<PAGE>
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 [NO FEE REQUIRED]
For the fiscal year ended January 29, 2000
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:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class
-------------------
Common Stock, No Par Value
_______________
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. X Yes 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. [X]
The aggregate market value of Common Stock held by nonaffiliates of
the Registrant on May 15, 2000 was approximately $691,143. On that date
there were 1,061,654 shares of Common Stock issued and outstanding.
-1-
<PAGE>
PART I
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."
Prior to the fiscal year ended January 29, 2000, the Company operated in
one industry segment of the retail market that was defined as Discount
Department Stores. Prior to the fiscal year ended January 29, 2000, the Company
operated eight discount department stores located in the Chicago, Illinois
vicinity and one in Indiana. On February 1, 2000, the Board of Directors of the
Company decided to cease operating the Company as an ongoing concern and
liquidate its assets. On February 2, 2000, the Company closed all of its
stores, entered into an agreement to sell seven of its eight department store
locations to an affiliate of Ames Department Stores, Inc., and began liquidating
all of its inventory and operating assets. All of the Company's store employees
were terminated as of April 1, 2000 and the Company currently has only 16 full-
time employees.
Item 2. Properties
- ------- ----------
At January 29, 2000, the Company owned in fee one retail location in
Chicago, Illinois. The Company has entered into a contract for the sale of such
retail location and the use of the Goldblatt's Department Stores name, and
expects to close the sale on or about May 31, 2000. At January 29, 2000, the
Company leased its other retail locations. On February 2, 2000, the Company
entered into an agreement to sell its interest in such leased retail locations
to an affiliate of Ames Department Stores, Inc. and such sale was consummated on
April 17, 2000.
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
- ------- ---------------------------------------------------
No matters were submitted to vote of the Company's shareholders during the
last quarter of the fiscal year ended January 29, 2000.
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<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
- ------- -----------------------------------------------------------------
Matters
-------
The following table lists the reported high and low sales quotations as
quoted on the NASD Automated Quotation System for the first three quarters of
fiscal 1999 (through October 7, 1998). Such over-the-counter market quotations
reflect interdealer prices, without retail markup, markdown or commission and
may not necessarily represent actual transactions. Effective with the close of
business on October 7, 1998, the Company's Common Stock was delisted from the
NASDAQ Stock Market, because the Company's Common Stock fell below the NASDAQ
requirement of maintaining a $1,000,000 market value of the public float, and
the Company was unable to raise the market value above this required level. The
Company's Common Stock has been trading over-the-counter since this date.
Accordingly, the following table reflects the reported high and low bid
quotations, as reported to the Company by National Quotation Bureau, LLC for all
quarterly periods in fiscal years 1999 and 2000, subsequent to October 7, 1998.
The Company has not paid dividends in any of the last five years. There were
approximately 924 holders of record of Common Stock on May 15, 2000.
Price Range
-----------
High Low
---- ---
Fiscal 2000
First Quarter $ .69 $ .39
Second Quarter .69 .16
Third Quarter .38 .13
Fourth Quarter .50 .15
Fiscal 1999
First Quarter $1.06 $ .75
Second Quarter 1.06 .50
Third Quarter .75 .25
Fourth Quarter .50 .13
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<PAGE>
Item 6. Selected Financial Data
- ------- -----------------------
Following is selected financial data for the Company for each of the last five
fiscal years.
<TABLE>
<CAPTION>
2000 (1) 1999 1998 1997 1996
----------- ------------ ------------ ----------- -----------
(in thousands, except share data)
<S> <C> <C> <C> <C> <C>
Net sales from continuing
operations $ 49,901 $ 52,236 $ 53,483 $ 60,198 $ 72,964
Operating loss (1,255) (1,883) (2,423) (2,195) (2,871)
Loss from continuing operations (1,745) (2,323) (2,569) (2,101) (4,103)
Income (loss) from discontinued
operations (49) 6,856
Income (loss) before
extraordinary items (1,745) (2,323) (2,569) (2,150) 2,753
Income from extraordinary items 1,365
Net income (loss) (1,745) (958) (2,569) (2,150) 2,753
Net income (loss) available to
common shareholders (1,880) (1,093) (2,707) (2,577) 2,472
Per share data:
Loss from continuing
operations - basic and
diluted (1.77) (2.32) (2.55) (1.15) (1.86)
Net income (loss) - basic (1.77) (1.03) (2.55) (1.17) 1.05
Net income (loss) - diluted (1.77) (1.03) (2.55) (1.17) 1.04
Total assets 11,041 12,134 14,213 15,675 25,315
Long-term obligations 1,240 1,350 3,343 2,031 2,776
Redeemable preferred stock 3,937
Convertible preferred stock 1,500 1,500 1,500 1,500
Weighted average number of common
shares outstanding 1,061,054 1,060,670 1,060,674 2,194,085 2,353,445
</TABLE>
(1) Subsequent to January 29, 2000 the Company has substantially liquidated its
assets. See Note 2 of Notes to Consolidated Financial Statements for additional
information on the Company's liquidation.
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<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and Results
- ------- -----------------------------------------------------------------------
of Operations
-------------
Liquidity and Capital Resources
Due to the Company's weak financial condition, including its continuing
operating losses, and uncertainty as to its ability to continue as a going
concern, management has discussed the sale of part or all of the Company's
assets with several parties. On February 1, 2000, the Company's Board of
Directors concluded that it was in the best interest of the Company and its
shareholders to sell substantially all of the Company's assets, wind-up its
operations and subsequently dissolve and liquidate. On February 2, 2000, the
Company executed a Sale-Purchase Agreement with Ames Department Stores, Inc.
("Ames") for the sale of the leasehold interests in the real estate where seven
of the Company's eight stores were located ("Ames Sale"). Pursuant to this
agreement, JG completed the sale to an affiliate of Ames on April 17, 2000. In
conjunction with the Ames Sale, JG has begun the process of selling its only
owned real property and agreed to sell it to a third party purchaser pursuant to
the terms of a Real Estate Sales Contract dated May 2, 2000 and expects to close
the sale on or about May 31, 2000. Prior to and in conjunction with the
closing of the Ames Sale, inventory and fixed assets have been liquidated. The
Company effectively ceased all retail operations as of the end of fiscal 2000.
As of the filing date, the Company does not have any operating assets with which
it can conduct business operations. The vast majority of its employees have been
terminated with a very limited number of corporate employees engaged in winding-
up of the Company's affairs. The Company currently anticipates that it will file
a Certificate of Dissolution with the Illinois Secretary of State in the near
future. Upon dissolution and liquidation, each shareholder will receive in cash
such shareholder's pro rata share of the liquidation proceeds. Holders of the
preferred stock will receive the amount they would have received if they
converted their shares into shares of common stock. Additionally, the holders of
any outstanding options for common stock will be deemed to have exercised their
options and will receive their pro rata share of the liquidation proceeds, net
of option exercise price.
The Company has adopted the liquidation basis of accounting effective
February 1, 2000 (the date that liquidation became imminent), whereby assets are
valued at their estimated net realizable values and liabilities are stated at
their estimated settlement amounts. The valuation of assets and liabilities
requires estimates and assumptions by management and are subject to significant
uncertainties as to the manner to which future events may occur and impact the
ultimate execution of the liquidation. The amount and timing of future
liquidating distributions, if any, will depend upon a variety of factors,
including, but not limited to, the actual proceeds from the sale of the
Company's assets, the ultimate settlement amounts of the Company's liabilities
and obligations, and actual costs incurred in connection with carrying out the
liquidation. Included in liabilities at February 1, 2000 is an accrual for
estimated costs of operating the Company through complete liquidation. The
estimated accrued liquidation costs include, but are not limited to, costs
associated with disposing of the Company's remaining assets and general
administrative expenses.
Year 2000 Issue
The Company has encountered some limited problems with its computer
software processing financial information as a result of the rollover from 1999
to 2000 which now have been rectified. However, the Company does not expect any
other significant Year 2000 related disruptions. The Company has spent
approximately $110,000 through fiscal year 2000 on the Year 2000 issue.
Maintenance or modification costs were expensed as incurred, while the
replacement of certain systems were recorded as assets and amortized.
Results of Operations
Year Ended January 29, 2000 (fiscal 2000, 52 weeks)
- ---------------------------------------------------
vs. Year Ended January 30, 1999 (fiscal 1999, 52 weeks)
- -------------------------------------------------------
The net loss increased to $1,745,000 in fiscal 2000 from $958,000 in fiscal
1999. During fiscal 1999, the Company recognized a $1,365,000 extraordinary gain
from debt restructuring. Accordingly, the loss from continuing operations
decreased by $578,000 from $2,323,000 in fiscal 1999 to $1,745,000 in fiscal
2000.
