================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended August 28, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For The Transition Period From_____________ to _____________
COMMISSION FILE NUMBER 1-8546
SYMS CORP
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
NEW JERSEY 22-2465228
- ------------------------------- ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
SYMS WAY, SECAUCUS, NEW JERSEY 07094
- ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(201) 902-9600
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
----------------------------------------------------
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
At September 28, 1999, the latest practicable date, there were 16,463,390 shares
outstanding of Common Stock, par value $0.05 per share.
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<PAGE>
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SYMS CORP AND SUBSIDIARIES
----------------------------
INDEX
-----
PAGE NO.
--------
PART I. Financial Information
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of August 28, 1999,
February 27, 1999 and August 29, 1998 2
Condensed Consolidated Statements of Operations for the 13
Weeks and 26 Weeks Ended August 28, 1999 and August 29, 1998 3
Condensed Consolidated Statements of Cash Flows for the 26
Weeks Ended August 28, 1999 and August 29, 1998 4
Notes to Condensed Consolidated Financial Statements 5-6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-9
PART II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 11
<PAGE>
----------------------------
SYMS CORP AND SUBSIDIARIES
----------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------
(IN THOUSANDS)
<TABLE>
<CAPTION>
AUGUST 28, FEBRUARY 27, AUGUST 29,
1999 1999 1998
--------- --------- ---------
(Unaudited) (Note) (Unaudited)
ASSETS
CURRENT ASSETS:
<S> <C> <C> <C>
Cash and cash equivalents $ 3,042 $ 2,926 $ 3,805
Merchandise inventories 144,043 129,438 158,695
Deferred income taxes 3,655 3,462 6,465
Prepaid expenses and other current assets 2,275 3,753 4,966
--------- --------- ---------
TOTAL CURRENT ASSETS 153,015 139,579 173,931
PROPERTY AND EQUIPMENT - Net of accumulated
depreciation and amortization 161,322 153,810 146,914
DEFERRED INCOME TAXES 138 -- --
OTHER ASSETS 5,934 5,353 6,639
--------- --------- ---------
TOTAL ASSETS $ 320,409 $ 298,742 $ 327,484
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short Term Borrowings $ 4,900 $ 2,350 $ 15,000
Accounts payable 49,110 19,268 38,135
Accrued expenses 7,130 7,719 7,362
Accrued insurance 1,989 2,550 4,232
Obligations to customers 2,656 3,451 4,175
Income taxes payable 812 2,230 3,190
Current portion of obligations under capital lease 146 419 524
--------- --------- ---------
TOTAL CURRENT LIABILITIES 66,743 37,987 72,618
--------- --------- ---------
OBLIGATIONS UNDER CAPITAL LEASE -- -- 146
--------- --------- ---------
DEFERRED INCOME TAXES -- 428 598
--------- --------- ---------
OTHER LONG TERM LIABILITIES 2,107 1,567 1,121
--------- --------- ---------
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; 16,463 shares outstanding (net of 1,424 treasury stock) on August 28,
1999 and 17,024 shares outstanding (net of 864 treasury shares) on February
27, 1999 and 17,563 shares outstanding
(net of 324 treasury shares) on August 29, 1998 823 851 878
Additional paid-in capital 13,752 13,752 13,513
Treasury Stock (14,650) (10,168) (4,750)
Retained earnings 251,634 254,325 243,360
--------- --------- ---------
TOTAL SHAREHOLDERS' EQUITY 251,559 258,760 253,001
--------- --------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 320,409 $ 298,742 $ 327,484
========= ========= =========
</TABLE>
NOTE: The balance sheet at February 27, 1999 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to condensed consolidated financial statements
2
<PAGE>
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SYMS CORP AND SUBSIDIARIES
----------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
AUGUST 28, AUGUST 29, AUGUST 28, AUGUST 29,
1999 1998 1999 1998
--------- --------- --------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net Sales $ 72,794 $ 73,649 $ 152,565 $ 157,261
Cost of goods sold 48,868 45,779 96,793 95,671
--------- --------- --------- ---------
Gross profit 23,926 27,870 55,772 61,590
Expenses:
Selling, general and administrative 19,886 18,379 39,707 35,394
Advertising 2,006 1,198 5,626 3,349
Occupancy 5,305 4,188 9,976 7,910
Depreciation and amortization 2,518 2,078 4,906 4,151
--------- --------- --------- ---------
Income (Loss) from operations (5,789) 2,027 (4,443) 10,786
Interest expense - net (10) 68 (31) (21)
--------- --------- --------- ---------
Income (Loss) before income taxes (5,779) 1,959 (4,412) 10,807
Provision (benefit) for income taxes (2,254) 784 (1,721) 4,323
