Form 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 29, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 001-14035
Stage Stores, Inc.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0407711
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identifications No.)
10201 Main Street, Houston, 77025
Texas (Zip Code)
(Address of principal executive
offices)
(713) 667-5601
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes __ No _X_
The number of shares of common stock of Stage Stores, Inc.
outstanding as of July 14, 2000 was 26,850,223 shares of Common
Stock and 1,250,584 shares of Class B Common Stock.
Part I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Stage Stores, Inc.
Consolidated Condensed Balance Sheet
(in thousands, except par values)
(unaudited)
April 29, 2000 January 29, 2000
ASSETS
Cash and cash equivalents $21,064 $20,179
Undivided interest in accounts
receivable trust 35,527 41,600
Merchandise inventories, net 261,332 261,104
Prepaid expenses and other
current assets 37,392 34,191
Total current assets 355,315 357,074
Property, equipment and leasehold
improvements, net 164,739 181,834
Other assets 15,691 15,779
Total assets $535,745 $554,687
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $63,963 $40,955
Accrued expenses and other
current liabilities 68,676 72,177
Current portion of long-term debt 4,841 9,830
Long-term debt classified as current 487,520 492,393
Total current liabilities 625,000 615,355
Other long-term liabilities 9,443 14,299
Total liabilities 634,443 629,654
Preferred stock, par value $1.00,
non-voting, 3 shares authorized,
no shares issued or outstanding -- --
Common stock, par value $0.01,
75,000 shares authorized, 26,850
and 26,834 shares issued and
outstanding, respectively 268 268
Class B common stock, par value
$0.01, non-voting, 3,000 shares
authorized, 1,250 shares
issued and outstanding 13 13
Additional paid-in capital 267,060 266,590
Accumulated deficit (361,701) (337,500)
Accumulated other comprehensive income (4,338) (4,338)
Stockholders' deficit (98,698) (74,967)
Commitments and contingencies -- --
Total liabilities and
stockholders' deficit $535,745 $554,687
The accompanying notes are an integral part of this statement.
Stage Stores, Inc.
Consolidated Condensed Statement of Operations
(in thousands, except per share amounts)
(unaudited)
Thirteen Weeks Ended
April 29, 2000 May 1, 1999
Net sales $230,352 $262,591
Cost of sales and related buying,
occupancy and distribution expenses 172,034 192,232
Gross profit 58,318 70,359
Selling, general and
administrative expenses 54,021 61,219
Store opening and closure
program costs 15,045 749
Operating income (loss) (10,748) 8,391
Interest, net 13,428 12,111
Loss before income tax and
cumulative effect of a
change in accounting principle (24,176) (3,720)
Income tax expense (benefit) 25 (1,451)
Loss before cumulative effect of
a change in accounting principle (24,201) (2,269)
Cumulative effect of a change in
accounting principle, net of
tax - reporting costs of start-up
activities -- (2,402)
Net loss $(24,201) $(4,671)
Basic earnings (loss) per common
share data:
Basic earnings (loss) per common
share before cumulative effect
of a change in accounting principle $(0.86) $(0.08)
Cumulative effect of a change in
accounting principle, net of tax -
reporting costs of start-up activities -- (0.09)
Basic earnings (loss) per common share $(0.86) $(0.17)
Basic weighted average common
shares outstanding 28,093 27,987
Diluted earnings (loss) per
common share data:
Diluted earnings (loss) per
common share before cumulative
effect of a change in
accounting principle $(0.86) $(0.08)
Cumulative effect of a change in
accounting principle, net of
tax - reporting costs of
start-up activities -- (0.09)
Diluted earnings (loss) per
common share $(0.86) $(0.17)
Diluted weighted average common
shares outstanding 28,093 27,987
The accompanying notes are an integral part of this statement.
Stage Stores, Inc.
Consolidated Condensed Statement of Cash Flows
(in thousands)
(unaudited)
Thirteen Weeks Ended
April 29, 2000 May 1, 1999
Cash flows from operating activities:
Net loss $(24,201) $(4,671)
Adjustments to reconcile net loss to net
cash provided by (used in)
operating activities:
Depreciation and amortization 15,828 8,620
Deferred income taxes -- (208)
Accretion of discount 323 285
Amortization of debt issue costs 1,889 759
Cumulative effect of a change in
accounting principle -- 2,402
Change in working capital 19,902 (11,575)
Total adjustments 37,942 283
Net cash provided by (used in)
operating activities 13,741 (4,388)
Cash flows from investing activities:
Additions to property, equipment and
leasehold improvements (807) (7,526)
Net cash used in investing activities (807) (7,526)
Cash flows from financing activities:
Proceeds from (payments on) working
capital facility (10,000) 7,650
Proceeds from issuance of common stock -- 221
Payments on long-term debt (185) (164)
Additions to debt issue costs (1,864) --
Net cash provided by (used in)
financing activities (12,049) 7,707
Net increase (decrease) in cash and
cash equivalents 885 (4,207)
Cash and cash equivalents:
Beginning of period 20,179 12,832
End of period $21,064 $8,625
Supplemental disclosure of cash flow
information:
Interest paid $5,455 $3,205
Income taxes paid (refunded) $(106) $ 2
The accompanying notes are an integral part of this statement.
Stage Stores, Inc.
Consolidated Statement of Stockholders' Equity
For the Thirteen Weeks Ended April 29, 2000
(in thousands)
Shares Outstanding
Shares of common stock issued:
Beginning balance 26,834
Issuance of stock 16
Ending balance 26,850
Shares of Class B stock issued:
Beginning balance 1,250
Ending balance 1,250
Stockholders' Equity
Common stock issued:
Beginning balance $268
Issuance of stock --
Ending balance 268
Class B stock issued:
Beginning balance 13
Ending balance 13
Additional Paid-in Capital:
Beginning balance 266,590
Issuance of stock 470
Ending balance 267,060
Accumulated deficit and
accumulated other
comprehensive income:
Beginning balance (341,838)
Comprehensive loss:
Net loss (24,201)
Other comprehensive loss --
Total comprehensive loss (24,201)
Ending balance (366,039)
Total Stockholders' Deficit $(98,698)
Accumulated other
comprehensive loss:
Beginning balance $(4,338)
Ending balance $(4,338)
The accompanying notes are an integral part of this statement.
