<PAGE> 1
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 JULY 30, 1994
-----------------
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 0-14681
J. BAKER, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MASSACHUSETTS 04-2866591
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
555 TURNPIKE STREET, CANTON, MASSACHUSETTS 02021
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(617) 828-9300
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
The registrant (1) has filed all reports to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months (or for such
period that the registrant was required to file such reports), and (2) has been
subject to filing such reports for the past 90 days.
YES X NO _____
------
The number of shares outstanding of the registrant's common stock as of July
30, 1994 was 13,834,322.
1
<PAGE> 2
<TABLE>
J. BAKER, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JULY 30, 1994 (UNAUDITED) AND JANUARY 29, 1994
<CAPTION>
July 30, January 29,
ASSETS 1994 1994
------ -------- ----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,672,842 $ 3,584,032
Accounts receivable 31,729,314 31,903,690
Merchandise inventories 332,400,970 278,220,413
Prepaid expenses 7,686,030 6,672,008
Deferred income taxes - 1,664,475
------------ -----------
Total current assets 373,489,156 322,044,618
Property, plant and equipment, at cost:
Land and buildings 24,755,249 24,114,820
Furniture, fixtures, machinery and equipment 103,420,189 87,993,608
Leasehold improvements 41,818,407 32,715,145
----------- -----------
169,993,845 144,823,573
Less accumulated depreciation 46,955,465 39,256,180
----------- -----------
Net property, plant and equipment 123,038,380 105,567,393
Deferred income taxes 1,210,000 1,210,000
Other assets 71,690,732 73,674,470
----------- -----------
$569,428,268 $502,496,481
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current portion of long-term debt $ 4,179,400 $ 2,636,300
Accounts payable 106,155,935 108,262,923
Accrued expenses 14,463,329 24,050,766
Income taxes payable 2,675,603 -
----------- -----------
Total current liabilities 127,474,267 134,949,989
----------- -----------
Other liabilities 12,474,647 12,794,652
Long-term debt, net of current portion 142,900,000 77,000,000
Senior subordinated debt 5,838,600 7,312,366
Convertible subordinated debt 70,353,000 70,353,000
Stockholders' equity 210,387,754 200,086,474
----------- -----------
$569,428,268 $502,496,481
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 3
<TABLE>
J. BAKER, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED EARNINGS
FOR THE QUARTERS ENDED JULY 30, 1994 AND JULY 31, 1993
(UNAUDITED)
<CAPTION>
Quarter Quarter
Ended Ended
July 30, 1994 July 31, 1993
------------- -------------
<S> <C> <C>
Sales $256,335,724 $232,529,128
Cost of sales 139,046,302 131,679,526
----------- -----------
Gross profit 117,289,422 100,849,602
Selling, administrative and general expenses 97,864,823 83,438,707
Depreciation and amortization 6,042,895 5,429,920
----------- -----------
Operating income 13,381,704 11,980,975
Net interest expense 2,235,389 1,848,141
----------- -----------
Earnings before income taxes 11,146,315 10,132,834
Taxes on earnings 4,012,000 3,748,000
----------- -----------
Net earnings $ 7,134,315 $ 6,384,834
=========== ===========
Net earnings per common share:
Primary $ 0.52 $ 0.47
============ ============
Fully diluted $ 0.43 $ 0.39
============ ============
Number of shares used to compute net
earnings per share:
Primary 13,833,796 13,682,764
=========== ===========
Fully diluted 18,409,255 18,423,278
=========== ===========
Dividends declared per share $ 0.015 $ 0.015
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
<TABLE>
J. BAKER, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED EARNINGS
FOR THE SIX MONTHS ENDED JULY 30, 1994 AND JULY 31, 1993
(UNAUDITED)
<CAPTION>
Six Months Six Months
Ended Ended
July 30, 1994 July 31, 1993
------------- -------------
<S> <C> <C>
Sales $477,674,184 $425,916,286
Cost of sales 263,165,570 237,301,945
----------- -----------
Gross profit 214,508,614 188,614,341
Selling, administrative and general expenses 182,415,395 160,260,373
Depreciation and amortization 11,512,712 10,607,565
----------- -----------
Operating income 20,580,507 17,746,403
Net interest expense 4,438,407 3,671,770
----------- -----------
Earnings before income taxes 16,142,100 14,074,633
