FORM 10-Q
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
(MARK ONE)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From ... to ...
Commission File No. 1-8739
Burlington Coat Factory Warehouse Corporation
________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 22-1970303
- ------------------------------ -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1830 Route 130 North
Burlington, New Jersey 08016
- ------------------------------ -------------------------------
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code (609)387-7800
Indicate by check mark whether the
Registrant (1) has filed all reports
required 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 the number of shares outstanding
of each of the issuer's classes of common
stock, as of the latest practicable date.
Class Outstanding at May 3, 1996
- -------------------------- --------------------------------
Common stock, par value $1 41,156,173
Page 1 of 24<PAGE>
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
I N D E X
Page
Part I - Financial Information:
Item 1. Financial Statements:
Condensed consolidated balance sheets - March 30, 1996 3
(unaudited), July 1, 1995 and April 1, 1995 (unaudited)
Condensed consolidated statements of operations - Nine and 4
three months ended March 30, 1996 and April 1, 1995
(unaudited)
Condensed consolidated statements of cash flows - nine 5
months ended March 30, 1996 and April 1, 1995
(unaudited)
Notes to condensed consolidated financial statements 6
Item 2. Management's discussion and analysis of results 7 -11
of operations and financial condition
Part II - Other Information:
Item 1. Legal Proceedings 12
Item 6. Exhibits and reports on Form 8-K 12
SIGNATURES 13
* * * * * * * * * * * *
Page 2 of 24<PAGE>
<TABLE>
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands)
<CAPTION>
March 30, July 01, April 01,
1996 1995 1995
(Unaudited) Note A (Unaudited)
----------- -------- -----------
ASSETS
<S> <C> <C> <C>
Current Assets:
Cash and Cash Equivalents $ 120,366 $ 14,520 $ 24,219
Short-Term Investments -- -- --
Accounts Receivable 17,931 15,326 15,618
Merchandise Inventories 428,750 452,026 529,294
Deferred Tax Asset 10,320 8,843 8,844
Prepaid and Other Current Assets 4,686 6,006 8,143
---------- ---------- ----------
Total Current Assets 582,053 496,721 586,118
Property and Equipment Net of Accumulated
Depreciation and Amortization 212,758 224,493 218,170
Other Assets 10,117 14,055 14,462
---------- ---------- ----------
Total Assets $ 804,928 $ 735,269 $ 818,750
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 189,586 $ 101,046 $ 193,598
Notes Payable 0 85,900 51,800
Income Taxes Payable 15,567 2,064 8,695
Other Current Liabilities 75,690 54,177 62,186
Current Maturities of Long Term Debt 8,071 8,066 64
--------- --------- ----------
Total Current Liabilities 288,914 251,253 316,343
Long Term Debt 83,244 83,298 91,315
Other Liabilities 8,322 9,728 7,778
Deferred Tax Liability 6,228 5,971 7,101
Stockholders' Equity:
Net Unrealized Loss on Noncurrent Marketable
Equity Securities (0) (8) (20)
Equity Adjustment for Translation -- -- --
Preferred Stock -- -- --
Common Stock 41,150 41,139 41,133
Capital in Excess of Par Value 25,243 25,143 24,661
Retained Earnings 353,651 320,595 332,289
Less Treasury Stock at Cost (1,824) (1,850) (1,850)
---------- ---------- ----------
Total Stockholders' Equity 418,220 385,019 396,213
---------- ---------- ----------
Total Liabilities and
Stockholders' Equity $ 804,928 $ 735,269 $ 818,750
========= ========= ==========
<FN>
See notes to the condensed consolidated financial statements.
</TABLE>
Page 3 of 24<PAGE>
<TABLE>
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
(All amounts in thousands except per share data)
<CAPTION>
Nine Months Ended Three Months Ended
March 30, April 01, March 30, April 01,
1996 1995 1996 1995
----------------------- ----------------------
<S> <C> <C> <C>
REVENUES:
Net Sales $1,273,092 $1,280,191 $ 323,234 $324,457
Other Income 14,299 8,386 6,707 2,879
---------- ---------- ---------
1,287,391 1,288,577 329,941 327,336
---------- ---------- ---------
COSTS AND EXPENSES:
Cost of Sales (Exclusive of Depreciation
and Amortization) 834,176 848,106 215,164 216,556
Selling and Administrative Expenses 366,173 367,955 112,753 115,235
Depreciation and Amortization 21,613 18,978 7,329 6,727
Interest Expense 9,454 10,355 2,351 2,991
---------- ---------- ---------- --------
1,231,416 1,245,394 337,597 341,509
---------- ---------- ---------- --------
Income (Loss) Before Income Taxes 55,975 43,183 (7,656) (14,173)
Provision (Benefit) For Income Taxes 22,919 16,623 (3,089) (5,144)
---------- ---------- ---------- --------
Net Income (Loss) $33,056 $26,560 $ (4,567) $ (9,029)
========== ========== ========== =========
Net Income (Loss) Per Share $0.81 $0.65 ($0.11) ($0.22)
========== ========== ========== =========
Weighted Average Shares Outstanding 40,715,343 40,700,550 40,718,641 40,704,114
========== ========== ========== ==========
Dividends Per Share -- -- -- --
========== ========== ========== ==========
<FN>
See notes to the condensed consolidated financial statements.