Stage Stores, Inc.
Notes to Unaudited Consolidated Condensed Financial Statements
1. The accompanying Unaudited Consolidated Condensed
Financial Statements of Stage Stores, Inc. ("Stage Stores") have
been prepared in accordance with Rule 10-01 of Regulation S-X and
do not include all the information and footnotes required by
generally accepted accounting principles for complete financial
statements. Those adjustments, which include only normal
recurring adjustments that are, in the opinion of management,
necessary for a fair presentation of the results of the interim
periods, have been made. The results of operations for such
interim periods are not necessarily indicative of the results of
operations for a full year. The Unaudited Consolidated Condensed
Financial Statements should be read in conjunction with the
Audited Consolidated Financial Statements and notes thereto for
the year ended January 29, 2000 filed with Stage Stores' Annual
Report on Form 10-K. The fiscal years discussed herein end on the
Saturday nearest to January 31 in the following calendar year.
For example, references to "2000" mean the fiscal year ending
February 3, 2001.
2. Stage Stores conducts its business primarily through its
wholly-owned subsidiary Specialty Retailers, Inc. ("SRI") which,
as of April 29, 2000, operated 647 family apparel stores in 33
states located throughout the United States. Stage Stores and
SRI are collectively referred to herein as the "Company".
3. On June 1, 2000, Stage Stores, SRI and Specialty
Retailer, Inc. (NV) filed for protection under Chapter 11 of
Title 11 of the United States Bankruptcy Code ("Chapter 11") in
the United States Bankruptcy Court for the Southern District of
Texas (the "Court"). Under Chapter 11, the Company is operating
its business as debtor-in-possession (see Note 2 to the Company's
Consolidated Financial Statements filed with Stage Stores' Annual
Report on Form 10-K for the year ended January 29, 2000).
The accompanying Unaudited Consolidated Condensed Financial
Statements have been prepared on a going concern basis, which
contemplates continuity of operations, realization of assets and
liquidation of liabilities in the ordinary course of business.
However, as a result of the Chapter 11 filing, such realization
of assets and liquidation of liabilities is subject to
uncertainty. Further, a plan of reorganization could materially
change the amounts reported in the consolidated financial
statements, which do not give effect to any adjustments to the
carrying value of assets or amounts of liabilities that might be
necessary as a consequence of a plan of reorganization. The
ability of the Company to continue as a going concern is
dependent upon, among other things, confirmation of a plan of
reorganization, future profitable operations, the ability to
comply with debtor-in-possession agreements and the ability to
generate sufficient cash from operations and financing sources to
meet obligations. Additionally, the accompanying Unaudited
Consolidated Condensed Financial Statements do not include any
adjustments that would be required if the Company were in
liquidation. Substantially all of the Company's pre-petition
liabilities are subject to compromise under reorganization
proceedings.
Prior to the Company's filing for protection under Chapter
11, the Company's debt to banks and bondholders was in default of
certain of the terms of the applicable loan agreements, notes and
debentures. For financial reporting purposes, those liabilities
and obligations have been classified as current liabilities in
the accompanying consolidated financial statements. The ultimate
adequacy of security for any secured debt obligations and
settlement of all liabilities and obligations cannot be
determined until a plan of reorganization is confirmed.
On June 2, 2000, the Company entered into a three year
$450.0 million debtor-in-possession financing agreement (the "DIP
Financing") with a lender to finance, among other things, the
Company's working capital requirements during Chapter 11
reorganization proceedings. On June 26, 2000, the Company was
given full and final approval for the DIP Financing agreement by
the U.S. Bankruptcy Court for the Southern District of Texas.
Borrowings under the DIP Financing are limited to the
availability under a borrowing base which includes eligible
inventory and accounts receivable and certain leasehold interest.
Borrowings under the DIP Financing agreement are payable upon
maturity and the daily interest rates are based upon a Base rate
or Eurodollar rate plus an applicable margin based on
availability as set forth in the DIP Financing agreement.
Initial borrowings under the DIP Financing were used to
terminate the Company's existing Accounts Receivable Program and
retire the Senior Revolving Credit Facility (defined herein) and
for certain closing costs associated with the DIP Financing. As
a result of the termination of the Company's existing Accounts
Receivable Program, accounts receivable generated under the
Company's private label credit card program will no longer be
transferred to the Trust but rather will be owned by SRI. Such
receivables, along with substantially all of the Company's other
assets, serve as collateral for the DIP Financing. On June 7,
2000, the Company paid the Trust $288.1 million and as a result
of this payment, all certificates in the Trust were cancelled and
the existing accounts receivable of $324.3 million was
transferred to SRI. Accordingly, the Company no longer holds a
retained interest in the Trust. Prior to the retirement of the
Trust, the Company accounted for its retained interest in the
Trust as an investment in debt securities classified as trading
securities under Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt Equity
Securities" ("SFAS 115"). As such, the retained interest was
recorded at its estimated fair value. In conjunction with the
retirement of the existing Accounts Receivable Program, the
Company will no longer account for its receivables financing
under SFAS 115.
The DIP Financing contains covenants which, among other
things, restrict the (i) incurrence of additional debt, (ii)
incurrence of capital lease obligations, (iii) aggregate amount
of capital expenditures and (iv) transactions with related
parties. In addition, the DIP Financing requires the Company to
maintain compliance with a certain specified level of earnings
before depreciation, interest, taxes and special charges.
On July 18, 2000, the U.S. Bankruptcy Court for the Southern
District of Texas approved the Company's plan to close 120
underperforming stores as part of its restructuring process. The
Company has engaged third parties to manage the inventory
liquidation process in these stores. As a result of this
announced store closure plan, the Company has reflected a $15.0
million charge in the first quarter to write off the fixed assets
and prepaid supplies associated with these 120 stores. The charge
is reflected in store opening and closure program costs in the
accompanying income statement. The Company estimates this store
closure plan will be completed within the current fiscal year.
