FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended July 2, 1994
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from............... to ...........
Commission File No. 1-8739
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
(Exact Name of Registrant as specified in
its charter)
Delaware 22-1970303
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1830 Route 130
Burlington, New Jersey 08016
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number,
including area code: (609) 387-7800
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
on which registered
Common Stock, $1.00 par value New York Stock Exchange, Inc.
per share
Securities Registered pursuant to Section 12(g) of the Act:
Title of Class
None
Page 1
<PAGE>
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_________.
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
The aggregate market value of the common stock, $1.00 par
value ("Common Stock"), of the registrant held by non-affiliates of
the registrant, as determined by reference to the closing sale
price of the Common Stock on the New York Stock Exchange as of
August 31, 1994, was $379,750,564.
As of August 31, 1994, the number of shares of Common
Stock, $1.00 par value, outstanding was 40,698,898.
Documents incorporated by Part of Form 10-K into which
reference into this report document is incorporated
__________________________ ____________________________
Registrant's Proxy Statement Part III
to be filed pursuant to
Regulation 14A
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<PAGE>
PART I
Item 1. Business
Burlington Coat Factory Warehouse Corporation and
its subsidiaries (the "Company" or "Burlington Coat") operates a
chain of "off-price" apparel stores which offer a broad range of
moderate to higher priced, current brand name merchandise for men,
women and children at prices substantially below traditional full
retail prices generally charged by department and specialty stores.
The sale of outerwear (coats, jackets and raincoats) accounted for
approximately 35% of the Company's total sales during fiscal 1994.
In addition, Burlington Coat offers customers a complete line of
men's, women's and children's wear as well as a linens, bath shop items,
gifts and accessories department in 180 of its stores and a children's
furniture department in approximately 126 of its stores. The Company's
policy of buying significant quantities of merchandise throughout the
year, maintaining inventory control and using a "no-frills" merchandising
approach, allows it to offer merchandise at prices below traditional full
retail prices. The sale of irregular or discontinued merchandise represents
only a small portion of the Company's business. Merchandise is displayed
on easy access racks and sales assistance generally is available. Clothing
alteration services are available on a limited basis in many stores for an
additional charge.
Burlington Coat's practice of purchasing outerwear early
in each fashion season and of reordering in rapid response to
sales has enabled it to maintain a large, current and varied
selection of outerwear throughout each year. Although the Company
believes that this practice helps attract customers to its stores,
to the extent the Company maintains a relatively large volume of
merchandise, particularly outerwear, the risks related to style
changes, weather and other seasonal factors, and economic
conditions are necessarily greater than if the Company maintained
smaller inventories.
An important factor in Burlington Coat's operations has
been its continued ability to purchase desirable, first-quality
current brand labeled merchandise directly from manufacturers on
terms at least as favorable as those offered large retail
department and specialty stores. The Company estimates that over
900 manufacturers of apparel, including over 300 manufacturers
of outerwear, are represented at the Company's stores, and that no
manufacturer accounted for more than 5% of the Company's pur-
chases during the last full fiscal year. The Company does not
maintain any long-term or exclusive commitments or arrangements to
purchase from any manufacturer. No assurance can be given that the Company
will be able to continue to purchase such merchandise directly from
manufacturers or to continue its current selling price structure.
See "Competition."
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<PAGE>
The Company sells its merchandise to retail customers for
cash and accepts checks and most major credit cards. The Company's
"Cohoes" division also offers its own credit card. In addition,
the Company sells on a layaway plan and offers special orders on
selected merchandise. It does not offer refunds, except on furs,
defective merchandise and certain specialty retail operations, but will
exchange or give store credit slips for merchandise returned within a
prescribed period of time.
The Company advertises primarily on television and, to a
lesser extent, in regional and local newspapers and radio. During
the past three fiscal years, advertising expenditures have averaged
approximately 2.8% of total revenues.
The Stores
As of August 31, 1994, the Company operated 215
stores, all but 19 of which are located in leased facilities
ranging in size (including storage space) from approximately
15,000 to approximately 133,000 square feet, with an average
area of approximately 60,000 square feet. Selling space accounts
for over four-fifths of the total area in most stores.
All except 1 of the Company's stores are either free-
standing or are located in shopping malls or strip shopping
centers. The remaining store is operated from the Company's former
distribution facility in Secaucus, New Jersey. The Company
believes that its customers are attracted to its stores principally
by the availability of a large assortment of first-quality current
brand name merchandise at attractive prices.
The Company also operates stores under the names "Cohoes
Fashions," "Decelle," "Luxury Linens," and "Totally 4 Kids." Cohoes
Fashions offers merchandise in the middle to higher price range.
Decelle offers merchandise in the moderate price range for the entire
family with an emphasis on children's and youth wear. Luxury Linens is
a specialty store for linens, bath shop items, gifts and accessories and
offers merchandise in the middle to higher range. Totally 4 Kids is a
new moderate to upscale concept store offering maternity wear, baby
furniture, children's wear from toddlers up to teens, children's books,
toys, computer software for kids and educational tapes in a family
environment.
In the past, Burlington Coat generally has selected sites
for its stores where there are suitable existing structures which
can be refurbished, and, if necessary, enlarged, in a manner
consistent with the Company's merchandising concepts. In some
cases, space has been substantially renovated or built to
specifications given by Burlington Coat to the lessor. Such
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properties have been available to the Company on lease terms which
it believes have been favorable. See "Growth and Expansion."
The stores generally are located in close proximity to
population centers, department stores and other retail operations
and are usually established near a major highway or thoroughfare,
making them easily accessible by automobile. Since the Company's
stores are generally located outside of urban centers and the
Company believes that some of its customers drive long distances to
visit store locations, it is likely that the Company would be
adversely affected by any conditions which were to result in the
reduction of automobile use.
The Company owns substantially all the equipment used in
its stores and believes that its selling space is well utilized and
that its equipment is well maintained and suitable for its
requirements.
At August 31, 1994, a majority of the Company's stores
contained one or more departments leased by unaffiliated parties
for the sale of shoes, jewelry, and accessories. During the fiscal year
ended July 2, 1994, the Company's rental income from all of its
leased departments aggregated less than 1% of the Company's total
revenues.
Central Distribution
Central distribution, warehousing, ticketing and marking
services are extended to approximately fifty percent of the dollar
volume of the Company's merchandise through its office and
warehouse/distribution facility in Burlington, New Jersey. This
facility is capable of servicing the Company's present stores as
well as accommodating anticipated expansion with modifications to
its existing data processing and materials handling systems, except
for juvenile furniture inventory. The Company is leasing
approximately 85,000 square feet of warehouse space nearby to its
existing warehouse distribution center for the purpose of
warehousing and distributing its juvenile furniture inventory.
Growth and Expansion
Since 1972 when its first store was opened in Burlington,
New Jersey, the Company has expanded to 196 Burlington Coat stores,
five Cohoes Fashions stores, eight Decelle stores, five stand-alone
Luxury Linens stores, and one Totally 4 Kids store as of August 31, 1994.
At August 31, 1994 the Company operated stores in 41
states and is exploring expansion opportunities both within its
current market areas and in other regions. For fiscal 1995, the
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<PAGE>
Company has opened or plans to open approximately 18 additional
Burlington Coat Factory stores, four Luxury Linens stores, three Totally
4 Kids, and two Decelle stores in the United States prior to March, 1995
and to close two stores prior to March, 1995.
The Company believes that its ability to find
satisfactory locations for its stores is essential for the
continued growth of its business. The opening of stores generally
is contingent upon a number of factors, including the availability
of desirable locations with suitable structures and the negotiation
of acceptable lease terms. There can be no assurance, however,
that the Company will be able to find suitable locations for new
stores or that even if such locations are found and acceptable
lease terms are obtained, the Company will be able to open the
number of new stores presently planned.
The Company began operating its own jewelry department
in three stores on a trial basis in the Fall of 1993. The jewelry
program consists of karat gold and precious and semi-precious stone
jewelry, and in some stores may include brand-name watches. Based
on the results to date, the Company is planning to expand the
program to an additional 24 stores during the Fall of 1994. Other stores
may be added to the program during the remainder of fiscal 1995.
In December 1993, the Company opened a store in Juarez,
Mexico which is across the border from El Paso, Texas, in a joint
venture with a Mexican partner. The Company is currently
evaluating the results of operations of this first store. Future
expansion in Mexico will depend in part on the results achieved by
the first store.
Also in December 1993, the Company acquired a nine-store
regional chain of stores operating in the New England region under
the name "Decelle." Decelle stores offer clothing for the entire
family in the moderate price range but specialize in children's
and youth wear. In June of 1994, the Company converted one of its
Decelle stores (located in Cranston, Rhode Island), into a Cohoes
Fashion store. This site was formerly that of a "Cohoes Specialty"
store, a predecessor of the Company's Cohoes Fashions division.
In May of 1994, the Company opened its first "Totally 4
Kids" store in Sterling, Virginia. The store caters to the moderate to
upscale market and offers maternity wear, baby furniture, children's wear
up to teens, children's books, educational tapes, computer software for
kids and toys in a family environment. The Company plans to open three
additional Totally 4 Kids stores in fiscal 1995.
In addition, the Company is planning to open one store, "Fit
for Men", specializing in special size mens wear. Depending on
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results of this store, the Company will consider opening additional
men's stores on a stand alone basis.
The Company seeks to maintain its competitive position
and improve its prospects by periodically reevaluating its methods
of operation, including its pricing and inventory policies, the
format of its stores and its ownership or leasing of stores.
Seasonality
The Company's business is seasonal, with its highest
sales occurring in the second fiscal quarter of each year.
Historically, approximately 65% of the Company's net sales have
occurred during the period from September through January.
Recently, however, the Company has increased its sales in other
periods so that sales in the September through January period
accounted for only approximately 58% of net sales in fiscal 1992,
57% in fiscal 1993 and 58% in fiscal 1994. Weather, however,
continues to be an important contributing factor to the sale of
clothing in the fall, winter and spring seasons. Generally, the
Company's sales are higher if the weather is cold during the early
fall and winter months and warm during the early spring months.
See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
Operations
Each store has a manager and one or more assistant
managers, as well as department managers. The Company also employs
regional and district managers to supervise overall store operating
and merchandising policies. Major merchandising decisions are
made, overall policies are set, and accounting and general
financial functions for the Company's stores are conducted, at
corporate headquarters. In addition, the Company employs
directors of administration, store operations, loss prevention and
merchandise presentation who are in charge of those functions on a
Company-wide basis.
