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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
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(Mark one)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 FOR THE FISCAL YEAR ENDED MARCH 1, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 COMMISSION FILE NUMBER 1-8546
SYMS CORP
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(Exact name of registrant as specified in its charter)
NEW JERSEY No. 22-2465228
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(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
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Name of each exchange on
Title of each class which registered
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Common Stock, $ .05 Par Value New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
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
--- ---
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. [ ]
The aggregate market value of the voting stock of the registrant held by
non-affiliates on May 2, 1997 was $64,242,711 based upon the closing price of
such stock on that date.
As of May 2, 1997, 17,694,015 shares of Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
NONE
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<PAGE>
PART I
ITEM 1. BUSINESS
GENERAL
Syms Corp operates a chain of forty "off-price" retail stores located
throughout the Northeastern and middle Atlantic regions and in the Midwest,
Southeast and Southwest. Each Syms store offers a broad range of first quality,
in-season merchandise bearing nationally recognized designer or brand-name
labels at prices substantially lower than those generally found in department
and specialty stores. Syms directs its merchandising efforts at predominantly
middle-income, fashion-minded and price conscious customers.
Since the first Syms store opened in New York City in 1959, the Company has
expanded to forty stores and the aggregate amount of selling space in the Syms
stores increased from approximately 2,000 square feet to approximately 1,540,000
square feet. In March 1987, the Company relocated to an approximately 275,000
square foot distribution center and executive headquarters. Syms Corp was
incorporated in New Jersey in 1983. On July 25, 1983, a reorganization was
effected pursuant to which Syms Inc. and a newly formed corporation, Syms
Advertising, Inc., became wholly owned subsidiaries of Syms Corp. Syms
Advertising Agency, a sole proprietorship owned by Sy Syms, was transferred to
Syms Advertising Inc. On December 31, 1985, Syms Inc. was merged into Syms Corp.
Syms Inc. was the principal retailing subsidiary of Syms Corp and the operations
previously conducted by Syms Inc. are now being conducted by Syms Corp.
The Company maintains its executive offices at Syms Way, Secaucus, New
Jersey 07094, telephone (201) 902-9600. Unless otherwise noted, references to
the "Company" or to "Syms" relate to Syms Corp, its subsidiaries and their
predecessors.
As reported on March 17, 1995, the Company changed its fiscal year end to
the Saturday nearest to the end of February. Prior to this change the Company
maintained its records on the basis of a 52-53 week fiscal year ending the
Saturday closest to December 31.
DESCRIPTION OF BUSINESS
The Syms chain of forty apparel stores offers a broad range of "off-price"
first quality, in-season merchandise consisting primarily of men's tailored
clothing and haberdashery, women's dresses, suits and separates, children's
apparel and men's, women's and children's shoes. Syms stores emphasize better
quality, nationally recognized designer and brand name merchandise at prices
substantially below those generally charged by department and specialty stores.
Syms carries a wide selection of sizes and styles of men's, women's and
children's wear.
Syms operates in a single industry segment and has no foreign operations.
No material part of the Company's consolidated revenues is received from a
single customer or group of customers.
MERCHANDISE
For the year ended March 1, 1997 net sales were generated by the following
categories:
Men's tailored clothes and haberdashery................. 54%
Women's dresses, suits, separates and accessories....... 31
Shoes................................................... 7
Children's wear......................................... 6
Luggage, domestics and fragrances....................... 2
---
100%
===
Most of the items sold by the Company consist of nationally recognized
fashion name merchandise. Merchandise is displayed by type and size on
conveniently arranged racks or counters. No emphasis is placed on any particular
"label". The stores generally offer minor alterations for an additional charge.
PURCHASING
The Company purchases first-quality, in-season, brand-name merchandise
directly from manufacturers on terms more favorable than those generally
obtained by department and specialty stores. Syms estimates that approximately
200 brand-name manufacturers of apparel are represented in its stores. The
Company does not maintain large out-of-season inventories. However, Syms
occasionally buys certain basic clothing which does not change in style from
year to year at attractive prices for storage until the following season.
Purchasing is performed by a buying staff in conjunction with their General
Merchandise Managers and several other key divisional merchandise managers.
1
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DISTRIBUTION
The Company owns a distribution center, located at Syms Way, Secaucus, New
Jersey. The facility contains approximately 277,000 square feet of warehouse and
distribution space, 34,000 square feet of office space and 29,000 square feet of
store space. The facility is located on an 18.6 acre parcel of land for which
the Company holds a ground lease for a remaining term of 279 years. Most
merchandise is received from manufacturers at the distribution center where it
is inspected, ticketed and allocated to particular stores.
MARKETING
The Company's pricing policy is to affix a ticket to each item displaying
Syms selling price as well as the price the Company regards as the traditional
full retail price of that item at department or specialty stores. All garments
are sold with the brand-name as affixed by the manufacturer. Because women's
dresses are vulnerable to considerable style fluctuation, Syms has long utilized
a ten-day automatic markdown pricing policy to promote movement of merchandise.
The date of placement on the selling floor of each women's dress is stamped on
the back of the price ticket. The front of each ticket contains what the Company
believes to be the nationally advertised price, the initial Syms price and three
reduced prices. Each reduced price becomes effective after the passage of ten
selling days. Women's dresses represent approximately 4.8% of net sales. The
Company also offers "dividend" prices consisting of additional price reductions
on various types of merchandise.
Syms has as its tag line "An Educated Consumer is Our Best Customer"(R),
one of the best known in retail advertising. The Company historically has
advertised principally on television and radio. In the Fall of 1994, the Company
revised its strategy and began to enhance its advertising by including print
media as well as direct mail to its Syms credit card customer base.
The Company sells its merchandise for cash, checks, national credit cards,
and its own Syms credit card. Syms sells its own credit card receivables on a
non-recourse basis to a third party for a fee. Merchandise purchased from the
Company may be returned within a reasonable amount of time, within season. The
Company does not offer cash refunds for purchases, but issues credits toward the
Syms charge card or store merchandise credits which may be used toward the
purchase of other merchandise.
TRADEMARKS
"Syms", "An Educated Consumer is Our Best Customer"(R), "Names You Must
Know"(R), and "The More You Know About Clothing, the Better it is for Syms"(R)
have been registered with the United States Patent and Trademark Office.
COMPETITION
The retail apparel business is highly competitive, and the Company accounts
for only a small fraction of the total market for men's, women's and children's
apparel. The Company's stores compete with discount stores, apparel specialty
stores, department stores, manufacturer-owned factory outlet stores and others.
Many of the stores with which the Company competes are units of large national
or regional chains that have substantially greater resources than the Company.
Retailers having substantially greater resources than the Company have indicated
their intention to enter the "off-price" apparel business, and the "off-price"
apparel business itself has become increasingly competitive especially with
respect to the increased use by manufacturers of their own factory outlets. At
various times of the year, department store chains and specialty shops offer
brand-name merchandise at substantial markdowns.
OPERATIONS AND CONTROL SYSTEMS
The Company has implemented a merchandise control system which tracks
product from its purchase to its ultimate sale in the Company's stores. The
system tracks the product by store in approximately 750 categories. All the
information regarding the product is transmitted daily through telephone lines
to the Company's database at its executive headquarters. Each week the Company's
executives receive detail reports regarding sales and inventory levels in units
and retail dollars on a store by store basis.
Management of the Company visit stores on a regular basis to coordinate
with the store managers, among other things, in the training of employees in
loss prevention methods. Each store has on premises security personnel during
normal hours and a security system after hours.
2
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EMPLOYEES
At March 1, 1997, the Company had 2,206 employees of whom approximately 657
work part time. The Company has collective bargaining agreements with the
Retail, Wholesale and Department Store Union and the United Food and Commercial
Workers Union which expire at various dates between 1997 and the year 2000 and
cover 1,625 sales and tailor employees. The Company believes its relationships
with the Unions are good. Approximately 30 to 100 persons, consisting mostly of
sales personnel, are employed at each Syms store.
ITEM 2. PROPERTIES
THE STORES
Location
At March 1, 1997 the Company had forty stores, twenty of which are located
in leased facilities. The following table indicates the locations of the stores
and the approximate selling space of each location. In addition to the selling
space indicated, each store contains between approximately 2,000 to 12,000
square feet for inspection and ticketing of merchandise and administrative
functions.
<TABLE>
<CAPTION>
Approximate Selling Approximate Selling
Owned Stores Space at March 1, Leased Stores Space at March 1,
Location 1997 (sq. ft.) Location 1997 (sq. ft.)
- - -------- -------------------- ------------ -------------------
<S> <C> <C> <C>
Lower Manhattan, NYC, New York .... 40,000 Elmsford, New York ................ 50,000
Westbury, Long Island ............. 72,000 Woodbridge, New Jersey ............ 32,000
Commack, Long Island .............. 36,000 Berlin, Connecticut ............... 31,000
Buffalo, New York ................. 39,000 N. Cranston, Rhode Island ......... 27,000
Rochester, New York ............... 32,000 Norwood, Massachusetts ............ 36,000
Paramus, New Jersey ............... 56,000 Peabody, Massachusetts ............ 39,000
Secaucus, New Jersey .............. 29,000 Franklin Mills Mall, Pennsylvania . 22,000
Cherry Hill, New Jersey ........... 40,000 Falls Church, Virginia ............ 28,000
Fairfield, Connecticut ............ 32,000 Potomac Mills Mall, Virginia ...... 33,000
King of Prussia, Pennsylvania ..... 41,000 Rockville, Maryland ............... 56,000
Monroeville, Pennsylvania ......... 31,000 Baltimore, Maryland ............... 43,000
Fort Lauderdale, Florida .......... 44,000 West Palm Beach, Florida .......... 36,000
Miami, Florida .................... 45,000 Gurnee Mills Mall, Illinois ....... 33,000
Tampa, Florida .................... 38,000 Niles, Illinois ................... 32,000
Addison, Illinois ................. 47,000 St. Louis, Missouri ............... 33,000
Norcross, Georgia ................. 51,000 Charlotte, North Carolina ......... 30,000
Southfield, Michigan .............. 46,000 Sharonville, Ohio ................. 31,000
Dallas, Texas ..................... 42,000 Highland Heights, Ohio ............ 36,000
Hurst, Texas ...................... 38,000 Parkway Center Mall, Pittsburgh ... 40,000
Houston, Texas .................... 34,000 Park Avenue, NYC, New York ........ 39,000
------- -------
Total Owned Space ................. 833,000 Total Leased Space ................ 707,000
======= =======
</TABLE>
Syms stores are either "free standing", or located in shopping centers or
indoor malls and all are surrounded by adequate parking areas, except for the
New York City stores. Syms stores are usually located near a major highway or
thoroughfare in suburban areas populated by at least one million people and are
readily accessible to customers by automobile. In certain areas where there is a
population in excess of two million people, Syms has opened more than one store
in the same general vicinity.
3
<PAGE>
Lease Terms
Nineteen of the Company's forty stores are currently leased from unrelated
parties, and the Elmsford, New York store is leased from Mr. Sy Syms, the
Chairman of Syms Corp. The following table summarizes lease expirations and any
renewal options:
Range
Number of Number of in Years of
Calendar Leases Leases with Renewal Option
Periods Expiring Options Periods (1)
- - ------- -------- ------- -----------
1997 ...................... 2 1 5
1998 ...................... 4 4 4-5
1999 ...................... 3 1 5
2000 ...................... 1 1 5
2001 ...................... 0 0 0
2002 and thereafter ....... 10 7 3-5
-- --
20 14
== ==
- - ----------
(1) Depending on the applicable option, the minimum rent due during the renewal
option periods may be based upon a formula contained in the existing lease
or negotiations between the parties.
Store leases provide for a base rental of between approximately $2.50 and
$34.00 per square foot. In addition, under the "net" terms of all of the leases,
the Company must also pay maintenance expenses, real estate taxes and other
charges. Four of the Company's stores have a percentage of sales rental as well
as a fixed minimum rent. Rental payments for Syms' leased stores aggregated
$5,868,000 for the year ended March 1, 1997, of which $600,000 was paid to Mr.
Sy Syms as fixed rent.
Store Openings/Closings
On March 14, 1996 the Company moved its North Randall, Ohio store
(approximately 40,000 square feet of selling space) to Highland Heights, Ohio
(approximately 36,000 square feet of selling space). On May 2, 1996 the Company
opened a new store in Pittsburgh, Pennsylvania (approximately 40,000 square feet
of selling space) and on November 21, 1996 opened its second store in New York
City (approximately 39,000 square feet of selling space).
ITEM 3. LEGAL PROCEEDINGS
The Company is a party to routine litigation incident to its business.
Management of the Company believes, based upon its assessment of the actions and
claims outstanding against the Company, and after discussion with counsel, that
there are no legal proceedings that will have a material adverse effect on the
financial condition or results of operations of the Company. Some of the
lawsuits to which the Company is a party are covered by insurance and are being
defended by the Company's insurance carriers.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.
4
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK
AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
The following table sets forth for the period indicated the high and low
sales prices for the Company's common stock as reported by the New York Stock
Exchange using the trading symbol SYM.
HIGH LOW
---- ---
1998 First Quarter (through May 2, 1997) ......... $10 $ 9
1997 Quarter ended March 1, 1997 ................. $10 1/4 $8 3/4
Quarter ended November 30, 1996 ............. 8 7/8 8 1/8
Quarter ended August 31, 1996 ............... 8 1/2 7 1/8
Quarter ended June 1, 1996 .................. 8 3/8 7 5/8
1996 Quarter ended March 2, 1996 ................. $ 8 1/4 $7 1/8
Quarter ended November 25, 1995 ............. 9 1/2 7 1/8
Quarter ended August 26, 1995 ............... 8 3/8 6 3/4
Quarter ended May 27, 1995 .................. 7 7/8 6 7/8
1995 Two months ended February 25, 1995 .......... $ 7 $6 5/8
HOLDERS
As of May 2, 1997 there were 301 record holders of the Company's Common
Stock. The Company believes that there were in excess of 1,700 beneficial owners
of the Company's Common Stock as of that date.