--------- --------- --------- ---------
Net (Loss) income $ (3,525) $ 1,175 $ (2,691) $ 6,484
========= ========= ========= =========
Net income (Loss) per share - basic $ (0.21) $ 0.07 $ (0.16) $ 0.37
========= ========= ========= =========
Weighted average shares outstanding-
basic 16,463 17,684 16,593 17,759
========= ========= ========= =========
Net income (Loss) per share - diluted $ (0.21) $ 0.07 $ (0.16) $ 0.36
========= ========= ========= =========
Weighted average shares outstanding-
diluted 16,463 17,777 16,593 17,860
========= ========= ========= =========
</TABLE>
See notes to condensed consolidated financial statements
3
<PAGE>
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SYMS CORP AND SUBSIDIARIES
----------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
(IN THOUSANDS)
<TABLE>
<CAPTION>
TWENTY-SIX WEEKS ENDED
----------------------
AUGUST 28, AUGUST 29,
1999 1998
-------- --------
(UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net (loss) income $ (2,691) $ 6,484
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 4,906 4,151
Deferred income taxes (759) (817)
(Gain) on sale of property and equipment (147) (605)
Loss on disposal of assets 16 --
(Increase) decrease in operating assets:
Merchandise inventories (14,605) (31,667)
Prepaid expenses and other current assets 1,478 (345)
Other assets (595) 52
Increase (decrease) in operating liabilities:
Accounts payable 29,842 16,149
Accrued expenses and insurance (1,150) (131)
Obligations to customers (795) (333)
Other long term liabilities 540 157
Income taxes (1,418) 515
-------- --------
Net cash provided by (used in) operating activities 14,622 (6,390)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for property and equipment (12,420) (4,953)
Proceeds from sale of property and equipment 147 891
-------- --------
Net cash (used in) investing activities (12,273) (4,062)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of obligations under capital lease (273) (230)
Revolving line of credit borrowings - net 2,550 15,000
Exercise of options -- 397
Stock repurchase (4,510) (4,750)
-------- --------
Net cash (used in) provided by financing activities (2,233) 10,417
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 116 (35)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,926 3,840
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,042 $ 3,805
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) $ 79 $ 105
======== ========
Income taxes paid - net $ 464 $ 4,959
======== ========
</TABLE>
See notes to condensed consolidated financial statements
4
<PAGE>
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SYMS CORP AND SUBSIDIARIES
----------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 13 AND 26 WEEKS ENDED
AUGUST 28, 1999 AND AUGUST 29, 1998
(UNAUDITED)
NOTE 1 - THE COMPANY
Syms Corp (the "Company") operates a chain of 47 "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 for men, women and children.
NOTE 2 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the 13 and 26 week periods ended August 28,
1999 are not necessarily indicative of the results that may be expected for the
entire fiscal year ending February 26, 2000. For further information, refer to
the consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the fiscal year ended February 27,
1999.
NOTE 3 - ACCOUNTING PERIOD
The Company maintains its records on the basis of a 52-53 week fiscal year
ending the Saturday closest to the end of February. The fiscal year ending
February 26, 2000 will be comprised of 52 weeks. The fiscal year ended February
27, 1999 was also comprised of 52 weeks.
NOTE 4 - MERCHANDISE INVENTORIES
Merchandise inventories are stated at the lower of cost (first in, first out) or
market, as determined by the retail inventory method.
NOTE 5 - 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, 2000. 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
Company had outstanding borrowings of $4,900,000, $2,350,000 and $15,000,000 as
of August 28, 1999, February 27, 1999 and August 29, 1998, respectively.
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.
In addition, the Company has a separate $20,000,000 credit facility with another
bank available for the issuance of letters of credit for the purchase of
merchandise as well as short-term borrowings. This agreement may be canceled at
any time by either party. At August 28, 1999, February 27, 1999 and August 29,
1998 the Company had $5,063,000, $3,352,000, and $6,614,000, respectively, in
outstanding letters of credit.
NOTE 6 - NET INCOME PER SHARE
In accordance with SFAS 128, basic income per share has been computed based upon
the weighted average common shares outstanding. Diluted net income per share
gives effect to outstanding stock options.
