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
Date of Report (Date of earliest event reported) N/A
Heilig-Meyers Company
(Exact name of registrant as specified in its charter)
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<S> <C>
Virginia 1-8484 54-0558861
(State or other jurisdiction of incorporation) (Commission (IRS Employer
file number) Identification No.)
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12560 West Creek Parkway, Richmond, Virginia 23238
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804) 784-7300
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N/A
(Former name or former address, if changed since last report)
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Item 5. Other Events
On September 10, 1999, Heilig-Meyers Company (the "Company") issued a
press release, which is attached hereto as Exhibit 99.1 and incorporated herein
by reference, announcing that the Company was exiting certain furniture stores
located in the Chicago, Illinois and Milwaukee, Wisconsin markets.
On September 22, 1999, the Company issued a press release, which is
attached hereto as Exhibit 99.2 and incorporated herein by reference, reporting
results for the second quarter ended August 31, 1999.
Item 7. Financial Statements and Exhibits
(c) Exhibits
The following exhibits are filed as a part of this report:
Exhibit 99.1 - Press Release dated September 10, 1999.
Exhibit 99.2 - Press Release dated September 22, 1999.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HEILIG-MEYERS COMPANY
Date: September 24, 1999 By: /s/ Roy B. Goodman
------------------------------
Roy B. Goodman
Executive Vice President,
Chief Financial Officer
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Exhibit Index
Exhibit
No. Description
- ------- -----------
99.1 Press Release dated September 10, 1999
99.2 Press Release dated September 22, 1999
Exhibit 99.1
FOR IMMEDIATE RELEASE SEPTEMBER 10, 1999
HEILIG-MEYERS FURNITURE COMPANY TO EXIT CHICAGO STORES
Richmond, VA: Heilig-Meyers Company (NYSE: HMY) today announced that it
was exiting 18 Heilig-Meyers Furniture stores, all of which are located in the
Chicago and Milwaukee markets. Donald S. Shaffer, President and Chief Operating
Officer, stated that this move was consistent with the Company's aggressive plan
to eliminate underperforming assets to improve profitability and shareholder
value. He added that after a thorough review of all options in this market,
management had determined that the cost of continuing these operations would not
allow the Company to achieve an acceptable level of return on its investment.
Management noted that the stores would close for normal business on September
10, 1999. The Company noted that approximately 500 employees would be affected
by these closings. Mr. Shaffer added that where possible, the Company will
attempt to find positions for these employees in the Heilig-Meyers family of
stores.
Management noted that the Company expects pre-tax costs associated with
exiting these stores to be approximately $45 to $50 million (approximately $31
to $35 million net of taxes). These costs are expected to be recorded against
results for the quarter ended August 31, 1999, which will also include the
previously announced gain of approximately $130 to $135 million (approximately
$55 to $58 million net of tax) associated with the sale of the Mattress
Discounters division. Upon the complete disposition of inventories, accounts
receivable and other assets associated with the Chicago and Milwaukee stores,
including income tax savings relating to these dispositions, the Company expects
to receive approximately $20 to $25 million in cash benefits. In a closing
statement Mr. Shaffer commented that management is continuing its aggressive
review of non-core assets and that certain strategic divestiture options are
still under evaluation.
Heilig-Meyers Company is the Nation's largest retailer of furniture,
bedding and related items. As of August 31, 1999, the Company operated 923
stores: 816 as Heilig-Meyers, 71 as The RoomStore, 3 Homemaker stores in Chicago
and 33 in Puerto Rico as Berrios. Visit the Company's retail web sites at
www.heiligmeyers.com and www.roomstore.com. For the latest corporate news visit
www.hmyco.com
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995: The forward looking statements made above and identified by the
word "expects," reflect the Company's reasonable judgments with respect to
future events and are subject to risks and uncertainties that could cause actual
results to differ materially from those in the forward-looking statements. Such
factors include but are not limited to, final determination of actual costs
associated with exiting the 18 stores and final valuations relating to the
disposition of the assets to be sold and or transferred to unrelated third
parties for sale.
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Exhibit 99.2
FOR IMMEDIATE RELEASE SEPTEMBER 22, 1999
HEILIG-MEYERS COMPANY REPORTS 2ND QUARTER RESULTS
Richmond, VA: Heilig-Meyers Company (NYSE:HMY) today reported results
for the second quarter ended August 31, 1999. Revenues in those divisions which
were under the Company's ownership for the full quarter increased 2.1% to $489.3
million, compared to $487.9 million for the quarter ended August 31, 1998. As a
result of the sales of the Company's Rhodes and Mattress Discounters divisions,
total revenues declined to $573.0 million versus reported revenues of $675.0
million in the prior year quarter, which included a full three months activity
for these divisions.
During the quarter, the Company completed the sale of its Mattress
Discounters division which resulted in a pre-tax gain of $135.2 million ($56.2
million net of tax). This gain was offset by $94.7 million in pre-tax charges
($62.9 million net of tax) associated with the write down of assets held for
sale which include stores in the Chicago and Milwaukee markets as well as
certain other non-core operations. Management noted that the Company's tax basis
in the Mattress Discounters division was minimal and as a result the effective
tax rate related to the sale of this division was significantly higher than the
Company's normalized rate. Net earnings from operations for the quarter ended
August 31, 1999, were $2.2 million or $0.04 per share compared to $8.8 million
or $0.15 per share in the prior year quarter. Including the net gain relating to
divestiture activity, the Company reported net income of $2.8 million or $0.05
per share for the three-month period ended August 31, 1999.