4. During the quarter ended April 29, 2000, the Company
charged $0.5 million against the store closure accrual it
established in 1999 resulting in a remaining balance of $7.3
million.
5. The Company has provided a valuation allowance against
the net deferred tax assets generated during the quarter ended
April 29, 2000. See Note 11 to the Audited Consolidated Financial
Statements for the year ended January 29, 2000, included in Stage
Stores Annual Report on Form 10-K.
6. The following Unaudited Consolidating Condensed Financial
Statements for Stage Stores and its wholly-owned subsidiaries is
presented to satisfy disclosure requirements pursuant to Sections
13 and 15(d) of the Securities Exchange Act of 1934 with respect
to wholly-owned subsidiaries of Stage Stores. Stage Stores does
not prepare separate financial statements and related disclosures
for its wholly-owned subsidiaries SRI and Specialty Retailers,
Inc. (NV), a wholly-owned subsidiary of Stage Stores which was
incorporated during June 1997, because management has determined
that such information is not material to investors. SRI is the
primary obligor under the 8.5% Senior Notes due 2005 and the 9%
Senior Subordinated Notes due 2007 (see Note 6 to the Company's
Consolidated Financial Statements filed with Stage Stores' Annual
Report on Form 10-K for the year ended January 29, 2000). Stage
Stores and Specialty Retailers, Inc. (NV) are guarantors of such
indebtedness.
The Consolidating Condensed Financial Statements for
Stage Stores and its wholly-owned subsidiaries, including all
significant intercompany transactions eliminated in
consolidation, are presented below. The results of operations of
SRPC as reported are not indicative of the total operating
performance of the Company's Accounts Receivable Program.
Consolidating Condensed Balance Sheet
April 29, 2000
(in thousands, unaudited)
Specialty SRI SRI SRI
Retailers, Inc. Receivables Eliminations Consolidated
Purchase Co.
ASSETS
Cash and cash equivalents $19,064 $ -- $ -- $19,064
Undivided interest in
accounts receivable trust (10,808) 46,335 -- 35,527
Merchandise inventories, net 261,332 -- -- 261,332
Prepaid expenses and other
current assets 26,739 10,653 -- 37,392
Total current assets 296,327 56,988 -- 353,315
Property, equipment and
leasehold improvements, net 163,687 -- -- 163,687
Other assets 13,260 2,371 -- 15,631
Investment in subsidiaries 36,893 -- (36,893) --
Total assets $510,167 $59,359 $(36,893) $532,633
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Accounts payable $63,963 $ -- $ -- $63,963
Accrued expenses and other
current liabilities 65,744 2,770 -- 68,514
Current portion of
long-term debt 4,841 -- -- 4,841
Long-term debt classified
as current 487,520 -- -- 487,520
Total current liabilities 622,068 2,770 -- 624,838
Intercompany notes/advances 172,785 19,696 -- 192,481
Other long-term liabilities 9,443 -- -- 9,443
Investment in subsidiaries -- -- -- --
Total liabilities 804,296 22,466 -- 826,762
Preferred stock -- -- -- --
Common stock -- -- -- --
Class B common stock -- -- -- --
Additional paid-in capital 3,317 34,111 (34,111) 3,317
Accumulated earnings
(deficit) (293,108) 2,782 (2,782) (293,108)
Accumulated other
comprehensive income (4,338) -- -- (4,338)
Stockholders' equity (294,129) 36,893 (36,893) (294,129)
Total liabilities and
stockholders' equity $510,167 $59,359 $(36,893) $532,633
Consolidating Condensed Balance Sheet
April 29, 2000
(in thousands, unaudited)
Specialty
Stage Retailers, Stage Stores
Stores, Inc. Inc. (NV) Eliminations Consolidated
ASSETS
Cash and cash equivalents $ 2 $1,998 $ -- $21,064
Undivided interest in
accounts receivable trust -- -- -- 35,527
Merchandise inventories, net -- -- -- 261,332
Prepaid expenses and other
current assets -- -- -- 37,392
Total current assets 2 1,998 -- 355,315
Property, equipment and
leasehold improvements, net -- 1,052 -- 164,739
Other assets -- 60 -- 15,691
Investment in subsidiaries -- -- -- --
Total assets $ 2 $3,110 $ -- $535,745
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Accounts payable $ -- $ -- $ -- $63,963
Accrued expenses and other
current liabilities 11 151 -- 68,676
Current portion of
long-term debt -- -- -- 4,841
Long-term debt classified
as current -- -- -- 487,520
Total current liabilities 11 151 -- 625,000
Intercompany notes/advances (530) (191,951) -- --
Other long-term liabilities -- -- -- 9,443
Investment in subsidiaries 99,219 -- (99,219) --
Total liabilities 99,700 (191,800) (99,219) 634,443
Preferred stock -- -- -- --
Common stock 268 -- -- 268
Class B common stock 13 -- -- 13
Additional paid-in capital 267,060 160,915 (164,232) 267,060
Accumulated earnings (deficit) (361,701) 33,995 259,113 (361,701)
Accumulated other
comprehensive income (4,338) -- 4,338 (4,338)
Stockholders' equity (98,698) 194,910 99,219 (98,698)
Total liabilities and
stockholders' equity $ 2 $3,110 $ -- $535,745
Consolidating Condensed Balance Sheet
January 29, 2000
(in thousands)
SRI
Specialty Receivables SRI SRI
Retailers, Inc. Purchase Co. Eliminations Consolidated
ASSETS
Cash and cash equivalents $18,077 $ -- $ -- $18,077
Undivided interest in
accounts receivable trust (13,101) 54,701 -- 41,600
Merchandise inventories,
net 261,104 -- -- 261,104
Prepaid expenses 7,725 220 -- 7,945
Other current assets 17,755 8,491 -- 26,246
Total current assets 291,560 63,412 -- 354,972
Property, equipment and
leasehold improvements,
net 180,761 -- -- 180,761
Other assets 13,111 2,608 -- 15,719
Investment in subsidiaries 36,690 -- (36,690) --
Total assets $522,122 $66,020 $(36,690) $551,452
LIABILITIES AND
STOCKHOLDERS'
EQUITY (DEFICIT)
Accounts payable $40,955 $ -- $ -- $40,955
Accrued expenses and other
current liabilities 69,385 2,770 -- 72,155
Current portion of
long-term debt 9,830 -- -- 9,830
Long-term debt classified