Merchandise purchased by the Company is either shipped
directly from manufacturers to store locations or distributed
through the Company's warehousing and distribution facility. See
"Central Distribution." A computerized merchandise information
system provides regular detailed reports of sales and inventory
levels for each store and assists the merchandise managers and
buyers in monitoring and, where necessary, adjusting inventory
levels.
At July 2, 1994, the Company had approximately 17,000
employees, including a large number of part time and seasonal
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<PAGE>
employees which varies throughout the year. Of the Company's
employees, only those employed at one of its stores and at its
warehousing facility (aggregating up to 600 persons at its peak
and approximately 500 persons at July 2, 1994) are covered by
collective bargaining agreements. The Company cannot predict
whether any future attempts to unionize its employees will be
successful. The Company believes that its relationship with its
employees has been and remains satisfactory.
Competition
General. The retail apparel business is highly
competitive. Competitors include other individual, regional and
national "off-price" retailers offering similar merchandise at
comparable prices as well as individual and chain stores, some of
which are regional and national department and discount store
chains. At various times throughout the year department store
chains and specialty shops offer brand name merchandise at
substantial markdowns, which can result in prices approximating
those offered by the Company. Some of the Company's competitors
are considerably larger than the Company and have substantially
greater financial and other resources.
Resale Price Maintenance. Since it is the general
policy of the Company to sell at lower than the traditional full
retail price, its business may be adversely affected by
manufacturers who attempt to maintain the resale price of their
merchandise by refusing to sell, or granting advertising allowances,
to purchasers who do not adhere to their suggested retail prices.
Federal legislation and regulations are proposed from time to time
which, if enacted, would be helpful to manufacturers attempting to
establish minimum prices or withhold allowances. In addition, the
rule against resale price maintenance is subject to challenge in
the courts from time to time. In the early part of 1984, the
United States Supreme Court in Monsanto Company v. Spray-Rite
Service Corporation, 465 U.S. 752 (1984), declined to reconsider
the per se rule against resale price maintenance but held that the
termination of a dealer by a manufacturer following the mere
complaint by another dealer concerning the first dealer's pricing
policies, without evidence that tends to exclude the possibility of
independent action by the manufacturer and the other dealer, is not
enough to raise the inference of a violation of the restriction
against vertical price-fixing. In May, 1988, the Supreme Court
rendered an opinion in another case, Business Electronics
Corporation v. Sharp Electronics Corporation, 108 S. Ct. 1515
(1988), wherein it again declined the invitation of a litigant to
reconsider the per se rule against resale price maintenance, but
held that an agreement between a full-price merchant and a
manufacturer whereunder the manufacturer terminates sales to a dis-
counter because of the discounter's pricing is not a price fixing
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<PAGE>
agreement unless the manufacturer and the full-price merchant also
agree to maintain specific retail prices or price levels.
The Company has, on several occasions in the past,
brought lawsuits against certain manufacturers and department store
chains and complained to the Federal Trade Commission seeking more
vigorous enforcement of existing Federal laws, as well as testified
before Congress in connection with proposed legislation concerning
the Federal antitrust laws.
Item 2. Properties
The Company owns the land and building for 19 of its
stores, and is a 50% partner in a partnership which owns the
building in which one store is located. Generally, however, the
Company's policy has been to lease its stores. Store leases
generally provide for fixed monthly rental payments, plus the
payment, in most cases, of real estate taxes and other charges with
escalation clauses. In certain locations, the Company's store
leases contain formulas providing for the payment of additional
rent based on sales.
<TABLE>
The following table shows the years in which store leases
existing at August 31, 1994 expire:
<CAPTION>
Fiscal Years Number of Leases Expiring with
Ending June 30 Expiring Renewal Options
<S> <C> <C>
1994-98 46 39
1999-2000 20 18
2001-2002 13 8
2003-2004 25 8
2005-2006 14 9
Thereafter 79 29
--- ---
Total 197 111
=== ===
</TABLE>
The Company owns five buildings in Burlington, New
Jersey. Of these buildings, two are used by the Company as retail
space and three are leased to third parties. In addition, the Company
owns approximately 97 acres of land in the Townships of Burlington and
Florence, New Jersey on which the Company has constructed its office and
and warehouse/distribution facility and leases approximately 85,000 square
feet of space nearby to the warehouse/distribution facility to store its
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juvenile furniture inventory. The Company leases approximately 20,000 square
feet of office space in New York City with the right of occupancy that
expires in January 2001. The Company also owns an older
warehouse/distribution facility in Secaucus, New Jersey, a portion of which
it is leasing to a third party and a portion of which uses as a store, but
may sell if favorable terms can be obtained.
Item 3. Legal Proceedings
On September 29, 1994, the Company received summons and
complaint in two separate class actions, each filed in the United States
District Court for the District of New Jersey and entitled Jack Turner v.
Monroe G. Milstein, Stephen E. Milstein, Robert L. LaPenta, Jr., and
Burlington Coat Factory Warehouse Corporation (Civil Action No. 94-4737)
the "Turner Action") and P. Gregory Buchanan v. Monroe G. Milstein,
Stephen E. Milstein, Robert L. LaPenta, Jr. and Burlington Coat Factory
Warehouse Corporation (the "Buchanan Action") (Civil Action No. 94-4663).
Each of the complaints seeks unspecified damages and alleges a cause of
action arising under Sections 10(b) and 20(a) of Securities Exchange Act of
1934, as amended, and Rule 10b-5 under such Act for alleged material
misstatements and omissions in public statements by the Company and other
defendants causing the market price of the Company's common stock to be
artificially inflated during (a) the period November 1, 1993 through
September 21, 1994, inclusive, in the case of the Turner Action, and
(b) the period from November 1, 1993 through September 19, 1994, inclusive
in the case of the Buchanan Action. The Company is unable to assess the
impact of such actions at this time but believes they are without merit.
In the past, the Company has initiated several lawsuits in its
initiated several lawsuits in its effort to stop what it believes
to be unlawful practices on the part of certain manufacturers and
large retailers to control the prices at which certain items of
merchandise may be sold at the Company's stores.
Item 4. Submission of Matters to a Vote
of Security Holders
The Company did not submit any matter to a vote of its
security holders during the fourth quarter of fiscal 1994.
PART II
Item 5. Market for Registrant's Common Equity
and Related Stockholder Matters
The Company's Common Stock is traded on the New York
Stock Exchange, Inc. and its trading symbol is "BCF."
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<TABLE>
The following table provides the high and low closing
prices on the New York Stock Exchange for each fiscal quarter for
the period from June 28, 1992 to July 2, 1994 and for the two
months ended August 31, 1994, as adjusted to give retroactive
effect to three-for-two stock splits effected on July 27, 1992 and
on September 24, 1993:
<CAPTION>
Period Low Price High Price
<S> <C> <C>
<C>
June 28, 1992 to
September 26, 1992 7 7/8 11 3/8
September 27, 1992 to
December 26, 1992 10 3/4 16
December 27, 1992 to
March 27, 1993 13 7/8 18 5/8
March 28, 1993 to
July 3, 1993 13 5/8 18 3/8
July 4, 1993 to
October 2, 1993 13 1/8 19 3/8
October 3, 1993 to
January 1, 1994 19 24 1/2
January 2, 1994 to
April 2, 1994 18 28 1/4
April 3, 1994 to
July 2, 1994 16 3/4 27 1/2
July 3, 1994 to
August 31, 1994 16 5/8 24 3/4
</TABLE>
As of August 31, 1994 there were 473 record holders of
the Company's Common Stock. The number of record holders does not
reflect the number of beneficial owners of the Company's Common
Stock for whom shares are held by Cede & Co., certain brokerage
firms and others.
Dividend Policy
The Company has not paid cash dividends in the past and
does not currently plan to do so. It is the present policy of the
Company's Board of Directors to retain future earnings to finance
the growth and development of the Company's business. Any payment
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of cash dividends in the future will be at the discretion of the
Company's Board of Directors and will depend upon the financial
condition, capital requirements and earnings of the Company as well
as other factors which the Board of Directors may deem relevant.
Item 6. Selected Financial Data
<TABLE>
The following table sets forth certain selected financial
data:
<CAPTION>
6/30/90 6/29/91 6/27/92 7/3/93 7/2/94
(In thousands of dollars, except per share data)
<S> <C> <C> <C> <C> <C>
<C>
Statement of Operations:
Revenues $811,999 $916,217 $1,013,470 $1,214,783 $1,480,676
Net Income 24,035 24,742 31,368 42,903(1) 45,383
Net Income per Share .60(2) .62(2) .78(2) 1.06(1)(2) 1.12
Balance Sheet Data:
Total Assets 418,508 438,751 491,940 585,481 725,439
Working Capital 214,520 229,403 252,364 275,113 278,590
Long-Term Debt 95,838 96,040 94,234 91,428 91,369
Stockholder's Equity 218,910 242,071 278,712 323,111 369,857
<FN>
__________________
<F1>
(1) Effective June 28, 1992, the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for
Income Taxes." The Company reflected the cumulative
effect of change in accounting for income taxes by
recording a benefit of $.6 million ($.02 per share)
during fiscal 1993.
<F2>
(2) Adjusted to give retroactive effect to three-for-two
stock splits effective in July, 1992 and September, 1993.
</FN>
</TABLE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The Company maintains its records on the basis of a 52-53
week fiscal year ending on the Saturday closest to June 30. Fiscal
1994 ended on July 2, 1994 and comprised 52 weeks, whereas fiscal
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1993 ended July 3, 1993 and comprised 53 weeks, and fiscal 1992
ended June 27, 1992 and comprised 52 weeks. The following
discussion compares the fiscal year ended July 2, 1994 with the
fiscal years ended July 3, 1993 and June 27, 1992.
Results of Operations
Fiscal Years Ended June 27, 1992 and
July 3, 1993 and July 2, 1994
<TABLE>
The following table sets forth certain items in the
consolidated statements of operations as a percentage of net sales
for the fiscal years ended June 27, 1992, July 3, 1993 and July 2,
1994.
