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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): FEBRUARY 17, 1994
-------------------
(FEBRUARY 17, 1994)
AMES DEPARTMENT STORES, INC.
(Exact Name of Registrant As Specified In Its Charter)
DELAWARE
(State Or Other Jurisdiction Of Incorporation)
1-5380 04-2269444
(Commission File Number) (IRS Employer Identification No.)
2418 MAIN STREET; ROCKY HILL, CONNECTICUT 06067-0801
(Address Of Principal Executive Offices) (Zip Code)
(203) 257-2000
(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
(Former Name Or Former Address, If Changed Since Last Report)
Exhibit Index on Page 4
Page 1 of 8 (Including Exhibit)
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ITEM 5: OTHER EVENTS
Beginning on February 17, 1994, Ames Department Stores, Inc. ("Ames"
or the "Company") will distribute, to certain of its banks, potential
lenders, principal trade vendors and factors, summaries of its
financial plan (referred to herein as the "Plan") for the fiscal year
ending January 28, 1995 ("Fiscal 1995"). The Plan is attached hereto
as Exhibit 20 and is incorporated by reference herein. The Plan
assumes, among other things, that the same financing terms that are
effective under the Company's current credit agreement, including the
required cash collateralization of outstanding letters of credit,
will remain effective for all of Fiscal 1995. The current credit
agreement expires on December 28, 1994 and the Company has started
discussions to obtain long-term financing that would extend beyond
that date.
As reported in a press release on January 28, 1994, there was a
partial roof collapse on that date at the Company's distribution
center in Leesport, PA. The collapse involved approximately 10,000
square feet of the total 1.2 million square feet in the facility. On
February 11, 1994, there was a further 20,000 square foot collapse of
the roof in an area immediately adjacent to the first collapse. The
Leesport facility remains closed while the extent of the damage is
assessed and pending determination of what remedial steps are
required with regard to the roof. The Company has obtained temporary
warehouse space within a short distance from Leesport and is also
operating additional shifts at its other distribution centers in
Mansfield and Clinton, MA. The Company believes that these steps
will enable it to provide an adequate supply of merchandise to its
stores in the immediately foreseeable future. As a result of the
closing of the Leesport facility, the Company may experience an
increase in its short- term borrowings for a brief period of time as
it repurchases certain inventory that is temporarily not removable
from Leesport (see also footnote (A) - Page 7). While the
investigation into the Leesport situation in still in its early
stages, the Company currently believes that a substantial portion of
any damages and any incremental expenses it may incur should be
recoverable. The net financial effect from the Leesport situation is
not yet determinable. The Plan does not reflect any financial effect
as a result of the roof damage at the Leesport facility.
Ames is distributing the Plan to its banks, potential lenders,
principal trade vendors and factors to facilitate their credit
analyses. The Plan 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 30, 1993, the Company's most recent
Form 10-Q for the quarter ended October 30, 1993, and the Company's
Form 10-K to be filed for the fiscal year ended January 29, 1994.
The Plan is being reported publicly solely because it is 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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Although Ames is publishing the Plan and currently expects to report
its monthly results during Fiscal 1995, Ames does not believe it is
obligated to provide such information indefinitely, other than as
required by applicable regulations, and may cease making such
disclosures and updates at any time. Moreover, Ames does not believe
that it is obligated to update the Plan to reflect subsequent events
or developments.
The Plan was not prepared with a view toward compliance with the
guidelines established by the American Institute of Certified Public
Accountants or the rules and regulations of the Securities and
Exchange Commission regarding financial projections. While presented
with numerical specificity, the Plan is based upon a variety of
assumptions that may not be realized and is subject to significant
business, economic and competitive uncertainties and contingencies,
many of which are beyond the control of Ames. Consequently, the Plan
should not be regarded as a representation or warranty by Ames, or
any other person, that the forecasts contained therein will be
realized. Actual results may vary materially from those presented in
the Plan.
