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 April 26, 1997
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
of incorporation or organization) Identification Number)
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 April 26, 1997
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10-Q
For Quarter Ended April 26, 1997
INDEX
Page
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
. Consolidated Balance Sheets - April 26, 1997 and
January 25, 1997 1
. Consolidated Statements of Earnings -
Thirteen Week Periods
Ended April 26, 1997 and April 27, 1996 2
. Consolidated Statements of Cash Flows -
Thirteen Week Periods
Ended April 26, 1997 and April 27, 1996 3
. Notes to Consolidated Financial Statements 4
Review by Independent Public Accountants 7
Exhibit:
. Report of Independent Public Accountants 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
All items except those set forth above are inapplicable
and have been omitted.
SIGNATURES 14
INDEX OF EXHIBITS
<PAGE>
<TABLE>
<CAPTION>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
April 26, January 25,
1997 1997
---------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 4,111 $ 4,871
Receivables from customers, net 35,786 41,710
Merchandise inventories 96,362 94,875
Prepaid expenses and other assets 2,280 2,923
Refundable income taxes 855 855
Deferred taxes 3,994 3,994
--------- ---------
Total current assets 143,388 149,228
--------- ---------
PROPERTY AND EQUIPMENT, NET 87,578 89,802
--------- ---------
OTHER ASSETS 21,643 21,388
--------- ---------
$ 252,609 $ 260,418
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 4,330 $ 4,350
Accounts payable 24,767 31,320
Accrued expenses 15,176 17,505
--------- ---------
Total current liabilities 44,273 53,175
--------- ---------
LONG-TERM DEBT 127,649 130,147
--------- ---------
DEFERRED TAXES 6,498 5,297
--------- ---------
OTHER LIABILITIES 4,027 3,812
--------- ---------
SHAREHOLDERS' EQUITY:
Common stock 5,966 5,966
Paid-in surplus 7,109 7,109
Retained earnings 57,486 55,311
Treasury stock (399) (399)
--------- ---------
70,162 67,987
--------- ---------
$ 252,609 $ 260,418
========= =========
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
- 1 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands except per share and dividend data)
(unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
--------------------
April 26, April 27,
1997 1996
--------- --------
<S> <C> <C>
NET SALES $111,908 $106,525
-------- --------
COSTS AND EXPENSES:
Cost of merchandise sold, buying and
occupancy expenses 72,314 68,260
Selling, general and administrative expenses 33,800 34,436
Interest expense, net 2,448 2,272
-------- --------
Total costs and expenses 108,562 104,968
-------- --------
EARNINGS BEFORE INCOME TAXES 3,346 1,557
PROVISION FOR INCOME TAXES 1,171 545
-------- --------
NET EARNINGS $ 2,175 $ 1,012
======== ========
EARNINGS PER COMMON SHARE:
Primary and fully diluted $ 0.38 $ 0.18
======== ========
CASH DIVIDENDS PER SHARE $ -- $ 0.12 1/2
======== ========
<FN>
The accompanying notes are an integral part of these statements.
</TABLE>
- 2 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
--------------------
April 26, April 27,
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 2,175 $ 1,012
Adjustments to reconcile net earnings to cash
provided by (used in) operating activities:
Depreciation and amortization 2,344 2,549
Deferred taxes 1,201 --
Other liabilities 215 124
Change in:
Receivables from customers, net 5,925 2,286
Merchandise inventories (1,487) (9,543)
Prepaid expenses and other assets 644 837
Accounts payable and accrued expenses (8,883) (3,056)
Current income taxes -- 594
-------- --------
Net cash provided by (used in)
operating activities 2,134 (5,197)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (119) (3,377)
Other non-current assets (257) 32
-------- --------
Net cash used in investing activities (376) (3,345)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Additions to long-term debt 49,500 11,300
Reduction of long-term debt (52,018) (1,874)
Cash dividends paid -- (722)
-------- --------
Net cash provided by (used in)
financing activities (2,518) 8,704
-------- --------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (760) 162
Cash and cash equivalents, beginning of period 4,871 3,068
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,111 $ 3,230
======== ========
<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 April 26, 1997
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 thirteen week periods ended April 26, 1997 and April
27, 1996 (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) STORE CLOSING COSTS
In March 1997, the Company closed underperforming stores in Jackson,
Kalamazoo and Dearborn, Michigan. The Company incurred a $4,200,000
pre-tax charge in fiscal 1996 to effect the closings and to state
property and equipment at estimated fair value. The Company charged
store closing costs totalling approximately $700,000, primarily for
severance and related benefits, against the accrual during the first
quarter this year. Based on costs incurred and a review of the
estimate of the remainder of store closing costs, the $3,500,000
remaining store closing reserve appears reasonable at April 26, 1997.
