UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 30, 1993
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 0-11736
The Dress Barn, Inc
Exact name of registrant as specified in its charter)
Connecticut 06-0812960
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
88 Hamilton Avenue, Stamford, Connecticut 06902
(Address of principal executive offices) (Zip Code)
(203) 327-4242
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report.)
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 X No
APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
.05 par value 22,164,008 shares on December 9, 1993
Page 1 of 9
THE DRESS BARN, INC. AND SUBSIDIARIES
INDEX
Page
Number
Part I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Consolidated Balance Sheets
October 30, 1993 (unaudited)
and July 31, 1993 I-3
Consolidated Statements of Earnings
(unaudited) for the Thirteen weeks
ended October 30, 1993 and October
24, 1992 I-4
Consolidated Statements of Cash Flows
(unaudited) for the Thirteen weeks
ended October 30, 1993 and October
24, 1992 I-5
Notes to Consolidated Financial
Statements (unaudited) I-6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations I-7 and I-8
Part II. OTHER INFORMATION:
Item 1. Legal Proceedings *
Item 2. Changes in Securities *
Item 3. Defaults Upon Senior Securities *
Item 4. Submissions of Matters to a Vote
of Security Holders *
Item 5. Other Information *
Item 6. Exhibits and Reports on Form 8-K I-9
* Not applicable in this filing.
I - 2
THE DRESS BARN, INC. AND SUBSIDIARIES
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. Financial Statements
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and do not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation for interim periods have been included. These
consolidated financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's
July 31, 1993 Annual Report to Shareholders.
The results of operations for the period ended October 30, 1993, are not
necessarily indicative of the operating results for the full year.
2. Reclassification
Certain reclassification have been made to prior year's financial
statements to conform with the current year's presentation.
I - 6
THE DRESS BARN, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The Company's net sales reflect the results of 664 stores in operation at
October 30, 1993 as compared with 587 at October 24, 1992. During the 13 weeks
ended October 30, 1993, the Company opened 30 stores and closed 7 for a net
addition of 23 stores during the quarter.
Net sales for the thirteen weeks ended October 30, 1993 increased by
$14,752,000 or 14.1%, compared to last year's first quarter. This increase was
due to the increased number of stores open during the full fiscal period this
year versus last as comparable store sales were flat for the period.
Gross profit less occupancy and buying costs as a percentage of net sales
increased to 37.6% from 37.3% last year for the thirteen week period. This
increase was due to improved initial margins and reduced shrinkage, which
offset a modest increases in markdowns as a percent of sales this year versus
last year's quarter.
Selling, general and administrative expenses as a percentage of net sales
increased slightly to 29.6% in 1993 versus 29.5% in last year's first quarter.
This increase in SG&A expenses reflected no leverage as a result of the flat
comparable store sales for the quarter. The Company continues to control
store labor and benefit costs; however, increased advertising and other store
expenses as a percent of sales led to the increase in SG&A over last year's
first quarter.
Interest income for the quarter increased to $628,515 this year versus
$484,536 in last year's first quarter as the increase in funds available for
short term investment was accompanied by higher investment yields in 1993
versus 1992.
The effective tax rate for the thirteen weeks ended October 30, 1993 was
37.0% as compared to the 36.0% effective tax rate in effect for the fiscal
year ended July 31, 1993. This reflects the increase in the corporate federal
tax rate specified in the Omnibus Budget Reconciliation Act of 1993.
As a result of the above factors, net earnings for the quarter ended
October 30,1993 were $6,405,954, an increase of $859,914 or 15.5% versus
the $5,546,040 earned for the same period a year earlier.
I - 7
THE DRESS BARN, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Liquidity and Capital Resources
At October 30, 1993, the Company had working capital of $87,836,000
and three bank credit lines totalling $70,000,000 without any outstanding
borrowings.Capital expenditures during the quarter utilized internally
generated funds.
I - 8
Part II - OTHER INFORMATION
Item 6 -- Exhibits and Reports on Form 8-K
(a) No exhibits are required to be filed herewith.
(b) No reports on Form 8-K have been filed during
the quarter for which this report is filed.
SIGNATURE
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.