In its Form 10-Q for the quarter ended October 30, 1993, the Company
reported that it and its independent accountants were in discussions
with the staff of the Securities and Exchange Commission
regarding their review of the Company's applications of the
American Institute of Certified Public Accountants Statement of
Position 90-7 ("SOP 90-7"). Those discussions have now concluded and
the Company will not amend its applications of SOP 90-7 as a result
of such discussions.
ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Exhibit: 20 Fiscal 1995 Summary Financial Plan
Page 3 of 8
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INDEX TO EXHIBITS
EXHIBIT NO. EXHIBIT PAGE NO.
20 Fiscal 1995 Summary Financial Plan 6
Page 4 of 8
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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.
Registrant
Dated: February 17, 1994 By: /s/ Peter Thorner
--------------------------
Peter Thorner
President, Chief Operating
Officer and Director
Dated: February 17, 1994 By: /s/ William C. Najdecki
--------------------------
William C. Najdecki
Senior Vice President,
Chief Accounting Officer
Page 5 of 8
[TEXT]
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<TABLE>
AMES DEPARTMENT STORES, INC.
CONDENSED INCOME STATEMENT
MANAGEMENT FORMAT
(307 stores thru Sep; 308 stores after Sep.)
($ 000's)
<CAPTION> EXHIBIT 20
Page 1 of 3
PLAN FYE 1/95
FOR MONTH ENDING
FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales $125,141 $181,358 $129,749 $161,067 $193,812 $148,086 $156,195 $200,168 $177,315 $226,889 $360,440 $113,856 $2,174,076
FIFO Margin $ 30,924 48,306 37,131 48,131 53,058 39,054 41,672 55,647 50,166 62,373 104,304 23,039 593,805
Margin % 24.71% 26.64% 28.62% 29.88% 27.38% 26.37% 26.68% 27.80% 28.29% 27.49% 28.94% 20.24% 27.31%
Total Expense 41,178 49,864 39,284 42,822 50,735 41,435 43,345 48,955 42,573 48,040 55,983 38,517 542,731
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EBIT ($10,254) ($1,558) ($2,153) $5,309 $2,323 ($2,381) ($1,673) $6,692 $7,593 $14,333 $48,321 ($15,478) $51,074
Net Interest 1,979 2,467 2,394 2,557 2,762 2,490 2,499 2,852 2,641 2,621 2,345 1,380 28,987
Income Taxes 0
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Net Income ($12,233) ($4,025) ($4,547) $2,752 ($439) ($4,871) ($4,172) $3,840 $4,952 $11,712 $45,976 ($16,858) $22,087
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From EBIT:
Sub:Net Amort 129 150 84 25 10 (54) (88) (80) (137) (153) (133) (174) (421)
Unfav Ls. 175 175 175 175 175 175 175 175 175 176 176 175 2,102
Add:LIFO Exp. 83 83 83 83 83 83 83 83 84 84 84 84 1,000
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EBITDA ($10,475) ($1,800) ($2,329) $5,192 $2,221 ($2,419) ($1,677) $6,680 $7,639 $14,394 $48,362 ($15,395) $50,393
FYE 1/94 ACTUALS (UNAUDITED) THRU DEC. (REVISED FOR COMP. STORES) AND JAN.'S PLAN FROM THE 4/5/93 FORM 8-K
FOR MONTH ENDING
FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN * TOTAL *
Net Sales $123,961 $171,041 $137,321 $157,818 $191,437 $144,670 $151,746 $196,467 $175,145 $219,404 $347,007 $115,059 $2,131,076
FIFO Margin $ 31,581 44,360 39,474 46,797 52,058 35,038 39,619 53,815 47,304 57,958 101,121 22,570 571,695
Margin % 25.48% 25.94% 28.75% 29.65% 27.19% 24.22% 26.11% 27.39% 27.01% 26.42% 29.14% 19.62% 26.83%
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EBITDA ($8,083) ($3,286) ($1,005) $3,802 ($912) ($7,501) ($3,449) $2,017 $5,427 $15,940 $48,728 ($17,843) $33,835
<FN>
* January and total fiscal year 1994 results have not yet been finalized and audited. Actual (unaudited) net sales for January
were $97,015.
