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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
JUNE 28, 1999 (JUNE 11, 1999)
Date of Report (Date of earliest event reported)
HECHINGER COMPANY
(Exact name of Registrant as specified in its charter)
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DELAWARE 0-7214 52-1001530
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
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1801 MCCORMICK DRIVE, LARGO, MARYLAND 20774
(Address of principal executive offices) (Zip Code)
(301) 341-1000
(Registrant's telephone number, including area code)
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ITEM 3. BANKRUPTCY OR RECEIVERSHIP
On June 11, 1999 Hechinger Company (the "Registrant") filed a voluntary petition
for bankruptcy (the "Bankruptcy Filing") under Chapter 11 of the U.S. Bankruptcy
Code in the United States Bankruptcy Court for the District of Delaware (Case
Number 99-2261PJW). Pursuant to the Bankruptcy Filing, the Registrant has
remained in possession of the Registrant's assets and properties, and its
business and affairs will continue to be managed by the Registrant's directors
and officers, subject in each case to the supervision of the Bankruptcy Court.
ITEM 5. OTHER EVENTS
On June 11, 1999, Hechinger Company issued a press release, a copy of which is
attached hereto as Exhibit 99 and incorporated herein in its entirety by
reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND
EXHIBITS
(c) Exhibits
99 Press Release issued by Hechinger Company on June 11, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: June 28, 1999 HECHINGER COMPANY
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Registrant
/S/ CONRAD F. HOCKING
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Conrad F. Hocking
Vice President-Finance and
Acting Chief Financial Officer
(principal accounting officer)
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EXHIBIT INDEX
The following exhibits are hereby filed as part of this Form 8-K:
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Exhibit
Number Description
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99 Press Release issued by Hechinger Company on June 11, 1999
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EXHIBIT 99
HECHINGER COMPANY
1801 MC CORMICK DRIVE
LARGO, MD 20774
(301) 341-1000
CONTACT:
SEAN FLYNN
212-373-0230
FOR IMMEDIATE RELEASE
HECHINGER COMPANY SEEKS TO RESTRUCTURE UNDER CHAPTER 11
DIP Financing in Place, Company to Close 89 Under-Performing Stores
LARGO, MD - June 11, 1999 - Hechinger Company today announced that it has filed
a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code in the United
States Bankruptcy Court for the District of Delaware.
The Company said that it elected to seek court protection in order to facilitate
its efforts to develop and implement an operational restructuring and financial
reorganization. As part of the Chapter 11 reorganization, Hechinger will
immediately commence the closing of approximately 89 under-performing stores in
approximately 36 markets in an effort to significantly reduce operating losses
and focus the Company's resources on a core of performing stores.
Hechinger said that it expects to operate its core stores in the ordinary course
of business. To ensure that the Company has the short-term working capital
necessary to operate its business, the Company is refinancing its working
capital facility through a commitment for up to $700 million in
debtor-in-possession ("DIP") financing from BankBoston Retail Finance Inc.
Hechinger said that it would seek the Court's permission to access the DIP
financing to fund the normal business operations and other cash needs during the
bankruptcy proceeding.
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Mark Adams, president and chief executive officer of Hechinger, said the Company
expects to continue to provide uninterrupted service in its core operating
locations and has requested, and expects to receive, immediate Court approval to
continue to pay its employee salary, wages and benefits throughout the
reorganization process. In addition, the Company's DIP financing will enable it
to pay for the post-petition delivery of goods and services in the ordinary
course.
"Filing for Chapter 11 and closing these unprofitable locations is the crucial
first step in our efforts to re-make Hechinger," Adams said. "During the next
few months, we will work with our creditors and attempt to finalize a plan that
allows us to develop and implement a long-term business strategy that will
return the Company to financial and competitive health."