5
<PAGE>
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SYMS CORP AND SUBSIDIARIES
----------------------------
Net income per share has been computed as follows:
<TABLE>
<CAPTION>
13 Weeks Ended 26 Weeks Ended
----------------------- ------------------------------
Aug. 28, 1999 Aug. 29, 1998 Aug. 28, 1999 Aug. 29, 1998
------------- -------------- ------------- -------------
Basic net income per share:
<S> <C> <C> <C> <C>
Net Income .................. $ (3,525) $ 1,175 $ (2,691) $ 6,484
Average shares outstanding .. 16,463 17,684 16,593 17,759
Basic net income per share .. $ (0.21) $ 0.07 $ (0.16) $ 0.37
Diluted net income per share:
Net Income .................. $ (3,525) $ 1,175 $ (2,691) $ 6,484
Average shares outstanding .. 16,463 17,684 16,593 17,759
Stock options ............... -(a) 93 -(a) 101
Total average equivalent
shares ...................... 16,463 17,777 16,593 17,860
Diluted net income per share $ (0.21) $ 0.07 $ (0.16) $ 0.36
</TABLE>
a) (In periods with losses, options were excluded from the computation of
diluted net income per share because the effect would be anti-dilutive.)
Options to purchase 461,700 and 0 shares of common stock at prices ranging from
$8.00 to $12.00 per share were outstanding as of August 28, 1999 and August 29,
1998, respectively, but were not included in the computation of diluted net
income per share because the exercise price of the options exceed the average
market price.
6
<PAGE>
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SYMS CORP AND SUBSIDIARIES
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Special Note Regarding forward-looking statement
The Quarterly Report includes forward-looking statements (as such term is
defined in the Private Securities Litigation Reform of Act of 1995) and
information relating to the Company that are based on the beliefs of the
management of the Company as well as assumptions made by and information
currently available to the management of the Company. When used in this
Quarterly Report, the words "anticipate," "believe," "estimate," "expect,"
"intend," "plan," and similar expressions, as they relate to the Company or the
management of the Company, identify forward-looking statements. Such statements
reflect the current views of the Company with respect to future events, the
outcome of which is subject to certain risks, including among others general
economic and market conditions, decreased consumer demand for the Company's
products, possible disruptions in the Company's computer or telephone systems,
increased or unanticipated costs or effects associated with year 2000 compliance
by the Company or its service or supply providers, possible work stoppages, or
increases in labor costs, effects of competition, possible disruptions or delays
in the opening of new stores or inability to obtain suitable sites for new
stores, higher than anticipated store closings or relocation costs, higher
interest rates, unanticipated increases in merchandise or occupancy costs and
other factors which may be outside the Company's control. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results or outcomes may vary materially from those described
therein as anticipated, believed, estimated, expected, intended or planned.
Subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the cautionary statements in this paragraph.
RESULTS OF OPERATIONS
13 and 26 Weeks Ended August 28, 1999 Compared to 13 and 26 Weeks Ended August
29, 1998
Net sales of $72,794,000 for the 13 weeks ended August 28, 1999 decreased
$855,000 (1.2%) as compared to net sales of $73,649,000 for the 13 weeks ended
August 29, 1998. For the 26 weeks ended August 28, 1999 net sales decreased
$4,696,000 (3.0%) to $152,565,000 as compared to net sales of $157,261,000 for
the 26 weeks ended August 29, 1998. Comparable store sales decreased 5.8% for
the 13 weeks and 8.4% for the 26 weeks ended August 29, 1998. This decline in
sales in the 13 and 26 week periods were partially caused by increased
promotional activity and price competition from other retailers.
Gross profit for the 13 weeks ended August 28, 1999 was $23,926,000, a decrease
of $3,944,000 (14.2%) as compared to $27,870,000 for the 13 weeks ended August
29, 1998. The decline in gross profit for the 13 weeks ended August 28, 1999
resulted from lower total net sales and higher markdowns. Gross profit for the
26 weeks ended August 28, 1999 was $55,772,000, a decrease of $5,818,000 (9.4%)
as compared to $61,590,000 for the 26 weeks ended August 29, 1998. This decrease
resulted mainly from lower net sales of $4,696,000 for the 26 week period and an
unusually high amount of markdowns taken in the second quarter in an effort to
clean out aged merchandise.
