<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 October 29, 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
October 29, 1994 was 13,840,247.
<PAGE> 2
<TABLE>
J. BAKER, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
October 29, 1994 (unaudited) and January 29, 1994
<CAPTION>
October 29, January 29,
Assets 1994 1994
------ ---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,700,599 $ 3,584,032
Accounts receivable 33,078,706 31,903,690
Merchandise inventories 347,163,592 278,220,413
Prepaid expenses 9,008,116 6,672,008
Deferred income taxes - 1,664,475
------------ ------------
Total current assets 390,951,013 322,044,618
Property, plant and equipment, at cost:
Land and buildings 24,957,521 24,114,820
Furniture, fixtures, machinery and equipment 109,532,575 87,993,608
Leasehold improvements 45,529,842 32,715,145
------------ ------------
180,019,938 144,823,573
Less accumulated depreciation 51,654,760 39,256,180
------------ ------------
Net property, plant and equipment 128,365,178 105,567,393
Deferred income taxes 1,210,000 1,210,000
Other assets 68,457,687 73,674,470
------------ ------------
$588,983,878 $502,496,481
============ ============
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Current portion of long-term debt $ 1,500,000 $ 2,636,300
Accounts payable 111,237,546 108,262,923
Accrued expenses 17,829,653 24,050,766
Income taxes payable 5,397,440 -
------------ ------------
Total current liabilities 135,964,639 134,949,989
------------ ------------
Other liabilities 12,084,919 12,794,652
Long-term debt, net of current portion 147,900,000 77,000,000
Senior subordinated debt 5,851,718 7,312,366
Convertible subordinated debt 70,353,000 70,353,000
Stockholders' equity 216,829,602 200,086,474
------------ ------------
$588,983,878 $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 October 29, 1994 and October 30, 1993
(Unaudited)
<CAPTION>
Quarter Quarter
Ended Ended
October 29, 1994 October 30, 1993
---------------- ----------------
<S> <C> <C>
Sales $262,015,105 $224,421,263
Cost of sales 142,666,363 124,364,264
------------ ------------
Gross profit 119,348,742 100,056,999
Selling, administrative and general expenses 99,803,257 82,461,518
Depreciation and amortization 6,689,277 5,615,793
------------ ------------
Operating income 12,856,208 11,979,688
Net interest expense 2,555,094 2,062,716
------------ ------------
Earnings before taxes 10,301,114 9,916,972
Taxes on earnings 3,709,000 3,431,000
------------ ------------
Net earnings $ 6,592,114 $ 6,485,972
============ ============
Net earnings per common share:
Primary $ 0.47 $ 0.48
============ ============
Fully diluted $ 0.40 $ 0.40
============ ============
Number of shares used to compute
earnings per common share:
Primary 13,838,427 13,708,174
============ ============
Fully diluted 18,377,716 18,380,984
============ ============
Dividends declared per share $ .015 $ .015
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
<TABLE>
J. BAKER, INC. AND SUBSIDIARIES
Statements of Consolidated Earnings
For the nine months ended October 29, 1994 and October 30, 1993
(Unaudited)
<CAPTION>
Nine Months Nine Months
Ended Ended
October 29, 1994 October 30, 1993
---------------- ----------------
<S> <C> <C>
Sales $739,689,289 $650,337,549
Cost of sales 405,831,933 361,666,209
------------ ------------
Gross profit 333,857,356 288,671,340
Selling, administrative and general expenses 282,218,652 242,721,891
Depreciation and amortization 18,201,989 16,223,358
------------ ------------
Operating income 33,436,715 29,726,091
Net interest expense 6,993,501 5,734,486
------------ ------------
Earnings before income taxes 26,443,214 23,991,605
Taxes on earnings 9,520,000 8,638,000
------------ ------------
Net earnings $ 16,923,214 $ 15,353,605
============ ============
Net earnings per common share:
Primary $ 1.22 $ 1.13
============ ============
Fully diluted $ 1.05 $ 0.97
============ ============
Number of shares used to compute
earnings per common share:
Primary 13,828,551 13,642,992
============ ============
Fully diluted 18,402,529 18,320,324
============ ============
Dividends declared per share $ .045 $ .045
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
<TABLE>
J. BAKER, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the nine months ended October 29, 1994 and October 30, 1993
(Unaudited)
<CAPTION>
October 29, 1994 October 30, 1993
---------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 16,923,214 $ 15,353,605
Adjustments to reconcile net earnings to net cash
used in operating activities:
Depreciation and amortization:
Fixed assets 12,403,570 10,674,736
Deferred charges, intangible assets and
deferred financing costs 5,837,770 5,583,523
Change in:
Accounts receivable (1,175,016) (10,617,381)
Merchandise inventories (68,943,179) (84,928,149)
Prepaid expenses (2,783,787) (2,144,461)
Accounts payable 2,974,623 31,772,438
Accrued expenses (6,221,113) (13,084,556)
Income taxes payable 7,061,915 6,610,280
Other liabilities (619,985) (2,890,306)
------------ ------------
Net cash used in operating
activities (34,541,988) (43,670,271)
------------ ------------
Cash flows from investing activities:
Capital expenditures for:
Property, plant and equipment (35,201,355) (18,372,311)
Other assets (223,704) (1,808,588)
------------ ------------
Net cash used in investing activities (35,425,059) (20,180,899)
------------ ------------
Cash flows from financing activities:
Proceeds from long-term debt 70,900,000 59,924,400
Repayment of senior debt (2,636,300) -
Proceeds from issuance of common stock 442,454 2,832,494
Payment of dividends (622,540) (614,498)
------------ ------------
Net cash provided by financing activities 68,083,614 62,142,396
------------ ------------
Net decrease in cash (1,883,433) (1,708,774)
Cash and cash equivalents at beginning of year 3,584,032 6,385,467
------------ ------------
Cash and cash equivalents at end of period $ 1,700,599 $ 4,676,693
============ ============
Supplemental disclosure of cash flow information:
Cash paid for interest $ 6,817,512 $ 3,921,179
============ ============
Cash paid for income taxes, net $ 1,765,154 $ 2,027,720
============ ============
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 October 29, 1994, carried
on the balance sheet in Other Assets are deferred lease acquisition costs of
$2.4 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 October 29, 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
December 5, 1994, the Bankruptcy Court approved a joint motion filed by
the Company and Rose's to assume the Company's license agreement with
Rose's. 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 sales
6
<PAGE> 7
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 $46.9
million for the nine months ended October 29, 1994. Sales in Fishers for the
nine months ended October 29, 1994 were $1.6 million.
6] On August 23, 1994, the Company paid in full its Series C Trade Notes in
the amount of $2.6 million. Concurrent with the redemption of the Series C
Trade Notes, $3.3 million previously held in trust for the benefit of
Trade Note holders was released to the Company by the Trade Note trustee.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
All references herein to fiscal 1995, fiscal 1994 and fiscal 1993 relate
to the years ending January 28, 1995, January 29, 1994 and January 30,
1993, respectively.
Results of Operations
FIRST NINE MONTHS FISCAL 1995 VERSUS FIRST NINE MONTHS FISCAL 1994
Net sales increased by $89.4 million to $739.7 million in the first
nine months of fiscal 1995 from $650.3 million in the first nine months of
fiscal 1994. Sales in the Company's footwear operations increased by $60.8
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 nine months of fiscal 1995 versus the first
nine months of fiscal 1994. The sales increase in footwear operations was
partially offset by a 1.4% 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 nine
months of fiscal 1995 versus the first nine months of fiscal 1994, and a
$15.8 million decrease in wholesale footwear sales (which is a result of the
closing of 149 wholesale footwear departments during the second quarter of
fiscal 1995). Sales in the Company's specialty apparel operations increased
by $28.6 million due to an increase in the number of Casual Male Big & Tall
stores and Work 'n Gear stores in operation during the first nine months of
fiscal 1995 over the first nine months of fiscal 1994, coupled with a 6.1%
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 54.9% of sales in the first nine months of
fiscal 1995 as compared to 55.6% in the first nine months of fiscal 1994. Cost
of sales in the Company's footwear operations was 55.8% of sales in the first
nine months of fiscal 1995 as compared to 56.6% of sales in the first nine
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 Company's specialty apparel operations was 51.0% of
sales in the first nine months of fiscal 1995 as compared to 51.3% of sales in
the first nine months of fiscal 1994. The decrease in such percentage is
primarily attributable to a higher initial markup on merchandise
purchases, partially offset by an increase in markdowns as a percentage
of sales.
