FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 26, 1996
Commission file number 0-6319
JACOBSON STORES INC.
(Exact name of registrant as specified in its charter)
Michigan 38-0686330
(State or other jurisdiction (IRS Employer Identification Number)
of incorporation or organization)
3333 Sargent Road, Jackson, Michigan 49201
(Address of principal executive offices, including zip code)
(517) 764-6400
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock ($1 Par Value):
5,779,021-2/3 Shares outstanding as of October 26, 1996
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For Quarter Ended October 26, 1996
INDEX
Page
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
. Consolidated Balance Sheets - October 26, 1996 and
January 27, 1996 1
. Consolidated Statements of Earnings - Thirteen and
Thirty-Nine Week Periods Ended October 26, 1996
and October 28, 1995 2
. Consolidated Statements of Cash Flows - Thirty-Nine Week
Periods Ended October 26, 1996 and October 28, 1995 3
. Notes to Consolidated Financial Statements 4
Review by Independent Public Accountants 8
Exhibit:
. Report of Independent Public Accountants 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
All items except those set forth above are inapplicable and have been
omitted.
SIGNATURES 15
INDEX OF EXHIBITS
<PAGE>
<TABLE>
<CAPTION>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
October 26, January 27,
ASSETS 1996 1996
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 3,926 $ 3,068
Receivables from customers, net 36,528 43,134
Merchandise inventories 106,794 89,249
Prepaid expenses and other assets 3,056 3,928
Refundable income taxes 3,714 3,029
Deferred taxes 2,363 2,363
--------- ---------
Total current assets 156,381 144,771
--------- ---------
PROPERTY AND EQUIPMENT, NET 92,894 96,597
--------- ---------
OTHER ASSETS 23,071 21,146
--------- ---------
$ 272,346 $ 262,514
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 2,668 $ 4,531
Accounts payable 37,856 30,537
Accrued expenses 13,802 14,612
--------- ---------
Total current liabilities 54,326 49,680
--------- ---------
LONG-TERM DEBT 137,787 119,727
--------- ---------
DEFERRED TAXES 5,718 9,115
--------- ---------
OTHER LIABILITIES 2,748 2,376
--------- ---------
SHAREHOLDERS' EQUITY:
Common stock 5,966 5,966
Paid-in surplus 7,109 7,109
Retained earnings 59,091 68,940
Treasury stock (399) (399)
--------- ---------
71,767 81,616
--------- ---------
$ 272,346 $ 262,514
========= =========
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
- 1 -
<PAGE>
<TABLE>
<CAPTION>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands except per share and dividend data)
(unaudited)
Thirteen Weeks Ended Thirty-Nine Weeks Ended
------------------------ ------------------------
October 26, October 28, October 26, October 28,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES, including leased departments $ 90,778 $ 87,802 $ 291,293 $ 281,199
--------- --------- --------- ---------
COSTS AND EXPENSES:
Cost of merchandise sold, buying and
occupancy expenses 59,410 57,316 196,928 189,580
Selling, general and administrative expenses 33,355 32,884 99,377 97,549
Interest expense, net 2,262 2,136 6,806 6,526
Gain on sale of property -- (1,065) -- (1,065)
--------- --------- --------- ---------
Total costs and expenses 95,027 91,271 303,111 292,590
--------- --------- --------- ---------
LOSS BEFORE INCOME TAXES (4,249) (3,469) (11,818) (11,391)
CREDIT FOR INCOME TAXES (1,486) (1,214) (4,136) (3,987)
--------- --------- --------- ---------
NET LOSS $ (2,763) $ (2,255) $ (7,682) $ (7,404)
========= ========= ========= =========
LOSS PER COMMON SHARE:
Primary and fully diluted $ (0.48) $ (0.39) $ (1.33) $ (1.28)
========= ========= ========= =========
CASH DIVIDENDS PER SHARE $0.12-1/2 $0.12-1/2 $0.37-1/2 $0.37-1/2
========= ========= ========= =========
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
- 2 -
<PAGE>
<TABLE>
<CAPTION>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Thirty-Nine Weeks Ended
------------------------
October 26, October 28,
1996 1995
----------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (7,682) $ (7,404)
Adjustments to reconcile net loss to cash provided by
(used in) operating activities:
Depreciation and amortization 7,732 7,646
Other liabilities 372 647
Change in:
Receivables from customers, net 6,606 8,528
Merchandise inventories (17,545) (12,880)
Prepaid expenses and other assets 872 1,013
Accounts payable and accrued expenses 6,509 8,957
Refundable income taxes (4,082) (4,290)
-------- --------
Net cash provided by (used in) operating activities (7,218) 1,524
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property, net of income tax -- 827
Additions to property and equipment (4,029) (5,809)
Other non-current assets (1,925) (2,475)
-------- --------