</TABLE>
Page 4 of 24<PAGE>
<TABLE>
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(All amounts in thousands)
<CAPTION>
Nine Months Ended
March 30, April 01,
1996 1995
----------------------------
<S> <S> <S>
OPERATING ACTIVITIES
Net Income $ 33,056 $ 26,560
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 21,613 18,978
Provision for Deferred Income Taxes (1,220) (1,790)
Loss on Disposition of Fixed Assets 174 102
Rent Expense and Other 5,032 4,487
Changes in Operating Assets and Liabilities:
Accounts Receivable (6,392) (1,676)
Merchandise Inventories 23,276 (60,373)
Prepaids and Other Current Assets 1,320 9,825
Accounts Payable 88,540 59,892
Other Current Liabilities 34,516 19,428
--------- ---------
Net Cash Provided by Operating Activities 199,915 75,433
--------- ---------
INVESTING ACTIVITIES
Acquisition of Property and Equipment (27,180) (52,683)
Proceeds From Sale of Fixed Assets 17,628 23
Issuance of Long Term Notes Receivable (413) (5,202)
Receipts Against Long Term Notes Receivable 4,194 1,409
Acquisition of Leasehold -- (2,652)
Minority Interest (12) (38)
Other (2,474) (123)
--------- ---------
Net Cash (Used) by Investing Activities (8,257) (59,266)
--------- ---------
FINANCING ACTIVITIES
Principal Payments on Long Term Debt (49) (44)
Issuance of Common Stock Upon Exercise of
Stock Options 137 80
Repayment Under Lines of Credit (85,900) (13,220)
--------- ---------
Net Cash (Used) in Financing Activities (85,812) (13,184)
--------- ---------
Increase in Cash and Cash Equivalents 105,846 2,983
Cash and Cash Equivalents at Beginning of Period 14,520 21,236
--------- ---------
Cash and Cash Equivalents at End of Period $120,366 $24,219
========= =========
Interest Paid: $ 7,773 $ 8,510
Income Taxes Paid: $ 10,636 $10,172
========= =========
<FN>
See notes to the condensed consolidated financial statements.
</TABLE>
Page 5 of 24<PAGE>
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE AND THREE MONTHS ENDED March 30, 1996 AND April 1, 1995
1. The condensed consolidated financial statements include the accounts
of the Company and all its subsidiaries. All significant intercompany
accounts and transactions have been eliminated. The accompanying financial
statements are unaudited, but in the opinion of management reflect all
adjustments (which are of a normal and recurring nature) necessary for a
fair presentation of the results of operations for the interim period.
Because the Company's business is seasonal in nature, the operating results
for the nine and three months ended March 30, 1996 and the corresponding
periods ended April 1, 1995 are not necessarily indicative of results for
the fiscal year.
2. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that
these condensed consolidated financial statements be read in conjunction
with the financial statements and notes thereto included in the Company's
Annual Report on Form 10-K filed with the Securities and Exchange
Commission on September 29, 1995.
3. Inventories as of March 30, 1996 and April 1, 1995 are stated at the
lower of cost or market, as valued by the gross profit method. Inventories
as of July 1, 1995 were valued by the retail inventory method.
4. As of March 30, 1996, the Company had a deferred tax liability of $6.2
million and a current deferred tax asset of $10.3 million. As of April 1,
1995, the Company had a deferred tax liability of $7.1 million and a
current deferred tax asset of $8.8 million. Valuation allowances were not
required. Deferred tax assets consisted primarily of certain operating
costs, provisions for uncollectible receivables, and certain inventory
related costs, not currently deductible for tax purposes. Deferred tax
liabilities primarily reflected the excess of tax depreciation over book
depreciation.
5. Licensee department sales, included in net sales, amounted to $26.8
million and $7.2 million for the nine and three month periods ended March
30, 1996 compared with $20.0 million and $6.1 million for the similar
periods of fiscal 1995.
6. Other current liabilities primarily consisted of sales tax payable,
accrued operating expenses, payroll taxes payable and other miscellaneous
items.
Page 6 of 24<PAGE>
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition.
Results of Operations
- ---------------------
The following table sets forth certain items in the condensed consolidated
statements of operations as a percentage of net sales for the nine and
three month periods ended March 30, 1996 and April 1, 1995.
Percentage of Net Sales
Nine Months Ended Three Months Ended
March 30, April 1, March 30, April 1,
1996 1995 1996 1995
Net Sales 100.0% 100.0% 100.0% 100.0%
Costs and expenses:
Cost of sales 65.5 66.2 66.6 66.7
Selling & adminis-
trative expenses 28.8 28.7 34.9 35.5
Depreciation &
amortization 1.7 1.5 2.3 2.1
Interest expense .7 .8 .7 .9
------- ------- ------- ------
96.7 97.2 104.5 105.2
------- ------- ------- ------
Other income 1.1 .6 2.1 .9
------- ------- -------- -------
Income (loss) before
income taxes 4.4 3.4 (2.4) (4.3)
Provision (benefit) for
income taxes 1.8 1.3 (1.0) (1.6)
-------- -------- -------- -------
Net income (loss) 2.6% 2.1% (1.4%) (2.7%)
======== ======== ======== =======
Page 7 of 24<PAGE>
Nine and Three Months Ended March 30, 1996 and April 1, 1995
- ----------------------------------------------------------------------
Net sales decreased $7.1 million (.6%) for the nine month period ended
March 30, 1996 compared with the similar period a year ago.