DIVIDENDS
The Board of Directors of the Company elected not to declare dividends in
the two month transition period ended February 25, 1995, in the fiscal years
ended March 2, 1996 and March 1, 1997, and through May 2, 1997. Payment of
dividends is within the discretion of the Company's Board of Directors and will
depend upon various factors including the earnings, capital requirements and
financial condition of the Company (see Note 4 to notes to consolidated
financial statements regarding covenants in the Company's revolving credit
agreement).
5
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ITEM 6. SELECTED FINANCIAL DATA
The selected financial information presented below has been derived from
the Company's audited Consolidated Financial Statements for the fiscal years
ended March 1, 1997, March 2, 1996, December 31, 1994, January 1, 1994 and
January 2, 1993 and the two months ended February 25, 1995, except that the
balance sheets at February 25, 1995 and February 26, 1994 are unaudited. The
selected financial information presented below should be read in conjunction
with such financial statements and notes thereto. The two months ended February
26, 1994 is unaudited and presented only for comparative purposes.
<TABLE>
<CAPTION>
Fiscal Year Ended Two Months Ended
-------------------------------------------------------------- -----------------------------
March 1, March 2, December January 1, January 2, February 25, February 26,
1997 1996 1994 1994 1993 1995 1994
------- -------- -------- --------- --------- ------------ ------------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Income statement data:
Net sales ...................... $ 346,792 $334,750 $326,651 $318,939 $319,623 $ 46,632 $ 41,642
========= ======== ======== ======== ======== ======== ========
Net income (loss) .............. $ 19,065 $ 10,411 $ 8,491 $ 10,847 $ 15,148 $ (383) $ 50
========= ======== ======== ======== ======== ======== ========
Net income (loss) per share .... $ 1.08 $ 0.59 $ 0.48 $ 0.61 $ 0.86 $ (0.02) $ --
========= ======== ======== ======== ======== ======== ========
Weighted Average
Shares Outstanding ........... 17,694 17,694 17,694 17,690 17,690 17,694 17,692
========= ======== ======== ======== ======== ======== ========
Cash Dividends Per Share ....... $ -- $ -- $ 0.10 $ 0.05 $ -- $ -- $ --
========= ======== ======== ======== ======== ======== ========
Balance sheet data:
Working Capital ................ $ 78,228 $ 75,521 $ 59,918 $ 59,871 $ 61,338 $ 60,703 $ 52,539
Total Assets ................... 284,018 260,144 245,385 221,152 204,071 255,612 238,203
Long term debt and
capitalized leases (A) ....... 900 1,304 1,696 1,974 2,209 1,645 1,931
Shareholders' equity ........... 226,434 207,369 197,341 190,605 180,625 196,958 190,655
- - --------
</TABLE>
(A) Excludes current maturities.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company has changed its fiscal year end to the Saturday nearest to the
end of February. This change was reported on March 17, 1995. Prior to this
change the Company maintained its records on the basis of a 52-53 week fiscal
year ending the Saturday closest to December 31. The following discussion
compares the fiscal years ended March 1, 1997, March 2, 1996, December 31, 1994
and the two months ended February 25, 1995 and February 26, 1994. The fiscal
years ended March 1, 1997 and December 31, 1994 was comprised of 52 weeks. The
fiscal year ended March 2, 1996 were comprised of 53 weeks.
RESULTS OF OPERATIONS
Fiscal Year Ended March 1, 1997 Compared to March 2, 1996
Net sales of $346,792,000 for the fiscal year ended March 1, 1997 increased
$12,042,000 (3.6%) as compared to net sales of $334,750,000 for the fiscal year
ended March 2, 1996. The increase was, for the most part, the result of an
increase in the number of stores in the year ended March 1, 1997. Comparable
store sales decreased by $736,000 (0.2%), caused mainly by fiscal 1996 being
comprised of 53 weeks vs. 52 weeks in fiscal 1997. The Company estimates that
the extra week added approximately $5,100,000 in net sales to the 1996 fiscal
year.
Gross profit for the fiscal year ended March 1, 1997 was $133,679,000, an
increase of $16,490,000 (14.1%) as compared to $117,189,000 for the fiscal year
ended March 2, 1996. This increase resulted mainly from increased net sales of
$12,042,000 and the Company's gross margin increasing to 38.5% from 35.0%. The
3.5% improvement in gross margin resulted primarily from increased levels of
opportunistic and in-season purchases which created better values for the
Company's customers.
Selling, general and administrative (SG&A) expense was $71,028,000 (20.5%
as a percentage of net sales) for the period ended March 1, 1997 as compared to
$70,579,000 (21.1% as a percentage of net sales) for the fiscal year ended March
2, 1996. The increase of $449,000 resulted from three additional stores in
fiscal 1997. As a percent to sales, SG&A expense decreased in fiscal 1997, due
to a continued effort by management to control store and corporate operational
expenses.
6
<PAGE>
Advertising expense for fiscal 1997 increased to $6,626,000, as compared to
$5,905,000 in the year ending March 2, 1996, resulting from a continued
commitment to expand the Company's advertising effort.
Occupancy costs were $14,215,000 (4.1% as a percentage of net sales) for
the period ended March 1, 1997, up from $12,330,000 (3.7% as a percentage of net
sales) for the year ended March 2, 1996. This increase was the result of three
additional leased locations in fiscal 1997.
Depreciation and amortization amounted to $7,971,000, an increase of
$220,000, as compared to $7,751,000 for the fiscal year ended March 2, 1996,
resulting from the new stores which opened in fiscal 1997, and a 40,000 square
foot addition to the Secaucus, NJ distribution center.
The provision for contractor advance and special charges for the fiscal
year ended March 2, 1996 include a $2,200,000 provision made in the fourth
quarter in recognition of then current information that a contractor advance
might not be fully recoverable, a charge in the first quarter of $1,200,000 for
costs associated with closing the store in Sterling Heights, Michigan, offset by
a $714,000 adjustment to the $2,935,000 special charges taken in the two month
period ended February 25, 1995, part of which relates to the write-off of costs
associated with a lease in Cincinnati, Ohio in which the Company had initially
decided to not open a store. The $714,000 adjustment arose when the Company,
based on subsequent experience with the real estate market in Cincinnati, Ohio,
concluded in November 1995 that the property would not be subleased in a
reasonable time frame and at an acceptable rate. The Company then decided to
open the store in February, 1996, operating with a reduced expense structure.
Income before income taxes of $33,742,000 increased $16,097,000 (91.2%), as
compared to $17,645,000 for the fiscal year ended March 2, 1996. This increase
for the most part reflects higher gross profit and no special charge in the
current period, offset by increased selling, general and administrative expense,
advertising, and occupancy expense.
For the fiscal year ended March 1, 1997 the effective income tax rate was
43.5% as compared to 41.0% last year.
Fiscal Year Ended March 2, 1996 Compared to December 31, 1994
For the year ended March 2, 1996, net sales were $334,750,000, an increase
of $8,099,000 or 2.5% from 1994. The increase was mainly a result of fiscal 1996
being 53 weeks compared to 52 weeks in the fiscal year ended December 31, 1994.
The extra week added approximately $5,100,000 in net sales to the 1996 fiscal
year.
For the year ended March 2, 1996, the Company's gross margin increased to
35.0% from 33.3% in 1994. The increase was the result of a higher initial markup
partially offset by additional markdowns.
For the fiscal year ended December 31, 1994, the Company's interim gross
margin was estimated based principally upon historical experience. The
determination of cost of sales for that fiscal year was based on a physical
inventory at the end of December 31, 1994. Using estimated gross margins for the
first three quarters resulted in upward adjustments to gross margin in the
fourth quarter. In 1994 the adjustment was due primarily to a higher initial
markup. These adjustments resulted in an increase to gross profit of
approximately $1,787,000 for the fourth quarter ended December 31, 1994.
Beginning in January 1995, Syms has been utilizing the retail inventory method
for quarterly inventory valuation.
As a percentage of net sales, selling, general and administrative expenses
and advertising (excluding occupancy, depreciation and amortization) were 22.8%
in 1996 and 22.5% in 1994. The increase in the 1996 fiscal year selling, general
and administrative expenses and advertising (excluding occupancy, depreciation
and amortization) was principally due to the added week (53 weeks vs. 52 weeks)
of payroll and payroll related expenses and higher legal and professional fees
as a result of the change in the fiscal year and the proposed, but subsequently
abandoned, "Going Private" transaction.
As a percentage of net sales, occupancy expenses were 3.7% in 1996,
unchanged from 3.7% in 1994.
Income before the provision for income taxes was 5.3% in 1996 and 4.4% in
1994. This increase reflects higher gross profit, offset by an increase in
selling, general and administrative expenses as well as occupancy expenses and
the special charges as discussed above.
In the fiscal year ended March 2, 1996 the effective income tax rate
increased to 41.0% from 40.9% in 1994.
Two Months Ended February 25, 1995 Compared to Two Months Ended
February 26, 1994
Net sales for the eight weeks ended February 25, 1995 were $46,632,000, an
increase of $4,990,000 or 12.0% when compared with $41,642,000 for the eight
weeks ended February 26, 1994. Comparable store net sales increased by
$2,098,000 or 5.5%. This was augmented by an increase of $2,892,000 for stores
opened less than one year.
7
<PAGE>
The gross margin for the eight weeks ended February 25, 1995 was 36.1%
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 to determine its interim inventory and gross margin.
As a percentage to net sales, selling, general and administrative and
advertising expenses (excluding occupancy, depreciation and amortization) were
24.1% for the eight weeks ended February 25, 1995 and 25.2% for the eight weeks
ended February 26, 1994. The decrease in selling, general and administrative
expenses as a percentage to sales is attributable to an increase in net sales.
As a percentage of net sales, occupancy expenses were 4.0% for the eight
weeks ended February 25, 1995 and 4.1% for the eight weeks ended February 26,
1994.
The special charges in the 1995 two month period of $2,935,000 include
costs associated with the close down of the Hoffman, Illinois store, write-off
of costs associated with a lease in Cincinnati, Ohio in which the Company had
initially decided not to open a store and write-off of pre-development costs
associated with property located in Roseland, New Jersey.
Loss before the benefit from income taxes was $567,000 or 1.0% of net sales
for the eight weeks ended February 25, 1995, compared with income before income
taxes of $84,000 for the eight weeks ended February 26, 1994. The decrease in
net income was attributable to the special charges, offset by the increase in
net sales and a higher gross margin.
Provision (benefit) for income taxes, as a percentage of income before
income taxes, reflected a benefit of 32.4% for the transition period ended
February 25, 1995, and an expense of 40.5% for the prior period ended February
26, 1994. The period ended February 25, 1995 includes a benefit of federal and
state income taxes offset by certain other state income taxes.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at March 1, 1997 was $78,228,000, an increase of $2,707,000
from March 2, 1996, and the ratio of current assets to current liabilities
decreased to 2.40 to 1 as compared to 2.48 to 1 at March 2, 1996.
Working capital at March 2, 1996 was $75,521,000, an increase of
$15,603,000 from December 31, 1994. The ratio of current assets to current
liabilities improved to 2.48 to 1 at March 2, 1996 as compared to 2.32 to 1 at
December 31, 1994.
Net cash provided by operating activities totaled $15,573,000 for the
fiscal year ended March 1, 1997 and increased by $4,437,000 compared to
$11,136,000 for the fiscal year ended March 2, 1996. Net income for 1997
amounted to $19,065,000 compared to $10,411,000 in 1996, an increase of
$8,654,000. In the period ended March 1, 1997, cash provided from operating
activities was mainly used to increase inventory by $9,586,000.
Net cash provided by operating activities totaled $11,136,000 in 1996
compared to $12,936,000 in 1994. Net income for 1996 amounted to $10,411,000
compared to $8,491,000 in 1994, an increase of $1,920,000. In 1996 merchandise
inventories increased by $2,694,000 and accounts payable decreased $4,721,000.
Net cash used in investing activities was $21,644,000 for the fiscal year
ended March 1, 1997. Net cash used in investing activities was $4,452,000 in
1996 compared to $14,488,000 in 1994. Purchases of property and equipment
totaled $21,709,000, $4,777,000, and $14,591,000 for the fiscal years ended
March 1, 1997, March 2, 1996 and December 31, 1994, respectively.
Net cash provided by financing activities was $4,611,000 for the fiscal
year ended March 1, 1997, resulting for the most part from the $4,950,000 in
short term borrowings. Net cash used in financing activities was $2,337,000 in
1996. Net cash provided by financing activities was $911,000 in 1994. The
Company paid cash dividends of $0.10 per share in 1994, which totaled
$1,769,000. The Company had net borrowings of $2,900,000 in 1994.
The Company has a revolving credit agreement with a bank for a line of
credit not to exceed $40,000,000 through December 1, 1997. At December 1, 1997
the Company has the option to reduce this commitment to zero or convert the
revolving credit agreement to a term loan with a maturity date of December 1,
2000. Except for funds provided from this credit agreement, the Company has
satisfied its operating and capital expenditure requirements, including those
for the opening and expansion of stores, from internally generated funds. For
the fiscal year ended March 1, 1997, under the revolving credit agreement, the
borrowings peaked at $21,450,000 and the average amount of borrowings was
$4,122,000 with a weighted average interest rate of 5.97%. For the fiscal year
ended March 2, 1996, under the revolving credit agreement, the average amount of
borrowings was $3,500,000 with a weighted average interest rate of 7.3%. For the
fiscal year ended December 31, 1994, under the revolving credit agreement, the
average amount of borrowings was $6,800,000 with a weighted average interest
rate of 5.2%.
The Company has planned capital expenditures of approximately $12,000,000
for the fiscal year ending February 28, 1998, which includes plans to open two
new stores, and to relocate one store from a leased location to a Company built
store.
8
<PAGE>
Management believes that existing cash, internally generated funds, trade
credit and funds available from the revolving credit agreement will be
sufficient for working capital and capital expenditure requirements for the
fiscal year ending February 28, 1998.
RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS No.
128"), which is effective for the Company for the year ended February 28, 1998.
SFAS No. 128 simplifies the standards for computing earnings per share
previously found in Accounting Principles Board Opinion No. 15 and establishes
new standards for computing and presenting earnings per share. Application of
SFAS No. 128 is not expected to have a significant effect on the Company's
earnings per share.