<CAPTION>
Percentage of Net Sales
Twelve-Month Period Ended
6/27/92 7/3/93 7/2/94
<S> <C> <C> <C>
<C>
Net Sales 100.0% 100.0% 100.0%
Costs and expenses:
Cost of Sales 65.1 65.0 65.2
Selling and administrative 29.1 28.6 28.6
expenses
Depreciation and 1.4 1.4 1.4
Amortization
Interest expense 1.0 0.8 0.7
----- ----- ------
96.6 95.8 95.9
----- ----- ------
Other income 1.6 1.4 0.8
----- ----- ------
Income before income taxes 5.0 5.6 4.9
and cumulative effect of
change in accounting for income
taxes
Provision for income taxes 1.8 2.1 1.8
----- ----- -----
Income before cumulative 3.2 3.5 3.1
effect of change in
accounting for income taxes
Cumulative effect of change -- .1 --
in accounting for income ---- ----- ----
taxes
Net income 3.2% 3.6% 3.1%
</TABLE>
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Net sales increased $200.6 million (20.1%) for the fiscal
year ended July 3, 1993 over the fiscal year ended June 27, 1992
and $270.1 million (22.5%) for the fiscal year ended July 2, 1994
over the fiscal year ended July 3, 1993. The increase in fiscal 1993
over fiscal 1992 was due to an increase in comparative store sales of
$109.6 million (11.8%) and to the net sales of new stores opened during
the fiscal year. The increase in fiscal 1994 over fiscal 1993 was derived from
the increase in comparative store sales of $75.4 million (6.8%), net sales
of new stores opened during the fiscal year, increases in net sales of the
Cohoes Fashions stores, and net sales from the Decelle stores and the Mexican
operations (hereafter, Cohoes Fashions, Decelle and the Mexican operation are
collectively referred to as the "Specialty Operations"). Fiscal 1994 and
1992 were 52-week fiscal years compared with a 53-week fiscal year in 1993.
Net sales for the 53rd week impacted fiscal 1993 by approximately $12.2
million compared to fiscal 1992 and net sales for the 53rd week impacted
fiscal 1993 by approximately $9.5 million compared to fiscal 1994. The
18 Burlington Coat Factory stores opened in fiscal 1993
contributed $61.1 million to net sales in fiscal 1993 compared with
$107.5 million in fiscal 1994. The 24 Burlington Coat Factory stores
opened in fiscal 1994 contributed $147.0 million to net sales. The two
Cohoes Fashion stores opened during fiscal 1994 contributed $8.7 milion
to net sales and the Decelle stores acquired during the period contributed
$19.4 million to net sales.
Other income increased $.7 million from the 1992 period
to the 1993 period and decreased $4.2 million from the 1993 period
to the 1994 period. For the fiscal year ended July 3, 1993, compared
with the fiscal year ended June 27, 1992, investment income decreases
were offset by increases in other income items including gains from sale
of investments and other miscellaneous income items. For the fiscal year
ended July 2, 1994, the decrease in other income was primarily due to
decreases in leased department rental income, the result of the closing of
approximately 30 leased departments which the Company has converted
to Company department selling space, and to a decrease in investment
income. New store openings and existing store capital improvement
expenditures as well as planned inventory growth throughout the Company
absorbed excess investable funds during fiscal 1994 resulting in a
decrease in interest income of $2.2 million during the fiscal year. In
addition, the Company lost $.3 million from the sale of investments
during the year.
Cost of sales increased by $128.2 million (19.7%) from
the 1992 period to the 1993 period and by $178.5 million (22.9%)
from the 1993 period to the 1994 period. The dollar increases in
cost of sales are attributable to the increases in unit sales from
new stores opened during the periods, and increases in comparative
store sales volume of 11.8% in the 1993 period and 6.8% in the 1994 period.
Cost of sales as a percentage of net sales decreased from 65.1% in the 1992
period to 65.0% in the 1993 period and increased to 65.2% in the 1994 period.
The decrease in the 1993 period was due primarily to decreases in markdowns
and shrinkage losses as a percentage of sales. The .2 percentage increase in
1994 over 1993 was due primarily to lower margins from the Specialty
Operations and increases in shrinkage and freight costs as a percentage of
purchases.
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Selling and administrative expenses increased by
$52.6 million (18.1%) from the 1992 period to the 1993 period and
by $77.2 million (22.5%) from the 1993 period to the 1994
period, primarily as a result of increased expenses in connection
with the increase in the number of stores. As a percentage of net
sales, selling and administrative expenses were 29.1% in the 1992
period, 28.6% in the 1993 period and 28.6% in the 1994 period. In
the fiscal 1993 period, expenses decreased as a percentage of sales
because of the positive leverage achieved through sales growth.
In the 1994 fiscal period, the positive effect on selling and
administrative costs, as a percentage of sales, created by comparative
store sales growth, were partially offset by growth in non-store
payroll related expenses and costs incurred to operate the Specialty
Operations.
The increase in depreciation expense of $3.1 million in
the 1993 period over the 1992 period is attributable to fixtures and
improvements acquired for 18 new stores as well as additional equipment
and improvements for existing stores and the home office and distribution
center. In addition, the Company acquired the real property associated
with three of the new stores opened during fiscal 1993. The increase in
depreciation expense of $4.4 million in the 1994 period is mainly
attributable to the fixturing and improvements made for the 26 new stores
opened during the period. In addition, the Company acquired the real
property associated with five stores during the 1994 fiscal year.
Interest expenses decreased $.1 million from the 1992
period to the 1993 period due to the early retirement of the mortgage
indebtedness pertaining to the Secaucus warehouse. Interest expenses
increased slightly from the 1993 period to the 1994 period due to the
Company's increased use of its lines of credit during the year.
The effective income tax rates were 36.5%, 36.7% and 37.3% for
the 1992, 1993 and 1994 periods, respectively. The increase in the effective
tax rate in fiscal 1993 is due mainly to decreased tax credits recorded in
fiscal 1993 as compared with tax credits recorded in fiscal 1992. The
increase in the effective tax rate in fiscal 1994 is due primarily to an
increase in the statutory federal tax rate to 35% in fiscal 1994.
Income before cumulative effect of change in accounting for
income taxes increased $10.9 million (34.9%) to $42.3 million for fiscal
year ended July 3, 1993 compared with the fiscal 1992 year. Income before
cumulative effect of change in accounting for income taxes increased $3.1
million (7.3%) to $45.4 million for the fiscal year ended July 2, 1994
compared with the 1993 fiscal year. Income per share before cumulative
effect of change in accounting for income taxes increased to $1.04 per share
for fiscal 1993 from $.78 per share for fiscal 1992 after giving effect to
the three-for-two stock split effected on September 24, 1993, due to
comparative store sales increases, new stores opened during the
period, leveraging of selling and administrative expenses from the double
digit comparative store sales increases and the extra week during the year.
Income per share before cumulative effect of change in accounting for income
taxes increased to $1.12 per share for fiscal 1994 due to comparative store
sales increases and new stores opened during the year. Income before cumulative
effect of change in accounting for income taxes, in part, was negatively
impacted in fiscal 1994 by an increase in the losses from the Specialty
Operations from $.5 million to $3.5 million.
Page 15
<PAGE>
During the fiscal year ended July 3, 1993, the Company
recorded a cumulative effect benefit resulting from the adoption of
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes" (See Notes to the Consolidated Financial
Statement No. A.6.) in the amount of $.6 million ($.01 per share
after giving effect to the three-for-two stock split). Net income
as a percentage of net sales was 3.1%, 3.6% and 3.1% for the 1992,
1993 and 1994 periods, respectively.
The results of operations for the fourth fiscal quarter of 1994
were negatively impacted in comparison with last year's fourth fiscal quarter
primarily by a shift in comparable calendar weeks and an earlier Easter
selling season to the third quarter of fiscal 1994, shifting approximately
$37.0 million in net sales and $9.6 million in pre-tax profit into the third
fiscal quarter of 1994. In addition, losses from the newly acquired operations,
start-up operations and increased store opening costs were approximately $1.6
million.
Liquidity and Capital Resources
The Company estimates that it will expend approximately
$21.2 million for capital expenditures (i.e. fixtures, equipment and leasehold
improvements) in connection with the opening of 28 new stores during fiscal
1995. The Company expects to satisfy its operating requirements, including
capital expenditures for the opening of new stores, from internally
generated funds and from borrowing.
Working capital increased from $252.4 million at June
27, 1992 to $275.1 million at July 3, 1993 and increased to $278.6
million at July 2, 1994.
Total funds provided from operations for the fiscal years
ended June 27, 1992, July 3, 1993 and July 2, 1994 were $50.7
million, $64.7 million and $72.6 million, respectively. Total
funds from operations are calculated by adding back to net income
non-cash expenditures such as depreciation and deferred taxes.
Net cash used by operating activities amounted to $28.3
million for the fiscal year ended July 2, 1994 compared with net cash
provided by operating activities of $11.1 million for the fiscal year
ended July 3, 1993. This change is primarily the result of increases in
merchandise inventories associated with the opening of 26 new stores during
fiscal 1994, opportunistic merchandise buying through June 1994, and
inventory purchased for the anticipated store openings scheduled for the first
and second quarters of the 1995 fiscal year. The inventory increases were
financed by cash generated from the disposition of short-term investments
during fiscal 1994 as well as increases in amounts owed to suppliers and
from borrowings.
The Company incurred capital expenditures of approximately
$63.7 million during fiscal 1994. These expenditures included store
fixtures and leasehold improvements for the 26 new stores opened during
the period, as well as purchases of equipment, fixtures and improvements
for the Company's existing stores, the home office and the distribution
center. In addition, real property associated with 5 of the new stores
was acquired during the fiscal year.
Page 16
<PAGE>
In view of the seasonal nature of its business, the
Company has in the past satisfied its cash flow requirements at
various times throughout its fiscal year through short-term
borrowing under its revolving credit and term loan agreement with
one bank in the amount of $40 million (the "Line of Credit")
together with uncommitted lines of credit in the aggregate amount
of $130 million (the "Uncommitted Lines"). In June, 1990, the
Company issued subordinated notes (the "Notes") in the principal
amount of $80 million to certain institutional investors (the "Note
Financing"). The Company believes that its operating requirements,
including capital expenditures, will be satisfied by the Note
Financing, the Uncommitted Lines and the Line of Credit, however,
it may seek additional financing if determined to be appropriate in
the future.
At July 2, 1994, the aggregate borrowings under
the Line of Credit and Uncommitted Lines was $65.0 million. Letters of
credit outstanding against these lines were $50.4 million and $39.7 million
at July 2, 1994 and July 3, 1993, respectively. The Company had $54.6
million available under these lines of credit at July 2, 1994. The
Company borrowed under its lines of credit during fiscal 1994 in order
to finance the opening of new stores as well as planned inventory growth
in existing stores. For the fiscal years ended June 27, 1992 and
July 3, 1993, the Company did not draw on its available credit line.
At June 27, 1992, and at July 3, 1993, there was no borrowing under the
Company's Line of Credit facility.
The Company's long-term borrowings include $80.0 million under
the Notes and an industrial development bond of $10.0 million issued by the New
Jersey Economic Development Authority.