Comparative store sales decreased 8.6%. New Burlington Coat Factory
Warehouse stores opened subsequent to April 1, 1995 contributed $78.8
million to this year's sales. Stores which were in operation a year
ago, but which were closed prior to this year, contributed $15.0
million to last year's sales. The Cohoes stores showed a comparative
stores sales decrease of 14.2%, while contributing $30.7 million to
consolidated sales for the period. Sales in the nine month period for
the Decelle stores were $25.1 million compared with $24.8 million in
the similar period of a year ago. "Specialty" stores opened
subsequent to last year's third fiscal quarter, including two Totally
4 Kids stores, and one Luxury Linens store, contributed sales of $3.6
million to the current nine month period. Sales from leased
departments, included in the nine month net sales figure, were $26.8
million compared with $20.0 million for the similar period of a year
ago.
For the three month period ended March 30, 1996, net sales decreased
.4% to $323.2 million compared with the similar period of a year ago.
Comparative store sales decreased 7.1%. New Burlington Coat Factory
Warehouse stores opened subsequent to April 1, 1995 contributed $22.2
million to the third quarter's net sales volume. Cohoes comparative
store sales decreased $1.2 million (5.2%) for the third quarter of
fiscal 1996 compared with the similar period of fiscal 1995. The
"Specialty" stores contributed $1.8 million to this year's third
quarter sales. Sales for the Decelle chain were $6.8 million for the
three months ended March 30, 1996 compared with $5.8 million in the
similar period of fiscal 1995. Leased department sales, included in
net sales, were $7.2 million for the third fiscal quarter this year
compared with $6.1 million in last year's similar period.
The Company closed seven stores during the first nine months of
fiscal 1996. These stores contributed $10.4 million and $3.2 million
to net sales for the nine and three months ended March 30, 1996,
respectively, compared with $13.5 million and $3.9 million in the
similar periods of a year ago.
Sales for the nine and three month periods were also favorably
affected by an earlier Easter selling season in fiscal 1996 as
compared to fiscal 1995. In fiscal 1995, approximately two weeks of
the Easter selling season fell into the Company's fourth quarter
compared with one week of this fiscal year's Easter selling season
being recorded in the fourth quarter. This resulted in shifting
approximately $13.9 million in net sales into this year's third
quarter.
Other income (consisting primarily of rental income from leased
departments, investment income and miscellaneous items) increased to
$14.3 million for the nine months ended March 30, 1996 compared with
$8.4 million for the nine months ended April 1, 1995. For the three
months ended March 30, 1996, other income was $6.7 million compared
with $2.9 million for the similar period of fiscal 1995. The increase
for the nine month period is due primarily to a gain of approximately
$1.9 million on the sale of the Company's Secaucus, New Jersey
facility, a portion of which the Company had been leasing to third
parties and a portion of which it uses as a store. In addition,
Page 8 of 24<PAGE>
increases in interest income of $2.3 million were the result of
increases in investable funds generated by the Company through its
continued plan of maintaining lower inventory levels compared with
inventory levels of a year ago. Furthermore, during the third quarter
of fiscal 1996, the Company recorded non-recurring miscellaneous
income of $4.0 million. For the three months ended March 30, 1996
interest income increased $1.4 million compared with the similar
period of a year ago. Offsetting these increases were losses of $2.3
and $1.5 million for the nine and three month periods ended March 30,
1996, respectively, recorded for the writeoff of leasehold
improvements of stores closed during this fiscal year.
Cost of sales decreased by $13.9 million (1.6%) for the nine month
period ended March 30, 1996 compared with the similar period a year
ago and by $1.4 million (.6%) for the quarter ended March 30, 1996
compared with the similar period a year ago. Cost of sales as a
percentage of net sales decreased from 66.2% to 65.5% for the nine
months and decreased from 66.7% to 66.6% for the quarter ended March
30, 1996 compared with the similar periods a year ago. These
decreases in cost of sales for both the nine months and third quarter
are due to decreases in markdowns taken and improvements in the
Company's initial markons. Markdowns taken in the third fiscal
quarter and year to date were lower compared with the similar periods
a year ago, due to the Company's substantial reduction in inventory
levels from last year. Comparable inventory levels have been reduced
20 to 25 percent. In addition, the Company's initial markups have
improved due to better buys from vendors, particularly in outerwear,
driven by the extremely weak apparel environment.
