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 April 30, 1994
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 parvalue 22,205,607 shares on June 10, 1994
Page 1 of 10
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THE DRESS BARN, INC. AND SUBSIDIARIES
INDEX
Page Number
Part I. FINANCIAL INFORMATION:
Item1. Financial Statements:
Consolidated Balance Sheets
April 30, 1994 (unaudited)
and July 31, 1993 I-3
Consolidated Statements of Earnings
(unaudited) for the Thirteen and
Thirty-nine weeks ended
April 30, 1994 and April 24, 1993 I-4 and I-5
Consolidated Statements of Cash Flows
(unaudited) for the Thirty-nine weeks
ended April 30, 1994 and April
24, 1993 I-6
Notes to Consolidated Financial
Statements (unaudited) I-7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations I-8 and I-9
Part II. OTHER INFORMATION:
Item 1. Legal Proceedings *
Item 2. Changes in Securities *
Item 3. Defaults Upon Senior Securities *
Item 4. Submission of Matters to a Vote
of Security Holders *
Item 5. Other Information *
Item 6. Exhibits and Reports on Form 8-K I-10
*Not applicable in this filing.
I -2
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The Dress Barn, Inc. and Subsidiaries
Consolidated Balance Sheets
April 30, July 31,
ASSETS 1994 1993
Current Assets: (unaudited)
Cash & cash equivalents $17,188,765 $10,054,792
Marketable securities 51,567,154 51,023,754
Merchandise inventories 83,480,456 73,403,238
Prepaid expenses and other 5,846,198 8,100,021
Total Current Assets 158,082,573 142,581,805
Property and Equipment:
Leasehold improvements 42,105,675 35,013,977
Fixtures and equipment 66,194,756 56,058,888
Computer software 5,268,793 4,135,985
Automotive equipment 277,264 316,408
113,846,488 95,525,258
Less accumulated depreciation
and amortization 45,121,977 36,578,447
68,724,511 58,946,811
Other Assets 729,333 857,041
$227,536,417 $202,385,657
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable- trade $54,552,697 $39,990,472
Accrued expenses 14,291,310 15,698,909
Customer credits 1,774,101 1,406,987
Income taxes payable 266,377 2,009,266
Total Current Liabilities 70,884,485 59,105,634
Deferred Income Taxes 1,119,351 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- 23,201,724 and 23,134,662
shares, respectively
Outstanding- 22,196,724 and 22,129,662
shares, respectively 1,160,086 1,156,733
Additional paid-in capital 13,473,427 12,789,169
Retained earnings 146,604,680 133,762,382
Treasury stock, at cost (5,705,612) (5,705,612)
155,532,581 142,002,672
$227,536,417 $202,385,657
See notes to consolidated financial statements (unaudited)
I-3
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The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Earnings- Third Quarter
Thirteen Weeks Ended
April 30, April 24, April 26,
1994 1993 1992
Net sales $112,861,564 $95,224,924 $90,974,453
Costs and expenses:
Cost of sales,
including occupancy
and buying costs 70,712,996 59,950,620 56,744,494
Selling, general
and administrative 35,601,291 30,315,287 27,432,056
Interest(income)net (289,683) (506,123) (552,077)
106,024,604 89,759,784 83,624,473
Earnings before
income taxes 6,836,960 5,465,140 7,349,980
Income taxes 2,530,000 1,967,450 2,587,000
Net Earnings $4,306,960 $3,497,690 $4,762,980
Earnings per share $0.19 $0.16 $0.22
Weighted average
shares outstanding 22,191,562 22,100,163 21,808,941
See notes to consolidated financial statements (unaudited)
I-4
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The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Earnings- Nine Months
Thirty-Nine Weeks Ended
April 30, April 24, April 26,
1994 1993 1992
Net sales $339,138,450 $298,756,088 $261,961,287
Costs and expenses:
Cost of sales, including
occupancy and
buying costs 215,501,156 188,920,784 167,075,453
Selling, general
and administrative 104,746,383 92,004,670 80,823,286
Interest(income) net (1,493,386) (1,478,729) (2,003,838)
318,754,153 279,446,725 245,894,901
Earnings before
income taxes 20,384,297 19,309,363 16,066,386
Income taxes 7,542,000 6,951,450 5,653,000
Net Earnings $12,842,297 $12,357,913 $10,413,386
Earnings per share $0.58 $0.56 $0.48
Weighted average
shares outstanding 22,167,310 21,983,819 21,793,107
See notes to consolidated financial statements (unaudited)
I-5
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The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Thirty-Nine Weeks Ended
April 30, April 24,
1994 1993
Operating Activities:
Net earnings $12,842,297 $12,357,913
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depreciation and amortization of