The Notes mature on June 27, 2005 and bear interest at
the rate of 10.60% per annum. The Notes have an average maturity
of ten years and are subject to mandatory prepayment in
installments of $8 million each without premium on June 27 of each
year beginning in 1996. The Notes are subordinated to senior debt,
including, among others, bank debt and indebtedness for borrowed
money. The interest rate on the bonds issued in connection with
the Company's industrial development bond financing is fixed at
9.78% over the life of these series and term bonds. The bonds
mature at various dates commencing in September 1996 and ending in
September 2010.
On August 10, 1993 the Omnibus Budget Reconciliation Act
was enacted which increases federal tax rates from 34% to 35%. The
effect on current and deferred taxes of a change in tax rates was
recognized in income in the period that includes the enactment
date. Therefore, the effect of the tax rate change was recorded in
the first quarter of fiscal 1994.
Page 17
<PAGE>
Inflation
Over the past three years, which has been a period of low
inflation, the Company has been able to increase sales volume to
compensate for increases in operating expenses. The Company has
historically been able to increase its selling prices as the costs
of merchandise and related operating expenses have increased and,
therefore, inflation has not had a significant effect on
operations.
New Accounting Standards
In November 1992, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Post-Employment Benefits." This
pronouncement will not have an effect on the Company's consolidated
financial statements as the benefits covered in the pronouncement
are not provided by the Company.
Item 8. Financial Statements and Supplementary Data
See Index to Financial Statements and following pages.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
Not Applicable
PART III
Item 10. Directors and Executive Officers of the
Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial
Owners and Management
Item 13. Certain Relationships and Related Transactions
In accordance with General Instruction G(3) of the
General Instructions to Form 10-K, the information called for by
Items 10, 11, 12 and 13 is omitted from this Report and is
incorporated by reference to the definitive Proxy Statement to be
filed by the Company pursuant to Regulation l4A of the General
Rules and Regulations under the Securities Exchange Act of 1934,
which the Company will file not later than 120 days after July 2,
1994.
Page 18
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K
(a) The following documents are filed as part of this
Report.
Page No.
1. Financial Statements
Index to Consolidated Financial 26
Statements
Independent Auditor's Report 27
Consolidated Balance Sheets 28
July 3, 1993 and July 2, 1994
Consolidated Statements of Operations 29
Fiscal Years Ended June 27, 1992,
July 3, 1993 and July 2, 1994
Consolidated Statements of 30
Stockholders' Equity for the
Fiscal Years Ended June 27, 1992,
July 3, 1993 and July 2, 1994
Consolidated Statements of Cash 31
Flows for the Fiscal Years
Ended June 27, 1992, July 3,
1993 and July 2, 1994
Notes to Consolidated Financial 33
Statements
2. Financial Statement Schedules
Schedule V - Property, Plant and 46
Equipment
Schedule VI - Accumulated Depreciation 47
and Amortization of Property, Plant
and Equipment
Schedule VIII - Valuation and 48
Qualifying Accounts
Schedule IX - Short-term Borrowing
is omitted because the information
required is presented in Management's
Discussion and Analysis of Financial
Condition and Results of Operations
appearing on pages 12 through 18
of this Report and the Notes to the
Consolidated Financial Statements.
Page 19
<PAGE>
Page No.
All other schedules are omitted
because they are not applicable or not
required or because the required
information is included in the consol-
idated financial statements or notes
thereto.
3. Exhibits
3.1 Articles of Incorporation,
as amended 1/
3.2 By-laws 1/
*10.1 1993 Stock Incentive Plan 1/
10.2 Revolving Credit Agreement dated 2/
August 30, 1985 between the
Company and BancOhio National
Bank, as amended through Amendment
No. 3.
10.3 Amendment No. 4 to Revolving Credit 1/
Agreement between the Company and
National City Bank, Columbus
(successor to BancOhio National Bank)
10.4 Loan Agreement dated as of September 1, 2/
1985 by and between New Jersey
Economic Development Authority and
Burlington Coat Factory Warehouse
of New Jersey, Inc.
10.5 Assignment of Lease dated as of Sep- 2/
tember 1, 1985 from Burlington
Coat Factory Warehouse of New
Jersey, Inc. to New Jersey
Economic Development Authority
10.6 Mortgage dated September 20, 1985 2/
between Burlington Coat Factory
Warehouse of New Jersey, Inc. and
New Jersey Economic Development
Authority
_______________
<F1>
(1) Incorporated by reference to the Exhibits filed with the
Company's Annual Report on Form 10-K for the year ended July
3, 1993, File No. 1-8739.
<F2>
(2) Incorporated by reference to the Exhibits filed with the
Company's Annual Report on Form 10-K for the year ended June
29, 1991, File No. 1-8739.
*Executive Compensation Plan
Page 20
<PAGE>
Page No.
10.7 Indenture of Trust dated as of 2/
September 1, 1985 by and between -
New Jersey Economic Development
Authority and National Westminster
Bank USA
10.8 Guarantee dated as of September 1, 2/
1985 from the Company to New Jersey -
Economic Development Authority
10.9 Employees Profit Sharing Plan, as 1/
amended September 30, 1988 -
10.10 Amendment No. 3, dated November 16, 1/
1989, to Employees Profit Sharing -
Plan
10.11 Amendment No. 4, dated February 24, 1/
1993, to Employees Profit Sharing -
Plan
10.12 Note Agreement dated June 27, 1990 3/
-
22 Subsidiaries of Registrant 53
24 Consent of Deloitte & Touche LLP, 55
independent certified public
accountants, to the use of
their report on the financial
statements of the Company for
the fiscal year ended July 2,
1994 in the Registration Statements
of the Company on Form S-8,
Registration No. 2-96332,
No. 33-21569 and No. 33-51965.
27 Financial Data Schedule 57
_______________
<F1>
(1) Incorporated by reference to the Exhibits filed with the
Company's Annual Report on Form 10-K for the year ended July
3, 1993, File No. 1-8739.
<F2>
(2) Incorporated by reference to the Exhibits filed with the
Company's Annual Report on Form 10-K for the year ended June
29, 1991, File No. 1-8739.
<F3>
(3) Incorporated by reference to the Exhibits filed with the
Company's Annual Report on Form 10-K for the year ended June
27, 1990, File No. 1-8739.
Page 21
<PAGE>
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
Description Location
1) 1993 Stock Incentive Plan Filed as Exhibit 10.1
to the Company's Annual
Report on Form 10-K for
the year ended July 3,
1993, Pages 103-130
(b) Reports on Form 8-K
During the period ended July 2, 1994, the Company did not
file any report on Form 8-K.
Page 22
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
(Registrant)
By: /s/ Monroe G. Milstein
Monroe G. Milstein, President
Dated: September 29, 1994
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
Name Title Date
/s/ Monroe G. Milstein Chief Executive Officer September 29, 1994
Monroe G. Milstein and President (Principal
Executive Officer);
Director
/s/ Robert L. LaPenta, Jr. Controller (Principal September 29, 1994
Robert L. LaPenta, Jr. Financial and
Accounting Officer)
/s/ Henrietta Milstein Director September 29, 1994
Henrietta Milstein
/s/ Harvey Morgan Director September 29, 1994
Harvey Morgan
/s/ Andrew R. Milstein Director September 29, 1994
Andrew R. Milstein
/s/ Stephen E. Milstein Director September 29, 1994
Stephen E. Milstein
/s/ Mark A. Nesci Director September 29, 1994
Mark A. Nesci
/s/ Irving Drillings Director September 29, 1994
Irving Drilings
Page 23
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
Page 24
<PAGE>
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page No.
Independent auditors' report 27
Consolidated balance sheets 28
July 3, 1993 and July 2, 1994
Consolidated statements of operations for the 29
fiscal years ended June 27, 1992, July 3,
1993 and July 2, 1994
Consolidated statements of stockholders' 30
equity for the fiscal years ended June 27,
1992, July 3, 1993 and July 2, 1994
Consolidated statements of cash flows for 31
the fiscal years ended June 27, 1992, July
3, 1993 and July 2, 1994
Notes to consolidated financial statements 33
Financial Statement Schedules
- Schedule V -- Property, Plant and Equipment 46
- Schedule VI -- Accumulated Depreciation and 47
Amortization of Property
Plant and Equipment
- Schedule VIII -- Valuation and Qualifying 48
Accounts
- Schedule IX -- (Omitted since information
required appears in Management's
Discussion and Analysis of
Financial Condition and Results
of Operations appearing on pages
12 through 18 of this Report)
- Schedule X -- (Omitted since information
required is included in Note K to the
consolidated financial statements)
Page 25
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Burlington Coat Factory Warehouse Corporation
Burlington, New Jersey
We have audited the accompanying consolidated balance sheets of
Burlington Coat Factory Warehouse Corporation and its
subsidiaries as of July 2, 1994 and July 3, 1993, and the related
consolidated statements of operations, stockholders' equity and
cash flows for each of the three fiscal years in the period ended
July 2, 1994. Our audits also included the financial statement
schedules listed in the Index at Item 14(a)(2). These financial
statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility
is to express an opinion on the financial statements and
financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe our
audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of
Burlington Coat Factory Warehouse Corporation and subsidiaries at
July 2, 1994 and July 3, 1993, and the results of their
operations and their cash flows for each of the three fiscal
years in the period ended July 2, 1994 in conformity with
generally accepted accounting principles. Also, in our opinion,
such financial statement schedules, when considered in relation
to the basic consolidated financial statements taken as a whole,
present fairly in all material respects the information set forth
therein.
As discussed in Note Q to the consolidated financial statements, the Company
is a defendant in two separate purported class action lawsuits. The ultimate
outcome of the litigation cannot presently be determined. Accordingly,
no provision for any loss that may result upon resolution of these matters
has been made in the accompanying consolidated financial statements.
As discussed in Note A.6 to the consolidated financial statements, the
Company changed its method of accounting for income taxes, effective June
28, 1992, to conform with Statement of Financial Accounting
Standards No. 109.