Selling, administrative and general expenses increased by $39.5
million in the first nine months of fiscal 1995 from the first nine 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 nine months of
fiscal 1995 as compared to 37.3% in the first nine 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 37.4% of sales in the first nine months of
fiscal 1995 as compared to 36.6% of sales in the first nine 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. Selling, administrative and general expenses in the Company's specialty
apparel operations were 41.3% of sales in the first nine months of fiscal 1995
as compared to 40.6% in the first nine months of fiscal 1994, primarily due
to an increase in store level expenses.
Depreciation and amortization expense increased by $2.0 million in the
first nine months of fiscal 1995 over the first nine months of fiscal 1994
due to an increase in depreciable assets and amortizable assets.
As a result of the above described effects, the Company's operating
income increased 12.5% to $33.4 million in the first nine months of fiscal
1995. As a percentage of sales, operating income was 4.5% in the first nine
months of fiscal 1995 as compared to 4.6% in the first nine months of fiscal
1994.
8
<PAGE> 9
Net interest expense increased to $7.0 million in the first nine months
of fiscal 1995 from $5.7 million in the first nine months of fiscal 1994
primarily due to higher levels of borrowings.
Taxes on earnings for the first nine months of fiscal 1995 were $9.5
million as compared to taxes on earnings of $8.6 million, yielding an
effective tax rate of 36.0% in the first nine months of both fiscal 1995 and
fiscal 1994.
Net earnings for the first nine months of fiscal 1995 were $16.9 million
as compared to net earnings of $15.4 million the first nine months of fiscal
1994, an increase of 10.2%.
THIRD QUARTER FISCAL 1995 VERSUS THIRD QUARTER FISCAL 1994
In the third quarter of fiscal 1995, net sales increased by $37.6 million
or 16.8% over net sales in the third quarter of fiscal 1994. Sales in the
Company's footwear operations increased by $27.8 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 third
quarter of fiscal 1995 versus the third quarter of fiscal 1994 and a 2.6%
increase in comparable retail footwear sales. The sales increase in footwear
operations was partially offset by a $12.5 million reduction in wholesale
footwear sales and a decrease in the number of discount licensed shoe
departments and Fayva shoe stores in operation during the third quarter
of fiscal 1995 versus the third quarter of fiscal 1994. Sales in the
Company's specialty apparel operations increased by $9.8 million due to an
increase in the number of Casual Male Big & Tall stores and Work 'n Gear
stores in operation during the third quarter of fiscal 1995 over the third
quarter of fiscal 1994, coupled with a 3.2% increase in comparable apparel
store sales.
Cost of sales constituted 54.4% of sales in the third quarter of fiscal
1995 as compared to 55.4% in the third quarter of fiscal 1994. Cost of sales
in the Company's footwear operations was 55.4% of sales in the third quarter
of fiscal 1995 as compared to 56.6% of sales in the third 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,
partially offset by an increase in markdowns as a percentage of sales. Cost
of sales in the Company's specialty apparel operations was 50.8% of sales
in the third quarter of fiscal 1995 as compared to 50.5% of sales in the
third quarter of fiscal 1994. The increase in such percentage is primarily
attributable to an increase in markdowns as a percentage of sales,
partially offset by higher initial markup on merchandise purchases.
Selling, administrative and general expenses increased by $17.3 million
in the third quarter of fiscal 1995 from the third 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 38.1% in the third quarter of fiscal
1995 as compared to 36.7% in the third quarter of fiscal 1994. The increase
was due 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 37.7% of sales in the third quarter of fiscal 1995 as compared
to 36.4% of sales in the third 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. Selling,
administrative and general expenses in the Company's specialty apparel
operations were 39.8% of sales in the third quarter of fiscal 1995 as compared
to 38.2% of sales in the third quarter of fiscal 1994 due to higher store
level expenses.
Depreciation and amortization increased by $1.1 million in the third
quarter of fiscal 1995 over the third 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 7.3% to $12.9 million in the third quarter of fiscal 1995
over the third quarter of fiscal 1994. As a percentage of sales, operating
income was 4.9% in the third quarter of fiscal 1995 as compared to 5.3% in the
third quarter of fiscal 1994.
Net interest expense increased to $2.6 million in the third quarter of
fiscal 1995 from $2.1 million in the third quarter of fiscal 1994
primarily due to higher levels of borrowings.
Taxes on earnings for the third quarter of fiscal 1995 were $3.7
million, yielding an effective tax rate of 36.0% as compared to taxes of
$3.4 million, yielding an effective tax rate of 34.6% in the third quarter of
fiscal 1994.