Selling and administrative expenses decreased by $1.8 million (.5%)
for the nine month period ended March 30, 1996 compared with the
similar period a year ago. As a percentage of net sales, selling and
administrative expenses increased to 28.8% from 28.7% in the
comparable nine month periods. For the three months ended March 30,
1996 selling and administrative expenses decreased $2.5 million to
$112.8 million (2.2%). As a percentage of net sales, selling and
administrative expenses were 34.9% compared with 35.5% for the similar
period of a year ago. For both the nine and three month periods ended
March 30, 1996, compared with the similar periods of a year ago,
increases in insurance expenses and in costs associated with the
opening of new stores have been offset by store payroll cost savings.
Comparative store payroll savings of approximately $19.7 million and $4.7
million were realized for the nine and three months ended March 30, 1996,
respectively.
Interest expense decreased $.9 million for the nine months ended March
30, 1996 compared with the similar period of fiscal 1995. For the
three month period ended March 30, 1996, interest expense decreased
$.6 million to $2.4 million compared with the three months ended April
1, 1995. The three and nine month decreases in interest expense are
the result of decreases in borrowing levels associated with the
Company's revolving credit and term loan agreements and the
refinancing of its industrial development bonds.
The provision for income taxes increased to $22.9 million for the nine
months ended March 30, 1996 from $16.6 million for the similar period
of fiscal 1995. For the three months ended March 30, 1996 the Company
Page 9 of 24<PAGE>
recorded an income tax benefit of $3.1 million compared with an income
tax benefit of $5.1 million in the similar period of fiscal 1995.
The effective tax rate was 40.9% for the nine month period ended March
30, 1996 compared with 38.5% for the comparable nine month period of
fiscal 1995. The effective tax rate was 40.3% for the three months
ended March 30, 1996 compared with 36.3% for the similar period of
fiscal 1995. The increases in the effective tax rates are primarily
the result of increases in the Company's effective state income tax
rate and the elimination of the Federal Targeted Jobs Tax Credit
Program effective January 1, 1995.
Net income increased $6.5 million to $33.1 million for the nine months
ended March 30, 1996 from $26.6 million for the comparative period of
fiscal 1995. Income per share was $.81 per share for the current
year's nine month period compared with $.65 for the similar period of
a year ago. Net loss was $4.6 million for the three month period
ended March 30, 1996 compared with $9.0 million for the three months
ended April 1, 1995. Net loss per share decreased to $.11 per share
for the three months ended March 30, 1996 compared with $.22 for
similar period of a year ago.
The Company's business is seasonal, with its highest sales occurring
in the months of October, November, and December of each year. The
Company's net income generally reflects the same seasonal pattern as
its net sales. In the past, substantially all of the Company's
profits have been derived from operations during the months of
October, November and December.
Liquidity and Capital Resources
The Company opened thirteen stores during the first six months of
fiscal 1996. During the third fiscal quarter, an additional two
stores were open. The Company closed six stores during the current
fiscal quarter bringing the total number of stores closed for the
fiscal year to seven stores. In addition, the Company plans to close
an additional three stores in the fourth quarter of fiscal 1996.
Expenditures incurred to set up and fixture new stores through the
first nine months of fiscal 1996, were approximately $14.5 million.
In addition, the Company expended approximately $6.3 million for
capital improvements and refurbishing of existing stores and its
former Secaucus, New Jersey property (which was sold on September 29,
1995).
In September 1995, the Company realized approximately $17.6 million
in net cash upon the sale of its Secaucus, New Jersey facility. The
sale added approximately $1.9 million to this fiscal year's earnings
before provision for income taxes.
Net cash provided by operating activities of $199.9 million, for the
nine months ended March 30, 1996, increased from $75.4 million in net
cash provided by operating activities for the comparable period of
fiscal 1995, an increase of $124.5 million. This change in net cash
from operations was primarily the result of the Company's inventory
being at a reduced level compared with the similar period of a year
ago.
Page 10 of 24<PAGE>
The Company's long-term borrowings at March 30, 1996 include $72
million of long term subordinated notes issued by the Company to
institutional investors in June 1990 (the Notes) and an industrial
development bond of $10 million issued by the New Jersey Economic
Development Authority.
The Notes mature on June 27, 2005 and bear interest at the rate of
10.6% 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 industrial development bond
financing (the "Bonds") consist of serial and term bonds. The serial
bonds aggregate $3.6 million and mature in series annually on
September 1, beginning in 1996 and continuing to and including 2003.
The term bonds consist of two portions, $1.4 million maturing on
September 1, 2005 and $5.0 million maturing on September 1, 2010. The
serial bonds bear interest ranging from 3.75% to 5.4% per annum, and
the term bonds bear interest at the rates of 5.60% for the portion
maturing on September 1, 2005 and 6.125% per annum for the portion
maturing on September 1, 2010. The average interest rate and average
maturity of the Bonds are 5.84% and 9.78 years, respectively.
The Company has in place a committed line of credit agreement in the
amount of $50 million. The Company also has uncommitted lines of
credit of $150 million. During the first quarter of fiscal 1996 the
Company had maximum borrowings of $120.4 million. The average
borrowing during the quarter amounted to $98.1 million at an average
interest rate of 6.2%. During the second quarter of fiscal 1996, the
Company had maximum borrowings under these agreements of $84.3
million. The average borrowing during this period was $65.1 million
with an average borrowing interest rate of 6.2%. The Company did not
draw on its lines of credit during the third quarter of fiscal 1996.
