<PAGE>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1994.
Commission file number 1-8765
BROADWAY STORES INC. 401(K) SAVINGS & INVESTMENT PLAN
(Full title of the Plan)
BROADWAY STORES, INC.
(Exact name of issuer of securities held)
3880 North Mission Road
Los Angeles, California 90031
(Address of issuer of securities held pursuant to the plan)
================================================================================
<PAGE>
BROADWAY STORES INC. 401(K) SAVINGS & INVESTMENT PLAN
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Accountants 1
Financial Statements:
Statement of Net Assets Available for Benefits,
with Fund Information 2
Statement of Changes in Net Assets Available for Benefits,
with Fund Information 3
Notes to Financial Statements 4
Supplementary Financial Schedules:
Schedule I - Schedule of Assets Held for Investment at December 31, 1994 8
Schedule V - Schedule of Reportable Transactions for the Year
Ended December 31, 1994 9
Signature 10
Index to Exhibits 11
</TABLE>
<PAGE>
Report of Independent Accountants
---------------------------------
To the Participants of the Broadway Stores Inc. 401(k)
Savings & Investment Plan and the Employee
Benefits Administrative Committee
of Broadway Stores, Inc.
In our opinion, the accompanying Statements of Net Assets Available for
Benefits, with Fund Information, and the related Statements of Changes in Net
Assets Available for Benefits, with Fund Information, present fairly, in all
material respects, the net assets available for benefits of the Broadway Stores
Inc. 401(k) Savings & Investment Plan (formerly the Carter Hawley Hale Savings
and Investment Plan) at December 31, 1994 and 1993, and the changes in net
assets available for benefits for the years then ended, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
schedules I and V is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is additional information
required by the Employee Retirement Income Security Act of 1974 as amended. The
Fund Information in the Statement of Net Assets Available for Benefits and the
Statement of Changes in Net Assets Available for Benefits is presented for
purposes of additional analysis rather than to present the net assets available
for benefits and the changes in net assets available for benefits of each fund.
Schedules I and V and the Fund Information have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
PRICE WATERHOUSE LLP
Los Angeles, California
June 23, 1995
1
<PAGE>
BROADWAY STORES INC. 401(K) SAVINGS & INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION
<TABLE>
<CAPTION>
DECEMBER 31, 1994 MONEY BROADWAY BROADWAY NMG
- -----------------
MARKET BOND EQUITY COMMON PREFERRED COMMON
ASSETS FUND FUND FUND STOCK STOCK STOCK TOTAL
------ ------------- ------------ ------------- ---------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $ $ $ $ 6,798 $ 7,906 $ 28,072 $ 42,776
Investments, at market value 22,141,380 2,575,961 4,434,266 3,884,545 1,005,699 4,832,055 38,873,906
Company contribution receivable 507,002 507,002
Participant contributions and other
miscellaneous receivables 33 1,361 77 1,471
------------- ------------ ------------ ------------ ------------ ------------ -------------
Total assets 22,141,380 2,575,961 4,434,266 4,398,378 1,014,966 4,860,204 39,425,155
LIABILITIES AND PLAN EQUITY
---------------------------
Trustee and management fees payable (8,399) (886) (1,797) (11,082)
------------- ------------ ------------ ------------ ------------ ------------ -------------
Net assets available for benefits for
approximately 6,700 participants $ 22,132,981 $ 2,575,075 $ 4,432,469 $ 4,398,378 $ 1,014,966 $ 4,860,204 $ 39,414,073
============= ============ ============ ============ ============ ============ =============
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1993 MONEY BROADWAY BROADWAY NMG
- -----------------
MARKET BOND EQUITY COMMON PREFERRED COMMON
ASSETS FUND FUND FUND STOCK STOCK STOCK TOTAL
------ ------------- ------------ ------------ ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents $ $ $ $ 2,704 $ 885 $ 80 $ 3,669
Investments, at market value 24,983,655 2,487,530 3,762,892 5,615,194 2,251,828 8,538,956 47,640,055
Company contribution receivable 412,248 412,248
Participant contributions and other
miscellaneous receivables 0
------------- ------------ ------------ ------------- ------------ ------------ -------------
Total assets 24,983,655 2,487,530 3,762,892 6,030,146 2,252,713 8,539,036 48,055,972
LIABILITIES AND PLAN EQUITY
---------------------------
Trustee and management fees payable 0
------------- ------------ ------------ ------------- ------------ ------------ -------------
Net assets available for benefits for
approximately 7,600 participants $ 24,983,655 $ 2,487,530 $ 3,762,892 $ 6,030,146 $ 2,252,713 $ 8,539,036 $ 48,055,972
============= ============ ============ ============= ============ ============ =============
</TABLE>
See Accompanying Notes to Financial Statements.
