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SYMS CORP AND SUBSIDIARIES
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED OCTOBER 1, 1994 COMMISSION FILE NUMBER 1-8564
SYMS CORP
(Exact name of registrant as specified in its charter)
NEW JERSEY NO. 22-2465228
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
SYMS WAY, SECAUCUS, NEW JERSEY 07094
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 902-9600
Indicate by check mark whether 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 ___
The number of shares of the Registrant's Common Stock, par value $.05
outstanding at October 1, 1994:
17,694,015
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SYMS CORP AND SUBSIDIARIES
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INDEX
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PAGE NO.
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PART I. Financial Information:
Item 1. Financial Statements
Consolidated Condensed Balance Sheets -
October 2, 1993, October 1, 1994 and
January 1, 1994. 1
Consolidated Condensed Statements of Income -
Thirteen and Thirty-nine Weeks Ended October 2, 1993
and October 1, 1994. 2
Consolidated Condensed Statements of Cash Flow -
Thirty-nine Weeks Ended October 2, 1993
and October 1, 1994. 3
Notes to Consolidated Condensed Financial Statements. 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. 5-6
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K 7
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SYMS CORP AND SUBSIDIARIES
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Consolidated Condensed Balance Sheets
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(In Thousands Except Share Amounts)
<TABLE>
<CAPTION>
OCTOBER 2, OCTOBER 1, JANUARY 1,
1993 1994 1994
(UNAUDITED) (UNAUDITED) ( * )
--------- --------- ---------
<S> <C> <C> <C>
.
ASSETS
Current Assets
Cash and Cash equivalents ........... $ 558 $ 1,876 $ 1,347
Marketable securities ............... - - -
Merchandise inventories (note 2) .... 102,351 111,802 79,418
Prepaid expenses and other current
assets ............................. 3,188 5,023 4,857
Deferred income taxes ............... 1,531 1,805 1,406
-------- -------- --------
TOTAL CURRENT ASSETS ....... 107,628 120,506 87,028
Property and equipment, net of
accumulated depreciation and
amortization ....................... 125,638 136,964 130,279
Other assets.......................... 3,582 3,865 3,845
-------- -------- --------
TOTAL ASSETS................. $236,848 $261,335 $221,152
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-Term borrowings .............. $ 750 $ 7,000 $ -
Current portion of obligations
under capital lease .............. 225 129 234
Accounts payable ................... 35,170 46,778 14,864
Accrued expenses and taxes other
than income taxes ................ 4,756 4,931 4,418
Obligations to customers ........... 2,710 3,435 3,500
Income taxes........................ 3,579 4,060 4,141
-------- -------- --------
TOTAL CURRENT LIABILITIES.... 47,190 66,333 27,157
-------- -------- --------
Obligations under capital lease....... 2,037 1,909 1,974
-------- -------- --------
Deferred income taxes................. 1,306 801 1,416
-------- -------- --------
Shareholders' equity
Preferred stock - par value,
$100 per share; authorized
1,000,000 shares; none issued
Common stock - par value, $.05
per share; authorized 30,000,000
shares; issued and outstanding
17,690,215 shares - October 2, 1993;
17,692,015 shares - January 1,
1994 and 17,694,015 shares -
October 1, 1994 .................. 885 885 885
Additional paid-in capital ......... 11,677 11,709 11,695
Retained earnings .................. 173,753 179,698 178,025
-------- -------- --------
TOTAL SHAREHOLDERS' EQUITY....... 186,315 192,292 190,605
-------- -------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY........... $236,848 $261,335 $221,152
======== ======== ========
<FN>
* Condensed from Audited Consolidated Financial Statements.
</FN>
</TABLE>
See accompanying notes to Consolidated Condensed Financial Statements.
1
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SYMS CORP AND SUBSIDIARIES
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Consolidated Condensed Statements of Income
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(In Thousands , Except Per Share Amount)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED THIRTY-NINE WEEKS ENDED
OCT. 2, 1993 OCT. 1, 1994 OCT. 2, 1993 OCT. 1, 1994
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
--------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net Sales ................................. $ 73,322 $ 77,813 $ 219,544 $ 226,470
------------- ------------- ----------- -------------
Costs and expenses:
Cost of Sales .......................... 49,859 52,524 149,290 152,867
Operating, general & administrative ..... 15,862 17,225 48,155 52,574
Occupancy ............................... 2,663 3,292 7,034 8,914
Depreciation and amortization ........... 1,797 2,070 5,448 5,784
Interest - net ........................ (81) 221 (233) 495
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70,100 75,332 209,694 220,634
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Income before provision for income
taxes ................................... 3,222 2,481 9,850 5,836
Provision for income taxes ................ 1,359 1,017 4,160 2,393
--------------- ------------ ------------ -------------
Net income ................................ $ 1,863 $ 1,464 $ 5,690 $ 3,443
============== ============= =========== =============
Earnings per share ........................ $ .11 $ .08 $ .32 $ .19
============== ============= =========== =============
Weighted average shares outstanding ....... 17,690 17,694 17,690 17,693
=============== =============== ============ ==============
Cash dividend per share ................... $ -- $ -- $ -- $ .10
=============== =============== ============ ==============
</TABLE>
See accompanying notes to Consolidated Condensed Financial Statements.