The Company said it will focus on a two-format strategy that features a
revitalized Home Quarters - which has proven highly successful in its remodeled
markets - in the large format category and a refocused Hechinger, which will
return to its historical roots as a community-based store tailored to the needs
of its immediate customers. The Company intends to convert its remaining 16
Builders Square stores to the Home Quarters format.
Adams said the restructuring will allow the Company to focus its resources on
its core operations. As previously announced, the Company's new management has
made several organizational and operational changes over the past 90 days to
strengthen core store performance functions, including distribution, management
information systems, customer service and merchandising.
Store Closings
The Company said the stores slated for closure were selected based on a number
of factors including strength of the Company's competitive position in
individual markets, growth prospects of individual stores and store
profitability. Following the closures, Hechinger will operate approximately 117
stores in 21 states.
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"Our primary objective is to right-size the Company so we can focus management
and move forward with a solid core of performing locations with an appropriate
capital structure," Adams said. "Repositioning the business in this manner will
allow us to reduce our working and other capital needs."
As previously announced, Hechinger has hired turnaround consultants Policano &
Manzo LLC to assist management with the Company's financial and operational
restructuring.
As a result of its financial situation, the Company does not meet the
requirements for continued listing on the Nasdaq SmallCap Market and expects to
have its 5 1/2 Convertible Subordinated Debentures formally delisted shortly.
Forward Looking Statements
Forward-looking statements in this release are made pursuant to the safe harbor
provision of the Private Securities Litigation Reform Act of 1995. There are
various factors that could cause results to differ materially and adversely from
those anticipated by some statements made herein. Investors are cautioned that
all forward-looking statements involve risks and uncertainty. Factors that could
cause actual results to differ materially and adversely include, but are not
limited to, the following: the Company's ability to maintain compliance with its
DIP facility or to obtain waivers, amendments, or refinancing thereof if
necessary; the Company's ability to obtain expected Court approvals with respect
to matters such as continued payment of employee salary, wages and benefits, the
overall viability of the Company's long-term operational reorganization and
financial restructuring plan; the effectiveness of its two-format strategy; the
strength and extent of new and existing competition; the Company's ability to
maintain competitive pricing; the success of the Company's customer service
programs; the
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Company's ability to attract, train and retain experienced, quality management
and employees; general economic conditions; weather; the Company's ability to
make its computer systems Year 2000 compliant, as well as Year 2000 issues
facing its vendors, lenders and others with whom the Company engaged in
substantial business; and other factors described from time to time in the
Company's Securities and Exchange Commission filings.