Taxes on earnings 5,811,000 5,207,000
----------- -----------
Net earnings $ 10,331,100 $ 8,867,633
=========== ===========
Net earnings per common share:
Primary $ 0.75 $ 0.65
=========== ===========
Fully diluted $ 0.65 $ 0.57
=========== ===========
Number of shares used to compute net
earnings per share:
Primary 13,823,597 13,610,397
=========== ===========
Fully diluted 18,419,272 18,349,888
=========== ===========
Dividends declared per share $ 0.030 $ 0.030
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
<TABLE>
J. BAKER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JULY 30, 1994 AND JULY 31, 1993
(UNAUDITED)
<CAPTION>
July 30, 1994 July 31, 1993
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 10,331,100 $ 8,867,633
Adjustments to reconcile net earnings to net cash
used in operating activities:
Depreciation and amortization:
Fixed assets 7,699,285 6,951,472
Deferred charges, intangible assets and
deferred financing costs 3,839,661 3,679,361
Change in:
Accounts receivable (518,555) (6,429,267)
Merchandise inventories (54,180,557) (59,016,088)
Prepaid expenses (1,014,022) (1,779,566)
Accounts payable (2,106,988) 32,100,725
Accrued expenses (9,587,437) (14,132,740)
Income taxes payable 5,033,009 3,595,683
Other liabilities (217,073) (2,838,038)
----------- -----------
Net cash used in operating
activities (40,721,577) (29,000,825)
----------- -----------
Cash flows from investing activities:
Capital expenditures for:
Property, plant and equipment (25,170,272) (9,726,452)
Other assets (1,889,521) (1,433,625)
----------- -----------
Net cash used in investing activities (27,059,793) (11,160,077)
----------- -----------
Cash flows from financing activities:
Proceeds from long-term debt 65,900,000 33,924,400
Proceeds from issuance of common stock 385,125 2,560,801
Payment of dividends (414,945) (408,714)
----------- ------------
Net cash provided by financing activities 65,870,180 36,076,487
----------- ------------
Net decrease in cash (1,911,190) (4,084,415)
Cash and cash equivalents at beginning of year 3,584,032 6,385,467
----------- -----------
Cash and cash equivalents at end of period $ 1,672,842 $ 2,301,052
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for interest $ 4,753,554 $ 3,759,635
=========== ===========
Cash paid for income taxes, net $ 2,923,516 $ 1,611,317
=========== ===========
Non-cash financing activity:
Conversion of subordinated debt $ - $ 2,671,000
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE> 6
J. BAKER, INC. AND SUBSIDIARIES
NOTES
-----
1] The accompanying unaudited consolidated financial statements, in the
opinion of management, include all adjustments (which consist only of recurring
accruals) necessary for a fair presentation of the Company's financial position
and results of operations. The results for the interim periods are not
necessarily indicative of results that may be expected for the entire fiscal
year.
2] Primary earnings per share is based on the weighted average number of
shares of Common Stock outstanding during such period. Stock options and
warrants are excluded from the calculation since they have less than a 3%
dilutive effect.
Fully diluted earnings per share is based on the weighted average number
of shares of Common Stock outstanding during such period. Included in this
calculation is the dilutive effect of Common Stock issuable under the 7%
convertible subordinated notes due 2002, stock options and warrants.
3] On November 19, 1993, the Company acquired 83% of the outstanding common
stock and all of the outstanding preferred stock of Tishkoff Enterprises, Inc.
of Columbus, Ohio ("TEI"), an operator of full-service, semi-service and
self-service licensed shoe departments in department stores, specialty stores
and discount stores. The 83% interest in the outstanding common stock was
acquired from certain TEI stockholders in exchange for 68,197 shares of the
Company's common stock (16,769 of which shares are being withheld from TEI
stockholders for up to two years and are available as a set-off to satisfy any
claims of the Company for indemnification that may arise) and the right to
receive payments equal in the aggregate to 8.3% of the consolidated pre-tax
earnings of TEI over a six year period commencing January 29, 1994, with a
maximum aggregate payment of $4,980,000. The acquisition of all of the
outstanding preferred stock of TEI was made for a payment of $650,000 in cash.
