, 1992 by and among
JG Industries, Inc., Westinghouse Credit Corporation and The Jupiter
Corporation. (Previously filed as Exhibit 10.1 to the October 13, 1992
8-K and is incorporated herein by reference.)
2.19 Settlement Agreement, dated as of January 30, 1993 by and among JG
Industries, Inc., The Jupiter Corporation, JGM Holdings, Inc.,
Theodore Lazaraton and Dennis McGarvy. (Previously filed as Exhibit
2.19 to the 1993 10-K and is incorporated herein by reference.)
2.20 Memorandum of Settlement, dated as of January 30, 1993 by and among JG
Industries, Inc., The Jupiter Corporation, JGM Holdings, Inc., Marvin
Kagan and Paul Homer, Trustee of The Marvin Kagan Irrevocable Trust.
(Previously filed as Exhibit 2.20 to the 1993 10-K and is incorporated
herein by reference.)
2.21 Agreement and Plan of Merger, dated July 20, 1993, between SGH, Inc.
and JG Industries, Inc. (Previously filed in preliminary form as
Exhibit A to the June 22, 1993 Notice of Annual Meeting of
Shareholders and Proxy Statement).
2.22 Stock Purchase and Loan Agreement, dated as of November 3, 1993 (but
effective October 29, 1993), among The Jupiter Corporation, Sussex
Group Ltd., and JG Industries, Inc. (Previously filed as Exhibit 2.22
to the November 30, 1993 Form 10-Q and is incorporated herein by
reference.)
2.23 First Amendment to Stock Purchase and Loan Agreement, dated as of
November 29, 1994, among Sussex Group, Ltd., Jupiter Industries, Inc.,
and JG Industries, Inc. (Previously filed as Exhibit 2.23 to the
October 29, 1994 10-Q and is incorporated herein by reference.)
2.24 Stock Purchase Agreement, dated as of November 29, 1994, between
Jupiter Industries, Inc. and Sussex Group, Ltd. (Previously filed as
Exhibit 2.24 to the October 29, 1994 10-Q and is incorporated herein
by reference).
31
<PAGE>
INDEX TO EXHIBITS, Continued
-----------------
Exhibit No.
- -----------
Description
-----------
2.25 Agreement and Plan of Merger, dated as of September 18, 1995, among
Huffman Koos, Inc., HK Acquisition Company, Inc. and Breuner's Home
Furnishings Corporation. (Previously filed as Exhibit 2.1 to the
September 18, 1995 8-K and is incorporated herein by reference.)
2.26 Stockholders' Agreement, dated September 18, 1995, among HK
Acquisition Company, Inc., Breuner's Home Furnishings Corporation,
Jupiter Industries, Inc. and Sussex Group, Ltd. (Previously filed as
Exhibit 2.2 to the September 18, 1995 8-K and is incorporated herein
by reference.)
3.1 Articles of Amendment and Restated Articles to the Articles of
Incorporation of the Company. (Previously filed as Exhibit 3.1 to the
July 28, 1990 10-Q and is incorporated herein by reference.)
3.2 By-Laws of the Company, as amended on April 29, 1992. (Previously
filed as Exhibit 3.3 to the April 25, 1992 10-Q and is incorporated
herein by reference.)
4.1 Certificate of the Voting Powers, Designations, Preferences and
Relative, Participating, Optional or Other Rights, and the
Qualifications, Limitations or Restrictions thereof, of the Series A
9% Cumulative Preferred Stock of the Company. (Previously filed as
Exhibit 4.1 to the July 28, 1990 10-Q and is incorporated herein by
reference.)
4.2 First Amendment to Certificate of the Voting Powers, Designations,
Preferences and Relative, Participating, Optional or Other Rights, and
the Qualifications, Limitations or Restrictions thereof, of the Series
A 9% Cumulative Preferred Stock of the Company. (Previously filed as
Exhibit 4.2 to the 1991 10-K and is incorporated herein by reference.)