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
September 16, 1994 (September 29, 1994 as to Note Q)
Page 26
<PAGE>
<TABLE>
<CAPTION>
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(All amounts in thousands except share data)
July 02, July 03,
1994 1993
<S> <C> <C>
<C>
ASSETS
Current Assets:
Cash and Cash Equivalents $ 21,236 $ 34,881
Short-Term Investments -- 16,421
Accounts Receivable Net of Allowance for Doubtful
Accounts of 1994--$4,995 and 1993--$4,237 13,915 10,057
Merchandise Inventories 468,921 352,919
Deferred Tax Asset 6,782 4,441
Prepaid and Other Current Assets 17,968 16,641
----------------------
Total Current Assets 528,822 435,360
Property and Equipment Net of Accumulated
Depreciation and Amortization 184,590 142,582
Other Assets 12,027 7,539
----------------------
Total Assets $725,439 $ 585,481
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
- - ------------------------------------
Current Liabilities:
Notes Payable $ 65,020 --
Accounts Payable 133,706 $ 116,207
Income Taxes Payable 454 5,758
Other Current Liabilities 50,998 38,169
Current Maturities of Long-Term Debt 54 113
---------------------
Total Current Liabilities 250,232 160,247
Long-Term Debt 91,369 91,428
Other Liabilities 7,151 5,379
Deferred Tax Liability 6,830 5,316
Stockholders' Equity:
Preferred Stock, Par Value $1; Authorized
5,000,000 shares; none issued and outstanding -- --
Common Stock, Par Value $1; Authorized
100,000,000 shares;
41,122,459 shares issued and outstanding
at July 2, 1994
41,027,944 shares issued and oustanding
at July 3, 1993 41,122 41,028
Capital in Excess of Par Value 24,592 23,598
Retained Earnings 305,729 260,346
Unrealized Loss-Marketable Securities (20) (11)
Foreign Currency Translation Adjustment 284 --
Treasury Stock at Cost; 1994 and 1993--427,387 Shares (1,850) (1,850)
----------------------
Total Stockholders' Equity 369,857 323,111
----------------------
Total Liabilities and Stockholders' Equity $725,439 $ 585,481
======================
See notes to consolidated financial statements
</TABLE>
Page 27
<PAGE>
<TABLE>
<CAPTION>
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands except share data)
YEAR YEAR YEAR
ENDED ENDED ENDED
July 02, July 03, June 27,
1994 1993 1992
<S> <C> <C> <C>
<C>
REVENUES:
Net Sales $1,468,440 $1,198,305 $ 997,698
Other Income 12,236 16,478 15,772
-----------------------------------------
1,480,676 1,214,783 1,013,470
-----------------------------------------
COSTS AND EXPENSES:
Cost of Sales (Exclusive of
Depreciation and Amortization) 956,818 778,306 650,060
Selling and Administrative Expenses 420,046 342,799 290,235
Depreciation and Amortization 21,528 17,090 13,974
Interest Expense 9,873 9,774 9,841
-----------------------------------------
1,408,265 1,147,969 964,110
-----------------------------------------
Income Before Provision for Income Taxes
and Cumulative Effect on Prior Years
of Change in Accounting Principle 72,411 66,814 49,360
Provision for Income Taxes 27,028 24,512 17,992
----------------------------------------
Income Before Cumulative Effect on
Prior Years of Change in
Accounting Principle 45,383 42,302 31,368
Cumulative Effect on Prior Years of
Change in Accounting Principle
(See Note 6) -- 601 -
-----------------------------------------
Net Income $ 45,383 $ 42,903 $ 31,368
=========================================
Earnings Per Share:
Income Per Share Before Cumulative
Effect on Prior Years of Change
in Accounting Principle $ 1.12 $ 1.04 $ 0.78
Income Per Share From Cumulative
Effect on Prior Years of Change
in Accounting Principle $ -- 0.02 --
-----------------------------------------
Net Income Per Share $ 1.12 $ 1.06 $ 0.78
=========================================
Weighted Average Shares Outstanding $40,632,201 40,503,350 40,050,993
=========================================
Dividends Per Share -- -- --
=========================================
See notes to consolidated financial statements
</TABLE>
Page 28
<PAGE>
<TABLE>
<CAPTION>
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED JUNE 27, 1992, JULY 03, 1993 AND JULY 02, 1994
(All amounts in thousands)
Capital in
Common Excess of Retained Treasury Valuation
Stock Par Value Earnings Stock Allowance Total
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
<C>
Balance at June 29, 1991 $17,819 $40,027 $186,075 $(1,850) $242,071
Net Income 31,368 31,368
Stock Options Exercised 345 4,929 5,274
Stock Split 9,083 (9,084) (1)
-------------------------------------------------------------------------
Balance at June 27, 1992 27,247 35,872 217,443 (1,850) 278,712
Net Income 42,903 42,903
Stock Options Exercised 101 1,406 1,507
Net Unrealized Loss on
Noncrrent Marketable
Securities (11) (11)
Stock Split 13,680 (13,680) 0
-------------------------------------------------------------------------
Balance at July 03, 1993 41,028 23,598 260,346 (1,850) (11) 323,111
Net Income 45,383 45,383
Stock Options Exercised 81 1,007 1,088
Net Unrealized Loss on
Noncurrent Marketable
Securities (9) (9)
Equity Adjustment for
Translation 284 284
Stock Split Adjustment 13 (13) 0
--------------------------------------------------------------------------
Balance at July 02, 1994 $41,122 $24,592 $305,729 $(1,850) $264 $369,857
==========================================================================
See notes to consolidated financial statements
Page 29
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All amounts in thousands)
Fiscal Year Ended
July 02, July 03, June 27,
1994 1993 1992
-------------------------------
<S> <C> <C> <C>
<C>
OPERATING ACTIVITIES
Net Income $45,383 $42,903 $31,368
Adjustments to Reconcile Net Income to
Provided by Operating Activities:
Depreciation and Amortization 21,528 17,090 13,974
Provision for Losses on Accounts Receivable 4,821 3,690 3,549
Provision for Deferred Income Taxes (827) 193 (653)
Writedown of Certain Investment to Market Value - - 750
Loss on Disposition of Fixed Assets 203 378 478
Rent Expense and Other 1,528 1,041 1,272
Cumulative Effect of Change in Accounting for
Income Taxes - (601) -
Changes in Operating Assets and Liabilities:
Accounts Receivable (8,674) (4,741) (5,708)
Merchandise Inventories (116,002) (88,780) (10,235)
Prepaids and Other Operating Assets (1,327) (7,551) (2,221)
Accounts Payable 17,499 44,703 12,849
Other Current Liabilities 7,525 2,766 4,643
-----------------------------------
Net Cash (Used in) Provided by
Operating Activities (28,343) 11,091 50,066
-----------------------------------
INVESTING ACTIVITIES
Acquisition of Property and Equipment (63,686) (39,836) (26,309)
Short-Term Investments-Net 16,421 41,623 (58,044)
Proceeds From Sale of Fixed Assets 17 14 577
Issuance of Long-Term Notes Receivable (3,668) (2,241) (225)
Receipts Against Long-Term Notes Receivable 609 442 187
Acquisition of Investments - (155) -
Proceeds From Sale of Investments - 113 11
Acquisition of Leasehold (2,050) - -
Minority Interest 497 - -
Other 568 43 (288)
----------------------------------
Net Cash (Used in) Provided by
Investing Activities (51,292) 3 (84,091)
----------------------------------
FINANCING ACTIVITIES
Principal Payments on Long-Term Debt (118) (3,069) (1,893)
Issuance of Common Stock Upon Exercise of
Stock Options 1,088 1,507 5,274
Net Borrowings Under Line of Credit 65,020 - -
-----------------------------------
Net Cash (Used in) Provided by Financing
Activities 65,990 (1,562) 3,381
-----------------------------------
(Decrease) Increase in Cash and
Cash Equivalents (13,645) 9,532 (30,644)
Cash and Cash Equivalents at
Beginning of Period 34,881 25,349 55,993
---------------------------------
Cash and Cash Equivalents at End
of Period $21,236 $34,881 $25,349
==================================
Interest Paid $ 9,873 $13,925 $ 5,663
==================================
Income Taxes Paid $32,414 $21,955 $21,680
==================================
See notes to consolidated financial statements
</TABLE>
Page 30
<PAGE>
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Supplemental Schedule of Non-Cash Financing and Investing Activities:
During the period ended June 27, 1992, the Company sold certain real estate
holdings with a book value of $.9 million for $1.1 million. In connection with
this sale, the Company received $.5 million in cash and $.6 million in notes
receivable.
In each of the fiscal years ended June 27, 1992 and July 3, 1993, the
Company wrote off certain fixed assets with a book value of $.4 million. During
fiscal 1994 the Company wrote off certain fixed assets with a book value of $.2
million.
See notes to consolidated financial statements
Page 31
<PAGE>
Notes to Consolidated Financial Statements
A. Summary of Significant Accounting Policies
1. Business
The Company operates 208 stores which sell off-price apparel for men, women
and children. A majority of these stores offer a home linens department and
baby room furniture department. In addition, the Company operates five
stand-alone Luxury Linens stores and one Totally 4 Kids store which sells
baby furniture, children's wear, toys and educational tapes.
2. Principles of consolidation
The consolidated financial statements include the accounts of
Burlington Coat Factory Warehouse Corporation and its subsidiaries
(the "Company"). All intercompany transactions and balances have
been eliminated in consolidation.
3. Inventories
Inventories are stated at the lower of the First In First Out
(FIFO) cost or market, as determined by the retail inventory
method.
4. Property and equipment
Property and equipment are stated at cost and depreciation is
computed on the straight line method over the estimated useful
lives of the assets. The estimated useful lives are between 20
and 40 years for buildings, depending upon the expected useful
life of the facility, and three to ten years for store fixtures
and equipment. Leasehold improvements are amortized over a ten
year period. Repairs and maintenance expenditures are charged to
expense as incurred. Renewals and betterments which significantly
extend the useful lives of existing property and equipment are
capitalized.
5. Store opening expenses
Expenses related to new store openings are charged to operations
in the period incurred.
6. Income taxes
Effective June 28, 1992, the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes." Deferred income taxes have been recorded to recognize
temporary differences which result from revenues and expenses
being recognized in different periods for financial reporting
purposes than for income tax purposes. The adoption of SFAS 109
created a $601,000 benefit ($.02 per share) and was accounted for
in fiscal 1993 as a cumulative change in accounting principle.
7. Income per share
Income per share is based on the weighted average number of shares
outstanding during each period. The dilutive effect of stock
options is not material. Net income per share for the 1992
Page 32
<PAGE>
fiscal year has been restated to reflect the stock splits (see
note B. Stock Splits).
8. Cash and Cash Equivalents
Cash and cash equivalents represent cash and short-term, highly
liquid investments with initial maturities of three months or less. Cash
equivalent investments amounted to $921,681 at July 2, 1994 and
$19,325,000 at July 3, 1993.