On December 13, 1993, the stockholders of TEI approved the merger of JBAK
Acquisition Corp., an Ohio corporation and a wholly owned subsidiary of the
Company, with and into TEI (the "Merger") and TEI became a wholly owned
subsidiary of the Company. In connection with the Merger, the Company paid
cash consideration to the remaining TEI stockholders in the amount of $442,000,
in payment for the remaining 17% interest in TEI common stock. Subsequent to
the Merger, the corporate name of TEI was changed to Shoe Corporation of
America, Inc. ("SCOA").
4] On January 30, 1993, Morse Acquisition, Inc., a wholly-owned subsidiary of
the Company ("Acquisition"), merged with and into Morse Shoe, Inc. ("Morse")
pursuant to an Amended and Restated Agreement and Plan of Reorganization dated
as of October 22, 1992 (the "Merger Agreement") by and among the Company,
Acquisition and Morse, whereby Morse became a wholly-owned subsidiary of the
Company. Pursuant to the acquisition of Morse, each share of Morse common
stock was exchanged for .17091 of a share of J. Baker common stock. In
connection with the acquisition, approximately 2,767,377 shares of J. Baker
common stock were issuable to Morse stockholders, including holders of
approximately $47 million, or 94%, of Morse convertible debentures which had
been converted into Morse common stock prior to January 30, 1993. During the
year ended January 29, 1994, holders of an additional $2.7 million of Morse
convertible debentures converted their debt into 49,820 shares of J. Baker
common stock. Approximately 6,500 additional shares of J. Baker common stock
are reserved for future issuance upon conversions of the remaining outstanding
Morse convertible debentures.
5] On July 8, 1993, July 19, 1993 and September 6, 1993 Fishers Big Wheel,
Inc. ("Fishers"), Jamesway Corporation ("Jamesway") and Rose's Stores, Inc.
("Rose's), respectively, licensors of the Company, filed for protection under
Chapter 11 of the Bankruptcy Code. At the time of the bankruptcy filings, the
Company had outstanding accounts receivable of $6.0 million in the aggregate
due from Fishers, Jamesway and Rose's. At July 30, 1994, carried on the
balance sheet in Other Assets are deferred lease acquisition costs of $2.7
million attributable to the Rose's license agreement. The Company intends to
continue to amortize the deferred lease acquisition costs of the Rose's license
agreement through the license termination date of July 30, 1997, since the
Company believes, based on its assessment of the likelihood and level of
ongoing business with Rose's, that the value of the license agreement supports
the historical carrying cost at July 30, 1994. During the first half of fiscal
1995, Jamesway and Rose's closed 113 stores. On August 29, 1994, Jamesway
filed its First Amended Plan of Reorganization, and anticipates confirmation of
such plan by the end of fiscal 1995. On August 1, 1994, Rose's filed its Plan
of Reorganization and anticipates confirmation of such plan by the end of
fiscal 1995. On January 5, 1994, Fishers received bankruptcy court approval to
conduct liquidation sales in all 54 of its stores. At the completion of the
liquidation
6
<PAGE> 7
sales in the first quarter of fiscal 1995, Fishers ceased business operations.
The Company does not expect these filings under the Bankruptcy Code, or the
aforementioned store closings, to have a material adverse effect on future
earnings. Combined sales in Jamesway and Rose's totaled $32.9 million for the
six months ended July 30, 1994. Sales in Fishers for the six months ended July
30, 1994 were $1.6 million.
6] On August 23, 1994, the Company paid in full its Series C Trade Notes in
the amount of $2.7 million. Such amount is reflected in the Company's balance
sheet at July 30, 1994 in current portion of long-term debt. Concurrent with
the redemption of the Series C Trade Notes, the Company received $3.3 million
previously held in trust for the benefit of Trade Note holders, which balance
is included in the Company's balance sheet at July 30, 1994 in other assets.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
All references herein to fiscal 1995 and fiscal 1994 relate to the years
ending January 28, 1995 and January 29, 1994, respectively.