-5-
<PAGE>
Net sales from continuing operations decreased to $49,901,000 in fiscal
2000 from $52,236,000 in fiscal 1999. The closed stores represented a decrease
in sales of approximately $3,705,000 on a comparable store basis. As a result,
the Company experienced a $1,370,000 sales increase on a comparable store basis
in fiscal 2000 as compared to fiscal 1999.
The Company's gross profit percentage increased to 33.0% of sales from
32.6% of sales in the previous year. This improvement is once again attributable
to more opportunistic purchasing complemented by tightened controls on
markdowns.
For the second year in a row, the Company experienced significant cost
savings. SG&A expenses decreased by $1,187,000 for fiscal 2000 as compared to
fiscal 1999. Reductions in fixed operating expenses - rent, real estate taxes,
depreciation and insurance - accounted for approximately $785,000 of the SG&A
expense savings. In particular, health insurance costs declined $339,000 in
fiscal 2000 as compared to fiscal 1999, as the Company experienced no
catastrophic illness among its employees in the current fiscal year.
Accordingly, SG&A expenses improved to 35.6% of sales in fiscal 2000 from 36.2%
of sales in the previous year.
Year Ended January 30, 1999 (fiscal 1999, 52 weeks)
- ----------------------------------------------------
vs. Year Ended January 31, 1998 (fiscal 1998, 53 weeks)
- -------------------------------------------------------
The net loss decreased by $1,611,000 from $2,569,000 in fiscal 1998 to
$958,000 in fiscal 1999. That improvement came despite a $400,000 store closing
provision for the store closed in November, 1998. During fiscal 1999, the
Company also recognized a $1,365,000 extraordinary gain from debt restructuring.
In addition, the loss from continuing operations decreased from $2,569,000 in
fiscal 1998 to $2,323,000 in fiscal 1999.
Net sales from continuing operations decreased from $53,483,000 to
$52,236,000. This decrease is attributable to both the store closing and having
one less operating week in fiscal 1999 vs. fiscal 1998. The closed store
represented a decrease in sales of approximately $1,155,000, while the effect of
the additional week accounted for a sales decrease of $729,000. As a result, the
Company experienced a $637,000 sales increase on a comparable store, comparable
week basis for fiscal 1999 as compared to fiscal 1998.
The Company's gross profit percentage increased to 32.6% of sales from
32.0% of sales in the previous year. This improvement is attributable to more
opportunistic purchasing complemented by tightened controls on markdowns.
Due in large part to the expense reduction program implemented early in
fiscal 1999, the Company experienced significant cost savings in fiscal 1999.
SG&A expenses decreased by $603,000 from fiscal 1998. Overall expense control
and, in particular, reductions in maintenance and other outside service-related
expenses, supplies, utilities, general insurance, real estate taxes and
corporate overhead expenditures were at the core of the SG&A expense savings. As
a result, SG&A expenses have improved to 36.2% of sales in fiscal 1999 from
36.5% of sales in fiscal 1998.
Forward - Looking Statements
Except for historical information, the matters discussed in this report are
forward-looking statements that involve risks and uncertainties that may affect
the Company's actual results and cause results to differ materially from such
forward-looking statements. Such risks and uncertainties include, but are not
limited to, risks and uncertainties with respect to the Company's liquidation,
unanticipated liabilities arising before or after the liquidation, the timing of
the Company's liquidation and dissolution and other factors indicated from time
to time in the Company's filings with the Securities and Exchange Commission.
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 15.
Item 9. Changes in and Disagreements with Accountants on Accounting and
- ------- ---------------------------------------------------------------
Financial Disclosure
--------------------
None.
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<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
- -------- --------------------------------------------------
The following individuals served as officers and/or directors of the
Company during the fiscal year ended January 29, 2000.
Name and Principal Occupation Age Term
Sheldon Collen........................ 77 Director since 1993
Consultant and Attorney at Law
Clarence Farrar....................... 65 Director since 1996
President and Chief Operating Officer President and Chief
of the Company; Vice President of Operating Officer since
Goldblatt's 1993
Lionel Goldblatt...................... 71 Director since 1959
Vice President of the Company;
Chairman of Goldblatt's
Noel Goldblatt........................ 74 Director since 1999
Chairman and Chief Executive Officer
of Noel Enterprises d/b/a
Presidential Villas from 1989 to 1999
Sheldon Harris........................ 76 Director since 1996
President of Evanston Property
Management
William Hellman....................... 79 Director and Chief
Chairman and Chief Executive Officer Executive Officer since
of the Company; President of 1983
Goldblatt's
Philip Rootberg...................... 83 Director since 1983
Vice President of the Company;
Senior Partner of Rootberg Business
Services, Inc., a public accounting
firm
Compensation of Directors
All outside directors who are not employees of the Company are compensated
at the rate of $1,250 per quarter for serving on the Board of Directors. In
addition, they receive $500 for each Board of Directors meeting attended.
Compliance With Section 16(a) Of The
Securities Exchange Act Of 1934
Based solely on certain representations made to the Company and the
Company's review of the Forms 3, 4 and 5 furnished to the Company during and
with respect to the fiscal year ended January 29, 2000, the Company does not
know of any failure to file a required form or of any late filings under Section
16(a) of the Securities Exchange Act of 1934, as amended.
-7-
<PAGE>
Item 11. Executive Compensation
- -------- ----------------------
The following table sets forth certain information regarding compensation
paid or accrued with respect to fiscal 2000, 1999 and 1998 by the Company and
its subsidiaries to the Chief Executive Officer and each of the other highest
compensated executive officers whose aggregate compensation for fiscal 2000
exceeded $100,000 (the "Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
All Other Securities
Name and Principal Position Year Salary Bonus Compensation Underlying
($) ($) ($)(1) Options/SARs
(#)(5)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
William Hellman (2) 2000 $127,404 $ 0 $224,050 66,667
Chairman and Chief Executive Officer of 1999 270,192 0 112,581
the Company, and President of Goldblatt's 1998 200,000 0 1,113
Lionel Goldblatt (3) 2000 $135,000 $ 0 $ 1,587 8,333
Vice President of the Company and 1999 127,308 0 1,564
Chairman of the Board of Goldblatt's 1998 125,000 0 1,360
Clarence Farrar (4) 2000 $150,000 $ 0 $ 2,508 10,667
President and Chief Operating Officer of the 1999 147,308 0 2,235
Company, and Vice President of Goldblatt's 1998 140,000 0 2,845
</TABLE>
- --------
(1) The amounts shown represent Company contributions to the account of the
named executive officer pursuant to the Company's 401(k) plan, the cost of
group term life insurance and reimbursement for medical expenses in excess
of that allowable to other employees pursuant to an executive officer
health insurance plan. For Mr. Hellman, the amount also includes payments
received under a Consulting Agreement.
(2) Mr. Hellman has entered into an Amended and Restated Employment Agreement
("Employment Agreement") with the Company, effective as of June 1, 1983
which as subsequently amended, provides for his employment as the Chairman
of the Board and Chief Executive Officer of the Company to serve through
June 30, 2000. He also serves as Chairman of the Executive Committee.
Pursuant to the Employment Agreement as amended, Mr. Hellman reduced his
base salary from $340,000 to $200,000 per year. Effective August 31, 1997,
the Employment Agreement was amended to increase his base salary to
$250,000. Effective January 31, 1999, he reduced his salary to $125,000
per year, such salary payable in accordance with the Company's remuneration
policy regarding executives. In addition, under the terms of his Employment
Agreement, Mr. Hellman receives a bonus equal to 5% of the pre-tax profits
of Goldblatt's Department Stores, Inc. ("Goldblatt's"), as adjusted for
certain items, and reimbursement for business expenses of up to $3,500 per
month. Mr. Hellman's contract further provided that the equivalent of 50
percent of his salary be accrued for payments to him following termination
of his employment. This was set forth in a Consulting Agreement on August
1, 1986 as amended, pursuant to which he has agreed to provide certain
services to the Company following the termination of his employment, and he
(or his estate) was to be paid $223,000 per year for ten years. The
obligations of the Company, pursuant to the Consulting Agreement, are
secured by an annuity which has been purchased by the Company, pursuant to
a Pledge and Security Agreement dated as of January 25, 1991. Pursuant to
an Amendment to the Agreement, the Consulting Agreement went into effect on
August 1, 1998 and payments commenced as of that date. On March 17, 2000,
the Compensation Committee of the Board of Directors authorized a lump-sum
distribution of the full amount of the annuity to Mr. Hellman to fund his
retirement plan.
