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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): AUGUST 25, 1994
- - ------------------------------------------------------------------
(AUGUST 25, 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 August 25, 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 twenty-six weeks ended July 30, 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 July 30, 1994 were $4.6
million less than Plan and EBITDA (as defined in Exhibit
20) was $.6 million worse than Plan. In July, the
unfavorable sales variance was primarily due to sales
shortfalls in apparel and convenience goods. July's gross
margin rate was also less than Plan due primarily to
higher-than-planned advertising and clearance markdowns,
particularly in apparel. The unfavorable impact on July's
EBITDA from the lower-than- planned sales and gross margin
rate was partially offset by lower-than- planned expenses
and a gain on the sale of certain property. Store, field
and home office expenses were all less than Plan in July.
Sales for the twenty-six weeks ended July 30, 1994 were
$12.1 million less than Plan; however, EBITDA was $.2
million better than Plan. The major portion of the year-
to-date unfavorable sales variance was in apparel and
convenience goods. The lower year-to-date gross margin
rate was due to higher-than-planned advertising
markdowns.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 and higher-
than-planned gains on property sales. Year-to-date store,
field and home office expenses were all less than Plan.
As of July 30, 1994, LIFO inventories were $4.7 million
greater than Plan, primarily in hardline categories. Trade
payables were $18.5 million greater than Plan due primarily
to improved payment terms. Outstanding borrowings under
the Company's new revolving line of credit as of July 30,
1994 were $18.6 million less than Plan due primarily to the
better-than- planned trade payable terms.
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
Page 2 of 7
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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, the
Company's Form 8-K dated May 27, 1994, and the Company's
Form 10-Q to be filed for the second fiscal quarter ended
July 30, 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, 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 public 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 Unaudited Financial Summary Results for
the Four and Twenty-six Weeks Ended
July 30, 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 for 6
the Four and Twenty-six Weeks Ended
July 30, 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: August 24, 1994 By: /s/ Joseph R. Ettore
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Joseph R. Ettore
President, Director, and
Chief Executive Officer
Dated: August 24, 1994 By: /s/ John F. Burtelow
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John F. Burtelow
Executive Vice President,
Chief Financial Officer
Dated: August 24, 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
JULY RESULTS VS. PLAN Page 1 of 2
MANAGEMENT FORMAT
(Unaudited)
(In Millions)
<CAPTION>
July 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 $143.5 $148.1 $145.6 $927.1 $939.2 $931.6
FIFO Margin $ 35.6 39.1 35.2 246.3 256.6 250.6
Margin % 24.8% 26.4% 24.2% 26.6% 27.3% 26.9%
Total Expenses 39.8 41.6 42.6 259.4 267.7 265.8
Gain on Dispos. of Properties 1.5 - - 3.5 1.9 -
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EBIT (2.7) (2.5) (7.4) (9.6) (9.2) (15.2)
Net Interest Expense 2.0 2.2 2.1 12.8 14.2 12.7
Non-Cash Inc. Tax Prov.(Ben.) (1.5) (1.5) - (3.4) (3.7) -
Extra. Chg., net of tax ben. - - - 1.5 1.5 -
Non-Recurring (Gain)-Wertheim - - - (12.0) (12.0) -
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Net Income (Loss) ($3.2) ($3.2) ($9.5) ($8.5) ($9.2) ($27.9)
===================================================
From EBIT:
Non-Cash SARs Exp.(Credit) (0.3) - - 0.1 1.5 -
Depr/Amort, LIFO, & other,net - 0.1 (0.2) 2.2 - (2.1)
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EBITDA ($3.0) ($2.4) ($7.6) ($7.3) ($7.7) ($17.3)
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BALANCE SHEET SUMMARY: Balance at
end of Period
Actual Plan
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Unrestricted Cash and Cash Equivalents $30.8 $29.1
Restricted Cash and Cash Equivalents 1.0 0.9
Merchandise Inventories, LIFO 484.3 479.6
Other Current Assets 39.2 31.5
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Total Current Assets 555.3 541.1
Net Fixed Assets 30.1 44.2
Other Assets and Deferred Charges 7.3 6.4
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Total Assets $592.7 $591.7
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Trade Accounts Payable $99.6 $81.1
Short-Term Debt (Revolver) 106.4 125.0
Other Current Liabilities 166.5 173.6
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Total Current Liabilities 372.5 379.7
Long-Term Debt 41.7 42.2
Fresh-start Excess Net Assets (Negative Goodwill) 51.7 51.8
Unfavorable Lease Liability 24.0 24.0
Other Long-Term Liabilities 50.9 49.8
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Total Liabilities & Fresh-St. Excess Net Assets 540.8 547.5
Paid-In-Capital 73.5 65.7
Retained Earnings (Deficit) (21.6) (21.5)
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Total Liabilities & Equity $592.7 $591.7
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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 305 stores in July 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
JULY RESULTS VS. PLAN Page 2 of 2
MANAGEMENT FORMAT
(Unaudited)
(In Millions)
<CAPTION>
Fiscal 1995
July 1994 Year-to-Date
Actual Plan* Actual Plan*
<S> <C> <C> <C> <C>
CASH FLOW SUMMARY:
Beg. Unrestricted Cash & Cash Equiv. $32.9 $34.1 $16.5 $26.9
Cash Generated from (Used in) Operations:
Net Income (Loss) (3.2) (3.2) (8.5) (9.2)
Non-Cash Income Tax Expense (Benefit) (1.5) (1.5) (3.4) (3.7)
Other (0.5) 0.5 0.5 3.5
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Cash from Operations (5.2) (4.2) (11.4) (9.4)
Changes in Working Capital:
FIFO Inventory (increase) decrease (9.9) (6.6) (42.7) (39.5)
Trade Payables increase (decrease) 27.2 18.3 25.5 6.2
All Other (0.4) (6.8) (2.4) (7.9)
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Net Changes in Working Capital 16.9 4.9 (19.6) (41.2)
Capital Expenditures (4.6) (5.2) (10.7) (21.0)
(Incr) Decr. in Rest. Cash & Cash Equiv. - 0.1 55.0 57.4
Other:
Short-Term Borrow. (Pymts) - Revolver (7.8) - 91.0 105.0
Payments of Capital Leases (0.3) (0.3) (1.8) (1.9)
Payments on Long-Term Debt (1.1) (0.3) (80.6) (79.3)
Increase in Deferred Financing Costs - - (7.6) (7.4)
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Total Other (9.2) (0.6) 1.0 16.4
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Unrestricted Cash Increase (Decrease) (2.1) (5.0) 14.3 2.2
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Ending Unrestricted Cash & Cash Equiv. $30.8 $29.1 $30.8 $29.1
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<FN>
* As reported on Form 8-K dated May 27, 1994.
Page 7 of 7
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