NOTE: EBIT is earnings (loss) before net interest expense, income taxes, and any non-cash extraordinary items. EBITDA is EBIT
before depreciation & amortization, LIFO expense, and any non-cash unusual charges or gains.
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<TABLE>
AMES DEPARTMENT STORES, INC.
CONDENSED BALANCE SHEET
MANAGEMENT FORMAT
(307 stores thru Sep; 308 stores after Sep.)
FYE 1/95 PLAN
($ 000's)
<CAPTION> EXHIBIT 20
Page 2 of 3
FOR MONTH ENDING
FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Current Assets:
Unrest. cash and equiv. $28,540 $28,119 $25,829 $30,323 $30,111 $27,191 $32,618 $29,513 $33,280 $53,198 $38,197 $28,998
Restricted cash and eq. 61,046 64,196 67,847 69,298 69,748 70,599 67,350 61,300 59,751 62,502 68,952 68,103
Merch. inventory, LIFO 491,588 487,021 504,163 500,171 473,096 479,587 488,945 521,310 538,081 558,109 396,619 408,479
Other current assets 32,684 40,246 39,077 38,060 34,352 35,677 39,503 53,389 62,493 75,924 40,707 38,472
Total Current Assets 613,858 619,582 636,916 637,852 607,307 613,054 628,416 665,512 693,605 749,733 544,475 544,052
Net Fixed Assets 27,255 29,057 32,247 36,388 39,608 41,696 43,904 44,261 44,626 44,776 44,727 44,473
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Total Assets $641,113 $648,639 $669,163 $674,240 $646,915 $654,750 $672,320 $709,773 $738,231 $794,509 $589,202 $588,525
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FOR MONTH ENDING
FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN
Liabilities
Current Liabilities:
Trade accounts payable $71,654 $67,528 $70,189 $77,402 $62,768 $81,088 $98,422 $122,126 $141,010 $177,970 $72,800 $91,188
Note (revolver) pay.(A) 95,000 110,000 135,000 135,000 125,000 125,000 130,000 140,000 145,000 150,000 0 15,000
Other current liabs.(B) 187,467 189,996 188,553 184,418 216,901 212,253 212,420 214,248 214,797 218,175 239,070 229,137
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Total Current Liabs. 354,121 367,524 393,742 396,820 404,669 418,341 440,842 476,374 500,807 546,145 311,870 335,325
Long-term debt (B) 110,896 110,076 109,872 110,082 76,387 76,372 76,584 75,713 75,746 75,955 60,005 58,585
Fresh-st ex.(neg. good.) 54,291 53,716 53,256 52,796 52,221 51,761 51,301 50,726 50,266 49,806 49,231 48,771
Unfavorable lease liab. 24,898 24,723 24,548 24,373 24,198 24,023 23,848 23,673 23,498 23,322 23,146 22,971
Other long-term liabs. 51,261 50,979 50,671 50,343 50,053 49,737 49,401 49,103 48,778 48,433 48,126 42,907
Total Liabilities 595,467 607,018 632,089 634,414 607,528 620,234 641,976 675,589 699,095 743,661 492,378 508,559
Shareholders' Equity
Paid-in capital 70,141 70,141 70,141 70,141 70,141 70,141 70,141 70,141 70,141 70,141 70,141 70,141
Retained earn. (def.) (24,495) (28,520) (33,067) (30,315) (30,754) (35,625) (39,797) (35,957) (31,005) (19,293) 26,683 9,825
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Total Sharehold. Eq. 45,646 41,621 37,074 39,826 39,387 34,516 30,344 34,184 39,136 50,848 96,824 79,966
Total Liabs. & Equity $641,113 $648,639 $669,163 $674,240 $646,915 $654,750 $672,320 $709,773 $738,231 $794,509 $589,202 $588,525
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<FN>
(A) Estimated incremental borrowings that may be required to replace certain inventories at the Leesport facility are between $5 and
$20 million for February through May. The extent and duration of such incremental borrowings is dependent upon the vendor trade
terms on the inventory repurchases and the Company's abilities to access the current inventory at Leesport.