Results of Operations
FIRST SIX MONTHS FISCAL 1995 VERSUS FIRST SIX MONTHS FISCAL 1994
Net sales increased by $51.8 million to $477.7 million in the first six
months of fiscal 1995 from $425.9 million in the first six months of fiscal
1994. Sales in the Company's footwear operations increased by $33.0 million
primarily as a result of sales in the newly-acquired SCOA licensed shoe
division, coupled with an increase in the number of Parade of Shoes stores in
operation during the first six months of fiscal 1995 versus the first six
months of fiscal 1994. The sales increase in footwear operations was partially
offset by a 3.5% decrease in comparable retail footwear store sales (Comparable
retail footwear sales increases/decreases are based upon comparisons of weekly
sales volume in licensed departments and Parade of Shoes and Fayva shoe stores
which were open in corresponding weeks of the two comparison periods.), a
decrease in the number of discount licensed shoe departments and Fayva shoe
stores in operation during the first six months of fiscal 1995 versus the first
six months of fiscal 1994, and a $3.2 million decrease in wholesale footwear
sales. Sales in the Company's specialty apparel operations increased by $18.8
million due to an increase in the number of Casual Male Big & Tall stores and
Work 'n Gear stores in operation during the first six months of fiscal 1995
over the first six months of fiscal 1994, coupled with a 7.7% increase in
comparable store sales. (Comparable specialty apparel store sales increases/
decreases are based upon comparisons of weekly sales volume in Casual Male Big
& Tall stores and Work 'n Gear stores which were open in corresponding weeks of
the two comparison periods.)
Cost of sales constituted 55.1% of sales in the first six months of fiscal
1995 as compared to 55.7% of sales in the first six months of fiscal 1994.
Cost of sales in the Company's footwear operations was 56.1% of sales in the
first six months of fiscal 1995 as compared to 56.5% of sales in the first six
months of fiscal 1994. The decrease in such percentage was primarily
attributable to a change in the relative mix of sales (the Company's newly
acquired SCOA licensed shoe division has a lower cost of sales as compared to
the cost of sales in the Company's other footwear divisions), coupled with a
decrease in wholesale footwear sales, which have a higher cost of sales than
retail sales, partially offset by an increase in markdowns as a percentage of
sales and a lower initial markup on merchandise purchases. Cost of sales in
the specialty apparel operations was 51.0% of sales in the first six months of
fiscal 1995 as compared to 51.8% of sales in the first six months of fiscal
1994 primarily due to a higher initial markup on merchandise purchases.
Selling, administrative and general expenses increased $22.2 million or
13.8% in the first six months of fiscal 1995 as compared to the first six
months of fiscal 1994 primarily due to the SCOA acquisition and the increase in
the number of Parade of Shoes stores, Casual Male Big & Tall stores and Work 'n
Gear stores in operation during the period. As a percentage of sales, selling,
administrative and general expenses were 38.2% in the first six months of
fiscal 1995 as compared to 37.6% in the first six months of fiscal 1994. This
increase was due primarily to the SCOA acquisition, the increase in sales in
specialty apparel and shoe stores and the decrease in wholesale footwear sales,
which have lower selling, administrative and general expenses than retail
sales. Selling, administrative and general expenses in the Company's footwear
operations were 37.2% of sales in the first six months of fiscal 1995 as
compared to 36.7% of sales in the first six months of fiscal 1994 primarily as
result of a change in the relative mix of sales (the Company's newly acquired
SCOA licensed shoe division has higher selling, administrative and general
expenses as compared to those in the Company's other footwear divisions), and
the decrease in wholesale footwear sales, which have lower selling,
administrative and general expenses than retail sales. Selling, administrative
and general expenses in the Company's specialty apparel operations were 42.1%
of sales in the first six months of fiscal 1995 as compared to 41.9% in the
first six months of fiscal 1994.
Depreciation and amortization expense increased by $905,000 in the first
six months of fiscal 1995 as compared to the first six months of fiscal 1994
due to an increase in depreciable and amortizable assets.
8
<PAGE> 9
As a result of the above described effects, the Company's operating income
increased by 16.0% to $20.6 million in the first six months of fiscal 1995 from
$17.7 million in the first six months of fiscal 1994. As a percentage of
sales, operating income was 4.3% in the first six months of fiscal 1995 as
compared to 4.2% in the first six months of fiscal 1994.
Net interest expense increased $767,000 to $4.4 million in the first six
months of fiscal 1995 from $3.7 million in the first six months of fiscal 1994
primarily due to higher levels of borrowings.
Taxes on earnings for the first six months of fiscal 1995 were $5.8
million, yielding an effective tax rate of 36.0%, as compared to taxes of $5.2
million, yielding an effective tax rate of 37.0% in the first six months of
fiscal 1994.
Net earnings for the first six months of fiscal 1995 were $10.3 million as
compared to earnings of $8.9 million in the first six months of 1994, an
increase of 16.5%.