2
<PAGE>
BROADWAY STORES INC. 401(K) SAVINGS & INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1994 MONEY BROADWAY BROADWAY
- ----------------------------
MARKET BOND EQUITY COMMON PREFERRED
ADDITIONS FUND FUND FUND STOCK STOCK
-------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
Income
Net appreciation (depreciation) in value $ 989,779 $ (76,571) $ 37,272 $ (997,090) $ (928,113)
Dividends
-------------- ------------- ------------- ------------- --------------
989,779 (76,571) 37,272 (997,090) (928,113)
-------------- ------------- ------------- ------------- --------------
Contributions
Participants 1,128,715 562,741 1,199,057 159,178
Broadway Stores, Inc. 507,002
-------------- ------------- ------------- ------------- --------------
1,128,715 562,741 1,199,057 666,180
-------------- ------------- ------------- ------------- --------------
Total Additions 2,118,494 486,170 1,236,329 (330,910) (928,113)
-------------- ------------- ------------- ------------- --------------
DEDUCTIONS
Distributions (6,040,296) (359,173) (716,211) (798,941) (167,959)
Transfers between funds 1,071,128 (39,452) 149,459 (501,917) (141,675)
-------------- ------------- ------------- ------------- --------------
Total deductions (4,969,168) (398,625) (566,752) (1,300,858) (309,634)
-------------- ------------- ------------- ------------- --------------
Net increase (decrease) in assets
available for benefits (2,850,674) 87,545 669,577 (1,631,768) (1,237,747)
Net assets available for benefits at
beginning of year 24,983,655 2,487,530 3,762,892 6,030,146 2,252,713
-------------- ------------- ------------- ------------- --------------
Net assets available for benefits at end of year $ 22,132,981 $ 2,575,075 $ 4,432,469 $ 4,398,378 $ 1,014,966
============== ============= ============= ============= ==============
<CAPTION>
YEAR ENDED DECEMBER 31, 1994 NMG
- ----------------------------
COMMON
ADDITIONS STOCK TOTAL
--------------- ---------------
<S> <C> <C>
Income
Net appreciation (depreciation) in value $ (2,293,403) $ (3,268,126)
Dividends 82,406 82,406
--------------- ---------------
(2,210,997) (3,185,720)
--------------- ---------------
Contributions
Participants 3,049,691
Broadway Stores, Inc. 507,002
--------------- ---------------
3,556,693
--------------- ---------------
Total Additions (2,210,997) 370,973
--------------- ---------------
DEDUCTIONS
Distributions (930,292) (9,012,872)
Transfers between funds (537,543)
--------------- ---------------
Total deductions (1,467,835) (9,012,872)
--------------- ---------------
Net increase (decrease) in assets
available for benefits (3,678,832) (8,641,899)
Net assets available for benefits at
beginning of year 8,539,036 48,055,972
--------------- ---------------
Net assets available for benefits at end of year $ 4,860,204 $ 39,414,073
=============== ===============
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1993 MONEY BROADWAY
- ----------------------------
MARKET BOND EQUITY COMMON
ADDITIONS FUND FUND FUND STOCK
--------------- --------------- --------------- -------------
<S> <C> <C> <C> <C>
Income
Net appreciation (depreciation) in value $ 1,127,602 $ 94,063 $ 183,456 $ 761,220
Dividends
--------------- --------------- --------------- -------------
1,127,602 94,063 183,456 761,220
--------------- --------------- --------------- -------------
Contributions
Participants 1,536,936 514,641 984,503 132,326
Broadway Stores, Inc. 412,248
--------------- --------------- --------------- -------------
1,536,936 514,641 984,503 544,574
--------------- --------------- --------------- -------------
Total Additions 2,664,538 608,704 1,167,959 1,305,794
--------------- --------------- --------------- -------------
DEDUCTIONS
Distributions (6,329,067) (105,446) (136,399) (1,379,535)
Transfers between funds (4,050,618) 1,984,272 2,731,332 2,866
--------------- --------------- --------------- -------------
Total deductions (10,379,685) 1,878,826 2,594,933 (1,376,669)
--------------- --------------- --------------- -------------
Net increase (decrease) in assets
available for benefits (7,715,147) 2,487,530 3,762,892 (70,875)
Net assets available for benefits at
beginning of year 32,698,802 0 0 6,101,021
--------------- --------------- --------------- -------------
Net assets available for benefits at end of
year $ 24,983,655 $ 2,487,530 $ 3,762,892 $ 6,030,146