as current 492,393 -- -- 492,393
Total current liabilities 612,563 2,770 -- 615,333
Long-term debt -- -- -- --
Other long-term liabilities 14,299 -- -- 14,299
Intercompany notes/advances 160,719 26,560 -- 187,279
Investment in subsidiaries -- -- -- --
Total liabilities 787,581 29,330 -- 816,911
Preferred stock -- -- -- --
Common stock -- -- -- --
Class B common stock -- -- -- --
Additional paid-in capital 3,317 33,908 (33,908) 3,317
Accumulated earnings
(deficit) (264,438) 2,782 (2,782) (264,438)
Accumulated other
comprehensive income (4,338) -- -- (4,338)
Stockholders' equity
(deficit) (265,459) 36,690 (36,690) (265,459)
Total liabilities
and stockholders'
equity (deficit) $522,122 $66,020 $(36,690) $551,452
Consolidating Condensed Balance Sheet
January 29, 2000
(in thousands)
Specialty
Stage Retailers, Stage Stores
Stores, Inc. Inc. (NV) Eliminations Consolidated
ASSETS
Cash and cash equivalents $102 $2,000 $ -- $20,179
Undivided interest in
accounts receivable trust -- -- -- 41,600
Merchandise inventories, net -- -- -- 261,104
Prepaid expenses -- -- -- 7,945
Other current assets -- -- -- 26,246
Total current assets 102 2,000 -- 357,074
Property, equipment and
leasehold improvements, net -- 1,073 -- 181,834
Other assets -- 60 -- 15,779
Investment in subsidiaries -- -- -- --
Total assets $102 $3,133 $ -- $554,687
LIABILITIES AND
STOCKHOLDERS'
EQUITY (DEFICIT)
Accounts payable $ -- $ -- $ -- $40,955
Accrued expenses and other
current liabilities 22 -- -- 72,177
Current portion of
long-term debt -- -- -- 9,830
Long-term debt classified
as current -- -- -- 492,393
Total current liabilities 22 -- -- 615,355
Long-term debt -- -- -- --
Other long-term liabilities -- -- -- 14,299
Intercompany notes/advances 18 (187,297) -- --
Investment in subsidiaries 75,029 -- (75,029) --
Total liabilities 75,069 (187,297) (75,029) 629,654
Preferred stock -- -- -- --
Common stock 268 -- -- 268
Class B common stock 13 -- -- 13
Additional paid-in capital 266,590 160,915 (164,232) 266,590
Accumulated earnings (deficit) (337,500) 29,515 234,923 (337,500)
Accumulated other
comprehensive income (4,338) -- 4,338 (4,338)
Stockholders' equity (deficit) (74,967) 190,430 75,029 (74,967)
Total liabilities and
stockholders' equity (deficit) $102 $3,133 $ -- $554,687
Consolidating Condensed Statement of Operations
Thirteen Weeks Ended April 29, 2000
(in thousands, unaudited)
SRI
Specialty Receivables SRI SRI
Retailers, Inc. Purchase Co. Eliminations Consolidated
Net sales $230,352 $ -- $ -- $230,352
Cost of sales and related
buying, occupancy and
distribution expenses 172,034 -- -- 172,034
Gross profit 58,318 -- -- 58,318
Selling, general
and administrative expenses 54,488 (171) -- 54,317
Store opening and closure
program costs 15,045 -- -- 15,045
Operating income (loss) (11,215) 171 -- (11,044)
Interest expense, net 17,581 171 -- 17,752
Income (loss) before
income taxes (28,796) -- -- (28,796)
Income tax expense (benefit) (126) -- -- (126)
Income (loss) before equity
in net earnings of
subsidiaries (28,670) -- -- (28,670)
Equity in net earnings
of subsidiaries -- -- -- --
Net income (loss) $(28,670) $ -- $ -- $(28,670)
Consolidating Condensed Statement of Operations
Thirteen Weeks Ended April 29, 2000
(in thousands, unaudited)
Specialty
Stage Retailers, Stage Stores
Stores, Inc. Inc. (NV) Eliminations Consolidated
Net sales $ -- $ -- $ -- $230,352
Cost of sales and related
buying, occupancy and
distribution expenses -- -- -- 172,034
Gross profit -- -- -- 58,318
Selling, general and
administrative expenses 11 (307) -- 54,021
Store opening and closure
program costs -- -- -- 15,045
Operating income (loss) (11) 307 -- (10,748)
Interest expense, net -- (4,324) -- 13,428
Income (loss) before income taxes (11) 4,631 -- (24,176)
Income tax expense (benefit) -- 151 -- 25
Income (loss) before equity in
net earnings of subsidiaries (11) 4,480 -- (24,201)
Equity in net earnings
of subsidiaries (24,190) -- 24,190 --
subsidiaries
Net income (loss) $(24,201) $4,480 $24,190 $(24,201)
Consolidating Condensed Statement of Operations
Thirteen Weeks Ended May 1, 1999
(in thousands, unaudited)
SRI
Specialty Receivables SRI SRI
Retailers, Inc. Purchase Co. Eliminations Consolidated
Net sales $262,591 $ -- $ -- $262,591
Cost of sales and related
buying, occupancy and
distribution expenses 192,232 -- -- 192,232
Gross profit 70,359 -- -- 70,359
Selling, general and
administrative expenses 62,784 (1,675) -- 61,109
Store opening and closure
program costs 749 -- -- 749
Operating income (loss) 6,826 1,675 -- 8,501
Interest expense, net 15,088 1,051 -- 16,139
Income (loss) before
income taxes (8,262) 624 -- (7,638)
Income tax expense (benefit) (3,065) 231 -- (2,834)
Income (loss) before equity
in net earnings of
subsidiaries and cumulative
effect of a change in
accounting principle (5,197) 393 -- (4,804)
Equity in net earnings
of subsidiaries (813) -- 813 --
Income (loss) before
cumulative effect of a
change in accounting
principle (6,010) 393 813 (4,804)
Cumulative effect of a
change in accounting
principle, net of
tax - reporting costs
of start-up activities (1,196) (1,206) -- (2,402)
Net income (loss) $(7,206) $(813) $813 $(7,206)
Consolidating Condensed Statement of Operations
Thirteen Weeks Ended May 1, 1999
(in thousands, unaudited)
Specialty
Stage Retailers, Stage Stores
Stores Inc. Inc. (NV) Eliminations Consolidated
Net sales $ -- $ -- $ -- $262,591
Cost of sales and related
buying, occupancy and
distribution expenses -- -- -- 192,232
Gross profit -- -- -- 70,359
Selling, general and
administrative expenses 34 76 -- 61,219
Store opening and closure
program costs -- -- -- 749
Operating income (loss) (34) (76) -- 8,391
Interest expense, net -- (4,028) -- 12,111
Income (loss) before
income taxes (34) 3,952 -- (3,720)
Income tax expense (benefit) -- 1,383 -- (1,451)