IMPACT OF INFLATION AND CHANGING PRICES
Although the Company cannot accurately determine the precise effect of
inflation on its operations, it does not believe inflation has had a material
effect on sales or results of operations.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's consolidated financial statements are filed together with
this report. See index to Consolidated Financial Statements in Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The directors and executive officers of the Company are as follows :
<TABLE>
<CAPTION>
Name Age Title
---- --- -----
<S> <C> <C>
Sy Syms (1) (2) (3) .................. 71 Chairman of the Board, Chief Executive Officer and
Director of the Company
Marcy Syms (1) (2)................... 46 President, Chief Operating
Officer and Director of the
Company
Stephen A. Merns (2)................. 44 Vice President, Secretary, Merchandise Manager
Men's Tailored Clothing, and Director of the Company
Harvey A. Weinberg (3) (4) (5) ...... 59 Director of the Company
Wilbur L. Ross, Jr. (3) (4) (5)...... 59 Director of the Company
David Messer ....................... 35 Director of the Company
Philip Barach........................ 67 Director of the Company
</TABLE>
- - ----------
(1) Member of the Executive Committee of the Company.
(2) Sy Syms is the father of Marcy Syms and Stephen A. Merns.
(3) Member of the Compensation Committee of the Company.
(4) Member of the Audit Committee of the Company.
(5) Member of the Stock Option Committee of the Company.
9
<PAGE>
The following officers are significant employees of the Company:
Name Age Title
---- --- -----
Ronald Zindman....................... 47 Executive Vice President--
General Merchandise
Manager
Allen Brailsford..................... 52 Vice President--Operations
Douglas C. Meyer..................... 44 Vice President--Marketing,
Advertising and Sales
Promotion
Isabel Regan ....................... 42 Vice President--Divisional
Merchandise Manager Ladies
Gail Margolin ...................... 44 Vice President--Human
Resources & Development
The officers and directors of Syms Advertising, Inc. are: Sy Syms -
Chairman of the Board, Chief Executive Officer and Director; Marcy Syms -
President, Chief Operating Officer and Director and Stephen A. Merns, Secretary.
The members of the Company's Board of Directors hold office until the next
annual meeting of shareholders and until their successors are duly elected and
qualified. Executive officers are elected annually by the Board of Directors of
the Company and serve at the pleasure of the Board. Marcy Syms and Stephen A.
Merns are the children of Sy Syms. There are no other family relationships
between any directors or executive officers of the Company. None of the
organizations with which these persons were previously associated is a parent,
subsidiary or other affiliate of the Company except as otherwise set forth.
SY SYMS has been Chairman of the Board, Chief Executive Officer and a
Director of the Company and/or its predecessors since 1959. Mr. Syms was Chief
Operating Officer of the Company from 1983 to 1984. Mr. Syms has been a Director
of Israel Discount Bank of New York since December 1991.
MARCY SYMS has been President and a Director of the Company since 1983 and
Chief Operating Officer of the Company since 1984.
WILBUR L. ROSS, JR. has been a Managing Director of Rothschild Inc. since
1976. He is a member of the Board of Directors of Mego Corp. He has been a
director of the Company since 1983.
HARVEY A. WEINBERG has been a consultant since April 1994. From April 1992
to April 1994 he was President and Chief Executive Officer of HSSI, Inc., a
retailer of men's and women's apparel. From 1987 to September, 1990 he was Chief
Executive Officer and Vice Chairman of the Board of Directors of Hartmarx
Corporation and from 1990 to September 1992 served as Chairman of the Board of
Hartmarx Corporation. He is a trustee of Glimcher Realty Trust (a real estate
investment trust). He has been a Director of the Company since December 1992.
PHILIP G. BARACH has been a consultant since March 1993. From 1968 to March
1993 he was Chairman of the Board or Chairman of the Board, President and Chief
Executive Officer of the United States Shoe Corp. (manufacturer and retailer of
footwear, apparel and eyewear). He is a member of the Board of Directors of
Bernard Chaus, Inc. (manufacturer of women's apparel), Glimcher Realty Trust (a
real estate investment trust), R.G. Barry Corp. (manufacturer of foldable
slippers and heat/cold preservation products) and Union Central Insurance Co.
(life insurance). He has been a Director of the Company since July 1996.
DAVID A. MESSER has been President of AIG Trading Corporation, a subsidiary
of American International Group, Inc. (NYSE: AIG), since January 1994. Prior to
January 1994, Mr. Messer was a Senior Vice President of AIG Trading Corporation,
where he has been employed since March 1990. He has been a Director of the
Company since July 1996.
STEPHEN A. MERNS has been Vice President, Secretary and Merchandise Manager
Mens Tailored Clothing of the Company since January 1, 1986. He was Vice
President and a buyer of men's haberdashery of Syms Inc. from 1980 through 1985
and Secretary of Syms Inc. from 1983 through 1985. He has been a Director of the
Company since July 1996.
RONALD ZINDMAN has been Executive Vice President - General Merchandise
Manager since March 2, 1997. He was Vice President, General Merchandise Manager,
Ladies, Mens and Haberdashery since July 10, 1994. Previously, Mr. Zindman was
Vice President - General Merchandise Manager Ladies from March 1993 to July 1994
and a buyer of men's and women's merchandise from March 1990 to March 1993.
ALLEN BRAILSFORD has been Vice President - Operations since January 1993.
Previously Mr. Brailsford was Director of Operations from March 1992 to January
1993 and Director of Distribution from March 1985 to March 1992.
ISABEL REGAN has been Vice President - Divisional Merchandise Manager,
Ladies since March 1993. She has held various positions at Syms since November
1, 1972, including buyer of women's apparel.
10
<PAGE>
DOUGLAS C. MEYER has been Vice President - Marketing, Advertising and Sales
Promotion since July 1994. Mr. Meyer was Vice President, Marketing and Creative
Services for Loehmann's from 1987 to 1994.
GAIL MARGOLIN has been Vice President - Human Resources and Development
since October 1996. Ms. Margolin has been employed by the Company since 1993 and
has held the positions of Director of Human Resources and Personnel Manager. Ms.
Margolin worked for Burlington Coat Factory from 1986 to 1993 and held various
corporate management positions in Executive Recruitment, College Relations and
Training and Development.
During 1994 HSSI, Inc., of which Mr. Weinberg was President, Chief
Executive Officer and a Director, filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy
Court for the Northern District of Illinois, Eastern Division.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Ronald Zindman inadvertently failed to timely file a Form 3 upon
becoming an officer of the Company in 1993 and to timely file a Form 5 in
connection with his September 1996 stock option grant. Such reports were
subsequently filed.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company and its
subsidiaries for the past three fiscal years, and for the 1995 calendar year, to
its five most highly compensated executive officers, including the Chief
Executive Officer, serving as such at the end of the most recently completed
fiscal year.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation (1) All Other
----------------------------------- Options/ Compen-
Name and Principal Position Year* Salary Bonus SARs (#) sation (2)
--------------------------- ----- ------ ----- --------------- ----------
<S> <C> <C> <C> <C> <C>
Sy Syms ...................................... 1997 $824,988(4) 0 0 $3,616
Chairman of the Board and 1996 $855,756(3)(4) 0 0 $2,306
Chief Executive Officer 1995 $824,988(4) 0 0 $2,306
1994 $624,988(4) 0 0 $2,368
Marcy Syms ................................... 1997 $469,000 0 0 $3,616
President and Chief Operating 1996 $515,154(3)(5) 0 0 $2,306
Officer 1995 $469,000(5) 0 0 $2,306
1994 $469,000(5) 0 0 $2,368
Ronald Zindman................................ 1997 $233,000 10,000 100,000 $3,616
Executive Vice President-General 1996 $206,000 0 0 $2,306
Merchandise Manager 1995 $198,000 0 0 $2,306
1994 $142,000 10,000 0 $2,368
Stephen A. Merns.............................. 1997 $145,200 0 0 $3,441
Vice President, Secretary and 1996 $137,800 0 0 $2,069
Merchandise Manager Men's 1995 $135,200 0 0 $2,069
Tailored Clothing 1994 $130,000 0 0 $2,030
Allen Brailsford .............................. 1997 $103,800 10,000 0 $2,423
Vice President - Operations 1996 $100,200 0 0 $1,453
1995 $ 97,500 0 0 $1,453
1994 $ 93,600 10,000 0 $1,583
</TABLE>
- - ---------
* During 1995, the Company changed its fiscal year end to the Saturday
nearest to the end of February. Accordingly, fiscal year information is
provided for the 52 weeks ended March 1, 1997, for the 53 weeks ended March
2, 1996, for the 1995 calendar year, and for 1994 fiscal year, which ended
December 31, 1994.
(1) During the period covered by the table, the Company did not make any
restricted stock awards or have in effect (or make payments under) any long
term incentive plan other than the Option Plan, pursuant to which only
stock options, but no stock appreciation rights, were awarded.
(2) Company's contributions to a defined contribution profit sharing retirement
plan.
(3) Mr. Sy Syms is paid at a weekly rate of $15,865.15 and Ms. Marcy Syms is
paid at a weekly rate of $9,019.23. The compensation reported for Mr. Syms
and Ms. Syms for the period ended March 2, 1996 is for 53 weeks and
reflects certain adjustments recorded in the second half of calendar 1995
in order for their calendar 1995 salary to amount to $824,988 and $469,000,
respectively.
11
<PAGE>
(4) Excludes payments made under the lease of the Elmsford store. See "Other
Transactions."
(5) Includes payment of $300,000 for the fiscal years ended March 1, 1997 and
March 2, 1996, $300,000 for 1995 and $300,000 for 1994 by Syms Advertising,
Inc., a subsidiary of the Company, as performance fees for advertising
during such years.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information concerning stock options granted
during fiscal 1997 to the executive officers name in the Summary Compensation
Table and related value information. No stock appreciation rights ("SARs") were
made granted to the named executive officers. All grants were made pursuant to
the Option Plan.
<TABLE>
<CAPTION>
Individual Grants Potential Realizable Values at
------------------ Assumed Annual Rates of Stock
% of Total Price Appreciation for Option
Options/SARs Term Compounded Annually
Options/ Granted to Exercise or -----------------------------
SARs Employees in Base Price Expiration
Name Granted Fiscal 1997 ($/Share)(2) Date 5% 10%
- - --------- -------- ------------ ------------ ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Ronald Zindman ...... 100,000(1) 100 $8.00 9/18/2006 $503,116 $1,274,994
</TABLE>
- - --------
(1) Consists of incentive stock options at a per share option exercise price
equal to the fair market value of the Company's Common Stock in the date of
the grant. The term of the option is ten years. The options become
exercisable at the rate of 12.5% per year.
(2) The exercise price may be paid by delivery of already owned shares of the
Company's Common Stock.
AGGREGATED OPTION/SAR EXERCISES
IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
The following table provides information concerning exercises of stock
options during fiscal 1997 by the executive officers named in the Summary
Compensation Table and the value of unexercised options held by them at year
end.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Number of Options/SARs In-the-Money Options/SARs
Shares at Fiscal Year End(1) at Fiscal Year End(2)
Acquired on Value --------------------------- -------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Marcy Syms................... 0 0 76,000 24,000 $35,000 2,500
Ronald Zindman............... 0 0 28,000 75,000 28,125 84,375
Stephen A. Merns............. 0 0 4,000 0 2,000 0
Allen Brailsford ............ 0 0 6,000 0 6,000 0
</TABLE>
- - ------------
(1) No SARs are held.
(2) Based upon a closing price of $9.125 per share of Common Stock on February
28, 1997.
PENSION PLAN
The following table sets forth the estimated annual benefits payable on
retirement to persons in specified remuneration and years of participation
classifications under the Company's defined benefit pension plan (the "Pension
Plan") for employees not covered under collective bargaining agreements:
Highest Five 5 15 25
Year Average Years of Years of Years of
Compensation Participation Participation Participation
------------ ------------- ------------- -------------
$50,000......................... $1,900 $ 5,700 $ 9,500
75,000......................... 2,850 8,550 14,250
100,000......................... 3,800 11,400 19,000
125,000......................... 4,750 14,250 23,750
150,000......................... 5,700 17,100 28,500
12
<PAGE>
Each participant in the Pension Plan is entitled to an annual retirement benefit
equal to 19% of the average compensation (excluding bonuses) during his five
consecutive highest paid calendar years during the ten years prior to retirement
except that the annual benefit payable to Sy Syms at normal retirement, as per
the plan, cannot exceed $70,000. For the executive officers named in the Summary
Compensation Table, compensation for purposes of the Pension Plan generally
corresponds to the amounts shown in the "Salary" column of the Summary
Compensation Table, but exclusive of the performance fees from Syms Advertising,
Inc. Currently no more than $150,000 (as adjusted from time to time by the
Internal Revenue Service) of cash compensation may be taken into account in
calculating benefits payable under the Pension Plan. Executive officers in the
Summary Compensation Table were credited with the following years of service at
December 31, 1996: Sy Syms, 15 or more years; Marcy Syms, 15 or more years;
Ronald Zindman, 7 years; Stephen A. Merns, 15 or more years; and Allen
Brailsford, 15 or more years. Benefits under the Pension Plan are not subject to
any deduction for social security or other offset amount. The annual retirement
benefit is reduced pro rata if the employee has completed less than fifteen
years of service. Effective December 31, 1994, the plan was amended to change
the pro rata reduction to be based on 25 years of participation. A participant
is entitled to be paid his benefits upon his retirement at age 65. If a
participant has completed at least 15 years of service he may retire upon
reaching age 55 but the benefits he receives will be actuarially reduced to
reflect the longer period during which he will receive a benefit. A participant
who leaves the Company for any reason other than death, disability or retirement
will be entitled to receive the vested portion of his benefit payable over
different periods of time depending on the aggregate amount vested and payment
option elected. A participant's interest vests over a 7 year period commencing
in the third year at the rate of 20% after completing three years of employment
and 20% for each year thereafter, and is 100% vested after the completion of 7
years of service. Benefit payments are made in the form of one of five annuity
payment options elected by the participant. Amounts in the table are based on a
straight life annuity.
