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 29, 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.)
30 Dunnigan Drive, Suffern, New York 10901
(Address of principal executive offices) (Zip Code)
(914) 369-4500
(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 22,240,050 shares on December 7, 1994
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 29, 1994 (unaudited)
and July 30, 1994 I-3
Consolidated Statements of Earnings
(unaudited) for the Thirteen weeks
ended October 29, 1994 and October
30, 1993 I-4
Consolidated Statements of Cash Flows
(unaudited) for the Thirteen weeks
ended October 29, 1994 and October
30, 1993 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
Consolidated Balance Sheets
October 29, July 30,
ASSETS 1994 1994
Current Assets: (unaudited)
Cash & cash equivalents $8,463,769 $6,668,006
Marketable securities 56,774,722 55,321,978
Merchandise inventories 92,936,232 79,601,016
Prepaid expenses and other 3,323,584 4,237,426
Total Current Assets 161,498,307 145,828,426
Property and Equipment:
Leasehold improvements 45,197,702 43,173,926
Fixtures and equipment 71,163,158 66,026,065
Computer software 6,389,809 6,360,151
Automotive equipment 236,291 251,571
122,986,960 115,811,713
Less accumulated depreciation
and amortization 47,789,815 44,459,195
75,197,145 71,352,518
Other Assets 677,633 681,711
$237,373,085 $217,862,655
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable- trade $47,646,467 $41,700,608
Accrued expenses 13,606,717 13,041,013
Customer credits 1,052,330 1,141,523
Income taxes payable 3,841,742 894,395
Total Current Liabilities 66,147,256 56,777,539
Deferred Income Taxes 1,966,163 1,887,163
Long Term Debt 3,500,000 --
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- 23,245,050 and 23,226,768
shares, respectively
Outstanding- 22,240,050 and 22,221,768
shares, respectively 1,162,252 1,161,338
Additional paid-in capital 13,995,136 13,826,629
Retained earnings 156,307,890 149,915,598
Treasury stock, at cost (5,705,612) (5,705,612)
165,759,666 159,197,953
$237,373,085 $217,862,655
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Earnings
Thirteen Weeks Ended
October 29, October 30,
1994 1993
Net sales $130,075,923 $119,700,127
Costs and expenses:
Cost of sales, including
occupancy and buying costs 80,863,827 74,678,447
Selling, general and administrative 39,566,423 35,482,241
Interest (income) - net (500,618) (628,515)
119,929,632 109,532,173
Earnings before income taxes 10,146,291 10,167,954
Income taxes 3,754,000 3,762,000
Net Earnings $6,392,291 $6,405,954
Earnings per share $0.29 $0.29
Weighted average shares outstanding 22,235,042 22,147,034
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Thirteen Weeks Ended
October 29, October 24,
1994 1993
Operating Activities:
Net earnings $6,392,291 $6,405,954
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization of property and
equipment 3,134,700 2,582,400
Increase in deferred income taxes 400,812 395,149
Deferred compensation 51,150 78,700
Changes in assets and liabilities:
Increase in merchandise inventories (13,335,216) (11,709,424)
Decrease in prepaid expenses 913,842 1,209,334
Decrease in other assets 4,078 36,423
Increase in accounts payable- trade 5,945,859 3,805,679
Increase (decrease) in accrued expenses 565,704 (885,550)
Decrease in customer credits (89,193) (61,912)
Increase in income taxes payable 2,625,535 3,101,085
Total adjustments 217,271 (1,448,116)
Net cash provided by
operating activities 6,609,562 4,957,838
Investing Activities:
Purchases of property and equipment (6,979,327) (5,288,478)
Sales and maturities of
marketable securities 5,626,198 7,908,197
Purchases of marketable securities (7,078,942) (8,536,597)
Net cash used in investing activities (8,432,071) (6,429,091)
Financing Activities:
Proceeds from long term debt 3,500,000 --
Proceeds from Employee Stock Purchase Plan 99,006 102,501
Proceeds from stock options exercised 19,266 47,238
Net cash provided by
financing activities 3,618,272 149,739
Net increase (decrease) in
cash and cash equivalents 1,795,763 (809,301)
Cash and cash equivalents-
beginning of period 6,668,006 10,054,792
Cash and cash equivalents- end of period $8,463,769 $9,245,491
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $694,968 $1,022,587
See notes to consolidated financial statements (unaudited)
I - 5
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 30, 1994
Annual Report to Shareholders.
The results of operations for the period ended October 29, 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 - 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 727 stores in operation
at October 29, 1994 as compared with 664 at October 30, 1993. During the 13
weeks ended October 29, 1994, the Company opened 48 stores and closed 9 for a
net addition of 39 stores during the quarter.
Net sales for the thirteen weeks ended October 29, 1994 increased 8.6%
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 year.
Comparable store sales fell 1.0% for the period.
Gross profit less occupancy and buying costs as a percentage of net
sales increased to 37.8% from 37.6% last year for the thirteen week period.
This increase was due to improved initial margins, which more than offset the
increase in markdowns as a percent of sales this year versus last year.
Selling, general and administrative expenses as a percentage of net
sales increased to 30.4% in 1994 versus 29.6% in last year's first quarter.
This increase in SG&A expenses reflected no leverage as a result of the
decrease in comparable store sales for the quarter. Increased expenditures
for store payroll, advertising, supplies and maintenance and repairs were the
primary factors in the increase.
Interest income for the quarter decreased to $500,618 this year versus
$628,515 in last year's first quarter as the increase in funds available for
short term investment was accompanied by a decline in the market value of the
municipal bond portfolio.
The effective tax rate for the thirteen weeks ended October 29, 1994
was 37.0%, the same as the effective rate for the fiscal year ended
July 30, 1994.
As a result of the above factors, net earnings for the quarter ended
October 29, 1994 were $6,392,291, a decrease of $13,663 or 0.2% versus the
$6,405,954 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 29, 1994, the Company had working capital of $95,351,000
and three bank credit lines totaling $76,500,000 without any outstanding
borrowings. The Company has long-term debt for the first time - a $3.5 million
below-market interest rate loan from New York State to help finance the move
to Suffern. 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)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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