4.3 Second Amendment to Certificate of the Voting Powers, Designations,
Preferences and Relative, Participating, Optional or Other Rights, and
the Qualifications, Limitations or Restrictions thereof, of the Series
A 9% Cumulative Preferred Stock of the Company. (Previously filed as
Exhibit 4.3 to the July 25, 1992 10-Q and is incorporated herein by
reference.)
4.4 Third Amendment to Certificate of the Voting Powers, Designations,
preferences and Relative, Participating, Optional or Other Rights, and
the Qualifications, Limitations or Restrictions thereof, of the Series
A 9% Cumulative Preferred Stock of the Company. (Previously filed as
Exhibit 4.1 to the October 13, 1992 8-K and is incorporated herein by
reference.)
4.5 Statement of Resolution Establishing Series Relating To The Series B
Convertible Preferred Stock, With No Par Value Per Share, of JG
Industries, Inc., filed with the office of the Secretary of State of
the State of Illinois on December 13, 1996. (Incorporated by reference
from the Registrant's definitive proxy statement filed with the
Securities and Exchange Commission on November 22, 1996.)
10.1 Amended and Restated Employment Agreement dated, June 1, 1983, between
the Company and William Hellman. (Previously filed as Exhibit 10.1 to
the 1984 10-K and is incorporated herein by reference.)
10.2 First Amendment to Amended and Restated Employment Agreement, dated
August 8, 1985, between the Company and William Hellman. (Previously
filed as Exhibit 10.2 to the 1986 10-K and is incorporated herein by
reference.)
10.3 Guaranty of The Jupiter Corporation, dated as of June 1, 1983 relative
to the Amended and Restated Employment Agreement, dated as of June 1,
1983, by and between the Company and William Hellman. (Previously
filed as Exhibit 10.2 to the 1985 10-K and is incorporated herein by
reference.)
32
<PAGE>
INDEX TO EXHIBITS, Continued
-----------------
Exhibit No.
- -----------
Description
-----------
10.4 Second Amendment to Amended and Restated Employment Agreement,
including a Stock Purchase and Sale Agreement, dated July 23, 1986,
between the Company and William Hellman. (Previously filed as Exhibit
10.4 to the Company's July 26, 1986 10-Q and is incorporated herein by
reference.)
10.5 Employment Agreement, dated June 1, 1983, between the Company and
Lionel H. Goldblatt. (Previously filed as Exhibit 10.2 to the 1984 10-
K and is incorporated herein by reference.)
10.6 Amendment to Employment Agreement, dated July 22, 1987 between and
among the Company, Goldblatt's Department Stores, Inc. and Lionel H.
Goldblatt. (Previously filed as Exhibit 10.6 to the 1988 10-K and is
incorporated herein by reference.)
10.7 Incentive Stock Option and Non-Statutory Stock Option Agreement.
(Previously filed as Exhibit 4.2 to the Company's Registration
Statement on Form S-8, dated September 29, 1984, and is incorporated
herein by reference.)
10.8 1983 Stock Option and Stock Appreciation Rights Plan. (Previously
filed as Exhibit 10.4 to the 1984 10-K and is incorporated herein by
reference.)
10.9 1988 Stock Option Plan (Previously filed as Exhibit 10.9 to the 1989
10-K and is incorporated herein by reference.)
10.10 Third Amendment to Amended and Restated Employment Agreement, dated
October 3, 1988, between the Company and William Hellman.(Previously
filed as Exhibit 10.10 to the 1989 10-K and is incorporated herein by
reference.)
10.11 Fourth Amendment to Amended and Restated Employment Agreement, dated
March 28, 1989, between the Company and William Hellman. (Previously
filed as Exhibit 10.11 to the 1989 10-K and is incorporated herein by
reference.)
10.12 Fourth Amendment to Employment Agreement, dated April 6, 1988 between
and among the Company, Goldblatt's Department Stores, Inc. and Lionel
H. Goldblatt. (Previously filed as Exhibit 10.12 to the 1989 10-K and
is incorporated herein by reference.)