COMPENSATION OF DIRECTORS
Each member of the Board of Directors who is not an officer or employee of
the Company receives a Director's Fee presently established at the rate of
$2,000 per meeting for attending regular or special meetings of the Board of
Directors, or any committee of the Board of Directors, together with travel
expenses related to such attendance.
EMPLOYMENT AGREEMENTS
The company has entered into an employment agreement dated November 1, 1996
with its Executive Vice-President, General Merchandising Manager, Ronald
Zindman. This agreement stipulates a minimum yearly salary to be paid to this
employee, and will remain in effect until March 1, 2009. Termination by the
Company before that date will require a payment to the employee equal to 150% of
one year's salary (at the employee's then current rate). If this agreement is
terminated by the employee prior to its final term, the company must pay to the
employee a sum equal to 60% of one year's salary (also at the employee's then
current rate).
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER INFORMATION
The members of the Compensation Committee of the Board of Directors are
Wilbur L. Ross, Jr. and Harvey Weinberg, each of whom is a non-employee
director, and Sy Syms, who is Chairman of the Board and Chief Executive Officer
of the Company (see "Other Transactions").
No executive officer of the Company served during fiscal 1997 (i) as a
member of the compensation committee or other board committee performing
equivalent functions or, in the absence of any such committee, the entire board
of directors, of another entity, one of whose executive officers serves on the
compensation committee of the Company; (ii) as a director of another entity, one
of whose executive officers served on the compensation committee of the Company;
or (iii) as a member of the compensation committee or other board committee
performing equivalent functions or, in the absence of any such committee, the
entire board of directors, of another entity, one of whose executive officers
served as a director of the Company.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock, by
each person known to the Company to be the beneficial owner of more than 5% of
Common Stock, each director, each of the executive officers named in the Summary
Compensation Table, and by all directors and executive officers of the Company
as a group.
13
<PAGE>
Amount and Nature of
Beneficial Ownership of
Common Stock Percent
Name of Beneficial Owner as of May 28, 1997 of Class (1)
------------------------ ------------------------- ------------
Sy Syms................................... 9,781,507(1) 55.3%
Tweedy, Browne Company, L.P.
52 Vanderbilt Avenue, New York,
NY 10017................................ 1,226,647 6.9%
Marcy Syms................................ 693,075(2) 3.9%
Ronald Zindman............................ 28,000(2) *
Stephen A. Merns.......................... 734,775(2) 4.2%
Wilbur L. Ross, Jr........................ 500 *
Harvey A. Weinberg........................ 200 *
Allen Brailsford.......................... 6,000(2)
Philip G. Barach.......................... 1,000 *
David A. Messer........................... -- *
All directors and executive officers as
a group (9 persons).................... 11,245,057 63.5%
- - -------------
* Less than one percent.
(1) Includes (a) 9,552,145 (54.0%) shares held in the Sy Syms Revocable Living
Trust, dated March 17, 1989, as amended, (b) 229,262 shares held for Laura
Merns and (c) 100 shares held by Sy Syms as custodian for Jillian E. Merns.
(2) Includes shares issuable upon the exercise of options granted under the
Option Plan and either currently exercisable or exercisable within 60 days
after May 2, 1997.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
OTHER TRANSACTIONS
The Company leases its store in Elmsford, New York of approximately 60,000
square feet from Sy Syms. Sy Syms voluntarily amended the lease as of August 1,
1983 as to its rental provisions based upon independent appraisals. Under the
original and amended leases, the rent payable by the Company consisted of a
fixed annual rent plus a percentage rent based on gross sales of the Elmsford
store. Not more frequently than once every five years, the rental terms may be
adjusted based upon independent appraisals if requested by Sy Syms. Effective
January, 1991, the rental terms were adjusted based upon independent appraisal,
which resulted in a fixed annual rental of $600,000 and the elimination of the
percentage rent based on gross sales. During the fiscal year ended March 1,
1997, the Company paid to Sy Syms $600,000 in fixed rent.
Pursuant to loan and stock purchase agreements entered into between Sy Syms
and Stanley Blacker, Inc. in 1987, as subsequently amended, Sy Syms personally
loaned to Stanley Blacker, Inc. approximately $6,000,000 and became a majority
stockholder and member of the Board of Directors of Stanley Blacker, Inc. During
1990, such shares were assigned to the Revocable Living Trust. Sy Syms retains
the right to vote such shares. During 1990, Marcy Syms became a member of the
Board of Directors of Stanley Blacker, Inc. Sy Syms and Marcy Syms constitute a
majority of the Board of Directors of Stanley Blacker, Inc. Neither Sy Syms nor
Marcy Syms have received any salary or other cash compensation from Stanley
Blacker, Inc. The Company's purchases of merchandise from Stanley Blacker, Inc.
and a licensee during fiscal 1997 was approximately $5,471,000. The Company
entered into an agreement with the licensee in 1991 to purchase annually
approximately $4,200,000 of suits for a five year period ending December 31,
1996. This agreement has been extended until further notice. The Company
believes the terms upon which it purchases merchandise from Stanley Blacker,
Inc. and the licensee are comparable to those obtained from unrelated third
parties. As of March 1, 1997, the Company had advanced funds to the licensee,
totaling approximately $2,459,000 for purchases to be received in the Spring and
Fall of 1997. A $2,200,000 provision was made for the fiscal year and fourth
quarter ended March 2, 1996 in recognition of current information that the
licensee advance may not be fully recoverable. In addition, the Company has
guaranteed a letter of credit on behalf of the licensee totaling $150,000 which
expires on July 5, 1997 and has advanced fabric in the approximate amount of
$311,000.
On November 22, 1996 the Company loaned the Marcy Syms Revocable Trust
$500,000 toward the purchase of a house for Ms. Syms in Westchester County, New
York. The loan is evidenced by the Trust's note, which is guaranteed by Ms.
Syms, and is secured by a first priority mortgage on the real estate purchased.
The note bears interest at the rate of 6.6% per annum (the then Federal Mid-Term
Rate) payable annually, and the principal of the note is due November 22, 2001.
14
<PAGE>
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
PAGE NUMBER
-----------
(a) (1) Financial Statements:
Report of Independent Public Accountants................... F-1
Consolidated Balance Sheets ............................... F-2
Consolidated Statements of Income ......................... F-3
Consolidated Statements of Shareholders' Equity ........... F-4
Consolidated Statements of Cash Flow ...................... F-5
Notes to Consolidated Financial Statements ................ F-6 - F-15
All schedules are omitted because they are not applicable, or not required,
or because the required information is included in the consolidated financial
statements or notes thereto.
(a) (3) List of Exhibits:
The following exhibits which are marked with an asterisk are filed as part
of this Report and the other exhibits set forth below are incorporated by
reference (utilizing the same exhibit numbers, except as stated otherwise below)
from (i) the Company's Registration Statement on Form S-1 under the Securities
Act of 1933 (Registration No. 2-85554) filed August 2, 1983 and declared
effective September 23, 1983 or (ii) where indicated, the Company's reports on
Form 8-K, Form 10-Q or Form 10-K or the Company's Proxy Statement (Commission
File No. 1-8564). Management contracts or compensatory plans or arrangements
required to be filed as exhibits are identified by a (+).
3.1 Certificate of Incorporation of Syms Corp, as amended
3.2 By-laws of Syms Corp
4.1 Specimen Certificate of Common stock
4.3 $5,600,000 New Jersey Economic Development Authority Revenue Bond
Agreement dated December 1, 1981
4.4 Amendments to the New Jersey Economic Development Authority Revenue Bond
Agreement
4.4a First Amendment dated April 14, 1982
4.4b Second Amendment dated May 17, 1982
4.4c Third Amendment dated June 27, 1983
4.4d Fourth Amendment dated July 14, 1983
4.5 Mortgage & Note dated December 11, 1981 between Syms Inc. and New Jersey
Economic Development Authority
10.3 Elmsford (White Plains), New York Leased Premises
10.3a Lease, June 21, 1977
10.3b Lease Modification, December 28, 1978
10.3c Lease Modification, July 26, 1983
10.3d Consent, July 29, 1983
10.3e Parking Area Lease No. 1, July 29, 1969
10.3f Parking Area Sublease No.1, November 29, 1974
10.3g Parking Area Lease No. 2, June 23, 1969
10.3h Parking Area Sublease No. 2, November 29, 1974
10.3i Assignment and Assumption, July 29, 1983
10.4 Ground Lease at One Emerson Lane, Township of Secaucus, Hudson County,
New Jersey Assignment and Assumption of Ground Lease, dated May 8, 1986,
to Registrant (exhibit 28.1 to 8-K Report dated May 1986)
+10.21 Syms Corp 1983 Incentive Stock Option and Appreciation Plan as Amended
and Restated (Exhibit A to Company's Proxy Statement for the 1993 Annual
Meeting of Shareholders)
10.29 Credit Card Program Agreement dated as of March 12, 1987 and as amended
as of March 16, 1987 between General Electric Credit Card Corporation and
Registrant (10-K Report for fiscal year ended December 31, 1987)
15
<PAGE>
10.32 Revolving Credit Agreement dated as of December 1, 1993 between Syms
Corp and United Jersey Bank (8-K Report dated December 7, 1993)
10.33 Form of Indemnification Agreement between Registrant and Directors and
Executive Officers of the Registrant
10.34 Credit Plan Agreement dated December 11, 1995 between Citicorp Retail
Services, Inc. and Registrant
*+10.35 Employment Agreement dated November 1, 1996 between Syms Corp and
Ronald Zindman
*+10.36 Stock Option Certificate for Ronald Zindman.
*10.37 Promissory note and mortgage from Syms Corp to Marcy Syms.
21 List of Subsidiaries of the Company
* 23 Consent of Deloitte & Touche LLP
* 27 Financial Data Schedule
(b) Reports on Form 8-K:
During the quarter ended March 1, 1997 no reports on Form 8-K were filed.
OTHER MATTERS - FORM S-8 UNDERTAKINGS
For the purposes of complying with the amendments to the rules governing Form
S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned
registrant hereby undertakes as follows, which undertakings shall be
incorporated by reference into registrant's Registration Statements on Form S-8
Nos. 2-85554 and 2-97033:
(a) Rule 415 offering.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
posteffective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) Filings incorporating subsequent Exchange Act documents by reference.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(h) Filing of Registration Statement on Form S-8.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
16
<PAGE>
SIGNATURE
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.
SYMS CORP
By /s/ SY SYMS
------------------------
Sy Syms
Chairman of the Board
Date: May 28, 1997
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.
<TABLE>
<CAPTION>
Signature Title Date
- - --------- ----- ----
<S> <C> <C>
/s/ SY SYMS Chairman of the Board, May 28, 1997
- - --------------------------- Chief Executive Officer
Sy Syms and Director
(principal executive officer)
/s/ MARCY SYMS President, Chief Operating
- - --------------------------- Officer and Director May 28, 1997
Marcy Syms
/s/ KIRK R. ONEY Controller May 28, 1997
- - --------------------------- (Acting Principal Financial
Kirk R. Oney and Accounting Officer)
/s/ WILBUR L. ROSS, JR Director May 28, 1997
- - ---------------------------
Wilbur L. Ross, Jr
/s/ HARVEY WEINBERG Director May 28, 1997
- - ---------------------------
Harvey Weinberg
/s/ DAVID MESSER Director May 28, 1997
- - ---------------------------
David Messer
/s/ PHILIP BARACH Director May 28, 1997
- - ---------------------------
Philip Barach
/s/ STEPHEN A. MERNS Director May 28, 1997
- - ---------------------------
Stephen A. Merns
</TABLE>
17
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of Syms Corp
Secaucus, New Jersey
We have audited the accompanying consolidated balance sheets of Syms Corp and
its subsidiaries as of March 1, 1997 and March 2, 1996, and the related
consolidated statements of income, shareholders' equity and cash flows for each
of the three fiscal years ended March 1, 1997, March 2, 1996 and December 31,
1994 and the two month period ended February 25, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements 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 consolidated 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 that 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 Syms Corp and subsidiaries as of
March 1, 1997 and March 2, 1996 and the results of their operations and their
cash flows for each of the three fiscal years ended March 1, 1997, March 2, 1996
and December 31, 1994 and the two month period ended February 25, 1995 in
conformity with generally accepted accounting principles.