Income (loss) before equity
in net earnings of
subsidiaries and cumulative
effect of a change in
accounting principle (34) 2,569 -- (2,269)
Equity in net earnings of
subsidiaries (4,637) -- 4,637 --
Income (loss) before
cumulative effect of a
change in accounting
principle (4,671) 2,569 4,637 (2,269)
Cumulative effect of a
change in accounting
principle, net of
tax - reporting costs
of start-up activities -- -- -- (2,402)
Net income (loss) $(4,671) $2,569 $ 4,637 $(4,671)
Consolidating Condensed Statement of Cash Flows
Thirteen Weeks Ended April 29, 2000
(in thousands, unaudited)
SRI
Specialty Receivables SRI SRI
Retailers, Inc. Purchase Co. Eliminations Consolidated
Cash flows from operating
activities:
Net cash used in
operating activities $20,303 $(6,460) $ -- $13,843
Cash flows from investing
activities:
Investment in subsidiary -- -- -- --
Additions to property,
equipment and leasehold
improvements (807) -- -- (807)
Proceeds from the sales
of accounts receivable,
net (6,460) 6,460 -- --
Net cash provided by
(used in) investing
activities (7,267) 6,460 -- (807)
Cash flows from financing
activities:
Proceeds from working
capital facility (10,000) -- -- (10,000)
Proceeds from issuance
of common stock -- -- -- --
Payments on long-term
debt (185) -- -- (185)
Additions to debt
issue costs (1,864) -- -- (1,864)
Net cash
provided by (used in)
Financing activities (12,049) -- -- (12,049)
Net increase (decrease) in
cash and cash equivalents 987 -- -- 987
Cash and cash equivalents:
Beginning of period 18,077 -- -- 18,077
End of period $19,064 -- -- $19,064
Consolidating Condensed Statement of Cash Flows
Thirteen Weeks Ended April 29, 2000
(in thousands, unaudited)
Specialty
Stage Retailers, Stage Stores
Stores, Inc. Inc. (NV) Eliminations Consolidated
Cash flows from operating
activities:
Net cash used in operating
activities $(100) $ (2) $ -- $13,741
Cash flows from investing
activities:
Investment in subsidiary -- -- -- --
Additions to property,
equipment and leasehold
improvements -- -- -- (807)
Proceeds from the sales of
accounts receivable, net -- -- -- --
Net cash provided by
(used in) investing
activities -- -- -- (807)
Cash flows from financing
activities:
Proceeds from working
capital facility -- -- -- (10,000)
Proceeds from issuance
of common stock -- -- -- --
Payments on long-term debt -- -- -- (185)
Additions to debt issue costs -- -- -- (1,864)
Net cash provided by (used
in) Financing activities -- -- -- (12,049)
Net increase (decrease) in
cash and cash equivalents (100) (2) -- 885
Cash and cash equivalents:
Beginning of period 102 2,000 -- 20,179
End of period $ 2 $1,998 -- $21,064
Consolidating Condensed Statement of Cash Flows
Thirteen Weeks Ended May 1, 1999
(in thousands, unaudited)
SRI
Specialty Receivables SRI SRI
Retailers, Inc. Purchase Co. Eliminations Consolidated
Cash flows from operating
activities:
Net cash used in
operating activities $ 89 $(4,256) $ -- $(4,167)
Cash flows from investing
activities:
Investment in subsidiary -- -- -- --
Additions to property,
equipment and leasehold
improvements (7,526) -- -- (7,526)
Proceeds from the sales of
accounts receivable, net (4,256) 4,256 -- --
Net cash provided by
(used in) investing
activities (11,782) 4,256 -- (7,526)
Cash flows from financing
activities:
Proceeds from working
capital facility 7,650 -- -- 7,650
Proceeds from issuance
of common stock -- -- -- --
Proceeds from capital
contribution -- -- -- --
Payments on long-term debt (164) -- -- (164)
Net cash provided by
(used in) financing
activities 7,486 -- -- 7,486
Net increase (decrease)
in cash and cash
equivalents (4,207) -- -- (4,207)
Cash and cash equivalents:
Beginning of period 10,882 -- -- 10,882
End of period $6,675 $ -- $ -- $6,675
Consolidating Condensed Statement of Cash Flows
Thirteen Weeks Ended May 1, 1999
(in thousands, unaudited)
Specialty
Stage Retailers, Stage Stores
Stores, Inc. Inc. (NV) Eliminations Consolidated
Cash flows from operating
activities:
Net cash used in operating
activities $(103) $(118) $ -- $(4,388)
Cash flows from investing
activities:
Investment in subsidiary (118) -- 118 --
Additions to property,
equipment and leasehold
improvements -- -- -- (7,526)
Proceeds from the sales of
accounts receivable, net -- -- -- --
Net cash provided by (used
in) investing activities (118) -- 118 (7,526)
Cash flows from financing
activities:
Proceeds from working
capital facility -- -- -- 7,650
Proceeds from issuance of
common stock 221 -- -- 221
Proceeds from capital
contribution -- 118 (118) --
Payments on long-term debt -- -- -- (164)
Net cash provided by (used
in) financing activities 221 118 (118) 7,707
Net increase (decrease) in
cash and cash equivalents -- -- -- (4,207)
Cash and cash equivalents:
Beginning of period 2 1,948 -- 12,832
End of period $ 2 $1,948 $ -- $8,625
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995
Certain items discussed or incorporated by reference herein
contain forward-looking statements that involve risks and
uncertainties including, but not limited to, the ability to
obtain financing on terms reasonably satisfactory to the Company,
the ability of the Company to obtain normal trade terms from its
vendors, the ability of the Company to comply with the various
covenant requirements contained in the Company's DIP Financing
and the demand for apparel. The demand for apparel can be
affected by weather patterns, levels of competition, competitors'
marketing strategies, changes in fashion trends, availability of
product on normal payment terms and the failure to achieve the
expected results of the Company's merchandising and marketing
plans as well as its store opening and closing plans. The
occurrence of the above has had and can continue to have a
material and adverse impact on the Company's operating results.
