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 29, 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 No X
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 22,302,369 shares on June 9, 1995
Page 1 of 10
THE DRESS BARN, INC. AND SUBSIDIARIES
INDEX
Page
Number
Part I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Consolidated Balance Sheets
April 29, 1995 (unaudited)
and July 30, 1994 I-3
Consolidated Statements of Earnings
(unaudited) for the Thirteen and
Thirty-nine weeks ended
April 29, 1995 and April 30, 1994 I-4 and I-5
Consolidated Statements of Cash Flows
(unaudited) for the Thirty-nine weeks
ended April 29, 1995 and April
30, 1994 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
The Dress Barn, Inc. and Subsidiaries
Consolidated Balance Sheets
April 29, July 30,
ASSETS 1995 1994
Current Assets: (unaudited) (unaudited)
Cash & cash equivalents $7,391,183 $6,668,006
Marketable securities 57,615,222 55,321,978
Merchandise inventories 106,699,968 79,601,016
Prepaid expenses and other 5,415,712 4,237,426
Total Current Assets 177,122,085 145,828,426
Property and Equipment:
Leasehold improvements 48,587,970 43,173,926
Fixtures and equipment 78,588,227 66,026,065
Computer software 6,982,330 6,360,151
Automotive equipment 255,237 251,571
134,413,764 115,811,713
Less accumulated depreciation
and amortization 54,772,538 44,459,195
79,641,226 71,352,518
Other Assets 647,451 681,711
$257,410,762 $217,862,655
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable- trade $62,232,883 $41,700,608
Accrued expenses 12,077,213 13,041,013
Customer credits 1,529,593 1,141,523
Income taxes payable 2,496,105 894,395
Total Current Liabilities 78,335,794 56,777,539
Deferred Income Taxes 2,057,163 1,887,163
Long Term Debt 3,500,000 --
Committments
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- 23,281,640 and 23,226,768
shares, respectively
Outstanding- 22,276,640 and 22,221,768
shares, respectively 1,164,082 1,161,338
Additional paid-in capital 14,326,122 13,826,629
Retained earnings 163,733,213 149,915,598
Treasury stock, at cost (5,705,612) (5,705,612)
173,517,805 159,197,953
$257,410,762 $217,862,655
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Earnings- Third Quarter
Unaudited
Thirteen Weeks Ended
April 29, April 30,
1995 1994
Net sales $123,540,622 $112,861,564
Costs and expenses:
Cost of sales, including
occupancy and buying costs 76,824,115 70,712,996
Selling, general and administrative 39,075,129 35,601,291
Interest (income) - net (301,722) (289,683)
115,597,522 106,024,604
Earnings before income taxes 7,943,100 6,836,960
Income taxes 2,941,000 2,530,000
Net Earnings $5,002,100 $4,306,960
Earnings per share $0.22 $0.19
Weighted average shares outstanding 22,274,692 22,191,562
See notes to consolidated financial statements (unaudited)
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Earnings- Nine Months
Unaudited
Thirty Nine Weeks Ended
April 29, April 30,
1995 1994
Net sales $370,277,044 $339,138,450
Costs and expenses:
Cost of sales, including
occupancy and buying costs 233,023,767 215,501,156
Selling, general and administrative 116,599,415 104,746,383
Interest (income) - net (1,279,752) (1,493,386)
348,343,430 318,754,153
Earnings before income taxes 21,933,614 20,384,297
Income taxes 8,116,000 7,542,000
Net Earnings $13,817,614 $12,842,297
Earnings per share $0.62 $0.58
Weighted average shares outstanding 22,254,281 22,167,310
See notes to consolidated financial statements (unaudited)
The Dress Barn, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Unaudited
Thirty-Nine Weeks Ended
April 29, April 30,
1995 1994
Operating Activities:
Net earnings $13,817,614 $12,842,297
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization of property and
equipment 9,721,800 7,762,200
Increase (decrease) in
deferred income taxes 170,000 (158,000)
Deferred compensation 151,200 236,200
Changes in assets and liabilities:
Increase in merchandise inventories (27,098,952) (10,077,218)
(Increase) decrease in prepaid expenses (1,178,286) 2,253,823
Decrease in other assets 34,260 127,708