10.13 Fifth Amendment to Employment Agreement, dated March 28, 1989 between
and among the Company, Goldblatt's Department Stores, Inc. and Lionel
H. Goldblatt. (Previously filed as Exhibit 10.13 to the 1989 10-K and
is incorporated herein by reference.)
10.14 Fifth Amendment to Amended and Restated Employment Agreement, dated
January 25, 1991 between the Company and William Hellman. (Previously
filed as Exhibit 10.14 to the 1991 10-K and is incorporated herein by
reference.)
10.15 Sixth Amendment to Employment Agreement, dated January 28, 1991
between and among the Company, Goldblatt's Department Stores, Inc. and
Lionel H. Goldblatt. (Previously filed as Exhibit 10.15 to the 1991
10-K and is incorporated herein by reference.)
10.16 Seventh Amendment to Employment Agreement, dated February 18, 1992
between and among the Company, Goldblatt's Department Stores, Inc. and
Lionel H. Goldblatt. (Previously filed as Exhibit 10.16 to the 1992
10-K and is incorporated herein by reference.)
10.17 Sixth Amendment to Amended and Restated Employment Agreement, dated
April 27, 1992, between the Company and William Hellman. (Previously
filed as Exhibit 10.17 to the April 25, 1992 10-Q and is incorporated
herein by reference.)
10.18 Eighth Amendment to Employment Agreement, dated February 23, 1994
between and among the Company, Goldblatt's Department Stores, Inc. and
Lionel H. Goldblatt (Previously filed as Exhibit 10.18 to the January
29, 1994 Form 10-K and is incorporated herein by reference.)
33
<PAGE>
INDEX TO EXHIBITS, Continued
-----------------
Exhibit No. Page
- ----------- ----
Description
-----------
10.19 Eighth Amendment to Amended and Restated Employment Agreement,
dated May 26, 1994, between the Company and William Hellman.
(Previously filed as Exhibit 10.19 to the April 30, 1994 10-Q
and is incorporated herein by reference.)
10.20 Ninth Amendment to Employment Agreement, dated April 19, 1995,
between and among the Company, Goldblatt's Department Stores,
Inc. and Lionel H. Goldblatt. (Previously filed as Exhibit
10.20 to the January 28, 1995 10-K and is incorporated herein
by reference.)
10.21 Ninth Amendment to Amended and Restated Employment Agreement,
dated June 12, 1995, between the Company, Goldblatt's
Department Stores, Inc. and William Hellman (Previously filed
as Exhibit 10.21 to the July 28, 1995 Form 10-Q and is
incorporated herein by reference.)
10.22 Stock Purchase Agreement, dated December 13, 1996, by and among
Jupiter Industries, Inc. and the Registrant. (Incorporated by
reference from the Registrant's definitive proxy statement filed
with the Securities and Exchange Commission on November 22,
1996.)
10.23 Series B Convertible Preferred Stock Purchase Agreement, dated
December 13, 1996, by and among William Hellman, Philip
Rootberg and Sheldon Harris and the Registrant. (Incorporated
by reference from the Registrant's definitive proxy statement
filed with the Securities and Exchange Commission on November
22, 1996.)
10.24 Thirteenth Amendment to Amended and Restated Employment
Agreement, dated February 1, 1997, between the Company,
Goldblatt's Department Stores, Inc. and William Hellman. -----
10.25 Employment Agreement, dated February 1, 1997, between the
Company and Clarence Farrar. -----
10.26 Employment Agreement, dated February 1, 1997, between
Goldblatt's Department Stores, Inc. and Lionel Goldblatt. -----
21 List of Subsidiaries. -----
23 Consent of Coopers & Lybrand L.L.P., Independent Accountants. -----
27 Financial Data Schedule. -----
28.1 Supplemental Agreement, dated as of June 17, 1983, between
the Company, Goldblatt Subsidiary, Inc. ("GS"), Jupiter
Subsidiary A. Inc. ("JSA"), J.G. Investments ("JG") and J.
Gold Corporation, together with a modification dated September
30, 1983. (Previously filed as Exhibit 28.1 to the 1983 8-K
and is incorporated herein by reference.)