Deloitte & Touche LLP
New York, New York
April 28, 1997
F-1
<PAGE>
SYMS CORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 1, MARCH 2,
1997 1996
-------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,344 $ 4,804
Merchandise inventories 122,540 112,954
Deferred income taxes 6,639 5,221
Prepaid expenses and other current assets 1,756 3,521
-------- --------
Total current assets 134,279 126,500
PROPERTY AND EQUIPMENT - Net 142,741 129,235
DEFERRED INCOME TAXES 197
OTHER ASSETS 6,801 4,409
-------- --------
TOTAL ASSETS $284,018 $260,144
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 28,723 $ 30,900
Accrued expenses 11,055 9,918
Obligations to customers 5,085 4,490
Income taxes payable 5,833 5,331
Short term borrowings 4,950 --
Current portion of obligations
under capital lease 405 340
-------- --------
Total current liabilities 56,051 50,979
OBLIGATIONS UNDER CAPITAL LEASE 900 1,304
DEFERRED INCOME TAXES 0 255
OTHER LONG TERM LIABILITIES 633 237
COMMITMENTS -- --
SHAREHOLDERS' EQUITY:
Preferred stock, par value $100 per share - authorized 1,000
shares; none outstanding -- --
Common stock, par value $0.05 per share - authorized 30,000
shares; 17,694 shares outstanding as of March 1, 1997 and
March 2, 1996 885 885
Additional paid-in capital 11,709 11,709
Retained earnings 213,840 194,775
-------- --------
Total shareholders' equity 226,434 207,369
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $284,018 $260,144
======== ========
</TABLE>
See notes to consolidated financial statements
F-2
<PAGE>
SYMS CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED TWO MONTHS ENDED
---------------------------------- ---------------------------
MARCH 1, MARCH 2, DECEMBER 31, FEBRUARY 25, FEBRUARY 26,
1997 1996 1994 1995 1994
---- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C>
NET SALES $346,792 $334,750 $326,651 $ 46,632 $41,642
Cost of goods sold 213,113 217,561 217,912 29,776 28,108
-------- -------- -------- -------- -------
Gross profit 133,679 117,189 108,739 16,856 13,534
EXPENSES
Selling, general and administrative 71,028 70,579 68,370 10,652 10,133
Advertising 6,626 5,905 5,069 576 364
Occupancy 14,215 12,330 12,017 1,841 1,702
Depreciation and amortization 7,971 7,751 8,854 1,359 1,190
Provision for contractor advance
and special charges -- 2,686 -- 2,935 --
-------- -------- -------- -------- -------
Income (loss) from operations 33,839 17,938 14,429 (507) 145
Interest expense (income) - net 97 293 59 60 61
-------- -------- -------- -------- -------
Income (loss) before income taxes 33,742 17,645 14,370 (567) 84
Provision (benefit) for income taxes 14,677 7,234 5,879 (184) 34
-------- -------- -------- -------- -------
NET INCOME (LOSS) $ 19,065 $ 10,411 $ 8,491 $ (383) $ 50
======== ======== ======== ======== =======
Net Income (Loss) Per Share $ 1.08 $ 0.59 $ 0.48 $ (0.02) $ --
======== ======== ======== ======== =======
Weighted Average Shares Outstanding 17,694 17,694 17,694 17,694 17,692
======== ======== ======== ======== =======
Cash Dividends Per Share $ -- $ -- $ 0.10 $ -- $ --
======== ======== ======== ======== =======
</TABLE>
See notes to consolidated financial statements
F-3
<PAGE>
SYMS CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PREFERRED STOCK, COMMON STOCK,
1,000 SHARES; 30,000 SHARES;
$100 PAR VALUE $0.05 PAR VALUE ADDITIONAL
--------------- --------------- PAID-IN RETAINED
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS TOTAL
------ ------ ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE JANUARY 1, 1994 -- -- 17,692 $885 $11,695 $ 178,025 $ 190,605
Exercise of stock options -- -- 2 -- 14 -- 14
Cash dividend -- -- -- -- -- (1,769) (1,769)
Net income -- -- -- -- -- 8,491 8,491
------ ------ ------ ---- ------- --------- ---------
BALANCE DECEMBER 31, 1994 -- -- 17,694 885 11,709 184,747 197,341
Net loss for the two months ended -
February 25, 1995 -- -- -- -- -- (383) (383)
Net income for the fiscal year
ended - March 2, 1996 -- -- -- -- -- 10,411 10,411
------ ------ ------ ---- ------- --------- ---------
BALANCE MARCH 2, 1996 -- -- 17,694 885 11,709 194,775 207,369
Net income -- -- -- -- -- 19,065 19,065
------ ------ ------ ---- ------- --------- ---------
BALANCE MARCH 1, 1997 -- -- 17,694 $885 $11,709 $ 213,840 $ 226,434
====== ====== ====== ==== ======= ========= =========
</TABLE>
See notes to consolidated financial statements
F-4
<PAGE>
SYMS CORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED TWO MONTHS ENDED
----------------- ----------------
MARCH 1, MARCH 2, DECEMBER 31, FEBRUARY 25, FEBRUARY 26,
1997 1996 1994 1995 1994
---- ---- ---- ---- ----
(Unaudited)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 19,065 $ 10,411 $ 8,491 $ (383) $ 50
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 7,971 7,751 8,854 1,359 1,190
Deferred income taxes (1,870) (3,539) (1,484) 47 --
(Gain) loss on sale of property and equipment (52) 10 (73) (16) --
Loss on disposal of assets 244 1,142 -- 1,360 --
(Increase) decrease in operating assets:
Merchandising inventories (9,586) (2,694) (17,389) (13,453) (9,000)
Prepaid expenses and other current assets 1,765 2,158 (418) (404) 2,403
Other assets (2,417) (306) (290) 4 (2)
Increase (decrease) in operating liabilities:
Accounts payable (2,177) (4,721) 8,535 12,222 14,573
Accrued expenses 1,137 1,203 4,164 133 (2,596)
Obligations to customers 595 (271) 805 456 (166)
Other long term liabilities 396 237 -- -- --
Income taxes 502 (245) 1,741 (306) (3,036)
-------- -------- -------- -------- --------
Net cash provided by operating activities 15,573 11,136 12,936 1,019 3,416
-------- -------- -------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (21,709) (4,777) (14,591) (388) (1,910)
Proceeds from sale of property and equipment 65 325 103 13 --
-------- -------- -------- -------- --------
Net cash used in investing activities (21,644) (4,452) (14,488) (375) (1,910)
-------- -------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of dividends -- -- (1,769) -- --
Repayments of obligations under capital lease (339) (287) (234) (43) (36)
Revolving line of credit borrowings (repayments) 4,950 (2,050) 2,900 (850) --
Exercise of options -- -- 14 -- --
-------- -------- -------- -------- --------
Net cash provided by (used in) financing activities 4,611 (2,337) 911 (893) (36)
-------- -------- -------- -------- --------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,460) 4,347 (641) (249) 1,470
CASH AND CASH EQUIVALENTS. BEGINNING OF PERIOD 4,804 457 1,347 706 1,347
-------- -------- -------- -------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,344 $ 4,804 $ 706 $ 457 $ 2,817
======== ======== ======== ======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) $ 291 $ 399 $ 253 $ -- $ --
======== ======== ======== ======== ========
Income taxes paid (refunds received) - net $ 16,041 $ 11,026 $ 5,106 $ (33) $ --
======== ======== ======== ======== ========
</TABLE>
See notes to consolidated financial statements
F-5
<PAGE>
SYMS CORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FISCAL YEARS ENDED MARCH 1, 1997, MARCH 2, 1996, DECEMBER 31, 1994
AND THE TWO MONTHS ENDED FEBRUARY 25, 1995
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Principal Business - Syms Corp and subsidiaries (the "Company") operates a
chain of forty "off-price" retail stores (thirty-eight in 1996) located
throughout the Northeastern and middle Atlantic regions and in the Midwest,
Southeast and Southwest. Each Syms store offers a broad range of first
quality, in season merchandise bearing nationally recognized designer or
brand-name labels for men, women and children.
b. Principles of Consolidation - The consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated.
c. Accounting Period - The Company has changed its fiscal year end to the
Saturday nearest to the end of February. This change was reported on March
17, 1995. The fiscal years ended March 1, 1997 and December 31, 1994 were
comprised of 52 weeks. The fiscal year ended March 2, 1996 was comprised of
53 weeks.
d. Merchandise Inventories - Merchandise inventories are stated at the lower
of cost or market on a first-in first- out (FIFO) basis, as determined by
the retail inventory method. During the fiscal year ended December 31,
1994, the Company changed its method of valuing inventory by computing
separate cost complements for each department within its five merchandise
categories. In the past, the Company computed a single cost complement for
each of its five merchandise categories. Management believes the change
results in a more accurate inventory valuation. This change resulted in a
total increase to gross margin of $780,000 of which approximately one half
relates to prior years. The Company considers that the effect on fiscal
year end 1994 and prior years is not material.
e. Property and Equipment - Property and equipment are stated at cost.
Depreciation and amortization are computed principally by the straight-line
method at rates adequate to allocate the cost of applicable assets over
their expected useful lives. The cost of leaseholds and leasehold
improvements are amortized over the terms of the leases or the useful lives
of the assets, whichever is shorter.
Facilities' leases (Note 7) having the substance of financing transactions
have been capitalized. The related lease obligations have been included as
obligations under capital lease. The leased assets are being amortized as
described above.
f. Income Taxes - Deferred income taxes reflect the future tax consequences of
differences between the tax basis of assets and liabilities and their
financial reporting amounts at year end.
g. Earnings Per Share - Net income per share is computed by dividing net
income by the weighted average number of common shares and common stock
equivalents outstanding during each period. The Company's common stock
equivalents consist of outstanding stock options and for the periods ended
March 1, 1997, March 2, 1996 and December 31, 1994, the effect of
outstanding common stock options was not dilutive.
h. Cash and Cash Equivalents- Syms Corp considers credit card receivables and
all short-term investments with a maturity of three months or less as cash
equivalents.
F-6
<PAGE>
i. Pre-opening Costs - Store pre-opening costs are deferred until the store's
opening, at which time they are expensed over the first 12 months of store
operation.
j. Closed Store Expense - Closed store costs, such as future rent and real
estate taxes net of expected sublease recovery, are accrued when management
makes the determination that no future economic benefit from operations
exists and are recorded in SG&A expenses.
k. Obligation to Customers - Obligations to customers represent credits issued
for returned merchandise as well as gift certificates. The Company's policy
is to allow customers to exchange credits issued for other merchandise or
credit to the Syms charge card.
l. Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
m. Recent Accounting Pronouncement - In March 1995, the Financial Accounting
Standards Board issued SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of." SFAS No.
121 requires that long-lived assets and certain identifiable intangibles to
be held and used by an entity be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may
not be recoverable, and is effective for fiscal years beginning after
December 15, 1995. The adoption of SFAS No. 121 did not have an effect on
the Company's financial position or results of operations.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("SFAS No. 128"), which is effective for the Company for the year ended
February 28, 1998. SFAS No. 128 simplifies the standards for computing
earnings per share previously found in Accounting Principles Board Opinion
No. 15 and establishes new standards for computing and presenting earnings
per share. Application of SFAS No. 128 is not expected to have a
significant effect on the Company's earnings per share.
n. Reclassification - Certain items in prior years in specific captions of the
accompanying consolidated financial statements and notes to consolidated
financial statements have been reclassified for comparative purposes.
F-7
<PAGE>
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment consists of:
MARCH 1, MARCH 2,
1997 1996
---- ----
(IN THOUSANDS)
Land ......................................... $ 40,061 $ 34,060
Buildings and building improvements .......... 105,511 102,244
Leasehold and leasehold improvements ......... 32,142 20,365
Machinery and equipment ...................... 16,747 14,893
Furniture and fixtures ....................... 15,661 15,547
Capital lease ................................ 3,763 3,763
Construction in progress ..................... 692 2,774
-------- --------
214,577 193,646
Less accumulated depreciation and amortization 71,836 64,411
-------- --------
$142,741 $129,235
======== ========
NOTE 3 - INCOME TAXES
The provision (benefit) for income taxes is as follows:
FISCAL YEAR ENDED TWO MONTHS ENDED
------------------------------------ ---------------------
MARCH 1, MARCH 2, DECEMBER 31, FEBRUARY 25,
1997 1996 1994 1995
(In thousands)
Current:
Federal $ 13,799 $ 9,109 $ 5,956 $(223)
State 2,748 1,664 1,407 ( 8)
-------- -------- ------- -----
16,547 10,773 7,363 (231)
-------- -------- ------- -----
Deferred:
Federal (1,560) (2,622) (1,202) 43
State (310) (917) (282) 4
-------- -------- ------- -----
(1,870) (3,539) (1,484) 47
-------- -------- ------- -----
$ 14,677 $ 7,234 $ 5,879 $(184)
======== ======== ======= =====
The following is a reconciliation of income taxes computed at the U.S. Federal
statutory rate to the provision for income taxes:
F-8
<PAGE>
The following is a reconciliation of income taxes computed at the U.S. Federal
statutory rate to the provision for income taxes:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED TWO MONTHS ENDED
------------------------------------- ----------------
MARCH 1, MARCH 2, DECEMBER 31, FEBRUARY 25,
1997 1996 1994 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Statutory Federal income tax rate 35.0 % 35.0 % 35.0 % (35.0) %
State taxes, net of Federal income
tax benefits 8.4 5.3 5.5 (3.2)
Officers' life insurance 0.1 0.7 0.4 5.2
Other, net -- -- -- 0.6
------ ------ ------ ------
Effective income tax rate 43.5 % 41.0 % 40.9 % (32.4) %
====== ====== ====== ======
</TABLE>
The composition of the Company's deferred tax assets and liabilities is as
follows:
MARCH 1, MARCH 2,
1997 1996
------- -------
(IN THOUSANDS)
Deferred tax assets:
Capitalization of inventory costs $ 4,085 $ 3,800
Capital lease 404 333
Accounts receivable 1,143 1,018
Other 2,645 650
------- -------
Total deferred tax assets 8,277 5,801
Deferred tax liability:
Depreciation method and different estimated lives (425) (835)
Other (1,016) --
------- -------
Total deferred tax liabilities $(1,441) $ (835)
======= =======
Net $ 6,836 $ 4,966
======= =======
Classified in balance sheet as follows:
Current deferred tax asset $ 6,639 $ 5,221
Long term deferred tax asset (net of
noncurrent deferred tax liability) 197
Long term deferred tax liability (net
of noncurrent deferred tax asset) (255)
------- -------
Net $ 6,836 $ 4,966
======= =======
F-9
<PAGE>
NOTE 4 - BANK CREDIT FACILITIES
The Company has an unsecured revolving credit agreement with a bank for a line
of credit not to exceed $40,000,000 through December 1, 1997. Interest on
individual advances is payable quarterly at 1 1/2% per annum below the bank's
base rate, except that at the time of advance, the Company has the option to
select an interest rate based upon one of two other alternative calculations,
with such rate to be fixed for a period not to exceed 90 days. The average daily
unused portion is subject to a commitment fee of 1/8 of 1% per annum. The
interest rate on short term borrowings was 6.75% at March 1, 1997. At March 1,
1997 there was $4,950,000 in outstanding borrowings and there were no borrowings
at March 2, 1996.
The agreement contains financial covenants, with respect to consolidated
tangible net worth, as defined, working capital and maximum capital
expenditures, including dividends, as well as other financial ratios.
Total interest charges incurred for the years ended March 1, 1997, March 2, 1996
and December 31, 1994 including amounts related to capital leases, were
$586,000, $623,000 and $865,000, respectively, of which $152,000, $105,000 and
$612,000 were capitalized in fiscals 1997, 1996 and 1994, respectively, in
connection with the purchase and construction of new facilities.