2
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SYMS CORP AND SUBSIDIARIES
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Consolidated Condensed Statements of Cash Flow
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(In Thousands)
<TABLE>
<CAPTION>
THIRTY-NINE WEEKS ENDED
OCT. 2, 1993 OCT. 1, 1994
(UNAUDITED) (UNAUDITED)
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<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income .............................. $ 5,690 $ 3,443
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization ......... 5,448 5,784
Deferred income taxes ................. (919) (1,014)
Changes in assets and liabilities:
Merchandise inventories ........... (34,619) (32,384)
Prepaid expenses and other current
assets .......................... 988 (166)
Other assets ...................... (435) (20)
Accounts payable .................. 29,565 31,914
Obligations to customers .......... (700) (65)
Accrued expenses and taxes other
than income taxes............... 499 513
Income tax payable ................ (2,305) (81)
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TOTAL ADJUSTMENTS ............... (2,478) 4,481
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Net cash provided by operating
activities ............................ 3,212 7,924
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CASH FLOW USED IN INVESTING ACTIVITIES:
Sale of marketable securities ........... 5,300 --
Purchase of marketable securities ....... -- --
Expenditures for fixed assets ........... (10,853) (12,470)
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Net cash used in investing activities:... (5,553) (12,470)
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CASH FLOW USED IN FINANCING ACTIVITIES:
Payment of dividends ................... -- (1,769)
Exercise of Stock Options............... -- 14
Net borrowings under
short-term debt arrangements.......... 750 7,000
Repayments of long term debt and
obligations under capital lease ...... (144) (170)
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Net cash provided in
financing activities: ................ 606 5,075
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NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS.................... (1,735) 529
CASH AND CASH EQUIVALENTS,
beginning of period .................... 2,293 1,347
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CASH AND CASH EQUIVALENTS,
end of period .......................... $ 558 $ 1,876
========== ==========
</TABLE>
See accompanying notes to Consolidated Condensed Financial Statements.
3
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SYMS CORP AND SUBSIDIARIES
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Notes to Consolidated Condensed Financial Statements
October 2, 1993 and October 1, 1994 (Unaudited)
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Note 1 - In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of
only normal recurring adjustments) necessary to present fairly the
financial position as of October 2, 1993 and October 1, 1994, the
results of operations for the thirteen and thirty-nine week periods
ended October 2, 1993 and October 1, 1994 and cash flow for the
thirty-nine week period ended October 2, 1993 and October 1, 1994.
While the Company believes that the disclosures presented are adequate
to make the information not misleading, it is suggested that these
consolidated condensed financial statements be read in conjunction
with the consolidated financial statements and notes included in the
Company's Annual Report on Form 10-K for the year ended January 1,
1994.
Because of the seasonal nature of the Company's business, the results
of the operations for the thirteen and thirty-nine week periods ended
October 1, 1994 are not necessarily indicative of the results for the
full year.
Note 2 - Inventories at October 2, 1993 and October 1, 1994 have been computed
using a gross profit margin estimated by management.
4
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SYMS CORP AND SUBSIDIARIES
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Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
RESULTS OF OPERATIONS
Net sales for the thirteen weeks ended October 1, 1994 increased by $4,491,000
or 6.1% when compared with the thirteen weeks ended October 2, 1993. This
increase in sales was attributable to five stores which opened in the fourth
quarter of 1993 and four new stores in 1994. However, comparable store net
sales decreased by $5,205,133 or 7.2%. Net sales for the thirty-nine weeks
ended October 1, 1994 increased by $6,926,000 or 3.2% when compared with the
thirty-nine weeks ended October 2, 1993. This increase is attributable to five
stores which opened in 1993 and four new stores which opened in 1994. However,
comparable store net sales decreased by $19,256,751 or 8.8%.
In 1994, the Company increased its estimated gross margin to 32.5% from 32.0%
in 1993.