(3) Mr. Goldblatt has entered into an Employment Agreement with the Company,
effective as of June 1, 1983 and as subsequently amended, providing for his
employment as a Vice President of the Company and as Chairman of
Goldblatt's through January 31, 2001. Pursuant to the Employment Agreement,
Mr. Goldblatt's base salary was increased from $125,000 to $135,000 per
year. If the Employment Contract is not renewed or extended, the Employment
Agreement provides that payment of base salary and other employee benefits
will continue, as payment of severance compensation, for a period of six
months upon expiration of the Employment Agreement or termination thereof
prior to expiration in certain events. Mr. Goldblatt participates in the
Goldblatt's Incentive Pool for officers.
-8-
<PAGE>
(4) Mr. Farrar has entered into an Employment Agreement with the Company, dated
as of November 30, 1990 and as subsequently amended, providing for his
employment as President and Chief Operating Officer until June 30, 2000.
Pursuant to the Employment Agreement, Mr. Farrar's base salary was
increased from $140,000 to $150,000 per year. If the Employment Contract is
not renewed or extended, the Employment Agreement provides that payment of
base salary and other employment benefits will continue, as severance
compensation, for a period of six months upon expiration of the Employment
Agreement or termination thereof prior to expiration in certain events. Mr.
Farrar participates in the Goldblatt's Incentive Pool for officers.
(5) During fiscal 2000, all remaining unexercised employee stock options
previously held by Messrs. Hellman, Goldblatt and Farrar were cancelled,
and the same number of options were reissued to them under the 1999
Amendment and Restatement of the 1988 Stock Option Plan.
Stock Option Plans
During fiscal 2000, the Company's Board of Directors adopted the 1999
Amendment and Restatement of the 1988 Stock Option Plan (the "1999 Plan"), after
approval by the shareholders at the annual meeting held on July 13, 1999. The
1999 Plan authorizes the issuance of 200,000 shares of the Company's Common
Stock to salaried officers and other key employees of the Company and its
subsidiaries.
After the adoption of the 1999 Plan, a substantial portion of the remaining
stock options previously granted under the Company's 1983 Stock Option and Stock
Appreciation Rights Plan, as amended and restated (the "1983 Plan"), and the
Company's 1988 Stock Option Plan, as amended and restated (the "1988 Plan"),
were canceled and a comparable number of stock options were reissued to each of
the participants, including Messrs. Hellman, Goldblatt and Farrar. All
remaining stock options under the 1983 Plan and the 1988 Plan which were not
canceled belonged to participants who had terminated their service from the
Company. As of May 15, 2000 all of these remaining stock options have been
canceled since the time period to exercise the options has lapsed. No
additional options may be granted under the 1983 or the 1988 Plans. There were
no individual grants made under the 1983 or 1988 Plans during the fiscal year
ended January 29, 2000.
As of May 15, 2000, 165,833 shares of the Company's Common Stock were
subject to outstanding options, and there were 35 participants under the 1999
Plan. The average per share exercise price of all such options was $.16. There
were 166,833 stock options granted under the 1999 Plan during the fiscal year
ended January 29, 2000, and options to purchase 1,000 shares were exercised
during the year. The remaining 165,833 shares will be deemed exercised and the
stock option holders will be eligible for a liquidation distribution, as
discussed in Note 3 to the consolidated financial statements.
The following table provides certain information concerning each exercise of
stock options under the Company's 1999 Stock Option Plan during the fiscal year
ended January 29, 2000 by each of the Named Executive Officers and the fiscal
year-end value of unexercised options held by such persons under the Company's
Stock Option Plan:
Aggregated Option Exercises in Fiscal 2000
and January 29, 2000 Option Value
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercisable In-the-Money Options at
Shares $ Options at Fiscal Year End Fiscal Year-End
Acquired Value (#) ($) (1)
---------------------------------------------------------------
Name Exercise # Realized Exercisable Unexercisable Exercisable Unexercisable
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
William Hellman
1999 Plan 0 - 66,667 0 $10,433 -
Lionel Goldblatt
1999 Plan 0 - 8,333 0 $ 1,304 -
Clarence Farrar
1999 Plan 0 - 10,667 0 $ 1,669 -
</TABLE>
- --------
(1) Dollar values were calculated by determining the difference between the
fair market value of the underlying securities at year-end and the exercise
price of the options at year-end.
-9-
<PAGE>
Stock Option Reissuance
The following table provides certain information concerning the cancellation
of stock options under the Company's 1983 and 1988 Plans, and the reissuance of
the same number of stock options under the 1999 Plan for each of the Named
Executive Officers:
<TABLE>
<CAPTION>
Ten-Year Option/SAR Reissuance
------------------------------------------------------------------------------------------------
Length of
Market Original
Number of Price of Exercise Option Term
Securities Stock at Price of New Remaining at
Underlying Time of Original Exercise Date of
Date of Options/SARs Reissuance Options Price Reissuance
Name Reissuance Reissued (#) ($) ($) ($) (years)
- ------------------ ------------ -------------- -------------- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
William Hellman 8/24/99 16,667 $0.16 $1.50 $0.16 1.25
8/24/99 50,000 0.16 1.38 0.16 7.50
Lionel Goldblatt 8/24/99 8,333 0.16 1.50 0.16 1.25
Clarence Farrar 8/24/99 2,667 0.16 1.50 0.16 1.25
8/24/99 8,000 0.16 1.38 0.16 7.50
</TABLE>
-10-
<PAGE>
Compensation Committee Interlocks And Insider Participation
Messrs. Harris, Collen And Rootberg Comprise The Compensation Committee.
Report of Compensation Committee
The Compensation Committee is charged by the Board of Directors with
determining salary and bonus arrangements for all executive officers of the
Company. During fiscal 2000, the Company's Compensation Committee was composed
of Mr. Rootberg (Chairman), Mr. Harris and Mr. Collen. The Company's
Compensation Committee met once in fiscal year 2000.
Compensation consists of a base salary and a bonus. The base salary level
is established using experience, longevity and degree of responsibility as a
guideline. The Compensation Committee has not retained a compensation consultant
or commissioned any executive compensation surveys.
All bonuses are earned based on a pre-determined formula related to the
profit performance of the Company or its subsidiaries. The bonus of Mr. Hellman,
the Chief Executive Officer of the Company, is equal to 5% of the pre-tax profit
of Goldblatt's. The Committee feels that this contractual arrangement fairly
provides a productivity clause to the performance of Goldblatt's which is of the
utmost importance to the stability of the Company. Mr. Hellman does not and has
not drawn a salary or bonus from any other division. Mr. Hellman was the
President of Goldblatt's through most of the 1980's, and reassumed that position
in 1993. Other than Mr. Hellman, the executive officers participate in a bonus
pool which is equal to 5% of the pre-tax profits of the Company. No bonuses were
paid for calendar 1999. The Compensation Committee determined that the
cancellation and reissuance of stock options during fiscal 2000, as described in
"Stock Option Plans", was appropriate in light of the affected employees'
contributions to the Company.
The Committee also reviews and administers policies and programs with
respect to employment and other agreements with executives. The Committee
believes these arrangements with executives serve the important purpose of
assuring continuing loyalty and concentration.
Overall, the Company has maintained employee compensation programs designed
to compensate its officers, managers and other key employees in relationship to
the profitability of the Company as well as individual job performance. In
addition, stock options for officers, managers and other key employees are
awarded at the discretion of this committee after consultation with the CEO and
approval by the Board. The stock option program is designed to give additional
incentive to key employees, which in turn enhances the value of the Company to
all shareholders.
By: The Compensation Committee Members
Philip Rootberg
Sheldon Harris
Sheldon Collen
-11-
<PAGE>
SHAREHOLDER RETURN
PERFORMANCE GRAPH
Comparison of Five Year Cumulative
Total Return Among the Company, the NASDAQ -
National Market System -United States Issuers,
and the NASDAQ - Retail Stocks
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999 2000
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
JG Industries, Inc. $ 100 $ 53.33 $ 26.67 $ 25.56 $ 4.44 $ 5.56
NASDAQ Stock Market 100 143.99 186.24 222.97 348.19 537.67
NASDAQ Retail Stocks 100 112.71 139.75 161.68 197.63 158.86
</TABLE>
The total return assumes that dividends were re-invested quarterly, and is
based on a $100 investment on January 28, 1995. The measurement point for each
year beginning 1996 is the end of the Company's fiscal year, which varied from
January 25 to January 31.