SECOND QUARTER FISCAL 1995 VERSUS SECOND QUARTER FISCAL 1994
Net sales increased by $23.8 million to $256.3 million in the second
quarter of fiscal 1995 from $232.5 million in the second quarter of fiscal
1994. Sales in the Company's footwear operations increased by $15.0 million
primarily as a result of sales in the newly-acquired SCOA licensed shoe
division, coupled with an increase in the number of Parade of Shoes stores in
operation during the second quarter of fiscal 1995 versus the second quarter of
fiscal 1994. The sales increase in footwear operations was partially offset by
a $6.5 million reduction in wholesale footwear sales, a 3.9% decrease in
comparable retail footwear store sales and a decrease in the number of discount
licensed shoe departments and Fayva shoe stores in operation during the second
quarter of fiscal 1995 versus the second quarter of fiscal 1994. Sales in the
Company's specialty apparel operations increased by $8.8 million due to an
increase in the number of Casual Male Big & Tall stores and Work 'n Gear stores
in operation during the second quarter of fiscal 1995 over the second quarter
of fiscal 1994 coupled with a 4.4% increase in comparable apparel store sales.
Cost of sales constituted 54.2% of sales in the second quarter of fiscal
1995 as compared to 56.6% of sales in the second quarter of fiscal 1994. Cost
of sales in the Company's footwear operations was 55.2% of sales in the second
quarter of fiscal 1995 as compared to 57.7% of sales in the second quarter of
fiscal 1994. The decrease in such percentage was primarily due to a change in
the relative mix of sales (the Company's newly acquired SCOA licensed shoe
division has a lower cost of sales as compared to those in the Company's other
footwear divisions), coupled with a decrease in wholesale footwear sales and a
decrease in markdowns as a percentage of sales, partially offset by a lower
initial markup on merchandise purchases. Cost of sales in the specialty
apparel operations was 50.2% of sales in the second quarter of fiscal 1995 as
compared to 51.6% of sales in the second quarter of fiscal 1994 due to a higher
initial markup on merchandise purchases and a decrease in markdowns and
shrinkage as a percentage of sales.
Selling, administrative and general expenses increased $14.4 million or 17.3%
in the second quarter of fiscal 1995 as compared to the second quarter of
fiscal 1994 primarily due to the SCOA acquisition and the increase in the
number of Parade of Shoes stores, Casual Male Big & Tall stores and Work 'n
Gear stores in operation during the period. As a percentage of sales, selling,
administrative and general expenses were 38.2% in the second quarter of fiscal
1995 as compared to 35.9% in the second quarter of fiscal 1994. The increase
was due to the SCOA acquisition and the increase in sales in specialty apparel
and shoe stores. Selling, administrative and general expenses in the Company's
footwear operations were 37.3% of sales in the second quarter of fiscal 1995 as
compared to 35.1% of sales in the second quarter of fiscal 1994, primarily as a
result of a change in the relative mix of sales (the Company's newly acquired
SCOA licensed shoe division has higher selling, administrative and general
expenses as compared to those in the Company's other footwear divisions), and a
decrease in wholesale footwear sales, which have lower selling, administrative
and general expenses than retail sales. Selling, administrative and general
expenses in the Company's specialty apparel operations were 41.8% of sales in
the second quarter of fiscal 1995 as compared to 39.6% of sales in the second
quarter of fiscal 1994 due to higher selling payroll and occupancy costs as a
percentage of sales.
9
<PAGE> 10
Depreciation and amortization expense increased by $613,000 in the second
quarter of fiscal 1995 as compared to the second quarter of fiscal 1994 due to
an increase in depreciable and amortizable assets.
As a result of the above described effects, the Company's operating income
increased by 11.7% to $13.4 million in the second quarter of fiscal 1995 from
$12.0 million in the second quarter of fiscal 1994. As a percentage of sales,
operating income was 5.2% in the second quarter of fiscal 1995 and the second
quarter of fiscal 1994.
Net interest expense increased $387,000 to $2.2 million in the second
quarter of fiscal 1995 from $1.8 million in the second quarter of fiscal 1994
primarily due to higher levels of borrowings.
Taxes on earnings for the second quarter of fiscal 1995 were $4.0 million,
yielding an effective tax rate of 36.0%, as compared to taxes of $3.7 million,
yielding an effective tax rate of 37.0% in the second quarter of fiscal 1994.