In April 1997, the Company announced its decision to close its Troy,
Michigan clearance center. The store closed in late May. The Company
does not expect to incur significant costs in connection with the
closing.
(2) 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 5,779,000 and 5,781,000 for the thirteen week
periods ended April 26, 1997 and April 27, 1996, respectively.
- 4 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
For Quarter Ended April 26, 1997
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 6,782,000 and 6,840,000 for the thirteen week
periods ended April 26, 1997 and April 27, 1996, respectively.
Statement of Financial Accounting Standards (SFAS) No. 128, Earnings
per Share, becomes effective for the Company in the fourth quarter of
fiscal year 1997. SFAS No. 128 will require primary earnings per
share (EPS) to be replaced by basic EPS, which is computed by
dividing reported earnings available to common stockholders by
weighted average common shares outstanding. No dilution for any
potentially dilutive securities is included. Fully diluted EPS, to be
called diluted EPS, is still required. This statement is not expected
to have a material effect on the Company's consolidated financial
statements.
(3) CUSTOMER CREDIT AND RECEIVABLES Receivables from customers were as
follows:
<TABLE>
<CAPTION>
April 26, January 25,
(in thousands) 1997 1997
--------- -----------
<S> <C> <C>
Receivables from customers $ 36,393 $ 42,460
Less reserve for doubtful accounts 607 750
--------- ---------
$ 35,786 $ 41,710
========= =========
</TABLE>
<TABLE>
<CAPTION>
(4) MERCHANDISE INVENTORIES
Merchandise inventories were as follows:
April 26, January 25,
(in thousands) 1997 1997
--------- -----------
<S> <C> <C>
Inventories at first-in, first out
(FIFO) cost $ 113,771 $ 111,955
Less LIFO reserves 17,409 17,080
--------- ---------
$ 96,362 $ 94,875
========= =========
</TABLE>
- 5 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
For Quarter Ended April 26, 1997
(5) PROPERTY AND EQUIPMENT
Property and equipment are set forth below:
<TABLE>
<CAPTION>
April 26, January 25,
(in thousands) 1997 1997
--------- -----------
<S> <C> <C>
Property and equipment $ 170,579 $ 173,080
Less accumulated depreciation
and amortization 83,001 83,278
--------- ---------
$ 87,578 $ 89,802
========= =========
</TABLE>
(6) STOCK OPTIONS
Subsequent to the close of the quarter covered by this report, at
their Annual Meeting on May 22, 1997, the Company's shareholders
approved an amendment to the 1994 stock option plan which increased
the available shares under the plan to 900,000 shares. Options to
purchase 200,000 shares at $8.38 per share were granted in 1996
contingent on shareholder approval of the option plan amendment.
(7) 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 $2,020,000 and
$1,697,000 in the thirteen week periods ended April 26, 1997 and
April 27, 1996, respectively. The Company received income tax refunds
of $30,000 and $51,000 in the thirteen week periods ended April 26,
1997 and April 27, 1996, respectively.
- 6 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
PART I: FINANCIAL INFORMATION
For Quarter Ended April 26, 1997
REVIEW BY INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, independent public accountants, have performed a limited
review of the condensed consolidated financial statements for the thirteen
week period ended April 26, 1997. Since they did not perform an audit, they
express no opinion on the financial statements referred to above.
- 7 -
<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 April
26, 1997 and the related condensed consolidated statements of earnings and
cash flows for the thirteen week period then ended. 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 25, 1997, and the related consolidated statements
of earnings, shareholders' equity and cash flows for the year then ended (not
presented herein), and, in our report dated March 24, 1997, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance
sheet as of April 26, 1997, 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
May 9, 1997
- 8 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
PART I: FINANCIAL INFORMATION
For Quarter Ended April 26, 1997
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 fashion specialty 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"). The Company
also has a consolidated wholly-owned finance subsidiary Jacobson Credit Corp.
("Jacobson Credit"). 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.