[Graph follows]
-12-
<PAGE>
Item 12. Security Ownership of Certain Beneficial Owners and Management
- -------- --------------------------------------------------------------
The following table sets forth certain information as of May 15, 2000
regarding the beneficial ownership of the Company's Common Stock (on an as-
converted basis) by (i) all persons who owned of record or, to the knowledge of
the Company, beneficially, 5% or more of the outstanding shares of Common Stock
(on an as-converted basis), (ii) each director, (iii) the Chief Executive
Officer and the other three most highly compensated executive officers, and (iv)
all directors and executive officers as a group.
<TABLE>
<CAPTION>
Number of
Shares Approximate
Beneficially Percentage
Name of Beneficial Owner Owned of Class
- ------------------------ ------------ --------------
<S> <C> <C>
Sheldon Collen(1)............................................ 5,333 (6) **
Sheldon Harris(1)............................................ 301,156 (5)(6)(7) 15.9
Lionel Goldblatt(1)(2)....................................... 60,829 (3) 3.2
William Hellman(1)(2)........................................ 357,921 (4)(7) 18.9
Philip Rootberg(1)(2)........................................ 251,461 (5)(6)(7) 13.3
Noel Goldblatt(1)............................................ 6,000 (6) **
Clarence Farrar(1)(2)........................................ 15,575 (8) **
------- ----
All current directors and executive officers as a group
(seven persons) 998,275 (9) 52.7
======= ====
</TABLE>
_________
**Less than 1%
(1) Director. Mr. Harris and Mr. Lionel Goldblatt are brothers-in-law. Mr.
Lionel Goldblatt and Mr. Noel Goldblatt are cousins.
(2) Executive Officer.
(3) Includes 8,333 shares issuable upon exercise of currently exercisable
employee stock options.
(4) Includes 66,667 shares issuable upon exercise of currently exercisable
employee stock options.
(5) With respect to Mr. Harris, includes (i) 25,780 shares of Common Stock held
by Mr. Harris and (ii) 48,154 shares held in trust for the benefit of
members of Mr. Harris' family, for which Mr. Harris disclaims beneficial
ownership. With respect to Mr. Rootberg, includes 18,739 shares of Common
Stock owned by Mr. Rootberg.
(6) Includes 5,000 shares issuable upon exercise of currently exercisable
employee stock options.
(7) For each of Mr. Harris, Mr. Hellman and Mr. Rootberg, the table above
includes 222,222 of the 666,666 shares of Common Stock into which the 1,500
shares of Series B Preferred Stock held pursuant to a Shareholders
Agreement dated December 13, 1996 (the "Shareholders Agreement"), for which
Messrs. Harris, Hellman and Rootberg are trustees, are convertible. Messrs.
Hellman and Harris each disclaims beneficial ownership of 444,444 of the
shares of Common Stock into which the shares of Series B Preferred Stock
held pursuant to the Shareholders Agreement are convertible. Mr. Rootberg
disclaims beneficial ownership of all 666,666 shares of Common Stock into
which shares of Series B Preferred Stock are convertible. 444,444 shares
are held pursuant to the Shareholders Agreement and 222,222 shares are held
in trust for the benefit of members of Mr. Rootberg's family.
(8) Includes 10,667 shares issuable upon exercise of currently exercisable
employee stock options.
(9) Includes 105,667 shares issuable upon exercise of currently exercisable
employee stock options.
-13-
<PAGE>
As of May 15, 2000, based on information filed with the Securities and
Exchange Commission, the persons known to the Company to beneficially own 5% or
more of the Company's outstanding Common Stock (on an as-converted basis) are as
follows:
<TABLE>
<CAPTION>
Number of
Shares Approximate
Beneficially Percentage
Name of Beneficial Owner Owned of Class
- ------------------------ ----- --------
<S> <C> <C>
Sheldon Harris.................................... 301,156 15.9
Evanston Property Management
803 1/2 Chicago Avenue
Evanston, IL 60202
William Hellman................................... 357,921 18.9
JG Industries, Inc.
5630 West Belmont Avenue
Chicago, IL 60634
Philip Rootberg................................... 251,461 13.3
Rootberg Business Services, Inc.
250 South Wacker Drive
Suite 800
Chicago, IL 60606
</TABLE>
Item 13. Certain Relationships and Related Transactions
- -------- ----------------------------------------------
See Note 13 of the Notes to the Company's Consolidated Financial Statements.
-14-
<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 16
Consolidated Balance Sheets, January 29, 2000 and January 30, 1999 17
Consolidated Statements of Operations for the fiscal years ended
January 29, 2000, January 30, 1999 and January 31, 1998 18
Consolidated Statements of Common Stock and Other Shareholders' Equity
for the fiscal years ended January 29, 2000, January 30, 1999
and January 31, 1998 19
Consolidated Statements of Cash Flows for the
fiscal years ended January 29, 2000, January 30, 1999
and January 31, 1998 20
Notes to Consolidated Financial Statements 21-29
Signatures 30
(2) See the Index to Exhibits on pages 31 through 32.
-------------------------------------------------
</TABLE>
(b) Reports on Form 8-K.
The Company filed no Current Reports on Form 8-K during the last
quarter of the fiscal year ended January 29, 2000.
-15-
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
of JG Industries, Inc.
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, common stock and other shareholders'
equity, and cash flows present fairly, in all material respects, the financial
position of JG Industries, Inc. and Subsidiaries (the "Company") at January 29,
2000 and January 30, 1999, and the results of their operations and their cash
flows for each of the three years in the period ended January 29, 2000, in
conformity with accounting principles generally accepted in the United States.
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 of these statements in accordance with
auditing standards generally accepted in the United States, which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2, due to the
Company's weak financial condition, including its continuing operating losses,
and uncertainty as to its ability to continue as a going concern, the Company
adopted a plan of liquidation as of February 1, 2000 which includes sale of all
of the assets of the Company. The consolidated financial statements do not
include any adjustments that might result from the liquidation of the Company
described in Note 2.
PricewaterhouseCoopers LLP
Chicago, Illinois
May 12, 2000
-16-
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 29, 2000 and January 30, 1999
(in thousands, except share data)
---------------------------------
<TABLE>
<CAPTION>
January 29, January 30,
2000 1999
--------------------- --------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 360 $ 212
Receivables, net of allowance of $36 and $16, respectively 212 198
Merchandise inventories 5,159 5,724
Other assets - restricted $223 271 256
--------------------- --------------------
Total current assets 6,002 6,390
--------------------- --------------------
Land, buildings and equipment, at cost:
Land 478 478
Buildings 998 998
Leasehold improvements 5,620 5,670
Furniture, fixtures and vehicle 6,141 6,604
--------------------- --------------------
13,237 13,750
Less accumulated depreciation and amortization 9,560 9,535
--------------------- --------------------
3,677 4,215
--------------------- --------------------
Leasehold rights, net 22 25
Other assets - restricted $1,185 and $1,299, respectively 1,340 1,504
--------------------- --------------------
$ 11,041 $ 12,134
===================== ====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 2,009 $ 5
Current portion of long-term debt 43 530
Accounts payable 2,817 3,084
Accrued real estate taxes 677 1,188
Accrued liabilities 1,091 1,022
Accrued dividends 6 7
--------------------- --------------------
Total current liabilities 6,643 5,836
--------------------- --------------------
Long-term debt, less current portion 724 745
Other long-term liabilities 516 605
Minority interest 1,547 1,457
Common stock and other shareholders' equity:
Common share: no par value; authorized 10,000,000 shares; issued
2,406,770 and 2,405,770 shares, respectively 11,246 11,246
Paid-in capital 5,939 5,939
Convertible preferred stock: no par value; authorized and issued
1,500 shares 1,500 1,500
Accumulated deficit (13,461) (11,581)
Treasury shares - 1,345,116 and 1,345,100 shares at cost, respectively (3,613) (3,613)
--------------------- --------------------
Total common stock and other shareholders' equity 1,611 3,491
--------------------- --------------------
$ 11,041 $ 12,134
===================== ====================
</TABLE>
The accommpanying notes are an integral part of these consolidated financial
statements.