In addition, the Company has a separate $10,000,000 credit facility with another
bank available for the issuance of letters of credit for the purchase of
merchandise. This agreement may be cancelled at any time by either party. At
March 1, 1997 and at March 2, 1996, the Company had $6,094,004 and $3,786,000,
respectively, in outstanding letters of credit.
NOTE 5 - FAIR VALUE DISCLOSURES
The estimated fair values of financial instruments which are presented herein
have been determined by the Company using available market information and
appropriate valuation methodologies. However, considerable judgment is required
in interpreting market data to develop estimates of fair value. Accordingly, the
estimates presented herein are not necessarily indicative of amounts the Company
could realize in a current market exchange.
The fair value of the Company's cash and cash equivalents, accounts receivable
and short-term borrowings approximates their carrying values at March 1, 1997
and March 2, 1996 due to the short-term maturities of these instruments.
F-10
<PAGE>
NOTE 6 - PENSION AND PROFIT SHARING PLANS
a. PENSION PLAN - The Company has a defined benefit pension plan for all
employees other than those covered under collective bargaining agreements.
The benefits are based on years of service and the employee's highest
average pay during any five consecutive years within the ten-year period
prior to retirement. Pension plan costs are funded annually. Contributions
are intended to provide not only for benefits attributed to service to
date, but also for those expected to be earned in the future.
The following table sets forth the Plan's funded status and amounts
recognized in the Company's consolidated balance sheet:
MARCH 1, MARCH 2,
1997 1996
------- -------
(IN THOUSANDS)
Actuarial present value of benefit obligation:
Accumulated benefit obligation, including vested
benefits of $3,128 at March 1, 1997 and $2,552
at March 2, 1996 $ 3,254 $ 2,711
======= =======
Projected benefit obligation $ 4,180 $ 3,592
Plan assets at fair value, primarily mutual
funds and United States Treasury bills 3,869 3,249
------- -------
Plan assets less than projected benefit obligation (311) (343)
Unrecognized net loss
147 186
Unamortized net asset at transition (127) (152)
------- -------
Accrued pension cost (included in accrued expenses) $ (291) $ (309)
======= =======
F-11
<PAGE>
Pension expense includes the following components:
FISCAL YEAR ENDED
-----------------------------------
MARCH 1, MARCH 2, DECEMBER 31,
1997 1996 1994
----- ----- -----
(IN THOUSANDS)
Service cost-benefits earned
during the period $ 326 $ 330 $ 384
Interest cost on the projected
benefit obligation 282 242 248
Actual return on plan assets
(159) (191) (193)
Net amortization and deferral
(155) (80) (82)
----- ----- -----
Net periodic pension cost $ 294 $ 301 $ 357
===== ===== =====
The weighted average discount rate of increase in future compensation
levels used in determining the actuarial present value of the projected
benefit obligation was 7.75% during each of the years ended March 1, 1997,
March 2, 1996, and December 31, 1994. The expected long-term rate of
return on plan assets was 8.5% during each of the years ended March 1,
1997, March 2, 1996 and December 31, 1994.
b. PROFIT-SHARING AND 401-K PLAN - The Company has a profit-sharing plan and
401(K) plan for all employees other than those covered under collective
bargaining agreements. In 1995, the Company established a defined
contribution savings plan 401(K) for substantially all of its eligible
employees. Employees may contribute a percentage of their salary to the
plan subject to statutory limits. The Company has not made any matching
contributions to this plan, however, profit-sharing contributions were
made in the amounts of $200,000 for year ended March 1, 1997, and $130,000
for each of the years ended March 2, 1996, and December 31, 1994.
F-12
<PAGE>
NOTE 7 - COMMITMENTS
a. LEASES - The Company has various operating leases and one capital lease
for its retail stores, with terms expiring between 1997 and 2016. Under
most lease agreements, the Company pays real estate taxes, maintenance and
other operating expenses. Certain store leases also provide for additional
contingent rentals based upon a percentage of sales in excess of certain
minimum amounts.
Future minimum lease payments at March 1, 1997 are as follows:
CAPITAL LEASE OPERATING
REAL ESTATE LEASES
----------- ------
(IN THOUSANDS)
1998 $ 600 $ 6,974
1999 600 6,158
2000 450 5,442
2001 -- 5,062
2002 -- 5,171
2003 and thereafter -- 39,785
------ -------
Total minimum payments 1,650 $68,592
=======
Less amount representing interest 345
------
Present value of net minimum lease payments 1,305
------
Less current maturities 405
------
$ 900
======
Payments under the real estate capital lease, which expires in 1999, are payable
to the Company's principal shareholder. Rental payments were $600,000 during
each of the years ended March 1, 1997, March 2, 1996 and December 31, 1994.
Rent expense for operating leases are as follows:
FISCAL YEAR ENDED TWO MONTHS ENDED
--------------------------------------- ------------
MARCH 1, MARCH 2, DECEMBER 31, FEBRUARY 25,
1997 1996 1994 1995
---- ---- ---- ----
(IN THOUSANDS)
Minimum rentals $ 5,832 $ 4,308 $ 4,030 $ 698
Escalation rentals 413 24 9 28
Contingent rentals 36 40 25 4
Sublease rentals (743) (386) (192) (32)
------- ------- ------- -----
$ 5,538 $ 3,986 $ 3,872 $ 698
======= ======= ======= =====
b. EMPLOYMENT AGREEMENT - At March 1, 1997 the Company had an employment
agreement with its General Merchandising Manager, expiring 2009, pursuant
to which annual compensation of approximately $300,000 is required. In
addition, that employee is entitled to additional compensation upon
occurrence of certain events.
F-13
<PAGE>
c. LEGAL PROCEEDINGS - The Company is a party to routine litigation incident
to its business. Management of the Company believes, based upon its
assessment of the actions and claims outstanding against the Company, and
after discussion with counsel, that there are no legal proceedings that
will have a material adverse effect on the financial condition or results
of operations of the Company. Some of the lawsuits to which the Company is
a party are covered by insurance and are being defended by the Company's
insurance carriers.
NOTE 8 - PREFERRED STOCK
The Company is authorized to issue up to 1,000,000 shares of preferred stock, in
one or more series of preferred stock. The Board of Directors is authorized to
establish the number of shares to be included in each such series, and to fix
the designation, relative rights, preferences, qualifications and limitations of
the shares of each such series.
NOTE 9 - STOCK OPTION PLAN
The Company's Stock Option Plan allows for the granting of incentive stock
options, as defined in Section 422A of the Internal Revenue Code of 1986 (as
amended), non-qualified stock options or stock appreciation rights. The plan
requires that incentive stock options be granted at an exercise price not less
than the fair market value of the common shares on the date the option is
granted. The exercise price of the option for holders of more than 10% of the
voting rights of the Company must be not less than 110% of the fair market value
of the common shares on the date of grant. Non-qualified options and stock
appreciation rights may be granted at any exercise price. The Company has
reserved 1,000,000 shares of common stock for issuance thereunder.
No option or stock appreciation rights may be granted under the stock option
plan after July 2003. The maximum exercise period for any option or stock
appreciation right under the plan is ten years from the date the option is
granted (five years for any optionee who holds more than 10% of the voting
rights of the Company).
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123"), was effective for the Company for fiscal 1997.
SFAS No. 123 encourages (but does not require) compensation expense to be
measured based on the fair value of the equity instrument awarded. In accordance
with APB No. 25, no compensation cost has been recognized in the Consolidated
Statements of Income for the Company's stock option plans. If compensation cost
for the Company's stock option plans had been determined in accordance with the
fair value method prescribed by SFAS No. 123, the Company's net income would
have been $19,042,000 and $10,411,000 for 1997 and 1996, respectively, and the
earnings per share would have been $1.08 and $0.59 for 1997 and 1996,
respectively. This pro forma information may not be representative of the
amounts to be expected in future years as the fair value method of accounting
prescribed by SFAS No. 123 has not been applied to options granted prior to
1997.
F-14
<PAGE>
Stock option transactions are summarized below:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED TWO MONTHS ENDED
---------------------------------------------------------------- ----------------------
MARCH 1, 1997 MARCH 2, 1996 DECEMBER 31, 1994 FEBRUARY 25, 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
-------------------------------------------------------------------------------------------
WEIGHTED WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE EXERCISE
FIXED OPTIONS SHARES PRICE SHARES PRICE SHARES PRICE SHARES PRICE
------- ------ ------- ------ ------- ------ ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Outstanding
beginning of year 426 $ 9.94 464 $9.90 547 $10.04 496 $ 9.96
Granted 100 8.00 - - 57 8.50 - -
Exercised - - - - (2) 8.63 - -
Cancelled (36) 10.27 (38) 9.53 (106) 9.81 (32) 10.65
- - -------------------------------------------------------------------------------------------------------------------------------
Outstanding, end of period 490 $ 9.52 426 $9.94 496 $ 9.96 464 $ 9.91
===============================================================================================================================
Options exerciseable at year end 360 $ 9.83 320 $10.02 288 $10.11 256 $10.04
Weighted-average fair value of
options granted during the year $ 4.99 - $ 4.99 -
</TABLE>
The following table summarizes information about stock options outstanding at
March 1, 1997:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
- - ------------------------------------------------------------------------------ ----------------------------------------
WEIGHTED-AVERAGE
NUMBER REMAINING WEIGHTED- NUMBER WEIGHTED-
RANGE OF OUTSTANDING AT CONTRACTURAL AVERAGE EXERCISABLE AT AVERAGE
EXERCISE PRICES MARCH 1, 1997 LIFE (YEARS) EXERCISE PRICE MARCH 1, 1997 EXERCISE PRICE
- - ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$7.125 - $12.250 490,625 4.8 $9.52 359,815 $9.83
</TABLE>
The fair value of each option grant is estimated on the date of each grant using
the Black-Scholes option-pricing model with the following weighted average
assumptions used for grants in 1997: risk-free interest rate 6.83%, expected
life 10 years, expected volatility of 33.29%, dividend yield 0%. The fair value
generated by the Black-Scholes model may not be indicative of the future
benefit, if any, that may be received by the option holder.
NOTE 10 - OTHER TRANSACTIONS
Included in cost of sales for the three fiscal years ended March 1, 1997, March
2, 1996 and December 31, 1994 are purchases of approximately $5,471,000,
$5,139,000 and $6,322,000, respectively, from a company related to the principal
shareholder, as well as a licensee of the related company. In 1991 the Company
entered into an agreement with the licensee to purchase annually approximately
$4,200,000 of suits. Included in prepaid expenses and other current assets at
March 1, 1997 and March 2, 1996 are advances to the licensee totaling
approximately $2,182,000 and $3,438,000, respectively. The advances at March 1,
1997 are for purchases to be received in the Spring and Fall of 1997 and are to
be received by the Company prior to December 31, 1997. A $2,200,000 provision
was made for the fiscal year and fourth quarter ended March 2, 1996 in
recognition of current information that the licensee advance may not be fully
recoverable. In addition, the
F-15
<PAGE>
Company has guaranteed a letter of credit on behalf of the licensee totaling
approximately $150,000, which expires on July 5, 1997 and at March 1, 1997 has
advanced fabric in the approximate amount of $311,000.
The Company has entered into a capital lease with the Chief Executive Officer.
Included in the Statement of Income are the following expense relating to this
agreement:
FISCAL YEAR ENDED TWO MONTHS ENDED
----------------- ----------------
MARCH 1, MARCH 2, DECEMBER 31, FEBRUARY 25,
1997 1996 1994 1995
--------- -------- ------------- ------------
(IN THOUSANDS)
Depreciation $238 $238 $238 $40
Interest 261 313 366 57
The balance sheet includes the following items relating to this agreement:
MARCH 1, 1997 MARCH 2, 1996
------------- -------------
(IN THOUSANDS)
Assets under Capital Lease $ 3,763 $ 3,763
Accumulated Depreciation (3,339) (3,101)
Capital Lease Obligation 1,305 1,644
On November 22, 1996 the Company loaned the Marcy Syms Revocable Trust $500,000
toward the purchase of a house for Ms. Syms in Westchester County, New York. The
loan is evidenced by the Trust's note, which is guaranteed by Ms. Syms, and is
secured by a first priority mortgage on the real estate purchased. The note
bears interest at the rate of 6.6% per annum (the then Federal Mid-Term Rate)
payable annually, and the principal of the note is due November 22, 2001.
NOTE 11 - UNAUDITED SELECTED QUARTERLY FINANCIAL DATA
QUARTER
-------
FIRST SECOND THIRD FOURTH
----- ------ ----- ------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
YEAR ENDED MARCH 1, 1997
Net sales $83,377 $75,128 $96,225 $92,062
Gross profit $30,456 $26,133 $41,494 $35,596
Net income $ 3,381 $ 1,441 $ 8,637 $ 5,606
Net income per share $ 0.19 $ 0.08 $ 0.49 $ 0.32
YEAR ENDED MARCH 2, 1996
Net sales $79,252 $72,814 $93,439 $89,245
Gross profit $27,174 $24,535 $34,577 $30,903
Net income $ 1,036 $ 741 $ 5,561 $ 3,073
Net income per share $ 0.06 $ 0.04 $ 0.32 $ 0.17
F-16
EXHIBIT 10.35
EMPLOYMENT AGREEMENT
Employment Agreement dated as of November 1, 1996 between Syms Corporation,
hereinafter "Syms," a corporation organized under the State of New Jersey with
offices at Syms Way, Secaucus, New Jersey 07094 and Ronald Zindman, hereinafter
"Employee" residing at 10 Conover Court, Belle Meade, New Jersey 08502.
W I T N E S S E T H:
1. On the terms and conditions herein Syms employs Employee as its General
Merchandise Manager to perform the duties incident to such Position for a period
of twelve years, four months, commencing November 1, 1996 and ending March 1,
2009. Employee shall continue to hold the additional office of Vice President of
Syms until March 2, 1997, at which time he shall be elected or appointed an
Executive Vice President of Syms. As used in this Agreement the term "year"
shall mean Syms' fiscal year.