9
<PAGE> 10
Net earnings for the third quarter of fiscal 1995 were $6.6 million
as compared to earnings of $6.5 million in the third quarter of fiscal
1994, an increase of 1.6%.
Financial Condition
OCTOBER 29, 1994 VERSUS JANUARY 29, 1994
Merchandise inventories at October 29, 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 $35.2 million in the first nine
months 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 32.0% at
October 29, 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 $224.1 million at October 29, 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 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"). As amended to date, the aggregate commitment amount under this
revolving credit facility will be reduced by $10 million on each December
30th of 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 October 29, 1994, the Company had
outstanding obligations under the revolving credit facility of $235.6 million,
consisting of loans, obligations under bankers' acceptances and letters of
credit.
<TABLE>
Following is a table showing actual and planned store openings by
division for fiscal 1995:
<CAPTION>
Actual Openings Planned Openings Total
First - Third Fourth Actual/Planned
Division Quarter Fiscal 1995 Quarter Fiscal 1995 Openings
-------- ------------------- ------------------- ------
<S> <C> <C> <C>
Licensed/Wholesale 357 34 391
Parade of Shoes 39 6 45
Fayva 2 0 2
Casual Male 49 16 65
Work 'n Gear 7 2 9
</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
340 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 21 Fayva stores during
10
<PAGE> 11
the first nine months of fiscal 1995, and has plans to close approximately
an additional 37 licensed departments, 10 Fayva stores and 6 Parade of Shoes
stores during the fourth quarter 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 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
December 9, 1994
By:/s/Philip Rosenberg
_________________________________________
Philip Rosenberg
First Senior Vice President and Treasurer
(Chief Accounting Officer)
Date: Canton, Massachusetts
December 9, 1994
13
<PAGE> 14
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
___________________
EXHIBITS
Filed with
Quarterly Report on Form 10-Q
of
J. BAKER, INC.
555 Turnpike Street
Canton, MA 02021
For the Quarter ended October 29, 1994
14
<PAGE> 15
<TABLE>
EXHIBIT INDEX
<CAPTION>
Exhibit
- - --------
<S> <C>
4. Instruments Defining the Rights of Security Holders, Including Indentures
-------------------------------------------------------------------------
(.01) Third Amendment Agreement to Revolving Credit and Loan Agreement
by and among JBI, Inc., et al, and Shawmut Bank, N.A., et al,
dated December 1, 1994.
11. Computation of Primary and Fully Diluted Earnings Per Share
-----------------------------------------------------------
27. Financial Data Schedule
-----------------------
</TABLE>
15
<PAGE> 1
EXHIBIT 4(.01)
THIRD AMENDMENT AGREEMENT
THIRD AMENDMENT AGREEMENT dated as of December 1, 1994, among JBI,
INC., a Massachusetts corporation (the "BORROWER"); J. BAKER, INC., a
Massachusetts corporation ("BAKER"); each of the banks that is a signatory
hereto (individually, a "BANK" and, collectively, the "BANKS"); and SHAWMUT
BANK, N.A., a national banking association, as agent for the Banks (in such
capacity, tgether with its successors in such capacity, the "AGENT").
The Borrower, Baker, the Banks and the Agent are parties to a Revolving
Credit and Loan Agreement dated as of February 1, 1993 (as amended by the First
Amendment and Waiver Agreement relating thereto dated as of November 19, 1993
and by the Second Amendment Agreement relating thereto dated as of April 29,
1994 and as in effect on the date hereof, the "CREDIT AGREEMENT").
The Borrower and Baker have requested that the Credit Agreement be
amended to, among other things, (i) change the scheduled reductions of the
Aggregate Commitment Amounts and (ii) increase the amount of capital
expenditures permitted under the Credit Agreement, and the Banks and the Agent
have agreed to such amedemtns upon the terms and conditions hereof.
Accordingly, the parties hereto hereyb agree as follows:
Section 1. DEFINITIONS. Except as otherwise defined in this Agreement,
terms defined in the Credit Agreement are used herein as defined therein.
Section 2. AMENDMENTS. Effective as of December 1, 1994 but subject to
the satisfaction of all of the conditions precedent set forth in Section 4
hereof, the Credit Agreement and other Operative Documents and Financing
Agreements shall be amended as follows:
A. The definition of "COMMITMENT REDUCTION DATE" is amended by changing
"December 30 of each of calendar years 1994, 1995 and 1996" to read "December
30 of each of Calendar years 1995 and 1996."