Net cash used in investing activities (5,954) (7,457)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Additions to long-term debt 19,600 11,100
Reduction of long-term debt (3,403) (2,763)
Cash dividends paid (2,167) (2,167)
-------- --------
Net cash provided by financing activities 14,030 6,170
-------- --------
INCREASE IN CASH AND CASH EQUIVALENTS 858 237
Cash and cash equivalents, beginning of period 3,068 3,558
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,926 $ 3,795
======== ========
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
- 3 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
For Quarter Ended October 26, 1996
The condensed financial statements included herein have been prepared
by the Company without audit and reflect all adjustments which are, in
the opinion of management, necessary to achieve a fair statement of
results for the interim periods. All adjustments are of a normal and
recurring nature.
Because of the nature of the specialty department store business, the
results for the thirty-nine week periods ended October 26, 1996 and
October 28, 1995 (which do not include the Christmas holiday season)
are not indicative of the results for the year as a whole.
Certain information in footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles has been condensed or amended, although the
Company believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that these
condensed financial statements be read in conjunction with the
financial statements and notes to consolidated financial statements
included in the Company's latest annual report on Form 10-K.
(1) EARNINGS PER SHARE
Primary earnings per share are computed by dividing net earnings by
the weighted average number of shares of common stock and common stock
equivalents outstanding during the periods. Weighted average shares
outstanding were 5,781,000 and 5,779,000 for the quarters ended
October 26, 1996 and October 28, 1995, respectively, and 5,788,000 and
5,781,000 for the thirty-nine week periods ended October 26, 1996 and
October 28, 1995, respectively.
Fully diluted earnings per share are computed based on the additional
assumption that the Company's 6-3/4% Convertible Subordinated
Debentures due 2011 were converted to common stock at the date of
issuance with a corresponding increase in net earnings to reflect a
reduction in related interest expense, net of income taxes. Weighted
average shares outstanding used in the computation of fully diluted
earnings per share were 6,837,000 and 6,835,000 for the quarters ended
October 26, 1996 and October 28, 1995, respectively, and 6,837,000 for
the thirty-nine week periods ended October 26, 1996 and October 28,
1995.
- 4 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
For Quarter Ended October 26, 1996
(2) CUSTOMER CREDIT AND RECEIVABLES
Receivables from customers were as follows:
<TABLE>
<CAPTION>
October 26, January 27,
(in thousands) 1996 1996
-----------------------------------------------------------------
<S> <C> <C>
Receivables from customers $ 37,229 $ 43,907
Less reserve for doubtful accounts 701 773
--------- ---------
$ 36,528 $ 43,134
========= =========
</TABLE>
(3) MERCHANDISE INVENTORIES
Merchandise inventories were as follows:
<TABLE>
<CAPTION>
October 26, January 27,
(in thousands) 1996 1996
------------------------------------------------------------------
<S> <C> <C>
Inventories at first-in, first out
(FIFO) cost $ 124,476 $ 106,061
Less LIFO reserves 17,682 16,812
--------- ---------
$ 106,794 $ 89,249
========= =========
</TABLE>
(4) PROPERTY AND EQUIPMENT
Property and equipment are set forth below:
<TABLE>
<CAPTION>
October 26, January 27,
(in thousands) 1996 1996
-----------------------------------------------------------------
<S> <C> <C>
Property and equipment $ 171,879 $ 172,525
Less accumulated depreciation
and amortization 78,985 75,928
--------- ---------
$ 92,894 $ 96,597
========= =========
</TABLE>
- 5 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
For Quarter Ended October 26, 1996
(5) CREDIT AGREEMENT
The Company has a Revolving Credit and Term Loan facility under a
Credit Agreement with two banks. The Revolving Credit portion of the
Agreement provides for borrowings of up to $45,000,000, subject to a
borrowing base limitation. Borrowings under the Revolving Credit line
mature on June 30, 1998, with one year renewals subject to approval by
both banks each year. The Company had requested renewal of the line
for an additional year through June 30, 1999. For 1996 only, the
Company and the banks had agreed to extend to November 30, 1996, the
due date for the banks' decision whether to renew the Revolving Credit
line for this additional year. The Company has withdrawn its request
pending a complete review of the Company's operations by its new CEO.
