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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 2, 1994
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(JUNE 2, 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 June 2, 1994, Ames Department Stores, Inc. ("Ames" or 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 thirteen weeks ended April 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 revised projections contained in the Form 8-K dated
May 27, 1994 (referred to herein as the "Plan"), sales for the four
weeks ended April 30, 1994 were $5.6 million above Plan and EBITDA (as
defined in Exhibit 20) was $2.6 million better than Plan. In April,
the major portion of the positive sales variance was in softlines.
The favorable EBITDA variance for April was primarily due to
higher-than-planned gross margin dollars that resulted from the
higher-than-planned sales and a higher-than-planned gross margin rate.
Both softlines and hardlines gross margin dollars and rates exceeded
Plan in April. Softlines gross margin in April benefitted from a
reduced level of markdowns on apparel merchandise because of markdowns
previously taken in March. The April and year-to-date fiscal 1995 net
income(loss) include an income tax benefit recorded at the end of the
first quarter, which is expected to be offset by income tax expense in
later interim periods, and an extraordinary charge, net of income tax
benefit, for the early extinguishment of certain debt to be prepaid in
June, 1994.
Sales for the thirteen weeks ended April 30, 1994 were $.4 million
below Plan; however, EBITDA was $1.4 million better than Plan. The
unfavorable impact on the year-to-date EBITDA from a lower-than-
planned gross margin rate was more than offset by lower-than-planned
expenses. 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 April 30, 1994, inventories were $2.6 million above Plan,
principally in hardline categories. Trade payables were $40.1 million
above Plan due primarily to improved payment terms. Outstanding
borrowings under the Company's revolving line of credit as of April
30, 1994 were $46.5 million below Plan due primarily to the
better-than-planned trade payable terms.
The Company is in compliance with all debt covenants through
April 30, 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
Page 2 of 7
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Form 10-Q to be filed 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.
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 Unaudited Financial Summary Results for the Four
Weeks and Thirteen Weeks Ended April 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 Weeks and Thirteen Weeks Ended
April 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: June 1, 1994 By: /S/ PETER THORNER
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Peter Thorner
President, Chief Operating
Officer and Director
Dated: June 1, 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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AMES DEPARTMENT STORES, INC. Exhibit 20
APRIL RESULTS VS. PLAN Page 1 of 2
MANAGEMENT FORMAT
(Unaudited)
(In Millions)
<CAPTION>
April 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 $135.3 $129.7 $138.1 $435.8 $436.2 $434.8
FIFO Margin $ 39.4 37.1 39.7 113.0 116.4 116.0
Margin % 29.1% 28.6% 28.7% 25.9% 26.7% 26.7%
Total Expenses 39.3 39.3 40.4 128.9 132.4 127.4
Gain on Dispos. of Properties - - - 1.8 1.8 -
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EBIT 0.1 (2.2) (0.7) (14.1) (14.2) (11.4)
Net Interest Expense 2.1 2.4 2.1 6.0 6.8 6.6
Non-Cash Inc. Tax Prov.(Ben.) (6.5) (6.8) - (6.5) (6.8) -
Extra. Chg., net of tax ben. 1.5 1.5 - 1.5 1.5 -
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Net Income (Loss) $3.0 $0.7 ($2.8) ($15.1) ($15.7) ($18.0)
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From EBIT:
Non-Cash SARs Exp.(Credit) (0.5) (0.5) - 1.5 1.5 -
Depr/Amort, LIFO, & other,net 0.3 0.0 (0.3) 1.2 (0.1) (1.2)
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EBITDA ($0.1) ($2.7) ($1.0) ($11.4) ($12.8) ($12.6)
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BALANCE SHEET SUMMARY: Balance at
end of Period
Actual Plan
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Unrestricted Cash and Cash Equivalents $24.4 $27.9
Restricted Cash and Cash Equivalents 56.6 67.8
Merchandise Inventories, LIFO 506.8 504.2
Other Current Assets 37.6 34.6
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Total Current Assets 625.4 634.5
Net Fixed Assets 22.7 30.8
Other Assets and Deferred Charges 1.1 1.1
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Total Assets $649.2 $666.4
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Trade Accounts Payable $110.3 $70.2
Short-Term Debt (Revolver) 88.5 135.0
Other Current Liabilities 239.5 255.2
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Total Current Liabilities 438.3 460.4
Long-Term Debt 43.1 42.9
Fresh-start Excess Net Assets (Negative Goodwill) 53.2 53.3
Unfavorable Lease Liability 24.5 24.5
Other Long-Term Liabilities 52.1 50.7
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Total Liabilities & Fresh-St. Excess Net Assets 611.2 631.8
Paid-In-Capital 66.2 62.6
Retained Earnings (Deficit) (28.2) (28.0)
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Total Liabilities & Equity $649.2 $666.4
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<FN>
* From revised plan 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 April 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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AMES DEPARTMENT STORES, INC. Exhibit 20
APRIL RESULTS VS. PLAN Page 2 of 2
MANAGEMENT FORMAT
(Unaudited)
(In Millions)
<CAPTION>
Fiscal 1995
April 1994 Year-to-Date
Actual Plan* Actual Plan*
<S> <C> <C> <C> <C>
CASH FLOW SUMMARY:
Beg. Unrestricted Cash & Cash Equiv. $38.0 $26.9 $16.5 $26.9
Cash Generated from (Used in) Operations:
Net Income (Loss) 3.0 0.7 (15.1) (15.7)
Non-Cash Income Tax Expense (Benefit) (6.5) (6.8) (6.5) (6.8)
Other 0.9 1.7 1.8 2.0
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Cash from Operations (2.6) (4.4) (19.8) (20.5)
Changes in Working Capital:
FIFO Inventory (increase) decrease (12.9) (17.2) (64.9) (63.8)
Trade Payables increase (decrease) (9.4) 2.7 36.2 (4.7)
All Other 0.3 2.5 (3.0) 1.7
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Net Changes in Working Capital (22.0) (12.0) (31.7) (66.8)
Capital Expenditures (1.0) (2.2) (2.2) (6.1)
(Incr) Decr. in Rest. Cash & Cash Equiv. (1.8) (3.7) (0.6) (9.6)
Other:
Short-Term Borrow. (Pymts) - Revolver 14.9 25.0 73.1 115.0
Payments of Capital Leases (0.3) (0.3) (0.9) (0.9)
Payments on Long-Term Debt 0.0 (0.3) (9.2) (9.0)
Increase in Deferred Financing Costs (0.8) (1.1) (0.8) (1.1)
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Total Other 13.8 23.3 62.2 104.0
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Unrestricted Cash Increase (Decrease) (13.6) 1.0 7.9 1.0
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Ending Unrestricted Cash & Cash Equiv. $24.4 $27.9 $24.4 $27.9
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<FN>
* Revised plan reported on Form 8-K dated May 27, 1994.
Page 7 of 7
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