28.2 Agreement and Plan of Merger, dated September 30, 1983, between
JSA and GS. (Previously filed as Exhibit 28.2 to the 1983 8-K
and is incorporated herein by reference.)
34
<PAGE>
EXHIBIT 10.24
THIRTEENTH AMENDMENT TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
-----------------------------------------
THIS AGREEMENT, entered into as of the 1st day of February, 1997,
between JG INDUSTRIES, INC. ("JG"), an Illinois corporation, GOLDBLATT'S
DEPARTMENT STORES, INC. ("Goldblatt's"), an Illinois corporation (collectively,
the "Employer"), and WILLIAM HELLMAN (the "Employee").
WHEREAS, Employee has been employed by Employer in an executive
capacity pursuant to an Amended and Restated Employment Agreement dated as of
the first day of June, 1983, as amended (the "Employment Agreement"); and
WHEREAS, Employer and Employee desire to further amend the Employment
Agreement in certain respects as hereinafter stated;
ACCORDINGLY, the Employment Agreement is hereby amended and restated
in the following respect;
1. New Termination Date. The Employment Period shall terminate on
August 31, 1997.
2. Paragraph 3(a), Base Compensation, is deleted in its entirety and
the following is substituted in its place and stead:
"(a) Base Compensation. He shall receive a salary for the Employment
Period based upon an annual salary of $200,000 ("Base Compensation")
payable in monthly or more frequent installments in accordance with
Employer's remuneration policy respecting executives."
3. Annuity Contracts. The provisions respecting Annuity Contracts set
forth in paragraph 2 of the Ninth Amendment to the Employment Agreement shall be
further modified by the following amended language:
<PAGE>
Adjustment of Annuity Contracts. Notwithstanding anything stated
to the contrary in subparagraph (i) of paragraph 20, the annuity
contracts shall in the aggregate as of the date hereof, yield a
monthly annuity of $17,167.00 for a period of ten years.
4. Effect of Amendment. All other paragraphs of the Employment
Agreement, as heretofore amended, shall remain unchanged and shall continue in
full force and effect.
IN WITNESS WHEREOF, the Employee and the Employer have executed this
Thirteenth Amendment to Amended and Restated Employment Agreement as of the date
first above written.
/s/ William Hellman
-----------------------------
William Hellman
JG INDUSTRIES, INC.
By: /s/ Clarence Farrar
-------------------------
Its: President
------------------------
GOLDBLATT'S DEPARTMENT
STORES, INC.
By: /s/ Lionel Goldblatt
-------------------------
Its: Chairman
------------------------
-2-
<PAGE>
EXHIBIT 10.25
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT, entered into as of this 1st day of February, 1997,
between JG INDUSTRIES, INC., an Illinois corporation (the "Employer"), and
CLARENCE FARRAR, Chicago, Illinois (the "Employee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Employee has been employed by Employer in an executive
capacity as its President and Chief Operating Officer and his services
thereunder have been of great benefit to the business and affairs of Employer;
and
WHEREAS, Employer desires to enter into this Agreement for the purpose
of securing the compensation and other benefits provided herein; and
WHEREAS, in view of the substantial value which Employee's services
have contributed to Employer's well being, Employer is desirous of entering into
this Agreement to make certain that it shall have the benefit of Employee's
continuing services;
NOW, THEREFORE, in consideration of the mutual premises and agreements
herein contained, the parties do hereby agree as follows:
1. Employment Period. Employer hereby employs Employee, and Employee
hereby agrees to remain in the employ of the Employer, to serve as its President
and Chief Operating Officer as of the date hereof and terminating on January 31,
2000 (the "Employment Period").
<PAGE>
2. Duties. The Employee shall have the authority and duties of the
President and Chief Operating Officer of the Employer as described in the
Employer's By-Laws, as amended, and shall exercise such other authority and
perform such other duties as are normally attendant to the position of president
and chief operating officer of a corporation. Employee agrees that during the
Employment Period he shall devote his full business time exclusively to the
business affairs of the Employer, its subsidiaries and affiliates.