(B) Includes certain projected reclassifications of long-term debt to current debt based upon the Company's current debt structure.
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<TABLE>
AMES DEPARTMENT STORES, INC.
CONDENSED CASH FLOW
MANAGEMENT FORMAT
(307 stores thru Sep; 308 stores after Sep.)
FYE 1/95 PLAN
($ 000's)
<CAPTION> EXHIBIT 20
Page 3 of 3
FOR MONTH ENDING
FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beg. unrest. cash and eq. $26,865 $28,540 $28,119 $25,829 $30,323 $30,111 $27,191 $32,618 $29,513 $33,280 $53,198 $38,197 $26,865
Cash generated from (used in) operations:
Net income (loss) (12,233) (4,025) (4,547) 2,752 (439) (4,871) (4,172) 3,840 4,952 11,712 45,976 (16,858) 22,087
Other 217 197 263 417 434 496 531 556 615 629 609 550 5,514
Cash from operations (12,016) (3,828) (4,284) 3,169 (5) (4,375) (3,641) 4,396 5,567 12,341 46,585 (16,308) 27,601
Changes in working capital:
FIFO inventory (inc) dec (51,089) 4,484 (17,225) 3,909 26,992 (6,574) (9,441)(32,448)(16,855)(20,112) 161,406 (11,944) 31,103
Trade payables inc (dec) (3,230) (4,125) 2,661 7,213 (14,634) 18,320 17,334 23,704 18,884 36,960 (105,170) 18,388 16,304
All other 5,784 (5,751) (1,878) (2,903) 2,829 (5,980) (3,443)(12,955) (8,551) (9,872) 41,670 (13,200) (14,249)
Net changes in working cap(48,535) (5,392)(16,442) 8,219 15,187 5,766 4,450 (21,699) (6,522) 6,976 97,906 (6,756) 33,158
Capital spending (1,712) (2,227) (3,566) (4,576) (3,785) (2,603) (2,755) (1,012) (962) (763) (659) (380) (25,000)
(Inc) dec. in rest. cash (2,754) (3,150) (3,651) (1,451) (450) (851) 3,249 6,050 1,549 (2,751) (6,450) 849 (9,811)
Other
Borrow. (pymts) -revolver 75,000 15,000 25,000 0 (10,000) 0 5,000 10,000 5,000 5,000 (150,000) 15,000 (5,000)
Payments of capital lease (322) (287) (312) (331) (295) (321) (340) (303) (329) (349) (312) (252) (3,753)
Pymts. on long-term debt (8,345) (346) (345) (345) (673) (345) (345) (346) (345) (346) (1,880) (1,161) (14,822)
Restructuring & other 359 (191) 1,309 (191) (191) (191) (191) (191) (191) (191) (191) (191) (240)
Total other 66,692 14,176 25,652 (867)(11,159) (857) 4,124 9,160 4,135 4,114 (152,383) 13,396 (23,815)
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Inc (dec.) in unrest. cash $1,675 ($421)($2,291) $4,494 ($212)($2,920) $5,427 ($3,105) $3,767 $19,917 ($15,001)($9,199) $2,133
End. unrest. cash and eq. $28,540 $28,119 $25,829 $30,323 $30,111 $27,191 $32,618 $29,513 $33,280 $53,198 $38,197 $28,998 $28,998
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