=============== =============== =============== =============
<CAPTION>
YEAR ENDED DECEMBER 31, 1993 BROADWAY NMG
- ----------------------------
PREFERRED COMMON
ADDITIONS STOCK STOCK TOTAL
--------------- -------------- --------------
<S> <C> <C> <C>
Income
Net appreciation (depreciation) in value $ 670,421 $ (195,818) $ 2,640,944
Dividends 109,202 109,202
--------------- -------------- --------------
670,421 (86,616) 2,750,146
Contributions --------------- -------------- --------------
Participants 3,168,406
Broadway Stores, Inc. 412,248
--------------- -------------- --------------
3,580,654
--------------- -------------- --------------
Total Additions 670,421 (86,616) 6,330,800
--------------- -------------- --------------
DEDUCTIONS
Distributions (444,264) (1,677,233) (10,071,944)
Transfers between funds (113,830) (554,022)
---------------- --------------- ---------------
Total deductions (558,094) (2,231,255) (10,071,944)
---------------- --------------- ---------------
Net increase (decrease) in assets
available for benefits 112,327 (2,317,871) (3,741,144)
Net assets available for benefits at
beginning of year 2,140,386 10,856,907 51,797,116
---------------- --------------- ---------------
Net assets available for benefits at end of
year $ 2,252,713 $ 8,539,036 $ 48,055,972
================ =============== ===============
</TABLE>
See Accompanying Notes to Financial Statements
3
<PAGE>
BROADWAY STORES INC. 401(K) SAVINGS & INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DESCRIPTION OF THE PLAN
The following description of the Broadway Stores Inc. 401(k) Savings &
Investment Plan (the "Plan") is provided for general information purposes only.
Participants should refer to the Plan agreement (the "Agreement") for more
complete information.
General
The Plan is a defined contribution plan administered by the Employee Benefits
Administrative Committee (the "Committee") of Broadway Stores, Inc. (the
"Company"), formerly known as Carter Hawley Hale Stores, Inc. On February 9,
1993, the Board of Directors of the Company adopted the Plan, as amended and
restated. The Plan, as amended and restated, reestablished Company matching
contributions, created additional investment options, and enabled participants
to direct their own investment allocations and monitor their accounts by using a
telephone information and transaction system. Effective June 17, 1994, the Plan
was further amended to change the Plan name to the Broadway Stores Inc. 401(k)
Savings & Investment Plan and to adopt certain other detailed amendments
required under the Internal Revenue Code. Prior to the restatement, the Plan
was known as the "Carter Hawley Hale Savings and Investment Plan".
Trustee for Plan Assets
In March 1993, the Plan appointed Bankers Trust Company as the trustee for plan
assets. During 1993 all assets were transferred to Bankers Trust Company from
the former trustee, Bank of America N.T. and S.A.
Plan Investments
Prior to March 1993, employee contributions were being invested entirely in a
limited risk investment fund. Plan investments also included shares of Company
common stock as a result of Company and participant investments made prior to
February 1991, shares of Company preferred stock issued in connection with the
Company's emergence from bankruptcy in October 1992 and shares of common stock
of The Neiman Marcus Group, Inc. ("NMG") as a result of a distribution received
in connection with the Company's restructuring which was completed in 1987.
Commencing March 1993, investment choices became participant directed and were
broadened to include money market, bond, and equity funds together with an
option to invest in shares of Company common stock. No recommendation is made
by the Company, the Committee, or the Trustee as to whether employees should
make contributions under the Plan or invest contributions in any of the
investment choices provided. No additional investments may be made in shares of
the Company preferred stock or Neiman Marcus common stock.
The money market fund invests in highly liquid, short maturity, and high credit
quality securities. The bond fund invests principally in fixed income
securities included in the Lehman Brothers Aggregate Bond Index. The equity
fund invests principally in common stocks of those companies included in the
Standard & Poor's 500 Stock Price Index.