3. Compensation. Subject to the terms and provisions hereof, during
the Employment Period, Employee shall be compensated for his services to
Employer in the following manner:
(a) Base Compensation. He shall receive an annual salary of
$140,000, payable in monthly or more frequent installments in
accordance with Employer's remuneration policy respecting
executives.
(b) Employee Benefits. He shall be a participant, to the extent
he meets all eligibility requirements of general application,
in any and all employee welfare benefit plans maintained by
Employer, including, but not limited to, group term life
insurance, hospitalization, medical and disability plans.
4. Termination. If (i) at any time or from time to time during the
term of this Agreement, Employee shall be unable to perform his duties hereunder
because of death, any physical or mental illness or other disability for a
period of three (3) consecutive months following the commencement of such
incapacity (collectively, the foregoing being referred to herein as
"Disability"), or (ii) this Agreement shall not be renewed at the expiration of
the Employment Period, this Agreement shall terminate and Employer
-2-
<PAGE>
and Employee shall have no further obligation hereunder, except that Employer
agrees to make payment of severance compensation to Employee consisting of the
continuation of base compensation for a period of six months in the aggregate
amount of $70,000, payable in five equal monthly installments in the amount of
$11,666.67 each on the last day of each of the five months next succeeding the
month in which said Employment Period shall have expired, and a final monthly
installment payment in the amount of $11,666.65 on the last day of the sixth
month next succeeding the month in which said Employment Period shall have
expired, as outlined above, plus a continuation for such six month period of the
employee benefits theretofore made available to Employee in accordance with the
provisions of Paragraph 3(b) of this Agreement. In the event that Employer
terminated Employee's employment hereunder for any reason other than cause or
Disability before the expiration of the Employment Period, Employer shall
nevertheless be obligated to continue to pay base compensation and to make
employee benefits available to Employee during the remaining term of the
Employment Period as provided in Paragraph 3 hereof and, following the
expiration of the Employment Period, Employee shall be entitled to receive
severance compensation consisting of the continuation of base compensation for a
period of six months in the aggregate amount of $70,000 payable in five equal
monthly installments in the amount of $11,666.67 each on the last day of each of
the five months next succeeding the month in which said Employment Period shall
have expired, and a final monthly installment payment in the amount of
$11,666.65 on the last day of the sixth month in which said Employment Period
shall have expired, plus a continuation during such six month period of the
employee benefits theretofore made available to Employee in accordance with the
provisions of Paragraph 3(b) of this Agreement. For purposes of
-3-
<PAGE>
this Agreement, termination hereof for cause shall mean any termination of this
Agreement by Employer as a consequence of the continuing gross dereliction of
duty by Employee or any refusal by him to act in accordance with the reasonable,
lawful and ethical direction of Employer's Board of Directors or officers of
Employer having the authority to direct Employee with respect to the conduct of
his activities.
5. Confidentiality. It is recognized that services to be rendered by
Employee hereunder may involve the presence of confidential information or trade
secrets relating to Employer and its business. In this regard, Employee does
hereby agree that, without the prior written consent of Employer, he will not
voluntarily disclose or publish during the term of this Agreement and for a
period of 2 years after the expiration or termination thereof any confidential
information or trade secrets relating to the business of Employer.
6. Remedies. Employee acknowledges that Employer would be irrevocably
injured by a violation of Paragraph 5 hereof and agrees that Employer shall be
entitled to an injunction restraining Employee from any actual or threatened
breach of Paragraph 5 and to any appropriate equitable remedy, without the
posting of any bond or other security being required on the part of Employer.
7. Amendment. This Agreement may be amended by mutual agreement of
the parties without the consent of any other person and no person, other than
the parties hereto, shall have any rights under or interest in this Agreement or
the subject matter hereof, except as provided herein.
8. Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered or
certified mail, postage prepaid, return receipt requested, to Employer at its
principal executive offices
-4-
<PAGE>
or to Employee at the last address filed by him in writing with Employer, as the
case may be.