As of March 30, 1996 all borrowing under these agreements had been
repaid.
The Company believes that its current capital expenditure and
operating requirements will be satisfied from internally generated
funds, and from short-term borrowings under its revolving credit and
term loan agreements as well as uncommitted lines of credit. The
Company may consider replacing some of its uncommitted lines of
credit with committed lines of credit and or replacing some of its
short term borrowings with long term financing. Furthermore, to the
extent that the Company decides to purchase additional store
locations, it may be necessary to finance such acquisitions with
additional long term borrowings.
On or about September 23, 1994 three separate putative class actions
were filed against the Company. These three actions were consolidated
and an amended complaint was received on January 18, 1995. On February 20,
1996, the District Court dismissed the plaintiffs' amended complaint
in its entirety. Plaintiffs have appealed. (See Part II - Other
Information, Item 1 Legal Proceedings.) The Company is unable
to determine the probability of any potential loss with respect to
these class actions suits or the materiality thereof at this time and
accordingly has not established any reserve for this matter.
Page 11 of 24<PAGE>
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1 Legal Proceedings
In late September 1994, three putative class action
lawsuits, P. Gregory Buchanan v. Monroe G. Milstein, et al., No. 94-
CV-4663, Jacob Turner v. Monroe G. Milstein, et al., No. 94-CV-4737,
and Ronald Abramoff v. Monroe G. Milstein, et al., No. 94-CV-4751
(collectively, the "Class Actions"), were filed against the Company,
Monroe G. Milstein, Stephen E. Milstein and Robert L. LaPenta, Jr. in
the United States District Court for the District of New Jersey. By
Order entered November 15, 1994, the Court consolidated the Class
Actions under the caption, In re Burlington Coat Factory Securities
Litigation. On January 17, 1995, plaintiffs filed their Consolidated
Amended and Supplemental Class Action Complaint (the "Amended
Complaint"), naming as defendants, in addition to those originally
named in September 1994, Andrew R. Milstein and Mark A. Nesci. The
Amended Complaint sought unspecified damages in connection with
alleged violations of Section 10(b) (and Rule 10b-5 promulgated
thereunder) and 20(a) of the Securities Exchange Act of 1934, as
amended. The Amended Complaint alleged material misstatements and
omissions by the Company and certain of its officers and directors
that plaintiffs allege caused the Company's common stock to be
artificially inflated during the proposed Class Period, which is
defined in the Amended Complaint as the period from October 4, 1993
through September 23, 1994. On February 20, 1996, the Disrict Court
granted the Company's motion, and dismissed the Amended Complaint in
its entirety. In March 1996, the plaintiffs filed their appeal from
the District Court's decision in the United States Court of Appeals
for the Third Circuit. Plaintiffs have not yet filed their opening
brief in connection with that appeal. Although the Company is unable
at this time to assess the probable outcome of the plaintiffs' appeal,
the Company fully agrees with the District Court's decision to dismiss
the Amended Complaint in its entirety, and intends to vigorously
oppose the plaintiffs' efforts to overturn the District Court's
decision.
Item 6 Exhibits and Reports on Form 8-K
Page No.
a. Exhibits
10.13 Amendment Nos. 5 and 6 to
Revolving Credit Agreement with
National City Bank 14
b. No reports on Form 8-K have been filed during the
quarter for which this report is filed
Page 12 of 24<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
/s/ MONROE G. MILSTEIN
-----------------------------------
Monroe G. Milstein
President & Chief Executive Officer
/s/ ROBERT L. LAPENTA, JR.
------------------------------------
Robert L. LaPenta, Jr.
Corporate Controller & Chief Accounting
Officer
Date: May 14, 1996
Page 13 of 24<PAGE>
EXHIBIT 10.13
Page 14 of 24<PAGE>
National City Bank National City Bank, Columbus
155 East Broad Street
Columbus, Ohio 43251
614-463-7466
Richard Ray
Senior Vice President
September 28, 1995
Mr. Robert L. LaPenta
Controller & Chief Accounting Officer
Burlington Coat Factory Warehouse Corp.
1830 Route 130
Burlington, NJ 08016
AMENDMENT NO. 5 TO REVOLVING CREDIT AGREEMENT
Dear Bob:
This letter will confirm to you our verbal representation and
hereby serve to amend the Revolving Credit Agreement (the
"Agreement") dated August 30, 1985 between Burlington Coat
Factory Warehouse Corporation (the "Borrower") and National City
Bank, Columbus (the "Bank"). Whereas, Borrower and Bank desire
to amend the Agreement in part to provide for indebtedness of
Borrower outside of the Agreement. Now therefore, the parties
hereto agree as follows:
Section 7.16(B) of the Agreement is hereby amended by deleting
the words "from Mellon pursuant to the Mellon Commitment" and
substituting therefor the following:
"from other sources up to $125,000,000.00 in total for the
period from December 1, 1994 to December 31, 1995,
thereafter, reducing to $10,000,000.00"
It is our understanding that Burlington Coat Factory fully
expects to be out of its short term borrowings by the end of
December 1995. It is also our understanding that the company
intends to further modify these provisions to maintain full
compliance prior to the end of its fiscal year 1996.