Company Contributions
Subsequent to filing for bankruptcy in February of 1991, the Company matching
contributions had been suspended. The Company emerged from bankruptcy in
October 1992 and, effective April 1, 1993, Company matching contributions
resumed at a rate of 25% of the participant's pretax contributions up to 6% of
compensation earned on or after April 1, 1993 (subject to limitations for
certain highly compensated employees). Company matching contributions are made
in the form
4
<PAGE>
of newly issued shares of Company common stock at an issue price calculated as
the average of the New York Stock Exchange daily closing prices for the Company
stock during the last ten trading days in December and the first ten trading
days in January. Matching contributions will only be made if the participant is
employed by the Company and eligible to participate in the Plan on December 31
of the applicable year.
Eligibility Requirements
Employees are eligible to participate in the Plan if they have 1,000 hours or
more of service with the Company either during their first 12 months of
employment or during any Plan year commencing after their initial date of
employment with the Company.
Employee Contributions
Within limits set out in Section 401(k) of the Internal Revenue Code (the
"Code"), as amended in 1986, participants may elect to contribute between two
and twelve percent of their pre-tax compensation; provided, however, that if the
employee is a highly compensated employee for purposes of Section 414(q) of the
Code, contribution rates are limited to between two and six percent of pre-tax
compensation. The Plan provides for participants to change the rate of
contribution, suspend contributions or resume contributions effective as of the
first paydate in the month following the election. Participants' contributions
and earnings thereon are fully vested at all times; however, certain withdrawal
restrictions apply under the Code to contributions of participants continuing in
the service of the Company.
Expenses of the Plan
Each month, the Plan is charged a portion of the direct expenses relating to
investment management, trustee, and administrative costs. The money market,
bond and equity funds are directly charged for expenses at fixed monthly rates
of .0375%, .0350% and .0417%, respectively, based on the fund's month end
balance. In 1994 and 1993, plan earnings were reduced by $114,738 and $120,771
respectively for these expenses. Costs in excess of these charges are borne by
the Company.
Plan Termination
The Company has not expressed an intent to terminate the Plan as it may subject
to Plan provisions. No amendment or termination of the Plan, however, shall
allow any part of the funds held by the trustee to return to the Company or to
be used for any purpose other than for exclusive benefit of the participants.
BASIS OF FINANCIAL STATEMENT PREPARATION
The accompanying financial statements are prepared on the accrual basis of
accounting. The money market, bond, and equity funds are valued at fair market
value at the end of each business day by the investment manager. The investment
in shares of common stock of the Company and in shares of NMG are valued at
market based upon the closing New York Stock Exchange composite price at the
Plan year end. The investment in Company preferred stock is convertible into
warrants to purchase Company common stock and is valued at market based upon the
price of the warrants at Plan year end. The change in the difference between
beginning and end of period cost and market value of Plan investments is
presented in the Statement of Changes in Net Assets Available for Benefits, with
Fund Information, as net appreciation (depreciation) in value.
OBLIGATIONS TO WITHDRAWING PARTICIPANTS
Net assets available for benefits include $1,171,099 and $1,589,961 for amounts
owing to withdrawing participants as of December 31, 1994 and 1993,
respectively. These
5
<PAGE>
amounts are reflected as liabilities on the Plan's Form 5500.
COMPANY CONTRIBUTION RECEIVABLE
The December 31, 1994 and 1993 Company contributions receivable of $507,002 and
$412,248, represent 1994 and 1993 plan year Company matching contributions to be
made to the Trust in the form of 69,691 and 44,298 newly issued shares of common
stock of the Company with a cost basis of $7.275 and $9.30625 per share,
respectively.
ASSETS HELD FOR INVESTMENT
Assets held for investment are shown at current value on the Statement of Net
Assets Available for Benefits. The cost basis of the investments are as
follows:
<TABLE>
<CAPTION>
Cost Basis At
---------------------------
December 31, December 31,
1994 1993
-------- --------
<S> <C> <C>
Money market fund $ 22,141,380 $ 24,983,655
Bond fund 2,558,348 2,392,200
Equity fund 4,222,110 3,573,857
Company common stock 33,507,513 41,247,743
Company preferred stock 3,257,146 3,979,181
Neiman Marcus common stock 4,687,228 5,910,963
</TABLE>
TAX STATUS OF THE PLAN
The Internal Revenue Service has determined and informed the Company by a
letter, including amendments effective July 1, 1987, that the Plan and related
trust are designed in accordance with applicable sections of the Code. The plan
has been amended since receiving the determination letter. However, the plan
administrator and the plan's tax counsel believe that the plan is designed and
is currently being operated in compliance with the applicable requirements of
the Code. Therefore, no provision for income taxes has been included in the
plan's financial statements.