9. Nonalienation. The interests of Employee under this Agreement are
not subject to the claims of his creditors, other than Employer and its
subsidiaries, and may not otherwise be voluntarily or involuntarily assigned,
alienated or encumbered.
10. Successors. This Agreement shall be binding upon, and inure to
the benefit of, Employer and its successors and assigns and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of Employer's assets and business.
11. Prior Agreements. This Agreement cancels and supersedes any
employment agreement entered into between the Employer and the Employee prior to
the day and year first above written.
12. Applicable Law. The provisions of this Agreement shall be
construed in accordance with the laws of the State of Illinois.
13. Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by arbitration in the
City of Chicago by three arbitrators, one of whom shall be appointed by
Employer, one by Employee, and the third of whom shall be appointed by the first
two arbitrators. If either party fails to appoint an arbitrator or if the first
two arbitrators cannot agree on the appointment of the third arbitrator, then
the third arbitrator shall be appointed by the Dean of the Business School at
the University of Chicago. The arbitration shall be conducted in accordance with
the rules of the American Arbitration Association, except with respect to the
selection of arbitrators which shall be as provided in this paragraph. Judgment
upon the award rendered by the arbitrators may be entered in any court
-5-
<PAGE>
having jurisdiction thereof. All costs of the arbitration, which may include
attorney's fees, shall be assessed as ordered by the arbitrators.
14. Counterparts. This Agreement may be executed in two or more
counterparts, any one of which shall be deemed the original without reference to
the others.
IN WITNESS WHEREOF, the Employee has hereunto set his hand, and the
Employer has caused there presents to be executed in its name and on its behalf
and its corporate seal to be hereunto affixed and attested to by its Secretary,
all as of the day and year first above written.
/s/ Clarence Farrar
-----------------------------
Employee
JG INDUSTRIES, INC.
By: /s/ William Hellman
-------------------------
Its: Chairman
--------------------
ATTEST:
/s/ Evelyn P. Egan
- --------------------
Its: Secretary
----------------
-6-
<PAGE>
EXHIBIT 10.26
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT, entered into as of this 1st day of February, 1997,
between GOLDBLATT BROS., INC., an Illinois corporation (the "Employer"), and
LIONEL GOLDBLATT, Chicago, Illinois (the "Employee").
W I T N E S S E T H:
-------------------
WHEREAS, Employee has been employed by Employer in an executive
capacity as its Chairman of the Board and his services thereunder have been of
great benefit to the business and affairs of Employer; and
WHEREAS, Employer desires to enter into this Agreement for the purpose
of securing the compensation and other benefits provided herein; and
WHEREAS, in view of the substantial value which Employee's services
have contributed to Employer's well being, Employer is desirous of entering into
this Agreement to make certain that it shall have the benefit of Employee's
continuing services;
NOW, THEREFORE, in consideration of the mutual premises and agreements
herein contained, the parties do hereby agree as follows:
1. Employment Period. Employer hereby employs Employee, and Employee
hereby agrees to remain in the employ of the Employer, to serve as its Chairman
of the Board as of the date hereof and terminating on January 31, 2000 (the
"Employment Period").
<PAGE>
2. Duties. The Employee shall have the authority and duties of the
Chairman of the Board of the Employer as described in the Employer's By-Laws, as
amended, and shall exercise such other authority and perform such other duties
as are normally attendant to the position of chairman of the board of a
corporation. Employee agrees that during the Employment Period he shall devote
his full business time exclusively to the business affairs of the Employer, its
subsidiaries and affiliates.
3. Compensation. Subject to the terms and provisions hereof, during
the Employment Period, Employee shall be compensated for his services to
Employer in the following manner:
(a) Base Compensation. He shall receive an annual salary of
$125,000, payable in monthly or more frequent installments
in accordance with Employer's remuneration policy respecting
executives.
(b) Employee Benefits. He shall be a participant, to the extent
he meets all eligibility requirements of general
application, in any and all employee welfare benefit plans
maintained by Employer, including, but not limited to, group
term life insurance, hospitalization, medical and disability
plans.