Net earnings for the second quarter of fiscal 1995 were $7.1 million as
compared to earnings of $6.4 million in the second quarter of 1994, an increase
of 11.7%.
Financial Condition
JULY 30, 1994 VERSUS JANUARY 29, 1994
Merchandise inventories at July 30, 1994 were higher than at January 29,
1994 primarily due to a seasonal increase in the average inventory level per
location and an increase in the total number of licensed shoe departments and
specialty footwear and apparel stores in operation.
The increase in net property, plant and equipment is the result of the
Company incurring capital expenditures of $25.2 million in the first half of
fiscal 1995, primarily for the opening of new stores and the renovation of
existing units.
The ratio of accounts payable to merchandise inventory was 31.9% at July
30, 1994 as compared to 38.9% at January 29, 1994. This decrease is primarily
the result of the Company's decision to reduce the average financing terms of
its foreign purchases, coupled with the acquisition of inventory for new
licensed departments, primarily in the Company's SCOA division.
Debt increased to $219.1 million at July 30, 1994 from $154.7 million at
January 29, 1994 primarily due to additional borrowings under the Company's
revolving line of credit to meet seasonal and new licensed department and
retail store working capital needs and to fund capital expenditures.
Liquidity and Capital Resources
As a result of an amendment dated April 29, 1994 increasing the aggregate
commitment amount from $215 million (the "Amendment"), the Company has a $250
million revolving credit facility on an unsecured basis with Shawmut Bank,
N.A., The First National Bank of Boston, Fleet Bank of Massachusetts, N.A.,
Citizens Savings Bank, National Westminster Bank USA, Fuji Bank, Ltd., The
Yasuda Trust and Banking Company, Ltd. and Standard Chartered Bank (the
"Banks"). Pursuant to the Amendment, the aggregate commitment amount will be
reduced by $10 million on each December 29th of 1994, 1995 and 1996.
Borrowings under the revolving credit facility bear interest at variable rates
and, at the discretion of the Company, can be in the form of loans, bankers'
acceptances and letters of credit. This facility expires in June, 1997. As of
July 30, 1994, the Company had outstanding obligations under the revolving
credit facility of $234.3 million, consisting of loans, obligations under
bankers' acceptances and letters of credit.
10
<PAGE> 11
<TABLE>
Following is a table showing actual and planned store openings by division
for fiscal 1995:
<CAPTION>
Actual Openings Planned Openings Total
First - Second Third - Fourth Actual/Planned
Division Quarter Fiscal 1995 Quarter Fiscal 1995 Openings
-------- ------------------- ------------------- --------
<S> <C> <C> <C>
Licensed/Wholesale 285 99 384
Parade of Shoes 26 16 42
Fayva 2 0 2
Casual Male 20 40 60
Work 'n Gear 2 8 10
</TABLE>
The majority of the licensed department openings are in the Company's SCOA
subsidiary, and are primarily a result of the acquisition of licensed shoe
departments previously operated by Wohl Shoe Company ("Wohl"), a subsidiary of
Brown Group Retail, Inc. Wohl had previously announced that it is
discontinuing its licensed footwear operations.
Offsetting the above store openings, the Company has closed 335
licensed/wholesale departments (including aforementioned Jamesway, Rose's and
Fishers licensed departments and 149 wholesale footwear departments in the
Caldor chain, to which the Company has ceased supplying shoes), 8 Parade of
Shoes stores and 17 Fayva stores during the first half of fiscal 1995, and has
plans to close approximately an additional 6 licensed departments, 20 Fayva
stores and 5 Parade of Shoes stores during the third and fourth quarters of
fiscal 1995.
The information on store openings and closings reflects management's
current plans and should not be interpreted as an assurance of actual future
developments.
The Company believes that amounts available under its revolving credit
facility, along with internally generated funds, will be sufficient to meet its
operating and capital requirements under ordinary circumstances through the end
of the current fiscal year.
11
<PAGE> 12
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
(a) The registrant's annual meeting of stockholders was held on June 7,
1994 (the "Meeting").
(b) Messrs. Thomas H. Lee and Stanley Simon were elected Class II
directors at the Meeting for a three year term. The term of office
for the following directors continued after the Meeting: Sherman N.
Baker, J. Christopher Clifford, Ervin D. Cruce, David Pulver, Melvin
M. Rosenblatt and Jerry M. Socol.
(c) The stockholders voted on the election of two Class II directors, a
proposal to approve the 1994 Equity Incentive Plan and the
ratification of the selection of KPMG Peat Marwick as independent
auditors for the fiscal year ending January 28, 1995.