Selling, general and administrative expense increased $1,507,000 to $19,886,000
(27.3% as a percentage of total net sales) for the 13 weeks ended August 28,
1999 as compared to $18,379,000 (25.0% as a percentage of total net sales) for
the 13 weeks ended August 29, 1998. Selling, general and administrative expense
increased $4,313,000 to $39,707,000 (26.0% as a percentage of total net sales)
for the 26 weeks ended August 28, 1999 as compared to $35,394,000 (22.5% as a
percentage of total net sales) for the 26 weeks ended August 29, 1998. The
increase in both the 13 week and 26 week periods results primarily from the
addition of four new stores (Troy, MI (opened September 10, 1998); Boston, MA
(opened November 19, 1998); Lawrenceville, NJ (opened April 29, 1999); and
Chicago, IL (opened August 26, 1999) ).
Advertising expense for the 13 weeks ended August 28, 1999 increased to
$2,006,000 (2.8% as a percent of total net sales), as compared to $1,198,000
(1.6% as a percent of total net sales) in the 13 week period ended August 29,
7
<PAGE>
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SYMS CORP AND SUBSIDIARIES
----------------------------
1998. Advertising expense for the 26 weeks ended August 28, 1999 increased to
$5,626,000 (3.7% as a percent of total net sales) as compared $3,349,000 (2.1%
as a percent of total net sales) in the 26 weeks ended August 29, 1998. This
higher expenditure in the 13 and 26 week periods is the result of increased
radio and TV use compared to last year, and the addition of radio to the
semi-annual (BASH) promotion this year.
Occupancy costs were $5,305,000 (7.3% as a percentage of total net sales) for
the 13 weeks ended August 28, 1999, up from $4,188,000 (5.7% as a percentage of
total net sales) for the 13 weeks ended August 29, 1998. Occupancy costs were
$9,976,000 (6.5% as a percentage of total net sales) for the 26 weeks ended
August 28, 1999, compared to $7,910,000 (5.0% as a percentage of total net
sales) for the 26 weeks ended August 29, 1998. The occupancy costs of the four
new stores (Troy, MI; Boston, MA; Lawrenceville, NJ; and Chicago, IL) accounts
for the major portion of this increase.
Depreciation and amortization for the 13 weeks ended August 28, 1999 amounted to
$2,518,000, an increase of $440,000 as compared to $2,078,000 for the 13 weeks
ended August 29, 1998. Depreciation and amortization for the 26 weeks ended
August 28, 1999 amounted to $4,906,000 an increase of $755,000 as compared to
$4,151,000 for the 26 weeks ended August 29, 1998. This increase is attributable
to the addition of the four new stores and the acquisition of new MIS systems
and equipment.
The loss before income taxes for the 13 weeks ended August 28, 1999 was
$5,779,000 compared to net income before taxes of $1,959,000 for the 13 weeks
ended August 29, 1998. The loss before income taxes for the 26 weeks ended
August 28, 1999 was $4,412,000 as compared to net income before taxes of
$10,807,000 for the 26 weeks ended August 29, 1998. As discussed above, this
loss in the 13 and 26 week periods compared to a year ago reflects declines in
sales and gross profit and higher expenses resulting from the opening of four
new stores.
For the 13 and 26 week periods ended August 28, 1999, the effective income tax
rate was 39.0% as compared to 40.0% last year.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at August 28, 1999, February 27, 1999 and August 29, 1998 was
$86,272,000, $101,592,000, and $101,313,000, respectively, and the ratio of
current assets to current liabilities was 2.29 to 1, 3.67 to 1 and 2.40 to 1 at
August 28, 1999, February 27, 1999 and August 29, 1998, respectively.
Net cash provided by operating activities totaled $14,622,000 for the 26 weeks
ended August 28, 1999 as compared to $6,390,000 used in operating activities for
the 26 weeks ended August 29, 1998. Net loss for the 26 weeks ended August 28,
1999 amounted to $2,691,000 as compared to net income of $6,484,000 for the same
period last year.
Net cash used in investing activities was $12,273,000 and $4,062,000 for the 26
weeks ended August 28, 1999 and August 29, 1998, respectively. This variance is
mainly attributable to the increase in capital expenditures for the 26 weeks
ended August 28, 1999 versus the comparable period in the last fiscal year. The
increased capital expenditures are for the opening of three new stores ($6.8
million) and new MIS systems and equipment ($3.5 million).
Net cash used in financing activities was $2,233,000 for the 26 weeks ended
August 28, 1999, compared to net cash provided by financing activities of
$10,417,000 for the 26 weeks ended August 29, 1998. This variance resulted from
a reduction in short-term borrowings. As of August 28, 1999 and August 29, 1998,
the Company had net borrowings of $4,900,000 and $15,000,000, respectively,
under its revolving credit agreement.