At October 26, 1996, borrowings under the Revolving Credit portion of
the Agreement totalled $36,800,000.
(6) SUPPLEMENTARY CASH FLOW INFORMATION
The Company considers all short-term investments with a maturity at
date of purchase of three months or less to be cash equivalents.
Interest paid (net of interest capitalized) totalled $6,323,000 and
$5,881,000 in the thirty-nine week periods ended October 26, 1996 and
October 28, 1995, respectively. The Company received income tax
refunds of $44,000 for the thirty-nine week period ended October 26,
1996 and paid $64,000 in income taxes for the thirty-nine week period
ended October 28, 1995.
(7) SUBSEQUENT EVENTS
Subsequent to the close of the quarter covered by this report,
effective October 31, 1996, the Company replaced its Chairman and
Chief Executive Officer. In the fiscal fourth quarter, the Company
will include a charge of approximately $1,100,000 to selling, general
and administrative expenses to recognize a contractual severance
obligation to its former Chairman.
- 6 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
For Quarter Ended October 26, 1996
On October 31, 1996, the Board of Directors approved an amendment to
the stock option plan adopted in 1994, subject to approval by the
Company's shareholders, to increase the aggregate number of shares of
the Company's common stock which may be issued on exercise of options
from 400,000 shares to 900,000 shares. Including 1996 employee and
director option grants, options outstanding under the 1994 Plan as of
October 31, 1996, totalled 361,750 shares, with 38,250 shares
available for grant to directors and employees. In addition, 200,000
employee options were granted on October 31, 1996, which are
contingent on shareholder approval of the amendment to the stock
option plan.
- 7 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
PART I: FINANCIAL INFORMATION
For Quarter Ended October 26, 1996
REVIEW BY INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, independent public accountants, have performed a
limited review of the condensed consolidated financial statements for
the thirty-nine week period ended October 26, 1996. Since they did not
perform an audit, they express no opinion on the financial statements
referred to above.
- 8 -
<PAGE>
ARTHUR ANDERSEN LLP
Report of Independent Public Accountants
To Jacobson Stores Inc.:
We have reviewed the accompanying condensed consolidated balance sheet of
JACOBSON STORES INC. (a Michigan corporation) and subsidiaries as of October
26, 1996 and the related condensed consolidated statements of earnings for the
thirteen week and thirty-nine week periods ended October 26, 1996, and October
28, 1995, and the condensed consolidated statement of cash flows for the
thirty-nine week periods ended October 26, 1996, and October 28, 1995. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the consolidated financial statements referred to above for
them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Jacobson Stores Inc. and
subsidiaries as of January 27, 1996 (not presented herein), and, in our report
dated March 4, 1996, we expressed an unqualified opinion on that statement. In
our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of January 27, 1996, is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.
/s/ ARTHUR ANDERSEN LLP
Detroit, Michigan
November 11, 1996
- 9 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
PART I: FINANCIAL INFORMATION
For Quarter Ended October 26, 1996
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The registrant, Jacobson Stores Inc., a Michigan corporation and successor to
a business founded in 1868, operates specialty department stores catering to
discerning customers with preferences for quality merchandise. The Company
emphasizes quality merchandise, fully staffed stores, personalized customer
service and attractive, comfortable shopping surroundings. Each store features
fashion apparel and accessories for the family, and most offer decorative
accents for the home.