4. Termination. If (i) at any time or from time to time during the
term of this Agreement, Employee shall be unable to perform his duties hereunder
because of death, any physical or mental illness or other disability for a
period of three (3) consecutive months following the commencement of such
incapacity (collectively, the foregoing being referred to herein as
"Disability"), or (ii) this Agreement shall not be renewed at the expiration of
the Employment Period, this Agreement shall terminate and Employer and Employee
shall have no further obligation hereunder, except that Employer agrees
-2-
<PAGE>
to make payment of severance compensation to Employee consisting of the
continuation of base compensation for a period of six months in the aggregate
amount of $62,500, payable in five equal monthly installments in the amount of
$10,416.67 each on the last day of each of the five months next succeeding the
month in which this agreement shall have terminated and a final monthly
installment payment in the amount of $10,416.65 on the last day of the sixth
month next succeeding the month in which said Employment Period shall have
expired, as outlined above, plus a continuation for such six month period of the
employee benefits theretofore made available to Employee in accordance with the
provisions of Paragraph 3(b) of this Agreement. In the event that Employer
terminated Employee's employment hereunder for any reason other than cause or
Disability before the expiration of the Employment Period, Employer shall
nevertheless be obligated to continue to pay base compensation and to make
employee benefits available to Employee during the remaining term of the
Employment Period as provided in Paragraph 3 hereof and, following the
expiration of the Employment Period, Employee shall be entitled to receive
severance compensation consisting of the continuation of base compensation for a
period of six months in the aggregate amount of $62,500 payable in five equal
monthly installments in the amount of $10,416.67 each on the last day of each of
the five months next succeeding the month in which said Employment Period shall
have expired and a final monthly installment payment of $10,416.65 on the last
day of the sixth month in which said Employment Period shall have expired, plus
a continuation during such six month period of the employee benefits theretofore
made available to Employee in accordance with the provisions of Paragraph 3(b)
of this Agreement. For purposes of this Agreement, termination hereof for cause
shall mean any termination of this Agreement
-3-
<PAGE>
by Employer as a consequence of the continuing gross dereliction of duty by
Employee or any refusal by him to act in accordance with the reasonable, lawful
and ethical direction of Employer's Board of Directors or officers of Employer
having the authority to direct Employee with respect to the conduct of his
activities.
5. Confidentiality. It is recognized that services to be rendered
by Employee hereunder may involve the presence of confidential information or
trade secrets relating to Employer and its business. In this regard, Employee
does hereby agree that, without the prior written consent of Employer, he will
not voluntarily disclose or publish during the term of this Agreement and for a
period of 2 years after the expiration or termination thereof any confidential
information or trade secrets relating to the business of Employer.
6. Remedies. Employee acknowledges that Employer would be
irrevocably injured by a violation of Paragraph 5 hereof and agrees that
Employer shall be entitled to an injunction restraining Employee from any actual
or threatened breach of Paragraph 5 and to any appropriate equitable remedy,
without the posting of any bond or other security being required on the part of
Employer.
7. Amendment. This Agreement may be amended by mutual agreement of
the parties without the consent of any other person and no person, other than
the parties hereto, shall have any rights under or interest in this Agreement or
the subject matter hereof, except as provided herein.
8. Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered or
certified mail, postage prepaid, return receipt requested, to Employer at its
principal executive offices
-4-
<PAGE>
or to Employee at the last address filed by him in writing with Employer, as the
case may be.
9. Nonalienation. The interests of Employee under this Agreement are
not subject to the claims of his creditors, other than Employer and its
subsidiaries, and may not otherwise be voluntarily or involuntarily assigned,
alienated or encumbered.
10. Successors. This Agreement shall be binding upon, and inure to
the benefit of, Employer and its successors and assigns and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of Employer's assets and business.
11. Prior Agreements. This Agreement cancels and supersedes any
employment agreement entered into between the Employer and the Employee prior to
the day and year first above written.