-17-
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FISCAL YEARS ENDED
January 29, 2000, January 30, 1999 and January 31, 1998
(in thousands, except share data)
---------------------------------
<TABLE>
<CAPTION>
2000 1999 1998
--------- --------- ---------
<S> <C> <C> <C>
Net sales from continuing operations $ 49,901 $ 52,236 $ 53,483
Cost of sales 33,411 35,187 36,371
--------- --------- ---------
Gross profit 16,490 17,049 17,112
Selling, general and administrative expenses 17,745 18,932 19,535
--------- --------- ---------
Operating loss from continuing operations (1,255) (1,883) (2,423)
--------- --------- ---------
Other income (expenses):
Interest income 115 105 114
Interest expense (272) (161) (151)
Loss on sale of assets and store closings, net (231) (400)
Minority interest in net income of subsidiaries (90) (99) (96)
--------- --------- ---------
(478) (555) (133)
--------- --------- ---------
Loss from continuing operations before income tax provision (1,733) (2,438) (2,556)
Income tax provision (benefit) 12 (115) 13
--------- --------- ---------
Loss from continuing operations (1,745) (2,323) (2,569)
Extraordinary item:
Gain on debt restructuring, net of related expenses 1,365
--------- --------- ---------
Net loss $ (1,745) $ (958) $ (2,569)
========= ========= =========
Net loss available to common shareholders (1,880) (1,093) $ (2,707)
========= ========= =========
Per share data - basic and diluted
Loss from continuing operations $ (1.77) $ (2.32) $ (2.55)
Extraordinary gain 1.29
--------- --------- ---------
Net loss $ (1.77) $ (1.03) $ (2.55)
========= ========= =========
</TABLE>
The accommpanying notes are an integral part of these consolidated financial
statements.
-18-
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMMON STOCK AND OTHER SHAREHOLDERS' EQUITY
for the fiscal years ended
January 29, 2000, January 30, 1999 and January 31, 1998
(in thousands, except share data)
-------------------------------
<TABLE>
<CAPTION>
Total Common
Stock and
Other
Common Paid-in Preferred Accumulated Treasury Shareholders'
Shares Capital Stock Deficit Shares Equity
----------- --------- ----------- ------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Balances, January 25, 1997 $ 11,246 $ 5,939 $ 1,500 $ (7,781) $ (3,613) $ 7,291
Net loss, fiscal 1998 (2,569) (2,569)
Dividends accrued on convertible
preferred stock (138) (138)
----------- --------- ----------- ------------- ---------- ---------------
Balances, January 31, 1998 $ 11,246 5,939 1,500 (10,488) (3,613) 4,584
Net loss, fiscal 1999 (958) (958)
Dividends accrued on convertible (135) (135)
preferred stock
------------ --------- ----------- ------------- ---------- ---------------
Balances, January 30, 1999 $ 11,246 5,939 1,500 (11,581) (3,613) 3,491
Net loss, fiscal 2000 (1,745) (1,745)
Dividends accrued on convertible
preferred stock (135) (135)
------------ --------- ----------- ------------- ---------- ---------------
Balances, January 29, 2000 $ 11,246 $ 5,939 $ 1,500 $ (13,461) $ (3,613) $ 1,611
=========== ========= =========== ============= ========== ===============
</TABLE>
-19-
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the fiscal years ended
January 29, 2000, January 30, 1999 and January 31, 1998
(in thousands)
----------------
<TABLE>
<CAPTION>
2000 1999 1998
-------- ----------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (1,745) $ (958) $ (2,569)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
Depreciation and amortization 825 929 1,007
Minority interest in net income of subsidiaries 90 99 96
Net loss on sale of assets and store closings 231 400
Extraordinary gain on debt restructuring (1,365)
Changes in assets in liabilities:
Accounts receivable (14) 83 9
Merchandise inventories 465 442 63
Other assets (current) (15) 48 (80)
Other assets (noncurrent) 164 233 (107)
Accounts payable and accrued liabilities (777) 406 388
Other liabilities (noncurrent) (89) (220) (42)
----------- ---------- -----------
Net cash (used in) provided by operating activities (865) 97 (1,235)
Cash used in investing activities:
Net proceeds from sale of assets 3 6 21
Capital expenditures (319) (366) (502)
Purchase of annuity contracts (32)
----------- ---------- ----------
Net cash used in investing activities (316) (360) (513)
----------- ---------- ----------
Cash flows from financing activities:
Borrowings under line of credit 2,004 4,155 2,275
Repayments under line of credit (4,150) (2,275)
Redemption of promissory note to Jupiter (500)
Proceeds from mortgage borrowing 800
Principal payments on long-term debt
and capital lease obligation (39) (25)
Dividends paid on convertible preferred stock (136) (135) (136)
----------- ---------- -----------
Net cash provided by (used in) financing activities 1,329 (155) 664
----------- ---------- -----------
Net increase (decrease) in cash and cash equivalents 148 (418) (1,084)
Cash and cash equivalents at beginning of year 212 630 1,714
----------- ---------- ------------
Cash and cash equivalents at end of year $ 360 $ 212 $ 630
=========== ========== ============
Cash paid during the fiscal year for:
Interest $ 256 $ 126 $ 45
Income taxes 12 13 17
</TABLE>
-20-
<PAGE>
JG INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
____________
1. Summary of Significant Accounting Policies - Going Concern Basis
-----------------------------------------------------------------
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 was merged into the Company subsequent to January 29, 2000).
The Company is engaged in retail merchandising operations in one
continuing business segment consisting of eight discount department
stores primarily located in the Chicago, Illinois vicinity.
Significant intercompany accounts and transactions have been
eliminated.
B) Cash and Cash Equivalents - The Company considers all highly liquid
-------------------------
investments purchased with an original maturity of three months or
less to be cash equivalents. As of January 29, 2000 and January 30,
1999, 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 85% of the inventory using the
retail method as of January 29, 2000 and January 30, 1999. The
remaining inventory was valued on the first-in, first-out (FIFO) basis
using the retail method. If the FIFO method had been used to value all
inventories, the cost would have been $438,000 and $497,000 higher at
January 29, 2000 and January 30, 1999, respectively. During fiscal
2000, 1999 and 1998, certain LIFO inventory levels were reduced which
increased income by approximately $41,000, $75,000 and $16,000,
respectively, 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; and 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
$28,000 at January 29, 2000 and $25,000 at January 30, 1999.
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.
G) Per Share Data - For fiscal 2000, 1999 and 1998, basic and diluted per
--------------
share calculations are computed based on the weighted average number
of common shares outstanding of 1,061,654, 1,060,670 and 1,060,674,
respectively. Incremental shares from the assumed conversion of
preferred stock of 666,666 in fiscal 2000 and 1999 are not included as
they would be anti-dilutive. Also, incremental shares from the assumed
exercise of common stock options of 44,945 in fiscal 2000 are not
included as they would be anti-dilutive. Options to purchase 2,333 and
162,167 shares of common stock were outstanding at January 29, 2000
and January 30, 1999, respectively, but were not included in the
computation of diluted earnings per share since the options' exercise
prices were greater than the average market price of the common
shares, and they also would be anti-dilutive.
Loss per share applicable to common shares for fiscal 2000, 1999 and
1998 is computed after recognition of the dividend requirements of
$135,000, $135,000 and $138,000, 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 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
-21-
<PAGE>
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.
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 29, 2000 and January 30, 1999 and the
reported amounts of revenues and expenses during the three years ended
January 29, 2000. Actual results could differ from those estimates.
2. Going Concern and Liquidation
-----------------------------
The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern. The fiscal 2000
consolidated financial statements do not include any adjustments that might
result from the liquidation of the Company as discussed below.
In fiscal 2000, the Company reported a loss from continuing operations of
$1,745,000, the eleventh consecutive loss from continuing operations. Due
to the Company's weak financial condition, its continuing operating losses
and poor future prospects, including the uncertainty as to its ability to
continue as a going concern, the Company has discussed the sale of part or
all of the Company's assets with several parties. On February 1, 2000, the
Company's Board of Directors concluded that it was in the best interest of
the Company and its shareholders to sell substantially all of the Company's
assets, wind-up its operations and subsequently dissolve and liquidate
("the Liquidation"). On February 2, 2000, the Company executed a Sale-
Purchase Agreement with Ames Department Stores, Inc. ("Ames") for the sale
of the Company's interests in leased real estate where seven of the
Company's eight stores were located ("Ames Sale"). Pursuant to this
agreement, JG completed the Ames Sale on April 17, 2000. In conjunction
with the Ames Sale, JG has begun the process of selling its only owned real
property. The Company has ceased all retail operations and began winding-
up its affairs shortly after the end of its fiscal year on January 29,
2000. Prior to and in conjunction with the closing of the Ames Sale, all
inventory and layaway receivables have been liquidated as well. The
Company has closed its stores and commenced the process of selling its
trade fixtures in sales to the public. As of the filing date, the Company
does not have any operating assets with which it can conduct business
operations. The vast majority of its employees have been terminated with a
very limited number of corporate employees engaged in winding-up of the
Company's affairs. The Company currently anticipates that it will file a
Certificate of Dissolution with the Illinois Secretary of State in the near
future.