2. Employee shall receive a salary payable in accordance with Syms'
customary practice as follows: $225,000 per year from the date hereof through
March 1, 1997; $300,000 per year for the next succeeding three (3) years;
$350,000 per year for the next succeeding three (3) years, $400,000 per year for
the next succeeding three (3) years and $450,000 per year for the final three
(3) years of this Agreement. Employee shall be entitled to participate in all
Syms benefit plans and programs for which he is eligible and shall be entitled
to mutually agreed upon vacations consistent with Syms' policy and procedures.
3. Notwithstanding any other term of this Agreement, Employee may terminate
this Agreement upon not less than 15 days' written notice to Syms, in which
event Employee shall be entitled to a sum equal to 60% of one year's salary (at
Employee's then current rate), excluding bonuses, if any, which will be paid by
Syms in a lump sum within 90 days after such termination.
<PAGE>
4. Notwithstanding any other term of this Agreement, Syms shall be entitled
at any time to terminate this Agreement. Whether termination by Syms is for
cause or without cause, Employee shall be entitled to a sum equal to 150% of one
year's salary (at Employee's then current rate), excluding bonuses, if any,
which will be paid by Syms in a lump sum within 90 days after such termination.
5. Employee's employment hereunder shall terminate upon his death or
disability. In the event of termination for disability (which condition shall be
verified by a physician), Employee shall be entitled to a sum equal to 150% of
one year's salary (at Employee's then current rate), excluding bonuses, if any,
which will be paid by Syms in a lump sum within 90 days after such termination.
6. The sums of 60% or 150% will not be paid if cause for termination is
conviction of a crime against Syms.
7. This Agreement shall constitute the entire agreement of the parties
superseding any other agreement relating to the employment by Syms and may be
amended or modified only by a writing signed by both parties.
SYMS CORP:
By: /s/ SY SYMS
----------------------------
Sy Syms
/s/ RONALD ZINDMAN
----------------------------
Ronald Zindman
EXHIBIT 10.36
SYMS CORP
STOCK OPTION CERTIFICATE
1. For valuable consideration, receipt of which is hereby acknowledged, Syms
Corp, a New Jersey corporation (the "Company"), hereby grants to Ronald
Zindman whose address is 10 Conover Court, Belle Mead, NJ 08502, (the
"Optionee"), an incentive stock option (the "Option) subject to the
following terms and conditions, to purchase from the Company an aggregate
of 100,000 shares of Common Stock, par value $.05 per share, (the "Common
Stock") of the Company. The Option is granted upon all of the terms and
conditions set forth in this Option Certificate and subject to all the
terms of the Company's Amended and Restated Incentive Stock Option and
Appreciation Plan (the "Plan"), attached hereto as Exhibit A.
2. Purchase Price -- The option price for the shares of Common Stock which may
be acquired upon exercise of the Option shall be $8.00 per share,
determined by the closing price on the New York Stock Exchange for
Thursday, September 19, 1996.
3. Exercise of Option -- The Option may be exercised within the next ten (10)
years as follows:
Date after which Option
may be exercised with
No. of Shares regards to such shares
------------- ----------------------
12,500 .......................... October 1, 1996
12,500 .......................... March 1, 1997
12,500 .......................... March 1, 1998
12,500 .......................... March 1, 1999
12,500 .......................... March 1, 2000
12,500 .......................... March 1, 2001
12,500 .......................... March 1, 2002
12,500 .......................... March 1, 2003
The option may be exercised by notice and payment to the Company as
provided in the Plan.
4. Term of Option -- The term of the Option shall be a period of ten (10)
years from the date hereof, expiring on September 18, 2006.
5. Registration and Resale -- If not already covered by a Registration
Statement on Form S-8, the Company shall its best efforts to file, cause to
become effective and maintain effective a registration statement or
statement under the Securities Act of 1933, as amended (the "Securities
Act"), on Form S-8, registering the offer and sale to Optionee of the
Common Stock that may be acquired upon exercise of the Option. The Company
shall be deemed to have used such best efforts on behalf of Optionee if it
shall have taken the same efforts to effect such registration as it shall
have taken to effect similar
<PAGE>
registrations on behalf of present and former officers and affiliates of
the Company. If, notwithstanding the use of the Company's best efforts,
such registration shall not have been effected, (a) the shares of Common
Stock subject to, and issuable upon the exercise of, the Option may be
issued to the holder of the Option without registration under the
Securities Act and, if required upon the request of counsel to the Company,
the Optionee shall give a representation as to his investment intent with
respect to such shares prior to their issuance as set forth in Section 6;
(b) upon any sale or transfer of the Common Stock purchased upon the
exercise of the Option, the Optionee shall, if requested by the Company,
deliver to the Company an opinion of counsel reasonably satisfactory to
counsel to the Company to the effect that either (i) the shares of Common
Stock to be sold or transferred have been registered under the Securities
Act and that there is in effect a current prospectus meeting the
requirements of Section 10 (a) of the Securities Act which is being or will
be delivered to the purchaser or transferee at or prior to the time of
delivery of the certificates evidencing the Common Stock to be sold or
transferred , or (ii) such shares of Common Stock may then be sold without
violating Section 5 of the Securities Act; (c) if required by counsel for
the Company the certificates representing shares of Common Stock issued
upon exercise of the Option shall bear the following legend:
"THE SHARES EVIDENCED BY THIS CERTIFICATE MAY NOT BE SOLD, OR
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS
THEY HAVE FIRST BEEN REGISTERED UNDER THE SECURITIES ACT OF 1993, AS
AMENDED, OR UNLESS, IN THE OPINION OF COUNSEL FOR THE COMPANY, SUCH
REGISTRATION IS NOT REQUIRED."
6. Method of Exercise of Option -- Subject to the provisions of the Plan and
this Option Certificate, the Option may be exercised by written notice to
the Company from the person or persons entitled to exercise the Option,
stating the number of shares with respect to which it is being exercised
and accompanied by payment of the option price by (a) certified or bank
cashier's check payable to the order of the Company in New York Clearing
House funds, (b) shares of Common Stock of the Company owned by the
Optionee (except that no shares of Common Stock of the Company may be
applied to the purchase price of shares of Common Stock issuable upon
exercise of an Option which was granted under the Qualified Stock Option
Plan of the Company), (c) notes, or (d) any other consideration acceptable
to the Committee of the Board of Directors of the Company (the "Committee")
or, in the absence of a Committee, the Board of Directors. If required by
counsel to the Company, the notice of exercise shall be accompanied by a
representation and agreement as to investment intent, in form satisfactory
to counsel to the Company. As soon as practicable after receipt of such
notice and payment, the Company shall, without transfer or issue tax or
other incidental expense to the Optionee, except payment of any required
withholding tax, deliver to the Optionee at Syms Way, Secaucus, New Jersey
07094, or such other place as may be mutually acceptable or, at the
election of the Company, by first-class insured mail
<PAGE>
addressed to the Optionee at the address of the Optionee as indicated in
the employment records of the Company or at the location at which the
Optionee is employed by the Company, a certificate or certificates for such
shares of Common Stock out of theretofore unissued shares of Common Stock
of the Company or re-acquired shares of its Common Stock, as the Company
may, in its sole discretion, elect.
The Company may postpone the time of delivery of certificates for shares of
its Common Stock for such additional time as the Company shall deem
necessary or desirable to enable it to comply with the listing requirements
of any securities exchange upon which the shares of Common Stock of the
Company may be listed or the requirements of the Securities Act or the
Securities Exchange Act of 1934 or any rules or regulations of the
Securities and Exchange Commission promulgated under of said Acts or the
requirements of applicable state laws relating to authorization, issuance
of sale of securities.
If the Optionee fails to accept delivery of and pay for all or any part of
the number of shares specified in such notice upon tender of delivery
thereof, the right of the Optionee to exercise the Option with respect to
such undelivered shares may be terminated. The Option may be exercised only
with respect to full shares, and no fractional shares will be issued upon
exercise of the Option.
7. In order that Optionee may realize to the fullest extent practicable the
benefits inherent in the grant of the Option, the Company may not terminate
the employment of Optionee upon less than 90 days' advance written notice
to Optionee.
8. The Company represents and warrants to Optionee that at the time of grant
of the Option, the Plan complied in all respects with the requirements of
Rule 16b-3 under the Securities Act of 1934, as amended.
9. In the event of (i) a consolidation or merger to which the Company is a
party, other than one in which the Company is a contiuing corporation, (ii)
the sale or conveyance of all or substantially all of the assets of the
Company, (iii) a reorganization, liquidation or other like occurrence, then
immediately prior to any such event, the Option shall become and shall
remain throughout the unexpired term thereof, exercisable in its entirety
(whether or not it would then have been exercisable in full in accordance
with its terms). If the exercise of the Option under provisions of this
Section 9 would be deemed to result in a violation of Section 6 of the
Plan, then without further action on the part of the Committee or Optionee,
the Option shall be deemed a nonqualified stock option to the extent
necessary to avoid any such violation.
<PAGE>
IN WITNESS WHEREOF, Syms Corp has caused this Option Certificate to be executed
by its officers, thereunto duly authorized, as of 20th day of September 1996.
ATTEST: SYMS CORP
/s/ KRISTINE A. KULESZ By: /s/ SY SYMS
- - ------------------------------ ------------------------------
Kristine A. Kulesz Sy Syms
ACCEPTED AND AGREED TO:
/s/ RONALD ZINDMAN
- - ------------------------------
Ronald Zindman
(the Optionee)
EXHIBIT 10.37
PROMISSORY NOTE
$500,000
New York, New York
November 22, 1996
FOR VALUE RECEIVED, the undersigned, MARCY SYMS MERNS, as Trustee under the
Marcy Syms Merns Revocable Trust dated January 12, 1990 (hereinafter referred to
as "Maker"), having an address at 205 West 57th Street, New York, New York
10019, hereby unconditionally PROMISES TO PAY to the order of SYMS CORP, a New
Jersey corporation (hereinafter collectively referred to as "Payee"), having an
address at Syms Way, Secaucus, New Jersey 07094 or at such other place as the
holder of this Note may designate from time to time in writing, in lawful money
of the United States of America and in immediately available funds, the
principal amount of up to FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($500,000) as
hereinafter provided,
The principal sum of this Note shall be payable in accordance with the
following provisions: Interest on the outstanding principal sum shall accrue
from and including the date hereof at the rate of 6.60% per annum and shall be
payable annually commencing on the first anniversary of the date hereof and on
each anniversary thereafter up to and including the fifth (5th) anniversary of
the date hereof (the "Maturity Date"), at which time the entire outstanding
principal sum and all accrued and unpaid interest shall be due and payable.
Notwithstanding the foregoing, this Note may be prepaid in whole or in
part, without penalty or premium, at any time prior to the Maturity Date.
This Note shall be secured by a first mortgage lien on the premises (and
any improvements made thereto) known as 14 Twin Ponds Lane, Bedford Hills, New
York 10507 (the "Premises") granted by Maker in favor of Payee (the "Mortgage").
A default under the Mortgage shall be deemed a default under this Note.
This Note has been executed, delivered and accepted in New York, New York
and shall be interpreted, governed by, and construed in accordance with, the
internal laws of the State of New York, without regard to New York choice of law
principles.
/s/ MARCY SYMS MERNS
-----------------------------------
Marcy Syms Merns,
as Trustee
<PAGE>
The undersigned, as the beneficiary of the Marcy Syms Merns Revocable Trust
dated January 12, 1990, hereby guarantees the prompt payment and performance of
all obligations, covenants and duties owing by the Maker to Payee of any kind or
nature, present or future, pursuant to this Note, due or to become due, now
existing or hereafter arising, and any amendments, extensions, renewals or
increases and all costs and expense of Payee incurred in the documentation,
negotiation, modification enforcement, collection or otherwise in connection
with any of the foregoing, including but not limited to reasonable attorneys'
fees and expenses.
/s/ MARCY SYMS MERNS
-----------------------------------
Marcy Syms Merns
<PAGE>
WESTCHESTER COUNTY RECORDING AND ENDORSEMENT PAGE
(THIS PAGE FORMS PART OF THE INSTRUMENT)
THE FOLLOWING INSTRUMENT WAS ENDORSED FOR THE RECORD AS FOLLOWS:
TYPE OF INSTRUMENT MTG-MORTGAGE FEE PAGE 6 TOTAL PAGES 6
------------ - -
(SEE CODES FOR DEFINITIONS)
STAT'Y CHARGE 5.25 MORTGE. DATE 11/22/96
-----
REC'ING CHARGE 18.00 MORTGE. AMT500000.00 LIBER: 22251
----- -----
PAGE: 320
---
RECMGT FUND 4.75 EXEMPT YES X NO-
-----
EA 5217 0.00
-----
TP-584 0.00 REC'D TAX ON ABOVE MTGE: THE PROPERTY IS
----- SITUATED IN
CROSS-REF. 0.00 YONKERS $ 0.00 WESTCHESTER COUNTY,
----- -------- NEW YORK IN THE:
MISC. 0.00 BASIC $2500.00 TOWN OF BEDFORD
----- --------
ADDITIONAL $1225.00
--------
SUBTOTAL $3725.00
--------
TOTAL PAID 28.00 MTA $1250.00
==== --------
SPECIAL $ 0.00
--------
TOTAL PAID $4975.00
========
SERIAL NO. CNI9258
CONSIDERATION DWELLING X 1-6 OVER
-
DUAL TOWN
RECEIVED: DUAL COUNTY/STATE
TAX AMOUNT $
TRANSFER TAX# HELD
NOT HELD
TITI.E COMPANY NUMBER: 01
--
EXAMINED BY SSG4 RECORDING DATE 11/25/96 TERMINAL CTRL#9633OP044 TIME 15:38
---- -------- --------- -----
DATE RETURNED
WITNESS MY HAND AND OFFICIAL SEAL
/s/ LEONARD N. SPANO
-----------------------------------
Leonard N. Spano
Westchester County Clerk
<PAGE>
CONSULT YOUR LAWYER BEFORE SIGNING THIS INSTRUMENT -- THIS INSTRUMENT
SHOULD BE USED BY LAWYERS ONLY
THIS MORTGAGE, made the 22nd day of November nineteen hundred and ninety-six
BETWEEN MARCY SYMS MERNS, as Trustee under the Marcy Syms Merns Revocable Trust
dated January 12, 1990
205 West 57th Street
New York, NY 10019
Apt # 4B
and SYMS CORP., a New Jersey corporation having an address at
the mortgagor, Syms Way, Secaucus, New Jersey 07094
the mortgagee,
WITNESSETH, that to secure the payment of an indebtedness in the sum of FIVE
HUNDRED THOUSAND ______________________________________________________________
_______________________________________________________________________________
DOLLARS ($500,000.00)__________________________________________________________
lawful money of the United States, to be paid _________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
________________________________________________________________ according to a
certain bond, note or obligation bearing even date herewith, the mortgagor
hereby mortgages to the mortgagee
ALL that certain plot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the Town of Bedford
Hills, County of Westchester, State of New York and more particularly described
on Schedule A annexed hereto.
