SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported: May 16, 1997)
(March 5, 1997)
J. BAKER, INC.
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(Exact name of registrant as specified in its charter)
Massachusetts 0-14681 04-2866591
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(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification Number)
555 Turnpike Street, Canton, Massachusetts 02021
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(Address of principal executive offices)
(Registrant's telephone number, including area code: (617) 828-9300
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Not Applicable
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(former Name or Former Address, if Changed Since Last Report)
<PAGE>
This amendment to the Registrant's Current Report on Form 8-K amends Item 7 to
add the pro forma financial statement information required to be filed.
Item 2. Acquisition or Disposition of Assets
On March 5, 1997, J. Baker, Inc. (the "Company") sold substantially all
of the assets of its Shoe Corporation of America ("SCOA") division to an entity
formed by CHB Capital Partners of Denver, Colorado along with Dennis B.
Tishkoff, President of SCOA, and certain members of SCOA management
(collectively "CHB"), for net cash proceeds of approximately $40.0 million. The
transaction involved the transfer to CHB of the SCOA division's inventory, fixed
assets, intellectual property and license agreements for the various department
and specialty store chains serviced by SCOA as well as the assumption by CHB of
certain liabilities of the SCOA division.
On March 10, 1997, the Company completed the sale of its Parade of
Shoes division to Payless ShoeSource, Inc. of Topeka, Kansas ("Payless") for net
cash proceeds of approximately $20.0 million. The transaction involved the
transfer to Payless of the Parade of Shoes division's 186 store leases,
inventory, fixed assets and intellectual property as well as the assumption by
Payless of certain liabilities of the Parade of Shoes division.
The net cash proceeds totaling approximately $60.0 million received by
the Company from both the SCOA and Parade of Shoes transactions, after funding
of escrow indemnity accounts and payment of related expenses and payables, were
used to pay down the Company's bank debt pursuant to the Revolving Credit and
Loan Agreement between J. Baker, Inc., JBI, Inc. and Fleet National Bank, as
Agent, (the "Credit Agreement"). Upon consummation of the aforementioned
transactions, the Company's aggregate commitment amount under the Credit
Agreement was reduced from $205 million to $145 million.
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<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits:
<TABLE>
<S> <C>
Page
(b) Pro Forma Financial Information
--Pro forma consolidated condensed balance sheet at 4
February 1, 1997
--Pro forma consolidated statement of earnings for the 5
year ended February 1, 1997
--Notes to pro forma consolidated financial statements 6
</TABLE>
The following unaudited pro forma consolidated condensed balance sheet
as of February 1, 1997 and the pro forma consolidated statement of
earnings for the year ended February 1, 1997 give effect to the
dispositions by the Company of its SCOA and Parade of Shoes divisions.
The pro forma statements have been prepared by management of J. Baker,
Inc. based on the historical financial statements of the Company. Each
gives effect to the assumptions and adjustments in the accompanying
notes to the pro forma consolidated financial statements as if the
dispositions had occurred, for purposes of the unaudited statement of
earnings, on February 4, 1996 (the beginning of the fiscal year ended
February 1, 1997), and for purposes of the unaudited consolidated
condensed balance sheet, on February 1, 1997.
The unaudited pro forma statements presented are for informational
purposes only and do not purport to represent what the Company's
financial condition and results of operations would have been, as of
and for the year ended February 1, 1997, respectively, had the
dispositions taken place on the dates indicated above, or to project
the Company's financial position or results of operations for any
future date or period.
The pro forma adjustments are based upon available information and upon
certain assumptions that the Company's management believes are
reasonable. The pro forma financial information should be read in
conjunction with the February 1, 1997 audited consolidated financial
statements of J. Baker, Inc.