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HECHINGER COMPANY STORE CLOSINGS
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MARKET NAME ADDRESS CITY OPENED
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Albany-Schenectady-Troy, NY Builders Square II 26 B The Crossing Blvd. Clifton Park 7/1993
Albany-Schenectady-Troy, NY Builders Square II 1814 Central Avenue Colonie 5/1990
Albany-Schenectady-Troy, NY Better Spaces 579 Troy-Schenectady Rd Latham 2/1997
Albuquerque, NM Builders Square 45 Hotel Circle N.E. Albuquerque 9/1987
Austin-San Marcos, TX Home Quarters 5501 Airport Blvd Austin 2/1987
Austin-San Marcos, TX Home Quarters 4970 Hwy 290 West Austin 3/1992
Austin-San Marcos, TX Home Quarters 12707 N. MoPac Expressway Austin 2/1993
Baltimore, MD Hechinger 7005 Security Blvd. Baltimore 4/1982
Baltimore, MD Hechinger 1400 Merritt Blvd. Dundalk 9/1989
Boston, MA-NH Home Quarters 205 Carnegie Row Norwood 8/1990
Boston, MA-NH Home Quarters 10 Newbury Street, Rt #1 Danvers 8/1990
Brockton, MA Home Quarters 135 Westgate Drive Brockton 11/1990
Buffalo-Niagara Falls, NY Builders Square II 4405 Milestrip Road Hamburg (Blasdell) 10/1992
Buffalo-Niagara Falls, NY Builders Square II 750 Builders Way Niagara Falls 4/1995
Columbus, OH Builders Square II 5865 Chantry Drive Columbus (SE) 7/1994
Columbus, OH Builders Square 5750 Columbus Square Columbus (NE) 10/1986
Corpus Christi, TX Builders Square II 5425 S. Padre Island Drive Corpus Christi 10/1989
Dayton-Springfield, OH Builders Square 1866 Shiloh Springs Road Dayton 10/1986
Daytona Beach, FL Builders Square II 2400 W. International Speedway Daytona Beach 9/1994
Denver, CO Builders Square II 860 S. Colorado Blvd. Glendale 11/1995
Denver, CO Builders Square II 880 S. Abilene Street Aurora 5/1994
Denver, CO Builders Square II 9050 N. Wadsworth Parkway Westminster 7/1993
Denver, CO Builders Square 1725 Sheridan Blvd. Edgewater 9/1987
Denver, CO Builders Square 4887 S. Wadsworth Way Denver (S. Wadswoth) 10/1991
Detroit, MI Home Quarters 33801 Van Dyke Road Sterling Heights 4/1996
El Paso, TX Builders Square II 11751 Gateway Blvd West El Paso 9/1994
Erie, PA Builders Square II 7200 Peach Street, #300 Erie 6/1991
Evansville-Henderson, IN-KY Builders Square II 115 Cross Pointe Road Evansville 8/1994
Flint, MI Builders Square 3603 Miller Road Flint 10/1986
Fort Collins-Loveland, CO Builders Square II 813 E. Harmony Road Ft. Collins 6/1991
Fort Myers-Cape Coral, FL Builders Square II 13711 S. Tamiami Trail, Ste. 1 Ft. Myers 7/1993
Grand Rapids-Muskegon-Holland, MI Builders Square II 555 Center Drive N.W. Walker 10/1994
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Grand Rapids-Muskegon-Holland, MI Builders Square II 4250 28th Street S.E. Kentwood 8/1988
Houston, TX Builders Square II 7950 FM 1960 Houston (FM 1960) 8/1994
Houston, TX Builders Square II 25415 I-45 North Woodlands 6/1994
Houston, TX Builders Square II 5118 Fairmont Pkwy Pasadena 5/1994
Houston, TX Builders Square II 10241 North Freeway I-45/W Houston (I-45) 11/1991
Houston, TX Builders Square II 4645 Beechnut Houston (Beechnut) 5/1984
Houston, TX Builders Square II 20091 Gulf Freeway Houston (G. Fwy-Webster) 1/1984
Indianapolis, IN Builders Square II 4641 Lafayette Road Indianapolis 11/1994
Indianapolis, IN Builders Square II 602 N. Shortridge Road Indianapolis (Shortridge) 10/1986
Jackson, MS Home Quarters 6370 Ridgewood Court Dr Jackson 9/1993
Kalamazoo-Battle Creek, MI Builders Square II 5115 Portage Road Kalamazoo 2/1992