<PAGE> 2
- 2 -
B. Section 6.03 of the Credit Agreement is amended to read in its
entirety as follows:
"6.03 The AGGREGATE COMMITMENT AMOUNT shall automatically be
reduced, as of the close of business Boston time on each AOMMITMENT
REDUCTION DATE, to the following respective amounts:
COMMITMENT REDUCTION AGGREGATE COMMITMENT
DATE IN: AMOUNT REDUCED TO:
December, 1995 $240,000,000
December, 1996 $230,000,000
No reduction will be scheduled to occur in December, 1994. The
AGGREGATE COMMITMENT AMOUNT shall automatically be reduced to zero on
the TERMINATION DATE."
C. Section 10.01.6 of the Credit Agreement is amended by changing
"$40,000,000" in clause (i) thereof to read "$45,000,000."
D. Reference in each of the Operative Documents and Financing
Agreements to the Credit Agreement or words of like import (including indirect
references thereto) shall be deemed to be references to the Credit Agreement as
amended hereby.
Section 3. Representations and Warranties; Covenants.
-----------------------------------------
Each of the Borrower and Baker hereby represents and warrants to the
Banks and the Agent that, as of the date hereof, after giving effect tothe
amendments contemplated by Section 2 hereof: (a) no Default has occurred and
is continuing, (b) the representations and warranties set forth in Article VIII
of the Credit Agreement are true and complete on the date hereof as if made on
and as of the date hereof and as if each reference in said Article VIII to
"this Agreement" included reference to this Agreement (provided that the
representation and warranty set forth herein shall not be deemed to be
inaccurate solely by reason of the failure of any information contained in any
of Exhibits G (solely as the information therein relates to Section 8.04 or
8.05 of the Credit Agreement), N, O, P, Q and R to the Credit Agreement to
remain true) and (c) the amendments contemplated by Section 2 hereof do not
require any consent under any agreement, instrument or other document
(including without limitation the Convertible Subordinated Notes, the Senior
Subordinated Notes and the Subordinated Covnertible Debentures) including
without limitation any consent necessary to cause the
<PAGE> 3
- 3 -
Loans and the Revolving Notes to be Obligations to which the Subordinated
Indebtedness shall be subordinated under the subordination agreement(s)
referred to in Seciton 1.110 of the Credit Agreement (and the foregoing shall
be deemed to be representations and warranties made in an Operative Document
for purposes of Section 11.01(d) of the Credit Agreement).
Section 4. CONDITIONS PRECEDENT. As provided in Section 2 above, this
Agreement shall be come effecttive as of December 1, 1994 upon the receipt by
the Agent of the following documents, each of which shall be satisfactory to
the Agent in form and substance:
(a) Counterparts of this Agreement duly executed and delivered
by each of the parties hereto;
(b) An opinion of Goodwin, Procter & Hoar, counsel to the
Obligors with respect to the transactions contemplated by this
Agreement and the Credit Agreement adn all other Operative Documents
and Financing Agreements as amended hereby, as to such matters relating
hereto as the Agent may require; and
(c) Such other documents relating to the transactions
contemplated by this Agreement as the Agent or any Bank or Messrs.
Milbank, Tweed, Hadley & McCloy, special counsel to the Agent, may
reasonably request.
Section 5. MISCELLANEOUS. Except as expressly herein provided, the
Credit Agreement and all other Operative Documents and Financing Agreemetns
shall remain unchanged and in full force and effect. This Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same amendatory instrucment and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be governed by, and constured in accorance with, the law of the
Commonwealth of Massachusetts.
<PAGE> 4
- 4 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of athe day and year first above written.
JBI, INC.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: Senior Executive Vice President
J. BAKER, INC.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: Senior Executive Vice President
SHAWMUT BANK, N.A.
/s/ ROGER A. STONE
By ______________________________________
Title: Director
THE FIRST NATIONAL BANK OF BOSTON
/s/ MITCHELL B. FELDMAN
By ______________________________________
Title: Director
FLEET BANK OF MASSACHUSETTS, N.A.
/s/ BARRIE KING
By ______________________________________
Title: Vice President
NATIONAL WESTMINSTER BANK USA
/s/ PAUL CHAU
By ______________________________________
Title: Vice President
<PAGE> 5
- 5 -
CITIZENS SAVINGS BANK
/s/ MARIAN L. BARRETTE
By ______________________________________
Title: Vice President
STANDARD CHARTERED BANK
/s/ GERARD LOB
By ______________________________________
Title: Vice President
THE YASUDA TRUST & BANKING CO., LTD.
