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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): JUNE 10, 1994
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(JUNE 10, 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 8 (Including Exhibits)
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ITEM 5: OTHER EVENTS
On June 10, 1994, Ames Department Stores, Inc. ("Ames" or the
"Company") announced that Joseph R. Ettore has been appointed
President and Chief Executive Officer, effective immediately. The
press release announcing the appointment, dated June 10, 1994, is
attached hereto as Exhibit 20-A. Mr. Ettore replaces Peter Thorner,
former President and Chief Operating Officer, who has resigned.
Also, beginning on June 10, 1994, Ames will distribute, to its banks
and other lenders, principal trade vendors and factors, summaries of
its unaudited financial results for the four and seventeen weeks ended
May 28, 1994. These monthly and year-to-date results (collectively,
the "monthly results") are attached hereto as Exhibit 20-B 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 May 28, 1994 were $12.8 million below Plan and EBITDA (as
defined in Exhibit 20-B) was $1.3 million below Plan. In May, the
major portion of the sales shortfall against Plan was in apparel due,
in part, to unseasonable weather in the first half of the month. The
unfavorable impact from the sales shortfall on May's EBITDA was
partially offset by lower-than-planned expenses.
Sales for the seventeen weeks ended May 28, 1994 were $13.3 million
below Plan; however, EBITDA was $.1 million better than Plan. The
unfavorable impact on the year-to-date EBITDA from the lower-than-
planned sales and gross margin rate was more than offset by
lower-than-planned expenses. The year-to-date sales shortfall was
primarily due to the $12.8 million shortfall in May. The lower gross
margin rate was primarily due to higher-than-planned clearance
markdowns on apparel merchandise in March. Store, field and home
office expenses were all below the year-to-date Plan.
As of May 28, 1994, inventories were $5.5 million above Plan,
principally in hardline categories as a result of the additional
merchandise purchased after the temporary closing of the Company's
Leesport, PA distribution center in February and March. Trade
payables were $24.3 million above Plan due primarily to improved
payment terms. Outstanding borrowings under the Company's revolving
line of credit as of May 28, 1994 were $26.8 million below Plan due
primarily to the better-than-planned trade payable terms.
The Company is in compliance with all debt covenants through
May 28, 1994.
Ames 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 fiscal quarter ended April 30, 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.
Page 2 of 8
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During the pendency of its reorganization case, Ames 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 Ames
expects to continue to make its monthly results public for the fiscal
year ending January 28, 1995, Ames does not believe it is obligated
to provide such information indefinitely, other than as required by
applicable regulations, and Ames may cease making such disclosures
and updates at any time. The monthly results were not examined,
reviewed or compiled by Ames' independent certified accountants.
Moreover, Ames 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-A Press Release, dated June 10, 1994, announcing
the appointment of Joseph R. Ettore as President
and Chief Executive Officer.
20-B Unaudited Financial Summary Results for the Four
Weeks and Seventeen Weeks Ended May 28, 1994.
Page 3 of 8
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INDEX TO EXHIBITS
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EXHIBIT NO. EXHIBIT PAGE NO.
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20-A Press Release, dated June 10, 1994, 6
announcing the appointment of
Joseph R. Ettore as President and
Chief Executive Officer.
20-B Unaudited Financial Summary Results for 7
the Four Weeks and Seventeen Weeks Ended
May 28, 1994
Page 4 of 8
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SIGNATURES
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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: June 10, 1994 By: /S/ WILLIAM C. NAJDECKI
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William C. Najdecki
Senior Vice President,
Chief Accounting Officer
Page 5 of 8
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Exhibit 20-A
June 10, 1994
NEWS RELEASE
AMES NAMES ETTORE PRESIDENT AND CHIEF EXECUTIVE OFFICER
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ROCKY HILL, Conn. -- Ames Department Stores, Inc. (NASDAQ: AMES) announced
today that Joseph R. Ettore has been appointed President and Chief Executive
Officer, effective immediately. Mr. Ettore was formerly President and Chief
Executive Officer of Jamesway Corporation, a discount retail chain based in
Secaucus, N.J. Ettore replaces Peter Thorner, former President and Chief
Operating Officer, who has resigned to pursue personal interests.
According to Paul M. Buxbaum, Ames Chairman, the appointment of Ettore is a
logical step in the evolution of Ames, enabling the company to be even more
competitive and achieve its full potential going forward.
Buxbaum said, "Joe Ettore, a veteran of the retail industry, has the proven
merchandising skills that we feel are needed to take Ames to the next level.
His appointment, along with the company's new, three-year, $300 million credit
facility, should allow Ames to continue to build on its positive momentum."
Ames, which operates 306 stores in the Northeast, reported its first annual net
profit in five years on April 5, 1994.