BY: /s/ ARMAND CORREIA
Armand Correia
Senior Vice President
(Principal Financial
and Accounting Officer)
I - 9
Dress Barn, Inc. and Subsidiaries
Consolidated Balance Sheets
October 30, July 31,
ASSETS 1993 1993
Current Assets: (unaudited)
Cash & cash equivalents $9,245,491 $10,054,792
Marketable securities 51,652,154 51,023,754
Merchandise inventories 85,112,662 73,403,238
Prepaid expenses and other 6,890,687 8,100,021
Total Current Assets 152,900,994 142,581,805
Property and Equipment:
Leasehold improvements 36,868,057 35,013,977
Fixtures and equipment 59,909,216 56,058,888
Computer software 4,479,655 4,135,985
Automotive equipment 316,597 316,408
101,573,525 95,525,258
Less accumulated depreciation
and amortization 39,920,636 36,578,447
61,652,889 58,946,811
Other Assets 820,618 857,041
$215,374,501 $202,385,657
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable- trade $43,796,151 $39,990,472
Accrued expenses 14,813,359 15,698,909
Customer credits 1,345,075 1,406,987
Income taxes payable 5,110,351 2,009,266
Total Current Liabilities 65,064,936 59,105,634
Deferred Income Taxes 1,672,500 1,277,351
Commitments
Shareholders' Equity:
Preferred stock, par value $.05 per share:
Authorized- 100,000 shares
Issued and outstanding- none -- --
Common stock, par value $.05 per share:
Authorized- 30,000,000 shares
Issued- 23,164,697 and 23,134,662
shares, respectively
Outstanding- 22,159,697 and 22,129,662
shares, respectively 1,158,23 1,156,733
Additional paid-in capital 13,016,106 12,789,169
Retained earnings 140,168,336 133,762,382
Treasury stock, at cost (5,705,612) (5,705,612)
148,637,065 142,002,672
$215,374,501 $202,385,657
See notes to consolidated financial statements (unaudited)
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Thirteen Weeks Ended
October 30, October 24,
1993 1992
Operating Activities:
Net earnings $6,405,954 $5,546,040
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization of property and
equipment 2,582,400 2,572,300
(Decrease) increase in deferred income taxes 395,149 (110,000)
Deferred compensation 78,700 65,100
Changes in assets and liabilities:
Decrease in merchandise inventories (11,709,424) (5,509,717)
Decrease in prepaid expenses 1,209,334 2,612,914
Decrease in other assets 36,423 (5,501)
(Decrease)-accounts payable- trade 3,805,679 (2,518,067)
(Decrease) in accrued expenses (885,550) (1,944,956)
Increase in customer credits (61,912) (78,340)
(Decrease) in income taxes payable 3,101,085 2,178,981
Total adjustments (1,448,116) (2,737,286)
Net cash provided by operating activities 4,957,838 2,808,754
Investing Activities
Purchases of property and equipment (5,288,478) (5,210,715)
Sales and maturities of marketable securities 7,908,197 9,681,744
Purchases of marketable securities (8,536,597) (10,900,120)
Net cash used in investing activities (5,916,878) (6,429,091)
Financing Activities
Proceeds from Employee Stock Purchase Plan 102,501 76,605
Proceeds from stock options exercised 47,238 192,575
Net cash provided by financing activities 149,739 269,180
Net increase (decrease) in
cash and cash equivalents (809,301) (3,351,157)
Cash and cash equivalents-beginning of period 10,054,792 4,631,246
Cash and cash equivalents- end of period $9,245,491 $1,280,089
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $1,022,587 $1,307,743
See notes to consolidated financial statements (unaudited)
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Earnings
Thirteen Weeks Ended
October 30, October 24, October 26,
1993 1992 1991
Net sales $119,700,127 $104,948,426 $87,804,543
Costs and expenses:
Cost of sales, including
occupancy and buying costs 74,678,447 65,843,441 55,517,631
Selling, general and administrative 35,482,241 30,923,481 26,989,088
Interest (income) - net (628,515) (484,536) (785,197)
109,532,173 96,282,386 81,721,523
Earnings before income taxes 10,167,954 8,666,040 6,083,021
Income taxes 3,762,000 3,120,000 2,139,000
Net Earnings $6,405,954 $5,546,040 $3,944,021
Earnings per share $0.29 $0.25 $0.18
Weighted average shares outstanding 22,147,034 21,889,715 21,771,750
See notes to consolidated financial statements (unaudited)