/s/ NEIL T. CHAU
By ______________________________________
Title: First Vice President
FUJI BANK, LIMITED
/s/ KATSUNORI NOZAWA
By ______________________________________
Title: Vice President and Manager
SHAWMUT BANK, N.A.,
as Agent
/s/ ROGER A. STONE
By ______________________________________
Title: Director
<PAGE> 6
- 6 -
We hereby acknowledge, consent and agree to the terms of the foregoing
Third Amendment Agreement and confirm that our obligations under the Guarantee
and the Pledge Agreement shall remain unchanged and in full force and effect.
Dated: December 1, 1994
SPENCER COMPANIES, INC.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: Senior Executive Vice President
SPENCER NO. 301 CORP.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: Senior Executive Vice President
JBI HOLDING CO., INC.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: President
THE CASUAL MALE, INC.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: Senior Executive Vice President
WGS CORP.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: Senior Executive Vice President
<PAGE> 7
- 7 -
TCM HOLDING COMPANY, INC.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: President
MORSE SHOE, INC.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: Senior Executive Vice President
BUCKMIN, INC.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: Senior Executive Vice President
ELM EQUIPMENT CORP.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: Senior Executive Vice President
JARED CORPORATION
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: Senior Executive Vice President
MORSE SHOE (CANADA) LTD.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: Senior Executive Vice President
MORSE SHOE INTERNATIONAL, INC.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: Senior Executive Vice President
<PAGE> 8
- 8 -
ISAB, INC.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: Senior Executive Vice President
WHITE CAP FOOTWEAR, INC.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: Senior Executive Vice President
SHOE CORPORATION OF AMERICA, INC.
/s/ ALAN I. WEINSTEIN
By ______________________________________
Title: Senior Executive Vice President
<PAGE> 1
<TABLE>
EXHIBIT 11
J. BAKER, INC. AND SUBSIDIARIES
COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE*
(UNAUDITED)
<CAPTION>
Quarter Ended Nine Months Ended
October 29, October 30, October 29, October 30,
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
PRIMARY:
Net Earnings $ 6,592,114 $ 6,485,972 $16,923,214 $15,353,605
=========== =========== =========== ===========
Weighted average number of common
shares outstanding 13,838,427 13,708,174 13,828,551 13,642,992
========== ========== ========== ==========
Earnings Per Share $0.476 $0.473 $1.224 $1.125
========== =========== =========== ===========
ASSUMING FULL DILUTION:
Net Earnings1 $ 7,376,114 $ 7,294,472 $19,275,214 $17,705,605
=========== =========== =========== ===========
Weighted average number of common
shares outstanding 13,838,427 13,708,174 13,828,551 13,642,992
Dilutive effect of outstanding stock options 198,204 331,725 232,893 336,247
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 18,377,716 18,380,984 18,402,529 18,320,324
========== ========== ========== ==========
Earnings Per Share $0.401 $0.397 $1.047 $0.966
========== ========== ========== ==========
<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 OCTOBER 29, 1994,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-28-1995
<PERIOD-START> JAN-30-1994
<PERIOD-END> OCT-29-1994
<EXCHANGE-RATE> 1
<CASH> 1,700,599
<SECURITIES> 0
<RECEIVABLES> 33,078,706
<ALLOWANCES> 0
<INVENTORY> 347,163,592
<CURRENT-ASSETS> 390,951,013
<PP&E> 180,019,938
<DEPRECIATION> (51,654,760)
<TOTAL-ASSETS> 588,983,878
<CURRENT-LIABILITIES> 135,964,639
<BONDS> 224,104,718
<COMMON> 6,920,124
0
0
<OTHER-SE> 209,909,478
<TOTAL-LIABILITY-AND-EQUITY> 588,983,878
<SALES> 739,689,289
<TOTAL-REVENUES> 739,689,289
<CGS> 405,831,933
<TOTAL-COSTS> 405,831,933
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,993,501
<INCOME-PRETAX> 26,443,214
<INCOME-TAX> 9,520,000
<INCOME-CONTINUING> 16,923,214
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,923,214
<EPS-PRIMARY> 1.22
<EPS-DILUTED> 1.05
</TABLE>