The Company has adopted the liquidation basis of accounting effective
February 1, 2000 (the date that liquidation became imminent), whereby
assets are valued at their estimated net realizable values and liabilities
are stated at their estimated settlement amounts. The valuation of assets
and liabilities requires estimates and assumptions by management and are
subject to significant uncertainties as to the manner to which future
events may occur and impact the ultimate execution of the Liquidation. The
amount and timing of future liquidating distributions, if any, will depend
upon a variety of factors, including, but not limited to, the actual
proceeds from the sale of the Company's assets, the ultimate settlement
amounts of the Company's liabilities and obligations, and actual costs
incurred in connection with carrying out the Liquidation. Included in
liabilities at February 1, 2000 is an accrual for estimated costs of
operating the Company through complete liquidation. The estimated accrued
liquidation costs include, but are not limited to, costs associated with
disposing of the Company's remaining assets and general administrative
expenses.
The Company's business strategy in order to achieve complete liquidation
and dissolution is as follows:
. Collect its assets, including without limitation, at the discretion of
the Board of Directors of the Company, the liquidation of some or all
of its subsidiaries;
. Convey and dispose of its real property;
. Discharge or make provisions for discharging its liabilities;
. Distribute its remaining assets among its shareholders;
. Do every other act necessary to wind up and liquidate its business and
affairs.
-22-
<PAGE>
3. Unaudited Pro-Forma Consolidated Statement of Net Assets in Liquidation
-----------------------------------------------------------------------
The following unaudited pro-forma consolidated financial information
represents the pro-forma consolidated statement of net assets in
liquidation as of February 1, 2000 (the date liquidation became imminent).
Unaudited Pro-Forma Consolidated Statement of Net Assets in Liquidation
As of February 1, 2000 (in thousands)
Assets
Cash and cash equivalents $ 360
Layaway and other receivables 154
Notes receivable 150
Receivable from Ames 7,526
Merchandise inventories 4,563
Land and building 1,900
Furniture, fixtures and vehicle 106
Annuity contract 1,408
--------
Total Assets $ 16,167
--------
Liabilities
Borrowings on line of credit $ 2,009
Accounts payable 2,637
Accrued liabilities 6,242
Mortgage loan 745
Capital lease obligation 22
Minority interest 1,547
--------
Total Liabilities $ 13,202
--------
Net assets in liquidation at February 1, 2000 $ 2,965
========
Layaway and Other Receivables - Subsequent to February 1, 2000, the Company
sold its layaway receivables to Hilco/Great American Group ("Hilco") for
42.0% of the retail value for a price of $53,666. The value of the
receivables is adjusted to reflect the net realizable value.
Notes Receivable - The balance represents notes receivable from a minority
shareholder of two of the Company's former subsidiaries, Sussex Group
Holding, Inc. and Sussex Group, Ltd. Collection of this receivable is
dependent, in part, on the settlement of the minority interest liability at
January 29, 2000, as discussed below.
Receivable from Ames - On April 17, 2000, pursuant to a Sale-Purchase
Agreement dated February 2, 2000, the Company completed the sale to Ames of
the Company's interests in leased real estate where seven of the eight
Goldblatt's stores were located. The final purchase price, after
adjustments, was $7,526,000. On April 17, 2000, the Company received
$6,981,000 in cash and cash equivalents. The remaining balance of $545,000
is being held in an escrow account by Ames to pay for certain claims that
may arise from the Company's prior use of the leased real estate for up to
fifteen months after April 17, 2000. As a result of this sale, the
Company's leasehold improvements with a net book value of $1,840,101 at
January 29, 2000 and straight-line rent obligations of $516,340 included in
other long-term liabilities at January 29, 2000 were written off.
Merchandise Inventories - On February 2, 2000, the Company sold its
merchandise inventory to Hilco for 45.4% of the retail value for a price of
$4,562,588. As a result of the sale, Hilco paid $2,024,640 directly to a
financial institution on behalf of the Company to settle the Company's
outstanding line of credit and paid $2,537,948 to the Company.
Land and Building - The Company entered into a contract dated May 2, 2000
for the sale of its solely owned store site located at 4700 S. Ashland
Avenue, Chicago, IL and the use of the Goldblatt's Department Stores name,
and expects to close the sale on May 31, 2000. As of February 1, 2000, the
property is valued at $1,900,000, which represents the contract selling
price. The property is subject to a $745,000 mortgage at January 29, 2000.
Furniture, Fixtures and Vehicle - The Company has liquidated furniture,
fixtures and equipment with a net book value of $1,250,623 for net proceeds
of approximately $60,000. The value of the furniture, fixtures and
equipment at February 1, 2000 is adjusted to reflect its net realizable
value. Additionally, included in the balance is a held for sale vehicle
with a net book value of $46,000.
-23-
<PAGE>
Annuity Contract - The balance represents the current value of an annuity
contract purchased to secure consulting payments to the chief executive
officer ("Executive"), as required by the Employment Agreement and
Consulting Agreement. On March 17, 2000, the Compensation Committee of the
Board of Directors authorized a lump-sum distribution of this amount to the
Executive to fund his retirement plan.
Accounts Payable - The Company has settled its vendor payables and realized
a net gain of $180,000. The value of the accounts payable at February 1,
2000 is adjusted to the net settlement amount.
Accrued Liabilities - Included in accrued liabilities are accrued estimated
costs of liquidation to be incurred in carrying out the Liquidation. The
estimated costs include known liabilities to be incurred in connection with
the sale and disposition of the Company's remaining assets (primarily
furniture, fixtures and equipment), salaries and related expenses of
officers and employees and general overhead expenses related to execution
of the Liquidation Plan. The components of the accrued estimated costs of
liquidation at February 1, 2000 are as follows (in thousands):
Salaries and benefits $1,167
Amount due under annuity contract 1,408
Rent expense 339
Real estate taxes 244
Insurance 100
Professional fees 400
Income taxes payable 60
Other, net 750
------
Total $4,468
======
The actual costs incurred could vary significantly from the related accrued
expenses due to uncertainty related to the length of time and actual costs
that may be required to execute the Liquidation Plan.
Minority Interest - A minority shareholder held minority interests in two
of the Company's subsidiaries, Sussex Group Ltd. and Sussex Group Holding
Company. These companies have been merged into the Company. In connection
with these mergers, the Company provided notice to this minority
shareholder that his interests would be converted to the right to receive
$1,165,500 in cash. While this minority shareholder has notified the
Company that he intends to exercise his appraisal rights with respect to
these minority interests under Delaware Law, the Company does not believe
that he exercised these appraisal rights in a timely manner. Therefore,
pursuant to the mergers, the Company is mailing to this minority
shareholder payment of $1,165,500 for his minority interests. This
minority shareholder may continue to dispute the amount owed to him, and
the Company could incur significant additional costs in connection with any
such dispute.
Income Taxes - Upon the sale of assets, the Company will recognize gain or
loss for federal income tax purposes. The amount of the Company's income
tax obligation with respect to these transactions will depend on the terms
of the transaction. If the Company recognizes a net gain on the sale of
its assets, it anticipates that it will not, because of the net operating
loss carryforwards of approximately $21,613,000 have any federal income tax
obligation with respect to such gain, except under the alternative minimum
tax rules, which is estimated at $60,000 at February 1, 2000.
Liquidation Distribution - Upon dissolution and liquidation, each
shareholder will receive in cash such shareholder's pro rata share of the
liquidation proceeds. Holders of the preferred stock will receive the
amount they would have received if they converted their shares into shares
of common stock. Additionally, the holders of any outstanding options for
common stock will be deemed to have exercised their options and will
receive their pro rata share of the liquidation proceeds, net of option
exercise price. The liquidation distribution is based on the total number
of shares of 1,894,153. This includes 1,061,654 in outstanding common
shares, 666,666 common shares from the conversion of the preferred stock,
and 165,833 shares attributable to the conversion of outstanding stock
options. The Company anticipates that holders of common stock (including
holders of the convertible preferred stock) will receive in excess of $1.00
per share for each share of common stock, and that holders of the stock
options will receive in excess of $.84 per share, net of option exercise
price, for each share. However, the inability of the Company to sell its
remaining assets for anticipated proceeds or to settle outstanding disputes
for anticipated amounts, unanticipated liabilities that arise during the
ongoing liquidation and/or other changes that occur during the course of
the liquidation could cause the actual amount received by holders of the
Company's stock to vary significantly from the currently anticipated
amount. JG Industries also does not anticipate distributing any amount to
shareholders in this liquidation prior to October 17, 2000, and the
liquidation could take significantly longer.