12. Applicable Law. The provisions of this Agreement shall be
construed in accordance with the laws of the State of Illinois.
13. Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by arbitration in the
City of Chicago by three arbitrators, one of whom shall be appointed by
Employer, one by Employee, and the third of whom shall be appointed by the first
two arbitrators. If either party fails to appoint an arbitrator or if the first
two arbitrators cannot agree on the appointment of the third arbitrator, then
the third arbitrator shall be appointed by the Dean of the Business School at
the University of Chicago. The arbitration shall be conducted in accordance with
the rules of the American Arbitration Association, except with respect to the
selection of arbitrators which shall be as provided in this paragraph. Judgment
upon the award rendered by the arbitrators may be entered in any court
-5-
<PAGE>
having jurisdiction thereof. All costs of the arbitration, which may include
attorney's fees, shall be assessed as ordered by the arbitrators.
14. Counterparts. This Agreement may be executed in two or more
counterparts, any one of which shall be deemed the original without reference to
the others.
IN WITNESS WHEREOF, the Employee has hereunto set his hand, and the
Employer has caused there presents to be executed in its name and on its behalf
and its corporate seal to be hereunto affixed and attested to by its Secretary,
all as of the day and year first above written.
/s/ Lionel Goldblatt
-----------------------------
Employee
GOLDBLATT BROS., INC.
By: /s/ William Hellman
-------------------------
Its: Chairman
--------------------
ATTEST:
/s/ Evelyn P. Egan
- ---------------------
Its: Secretary
----------------
-6-
<PAGE>
EXHIBIT 21
LIST OF SUBSIDIARIES
------------
Goldblatt's Department Stores, Inc.
Capital & Vermont Realty Corporation
Goldblatt Subsidiary, Inc.
GBI Belmont Central, Inc.
Sussex Group Holding Company
Sussex Group, Ltd.
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of JG
Industries, Inc. and Subsidiaries on Form S-8 of our report dated May 9, 1997 on
our audits of the consolidated financial statements of JG Industries, Inc. and
Subsidiaries as of January 25, 1997 and January 27, 1996, and for each of the
three fiscal years in the period ended January 25, 1997, which report is
included in this Annual Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
May 12, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from
the consolidated financial statements of J.G. Industries, Inc. and Subsidiaries
for the fiscal years ended January 25, 1997 and January 27, 1996 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> JAN-25-1997 JAN-27-1996
<PERIOD-START> JAN-28-1996 JAN-29-1995
<PERIOD-END> JAN-25-1997 JAN-27-1996
<CASH> 1,714<F1> 3,792<F1>
<SECURITIES> 0 0
<RECEIVABLES> 332 392
<ALLOWANCES> 42 42
<INVENTORY> 6,305 8,734
<CURRENT-ASSETS> 8,533 13,211
<PP&E> 14,908 23,650
<DEPRECIATION> 9,395 14,347
<TOTAL-ASSETS> 15,675 25,315
<CURRENT-LIABILITIES> 5,091 7,897
<BONDS> 1,164 1,848
0 3,937
1,500 0
<COMMON> 11,246 11,246
<OTHER-SE> (3,955) (1,714)
<TOTAL-LIABILITY-AND-EQUITY> 15,675 25,315
<SALES> 60,198 72,964
<TOTAL-REVENUES> 60,555 73,133
<CGS> 40,526 50,029
<TOTAL-COSTS> 62,393 75,835
<OTHER-EXPENSES> 250<F2> 1,383<F2>
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 161 897
<INCOME-PRETAX> (2,088) (4,085)
<INCOME-TAX> 13 18
<INCOME-CONTINUING> (2,101) (4,103)
<DISCONTINUED> (49) 6,856
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (2,150) 2,753
<EPS-PRIMARY> ($1.17) $1.05
<EPS-DILUTED> 0<F3> 0<F3>
<FN>
<F1> Includes cash and cash equivalents
<F2> Includes Interest Expense
<F3> In accordance with current financial statement presentation requirements,
this information is not included in the Companys' financial statements.
</FN>
</TABLE>
