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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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[Mark One]
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended May 27, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Transition Period From_____________
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 May 27, 1995:
17,694,015
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<PAGE>
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SYMS CORP AND SUBSIDIARIES
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INDEX
PAGE NO.
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PART I. Financial Information:
Item 1. Financial Statements
Consolidated Condensed Balanced Sheets -
May 27, 1995 and December 31, 1994. ........................ 1
Consolidated Condensed Statements of Income -
Thirteen Weeks Ended May 28, 1994 and May 27, 1995. ........ 2
Consolidated Condensed Statements of Cash Flows -
Thirteen Weeks Ended May 28, 1994 and May 27, 1995. ........ 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 .......................................... 7
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
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SYMS CORP AND SUBSIDIARIES
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Consolidated Condensed Balance Sheets
- - --------------------------------------------------------------------------------
(In Thousands)
<TABLE>
<CAPTION>
DECEMBER 31, MAY 27,
1994 1995
(*) (UNAUDITED)
-------- --------
<S> <C> <C>
ASSETS
Current Assets
Cash and Cash equivalents .................................................... $ 706 $ 2,332
Merchandise inventories (Note 2) ............................................. 96,807 120,306
Deferred income taxes ........................................................ 2,476 1,316
Prepaid expenses and other current assets .................................... 5,275 4,291
-------- --------
TOTAL CURRENT ASSETS .................................................... 105,264 128,245
PROPERTY AND EQUIPMENT--Net of accumulated depreciation and amortization ......... 135,986 132,432
DEFERRED INCOME TAXES ............................................................ -- 111
OTHER ASSETS ..................................................................... 4,135 4,056
-------- --------
TOTAL ASSETS ............................................................ $245,385 $264,844
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ............................................................ $ 23,399 $ 43,099
Accrued expenses ............................................................ 7,237 11,954
Obligations to customers .................................................... 4,305 4,055
Taxes other than income taxes ............................................... 1,345 899
Income taxes payable ........................................................ 5,882 979
Short term borrowings ....................................................... 2,900 4,000
Current portion of obligations under capital lease .......................... 278 299
-------- --------
TOTAL CURRENT LIABILITIES .............................................. 45,346 65,285
-------- --------
OBLIGATIONS UNDER CAPITAL LEASE .................................................. 1,696 1,565
-------- --------
DEFERRED INCOME TAXES ............................................................ 1,002 --
-------- --------
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY:
Common stock 17,694 shares outstanding on
December 31, 1994 and May 27, 1995, respectively ......................... 885 885
Additional paid-in capital ................................................. 11,709 11,709
Retained earnings .......................................................... 184,747 185,400
-------- --------
TOTAL SHAREHOLDERS' EQUITY ............................................. 197,341 197,994
-------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY ................................................. $245,385 $264,844
======== ========
<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
- - -------------------------------------------
(In Thousands, Except Per Share Amount)
THIRTEEN WEEKS ENDED
MAY 28, 1994 MAY 27, 1995
(UNAUDITED) (UNAUDITED)
------------ ------------
Net Sales ........................................ $77,581 $79,252
------- -------
Costs and expenses:
Cost of Sales (Note 2) ........................ 52,367 52,078
Operating, general and administrative .......... 18,214 19,070
Special charges (Note 3) ....................... -- 1,200
Occupancy ...................................... 2,800 3,082
Depreciation and amortization .................. 1,784 1,940
Interest--net .................................. 175 126
------- -------
75,340 77,496
------- -------
Income before provision for income taxes ......... 2,241 1,756
Provision for income taxes ....................... 919 720
------- -------
Net income ....................................... $ 1,322 $ 1,036
======= =======
Net income per share ............................. $ .07 $ .06
======= =======
Weighted average shares outstanding .............. 17,694 17,694
======= =======
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 Flows
- - --------------------------------------------------------------------------------
(In Thousands)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
MAY 28, 1994 MAY 27, 1995
(UNAUDITED) (UNAUDITED)
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash (used in) provided by operating activities ...... $ (223) $ 1,069
-------- --------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Expenditures for property and equipment .................. (6,212) (1,113)
Proceeds from sale of property and equipment ............. 31 79
-------- --------
Net cash used in investing activities: ................... (6,181) (1,034)
-------- --------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
Short term borrowings .................................... 12,300 1,950
Repayments of obligations under capital lease ............ (93) (110)
-------- --------
Net cash provided by financing activities ................ 12,207 1,840
-------- --------
NET INCREASE IN CASH AND
CASH EQUIVALENTS ......................................... 5,803 1,875
CASH AND CASH EQUIVALENTS, beginning of period ............. 2,817 457
-------- --------
CASH AND CASH EQUIVALENTS, end of period ................... $ 8,620 $ 2,332
======== ========
</TABLE>
See accompanying notes to Consolidated Condensed Financial Statements.
3
<PAGE>
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SYMS CORP AND SUBSIDIARIES
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Notes to Consolidated Condensed Financial Statements
May 28, 1994 and May 27, 1995 (Unaudited)
- - -----------------------------------------
Note 1 - The Company has changed its fiscal year end to the Saturday closest
to the end of February. This report reflects the thirteen week first
quarter for the fiscal year ending March 2, 1995 and the comparable
period for the thirteen weeks ended May 28, 1994.
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 May 28, 1994 and May 27, 1995 and the results
of operations and cash flows for the thirteen week periods ending May
28, 1994 and May 27, 1995.
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 December 31,
1994.
Because of the seasonal nature of the Company's business, the results
of the operations for the thirteen week period ended May 27, 1995 is
not necessarily indicative of the results for a full year.