For the six-month period ended August 31, 1999, revenues in those
divisions which were under the Company's ownership for the full six-months
increased 1.4% to $994.2 million, compared to $980.0 million for the six months
ended August 31, 1998. As a result of the sales of the Company's Rhodes and
Mattress Discounters divisions, the total revenues for the six month period
declined to $1.26 billion from $1.34 billion for the same period in the prior
year. Net earnings from operations for the six-month period ended August 31,
1999, were $11.2 million, or $0.19 per share, compared to $19.0 million, or
$0.32 per share, in the prior year comparative period. For the six-month period
ended August 31, 1999, the Company has incurred pre-tax costs of $63.1 million
($78.9 million net of tax) associated with divestiture activities. Including
these costs, the Company reported a net loss of $67.7 million or $1.13 per share
for the first six months of the current fiscal year.
William C. DeRusha, Chairman and Chief Executive Officer, reiterated
the Company's commitment to aggressively pursuing those strategies which improve
operating performance, financial flexibility and accordingly shareholder value.
The sale of the Mattress Discounters and Rhodes divisions resulted in net cash
proceeds of $250 million that were used to lower debt obligations by
approximately 30%.
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Donald S. Shaffer, President and Chief Operating Officer, commented
that the Company's divestiture plan for non-core and underperforming assets
would allow management to redirect resources to assist in improving the overall
performance of the core Heilig-Meyers and RoomStore operations. He added that
the Company had reorganized its senior management team along functional
operating areas versus divisional lines as well as added senior level expertise
in the credit and logistics areas. Mr. Shaffer noted that key strategic
operating initiatives, in particular in the credit and merchandising areas, were
under final review and that management expected to begin the implementation of
the initial phases of these plans in the third and fourth quarters of the
current fiscal year.
The Company also announced today that on September 22, 1999, its Board
of Directors declared a quarterly dividend of $0.02 per share. This dividend is
payable to shareholders of record as of November 3, 1999, on November 20, 1999.
Mr. DeRusha noted that the Board of Directors had voted to lower the quarterly
dividend to $0.02 per share to adjust the pay-out ratio to approximately 20% of
annualized earnings. He added that the Board would consider dividend increases
to the extent the operating initiatives currently under way result in improved
levels of performance.
Heilig-Meyers Company is the Nation's largest retailer of home
furnishings and related items. As of August 31, 1999, the Company operated 923
stores: 816 as Heilig-Meyers, 74 as The RoomStore and 33 in Puerto Rico as
Berrios. Visit the Company's retail web sites at www.heiligmeyers.com and
www.roomstore.com. For the latest corporate news visit www.hmyco.com.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995: The forward looking statement made above and identified by the
words "would consider," reflects the Company's reasonable judgments with respect
to future events and are subject to risks and uncertainties that could cause
actual results to differ materially from those in the forward-looking
statements. Such factors include but are not limited to, the customer's
willingness, need and financial ability to purchase home furnishings and related
items, the Company's ability to extend credit to its customers, the costs and
effectiveness of promotional activities and format realignments as well as the
Company's access to, and cost of, capital. Other factors such as changes in tax
laws, consumer credit and bankruptcy trends, recessionary or expansive trends in
the Company's markets, inflation rates and regulations and laws which affect the
Company's ability to do business in its markets may also impact the outcome of
forward-looking statements.
2
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HEILIG-MEYERS COMPANY
CONSOLIDATED CONDENSED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
AUGUST 31, FEBRUARY 28,
1999 1999
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ASSETS
Current assets:
Cash $ 4,906 $ 67,254
Accounts receivable, net 148,654 254,282
Retained interest in securitized
receivables 191,999 190,970
Inventories 366,135 493,463
Other current assets 103,050 124,305
Net assets held for sale 161,519 -
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Total current assets 976,263 1,130,274
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Property and equipment, net 293,138 400,686
Other assets 133,786 72,632
Excess costs over net assets acquired, net 145,014 344,160
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$1,548,201 $1,947,752
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 89,707 $ 210,000
Long-term debt due within one year 37,540 167,486
Accounts payable 138,147 193,799
Accrued expenses 160,417 178,656
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Total current liabilities 425,811 749,941
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Long-term debt 536,481 547,344
Deferred income taxes 56,194 45,365
Total stockholders' equity 529,715 605,102
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$1,548,201 $1,947,752
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HEILIG-MEYERS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA )
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THREE MONTHS ENDED SIX MONTHS ENDED
AUGUST 31, AUGUST 31,
------------------------- -------------------------
1999 1998 1999 1998
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Revenues:
Sales $507,640 $596,360 $1,126,133 $1,190,155
Other income 65,308 78,647 136,020 153,791
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Total revenues 572,948 675,007 1,262,153 1,343,946
-------- -------- ---------- ----------
Costs and expenses:
Costs of sales 334,868 405,831 735,097 799,263
Selling, general and administrative 192,885 213,935 424,205 431,231
Interest 18,557 18,986 38,292 38,126
Provision for doubtful accounts 23,279 22,494 47,151 45,693
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Total costs and expenses 569,589 661,246 1,244,745 1,314,313
-------- -------- ---------- ----------
Gain (loss) on sale of and write-down
of assets held for sale 50,554 - (63,136) -
Earnings (loss) before provision for income taxes 53,913 13,761 (45,728) 29,633
Provision for income taxes 51,071 5,003 21,970 10,681
-------- -------- ---------- ----------
Net earnings (loss) $ 2,842 $ 8,758 $ (67,698) $ 18,952
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Net earnings (loss) per share of common stock:
Basic $ 0.05 $ 0.15 $ (1.13) $ 0.32
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Diluted $ 0.05 $ 0.15 $ (1.13) $ 0.32
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Weighted average shares:
Basic 59,870 59,077 59,866 58,945
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Diluted 60,963 59,571 59,866 59,621
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Cash dividends per share of common stock $ 0.07 $ 0.07 $ 0.14 $ 0.14
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