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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): November 23, 1994
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(November 23, 1994)
Ames Department Stores, Inc.
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(Exact Name of Registrant As Specified In Its Charter)
Delaware
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(State Or Other Jurisdiction Of Incorporation)
1-5380 04-2269444
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(Commission File Number) (IRS Employer Identification No.)
2418 Main Street; Rocky Hill, Connecticut 06067-0801
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(Address Of Principal Executive Offices) (Zip Code)
(203) 257-2000
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name Or Former Address, If Changed Since Last Report)
Exhibit Index on Page 4
Page 1 of 7 (Including Exhibit)
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ITEM 5: OTHER EVENTS
Beginning on November 23, 1994, Ames Department Stores, Inc. ("the
Company") will distribute to its banks and other lenders,
principal trade vendors and factors, summaries of its unaudited
financial results for the four and thirty-nine weeks ended October
29, 1994. These monthly and year-to-date results (collectively,
the "monthly results") are attached hereto as Exhibit 20 and are
incorporated by reference herein.
Compared with the projections contained in the Form 8-K dated May
27, 1994 (referred to herein as the "Plan"), sales for the four
weeks ended October 29, 1994 were $6.7 million less than Plan and
EBITDA (as defined in Exhibit 20) was $5.2 million less than Plan
and $2.9 million less than last year. In October, the unfavorable
sales variance was primarily due to shortfalls in apparel and
jewelry categories. Apparel sales in October were affected by a
weak apparel market throughout most of the industry and by
unseasonably warm weather. October's gross margin rate was also
less than Plan due primarily to the unfavorable mix of sales.
Store non-payroll, advertising, field and home office expenses
were less than Plan in October. October's net loss of $1.6
million included a $2.5 million provision, before income tax
benefit, for the estimated costs associated with the planned
closing of the Company's distribution center in Clinton,
Massachusetts.
Sales for the thirty-nine weeks ended October 29, 1994 were $34.6
million less than Plan and EBITDA was $10.3 million less than Plan
but $8.4 million greater than last year. The year-to-date
unfavorable sales variance was due primarily to shortfalls in
ladies apparel, crafts, and convenience goods. The lower
year-to-date gross margin rate was due to higher-than-planned
markdowns, particularly in apparel. The unfavorable impact on the
year-to-date EBITDA from the lower-than-planned sales and gross
margin rate was partially offset by lower-than-planned expenses.
Year-to-date store, field and home office expenses were all less
than Plan.
As of October 29, 1994, LIFO inventories were $58.8 million
greater than Plan, primarily in hardline categories. This
variance was due primarily to the sales shortfall, special
purchases and the Company's decision to temporarily build
inventory levels above those projected in the Plan to support
several new sales promotions for the Fall and Christmas seasons.
Trade payables were $59.5 million greater than Plan due primarily
to the higher-than-planned inventory purchases and improved
payment terms. Outstanding borrowings under the Company's
revolving line of credit as of October 29, 1994 were $3.7 million
greater than Plan.
Page 2 of 7
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The Company is distributing the monthly results to its banks and
other lenders, principal trade vendors and factors to facilitate
their credit analyses. The summary results SHOULD NOT BE RELIED
UPON FOR ANY OTHER PURPOSE and should be read in conjunction with
the Company's Form 10-K for the fiscal year ended January 29,
1994, the Company's Form 10-Q for the first and second fiscal
quarters ended April 30 and July 30, 1994, respectively, the
Company's Form 10-Q to be filed for the third fiscal quarter ended
October 29, 1994, and the Company's Form 8-K dated May 27, 1994.
The monthly results are being reported publicly solely because
they are being distributed to a large number of the Company's
vendors for purposes of their credit analyses.
During the pendency of its reorganization case, the Company
disclosed publicly its monthly results through filings with the
Office of the U.S. Bankruptcy Trustee and continued to report
publicly its monthly results during the fiscal year ended January
29, 1994. Although the Company expects to continue to make its
monthly results public for the fiscal year ending January 28,
1995, the Company does not believe it is obligated to provide such
information indefinitely, other than as required by applicable
regulations, and the Company may cease making such disclosures and
updates at any time. The monthly results were not examined,
reviewed or compiled by the Company's independent certified public
accountants. Moreover, the Company does not believe that it is
obligated to update the monthly results to reflect subsequent
events or developments. The reported monthly results are subject
to future adjustments, if any, that could materially affect such
results. However, in the opinion of the Company, the monthly
results contain all adjustments (consisting of normal recurring
adjustments) necessary for a fair statement of the results for the
periods presented.
ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Exhibit: 20 Unaudited Financial Summary Results for the Four
and Thirty-nine Weeks Ended October 29, 1994.
Page 3 of 7
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INDEX TO EXHIBITS
Exhibit No. Exhibit Page No.
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20 Unaudited Financial Summary Results 6
for the Four and Thirty-nine Weeks
Ended October 29, 1994.
Page 4 of 7
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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.
AMES DEPARTMENT STORES, INC.