The Company owns a substantial portion of the real property used in its
business, primarily through its consolidated, wholly-owned real estate
subsidiary, Jacobson Stores Realty Company ("Jacobson Realty"). As used in
this report, the terms "registrant", "Company" and "Jacobson's" refer to
Jacobson Stores Inc. and its subsidiaries unless the context indicates
otherwise.
a. OPERATING RESULTS: THIRTEEN WEEKS ENDED OCTOBER 26, 1996 COMPARED TO
THIRTEEN WEEKS ENDED OCTOBER 28, 1995
Sales for the quarter ended October 26, 1996, totalled $90,778,000, an
increase of 3.4% from 1995. The thirteen weeks this year include sales in
a new store in Leawood, Kansas, which opened in March 1996. Comparable
store sales decreased 1.5% (8.3% increase in Florida; 4.3% decrease in
Midwest). Sales in the metropolitan Detroit stores have been pressured as
a result of increased competition, including an additional 950,000
square feet of retail space opened in the market in August 1996. The
Company expects difficult overall comparable store sales comparisons
to continue in the fourth quarter.
The Company's gross profit percentage decreased to 34.6% for the thirteen
weeks this year from 34.7% in 1995, reflecting incentive discounts
offered to new charge customers, partially offset by lower markdowns,
lower buying costs and a lower LIFO provision.
Selling, general and administrative expenses, expressed as a percentage
of sales, decreased to 36.7% in the quarter from 37.5% one year ago. The
decrease is due primarily to lower health care, advertising and store
pre-opening expenses, as well as to a reduction in comparable location
payroll expense.
In the fiscal fourth quarter, the Company will recognize a one-time
charge of approximately $1,100,000 to selling, general and administrative
expenses due to a contractual severance obligation to its former
Chairman.
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<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
PART I: FINANCIAL INFORMATION
For Quarter Ended October 26, 1996
Interest expense, expressed as a percentage of sales, increased to 2.5%
for the quarter from 2.4% one year ago due to higher revolving credit
borrowings.
1996 net loss for the thirteen weeks totalled $2,763,000, or 48 cents per
common share, compared to $2,255,000, or 39 cents per share, last year.
As a percentage of sales, net loss was 3.0% in 1996 compared to 2.6% one
year ago. Last year's results included a gain on sale of property
totalling $693,000 after-tax, or 12 cents per share.
b. OPERATING RESULTS: THIRTY-NINE WEEKS ENDED OCTOBER 26, 1996 COMPARED TO
THIRTY-NINE WEEKS ENDED OCTOBER 28, 1995
Sales for the thirty-nine weeks ended October 26, 1996, totalled
$291,293,000, an increase of 3.6% from 1995. The thirty-nine weeks this
year include sales in a new store in Leawood, Kansas, which opened in
March 1996. Comparable store sales decreased 0.8% (7.1% increase in
Florida; 3.9% decrease in Midwest). Sales in the Metropolitan Detroit
stores have been pressured as a result of increased competition,
including an additional 950,000 square feet of retail space opened in
the market in August 1996. The Company expects difficult overall
comparable store sales comparisons to continue in the fourth quarter.
The Company's gross profit percentage decreased to 32.4% from 32.6% in
1995, reflecting incentive discounts offered to new charge customers,
partially offset by lower markdowns, lower buying costs and a lower LIFO
provision.
Selling, general and administrative expenses, expressed as a percentage
of sales, decreased to 34.1% year-to-date from 34.7% one year ago. The
decrease is due primarily to lower health care, advertising and store
pre-opening expenses.
In the fiscal fourth quarter, the Company will recognize a one-time
charge of approximately $1,100,000 to selling, general and administrative
expenses due to a contractual severance obligation to its former
Chairman.
Interest expense, expressed as a percentage of sales, totalled 2.3% in
both years.
1996 net loss for the thirty-nine weeks totalled $7,682,000, or $1.33 per
common share, compared to $7,404,000, or $1.28 per share, in 1995. As a
percentage of sales, net loss was 2.6% in both years. Last year's results
included a gain on sale of property totalling $693,000 after-tax, or 12
cents per share.