If the provisions of this amendment are acceptable to you, please
indicate your acceptance below.
Page 15 of 24 <PAGE>
Accepted and agreed to this 28th day of September 1995.
NATIONAL CITY BANK, COLUMBUS BURLINGTON COAT FACTORY
WAREHOUSE CORPORATION
By: /s/ Richard A. Ray By: /s/ Robert L. LaPenta, Jr.
Its: Senior Vice President Its: Controller
Page 16 of 24<PAGE>
AMENDMENT NO. SIX TO REVOLVING CREDIT AGREEMENT
THIS AMENDMENT NO. SIX TO REVOLVING CREDIT AGREEMENT (the
"Amendment No. Six") is made to the Revolving Credit Agreement
(the "Agreement") dated August 30, 1985, executed by and between
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION, a corporation duly
organized under the laws of the State of Delaware and BURLINGTON
COAT FACTORY WAREHOUSE OF NEW JERSEY, INC., a corporation duly
organized under the laws of the State of New Jersey (herein
collectively referred to as the "Borrower"), and NATIONAL CITY
BANK, COLUMBUS, fka BancOhio National Bank, a national banking
association with its principal office at 155 East Broad Street,
Columbus, Ohio 43251 (herein called "Bank").
WITNESSETH:
WHEREAS, Borrower and Bank entered into the Agreement pursuant to
which Bank extended a revolving loan up to a maximum principal
amount of Twenty-Five Million and No/100 Dollars
($25,000,000.00), said maximum principal amount having previously
been increased to $40,000,000.00, and each loan having been made
pursuant to the terms of the Agreement; and
WHEREAS, Borrower and Bank have previously entered into
amendments of the Agreement, as evidenced by an Amendment No. 1
dated January 7, 1987, by an Amendment No. 2 dated February 3,
1987, by Amendment No. 3 dated August 30, 1985, by Amendment No.
4 dated August 30, 1985, and by Amendment No. 5 dated September
28, 1995 (the "Amendments") (the Agreement together with the
Amendments hereinafter collectively referred to as the
"Agreement") and
WHEREAS, Borrower and Bank desire to amend the Agreement in part
to increase the maximum principal amount and to provide for
certain changes in covenants contained in the Agreement.
NOW THEREFORE, the parties hereto, in consideration of the mutual
promises and covenants herein contained, agree as follows:
1. Section 2.01 of the Agreement is hereby amended by deleting
such section in its entirety and substituting therefor the
following:
"The Commitment. Subject to the terms and conditions
hereinafter provided, Bank shall lend Borrower, from time to
time during the period from the date hereof to and including
the Commitment Termination Date, such sums (the "Loans") as
Page 17 of 24<PAGE>
Borrower may request in an aggregate principal amount not to
exceed at any time outstanding the amount of Fifty Million
Dollars ($50,000,000.00), as such amount may be reduced
pursuant to Section 2.08 hereof (such amount being the
"Commitment"). Each Loan shall be in an amount equal to not
less than One Million Dollars ($1,000,000.00). Within the
limits of the Commitment and prior to the Commitment
Termination Date, Borrower may borrow, repay and reborrow
pursuant to this Section 2.01."
2. Section 2.03 of the Agreement is hereby amended by deleting
such section in its entirety and substituting therefor the
following:
"The Note. The Loans shall be evidenced by a substitute
revolving loan promissory note of Borrower (the "Note"),
dated the date of Amendment No. Six to this Agreement,
payable to the order of Bank in the principal amount of the
Commitment and otherwise substantially in the form of
Replacement Exhibit 2.03 attached hereto. The Note shall be
in substitution for and shall now evidence the unpaid
principal indebtedness existing under a former promissory
note dated as of June 1, 1989 executed and delivered by
Borrower to Bank in the original principal amount of
$40,000,000.00 and payable in accordance with its terms.
Upon the execution and delivery of the Note, all existing
indebtedness under such previous note shall be considered
refinanced and transferred to the Note in the principal
amount thereof. In such event, the previous note shall be
deemed satisfied and replaced by the Note. Bank shall
endorse the Note with an appropriate notation indicating the
amount of each Loan made by it hereunder and the amount of
each payment or prepayment on account of the principal
balance of the Note. A copy of each such annotation shall
be delivered to Borrower promptly after same is made."
3. Section 7.07 of the Agreement is hereby amended by deleting
such section in its entirety and substituting therefor the
following:
"Tangible Net Worth. Borrower's Tangible Net Worth as at
the end of any of its fiscal years during the term of this
Agreement shall be equal to not less than (A) Three Hundred
Million Dollars ($300,000,000.00) plus (B) Thirty percent
Page 18 of 24<PAGE>
(30%) of Borrower's Net income for each fiscal year after
June 30, 1996 (This Tangible Net Worth requirement shall not
be reduced in the event the Borrower sustains a net loss in
any fiscal year). If Borrower changes its fiscal year, the
minimum Tangible Net Worth as at the end of the new fiscal
year end shall be equal to the minimum Tangible Net Worth at
the end of the immediately preceding fiscal year plus thirty
percent (30%) of Borrower's Net Income for the shortened
fiscal year period."