9. Fiscal year end date
The Company's fiscal year is a 52-53 week year with its year ending
on the Saturday closest to June 30th of each year. Fiscal 1993
ended July 3, 1993 and comprised 53 weeks, whereas fiscal 1994 and
fiscal 1992 ended July 2, 1994 and June 27, 1992, respectively,
comprised 52 weeks each.
10. Other income
Other income is primarily rental income received from leased
departments and interest income.
11. Reclassifications
Certain reclassifications have been made to the prior years
financial statements to conform to the classifications used in the
current year.
B. Stock Splits
On September 13, 1993, the Board of Directors declared a three-
for-two split of the Company's common stock effective October 4,
1993, to stockholders of record on September 24, 1993. This stock
split was effected in the form of a 50% stock dividend by the
distribution of one additional share for every two shares of stock
already issued. The par value of the common stock remained at
$1.00 per share. As a result, $13.68 million, representing the
total par value of the new shares issued, were transferred from
the capital in excess of par value account to common stock.
Common stock and paid in capital in excess of par value accounts
as of July 3, 1993 and June 27, 1992 were adjusted to give effect
to the stock split. All amounts per share were adjusted to give
retroactive effect to the stock split.
On June 23, 1992, the Board of Directors declared a three-for-two
split of the Company's common stock effective July 27, 1992, to
stockholders of record on July 16, 1992. This stock split was
effected in the form of a 50% stock dividend by the distribution
of one additional share for every two shares of stock already
issued. The par value of the common stock remained at $1.00 per
share. As a result, $9.083 million, representing the total par
value of the new shares issued, were transferred from the capital
in excess of par value account to common stock. Common stock and
paid in capital in excess of par value accounts as of June 27,
1992 were adjusted to give effect to the stock split. All amounts
per share were adjusted to give retroactive effect to the stock
split.
Page 33
<PAGE>
C. Investments
Investments are valued at the lower of cost or market and consist
of the following:
<TABLE>
<CAPTION>
_________________________________________________________________
Market Value
July 2, July 3,
1994 1993
(in thousands)
- - -----------------------------------------------------------------
<S> <C> <C>
<C>
Short-Term:
Mutual funds (cost: 1993,
$11,482) $ 0 $11,674
Bankers Acceptances, at cost
which approximates market 985
Commercial Paper, at cost
which approximates market 1,954
Bonds (cost: 1993 $2,000) 1,994
- - -------------------------------------------------------------------
$ 0 $16,607
- - -------------------------------------------------------------------
Long-Term:
Common Stock (cost: 1994,
$34; 1993, $34) $ 9 $ 12
Preferred Stock (cost: 1994,
$69; 1993, $69) 74 80
- - -------------------------------------------------------------------
$ 83 $ 92
</TABLE>
To reduce the carrying amount of the non-current investments to
market, which was lower than the cost at July 2, 1994, an adjustment to
the valuation allowance in the amount of $9,000 was made by a charge to
stockholders' equity representing the net unrealized loss. For the period
ended July 3, 1993 the valuation allowance adjustment charged to stockholders'
equity amounted to $11,000.
Page 34
<PAGE>
D. Property and Equipment
Property and equipment consists of:
<TABLE>
<CAPTION>
July 2, July 3
1994 1993
(in thousands)
<S> <C> <C>
<C>
Land $ 14,989 $ 14,974
Buildings 78,626 60,261
Store Fixtures and Equipment 155,359 120,635
Leasehold Improvements 35,581 25,029
Construction in Progress 1,100 1,594
- - --------------------------------------------------------------
285,655 222,493
- - --------------------------------------------------------------
Less Accumulated Depreciation
and Amortization <101,065> <79,911>
- - --------------------------------------------------------------
$184,590 $142,582
- - --------------------------------------------------------------
</TABLE>
E. Accounts Payable
Accounts payable consists of the following:
<TABLE>
<CAPTION>
July 2, July 3
1994 1993
(in thousands)
- - --------------------------------------------------------------
<S> <C> <C>
<C>
Accounts Payable-Trade $114,549 $ 99,406
Accounts Payable-Due Banks 3,258 5,618
Other 15,899 11,183
- - --------------------------------------------------------------
$133,706 $116,207
- - --------------------------------------------------------------
</TABLE>
Page 35
<PAGE>
F. Lines of Credit
The Company had available committed lines of credit of $40.0 million
at July 2, 1994 and July 3, 1993. The Company also had uncomitted lines
of credit of $130.0 million and $60.0 million at July 2, 1994 and July 3,
1993, respectively. Short-term borrowings outstanding under these lines
were $65.0 million and $0 at July 2, 1994 and July 3, 1993, respectively.
Letters of credit outstanding against these lines were $50.4 million and
$39.7 million at July 2, 1994 and July 3, 1993, respectively.
The maximum borrowings outstanding under these lines were $65.0 million
during fiscal 1994. The average borrowings outstanding under these lines
were $15.7 million during fiscal 1994. There were no borrowings under
these lines of credit during fiscal 1993.
The weighted average interest rate on outstanding borrowings was 4.9% at
July 2, 1994. The weighted average interest rate on outstanding borrowings
was 3.8% during fiscal 1994.
The Company's committed line of credit renews annually and is available
through 1998. The uncommitted lines of credit are cancellable at any time.
Short-term borrowings against these lines of credit bear interest
at or below the lending bank's prime rate. The $40 million committed line
of credit requires a commitment fee on the unused portion of 1/5 of 1
percent.
G. Long-Term Debt
Long-term debt consists of:
<TABLE>
<CAPTION>
July 2, July 3
1994 1993
(in thousands)
- - ----------------------------------------------------------------------
<S> <C> <C>
<C>
Subordinated Notes, 10.6%, due in
annual $8 million payments from
June 1996 to June 2005 $ 80,000 $ 80,000
Industrial Revenue Bonds 9.78%,
due in semi-annual payments of
various amounts from September 1,
1996 to September 1, 2010 10,000 10,000
Urban Development Action Grant, non-
interest bearing, due April 1999 917 917
Promissory note due at various dates
through 2000 (interest rate
imputed at 10.6%) 506 559
Other -- 65
- - ----------------------------------------------------------------------
Subtotal 91,423 91,541
Less current portion <54> <113>
- - ----------------------------------------------------------------------
Long-Term Debt $ 91,369 $91,428
</TABLE>
The Industrial Revenue Bonds and Urban Development Action Grant
were issued in connection with the construction of the Company's
distribution center. The Bonds are secured by a first mortgage on
the Company's distribution center. The Urban Development Action
Grant was secured by a second mortgage on the facility.
Certain indebtedness totaling $10,917,000 are secured by land and
buildings with a net book value of $20,641,267 at July 2, 1994.
Long-term debt maturing in each of the next five fiscal years is
as follows: 1995 - $54,000; 1996 - $8,066,000; 1997 - $8,393,000;
1998 - $8,431,000 and 1999 - $9,393,000.
Several loan agreements of the Company contain restrictions which, among
other things, require maintenance of certain financial ratios, restrict
encumbrance of assets and creation of indebtedness, and limit the payment
of dividends. At July 2, 1994, $164,745,000 of the Company's retained
earnings of $305,729,000 were unrestricted and available for the payment
of dividends under the most restrictive terms of the agreements.
Page 36
<PAGE>
H. Sales from Leased Departments
Sales from certain leased departments, included in net sales, amounted to
$18.8 million, $18.8 million and $15.8 million in fiscal 1994, fiscal 1993
and fiscal 1992, respectively.
I. Lease Commitments
The Company leases 195 stores and office spaces under operating
leases that will expire principally during the next twenty years.
The leases usually include renewal options and escalation clauses
and provide for contingent rentals based on a percentage of gross
sales.
The following is a schedule of future minimum lease payments under
the operating leases:
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------
(in thousands)
<S> <C>
<C>
Fiscal Year
- - ----------------------------------------------------------------------
1995 46,064
1996 44,687
1997 42,984
1998 41,138
1999 38,188
Thereafter 309,257
- - ----------------------------------------------------------------------
Total minimum lease payments $ 522,318
- - ----------------------------------------------------------------------
</TABLE>
The above schedule of future minimum lease payments has not been
reduced by future minimum sublease rental income of $8,790,000
under non-cancelable subleases and other contingent rental
agreements.
Total rental expenses under operating leases for the periods ended
July 2, 1994, July 3, 1993 and June 27, 1992 were $47,333,000, $39,256,000
and $36,095,000, respectively, including contingent rentals of $1,511,000,
$989,000 and $876,000. Rent expense for the above periods has not been
reduced by sublease rental income of $4,853,000, $6,877,000 and $6,710,000
which has been included in other income for the periods ended July 2, 1994,
July 3, 1993 and June 27, 1992, respectively.
The Company has issued irrevocable letters of credit in the amount
of $11,302,329 to guarantee payment and performance under certain
leases and insurance contracts.
J. Employee Retirement Benefit Plans
The Company has a noncontributory profit-sharing plan covering
full-time employees who meet age and service requirements. Under
the plan, the Company's contribution is determined annually by
Page 37
<PAGE>
the Board of Directors. Profit sharing contributions were
$4,167,000, $3,739,000 and $3,034,000, respectively, for the
periods ended July 2, 1994, July 3, 1993 and June 27, 1992.
K. Income Taxes
The provision for income taxes is summarized as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
<C>
- - ----------------------------------------------------------------------
Year ended 1994 1993 1992
(in thousands)
- - ----------------------------------------------------------------------
Current:
Federal $24,779 $20,795 $16,025
State and Local 3,075 3,309 2,619
- - ----------------------------------------------------------------------
Subtotal 27,854 24,104 18,644
Deferred (826) 408 (652)
- - ----------------------------------------------------------------------
Total $27,028 $24,512 $17,992
- - ----------------------------------------------------------------------
</TABLE>
A reconciliation of the Company's effective tax rate with the
statutory federal tax rate is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
<C>
Year ended 1994 1993 1992
- - ----------------------------------------------------------------------
Tax at statutory rate 35.0% 34.0% 34.0%
State income taxes, net
of federal benefit 2.8 3.2 3.5
Job tax credit (.9) (.8) (1.4)
Other charges .4 .3 .4
- - ----------------------------------------------------------------------
Effective tax rate 37.3% 36.7% 36.5%
- - ----------------------------------------------------------------------
</TABLE>
As discussed in Note A.6. the Company adopted SFAS No. 109 for the
fiscal year beginning June 28, 1992, and the cumulative effect of
this change is reported in the 1993 consolidated statement of
operations. Prior year's financial statements have not been
restated to apply the provisions of SFAS No. 109. Deferred income
taxes for 1994 and 1993 reflect the impact of "temporary differences"
between amounts of assets and liabilities for financial reporting
purposes and such amounts as measured by tax laws. These
temporary differences are determined in accordance with SFAS No.