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<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
PART I: FINANCIAL INFORMATION
For Quarter Ended October 26, 1996
c. LIQUIDITY AND CAPITAL RESOURCES
At October 26, 1996, the Company's current ratio was 2.88 to 1 and
working capital totalled $102,055,000, including $3,926,000 of cash and
cash equivalents. At January 27, 1996, the current ratio was 2.91 to 1
and working capital totalled $95,091,000, including $3,068,000 of cash
and cash equivalents.
The Company utilizes cash flows from operations and revolving credit line
borrowings to fund its seasonal working capital needs. To support its
present and planned working capital requirements, including working
capital requirements for the two stores opened in 1996, the Company has a
$65,000,000 Revolving Credit and Term Loan facility under a Credit
Agreement with two banks. At October 26, 1996, Revolving Credit
borrowings totalled $36,800,000, leaving $8,200,000 available under the
line, and Term Loan borrowings totalled $20,000,000. For the quarter
ended October 26, 1996, the daily weighted average interest rate on
borrowings under the Revolving Credit line was 7.31%.
d. CASH FLOWS
Cash and cash equivalents increased $858,000 in the thirty-nine weeks
ended October 26, 1996 compared to an increase of $237,000 in the
thirty-nine weeks ended October 28, 1995. Cash flows are impacted by
operating, investing and financing activities. In the thirty-nine weeks
this year, operating activities used $7,218,000 of cash, compared to
$1,524,000 of cash provided in 1995. The decrease in 1996 versus 1995
reflects primarily inventory of the new Leawood, Kansas, and Boca Raton,
Florida, stores.
Investing activities used cash of $5,954,000 in the thirty-nine weeks
this year compared to $7,457,000 in 1995. Investing activities include
capital expenditures for new stores and modernization and refixturing of
existing stores and support facilities totalling $4,029,000 in the first
thirty-nine weeks of 1996 compared to $5,809,000 last year.
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<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
PART I: FINANCIAL INFORMATION
For Quarter Ended October 26, 1996
Financing activities provided cash of $14,030,000 in the thirty-nine
weeks this year compared to $6,170,000 last year. In the first
thirty-nine weeks this year, the Company borrowed $19,600,000 under the
Revolving Credit portion of its Credit Agreement compared to $11,100,000
under its former revolving credit facility in the first thirty-nine weeks
of 1995. In the first thirty-nine weeks this year, the Company used
$3,403,000 to service current maturities of long-term debt, including the
$1,725,000 annual sinking fund payment on its 6 3/4% Convertible
Subordinated Debentures which is due in December 1996. The Company used
$2,763,000 to service current maturities of long-term debt in 1995. The
Company paid common stock dividends of $2,167,000 in each thirty-nine
week period in 1996 and 1995.
Subsequent to the close of the quarter covered by this report, on
November 16, 1996, the Company's Board of Directors discontinued the
Company's quarterly dividend, effective in the fourth quarter.
The Company believes its cash flows from operations, along with its
borrowing capacity and access to financial markets are adequate to fund
its operations, debt maturities and 1996 store openings.
e. CORPORATE DEVELOPMENT
The Company opened a 120,000 square foot leased store in the Town Center
Plaza, a shopping center in Leawood, Kansas, a suburb of Kansas City, in
March 1996.
Subsequent to the close of the quarter covered by this report, in
November 1996, the Company opened an 80,000 square foot store in Mizner
Park, a mixed-use retail, residential and office development in Boca
Raton, Florida.
The Company has no commitments for any new store locations at the
present time. The Company reviews the performance of its less profitable
existing stores from time to time to determine whether it would be in the
Company's best interest to close any of these stores. Store openings and
closings could have a significant impact on the Company's sales, expenses
and capital requirements. In addition, store closings would likely entail
significant one-time charges to effect the closing and to recognize any
impairment of assets resulting from the closing decision.
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<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
PART II: OTHER INFORMATION
For Quarter Ended October 26, 1996
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11 Computation of Earnings Per Share
15 Letter from Independent Public Accountants
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during its fiscal
quarter ended October 26, 1996.
All exhibits except as set forth above have been omitted as not applicable or
not required.
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<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
For Quarter Ended October 26, 1996
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.
JACOBSON STORES INC.