See "Risk Factors" below. Certain information herein contains
estimates which represent management's best judgment as of the
date hereof based on information currently available; however,
the Company does not intend to update this information to reflect
developments or information obtained after the date hereof and
disclaims any legal obligation to the contrary.
General
Overview. The Company operates family apparel stores
offering moderately priced, nationally recognized brand name
apparel, accessories, cosmetics and footwear in approximately 500
small towns and communities throughout the United States. The
Company has recognized the high level of brand awareness and
demand for fashionable, quality apparel by consumers in small
markets and has identified these markets as a strategically
important and under served niche. The Company has developed a
franchise focused on small markets offering a broad range of
brand name merchandise with a high level of customer service in
convenient locations.
Significant Event . On June 1, 2000, Stage Stores, SRI and
Specialty Retailers, Inc. (NV) filed for protection under Chapter
11 of Title 11 of the United States Bankruptcy Code ("Chapter
11") in the United States Bankruptcy Court for the Southern
District of Texas (the "Court"). Under Chapter 11, the Company
will operate its business as debtor-in-possession. Additionally,
a creditor committee has been formed and will have the right to
review and object to any non-ordinary course of business
transactions and participate in the formulation of any plan or
plans of reorganization.
As of the petition date, actions to collect pre-petition
indebtedness are stayed and other contractual obligations may not
be enforced against the Company. In addition, the Company may
reject executory contracts and lease obligations, and parties
affected by these rejections may file claims with the Bankruptcy
Court in accordance with the reorganization process.
Substantially all liabilities as of the petition date are subject
to settlement under a plan of reorganization to be voted upon by
all impaired classes of creditors and equity security holders and
approved by the Bankruptcy Court.
Substantially all of the Company's liabilities are subject
to compromise under reorganization proceedings. The Company's
debt to banks and bondholders is in default of the terms of the
applicable loan agreements, notes and debentures. For financial
reporting purposes, those liabilities and obligations have been
classified as current liabilities. The ultimate adequacy of
security for any secured debt obligations and settlement of all
liabilities and obligations cannot be determined until a plan of
reorganization is confirmed.
On June 2, 2000, the Company entered into the three year
$450.0 million DIP Financing with a lender to finance, among
other things, the Company's working capital requirements during
Chapter 11 reorganization proceedings. On June 26, 2000, the
Company was given full and final approval for the DIP Financing
agreement by the U.S. Bankruptcy Court for the Southern District
of Texas. Borrowings under the DIP Financing are limited to the
availability under a borrowing base which includes eligible
inventory and accounts receivable and certain leasehold interest.
Initial borrowings under the DIP Financing were used to
retire the Company's existing Accounts Receivable Program and the
Senior Revolving Credit Facility and for certain closing costs
associated with the DIP Financing. As a result of the retirement
of the Company's existing Accounts Receivable Program, accounts
receivable generated under the Company's private label credit
card program will no longer be transferred to the Trust but
rather will be owned by SRI. Such receivables, along with
substantially all of the Company's other assets, serve as
collateral for the DIP Financing.
On July 18, 2000, the U.S. Bankruptcy Court for the Southern
District of Texas approved the Company's plan to close 120
underperforming stores as part of its restructuring process. The
Company has engaged third parties to manage the liquidation
process in these stores. As a result of this announced store
closure plan, the Company reflected a $15.0 million charge in the
first quarter to write off the fixed assets and prepaid supplies
associated with these 120 stores. The charge is reflected in
store opening and closure program costs in the accompanying
income statement.
The financial information, discussion and analysis that
follow should be read in conjunction with the Company's
Consolidated Financial Statements included in the Company's
Annual Report on Form 10-K for the year ended January 29, 2000.
Results of Operations
Thirteen Weeks Ended April 29, 2000 Compared to Thirteen Weeks
Ended May 1, 1999
Sales for the thirteen weeks ended April 29, 2000 ("current
year first quarter") decreased 12.2% to $230.4 million from
$262.6 million for the thirteen weeks ended May 1, 1999 ("prior
year first quarter"). The decrease in sales for the current year
first quarter reflects, among other things, (i) the net reduction
of 41 stores since the end of the prior year first quarter, (ii)
the impact of liquidation sales related to the Company's 2000
store closure program and (iii) a 10.6% decline in comparable
store sales. Management believes the majority of the decline in
comparable store sales was attributable to the impact of lower
inventory levels throughout the current year first quarter as a
result of a contraction in trade support from the Company's
vendors and factors. The contraction in trade support caused a
significant disruption in the Company's spring merchandise
receipt flows.
Gross profit decreased 17.2% to $58.3 million for the
current year first quarter from $70.4 million for the prior year
first quarter. Gross profit, as a percent of sales, decreased to
25.3% for the current year first quarter from 26.8% for the prior
year first quarter. The lower gross profit percentage for the
current year first quarter reflects, among other things, (i) the
impact of the increased level of promotional and liquidation
activity utilized during the quarter, (ii) the negative sales
leverage associated with the Company's fixed buying, occupancy
and distribution expenses which are included in cost of goods
sold and (iii) lower vendor discounts as a result of reduced
inventory purchases.