Contacts:
Marge Wyrwas - (203) 257-2659
Jim Bierfeldt, Mintz & Hoke - (203) 679-9713
Page 6 of 8
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AMES DEPARTMENT STORES, INC. Exhibit 20-B
MAY RESULTS VS. PLAN Page 1 of 2
MANAGEMENT FORMAT
(Unaudited)
(In Millions)
<CAPTION>
May 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 $148.3 $161.1 $158.7 $584.0 $597.3 $593.5
FIFO Margin $ 44.4 48.1 47.1 157.4 164.5 163.0
Margin % 29.9% 29.9% 29.7% 27.0% 27.5% 27.5%
Total Expenses 40.7 42.9 43.0 169.8 175.3 170.3
Gain on Dispos. of Properties 0.2 0.1 - 2.0 1.9 -
---------------------------------------------------
EBIT 3.9 5.3 4.1 (10.4) (8.9) (7.3)
Net Interest Expense 2.3 2.8 1.7 8.2 9.6 8.2
Non-Cash Inc. Tax Prov.(Ben.) 0.5 0.8 - (6.0) (6.0) -
Extra. Chg., net of tax ben. - - - 1.5 1.5 -
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Net Income (Loss) $1.1 $1.7 $2.4 ($14.1) ($14.0) ($15.5)
===================================================
From EBIT:
Non-Cash SARs Exp.(Credit) (0.7) - - 0.8 1.5 -
Depr/Amort, LIFO, & other,net 0.9 0.1 (0.3) 2.3 0.0 (1.5)
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EBITDA $4.1 $5.4 $3.8 ($7.3) ($7.4) ($8.8)
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BALANCE SHEET SUMMARY: Balance at
end of Period
Actual Plan
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Unrestricted Cash and Cash Equivalents $32.2 $33.0
Restricted Cash and Cash Equivalents 55.3 69.3
Merchandise Inventories, LIFO 505.6 500.1
Other Current Assets 39.8 33.7
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Total Current Assets 632.9 636.1
Net Fixed Assets 23.1 34.0
Other Assets and Deferred Charges 1.2 1.3
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Total Assets $657.2 $671.4
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Trade Accounts Payable $101.7 $77.4
Short-Term Debt (Revolver) 108.2 135.0
Other Current Liabilities 235.7 251.3
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Total Current Liabilities 445.6 463.7
Long-Term Debt 43.2 43.1
Fresh-start Excess Net Assets (Negative Goodwill) 52.8 52.8
Unfavorable Lease Liability 24.3 24.4
Other Long-Term Liabilities 51.7 50.3
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Total Liabilities & Fresh-St. Excess Net Assets 617.6 634.3
Paid-In-Capital 66.7 63.4
Retained Earnings (Deficit) (27.1) (26.3)
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Total Liabilities & Equity $657.2 $671.4
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<FN>
* As reported on Form 8-K dated May 27, 1994.
** Last year's (fiscal 1994) income summary represents 309 stores as
compared to 306 stores in May 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 7 of 8
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AMES DEPARTMENT STORES, INC. Exhibit 20-B
MAY RESULTS VS. PLAN Page 2 of 2
MANAGEMENT FORMAT
(Unaudited)
(In Millions)
<CAPTION>
Fiscal 1995
May 1994 Year-to-Date
Actual Plan* Actual Plan*
<S> <C> <C> <C> <C>
CASH FLOW SUMMARY:
Beg. Unrestricted Cash & Cash Equiv. $24.4 $27.9 $16.5 $26.9
Cash Generated from (Used in) Operations:
Net Income (Loss) 1.1 1.7 (14.1) (14.0)
Non-Cash Income Tax Expense (Benefit) 0.5 0.8 (6.0) (6.0)
Other (0.6) 0.4 1.3 2.4
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Cash from Operations 1.0 2.9 (18.8) (17.6)
Changes in Working Capital:
FIFO Inventory (increase) decrease 1.3 3.9 (63.6) (59.9)
Trade Payables increase (decrease) (8.6) 7.2 27.6 2.5
All Other (5.4) (2.7) (8.4) (1.0)
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Net Changes in Working Capital (12.7) 8.4 (44.4) (58.4)
Capital Expenditures (0.7) (3.6) (2.9) (9.7)
(Incr) Decr. in Rest. Cash & Cash Equiv. 1.3 (1.5) 0.7 (11.0)
Other:
Short-Term Borrow. (Pymts) - Revolver 19.8 0.0 92.9 115.0
Payments of Capital Leases (0.3) (0.3) (1.2) (1.2)
Payments on Long-Term Debt (0.4) (0.5) (9.6) (9.4)
Increase in Deferred Financing Costs (0.2) (0.3) (1.0) (1.6)
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Total Other 18.9 (1.1) 81.1 102.8
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Unrestricted Cash Increase (Decrease) 7.8 5.1 15.7 6.1
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Ending Unrestricted Cash & Cash Equiv. $32.2 $33.0 $32.2 $33.0
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<FN>
* As reported on Form 8-K dated May 27, 1994.
Page 8 of 8
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