Increase-accounts payable- trade 20,532,275 14,562,225
(Decrease) in accrued expenses (963,800) (1,407,599)
Increase in customer credits 388,070 367,113
Increase(decrease)in income taxes payable 1,601,710 (1,742,889)
Total adjustments 3,358,277 11,923,563
Net cash provided by operating activities 17,175,891 24,765,860
Investing Activities
Purchases of property and equipment (18,010,508) (17,539,900)
Sales and maturities of
marketable securities (18,544,398) (14,358,078)
Purchases of marketable securities 16,251,154 13,814,678
Net cash used in investing activities (20,303,752) (18,083,300)
Financing Activities
Proceeds from long term debt 3,500,000 --
Proceeds from Employee Stock Purchase Plan 297,345 295,268
Proceeds from stock options exercised 53,693 156,145
Net cash provided by financing activities 3,851,038 451,413
Net increase in cash and cash equivalents 723,177 7,133,973
Cash and cash equivalents- beginning of period 6,668,006 10,054,792
Cash and cash equivalents- end of period $7,391,183 $17,188,765
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $6,291,605 $10,054,792
See notes to consolidated financial statements (unaudited)
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 April 29, 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 - 7
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 764 stores in operation
at April 29, 1995 as compared with 683 at April 30, 1994. During the
thirty-nine weeks ended April 29, 1995, the Company opened 98 stores and closed
22 for a net addition of 7 stores during the nine month period.
The following summarizes the financial results for the thirteen and
thirty-nine week periods ended April 29, 1995 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 9.5% 9.2%
Gross Profit, less
Occupancy & Buying 10.8% 37.8% 37.3% 11.0% 37.1% 36.5%
Selling, General and
Admin. Expenses 9.8% 31.6% 31.5% 11.3% 31.5% 30.9%
Operating Income 16.7% 6.2% 5.8% 9.3% 5.6% 5.6%
Interest Income 4.1% 0.2% 0.3% -14.3% 0.3% 0.4%
Income Taxes 16.2% 2.4% 2.2% 7.6% 2.2% 2.2%
Net Income 16.1% 4.0% 3.8% 7.6% 3.7% 3.8%
Net sales increased due to the increased number of stores open during
both fiscal periods this year versus last. The increases were reduced by
declines in comparable store sales of 2% for both the three and nine month
periods.
Gross profit less occupancy and buying costs as a percentage of sales
for the third quarter and nine month periods increased primarily due to higher
initial margins, which offset increased markdowns and increased occupancy costs
from new stores.
Selling, general and administrative expenses as a percentage of sales
for the both the third quarter and nine month periods increased as no leverage
was achieved as a result of the decrease in comparable store sales for the
quarter. Despite the minimal increase as a percent of sales in the third
quarter, average expenses per store were less than last year. This resulted
from the Company's continued focus on expense controls. The increase as a
percent of sales in the nine month period was the result of increased
expenditures for store payroll, advertising, supplies and maintenance and
repairs.
Interest income decreased in the nine month period and marginally
increased in the third quarter as the increase in funds available for short
term investment was offset by a decline in the market value of the municipal
bond portfolio.
The effective tax rate for the thirty-nine weeks ended April 29, 1995
was 37.0%, the same as the effective rate for the fiscal year ended July 30,
1994.
I - 8
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 29, 1995 there was no material
change in the Company's liquidity or capital resources. The Company incurred
long-term debt for the first time in October 1994 - 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.
At April 29, 1995, the Company had working capital of $98,786,000 and
three bank credit lines totaling $76,500,000 without any outstanding borrowings.
I - 9
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 - 10
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