109 and are more inclusive in nature than "timing differences" as
determined under previously applicable accounting principles.
On August 10, 1993 the Omnibus Budget Reconciliation Act was
enacted which increases federal tax rates from 34% to 35%. The
Page 38
<PAGE>
effect on current and deferred taxes of this change in tax rates was
not significant and was recognized in income during fiscal 1994.
Temporary differences which give rise to deferred tax assets and
liabilities at July 2, 1994 and July 3, 1993 are as follows:
<TABLE>
<CAPTION>
- - ------------------------------------------------------------------------------------------------------------
1994 1993
Deferred Tax Deferred Tax Deferred Tax Deferred Tax
Assets Liabilities Assets Liabilities
(in thousands)
- - ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
<C>
Current:
Allowance for doubtful
accounts $1,954 $1,660
Compensated absences 676 543
Inventory costs
capitalized for IRS
purposes 2,845 2,012
Insurance Reserves 2,746 1,206
Prepaid Items deductible
for IRS purposes $1,439 --- $ 980
- - -------------------------------------------------------------------------------------------------------------
8,221 1,439 5,421 980
- - -------------------------------------------------------------------------------------------------------------
Non-Current:
Depreciation 8,281 --- 7,285
Straight line method of
expending rent payment 1,261 1,742 ---
Other 190 227 ---
- - --------------------------------------------------------------------------------------------------------------
$1,451 $8,281 $1,969 $7,285
- - --------------------------------------------------------------------------------------------------------------
</TABLE>
No valuation account is deemed necessary.
L. Supplementary Income Statement Information
<TABLE>
<CAPTION>
<S> <C> <C> <C>
<C>
- - ----------------------------------------------------------------------
Year ended 1994 1993 1992
(in thousands)
- - ----------------------------------------------------------------------
Advertising $38,793 $35,384 $29,881
Repairs and Maintenance 13,330 10,696 10,421
- - ----------------------------------------------------------------------
</TABLE>
Page 39
<PAGE>
All other required items are omitted since they are less than 1% of total
revenues.
M. Incentive Plans
In April 1983, the stockholders of the Company adopted a Stock Option and Stock
Appreciation Rights Plan (the "1983 Plan") which authorized the granting of
options for the issuance of 1,125,000 shares of common stock. During 1988
the stockholders authorized the issuance of an additional 675,000 shares of
common stock for a total of 1,800,000 shares. The 1983 Plan provided for the
issuance of incentive stock options, nonqualified stock options and stock
appreciation rights. This Plan expired in April, 1993. In November, 1993,
the stockholders of the Company approved a stock incentive plan
(the "1993 Plan"), authorizing the granting of incentive stock options,
non-qualified stock options, stock appreciation rights, restricted stock,
performance stock and other stock based compensation. A total of 450,000 shares
of common stock have been reserved for issuance under the 1993 Plan. A
summary of stock options transactions in fiscal 1992, 1993 and 1994 is as
follows (all data have been restated to reflect the three-for-two stock split):
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------
Number Option Price
of Shares Per Share
- - -----------------------------------------------------------------------
<S> <C> <C>
<C>
Options outstanding
June 27, 1991 . . . . . 1,409,730 $ 4.48 to $ 8.30
Options canceled . . . . . (90,291) $ 4.48 to $ 8.30
Options exercised . . . . . (777,516) $ 4.48 to $ 8.30
- - ----------------------------------------------------------------------
Options outstanding
June 27, 1992 . . . . . 541,923 $ 4.48 to $ 8.30
Options issued . . . . . 9,000 $11.08
Options canceled . . . . . (20,236) $ 4.48 to $ 8.22
Options exercised . . . . . (151,286) $ 4.75 to $ 8.22
- - -----------------------------------------------------------------------
Options outstanding
July 3, 1993 . . . . . 379,401 $ 4.48 to $ 8.30
Options issued . . . . . 25,100 $24.69
Options cancelled . . . . . (5,445) $ 4.74 to $ 7.37
Options exercised . . . . . (81,011) $ 4.74 to $ 7.37
- - -----------------------------------------------------------------------
Options outstanding
July 2, 1994 . . . . . 318,045 $ 4.74 to $24.69
Options exercisable . . . . . 292,945 $ 4.74 to $ 7.37
- - ----------------------------------------------------------------------
</TABLE>
Included in the above are options to purchase 2,250 shares of stock
issued to a member of the Board of Directors at $8.22 per share which
were exercised during the year ended July 2, 1994. To date only stock
options have been granted under both the 1983 Plan and the 1993 Plan.
Page 40
<PAGE>
N. Other Post Employment Benefits
In November, 1992, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 112, "Employers'
Accounting for Post-Employment Benefits." This pronouncement will
not have an effect on the Company's consolidated financial
statements as the benefits covered in the pronouncements are not
provided by the Company.
O. Interim Financial Information (Unaudited)
(All amounts in thousands except per share data.)
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------------------------
Income (Loss)
Income (Loss) Per Share
Before Before
Cumulative Cumulative
Effect of Effect of Income
Provision Change in Change in (Loss)
(Benefit) Accounting Net Accounting per
Net Gross for Income for Income Income for Income Share
Sales Profit Taxes Taxes (Loss) (1) Taxes (1)
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
1994:
First $241,215 $85,445 $(1,352) $(2,916) $(2,916) $(.07) $(.07)
Second 625,420 218,924 33,914 56,082 56,082 1.38 1.38
Third 327,413 114,453 1,727 2,828 2,828 .07 .07
Fourth 274,392 92,800 (7,261) (10,611) (10,611) (.26) (.26)
1993:
First $192,587 $68,234 $(2,277) $(3,889) $(3,288) $(.10) $(.08)
Second 497,498 171,427 25,632 43,677 43,677 1.07 1.07
Third 257,323 88,831 1,125 1,901 1,901 .05 .05
Fourth 250,897 91,507 32 613 613 .02 .02
- - -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Income per share is based on the weighted average number of
shares outstanding during each of the quarters. The sum of the
four quarters may not equal the full year computation due to
rounding.
On an interim basis the Company values inventory using the gross
profit method and at year-end values inventory at the lower of
FIFO cost or market as determined by the retail inventory method.
The annual adjustment for the difference between actual gross
profit and interim estimated gross profit is recorded in the fourth
quarter of the fiscal year. Results of quarterly operations are impacted
by the highly seasonal nature of the Company's business, timing of certain
holiday selling seasons and the comparability of calendar weeks within a
quarter as a result of the 52/53 week fiscal years.
Page 41
<PAGE>
P. Fair Value of Financial Instruments
The carrying values of cash and cash equivalents, short-term
investments, accounts receivable, accounts payable-trade, and
accounts payable-due to banks approximate fair value because of
the short maturities of these items.
Interest rates that are currently available to the Company for
issuance of notes payable and long-term debt (including current
maturities) with similar terms and remaining maturities are used
to estimate fair value for debt issues. The estimated fair value
of notes payable and long-term debt (including current maturities)
are as follows:
<TABLE>
<CAPTION>
July 2, July 3,
1994 1993
(in thousands)
Carrying Fair Carrying Fair
Amount Value Amount Value
<S> <C> <C> <C> <C>
<C>
Notes Payable $65,020 $ 65,020 -- --
Long-Term Debt
(including current maturities) 91,423 102,800 $91,541 $110,000
</TABLE>
The fair values presented herein are based on pertinent
information available to management as of July 2, 1994. Although
management is not aware of any factors that could significantly
affect the estimated fair value amounts, such amounts have not
been comprehensively revalued for purposes of these financial
statements since that date, and current estimates of fair value
may differ from amounts presented herein.
Q. Subsequent Event
On September 29, 1994, the Company received summons and complaint in two
separate purported class action lawsuits. Each of the complaints seeks
unspecified damages and alleges a cause of action arising under certain
federal securities laws for alleged material misstatements and omissions
in public statements by the Company and three executive officers purportedly
causing the market price of the Company's common stock to be artificially
inflated during the period from November 1, 1993 through September 21, 1994,
inclusive. The Company is unable to fully assess the impact of such actions
at this time but believes they are without merit. Accordingly, no provision
for any loss that may result upon resolution of these matters has been made
in the accompanying consolidated financial statements.
- - ------------------------------------------------------------------------
Dividend Policy
The Company has not paid cash dividends in the past and does not
currently plan to do so. It is the present policy of the
Company's Board of Directors to retain future earnings to finance
the growth and development of the Company's business. Any payment
of cash dividends in the future will be at the discretion of the
Company's Board of Directors and will depend upon the financial
condition, capital requirements and earnings of the Company as
well as other factors which the Board of Directors may deem
relevant.
Market for the Registrant's Common Equity and Related Stockholder
Matters
The Company's Common Stock is traded on the New York Stock
Exchange, Inc. and its trading symbol is "BCF." The following
table provides the high and low closing prices on the New York
Stock Exchange for each fiscal quarter for the period from June
28, 1992 to July 2, 1994 and for the two months ended August 31,
1994 (all data has been restated to reflect the three-for-two
stock splits effected on July 27, 1992 and on September 24, 1993):
Page 42
<PAGE>
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------
Period Low Price High Price
- - ----------------------------------------------------------------
<S> <C> <C>
<C>
June 28, 1992 to 7 7/8 11 3/8
September 26, 1992
- - -----------------------------------------------------------------
September 27, 1992 to 10 3/4 16
December 26, 1992
- - ------------------------------------------------------------------
December 27, 1992 to 13 7/8 18 5/8
March 27, 1993
- - ------------------------------------------------------------------
March 28, 1993 to 13 5/8 18 3/8
July 3, 1993
- - ------------------------------------------------------------------
July 4, 1993 to 13 1/8 19 3/8
October 2, 1993
- - ------------------------------------------------------------------
October 3, 1993 to 19 24 1/2
January 1, 1994
- - ------------------------------------------------------------------
January 2, 1994 to 18 28 1/4
April 2, 1994
- - ------------------------------------------------------------------
April 3, 1994 to 16 3/4 27 1/2
July 2, 1994
- - ------------------------------------------------------------------
July 3, 1994 to 16 5/8 24 3/4
August 31, 1994
- - ------------------------------------------------------------------
</TABLE>
As of August 31, 1994, there were 473 record holders of the
Corporate Common Stock. The number of record holders does not
reflect that number of beneficial owners of the Company's Common
Stock for whom shares are held by Lede & Co., certain brokerage
firms and others.