property and equipment 7,762,200 6,226,900
(Decrease)increase in deferred
income taxes (158,000) (242,000)
Deferred compensation 236,200 195,600
Changes in assets and liabilities:
Increase in merchandise inventories (10,077,218)(11,366,193)
Decrease in prepaid expenses 2,253,823 2,183,746
Decrease in other assets 127,708 258,705
Increase-accounts payable- trade 14,562,225 9,546,153
(Decrease)in accrued expenses (1,407,599) (1,435,696)
Increase in customer credits 367,1133 14,500
(Decrease) in income taxes payable (1,742,889) (2,292,584)
Total adjustments 11,923,563 3,389,131
Net cash provided by
operating activities 24,765,860 15,747,044
Investing Activities:
Purchases of property and equipment (17,539,900)(12,849,244)
Sales and maturities of
marketable securities (14,358,078)(18,356,033)
Purchases of marketable securities 13,814,678 14,200,657
Net cash used in investing activities(18,083,300)(17,004,620)
Financing Activities
Proceeds from Employee
Stock Purchase Plan 295,268 258,380
Proceeds from stock options exercised 156,145 1,016,929
Net cash provided by financing activities451,413 1,275,309
Net increase in cash
and cash equivalents 7,133,973 17,733
Cash and cash equivalents-
beginning of period 10,054,792 4,631,246
Cash and cash equivalents-
end of period $17,188,765 $4,648,979
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $10,054,792 $8,117,397
See notes to consolidated financial statements (unaudited)
I-6
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THE DRESS BARN, INC. AND SUBSIDIARIES
NOTES 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 April 30, 1994, 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-7
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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 683 stores in operation at
April 30, 1994 as compared with 626 at April 24, 1993. During the
thirty-nine weeks ended April 30, 1994, the Company opened 68 stores and
closed 26 for a net addition of 42 stores during the nine months.
The following summarizes the financial results for the thirteen and
thirty-nine week periods ended April 30, 1994 versus the comparable periods
last year:
Third Quarter Nine Months
% Change % of Sales % Change % of Sales
from L/Y T/Y L/Y from L/Y T/Y L/Y
Net Sales 18.5% 13.5%
Gross Profit, less
Occupancy & Buying 19.5% 37.3% 37.0% 12.6% 36.5% 36.8%
Selling, General and
Admin. Expenses 17.4% 31.5% 31.8% 13.8% 30.9% 30.8%
Operating Income 32.0% 5.8% 5.2% 5.9% 5.6% 6.0%
Interest Income -42.8% 0.3% 0.5% 1.0% 0.4% 0.5%
Income Taxes 28.6% 2.2% 2.1% 8.5% 2.2% 2.3%
Net Income 23.1% 3.8% 3.7% 3.9% 3.8% 4.1%
Net sales increased due to the increased number of stores open
during both fiscal periods this year versus last. Sales in the
third quarter were enhanced by a 6% increase in comparable store
sales. For the nine month period, comparable store sales were
flat.
Gross profit less occupancy and buying costs ("GP") as a
percentage of sales for the third quarter increased primarily
due to higher initial margins. For the nine month period, GP
decreased as a percentage of sales due to increased markdowns,
especially in the second quarter, and increased occupancy costs
from new stores.
Selling, general and administrative expenses ("SGA") as a
percentage of sales for the third quarter decreased due to the
increase in comparable store sales. In the nine month period,
SGA as a percentage of sales increased as tight expense controls
over variable expenses did not provide savings to cover the
shortfall in sales from planned levels.
Interest income decreased in the third quarter and marginally
increased in the nine month period as longer term investments
that matured this year were reinvested in new investments with
lower returns.
The effective tax rate for the thirty-nine weeks ended April 30,
1994 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.
I-8
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THE DRESS BARN, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Liquidity and Capital Resources
During the nine months ended April 30, 1994 there was no material
change in the Company's liquidity or capital resources. Capital
expenditures during the nine months utilized internally generated
funds.
At April 30, 1994, the Company had working capital of $87,198,000
and three bank credit lines totalling $75,000,000 without any
outstanding borrowings.
I-9
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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)
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