-24-
<PAGE>
4. Notes Payable and Long-Term Debt
--------------------------------
Long-term debt at January 29, 2000 and January 30, 1999 is summarized as
follows (in thousands):
Balance
-----------------
Description 1/29/00 1/30/99
----------- ------- -------
JG:
Jupiter promissory note $ 0 $ 500
Goldblatt's:
Mortgage loan 745 775
Capital lease 22
------- -------
767 1,275
Less current maturities 43 530
------- -------
$ 724 $ 745
======= =======
Long-term debt maturing within each of the six fiscal years subsequent to
January 29, 2000 is as follows (in thousands):
2001 $ 43
2002 47
2003 39
2004 42
2005 45
2006 551
Effective May 15, 1998, the original $1,745,898 Jupiter promissory note
obligation was amended and restated. As a result of this transaction, the
Company recognized an extraordinary gain on debt restructuring of
approximately $124,000, net of related expenses, during fiscal 1999. The
amended and restated note was payable in three annual installments of
$581,966 each commencing May 15, 1999, with the last installment due and
payable on May 15, 2001. On January 29, 1999, the Company and Jupiter
entered into a Cancellation Agreement whereby the amended and restated
$1,745,898 promissory obligation was canceled upon a lump-sum payment of
$500,000 to Jupiter. As a result of this transaction, the Company
recognized an additional extraordinary gain on debt restructuring of
approximately $1,241,000, net of related expenses, during fiscal 1999.
During fiscal year 2000, the Company made the $500,000 lump-sum payment to
Jupiter.
Effective January 30, 1998, Goldblatt's entered into a mortgage loan
agreement for $800,000 with an 8.5% fixed rate of interest from a regional
financial institution. The mortgage is secured by a parcel of owned real
estate housing a Goldblatt's store, and is guaranteed by JG. The loan
agreement stipulates monthly principal and interest payments of $7,878 and
a final principal payment of approximately $551,000 due on January 31,
2005. The loan agreement requires that no default exists under the line of
credit agreement.
Effective January 28, 1999, Goldblatt's entered into a Loan and Security
Agreement ("Loan Agreement") with a financial institution. The Loan
Agreement provided a revolving line of credit of up to $3,000,000 through
January, 2001 based on availability of a borrowing base equal to 45% of
merchandise inventory computed on a FIFO basis. The line was
collateralized by Goldblatt's inventory and cash and cash equivalents. The
line of credit agreement required that Goldblatt's maintain a FIFO
inventory cost of at least $5,500,000. Additionally, the Company was
required to pay down the outstanding line of credit with any available cash
on a daily basis. Interest was payable at the prime rate plus 1%. The line
was guaranteed by JG. There was $2,009,000 in outstanding borrowings on
the line as of January 29, 2000. At January 29, 2000 the Company had
$991,000 available on the line of credit.
As more fully described in Note 3, the outstanding amount on the line of
credit was paid off with the proceeds from the liquidation of inventory on
February 8, 2000.
The weighted average interest rate on short-term borrowings for fiscal
2000, 1999 and 1998 was 9.06%, 9.28% and 9.50%, respectively.
-25-
<PAGE>
5. Preferred Stock
---------------
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 47.9% 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 provision for fiscal 2000 is comprised of current state
taxes of $12,000. The income tax provision for fiscal 1999 is comprised of
current state taxes of $13,000, offset by a tax benefit related to the
reversal of previously recorded tax liability of $128,000.
At January 29, 2000, the Company has net operating loss carryforwards of
approximately $21,613,000 available to offset future taxable income for
federal income tax purposes. The amount of carryforwards which expired in
fiscal 2000 was $3,146,604.
The components of the net deferred tax assets and liabilities as of January
29, 2000 and January 30, 1999 are as follows:
<TABLE>
2000 1999
---- ----
(in thousands)
<S> <C> <C>
Deferred tax assets:
Inventory $ 102 $ 126
Accruals and other liabilities 201 236
Alternative Minimum Tax credit 398 398
Net operating loss carryforwards 8,429 9,106
------- -------
9,130 9,866
Valuation allowance (8,480) (9,085)
------- -------
650 781
------- -------
Deferred tax liabilities:
Property, plant and equipment 650 781
------- -------
650 781
------- -------
Net deferred tax liabilities $ - $ -
======= =======
</TABLE>
7. Lease Commitments
-----------------
At January 29, 2000, the Company leased seven of its eight Goldblatt's store
locations. Certain store leases contained contingent rental provisions based
on retail sales. Rent expense, net of insignificant sublease income, for
fiscal years 2000, 1999 and 1998 was $1,818,000, $1,894,000 and $1,873,000,
respectively, including contingent rentals of $168,000, $223,000 and
$228,000, respectively. Straight-line rent obligations of $516,000 and
$605,000 are included in other long-term liabilities at January 29, 2000 and
January 30, 1999, respectively.
-26-
<PAGE>
Effective April 17, 2000, the Company sold its interest in all the leased
real estate to Ames (as more fully described in Notes 2 and 3). As a
result, the future minimum lease commitments for the operating leases for
the store locations consist only of $339,000 for fiscal year 2001, which
represents the lease payments through April 17, 2000.
8. Sale of Assets and Store Closings
---------------------------------
On November 1, 1999, the Company closed one of its underperforming
Goldblatt's store locations in the Chicagoland area. As a result of this
store closing, the Company has recorded store closing costs of
approximately $231,000, which are comprised of a write-down of merchandise
of approximately $100,000, a write-off of the furniture and fixtures of
approximately $62,000 and operating expenses primarily for rent and
insurance costs during the liquidation time period of approximately
$69,000. During fiscal 1999, the Company closed one of its underperforming
Goldblatt's store locations in Chicago and recorded a store closing
provision of $400,000.
As of January 29, 2000 there are no remaining liabilities related to these
store closings.
9. Pension, Profit-Sharing and Employee Benefit Plans
--------------------------------------------------
The Company has a defined contribution plan which substantially all non-
union employees may join after completing one year and 1,000 hours of
service. Annually, the Company contributes a discretionary amount
determined by the Board of Directors and participants may voluntarily
contribute varying percentages of their compensation.
Approximately $108,000, $120,000 and $117,000 of expenses relating to this
plan are included in the consolidated statements of operations in fiscal
2000, 1999 and 1998, respectively. The plan is qualified under provisions
of the Internal Revenue Code.
10. Stock Option Plan
-----------------
The Company maintains Stock Option and Stock Appreciation Rights Plans.
All options under these plans vest immediately once granted. 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 29, 2000 is approximately 9.5 years.
Information for the fiscal years ended January 31, 1998, January 30, 1999
and January 29, 2000 with respect to option activity is as follows:
<TABLE>
<CAPTION>
Exercise Weighted-Average
Number of Price per Exercise
Shares under Option: Shares Share Price per Share
------------ --------------- --------------------
<S> <C> <C> <C>
January 25, 1997 89,167 $1.38 to 1.50 $1.42
Granted 85,000 1.50 1.50
Expired/Canceled (3,000) 1.50 1.50
------------
January 31, 1998 171,167 1.38 to 1.50 1.46
Expired/Canceled (9,000) 1.50 1.50
------------
January 30, 1999 162,167 1.38 to 1.50 1.46
Expired/Canceled (159,834) 1.38 to 1.50 1.45
Granted 166,833 .16 .16
Exercised (1,000) .16 .16
------------
January 29, 2000 168,166 .16 to 1.50 .17
============
</TABLE>
-27-
<PAGE>
As permitted by SFAS No. 123, "Accounting for Stock-Based Compensation"
("SFAS 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." Accordingly, there is no compensation expense recognized in
association with options granted at or above the market price of the stock
at the date of grant. Had compensation expense for the Company's stock
options been determined based on the fair market value at the grant dates
consistent with the method of SFAS 123, the Company's pro forma net loss
and net loss per basic and diluted share would have been approximately
$2,644,000 and $2.62, respectively, for fiscal 1998. No options were
granted during fiscal 1999 and the pro forma effect of the options granted
during fiscal 2000 on reported net loss and loss per share would have been
immaterial.
The fair market value of options granted during fiscal 1998 was estimated
as of the date of grant using the Black-Scholes option-pricing model with
the following weighted-average assumptions:
Risk free interest rate 6.26%
Expected dividend yield 0.00%
Expected volatility factor 86.32
Expected option term (years) 3
The weighted-average fair value per option at the date of grant for options
granted in fiscal 1998 was $.88.