Page 43
<PAGE>
<TABLE>
<CAPTION>
Schedule V-Burlington Coat Factory Warehouse Corporation
Property, Plant and Equipment-Cost
(All amounts in thousands)
Balance at Additions at Other Changes Balance at
Description July 03, 1993 Cost Retirements Add (Deduct) July 02, 1994
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
<C>
Land $14,974 $15 $14,989
Building 60,261 17,071 $1,294 78,626
Store Fixtures and Equipment 120,635 35,001 $(277) 155,359
Leasehold Improvements 25,029 10,799 (247) 35,581
Construction in Progress 1,594 1,100 (1,594) 1,100
--------------------------------------------------------------------------------------
$222,493 $63,986 $(524) ($300) $285,655
======================================================================================
Balance at Additions at Other Changes Balance at
Description June 27, 1992 Cost Retirements Add (Deduct) July 03, 1993
- - ------------------------------------------------------------------------------------------------------------------
Land $10,420 $4,554 $14,974
Building 53,038 7,223 60,261
Store Fixtures and Equipment 99,469 20,608 $(64) $622 120,635
Leasehold Improvements 19,760 5,867 (598) 25,029
Construction in Progress 10 1,584 1,594
--------------------------------------------------------------------------------------
$182,697 $39,836 $(662) $622 $222,493
======================================================================================
Balance at Additions at Other Changes Balance at
Description June 29, 1991 Cost Retirements Add (Deduct) June 27, 1992
- - ------------------------------------------------------------------------------------------------------------------
Land $9,964 $10 $(240) $686 $10,420
Building 48,135 3,413 (754) 2,244 53,038
Store Fixtures and Equipment 81,963 18,994 (924) (564) 99,469
Leasehold Improvements 16,704 3,882 (682) (144) 19,760
Construction in Progress 0 10 10
--------------------------------------------------------------------------------------
$156,766 $26,309 $(2,600) $2,222 $182,697
======================================================================================
</TABLE>
Page 44
<PAGE>
<TABLE>
<CAPTION>
Schedule VI-Burlington Coat Factory Warehouse Corporation
Property, Plant and Equipment-Accumulated Depreciation
(All amounts in thousands)
Additions
Balance at Charged to Other Changes Balance at
Description July 03, 1993 Expense Retirements Add (Deduct) July 02, 1994
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
<C>
Building $15,274 $3,669 $18,943
Store Fixtures and Equipment 54,536 14,956 $(153) 69,339
Leasehold Improvements 10,101 2,834 (152) 12,783
--------------------------------------------------------------------------------------
$79,911 $21,459 $(305) $0 $101,065
======================================================================================
Additions
Balance at Charged to Other Changes Balance at
Description June 27, 1992 Expense Retirements Add (Deduct) July 03, 1993
- - ------------------------------------------------------------------------------------------------------------------
Building $12,471 $2,803 $15,274
Store Fixtures and Equipment 42,437 12,145 $(46) 54,536
Leasehold Improvements 8,183 2,142 (224) 10,101
--------------------------------------------------------------------------------------
$63,091 $17,090 $(270) $0 $79,911
======================================================================================
Additions
Balance at Charged to Other Changes Balance at
Description June 29, 1991 Expense Retirements Add (Deduct) June 27, 1992
- - ------------------------------------------------------------------------------------------------------------------
Building $10,149 $2,379 $(132) $75 $12,471
Store Fixtures and Equipment 33,085 9,835 (483) 42,437
Leasehold Improvements 6,789 1,760 (291) (75) 8,183
--------------------------------------------------------------------------------------
$50,023 $13,974 $(906) $0 $63,091
======================================================================================
</TABLE>
Page 45
<PAGE>
<TABLE>
<CAPTION>
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(ALL AMOUNTS IN THOUSANDS)
- - ---------------------------------------------------------------------------------------------
COL. A COL. B COL. C COL. D COL. E
- - ---------------------------------------------------------------------------------------------
DESCRIPTION BALANCE AT CHARGED TO DEDUCTIONS- BALANCE AT
BEGINNING CHARGED TO OTHER ACCOUNTS END OF
OF PERIOD EXPENSE ACCOUNTS WRITTEN OFF PERIOD
- - ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
<C>
Period ending 7/03/93
- - ---------------------
ALLOWANCE FOR DOUBTFUL
ACCOUNTS-
ACCOUNTS RECEIVABLE $3,723 $3,690 $0 $(3,176) $4,237
PERIOD ENDING 7/02/94
- - ---------------------
ALLOWANCE FOR DOUBTFUL
ACCOUNTS-
ACCOUNTS RECEIVABLE $4,237 $4,821 $0 $(4,063) $4,995
</TABLE>
Page 46
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
Page 47
<PAGE>
File No. 1-8739
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
EXHIBITS FILED WITH
FORM 10-K
FOR FISCAL YEAR ENDED
July 2, 1994
under
The Securities Exchange Act of 1934
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
(Exact Name of Registrant as specified in its Charter)
Page 48
<PAGE>
INDEX TO EXHIBITS
Exhibits Page No.
3.1 Articles of Incorporation, as Amended 1/
3.2 By-laws 1/
10.1 1993 Stock Incentive Plan 1/
10.2 Revolving Credit Agreement dated 2/
August 30, 1985 between the Company
and BancOhio National Bank as amended
through Amendment No. 3
10.3 Amendment No. 4 to Revolving Credit 1/
Agreement between the Company and
National City Bank, Columbus (successor
to BancOhio National Bank)
10.4 Loan Agreement dated as of 2/
September 1, 1985 by and between
New Jersey Economic Development
Authority and Burlington Coat Factory
Warehouse of New Jersey, Inc.
10.5 Assignment of Lease dated as of 2/
September 1, 1985 from Burlington
Coat Factory Warehouse of New
Jersey, Inc. to New Jersey Economic
Development Authority
10.6 Mortgage dated September 20, 1985 2/
between Burlington Coat Factory of
New Jersey, Inc. and New Jersey
Economic Development Authority
_______________
<F1>
(1) Incorporated by reference to Exhibits filed with the
Company's Annual Report on Form 10-K for the year ended July
3, 1993, File No. 1-8739.
<F2>
(2) Incorporated by reference to Exhibits filed with the
Company's Annual Report on Form 10-K for the year ended June
29, 1991, File No. 1-8739.
Page 49
<PAGE>
Exhibits Page No.
10.7 Indenture of Trust dated as of 2/
September 1, 1985 by and between
New Jersey Economic Development
Authority and National Westminster
Bank USA
10.8 Guarantee dated as of September 1, 1985 2/
from the Company to New Jersey
Economic Development Authority
10.9 Employees Profit Sharing Plan, as 1/
amended September 30, 1988
10.10 Amendment No. 3 dated November 16, 1/
1989, to Employees Profit Sharing
Plan
10.11 Amendment No. 4, dated February 24, 1/
1993, to Employees Profit Sharing
Plan
10.12 Note Agreement dated June 27, 1990 3/
22 Subsidiaries of Registrant 53
24 Consent of Deloitte & Touche LLP 55
independent certified public accountants,
to the use of their report on the financial
statements of the Company for the fiscal
year ended July 2, 1994 in the Registration
Statements of the Company on Form S-8,
Registration No. 2-96332, No. 33-21569
and No. 33-51965
27 Financial Data Schedule 57
_______________
<F3>
(3) Incorporated by reference to the Exhibits filed within the
Company's Current Report on Form 8-K dated June 27, 1990, File No.
1-8739.
Page 50
<PAGE>
EXHIBIT 22
Page 51
<PAGE>
SUBSIDIARIES OF THE COMPANY
Burlington Coat Factory Warehouse Corporation is the parent
corporation of two hundred and fifteen subsidiaries which
operate "off-price" retail apparel stores in the United States.
Burlington Coat Factory Realty Corp., a Delaware corporation,
which buys, sells and otherwise deals in real estate in
connection with the Company's business.
Burlington Coat Factory Warehouse, Inc., a Pennsylvania
corporation, which leases the Company's store in Clifton Heights,
Pennsylvania to one of the Company's operating subsidiaries.
Monroe G. Milstein, Inc., a New York corporation, which operates a
wholesale apparel business.
LC Acquisition Corp., a New York corporation, which owns an
interest in a manufacturer of coats.
C.L.B., Inc., a Delaware corporation, through which the Company
collects royalties from its subsidiaries for the use of its trade
names.
C.F.I.C. Corporation, a Delaware corporation, through which the
Company invests excess funds.
C.F.B., Inc., a Delaware corporation, through which the Company
provides financing for its subsidiaries for the acquisition of
their merchandise inventory and store fixtures.
Burlington Coat Factory Warehouse de Mexico, S.A. de C.V., which is a
holding company for the Company's Mexican operations.
Page 52
<PAGE>
EXHIBIT 24
Page 53
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements
No. 2-96332, No. 33-21569 and No. 33-51965 of Burlington Coat Factory
Warehouse Corporation and subsidiaries on Form S-8 of our report dated
September 16, 1994 (September 29, 1994 as to Note Q), appearing in this
Annual Report on Form 10-K of Burlington Coat Factory Warehouse Corporation
and subsidiaries for the year ended July 2, 1994.
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
September 29, 1994
Page 54
<PAGE>
EXHIBIT 27
Page 55
<PAGE>
Page 56
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE REGISTRANT'S
AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JULY 2, 1994 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-02-1994
<PERIOD-END> JUL-02-1994
<CASH> 21,236,000
<SECURITIES> 0
<RECEIVABLES> 18,910,000
<ALLOWANCES> 4,995,000
<INVENTORY> 468,921,000
<CURRENT-ASSETS> 528,822,000
<PP&E> 285,655,000
<DEPRECIATION> 101,065,000
<TOTAL-ASSETS> 725,439,000
<CURRENT-LIABILITIES> 250,232,000
<BONDS> 91,369,000
<COMMON> 41,122,000
0
0
<OTHER-SE> 328,735,000
<TOTAL-LIABILITY-AND-EQUITY> 725,439,000
<SALES> 1,468,440,000
<TOTAL-REVENUES> 1,480,676,000
<CGS> 956,818,000
<TOTAL-COSTS> 956,818,000
<OTHER-EXPENSES> 436,753,000
<LOSS-PROVISION> 4,821,000
<INTEREST-EXPENSE> 9,873,000
<INCOME-PRETAX> 72,411,000
<INCOME-TAX> 27,028,000
<INCOME-CONTINUING> 45,383,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 45,383,000
<EPS-PRIMARY> 1.12
<EPS-DILUTED> 1.12
</TABLE>