4. Section 7.16 of the Agreement is hereby amended by deleting
such section in its entirety as written and substituting
therefor the following:
"Indebtedness for Borrowed Money. Borrower will not borrow,
and will not permit any Subsidiary to borrow, any funds
except pursuant to the following types of borrowings: (A)
borrowings by Subsidiaries from Borrower as provided in
Section 7.12 hereof; (B) from other sources (excluding
letters of credit, the Revolving Credit and Long-Term
Liabilities) up to fifty percent (50%) of Borrower's
Tangible Net Worth; (C) borrowings of the type described in
Sections 7.05(F), (G) and (H) hereof; (D) borrowings from
Bank hereunder; and (E) Long-Term Liabilites, except as
otherwise restricted or conditioned in the Agreement. The
foregoing exceptions, in the aggregate, are subject,
however, to the provisions of Sections 7.08 and 7.09 hereof.
Nothing herein contained shall be deemed in any way to limit
the right and ability of Borrower and Subsidiaries to post
letters of credit or to incur trade indebtedness in the
ordinary course or their respective businesses."
5. Borrower hereby expressly acknowledges and confirms that the
representations and warranties of Borrower set forth in
Article VI of the Agreement are true and accurate on this
date with the same effect as if made on and as of this date;
that except as previously disclosed to Bank, no financial
condition or circumstances exists as to Borrower which would
inevitably result in the occurrence of an Event of Default
under Article VII of the Agreement; and that except as
previously disclosed to Bank, no event has occurred or no
condition exists which constitutes, or with the running of
time or the giving of notice would constitute an Event of
Default under Article VIII of the Agreement.
Page 19 of 24<PAGE>
6. Except as herein expressly modified, the parties hereto
ratify and confirm all of the terms, conditions, warranties
and covenants of the Agreement, and all security agreements,
pledge agreements, or mortgage deeds executed in connection
with the Agreement, including provisions for the payment of
the Note pursuant to the terms of the Agreement. This
Amendment does not constitute the extinguishment of any
obligation or indebtedness previously incurred, nor does it
in any manner effect or impair any security interest granted
to Bank, all of such security interests to be continued in
full force and effect until the indebtedness described
herein is fully satisfied.
7. This Amendment shall only be effective upon the
acknowledgment and acceptance by any guarantor, guaranteeing
the performance of Borrower's obligations under the
Agreement and the Note pursuant to any separate contract of
guaranty or guaranty contained in the Note, that the terms
of any such contract of guaranty shall continue in full
force and effect with respect to the liability referenced
under the Agreement irrespective of any modification made by
this Amendment which acknowledgment and acceptance shall be
evidenced by the execution of this Amendment by the
guarantor at the space indicated below.
8. This Amendment shall be binding upon Borrower, and Bank and
their respective successors and assigns, and shall inure to
the benefit of Bank and its respective successors and
assigns.
Executed by the parties hereto in manner an form sufficient to
bind them on this 28th day of March, 1996, and deemed to be
executed at Columbus, Ohio.
NATIONAL CITY BANK, COLUMBUS BURLINGTON COAT FACTORY
WAREHOUSE CORPORATION
By: /s/ Richard A. Ray By: /s/ Monroe G. Milstein
Its: Senior Vice President Its: President
BURLINGTON COAT FACTORY
WAREHOUSE OF NEW JERSEY, INC.
By: /s/ Monroe G. Milstein
Its: President
Page 20 of 24<PAGE>
SECOND SUBSTITUTE
REVOLVING LOAN PROMISSORY NOTE
$50,000,000.00 Executed at _____________
March __, 1996
For value received, the undersigned, jointly and severally,
promise to pay to the order of NATIONAL CITY BANK, COLUMBUS fka
BankOhio National Bank, a national banking association ("Bank")
the principal sum of Fifty Million and No/100 Dollars
($50,000,000.00) or so much thereof as may be disbursed to, or
for the benefit of, the undersigned and remain unpaid together
with the interest thereon from the date hereof in the manner and
at the rate or rates hereinafter described.
The indebtedness evidenced by this Note consists of a revolving
credit line extended to the undersigned by Bank pursuant to a
Revolving Credit Agreement dated August 30, 1985 ("Credit
Agreement"), as previously amended, which Credit Agreement, as
amended, is incorporated herein by reference as if fully
rewritten herein. The Credit Agreement contemplates a series of
Loans (as defined therein) from Bank to the undersigned with
varying amounts, payment terms and interest rates. It is the
intent of the undersigned and Bank that this Note shall evidence
the indebtedness created by all of the Loans. The interest rates
payable on the indebtedness evidenced hereby, the repayment
terms, the maturity dates, the prepayment privilege and the
computation of interest shall be determined in accordance with
the terms of the Credit Agreement. The amount, date, interest
rate and maturity date of all advances evidenced by this Note and
whether the same have been repaid shall be noted hereon, but
failure to do so shall not affect Bank's right to collect
repayment and said advances.
