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 28, 1995
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 22,380,630 shares on December 7, 1995
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 28, 1995 (unaudited)
and July 29, 1995 I-3
Consolidated Statements of Earnings
(unaudited) for the Thirteen weeks
ended October 28, 1995 and October
29, 1994 I-4
Consolidated Statements of Cash Flows
(unaudited) for the Thirteen weeks ended
October 28, 1995 and October 29, 1994 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 28, July 29,
ASSETS 1995 1995
--------------- --------------
Current Assets: (unaudited)
Cash & cash equivalents $6,817,938 $7,378,747
Marketable securities 63,480,799 64,412,660
Merchandise inventories 98,923,692 88,044,774
Prepaid expenses and 3,325,889 3,439,685
other
--------------- --------------
Total Current Assets 172,548,318 163,275,866
--------------- --------------
Property and Equipment:
Leasehold improvements 50,645,859 48,908,048
Fixtures and equipment 84,603,983 80,617,805
Computer software 7,006,253 6,915,150
Automotive equipment 255,237 255,237
--------------- --------------
142,511,332 136,696,240
Less accumulated
depreciation
and amortization 61,808,338 57,072,264
--------------- --------------
80,702,994 79,623,976
--------------- --------------
Other Assets 758,923 621,213
=============== ==============
$254,010,235 $243,521,055
=============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable- trade $44,588,088 $38,424,376
Accrued expenses 13,212,914 16,652,543
Customer credits 1,354,227 1,487,579
Income taxes payable 5,047,469 3,401,456
--------------- --------------
Total Current 64,202,698 59,965,954
Liabilities
--------------- --------------
Deferred Income Taxes 1,117,163 1,117,163
--------------- --------------
Long Term Debt 3,500,000 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- 23,335,480 and 23,320,108 shares,
respectively
Outstanding- 22,330,480 and
22,315,108 shares,respectively 1,166,774 1,166,005
Additional paid-in capital 15,282,006 15,055,061
Retained earnings 174,225,805 168,201,083
Treasury stock, at cost (5,705,612) (5,705,612)
Unrealized holding gains
on investments 221,401 221,401
--------------- --------------
185,190,374 178,937,938
=============== ==============
$254,010,235 $243,521,055
=============== ==============
See notes to consolidated financial statements
(unaudited)
I-3
<PAGE>
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Earnings
Thirteen Weeks Ended
--------------------------------------
October 28, October 29,
1995 1994
--------------- ---------------
Net sales $137,350,550 $130,075,923
--------------- ---------------
Costs and expenses:
Cost of sales, including
occupancy and buying costs 89,486,279 83,383,455
Selling, general and administrative 39,044,162 37,046,795
Interest (income) - net (743,118) (500,618)
--------------- ---------------
127,787,323 119,929,632
--------------- ---------------
Earnings before income taxes 9,563,227 10,146,291
Income taxes 3,538,000 3,754,000
--------------- ---------------
Net Earnings $6,025,227 $6,392,291
=============== ===============
Earnings per share $0.27 $0.29
=============== ===============
Weighted average shares outstanding 22,323,404 22,235,042
=============== ===============
See notes to consolidated financial statements
(unaudited)
I-4
<PAGE>
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Thirteen Weeks Ended
------------------------------------
October 28, October 29,
1995 1994
-------------- --------------
Operating Activities:
Net earnings $6,025,227 $6,392,291
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization of
property and equipment 4,736,074 3,134,700
Increase in deferred income taxes 0 400,812
Deferred compensation 46,387 51,150
Changes in assets and liabilities:
Increase in merchandise inventories (10,878,918) (13,335,216)
Decrease in prepaid expenses 113,796 913,842
(Increase) decrease in other assets (137,710) 4,078
Increase in accounts payable- trade 6,163,712 5,945,859
(Decrease) increase in accrued
expenses (3,439,629) 565,704
Decrease in customer credits (133,352) (89,193)
Increase in income taxes payable 1,646,013 2,625,535
-------------- --------------
Total adjustments (1,883,627) 217,271
-------------- --------------
Net cash provided by operating activities 4,141,600 6,609,562
-------------- --------------
Investing Activities:
Purchases of property and equipment (5,815,092) (6,979,327)
Sales and maturities of marketable
securities 8,978,843 5,626,198
Purchases of marketable securities (8,046,982) (7,078,942)
-------------- --------------
Net cash used in investing activities (4,883,231) (8,432,071)
-------------- --------------
Financing Activities:
Proceeds from long term debt -- 3,500,000
Proceeds from Employee Stock Purchase Plan 87,500 99,006
Proceeds from stock options exercised 93,322 19,266
-------------- --------------
Net cash provided by financing activities 180,822 3,618,272
-------------- --------------
Net (decrease) increase in cash and cash
equivalents (560,809) 1,795,763
Cash and cash equivalents- beginning of
period 7,378,747 6,668,006
-------------- --------------
Cash and cash equivalents- end of period $6,817,938 $8,463,769
============== ==============
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $1,891,987 $694,968
============== ==============
See notes to consolidated financial statements (unaudited)
I-5
<PAGE>
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 29, 1995 Annual Report to
Shareholders.
The results of operations for the period ended October 28, 1995, 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 776 stores in operation at
October 28, 1995 as compared with 727 at October 29, 1994. During the 13 weeks
ended October 28, 1995, the Company opened 23 stores and closed 13 for a net
addition of 10 stores during the quarter.
Net sales for the thirteen weeks ended October 28, 1995 increased 5.6%
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 4.0% for the period.
Gross profit less occupancy and buying costs as a percentage of net sales
decreased to 34.8% from 35.9% last year for the thirteen week period. The
improvement in maintained margin did not offset the increase in store occupancy
costs as a percent of sales.
As a percent of sales, SG&A expenses (excluding depreciation) decreased to
25.0% in 1995 versus 25.9% of sales in 1994. This decrease was achieved despite
no leverage as a result of the decrease in comp sales for the quarter. Many
expenses decreased in total dollars from last year, such as supplies, medical
insurance and home office payroll. The company-wide focus on cost reductions and
productivity improvements led to these decreases. Depreciation as a percent of
sales increased to 3.4% from 2.6% last year. Included in this year's
depreciation is a reserve for anticipated store closings, which are
substantially higher than last year.
Interest income for the quarter increased to $743,118 this year versus
$500,618 in last year's first quarter as the funds available for short term
investment increased.
The effective tax rate for the thirteen weeks ended October 28, 1995 was
37.0%, the same as the effective rate for the fiscal year ended July 29, 1995.
As a result of the above factors, net earnings for the quarter ended
October 28, 1995 were $6,025,227, a decrease of 5.7% versus the $6,392,291
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 28, 1995, the Company had working capital of $108,346,000 and
three bank credit lines totaling $90,000,000 without any outstanding borrowings.
The Company has minimal long-term debt - 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)
I - 9
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