Jacobson's operates in two regions and maintains separate staffs of buyers
for each region in order to better respond to customers' lifestyles and
merchandise preferences. The Company has stores in twenty-four cities in
Michigan, Indiana, Kansas, Kentucky, Ohio and Florida. The principal
merchandising and distribution functions are performed through regional
facilities. Functions common to all stores, such as management coordination,
sales promotion, data processing and accounting, are centralized at the
corporate headquarters in Jackson, Michigan.
a. OPERATING RESULTS: THIRTEEN WEEKS ENDED APRIL 26, 1997 COMPARED TO
THIRTEEN WEEKS ENDED APRIL 27, 1996
Sales for the quarter ended April 26, 1997, totalled $111,908,000, an
increase of 5.1% from 1996. The overall increase in sales is due to the
opening of new stores in Leawood, Kansas, and Boca Raton, Florida, in
March 1996 and November 1996, respectively. Comparable store sales
decreased 0.2% for the thirteen weeks, including a 1.6% decrease in the
Midwest region, and a 1.9% increase in Florida. Sales in the Company's
Midwest stores were pressured as a result of increased competition,
including the addition of 950,000 square feet of retail space to the
Somerset Collection, a regional shopping mall in the metropolitan
Detroit area, in August 1996. In 1997, the Company expects the sales
volume of the three stores closed in March 1997 and the Troy, Michigan,
clearance center closed in May 1997, to be largely offset by the
remaining stores, including the impact of a full year's sales in the
Company's Leawood, Kansas, and Boca Raton, Florida, stores.
- 9 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
PART I: FINANCIAL INFORMATION
For Quarter Ended April 26, 1997
The Company's gross profit percentage decreased to 35.4% for the
thirteen weeks this year from 35.9% in 1996, reflecting principally
higher markdowns as well as the tenancy costs associated with two stores
opened in 1996.
Selling, general and administrative expenses, expressed as a percentage
of sales, decreased to 30.2% in the quarter from 32.3% one year ago. The
decrease is due primarily to Company-wide expense reduction initiatives
and to expense leverage resulting from increased sales, partially offset
by higher sales promotion expense.
Interest expense, expressed as a percentage of sales, increased to 2.2%
for the quarter from 2.1% one year ago primarily due to higher revolving
credit borrowings.
1997 net earnings for the thirteen weeks totalled $2,175,000, or 38
cents per common share compared to $1,012,000, or 18 cents per common
share last year. Store closing promotions conducted at the three stores
closed in March 1997 increased net earnings for the quarter this year by
$788,000 or 14 cents per share. As a percent of sales, net earnings were
1.9% in 1997 compared to 1.0% in 1996.
b. LIQUIDITY AND CAPITAL RESOURCES
At April 26, 1997, the Company's current ratio was 3.24 to 1 and working
capital totalled $99,115,000, including $4,111,000 of cash and cash
equivalents. At January 25, 1997, the current ratio was 2.81 to 1 and
working capital totalled $96,053,000, including $4,871,000 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, the Company has a
$100,000,000 revolving credit facility under a Revolving Credit
Agreement with a commercial lender. The revolving credit facility
currently provides for borrowings of up to $80,000,000, subject to a
borrowing base limitation and lender reserves. The Company may, at its
option, increase the maximum available borrowings under the revolving
credit facility to up to $100,000,000 in the aggregate, subject to the
borrowing base limitation and lender reserves. As of April 26, 1997, the
Company had borrowed $49,539,000 under this facility and had $30,461,000
of borrowing availability. For the quarter ended April 26, 1997, the
daily weighted average interest rate on borrowings under the Revolving
Credit Agreement was 8.5%.
- 10 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
PART I: FINANCIAL INFORMATION
For Quarter Ended April 26, 1997
c. CASH FLOWS
Cash and cash equivalents decreased $760,000 in the thirteen weeks ended
April 26, 1997, compared to an increase of $162,000 in the thirteen
weeks ended April 27, 1996. Cash flows are impacted by operating,
investing and financing activities. In the thirteen weeks this year,
operating activities provided $2,134,000 of cash, compared to $5,197,000
of cash used in 1996. The increase in 1997 versus 1996 reflects
primarily higher net earnings, cash generated from store closings in
1997, and the start-up inventory required in 1996 for a new store in
Leawood, Kansas. These changes were partially offset by reduced
merchandise payables.
Investing activities used cash of $376,000 in the thirteen weeks this
year compared to $3,345,000 in 1996. Capital expenditures for new stores
or modernization and refixturing of existing stores and support
facilities totalled $119,000 in the first thirteen weeks of 1997
compared to $3,377,000 last year.
Financing activities used cash of $2,518,000 in the thirteen weeks this
year compared to $8,704,000 provided last year. In March 1997, the
Company borrowed $49,500,000 under its current Revolving Credit
Agreement to repay the then outstanding principal balance under its
former Credit Agreement and used $2,518,000 to service current
maturities of long-term debt. In the thirteen weeks last year, the
Company borrowed $11,300,000 under its former Credit Agreement and used
$1,874,000 to service current maturities of long-term debt. The Company
paid a cash dividend of $722,000 in the thirteen week period in 1996.