Note 2 - Inventory at May 28, 1994 was computed using a gross profit margin
estimated by management. Commencing January 1, 1995, the Company
implemented a retail stock ledger which enabled it to determine its
interim inventory and gross margin based upon the retail method of
accounting.
Note 3 - Special charges consist of the following:
Store close down costs: $1,200,000
==========
4
<PAGE>
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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 May 27, 1995 increased by $1,671,000 or
2.2% compared with the thirteen weeks ended May 28, 1994. Comparable store net
sales decreased by $791,000 or 1.1%. This was augmented by an increase of
$2,462,000 for stores opened less than one year.
The gross margin for the thirteen weeks ended May 27, 1995 was 34.3% compared
with 32.5% for the prior period. The prior period's gross margin was estimated
by management. Commencing January 1, 1995, the Company implemented a retail
stock ledger which enabled it to determine its interim inventory and gross
margin based upon the retail method of accounting.
As a percentage of net sales, operating, general and administrative expenses
(excluding occupancy, depreciation and amortization) were 24.1% for the thirteen
weeks ended May 27, 1995 and 23.5% for the thirteen weeks ended May 28, 1994.
The increase in operating, general and administrative expenses as a percentage
of sales is attributable to stores opened less than one year.
As a percentage of net sales, occupancy expenses were 3.9% for the thirteen
weeks ended May 27, 1995 and 3.6% in the prior period. The increase in occupancy
expenses in the 1995 period is attributable to new stores opened less than one
year.
Income before the provision for income taxes was $1,756,000 or 2.2% of net sales
for the thirteen weeks ended May 27, 1995, compared with $2,241,000 or 2.9% of
net sales in the prior period. The decrease in income before the provision for
income taxes was attributable to a charge of $1,200,000 associated with the
close down of the store in Sterling Heights, Michigan, and higher operating,
general and administrative expenses, offset by an increase in net sales and a
higher gross margin. The Company decided to close its store located in Sterling
Heights, Michigan, which has been open for less than 2 years, because the store
never met management's sales expectations.
Net income after the provision for income taxes was $1,036,000 or 1.3% of net
sales for the thirteen weeks ended May 27, 1995, compared with $1,322,000 or
1.7% of net sales for the thirteen weeks ended May 28, 1994.
Provision for income taxes, as a percentage of income before provision for
income taxes was 41% for the period ended May 27, 1995 and May 28, 1994.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at May 27, 1995 was $62,960,000
Net cash provided by operating activities totaled $1,069,000 in the 1995 period
compared to net cash used in operating activities of $223,000 in the 1994
period. Net income for the thirteen weeks ended May 27, 1995 totaled $1,036,000
compared with $1,322,000 in the prior period.
Net cash used in investing activities was $1,034,000 in the 1995 period compared
to $6,181,000 in the 1994 period, primarily due to expenditures related to new
store openings in 1994.
Net cash provided by financing activities was $1,840,000 in the 1995 period
compared to $12,207,000 in the 1994 period. The financing activities in the 1994
period were due to additional borrowings for capital expenditures.
5
<PAGE>
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SYMS CORP AND SUBSIDIARIES
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Although it is not committed, the Company has planned capital expenditures of
approximately $15,000,000 to $20,000,000 in 1995 compared with $14,591,000 in
the year ended December 31, 1994 and $17,508,000 in the year ended January 1,
1994.
Management believes that existing resources, internally generated funds and
funds available from the revolving credit agreement will be sufficient for
future working capital and capital expenditure requirements.
6
<PAGE>
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SYMS CORP AND SUBSIDIARIES
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Part II--Other Information
- - --------------------------------------------------------------------------------
Item 4. Submission of Matters to a Vote of Security Holders
(a) The 1995 Annual Meeting of Stockholders of the Company was
held on May 12, 1995.
(b) The following five persons were elected as directors at the
meeting pursuant to the following vote:
For Withhold
--------- --------
Sy Syms ....................... 15,744,703 16,263
Marcy Syms .................... 15,744,703 16,263
Harry C. Kleinman ............. 15,744,703 16,263
Wilbur L. Ross, Jr. ........... 15,744,703 16,263
Harvey Weinberg ............... 15,744,703 16,263
In the approval of the appointment of Deloitte & Touche as the
independent auditors of the Company, the vote was as follows:
For: ................ 15,743,877
Against: ............ 10,769
Abstain: ............ 6,320
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
Exhibit 27--Financial Data Schedule
(b) REPORTS ON FORM 8-K
On March 22, 1995 the Company filed a report on Form 8-K as amended
on March 31, 1995 with respect to the determination to change the
Company's fiscal year end to the Saturday closest to the end of
February. The date of the event reported (under Item 8 of Form 8-K)
was March 17, 1995.
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 be signed on its behalf by the
undersigned thereunto duly authorized.
SYMS CORP
---------
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HARRY C. KLEINMAN
VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
July 10, 1995
7
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-02-1996
<PERIOD-END> MAY-27-1995
<CASH> 2,332
<SECURITIES> 0
<RECEIVABLES> 719
<ALLOWANCES> 0
<INVENTORY> 120,306
<CURRENT-ASSETS> 128,245
<PP&E> 191,686
<DEPRECIATION> 59,254
<TOTAL-ASSETS> 264,844
<CURRENT-LIABILITIES> 65,284
<BONDS> 1,565
0
0
<COMMON> 885
<OTHER-SE> 197,109
<TOTAL-LIABILITY-AND-EQUITY> 264,844
<SALES> 79,252
<TOTAL-REVENUES> 79,252
<CGS> 52,078
<TOTAL-COSTS> 52,078
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 126
<INCOME-PRETAX> 1,756
<INCOME-TAX> 720
<INCOME-CONTINUING> 1,036
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,036
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