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<PAGE>
J. BAKER, INC. AND SUBSIDIARIES
Pro Forma Consolidated Condensed Balance Sheet
February 1, 1997
(Unaudited, in thousands)
<TABLE>
<S> <C> <C> <C>
Pro Forma Pro Forma
As Reported Adjustments(1) Balances
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Assets
Current assets:
Cash and cash equivalents $ 3,969 $ 3,969
Accounts receivable, net 16,510 16,510
Merchandise inventories 146,045 146,045
Prepaid expenses 6,031 6,031
Deferred income taxes 37,548 37,548
Assets held for sale 62,256 (62,256) -
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Total current assets 272,359 210,103
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Property, plant and equipment, at cost,
less accumulated depreciation
and amortization of $40,033 76,654 76,654
Deferred income taxes 26,199 26,199
Other assets, at cost, less accumulated
amortization 7,309 4,156 11,465
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$382,521 (58,100) $324,421
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $57,006 (5,800) $51,206
Accrued expenses 29,837 (1,300) 28,537
Other current liabilities 3,393 3,393
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Total current liabilities 90,236 83,136
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Other liabilities 6,203 (3,000) 3,203
Long-term debt, net of current portion 140,788 (48,000) 92,788
Senior subordinated debt 2,952 2,952
Convertible subordinated debt 70,353 70,353
Stockholders' equity 71,989 71,989
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$382,521 (58,100) $324,421
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</TABLE>
See accompanying notes to pro forma consolidated financial statements.
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<PAGE>
J. BAKER, INC. AND SUBSIDIARIES
Pro Forma Consolidated Statement of Earnings
February 1, 1997
(Unaudited, in thousands, except per share amounts)
<TABLE>
<S> <C> <C> <C>
Pro Forma Pro Forma
As Reported Adjustments(1) Balances
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Net sales $897,492 $(300,740) $ 596,752
Cost of sales 542,247 (174,815) 367,432
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Gross profit 355,245 (125,925) 229,320
Selling, administrative and
general expenses 347,977 (119,069) 228,908
Depreciation and amortization 29,431 (6,390) 23,041
Restructuring and other non-recurring
charges 122,309 122,309
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Operating loss (144,472) (466) (144,938)
Interest income 254 254
Interest expense (13,056) 4,920 (8,136)
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Profit (loss) before taxes (157,274) 4,454 (152,820)
Income tax expense (benefit) (45,846) 1,737 (44,109)
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Net loss $(111,428) 2,717 $(108,711)
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Loss per common share:
Primary $(8.02) $(7.83)
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Fully diluted $(8.02) $(7.83)
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Number of shares used to compute loss per common share:
Primary 13,888 13,888
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Fully diluted 13,901 13,901
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</TABLE>
See accompanying notes to pro forma consolidated financial statements.
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<PAGE>
J. Baker, Inc. and Subsidiaries
Notes to Unaudited Pro Forma Consolidated Financial Statements
(1) As previously disclosed in the Company's Form 10-K for the fiscal year
ended February 1, 1997 and elsewhere in this Form 8-K in March, 1997, the
Company completed the sales of its Shoe Corporation of America ("SCOA")
and Parade of Shoes divisions. Included in the Company's balance sheet at
February 1, 1997, the then net realizable values of the assets in both the
SCOA and Parade of Shoes divisions were classified as "Assets held for
sale".
Following is an analysis of the receipt and application of the sales
proceeds as if the sales of both divisions occurred on February 1, 1997
(in thousands):
<TABLE>
<S> <C> <C>
Net value of assets held for sale at February 1, 1997 $62,256
Less: Proceeds placed in escrow accounts (4,156)
Payment of transaction related expenses (1,300)
Payment of Parade of Shoes accounts payable (5,800)
Payment of contractual contingent payment obligation
to former SCOA stockholders (3,000)
(14,256)
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Pro forma proceeds available to pay bank debt $48,000
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</TABLE>
From February 1, 1997 until the time of the actual closing dates of each
of the transactions in March, 1997, the inventory value in the Company's
SCOA and Parade of Shoes divisions, net of the increase in each division's
accounts payable, increased by $12.0 million, thus increasing the proceeds
received on the sale of both divisions to $60.0 million from $48.0
million.
(2) Pro forma adjustments to the Company's Consolidated Statement of Earnings
for the year ended February 1, 1997 remove the results of operations for
both the SCOA and Parade of Shoes divisions. In addition, the pro forma
adjustment to reduce interest expense represents the receipt of $60.0
million in proceeds from the sales of both divisions, which proceeds were
used to reduce the Company's outstanding bank debt. The pro forma
effective tax rate used was 39.0%, the effective rate used on reported
pre-tax income excluding restructuring and other non-recurring charges.
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<PAGE>
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.
(Registrant)
By/s/Alan I. Weinstein
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Alan I. Weinstein
Date: Canton, Massachusetts
May 16, 1997
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