Lakeland-Winter Haven, FL Builders Square 4025 U.S. 98 North Lakeland 1/1987
Lancaster, PA Builders Square 2030 Fruitville Pike Lancaster 3/1992
Louisville, KY-IN Home Quarters 7500 Jefferson Boulevard Louisville 11/1992
Melbourne-Titusville-Palm Bay, FL Builders Square II 1450 Executive Circle Palm Bay 10/1993
Memphis, TN-AR-MS Home Quarters 3682 Ridgeway Road Hickory Ridge 3/1992
Memphis, TN-AR-MS Home Quarters 4875 Stage Road Memphis (Covington Corners) 5/1992
Milwaukee-Waukesha, WI Builders Square II 401 E. Capitol Drive Milwaukee 5/1994
Milwaukee-Waukesha, WI Builders Square 150 West Holt Avenue Milwaukee (Holt) 8/1987
Milwaukee-Waukesha, WI Builders Square 6740 West Greenfield Rd. West Allis 10/1987
Milwaukee-Waukesha, WI Builders Square 10202 West Silver Spring Rd. Milwaukee (Silver Spring) 8/1987
Orlando, FL Builders Square II 2302 E. Semoran Blvd. Apopka 9/1992
Orlando, FL Builders Square II 11100 E. Colonial Drive Orlando 4/1993
Orlando, FL Builders Square 204 Semoran Blvd. Casselberry 5/1988
Philadelphia, PA-NJ Builders Square II 2080 N, Blackhorse Pike Williamstown 10/1994
Philadelphia, PA-NJ Builders Square II 2424 E. Lincoln Hwy Langhorne 10/1986
Philadelphia, PA-NJ Hechinger 199 Franklin Mills Blvd. Philadelphia 3/1989
Philadelphia, PA-NJ Hechinger 5694 Rising Sun Ave. Philadelphia 12/1984
Pittsburgh, PA Builders Square II Route 51 Constitution Blvd. Chippewa (Beaver Falls) 3/1993
Pittsburgh, PA Builders Square 1500 Yost Blvd. Braddock Hills 5/1986
Pittsburgh, PA Builders Square 8050 McKnight Road Pittsburgh (McKnight Rd) 7/1987
Pittsburgh, PA Builders Square 1025 Mountain View Drive West Mifflin (Centruy III) 8/1991
Pittsburgh, PA Hechinger 999 Ross Park Mall Dr. Pittsburgh 8/1987
Pittsburgh, PA Hechinger Raceway Plaza Carnegie 12/1987
Pittsburgh, PA Hechinger 3700 William Penn Hwy. Monroeville 12/1985
Pittsburgh, PA Hechinger 3000 Mountain View Dr. W. Mifflin 12/1985
Racine, WI Builders Square II 2429 S. Greenbay Road Racine 4/1993
Richmond-Petersburg, VA Home Quarters 9901 W. Broad Street Glen Allen 11/1989
Richmond-Petersburg, VA Home Quarters 200 Wadsworth Drive Richmond 3/1993
Saginaw-Bay City-Midland, MI Builders Square II 3175 West Bay Road Saginaw 8/1994
Springfield, MO Builders Square 3300 S. Glenstone Avenue Springfield 10/1991
St. Louis, MO-IL Home Quarters 9440 Watson Rd Crestwood 11/1994
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Syracuse, NY Builders Square II Northern Lights Shop. Cntr., Rt N. Syracuse 7/1992
Syracuse, NY Hechinger 7755 Frontage Rd. Cicero 5/1989
Syracuse, NY Hechinger 3179 Erie Blvd. East DeWitt 4/1986
Tampa-St. Petersburg, FL Builders Square II 2495 Gulf to Bay Boulevard Clearwater 8/1995
Tampa-St. Petersburg, FL Builders Square II 955 W. Brandon Blvd. Brandon 2/1993
Tampa-St. Petersburg, FL Builders Square 5181 110th Avenue N. Clearwater (Pinellas) 3/1989
Tulsa, OK Builders Square II 9717 E. 71st Street Tulsa (E. 71st St) 3/1994
Tulsa, OK Builders Square II 525 N. Memorial Dr. Tulsa 10/1986
Washington, DC-MD-VA-WV Hechinger 18501 N. Frederick Ave. Gaithersburg 1/1989
Washington, DC-MD-VA-WV Hechinger 2380 Plank Rd. Fredericksburg 1/1987
Washington, DC-MD-VA-WV Hechinger 4444 Branch Ave. Temple Hills 1/1994
Wichita, KS Builders Square 9609 E. Kellogg Wichita (E Kellogg) 9/1992
Wichita, KS Builders Square II 613 S. Dugan Road Wichita (S. Dugan Rd) 5/1987
Worcester, MA-CT Home Quarters 571 Boston Turnpike Shrewsbury 3/1991
York, PA Hechinger 380 Northern Way York 10/1978
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