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Registrant
Dated: November 22, 1994 By: /s/ Joseph R. Ettore
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Joseph R. Ettore
President, Director, and
Chief Executive Officer
Dated: November 22, 1994 By: /s/ John F. Burtelow
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John F. Burtelow
Executive Vice President,
Chief Financial Officer
Dated: November 22, 1994 By: /s/ William C. Najdecki
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William C. Najdecki
Senior Vice President,
Chief Accounting Officer
Page 5 of 7
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<TABLE>
AMES DEPARTMENT STORES, INC. Exhibit 20
OCTOBER RESULTS VS. PLAN Page 1 of 2
MANAGEMENT FORMAT
(Unaudited)
(In Millions)
<CAPTION>
October 1994 Fiscal 1995 Year-to-Date
Actual Plan* Last Yr** Actual Plan* Last Yr**
<S> <C> <C> <C> <C> <C> <C>
INCOME SUMMARY:
Net Sales $170.6 $177.3 $176.2 $1,438.3 $1,472.9 $1,458.1
FIFO Margin $ 43.1 50.2 47.6 379.9 404.1 392.1
Margin % 25.3% 28.3% 27.0% 26.4% 27.4% 26.9%
Total Expenses 40.6 42.7 42.6 391.2 402.9 403.1
Gain on Dispos. of Properties - - 0.8 3.5 1.9 0.8
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EBIT 2.5 7.5 5.8 (7.8) 3.1 (10.2)
Net Interest Expense 2.4 2.3 2.5 19.6 21.3 20.3
Non-Cash Inc. Tax Prov.(Ben.) (0.8) 1.7 - (5.8) (2.0) -
Extraordinary Loss (Gain) - - (0.9) 1.5 1.5 (0.9)
Non-Recurring (Gain)-Wertheim - - - (12.0) (12.0) -
Dist. Center Closing Costs 2.5 - - 2.5 - -
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Net Income (Loss) ($1.6) $3.5 $4.2 ($13.6) ($5.7) ($29.6)
===================================================
From EBIT:
Non-Cash SARs Exp.(Credit) (0.1) - - 0.2 1.5 -
Depr/Amort, LIFO, & other,net 0.1 0.2 (0.4) 2.6 0.7 (3.2)
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EBITDA $2.5 $7.7 $5.4 ($5.0) $5.3 ($13.4)
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BALANCE SHEET SUMMARY:
Balance at end of Period
Actual Plan* Last Yr**
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Unrestricted Cash and Cash Equivalents $26.9 $30.2 $29.0
Restricted Cash and Cash Equivalents 0.7 0.5 49.8
Merchandise Inventories, LIFO 596.9 538.1 578.5
Other Current Assets 63.7 58.1 54.7
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Total Current Assets 688.2 626.9 712.0
Net Fixed Assets 39.5 51.6 17.8
Other Assets and Deferred Charges 6.6 5.5 0.5
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Total Assets $734.3 $684.0 $730.3
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Trade Accounts Payable $200.5 $141.0 $123.4
Short-Term Debt (Revolver) 153.7 150.0 148.3
Other Current Liabilities 168.7 179.5 185.6
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Total Current Liabilities 522.9 470.5 457.3
Long-Term Debt 41.0 41.4 121.1
Other Long-Term Liabilities 50.0 48.8 53.2
Unfavorable Lease Liability 23.4 23.5 25.6
Fresh-start Excess Net Assets (Negative Goodwill) 50.2 50.3 56.5
Paid-In-Capital 73.5 67.4 70.1
Retained Earnings (Deficit) (26.7) (17.9) (53.5)
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Total Stockholders' Equity 46.8 49.5 16.6
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Total Liabilities & Equity $734.3 $684.0 $730.3
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<FN>
* As reported on Form 8-K dated May 27, 1994.
** Last year's (fiscal 1994) income and balance sheet summaries
represent 309 stores as compared to 305 stores in October 1994.
NOTE: EBIT is earnings (loss) before net interest expense, income taxes, and
non-recurring or extraordinary items. EBITDA is EBIT before depre-
ciation & amortization, LIFO expense, stock appreciation rights (SARs)
accruals, and other non-cash charges.
Page 6 of 7
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<TABLE>
AMES DEPARTMENT STORES, INC. Exhibit 20
OCTOBER RESULTS VS. PLAN Page 2 of 2
MANAGEMENT FORMAT
(Unaudited)
(In Millions)
<CAPTION>
Fiscal 1995
October 1994 Year-to-Date
Actual Plan* Actual Plan*
<S> <C> <C> <C> <C>
CASH FLOW SUMMARY:
Beg. Unrestricted Cash & Cash Equiv. $31.5 $27.3 $16.5 $26.9
Cash Generated from (Used in) Operations:
Net Income (Loss) (1.6) 3.5 (13.6) (5.7)
Non-Cash Income Tax Expense (Benefit) (0.8) 1.7 (5.8) (2.0)
Other 2.8 0.5 6.7 5.1
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Cash from Operations 0.4 5.7 (12.7) (2.6)
Changes in Working Capital:
FIFO Inventory (increase) decrease (42.7) (16.8) (155.4) (98.2)
Trade Payables increase (decrease) 55.7 18.9 126.4 66.1
All Other (12.0) (7.9) (27.9) (29.0)
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Net Changes in Working Capital 1.0 (5.8) (56.9) (61.1)
Capital Expenditures (1.2) (1.5) (21.1) (30.2)
(Incr) Decr. in Rest. Cash & Cash Equiv. - 0.2 55.3 57.8
Other:
Short-Term Borrow. (Pymts) - Revolver (4.4) 5.0 138.4 130.0
Payments of Capital Leases (0.4) (0.3) (3.0) (2.8)
Payments on Long-Term Debt - (0.4) (81.8) (80.4)
Increase in Deferred Financing Costs - - (7.8) (7.4)
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Total Other (4.8) 4.3 45.8 39.4
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Unrestricted Cash Increase (Decrease) (4.6) 2.9 10.4 3.3
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Ending Unrestricted Cash & Cash Equiv. $26.9 $30.2 $26.9 $30.2
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<FN>
* As reported on Form 8-K dated May 27, 1994.
Page 7 of 7
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