Selling, general and administrative ("SG&A") expenses for
the current year first quarter decreased 11.8% to $54.0 million
from $61.2 million in the prior year first quarter and, as a
percent of sales, increased to 23.5% from 23.3% in the comparable
period last year. SG&A expenses for the current year first
quarter benefited from, among other things, (i) the net year-over-
year reduction of 41stores, and (ii) the Company's continuing
efforts in controlling SG&A expenses. SG&A expenses for the
current year first quarter includes $2.0 million of operating
costs at stores which are in the process of being closed.
Store opening and closure program costs of $0.8 million for
the prior year first quarter reflect costs associated with the
opening of 10 new stores during the period, while the current
year first quarter reflects the costs associated with one new
store opening. Store opening and closure program costs for the
current quarter also includes $15.0 million write-off of fixed
assets and prepaid supplies associated with the 120 stores in the
store closure program discussed above.
As a result of the factors discussed above, operating income
for the current year first quarter decreased to a loss of $10.7
million from $8.4 million of income for the prior year first
quarter.
Net interest expense for the current year first quarter
increased 10.7% to $13.4 million from $12.1 million for the prior
year first quarter due to a higher level of average borrowings
outstanding and an increase in overall borrowing rates.
As a result of the foregoing, the Company's net loss for the
current year first quarter was $24.2 million as compared to a net
loss for the prior year first quarter of $2.3 million before the
cumulative effect of change in accounting.
In connection with the adoption of SOP 98-5, the Company
recorded the cumulative effect of change in accounting principle,
net of tax, of $2.4 million during the prior year first quarter.
The charge reflects the write-off of the unamortized
organizational costs associated with the Company's accounts
receivable trust and credit card bank.
Seasonality and Inflation
The Company's business is seasonal and annual results of
operations are highly dependent upon the fourth quarter as
quarterly sales and profits are traditionally lower during the
first three quarters (February through October) and higher during
the fourth quarter (November through January). In addition,
working capital requirements fluctuate throughout the year,
increasing substantially in October and November due to
requirements for significantly higher inventory levels in
anticipation of the holiday season.
The following table shows certain unaudited financial
information for the Company by quarter (dollars in thousands):
2000 1999
Q1 Q1 Q2 Q3 Q4
Net sales $230,352 $262,591 $269,848 $264,327 $324,801
Gross profit 58,318 70,359 74,021 77,203 2,867
Operating income (loss) (10,748) 8,391 (8,332) 12,560 (220,971)
Quarters' operating
income as a percent
of total -- N/A N/A N/A N/A
Income (loss) before
cumulative effect of a
change in accounting
principle $(24,201) $(2,269) $(15,091) $ 224 $(260,067)
Net income (loss) $(24,204) $(4,671) $(15,091) $ 224 $(262,352)
The Company does not believe that inflation had a material
effect on its results of operations during the past two years.
However, there can be no assurance that the Company's business
will not be affected by inflation in the future.
Liquidity and Capital Resources
Total working capital decreased $11.4 million to a deficit
of $269.7 million at April 29, 2000 from a deficit of $258.3
million at January 29, 2000. During the quarter, merchandise
inventories decreased $18.2 million as a result of the disruption
in the flow of merchandise during the period.
As discussed above, as a result of the Company's poor
financial performance, lack of adequate trade support to fund its
inventory working capital requirements, lack of sufficient
financial flexibility and liquidity and violations under certain
covenants under its various debt agreements, the Company filed
for protection under Chapter 11 in the United States Bankruptcy
Court for the Southern District of Texas on June 1, 2000.
On June 2, 2000, the Company entered into a three year
$450.0 million DIP Financing with a lender to finance, among
other things, the Company's working capital requirements during
Chapter 11 reorganization proceedings. On June 26, 2000, the
Company was given full and final approval for the DIP Financing
by the U.S. Bankruptcy Court for the Southern District of Texas.
Borrowings under the DIP Financing are limited to the
availability under a borrowing base which includes eligible
inventory and accounts receivable and certain leasehold interest.
Borrowings under the DIP Financing agreement are payable upon
maturity and the daily interest rates are based upon a Base rate
or Eurodollar rate plus an applicable margin based on
availability which is included on the grid contained in the DIP
Financing agreement.
Initial borrowings under the DIP Financing were used to
retire the Company's existing Accounts Receivable Program and
Senior Revolving Credit Facility (defined herein) and for certain
closing costs associated with the DIP Financing. As a result of
the retirement of the Company's existing Accounts Receivable
Program, accounts receivable generated under the Company's
private label credit card program will no longer be transferred
to the Trust but rather will be owned by Specialty Retailers,
Inc. Such receivables, along with substantially all of the
Company's other assets, serve as collateral for the DIP
Financing.
The DIP Financing contains covenants which, among other
things, restrict the (i) incurrence of additional debt, (ii)
incurrence of capital lease obligations, (iii) aggregate amount
of capital expenditures and (iv) transactions with related
parties. In addition, the DIP Financing requires the Company to
maintain compliance with a certain specified level of earnings
before depreciation, interest, taxes and special charges.
The Company's primary capital requirements are for working
capital, debt service under the DIP Financing, professional fees
during the reorganization process and capital expenditures.
Management believes cash interest payments under the DIP
Financing will be approximately $21.0 million for the remainder
of 2000. Capital expenditures for 2000 are expected to be $10.0
million primarily reflecting maintenance expenditures at the
Company's stores and infrastructure investment. Management
believes that there should be sufficient liquidity under the DIP
Financing to fund the Company's working capital requirements
during the reorganization proceedings.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time the Company and its subsidiaries are
involved in various litigation matters arising in the ordinary
course of its business.
Due to the bankruptcy filing mentioned previously, much of
the litigation mentioned below is subject to provisions of an
automatic stay against further proceedings. Under an automatic
stay, the bankruptcy court must approve of the proceedings or the
action must be specifically exempt by federal statute to
continue.
On March 30, 1999, a class action lawsuit was filed against
the Company and certain of its officers, directors and
stockholders in the United States District Court for the Southern
District of Texas by John C. Weld, Jr., a stockholder who
purchased 125 shares of the Company's common stock on August 3,
1998, alleging violations of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder (the "Weld Suit"). The Company believed that the
allegations of the Weld Suit are without merit, and on July 23,
1999, the Company filed a motion to dismiss. United States
District Judge Kenneth Hoyt entered an order on December 8, 1999
dismissing the Weld Suit. The order has been appealed by Mr.