This Note shall be in substitution for and shall now evidence the
unpaid principal indebtedness existing under a form revolving
loan promissory note dated as of June 1, 1989 executed and
delivered by the undersigned to Bank in connection with the
Credit Agreement in the original principal amount of
$40,000,000.00 and payable in accordance with its terms. Upon
the execution and delivery of this Note, all existing
indebtedness under such previous note shall be considered
refinanced and transferred to this Note in the principal amount
thereof. In such event, the previous note shall be deemed
satisfied and replaced by this Note.
Page 21 of 24<PAGE>
If default be made in the payment of any sum due under this Note
or should an Event of Default (as defined therein) occur in the
Credit Agreement and continue beyond the applicable notice and/or
grace period, if any, relating thereto, the entire principal sum
and accrued interest evidenced by this Note shall at once become
due and payable at the option of the holder of this Note.
Failure to exercise this option shall not constitute a waiver of
the right to exercise the same in the event of any subsequent
default.
Any and all moneys now or at any time hereafter owing to the
undersigned from the holder hereof are hereby pledged for the
security of this and all other indebtedness from the undersigned
to the legal holder hereof and may be paid and applied thereon at
any time such indebtedness become due or is declared due and
payable.
No delay or omission on the part of the holder in exercising any
right hereunder shall operate as a waiver of any such right or of
any other right under this Note. A waiver on any one occasion
shall not be construed as a bar to or waiver of any such right
and/or remedy on any future occasion.
All persons now or hereafter liable, primarily or secondarily,
for the payment of the indebtedness evidenced hereby or any part
thereof, do hereby expressly waive presentment for payment,
notice of dishonor, protest and notice of protest, and agree that
the time for payment or payments of any part of the indebtedness
evidenced hereby may be extended without releasing or otherwise
affecting their liability hereon, or the lien of any deed of
trust, mortgage, assignment, or security agreement, if any, then
or hereafter securing this Note.
As a specifically bargained inducement for Bank to extend credit
giving rise to the indebtedness evidenced hereby, the undersigned
and Bank agree that: ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF
OR ARISING FROM OR OUT OF THIS NOTE OR ITS MAKING, VALIDITY OR
PERFORMANCE MAY BE PROSECUTED AS TO ALL PARTIES AND THEIR
SUCCESSORS AND ASSIGNS AT COLUMBUS, OHIO, AND THE UNDERSIGNED
CONSENTS TO AND SUBMITS TO THE EXERCISE OF JURISDICTION OVER ITS
PERSON BY ANY COURT SITUATED IN COLUMBUS, OHIO, AND HAVING
JURISDICTION OVER THE SUBJECT MATTER. The undersigned hereby
irrevocably appoints and designates Richard A. Ray, whose address
is 155 East Broad Street, Columbus, Ohio 43251, or any other
person whom Bank, after giving the undersigned five (5) days
Page 22 of 24<PAGE>
written notice thereof may appoint, as its true and lawful
attorney-in-fact and duly authorized agent for service of legal
process and agrees that service of such process upon such party
shall constitute personal service of such process upon it,
provided that such attorney-in-fact, within two (2) days after
receipt of such process, shall forward the same, by certified or
registered mail, together with all papers affixed thereto, to the
undersigned at its address as set forth in the Credit Agreement.
If any rate of interest presently or hereafter provided for
herein may not be collected from the undersigned under applicable
law, the rate of interest provided for herein shall be reduced
to, and payee may colect from the undersigned, the maximum rate
permissible under applicable law.
This Note is deemed to be executed at Columbus, Franklin County,
Ohio.
BURLINGTON COAT FACTORY
WAREHOUSE CORPORATION
By: ____________________
Its: ____________________
BURLINGTON COAT FACTORY
WAREHOUSE OF NEW JERSEY, INC.
By: ____________________
Its: ____________________
Page 23 of 24<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-29-1996
<PERIOD-END> MAR-30-1996
<CASH> 120,366,000
<SECURITIES> 0
<RECEIVABLES> 25,217,000
<ALLOWANCES> (7,286,000)
<INVENTORY> 428,750,000
<CURRENT-ASSETS> 582,053,000
<PP&E> 332,921,000
<DEPRECIATION> (120,163,000)
<TOTAL-ASSETS> 804,928,000
<CURRENT-LIABILITIES> 288,914,000
<BONDS> 83,244,000
<COMMON> 41,150,000
0
0
<OTHER-SE> 377,070,000
<TOTAL-LIABILITY-AND-EQUITY> 804,928,000
<SALES> 1,273,092,000
<TOTAL-REVENUES> 1,287,391,000
<CGS> 834,176,000
<TOTAL-COSTS> 834,176,000
<OTHER-EXPENSES> 384,106,000
<LOSS-PROVISION> 3,680,000
<INTEREST-EXPENSE> 9,454,000
<INCOME-PRETAX> 55,975,000
<INCOME-TAX> 22,919,000
<INCOME-CONTINUING> 33,056,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,056,000
<EPS-PRIMARY> .81
<EPS-DILUTED> .81
Page 24 of 24
</TABLE>