CHANGE IN MARKET VALUE OF PLAN INVESTMENT IN COMPANY AND NEIMAN MARCUS GROUP
SHARES
The net market value of the December 31, 1994 Plan investment in Company and
Neiman Marcus Group shares of common and Company preferred stock changed during
the period January 1, 1995 to June 23, 1995 as follows:
<TABLE>
<CAPTION>
Market Value At
-------------------------
Number of December 31, June 23,
Shares 1994 1995 Change
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Company Common Stock 526,718 $ 3,884,545 $ 2,501,910 $ (1,382,635)
Company Preferred Stock 473,270 1,005,699 177,476 (828,223)
Neiman Marcus Group 357,930 4,832,055 4,921,537 89,482
----------- ----------- ------------
$ 9,722,299 $ 7,600,923 $ (2,121,376)
=========== =========== ============
</TABLE>
6
<PAGE>
SUPPLEMENTARY FINANCIAL SCHEDULES
The information included in the accompanying Schedules I and V has been prepared
as of and for the year ended December 31, 1994 as required by the Employee
Retirement Income Security Act of 1974 as amended. Schedules not included in
this supplementary information have been omitted because they are not
applicable.
7
<PAGE>
SCHEDULE I
BROADWAY STORES INC. 401(K) SAVINGS & INVESTMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT
AT DECEMBER 31, 1994
<TABLE>
<CAPTION>
Market
Units Shares/Description Cost Value
--------- ------------------------------- -------------- ---------------
<S> <C> <C> <C>
Money Market Fund of Broadway
Stores, Inc. 22,141,380 22,141,380
Bond Fund of Broadway
Stores, Inc. 2,558,348 2,575,961
Equity Fund of Broadway
Stores, Inc. 4,222,110 4,434,266
526,718 Common Stock of Broadway
Stores, Inc. 33,507,513 3,884,545
473,270 Preferred Stock of Broadway
Stores, Inc. 3,257,146 1,005,699
357,930 Common Stock of Neiman Marcus
Group, Inc. 4,687,228 4,832,055
------------- ------------
70,373,725 38,873,906
============= ============
</TABLE>
8
<PAGE>
SCHEDULE V
BROADWAY STORES INC. 401(K) SAVINGS & INVESTMENT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
CURRENT VALUE
IDENTITY OF OF ASSET
PARTY NUMBER OF NUMBER OF COST OF ON DATE OF NET GAIN
INVOLVED DESCRIPTION OF ASSET PURCHASES SALES ASSET TRANSACTION OR (LOSS)
- ------------------------------------------------------ ---------- --------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Bankers Trust Company Purchases of units of Bankers
of California, N.A. Co., N.A. Discretionary
Cash Fund 275 $3,846,011 $3,846,011 $0
Bankers Trust Company Sales of units of Bankers
of California, N.A. Co., N.A. Discretionary
Cash Fund 143 $6,651,659 $6,651,659 $0
Bankers Trust Company Purchases of units of Bankers
of California, N.A. Co., N.A. Equity Fund 102 $1,586,973 $1,586,973 $0
Bankers Trust Company Sales of units of Bankers
of California, N.A. Co., N.A. Equity Fund 59 $938,732 $965,441 $26,709
Broadway Stores, Inc. Purchases of shares of
common stock 29 $95,061 $95,061 $0
Broadway Stores, Inc. Sales of shares of
common stock 165 $4,097,415 $468,085 ($3,629,330)
</TABLE>
9
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Employee Benefits Administrative Committee of the registrant has duly caused
this annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
BROADWAY STORES INC 401(K) SAVINGS & INVESTMENT PLAN
June 23, 1995 By /s/ JOHN D. DAVIES
------------------------------------------------
John D. Davies
Vice President, Accounting
10
<PAGE>
BROADWAY STORES INC. 401(K) SAVINGS & INVESTMENT PLAN
INDEX TO EXHIBITS
Exhibit
No. Description
--------- -----------
23.1* Consent of Price Waterhouse LLP
* Exhibit filed with this Form 11-K
11
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-58478) of Broadway Stores, Inc. of our report
dated June 23, 1995 appearing on page 1 of this Form 11-K.
Price Waterhouse LLP
Los Angeles, California
June 23, 1995