Weld.
On March 28, 2000, the Company filed a lawsuit against Carl
Tooker, the Company's former Chairman, Chief Executive Officer
and President in the District Court of Harris County, Texas. The
lawsuit is an action for damages arising from transactions
Mr. Tooker engaged in or directed while serving as President,
Chief Executive Officer and Chairman of the Board of Directors of
the Company which transactions benefited him personally or were
otherwise contrary to his duties as an officer and director. (See
Form 8-K dated March 9, 2000). The suit also seeks recovery of
debt owed by Mr. Tooker to the Company pursuant to loans and
promissory notes Mr. Tooker caused the Company to make to him
while serving in those capacities, and for conversion of stock
collateral pledged to the Company to secure his indebtedness.
The Company also seeks a mandatory injunction requiring
Mr. Tooker to deposit into the registry of the Court all
remaining stock collateral in his possession, and for a
declaratory judgment that Mr. Tooker was properly terminated "for
cause" under the terms of his employment agreement. The Company
seeks to recover not less than an aggregate of $2,755,672,
accrued interest, punitive damages, costs and reasonable
attorneys' fees.
On or about April 27, 2000 Mr. Tooker filed an Answer and
Counterclaim against the Company and a Third Part Petition
against the Company's Interim President, Chief Executive Officer
and Chairman of the Board, John J. Wiesner, Martin Stringer,
counsel to the Special Committee, and the law firm of McKinney &
Stringer, P.C. The answer generally denies all allegations made
by the Company. Mr. Tooker seeks damages from the Company of
approximately $3.9 million, plus attorney's fees, interest, and
costs for breach of his employment contract, and a like amount,
including punitive damages, from the third-party defendants for
alleged tortious interference with his employment contract. Mr.
Tooker also seeks to impose a constructive trust on the $300,000
in the Company's possession for certain contractual benefits he
claims to be due under his employment agreement. The remaining
claims seek damages against the Company and in part against the
third-party defendants, totaling $18 million, plus punitive
damages, fees, interest and costs, on theories of defamation,
civil conspiracy, breach of fiduciary duty and breach of duty of
good faith and fair dealing. The case is in its initial
development, prior to any discovery. The Company and the third-
party defendants dispute his allegations and intend to vigorously
defend against all of Mr. Tooker's counterclaims.
In March 2000, eleven former employees of SRI d/b/a Palais
Royal, filed two separate suits in the United States District
Court for the Southern District of Texas against the Company, SRI
and Mary Elizabeth Pena, arising out of alleged conduct occurring
over an unspecified time while the plaintiffs were working at one
or more Palais Royal stores in the Houston, Texas area. The
plaintiffs allege that on separate occasions they were falsely
accused of stealing merchandise and other company property and
giving discounts for purchases against company policy. The suits
accuse the defendants of defamation, false imprisonment,
intentional infliction of mental distress, assault and violation
of the Racketeer Influenced and Corrupt Organizations (RICO) Act.
The claims seek unspecified damages for mental anguish, lost
earnings, exemplary damages, treble damages, interest, attorneys'
fees and costs. The Company denies the allegations and intends
to vigorously defend against the claims.
Management believes that none of the matters in which the
Company or its subsidiaries are currently involved, either
individually or in the aggregate, is material to the financial
position, results of operations or cash flows of the Company or
its subsidiaries.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
Substantially all of the Company's liabilities are subject
to settlement under reorganization proceedings. The Company's
debt to banks and bondholders is in default of the terms of the
applicable loan agreements, notes and debentures. For financial
reporting purposes, those liabilities and obligations have been
classified as current liabilities. The ultimate adequacy of
security for any secured debt obligations and settlement of all
liabilities and obligations cannot be determined until a plan of
reorganization is confirmed.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information
On June 6, 2000, the New York Stock Exchange informed the
Company that the trading of the Company's stock will be suspended
immediately. Following the suspension, application will be made
by the New York Stock Exchange to the Securities and Exchange
Commission to delist the Company's stock.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
The Company filed a News Release on Form 8-K dated
February 3, 2000 related to Stage Stores, Inc.
announcing an amendment to the credit agreement,
discussing the Company's cost reduction program and
reporting fourth quarter 1999 sales.
The Company filed a copy of the Fifth Amendment
Agreement to the Credit Agreement, dated as of February
3, 2000, on Form 8-K dated February 7, 2000.
The Company filed a News Release on Form 8-K dated
February 23, 2000 related to Stage Stores, Inc.
announcing the departure of the Company's President and
Chief Executive Officer and a commitment to increase
the Company's working capital facility.
The Company filed a News Release on Form 8-K dated
March 9, 2000 related to Stage Stores, Inc. announcing
fourth quarter and full year 1999 results. The Company
also provided additional details on the departure of
the Company's President and Chief Executive Officer as
announced in a News Release on Form 8-K dated February
23, 2000.
The Company filed a News Release on Form 8-K dated May
1, 2000 related to Stage Stores Inc. announcing the
departure of the Company's Vice Chairman and Chief
Financial Officer.
The Company filed a News Release on Form 8-K dated
June 1, 2000 related to Stage Stores Inc. announcing a
major restructuring under Chapter 11 of the United
States Bankruptcy Code and commencement of its
reorganization proceedings in the United States
Bankruptcy Court in Houston, Texas.
The Company filed a News Release on Form 8-K dated
June 1, 2000 related to Stage Stores Inc. announcing
the $450 million debtor-in-possession credit agreement
and announcing that on June 6, 2000, the New York Stock
Exchange informed the Company that the trading of the
Company's stock will be suspended immediately.
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.
STAGE STORES, INC.
July 21, 2000 /s/ John J. Wiesner
(Date) John J. Wiesner
Chairman, Interim Chief Executive
Officer and President
(principal executive officer)
July 21, 2000 /s/ Charles M. Sledge
(Date) Charles M. Sledge
Senior VP Finance, Treasurer and
Corporate Secretary