As a percentage of net sales, operating, general and administrative expenses
(excluding occupancy, depreciation and amortization) were 22.1% for the
thirteen weeks and 23.2% for the thirty-nine weeks ended October 1, 1994 and
21.6% for the thirteen weeks and 21.9% for the thirty-nine weeks ended October
2, 1993. This increase in operating, general and administrative expenses as a
percentage of net sales is attributable to a decrease in comparable store net
sales and additional operating costs associated with the five stores opened in
1993 and four new stores in 1994.
Operating, general and administrative expenses for the thirteen weeks ended
October 1, 1994 increased by $1,363,000 or 8.6% from the thirteen weeks ended
October 2, 1993. This increase in operating, general and administrative
expenses was related to the five stores opened in 1993 and the four new stores
opened in 1994. However, comparable store operating, general and administrative
expenses decreased by $1,143,000 or 7.5%. Operating, general and administrative
expenses for the thirty-nine weeks ended October 1, 1994 increased by
$4,419,0000 or 9.2% from the thirty-nine weeks ended October 2, 1993. This
increase was related to the five stores opened in 1993 and the four new stores
which opened in 1994. However, comparable store operating, general and
administrative expenses decreased by $2,630,000 or 5.5%.
As a percentage of net sales, occupancy expenses were 4.2% for the thirteen
weeks and 3.9% for the thirty-nine weeks ended October 1, 1994 and 3.6% for the
thirteen weeks and 3.2% for the thirty-nine weeks ended October 2, 1993. The
increase in occupancy expenses as a percentage of net sales can be attributed to
a decrease in comparable store net sales and the additional occupancy expenses
associated with the five stores opened in 1993 and the four new stores which
opened in 1994.
Interest - net for the thirty-nine weeks ended October 1, 1994 resulted in
interest expense of $495,000 as compared to interest income of $233,000 in the
comparable prior period. The change was the result of additional borrowings and
a decrease in capitalized interest.
Income before provision for income taxes was 3.2% for the thirteen weeks and
2.6% for the thirty-nine weeks ended October 1, 1994 and 4.4% for the thirteen
weeks and 4.5% for the thirty-nine weeks ended October 1, 1993. The decrease in
income before provision for income taxes as percentage of net sales from the
preceding period resulted principally from a decrease in comparable store net
sales.
Provision for income taxes, as a percent of pre-tax income, decreased from
42.2% in 1993 to 41.0% in 1994 principally as a result of decreases in certain
non-tax deductible expenses.
5
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SYMS CORP AND SUBSIDIARIES
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LIQUIDITY AND CAPITAL RESOURCES
Working capital decreased to $54,173,000 at October 1, 1994 from $60,438,000 at
October 2, 1993.
Net cash provided by operating activities totaled $7,924,000 in the 1994 period
compared to $3,212,000 in the 1993 period. Net income for the thirty-nine weeks
ended October 1, 1994 amounted to $3,443,000 compared to $5,690,000 in the
preceding period, a decrease of $2,247,000. The $32,384,000 increase in
merchandise inventories and the $31,914,000 increase in accounts payable are
primarily due to the addition of five stores which opened during 1993 and four
new stores which opened in 1994.
Net cash used in investing activities was $12,470,000 in the 1994 period
compared to $5,553,000 in the 1993 period. The increase is primarily due to
capital expenditures for fixed assets related to the four stores opened in 1994.
Net cash provided by financing activities was $5,075,000 in the 1994 period
compared to $606,000 in the 1993 period. The increase in financing activities
was related to additional borrowings for capital expenditures and merchandise
inventories.
During the thirty-nine week period ended October 1, 1994 the Company opened
four stores and plans to open one more store in 1994. The capital expenditures
historically required to open a Syms store vary based upon whether the Company
leases or purchases the location. The average cost to open a leased location is
approximately $1,100,000 and $4,700,000 for an owned location. These costs can
vary significantly based upon geographical location, amount of tenant required
improvements and total store square footage. The Company has projected capital
expenditures of $14,700,000 for the fiscal year ended December 31, 1994.
Management believes that existing reserves, internally generated funds and
funds available from the revolving credit agreement will be sufficient for
future working capital and capital expenditure requirements, for new and
existing stores.
6
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SYMS CORP AND SUBSIDIARIES
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Part II - Other Information
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Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
NONE
(b) REPORTS ON FORM 8-K
NONE
SIGNATURES
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Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to by signed on its behalf by the
undersigned thereunto duly authorized.
SYMS CORP
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/s/ ARTHUR WEBER
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CHIEF FINANCIAL OFFICER
November 14, 1994
7