The Company has a revolving credit agreement with a bank for a line of credit
not to exceed $40,000,000 through December 1, 2000. At December 1, 2000 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,
2004. 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 26 weeks ended August 28,
8
<PAGE>
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SYMS CORP AND SUBSIDIARIES
----------------------------
1999 average borrowings under the revolving credit agreement were $643,000 with
a weighted average interest rate of 5.95%. For the 26 weeks ended August 29,
1998 average borrowings under the revolving credit agreement were $5,080,082
with a weighted average interest rate of 6.23%.
The Company has planned capital expenditures of approximately $14,200,000 for
the fiscal year ending February 26, 2000, which includes the opening of three
new stores and the implementing of new software and MIS systems. Through the 26
week period ended August 28, 1999 the Company has incurred $12,420,000 of
capital expenditures.
The Company has also announced that its Board of Directors has authorized the
repurchase of an aggregate of up to 15% of its outstanding shares of common
stock at prevailing market prices through the fiscal year ending February 26,
2000. This program is subject to market and general economic conditions and may
be suspended from time to time without further notice. As of August 28, 1999,
the Company has purchased approximately 1,424,300 shares which represented 8.0%
of its outstanding shares at a total cost of approximately $14,271,000.
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 and the stock repurchase program
requirements for the fiscal year ending February 26, 2000.
YEAR 2000
The Company is near completion of a comprehensive program consisting of
identifying, assessing and, if necessary, upgrading and/or replacing its systems
and equipment that may be vulnerable to year 2000 problems. The Company believes
that it will have completed all of its necessary upgrades and/or replacements
and the testing of its systems by November 1999.
The Company has communicated with those companies whose systems interface with
the Company's systems or may otherwise impact the operations of the Company to
determine if they have appropriate plans to remedy year 2000 issues. To date the
Company has not identified any significant issues with respect to such
companies. There can be no assurance, however, that the systems of other
companies on which the Company's processes rely will be timely converted, or
that a failure to successfully convert by another company, or a conversion that
is incompatible with the Company's systems, would not have an impact on the
Company's operations.
Management currently estimates that the cost, in connection with bringing its
own systems and equipment into compliance, was less than $200,000 for the 26
weeks ended August 28, 1999 and does not expect the additional cost to exceed
$600,000. Although the Company is not aware of any material operational issues
or costs associated with preparing its internal systems for the year 2000, there
can be no assurance that there will not be a delay in, or increased costs
associated with, the implementation of the necessary systems and changes to
address the year 2000.
A potential source of risk includes, but is not limited to, the inability of
principal suppliers to be year 2000 compliant, which could result in delays in
product deliveries from such suppliers.
The Company currently does not have a contingency plan in place to cover any
unforeseen problems encountered that relate to the year 2000, but intends to
produce one.
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.
9
<PAGE>
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SYMS CORP AND SUBSIDIARIES
----------------------------
Part II. Other Information
Item 1. LEGAL PROCEEDINGS - None
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS - None
Item 3. DEFAULTS UPON SENIOR SECURITIES - None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The 1999 Annual Meeting of Shareholders of the Company was
held on July 8, 1999.
(b) The following six persons were elected as directors at the
meeting pursuant to the following vote:
FOR WITHHELD
---------- --------
Sy Syms 14,550,524 52,685
Marcy Syms 14,550,524 52,685
Antone F. Moreira 14,550,524 52,685
Harvey Weinberg 14,550,524 52,685
Philip G. Barach 14,550,524 52,685
David A. Messer 14,550,524 52,685
In the approval of the appointment of Deloitte & Touche LLP
as the independent accountants of the Company, the vote was
as follows:
For: 14,513,407
Against: 13,401
Abstain: 2,100
Item 5. OTHER INFORMATION - None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K - During the quarter ended August 28,
1999 no reports on Form 8-K were filed.
10
<PAGE>
----------------------------
SYMS CORP AND SUBSIDIARIES
----------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SYMS CORP
Date: 10/12/99 By: /s/ MARCY SYMS
-----------------------
Marcy Syms
CHIEF EXECUTIVE OFFICER
Date: 10/12/99 By: /s/ ANTONE F. MOREIRA
-----------------------
Antone F. Moreira
VICE PRESIDENT, CHIEF
FINANCIAL OFFICER
(Principal Financial and
Chief Accounting Officer)
11
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-28-1999
<PERIOD-END> AUG-28-1999
<CASH> 3,042
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
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0
0
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</TABLE>