--------------------
(Registrant)
Date: December 9, 1996 BY: /s/ P. Gerald Mills
------------------ -------------------------------
P. GERALD MILLS
Chairman of the Board and Chief
Executive Officer
Date: December 9, 1996 BY: /s/ Paul W. Gilbert
------------------ -------------------------------
PAUL W. GILBERT
Vice Chairman of the Board
(Principal Financial Officer)
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<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
INDEX OF EXHIBITS
11 Computation of Earnings Per Share
15 Letter from Independent Public Accountants
27 Financial Data Schedule
All exhibits except as set forth above have been omitted as not applicable
or not required.
Exhibit 11
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(in thousands)
(unaudited)
Primary earnings per common share, as set forth in the consolidated statements
of earnings, are computed by dividing net earnings by the weighted average
number of shares of common stock and common stock equivalents outstanding
during the period. Fully diluted earnings per share are computed based on the
additional assumption that the Company's 6-3/4% Convertible Subordinated
Debentures due 2011 were converted to common stock at the date of issuance
with a corresponding increase in net earnings to reflect reduction in related
interest expense, net of income taxes, except if anti-dilutive.
These computations are set forth below (in thousands except per share data):
<TABLE>
<CAPTION>
Thirteen Weeks Ended Thirty-Nine Weeks Ended
----------------------- -----------------------
October 26, October 28, October 26, October 28,
1996 1995 1996 1995
---------- ---------- ---------- -----------
<S> <C> <C> <C> <S>
EARNINGS (LOSS) PER COMMON SHARE AND
COMMON EQUIVALENT SHARE:
Weighted average number of shares of common
stock and common stock equivalents outstanding -
Primary 5,781 5,779 5,788 5,781
Fully diluted 6,837 6,835 6,837 6,837
======== ======== ======== =======
NET LOSS $ (2,763) $ (2,255) $ (7,682) $(7,404)
======== ======== ======== =======
NET LOSS, adjusted to reflect reduction in
interest expense attributable to convertible
debentures, net of income tax $ (2,379) $ (1,871) $ (6,530) $(6,252)
======== ======== ======== =======
NET LOSS PER SHARE:
Primary and Fully diluted $ (0.48) $ (0.39) $ (1.33) $ (1.28)
======== ======== ======== =======
</TABLE>
Exhibit 15
ARTHUR ANDERSEN LLP
To Jacobson Stores Inc.:
We are aware that Jacobson Stores Inc. has incorporated by reference in its
Form S-8 Registration Statements File No. 2-88295 and File No. 033-53469 and
Form S-2 File No. 33-10532 its Form 10-Q for the quarter ended October 26,
1996, which includes our report dated November 11, 1996, covering the
unaudited interim condensed consolidated financial information contained
therein. Pursuant to Regulation C of the Securities Act of 1933, that report
is not considered a part of the registration statement prepared or certified
by our firm or a report prepared or certified by our firm within the meaning
of Sections 7 and 11 of the Act.
Very truly yours,
/s/ Arthur Andersen LLP
Detroit, Michigan
December 4, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES AS
OF, AND FOR THE THIRTY-NINE WEEK PERIOD ENDED, OCTOBER 26, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND
ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> JAN-25-1997
<PERIOD-END> OCT-26-1996
<PERIOD-TYPE> 9-MOS
<CASH> 3,926
<SECURITIES> 0
<RECEIVABLES> 37,229
<ALLOWANCES> 701
<INVENTORY> 106,794
<CURRENT-ASSETS> 156,381
<PP&E> 171,879
<DEPRECIATION> 78,985
<TOTAL-ASSETS> 272,346
<CURRENT-LIABILITIES> 54,326
<BONDS> 137,787
<COMMON> 5,966
0
0
<OTHER-SE> 65,801
<TOTAL-LIABILITY-AND-EQUITY> 272,346
<SALES> 291,293
<TOTAL-REVENUES> 291,293
<CGS> 196,928
<TOTAL-COSTS> 196,928
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,806
<INCOME-PRETAX> (11,818)
<INCOME-TAX> (4,136)
<INCOME-CONTINUING> (7,682)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,682)
<EPS-PRIMARY> (1.33)
<EPS-DILUTED> (1.33)
</TABLE>