<TABLE>
The following votes were cast at the Meeting with respect to each nominee for Class II director:
<CAPTION>
Total vote
Total vote for withheld from
each director each director
-------------- --------------
<S> <C> <C>
Thomas H. Lee 9,977,473 83,080
Stanley Simon 10,048,739 11,814
</TABLE>
The following votes were cast with respect to the approval of the 1994
Equity Incentive Plan:
For: 8,535,613
Against: 638,218
Abstain: 22,774
Broker non-votes: 863,948
The following votes were cast with respect to the ratification of
auditors:
For: 10,055,143
Against: 2,543
Abstain: 2,867
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) The Exhibits in the Exhibit Index are filed as part of this report.
(b) No reports on Form 8-K were filed by the registrant during the quarter
for which this report is filed.
12
<PAGE> 13
SIGNATURES
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.
J. BAKER, INC.
By:/s/Alan I. Weinstein
---------------------------------
Alan I. Weinstein
Senior Executive Vice President
and Principal Financial Officer
Date: Canton, Massachusetts
September 12, 1994
By:/s/Philip Rosenberg
---------------------------------
Philip Rosenberg
First Senior Vice President and
Treasurer (Chief Accounting Officer)
Date: Canton, Massachusetts
September 12, 1994
13
<PAGE> 14
<TABLE>
EXHIBIT INDEX
<CAPTION>
EXHIBIT PAGE NO.
- ------- --------
<S> <C>
10. MATERIAL CONTRACTS
------------------
(.01) Amendment to Employment Agreement, between J. Baker, Inc. and Alan I. Weinstein, **
dated April 27, 1994.
(.02) Amendment to Employment Agreement, between J. Baker, Inc. and Larry I. Kelley, **
dated April 27, 1994.
(.03) Amendment to Employment Agreement, between J. Baker, Inc. and Linda B. Kanner, **
dated April 27, 1994.
11. COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE **
-----------------------------------------------------------
27. FINANCIAL DATA SCHEDULE **
-----------------------
</TABLE>
14
<PAGE> 1
EXHIBIT 10.(01)
AMENDMENT
TO EMPLOYMENT AGREEMENT
DATED MARCH 25, 1993
Reference is made to the Executive Employment Agreement dated as of
March 25, 1993 (the "Agreement") by and between J. Baker, Inc. and Alan I.
Weinstein. Pursuant to paragraph 19 of the Agreement and in order to amend
certain provisions of the Agreement, the Agreement is hereby amended as
follows:
1. Paragraph 3 of the Agreement entitled "Compensation" is hereby
amended by deleting the figure "$290,000" in the third line thereof and
inserting in its place the figure "$308,000".
2. Paragraph 6 of the Agreement is hereby amended by deleting the
phrase "ending on April 1, 1995" in the fifth line thereof and inserting in its
place the phrase "ending on April 1, 1996".
3. All other terms of the Agreement shall remain unchanged and
continue in full force and effect.
J. BAKER, INC.
/s/Jerry M. Socol April 27, 1994
- -------------------------------------- -----------------------
By: Jerry M. Socol Date
President and
Chief Executive Officer
/s/Alan I. Weinstein April 27, 1994
- -------------------------------------- -----------------------
Alan I. Weinstein Date
<PAGE> 1
EXHIBIT 10.(02)
AMENDMENT
TO EMPLOYMENT AGREEMENT
DATED MARCH 25, 1993
Reference is made to the Executive Employment Agreement dated as of
March 25, 1993 (the "Agreement") by and between J. Baker, Inc. and Larry I.
Kelley. Pursuant to paragraph 19 of the Agreement and in order to amend
certain provisions of the Agreement, the Agreement is hereby amended as
follows:
1. Paragraph 3 of the Agreement entitled "Compensation" is hereby
amended by deleting the figure "$255,000" in the third line thereof and
inserting in its place the figure "$271,000".
2. Paragraph 6 of the Agreement is hereby amended by deleting the
phrase "ending on April 1, 1995" in the fifth line thereof and inserting in its
place the phrase "ending on April 1, 1996".
3. All other terms of the Agreement shall remain unchanged and
continue in full force and effect.