On August 24, 1999, the Company canceled substantially all of the
outstanding stock options previously granted under the 1983 and 1988 Stock
Option and Stock Appreciation Rights Plans, and then granted a comparable
number of new stock options under the 1999 Amendment and Restatement of the
1983 and 1988 Stock Option Plans. No compensation expense was recognized
at the date of grant by the Company as all options were granted at the
market price of the stock on the date of the grant. However, these options
will be subject to a variable plan accounting treatment on a prospective
basis effective July 1, 2000, as indicated in the FASB Interpretation of
Opinion 25, "Accounting for Certain Transactions Involving Stock
Compensation." Pursuant to variable plan accounting, the Company will
measure compensation expense at each reporting date, and the effects of
applying this Interpretation of Opinion 25 cannot be estimated.
11. Fourth Quarter Adjustments
--------------------------
Results of continuing operations in the fourth quarter of fiscal 2000, 1999
and 1998 were increased by year-end adjustments of approximately $258,000,
$44,000 and $66,000, respectively, which related primarily to adjustments
to inventory and certain miscellaneous accruals.
12. Supplementary Information
-------------------------
Charges to selling, general and administrative expenses for fiscal 2000,
1999 and 1998 include the following:
2000 1999 1998
---- ---- ----
(in thousands)
Advertising costs $1,080 $1,102 $1,091
Real estate and personal property taxes 511 751 811
Advertising costs are expensed when incurred.
-28-
<PAGE>
13. Related Party Transactions
--------------------------
The Company purchased a certain annuity contract from a former affiliate to
secure consulting payments to the chief executive officer ("Executive"), as
required by the Employment Agreement and Consulting Agreement. Pursuant to
the Consulting Agreement, the Executive has agreed to provide certain
services to the Company for which he (or his estate) will be paid $223,000
per year for ten years. The obligations of the Company, pursuant to the
Consulting Agreement, are secured by the annuity contract, pursuant to a
Pledge and Security Agreement dated as of January 25, 1991. The total
account value of the contract as of January 29, 2000 and January 30, 1999
is $1,408,000 and $1,522,000, respectively, and is included in other assets
and designated as "restricted". During fiscal 1999, the Executive
commenced providing consulting services and, as a result, the Company
entered into a settlement option for a fixed payout schedule on the annuity
contract. The current portion of the annuity contract is $223,000 as of
January 29, 2000.
The Company earned interest of $109,000, $95,000 and $86,000 on this
annuity contract during fiscal 2000, 1999 and 1998, respectively.
On March 17, 2000, the Compensation Committee of the Board of Directors
authorized a lump-sum distribution of the full amount of this annuity
contract to the Executive to fund his retirement fund.
-29-
<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 25, 2000 By: /s/William Hellman
------------ -------------------
William Hellman
Chairman and Chief Executive Officer
POWER OF ATTORNEY
The undersigned directors and officers of JG Industries, Inc. do hereby
constitute and appoint William Hellman and Clarence Farrar and each of them,
with full power of substitution, our true and lawful attorneys-in-fact and
agents to do any and all acts and things in our name and behalf in our
capacities as directors and officers, and to execute any and all instruments for
us and in our names in the capacities indicated below which such person may deem
necessary or advisable to enable the Registrant to comply with the Securities
Exchange Act of 1934, as amended, and any rules, regulations and requirements of
the Securities and Exchange Commission, in connection with this Report on Form
10-K, including specifically, but not limited to, the power and authority to
sign for us, or any of us, in the capacities indicated below and any and all
amendments hereto; and we do hereby ratify and confirm all that such person or
persons shall do or cause to be done by virtue hereof.
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.
<TABLE>
<S> <C> <C>
/s/ William Hellman Chairman and Chief Date: May 25, 2000
- ---------------------- Executive Officer
William Hellman
/s/ Clifford Gutmann Chief Financial Officer and Date: May 25, 2000
- ---------------------- Principal Accounting Officer
Clifford Gutmann
Directors:
/s/ Sheldon Collen Director Date: May 25, 2000
- ----------------------
Sheldon Collen
/s/ Clarence Farrar Director and Chief Date: May 25, 2000
- ---------------------- Operating Officer
Clarence Farrar
/s/ Lionel Goldblatt Director Date: May 25, 2000
- ----------------------
Lionel Goldblatt
/s/ Sheldon Harris Director Date: May 25, 2000
- ----------------------
Sheldon Harris
/s/ William Hellman Director Date: May 25, 2000
- ----------------------
William Hellman
/s/ Philip Rootberg Director Date: May 25, 2000
- ----------------------
Philip Rootberg
/s/ Noel Goldblatt Director Date: May 25, 2000
- ---------------------- ------------
Noel Goldblatt
</TABLE>
-30-
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit No. Description
- ----------- -----------
2 Sale-Purchase Agreement dated February 2, 2000 by and among Goldblatt's
Department Stores, Inc., JG Industries, Inc., Ames Realty II, Inc. and
Ames Department Stores, Inc. (Previously filed as Annex A to the
Information Statement on Schedule 14C filed on March 10, 2000 and is
incorporated herein by reference.)
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.)
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.)
10.7 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.)
10.14 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.)
10.17 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.)
10.19 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.)
-31-
<PAGE>
INDEX TO EXHIBITS, Continued
----------------------------
Exhibit No. Description
- ---------- -----------
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.)
10.24 Thirteenth Amendment to Amended and Restated Employment Agreement,
dated February 1, 1997, between the Company, Goldblatt's Department
Stores, Inc. and William Hellman. (Previously filed as Exhibit 10.24
to the January 25, 1997 Form 10-K and is incorporated herein by
reference.)
10.25 Employment Agreement, dated February 1, 1997, between the Company and
Clarence Farrar. (Previously filed as Exhibit 10.25 to the January
25, 1997 Form 10-K and is incorporated herein by reference.)
10.26 Employment Agreement, dated February 1, 1997, between Goldblatt's
Department Stores, Inc. and Lionel Goldblatt. (Previously filed as
Exhibit 10.26 to the January 25, 1997 Form 10-K and is incorporated
herein by reference.)
10.27 Fourteenth Amendment to Amended and Restated Employment Agreement,
dated August 31, 1997, between the Company, Goldblatt's Department
Stores, Inc. and William Hellman. (Previously filed as Exhibit 10.27
to the January 31, 1998 Form 10-K and is incorporated herein by
reference.)
10.28 Fifteenth Amendment to Amended and Restated Employment Agreement,
dated November 12, 1998, between the Company, Goldblatt's Department
Stores, Inc. and William Hellman. (Previously filed as Exhibit 10.28
to the January 30, 1999 Form 10-K and is incorporated herein by
reference.)
21 List of Subsidiaries.
24 Power of Attorney (contained on signature page hereto).
27 Financial Data Schedule.
-32-
<PAGE>
Exhibit 21
----------
List of Subsidiaries
- --------------------
Goldblatt's Department Stores, Inc.
Sussex Group Holding Company (merged into the Company in May, 2000)
Sussex Group Ltd. (merged into Sussex Group Holding Company in April, 2000)
-33-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF JG INDUSTRIES, INC. AND SUBSIDIARIES FOR
THE FISCAL YEARS ENDED JANUARY 29, 2000 AND JANUARY 30, 1999 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-29-2000 JAN-30-1999
<PERIOD-START> JAN-31-1999 FEB-01-1998
<PERIOD-END> JAN-29-2000 JAN-30-1999
<CASH> 360 212
<SECURITIES> 0 0
<RECEIVABLES> 248 214
<ALLOWANCES> 36 16
<INVENTORY> 5,159 5,724
<CURRENT-ASSETS> 6,002 6,390
<PP&E> 13,237 13,750
<DEPRECIATION> 9,560 9,535
<TOTAL-ASSETS> 11,041 12,134
<CURRENT-LIABILITIES> 6,643 5,836
<BONDS> 724 745
0 0
1,500 1,500
<COMMON> 11,246 11,246
<OTHER-SE> (11,135) (9,255)
<TOTAL-LIABILITY-AND-EQUITY> 11,041 12,134
<SALES> 49,901 52,236
<TOTAL-REVENUES> 49,901 52,236
<CGS> 33,411 35,187
<TOTAL-COSTS> 33,411 35,187
<OTHER-EXPENSES> 17,745 18,932
<LOSS-PROVISION> 231 400
<INTEREST-EXPENSE> 272 161
<INCOME-PRETAX> (1,733) (2,438)
<INCOME-TAX> 12 (115)
<INCOME-CONTINUING> (1,745) (2,323)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 1,365
<CHANGES> 0 0
<NET-INCOME> (1,745) (958)
<EPS-BASIC> (1.77) (1.03)
<EPS-DILUTED> (1.77) (1.03)
</TABLE>