The Company discontinued its cash dividend, effective in the fourth
quarter of 1996.
The Company believes its cash flows from operations, along with its
borrowing capacity and access to financial markets are adequate to fund
its operations and debt maturities.
- 11 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
PART I: FINANCIAL INFORMATION
For Quarter Ended April 26, 1997
d. CORPORATE DEVELOPMENT
The Company opened two new stores in 1996, but 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 closings could have a significant impact on
the Company's sales, expenses and capital requirements and would likely
entail additional significant one-time charges to effect the closing and
to recognize any impairment of assets resulting from the closing
decision. In March 1997, the Company closed under-performing stores in
Jackson, Kalamazoo and Dearborn, Michigan. The Company incurred a
$4,200,000 pre-tax charge in fiscal 1996 to effect the closings and to
state property and equipment at estimated fair value. The Company
charged store closing costs totalling approximately $700,000, primarily
for severance and related benefits, against the accrual during the
quarter ended April 26, 1997. Based on total costs incurred and a review
of the estimate of the remainder of store closing costs, the $3,500,000
remaining store closing reserve appears reasonable at April 26, 1997.
In April 1997, the Company announced its decision to close its Troy,
Michigan clearance center. The store closed in late May. The Company
does not expect to incur significant costs in connection with the
clearance center closing.
Each of the above statements regarding future revenues, expenses or
business plans (including statements regarding the sufficiency of the
Company's capital resources to fund future operations) may be a "forward
looking statement" within the meaning of the Securities Exchange Act of
1934. Such statements are subject to important factors and uncertainties
that could cause actual results to differ materially from those in the
forward-looking statement, including the continued support of the
Company's trade creditors and factors, the risks inherent in the level
of the Company's long-term debt compared to its equity, the Company's
ability to reduce its operating expenses, general trends in retail
clothing apparel purchasing, especially during the Christmas season, and
the factors set forth in this Management's Discussion and Analysis of
financial condition and results of operations.
- 12 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
PART II: OTHER INFORMATION
For Quarter Ended April 26, 1997
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 April 26, 1997.
All exhibits except as set forth above have been omitted as not applicable or
not required.
- 13 -
<PAGE>
JACOBSON STORES INC. AND CONSOLIDATED SUBSIDIARIES
For Quarter Ended April 26, 1997
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: June 5 , 1997 BY: /s/ P. Gerald Mills
------------ ------------------------------------
P. GERALD MILLS
Chairman of the Board, President and
Chief Executive Officer
Date: June 5 , 1997 BY: /s/ Paul W. Gilbert
------------ ------------------------------------
PAUL W. GILBERT
Vice Chairman of the Board
(Principal Financial Officer)
- 14 -
<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
-----------------------
April 26, April 27,
1997 1996
--------- ---------
<S> <C> <C>
EARNINGS PER COMMON SHARE AND
COMMON EQUIVALENT SHARE:
Weighted average number of shares of common
stock and common stock equivalents outstanding -
Primary 5,779 5,781
Fully diluted 6,782 6,840
====== =======
NET EARNINGS $2,175 $ 1,012
====== =======
NET EARNINGS, adjusted to reflect reduction
in interest expense attributable to convertible
debentures, net of income tax $2,540 $ 1,396
====== =======
NET EARNINGS PER SHARE:
Primary and Fully diluted $ 0.38 $ 0.18
====== =======
</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 April 26,
1997, which includes our report dated May 9, 1997, 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
June 5, 1997
<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 THIRTEEN WEEK PERIOD ENDED, APRIL 26, 1997 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-31-1998
<PERIOD-END> APR-26-1997
<PERIOD-TYPE> 3-MOS
<CASH> 4,111
<SECURITIES> 0
<RECEIVABLES> 36,393
<ALLOWANCES> 607
<INVENTORY> 96,362
<CURRENT-ASSETS> 143,388
<PP&E> 170,579
<DEPRECIATION> 83,001
<TOTAL-ASSETS> 252,609
<CURRENT-LIABILITIES> 44,273
<BONDS> 127,649
<COMMON> 5,966
0
0
<OTHER-SE> 64,196
<TOTAL-LIABILITY-AND-EQUITY> 252,609
<SALES> 111,908
<TOTAL-REVENUES> 111,908
<CGS> 72,314
<TOTAL-COSTS> 72,314
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<INCOME-PRETAX> 3,346
<INCOME-TAX> 1,171
<INCOME-CONTINUING> 2,175
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,175
<EPS-PRIMARY> 0.38
<EPS-DILUTED> 0.38
</TABLE>