The premises herein are improved by a single family dwelling only.
<PAGE>
TOGETHER with all right, title and interest of the mortgagor in and to the land
lying in the streets and roads in front of and adjoining said premises;
TOGETHER with all fixtures, chattels and articles of personal property now or
hereafter attached to or used in connection with said premises, including but
not limited to furnaces, boilers, oil burners, radiators and piping, coal
stokers, plumbing and bathroom fixtures, refrigeration, air conditioning and
sprinkler systems, wash-tubs, sinks, gas and electric fixtures, stoves, ranges,
awnings, screens, window shades, elevators, motors, dynamos, refrigerators,
kitchen cabinets, incinerators, plants and shrubbery and all other equipment and
machinery, appliances, fittings, and fixtures of every kind in or used in the
operation of the buildings standing on said premises, together with any and all
replacements thereof and additions thereto;
TOGETHER with all awards heretofore and hereafter made to the mortgagor for
taking by eminent domain the whole or any part of said premises or any easement
therein, including any awards for changes of grade of streets, which said awards
are hereby assigned to the mortgagee, who is hereby authorized to collect and
receive the proceeds of such awards and to give proper receipts and
acquaintances therefor, and to apply the same toward the payment of the mortgage
debt, notwithstanding the fact that the amount owing thereon may not then be due
and payable; and the said mortgagor hereby agrees, upon request, to make,
execute and deliver any and all assignments and other instruments sufficient for
the purpose of assigning said awards to the mortgagee, free, clear and
discharged of any encumbrances of any kind or nature whatsoever.
AND the mortgagor covenants with the mortgagee as follows:
1. That the mortgagor will pay the indebtedness as hereinbefore provided.
2. That the mortgagor will keep the buildings on the premises insured against
loss by fire for the benefit of the mortgagee; that he will assign and
deliver the policies to the mortgagee; and that he will reimburse the
mortgage for any premiums paid for insurance made by the mortgagee on the
mortgagor's default in so insuring the buildings or in so assigning and
delivering the policies.
3. That no building on the premises shall be altered, removed or demolished
without the consent of the mortgagee.
4. That the whole of said principal sum and interest shall become due at the
option of the mortgagee: after default in the payment of any installment of
principal or of interest for fifteen days; or after default in the payment
of any tax, water rate, sewer rent or assessment for thirty days after
notice and demand; or after default after notice and demand either in
assigning and delivering the policies insuring the buildings against loss
by fire or in reimbursing the mortgagee for premiums paid on such
insurance, as hereinbefore provided; or after default upon request in
furnishing a statement of the amount due on the mortgage and whether any
offsets or defenses exist against the mortgage debt, as hereinafter
provided. An assessment which has been made payable in installments at the
application of the mortgagor or lessee of the premises shall nevertheless,
for the purpose of this paragraph, be deemed due and payable in its
entirety on the day the first installment becomes due or payable or a lien.
<PAGE>
5. That the holder of this mortgage, in any action to foreclose it, shall be
entitled to the appointment of a receiver.
6. That the mortgagor will pay all taxes, assessments, sewer rents or water
rates, and in default thereof, the mortgagee may pay the same.
7. That the mortgagor within five days upon request in person or within ten
days upon request by mail will furnish a written statement duly
acknowledged of the amount due on this mortgage and whether any offsets or
defenses exist against the mortgage debt.
8. That notice and demand or request may be in writing and may be served in
person or by mail.
9. That the mortgagor warrants the title to the premises.
10. That the fire insurance policies required by paragraph No. 2 above shall
contain the usual extended coverage endorsement; that in addition thereto
the mortgagor, within thirty days after notice and demand, will keep the
premises insured against war risk and any other hazard that may reasonably
be required by the mortgagee. All of the provisions of paragraphs No. 2 and
No. 4 above relating to fire insurance and the provisions of Section 254 of
the Real Property Law construing the same shall apply to the additional
insurance required by this paragraph.
11. That in case of a foreclosure sale, said premises, or so much thereof as
may be affected by this mortgage, may be sold in one parcel.
12. That if any action or proceeding be commenced (except an action to
foreclose this mortgage or to collect the debt secured thereby), to which
action or proceeding the mortgagee is made a party, or in which it becomes
necessary to defend or uphold the lien of this mortgage, all sums paid by
the mortgagee for the expense of any litigation to prosecute or defend the
rights and lien created by this mortgage (including reasonable counsel
fees), shall be paid by the mortgagor, together with interest thereon at
the rate of six per cent per annum, and any such sum and the interest
thereon shall be a, lien on said premises, prior to any right, or title to,
interest in or claim upon said premises attaching or accruing subsequent to
the lien of this mortgage, and shall be deemed to be secured by this
mortgage. In any action or proceeding to foreclose this mortgage, or to
recover or collect the debt secured thereby, the provisions of law
respecting the recovering of costs, disbursements and allowances shall
prevail unaffected by this covenant.
<PAGE>
13. That the mortgagor hereby assigns to the mortgagee the rents, issues and
profits of the premises as further security for the payment of said
indebtedness, and the mortgagor grants to the mortgagee the right to enter
upon and to take possession of the premises for the purpose of collecting
the same and to let the premises or any part thereof, and to apply the
rents, issues and profits, after payment of all necessary charges and
expenses, on account of said indebtedness. This assignment and grant shall
continue in effect until this mortgage is paid, The mortgagee hereby waives
the right to enter upon and to take possession of said premises for the
purpose of collecting said rents, issues and profits, and the mortgagor
shall be entitled to collect and receive said rents, issues and profits
until default under any of the covenants, conditions or agreements
contained in this mortgage, and agrees to use such rents, issues and
profits in payment of principal and interest becoming due on this mortgage
and in payment of taxes, assessments, sewer rents, water rates and carrying
charges becoming due against said premises, but such right of the mortgagor
may be revoked by the mortgagee upon any default, on five days' written
notice. The mortgagor will not, without the written consent of the
mortgagee, receive or collect rent from any tenant of said premises or any
part thereof for a period of more than one month in advance, and in the
event of any default under this mortgage will pay monthly in advance to the
mortgagee, or to any receiver appointed to collect said rents, issues and
profits, the fair and reasonable rental value for the use and occupation of
said premises or of such part thereof as may be in the possession of the
mortgagor, and upon default in any such payment will vacate and surrender
the possession of said premises to the mortgagee or to such receiver, and
in default thereof may be evicted by summary proceedings.
14. That the whole of said principal sum and the interest shall become due at
the option of the mortgagee: (a) after failure to exhibit to the mortgagee,
within ten days after demand, receipts showing payment of all taxes, water
rates, sewer rents and assessments; or (b)) after the actual or threatened
alteration, demolition or removal of any building on the premises without
the written consent of the mortgagee; or (c) after the assignment of the
rents of the premises or any part thereof without the written consent of
the mortgagee; or (d) if the buildings on said premises are not maintained
in reasonably good repair; or (e) after failure to comply with any
requirement or order or notice of violation of law or ordinance issued by
any governmental department claiming jurisdiction over the premises within
three months from the issuance thereof; or (f) if on application of the
mortgagee two or more fire insurance companies lawfully doing business in
the State of New York refuse to issue policies insuring the buildings on
the premises; or (g) in the event of the removal, demolition or destruction
in whole or in part of any of the fixtures, chattels or articles of
personal properly covered hereby, unless the same are promptly replaced by
similar fixtures, chattels and articles of personal property at least equal
in quality and condition to those replaced, free from chattel mortgages or
other encumbrances thereon and free from any reservation of title thereto;
or (h) after thirty days' notice to the mortgagor, in the event of the
passage of any law deducting from the value of the land for the purposes of
taxation any lien thereon, or changing in any way the taxation of mortgages
or debts Secured thereby for state or local purposes; or (i) if the
mortgagor fails to keep, observe and perform any of the other covenants,
conditions or agreements contained in this mortgage.
15. That the mortgagor will, in compliance with Section 13 of the Lien Law,
receive the advances secured hereby and will hold the right to receive such
advances as a trust fund to be applied first for the purpose of paying the
cost of the improvement and will apply the same first to the payment of the
cost of the improvement before using any part of the total of the same for
any other purpose.
16. That the execution of this mortgage has been duly authorized by the board
of directors of the mortgagor.
<PAGE>
This mortgage may not be changed or terminated orally. The covenants
contained in this mortgage shall run with the land and bind the mortgagor, the
heirs, personal representatives, successors and assigns of the mortgagor and all
subsequent owners, encumbrances, tenants and subtenants of the premises, and
shall enure to the benefit of the mortgagee, the personal representatives,
successors and assigns of the mortgagee and all subsequent holders of this
mortgage. The word "mortgagor" shall be construed as if it read "mortgagors" and
the word "mortgagee" shall be construed as if it read "mortgagees" whenever the
sense of this mortgage so requires.
IN WITNESS WHEREOF, this mortgage has been duly executed by the mortgagor,
IN PRESENCE OF:
/s/ MARCY SYMS MERNS
---------------------------------------
Marcy Syms Merns, as Trustee
<PAGE>
STATE OF NEW JERSEY ) STATE OF NEW YORK )
) SS: ) SS:
COUNTY OF HUDSON ) COUNTY OF )
On the 22nd day of November __, 1996 before me on the _______ day of 19__
before me personally came personally came
Marcy Syms Merns _______________________
to me known to be the individual to me known to be the individual
described in and who executed the described in and who executed the
foregoing instrument, and acknowledged foregoing instrument, and
that ____________________________ acknowledged that __________________
executed the same. executed the same.
RICHARD A. TEREO
NOTARY PUBLIC OF NEW JERSEY
MY COMMISSION EXPIRES MARCH 6, 2001
----------
STATE OF NEW YORK ) STATE OF NEW YORK )
) SS: ) SS:
COUNTY OF ) COUNTY OF )
On the _______ day of 19__ before me On the _______ day of 19__ before me
personally came personally came
_______________________ _______________________
to me known, who, being by me duty the subscribing witness to the
sworn, did depose and say that ______ foregoing instrument, with whom I am
he resides at No. ____ personally acquainted who, being by me
duly sworn, did depose and say that he
that ______ he is the _______________ resides at No. ____
of___________________________________
____________________,the corporation that ______ he knows _________________
described in and which executed the
foregoing instrument; that he knows to be the individual described in and
the seal of said corporation; that the who executed the foregoing instrument;
seal affixed to said instrument is that he, said subscribing witness, was
such corporate seal; that it was so present and saw execute the same; and
affixed by order of the board of that he, said witness, at the same
directors of said corporation, and time subscribed his name as witness
that he signed his name thereto by like thereto.
order.
MORTGAGE SECTION 59.12
Title No. ________________ BLOCK I
LOT 2
MARCY SYMS MERNS COUNTY OR TOWN Bedford, Westchester
TO Recorded at Request of
COMMONWEALTH
LAND
SYMS CORP. LAND TITLE INSURANCE COMPANY
RETURN BY MAIL TO
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza -- 29th Floor
New York, NY 10112
Attention: Norman Alpert, Esq.
<PAGE>
Title No. MAC-14O.11552-WO
AMENDED 11/20/96
SCHEDULE "A"
ALL that certain plot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the Town of Bedford,
County of Westchester and the State of New York, known and designated as Lot No.
6 on a certain map entitled, "Subdivision Plot prepared for Haines Associates,
dated July 21, 1986, and revised on August 25, 1987, and filed in the Office of
the Clark of Westchester County on October 9, 1987, as Map No. 22971, said lot
being more particularly bounded described as follows:
BEGINNING at a point on the northwesterly side of Twin Ponds Drive distant
686.14 feet southerly and southwesterly from the comer formed by the
intersection of the westerly side of Twin Ponds Drive with the northerly side of
Haines Road, said point also being where the dividing line between Lot #5 and
Lot #6 as shown on the above referred to map intersects the northwesterly side
of Twin Ponds Drive;
RUNNING THENCE along said above referred to map line, North 23(Degree) 26' 41"
West 543.41 feet to a point on the southerly side at Twin Ponds Drive;
THENCE along the southerly, southwesterly, westerly and northwesterly sides of
Twin Ponds Drive as same twists and turns, the following seven (7) courses and
distances:
1. North 01(Degree) 001 00" East 24.47 feet;
2. North 68(Degree) 33' 55" East 404.82 feet to a point of curve;
3. Along the arc of a curve bearing to the right having a radius of 110 feet,
transponding a central angle of 149(Degree) 48' 45" for a distance of
287.62 feet to a point of tangency;
4. South 38(Degree) 22' 40" West 156.68 feet to a point of curve;
5. Along the arc of a curve bearing to the left having a radius of 500.00
feet, transponding a central angle of 23(Degree) 05'25" for a distance of
201.50 feet to a point of tangency;
6. South 15(Degree) 17' 15" West 102.23 feet to a point of curve; and
7. Along the arc of a curve bearing to the right having a radius of 175.00
feet, transponding a central angle of 41(Degree) 28' 52" for a distance of
126.70 feet to the point or place of BEGINNING.
EXHIBIT 23
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in Registration Statement
No.2-85554 on Form S-8 and in Registration Statement No. 2-97033 on Form S-8
of our report dated April 28, 1997, appearing in this Annual Report on Form 10-K
of Syms Corp and Subsidiaries for the fiscal year ended March 1, 1997.
Deloitte & Touche LLP
New York, New York
May 28, 1997
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