J. BAKER, INC.
/s/Jerry M. Socol April 27, 1994
- ---------------------------------------- ------------------------
By: Jerry M. Socol Date
President and
Chief Executive Officer
/s/Larry I. Kelley April 27, 1994
- ---------------------------------------- ------------------------
Larry I. Kelley Date
<PAGE> 1
EXHIBIT 10.(03)
AMENDMENT
TO EMPLOYMENT AGREEMENT
DATED MARCH 25, 1993
Reference is made to the Executive Employment Agreement dated as of
March 25, 1993 (the "Agreement") by and between J. Baker, Inc. and Linda B.
Kanner. Pursuant to paragraph 19 of the Agreement and in order to amend
certain provisions of the Agreement, the Agreement is hereby amended as
follows:
1. Paragraph 3 of the Agreement entitled "Compensation" is hereby
amended by deleting the figure "$270,000" in the third line thereof and
inserting in its place the figure "$280,000".
2. Paragraph 6 of the Agreement is hereby amended by deleting the
phrase "ending on April 1, 1995" in the fifth line thereof and inserting in its
place the phrase "ending on April 1, 1996".
3. All other terms of the Agreement shall remain unchanged and
continue in full force and effect.
J. BAKER, INC.
/s/Jerry M. Socol April 27, 1994
- ------------------------------------- -----------------------
By: Jerry M. Socol Date
President and
Chief Executive Officer
/s/Linda B. Kanner April 27, 1994
- ------------------------------------- -----------------------
Linda B. Kanner Date
<PAGE> 1
<TABLE>
EXHIBIT 11
J. BAKER, INC. AND SUBSIDIARIES
COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE*
(UNAUDITED)
<CAPTION>
Quarter Ended Six Months Ended
July 30, July 31, July 30, July 31,
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
PRIMARY:
Net Earnings $ 7,134,315 $ 6,384,834 $10,331,100 $ 8,867,633
========== ========== =========== ==========
Weighted average number of common
shares outstanding 13,833,796 13,682,764 13,823,597 13,610,397
========== ========== ========== ==========
Earnings Per Share $ 0.516 $ 0.467 $ 0.747 $ 0.652
========== ========== ========== =========
ASSUMING FULL DILUTION:
Net Earnings(1) $ 7,918,315 $ 7,156,584 $11,899,100 $10,411,133
========== ========== =========== ===========
Weighted average number of common
shares outstanding 13,833,796 13,682,764 13,823,597 13,610,397
Dilutive effect of outstanding stock options 234,374 399,429 254,590 398,406
Dilutive effect of convertible subordinated debt 4,341,085 4,341,085 4,341,085 4,341,085
---------- ---------- ---------- -----------
Weighted average number of common
shares as adjusted 18,409,255 18,423,278 18,419,272 18,349,888
========== ========== ========== ==========
Earnings Per Share $ 0.430 $ 0.389 $ 0.646 $ 0.567
========== ========== ========= ==========
<FN>
1 For the purpose of calculating fully diluted earnings per share the conversion of the 7% convertible debt results in an
after tax benefit from reduced interest expense.
* This calculation is submitted in accordance with Item 601(b)(11) of Regulation S-K.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF J. BAKER, INC. FOR THE QUARTER ENDED JULY 30, 1994, AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-28-1995
<PERIOD-START> JAN-30-1994
<PERIOD-END> JUL-30-1994
<EXCHANGE-RATE> 1
<CASH> 1,672,842
<SECURITIES> 0
<RECEIVABLES> 31,729,314
<ALLOWANCES> 0
<INVENTORY> 332,400,970
<CURRENT-ASSETS> 373,489,156
<PP&E> 169,993,845
<DEPRECIATION> (46,955,465)
<TOTAL-ASSETS> 569,428,268
<CURRENT-LIABILITIES> 127,474,267
<BONDS> 219,091,600
<COMMON> 6,917,161
0
0
<OTHER-SE> 203,470,593
<TOTAL-LIABILITY-AND-EQUITY> 569,428,268
<SALES> 477,674,184
<TOTAL-REVENUES> 477,674,184
<CGS> 263,165,570
<TOTAL-COSTS> 263,165,570
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,438,407
<INCOME-PRETAX> 16,142,100
<INCOME-TAX> 5,811,000
<INCOME-CONTINUING> 10,331,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,331,100
<EPS-PRIMARY> 0.75
<EPS-DILUTED> 0.65
</TABLE>
