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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
JULY 1, 1999
Date of Report (Date of
earliest event reported)
THE COSMETIC CENTER, INC.
(Exact name of registrant as specified in its charter)
COMMISSION FILE NO. 0-14756
DELAWARE 52-1266697
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or jurisdiction)
8700 ROBERT FULTON DRIVE
COLUMBIA, MARYLAND 21046
(Address of principal (Zip Code)
executive offices)
(301) 497-6800
Registrant's telephone number, including area code:
- --------------------------------------------------------------------------------
(Former names or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
This Current Report on Form 8-K/A amends the Current Report on Form 8-K filed
with the Securities and Exchange Commission on July 14, 1999. As previously
reported by The Cosmetic Center, Inc. (the "Company"), on April 16, 1999, the
Company filed in the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court"), Bankruptcy Case No. 99-888 (PJW), a
voluntary petition for relief under Chapter 11 of the United States
Bankruptcy Code. In accordance with its Chapter 11 reporting obligations, the
Company filed its monthly operating report for the month ended May 1999 (the
"Monthly Report") with the Office of the U.S. Trustee and the Bankruptcy
Court on July 1, 1999. Portions of the Monthly Report are attached with this
Current Report on Form 8-K/A as Exhibit 99.1. Due to the volume of supporting
documents and the expense associated with the electronic filing of the
Monthly Report in its entirety, certain underlying exhibits and attachments
to the Monthly Report are not attached as part of Exhibit 99.1, but are
available upon request from the Office of the United States Trustee, the
Bankruptcy Court or the Company. In addition, the Company agrees that it will
furnish a copies of the omitted attachments and exhibits to the Commission or
any stockholder of the Company upon request.
On July 9, 1999, the Company disseminated the press release filed with this
Current Report on Form 8-K/A as Exhibit 99.2 announcing that it had determined
to proceed with an orderly wind-down of its operations, subject to Bankruptcy
Court approval. The Company reported that it was unable to obtain sufficient
trade credit from its vendors to enable it to operate its business
successfully. Furthermore, the Company reported that it was unsuccessful in
locating a financial or strategic partner. The Company plans to liquidate its
inventory through going-out-of-business sales, which are expected to begin by
the end of July, after the selection of a Court-approved liquidator.
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Item 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibits. The following exhibits are furnished as part of this report:
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
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<S> <C>
99.1 Portions of Monthly Operating Report of The
Cosmetic Center, Inc. as filed with the Office
of the U.S. Trustee and the United States
Bankruptcy Court for the District of Delaware on
July 1, 1999.
99.2 Press Release, dated July 9, 1999, issued by
The Cosmetic Center, Inc.
</TABLE>
FORWARD LOOKING STATEMENTS
This Report contains forward-looking statements. The words, "believe",
"expect", and "anticipate" and similar expressions identify such
forwarding-looking statements. These forward-looking statements reflect the
Company's views with respect to future events and financial performance. Such
statements are subject to risks and uncertainties that could cause the Company's
actual results and financial position to differ materially from those projected
in the forward-looking statements. Risks associated with the Company's
forward-looking statements include, but are not limited to, those risk factors
described in the Company's Form 10-K under the caption "Business Risk Factors".
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates. The Company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE COSMETIC CENTER, INC.
By: /s/ Kevin Regan
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Name: Kevin Regan
Title: President
Dated: July 19, 1999
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
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<S> <C>
99.1 Portions of Monthly Operating Report of The
Cosmetic Center, Inc. as filed with the Office
of the U.S. Trustee and the United States
Bankruptcy Court for the District of Delaware on
July 1, 1999.
99.2 Press Release, dated July 9, 1999, issued by
The Cosmetic Center, Inc.
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Exhibit 99.1
THE COSMETIC CENTER, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
May 29, December 26,
1999 1998
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(unaudited) (unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 6,328 $ 6,430
Accounts receivable, net 1,967 2,251
Inventories 52,453 78,553
Prepaid expenses 781 144
Deferred tax asset 0
Total current assets 61,529 87,378
PROPERTY AND EQUIPMENT, NET 8,430 12,325
DEPOSITS AND OTHER ASSETS 1,361 1,440
GOODWILL, NET 3,040 3,665
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TOTAL ASSETS $ 74,360 $ 104,808
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,138 $ 19,906
Accounts payable - Prestige 6,000
Accrued expenses and other 9,296 11,530
Notes payable (current portion) 32,776 42,617
Note Payable - Products Corp 850
Note Payable - Prestige 20,255
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Total current liabilities 44,210 101,158
LIABILITIES SUBJECT TO COMPROMISE 45,213
NOTE PAYABLE - Products Corp 850
LONG-TERM DEBT 0 0
OTHER LONG-TERM LIABILITIES 8 1,158
SHAREHOLDERS' EQUITY:
Class C common stock, $.01 par value; 40,000,000 shares
authorized; 10,015,101 shares issued and outstanding 100 100
Additional paid-in capital 41,357 41,284
Retained earnings (56,528) (39,742)
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TOTAL SHAREHOLDERS' EQUITY (15,071) 1,642
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 74,360 $ 104,808
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</TABLE>
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THE COSMETIC CENTER, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Month Ending Five Months Ending
29-May 29-May
1999 1999
<S> <C> <C>
Net sales $ 18,384 $ 67,232
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Cost of sales including buying,
occupancy and distribution 14,355 52,342
Selling, general and administrative expenses 6,789 29,692
Restructuring Costs (33) 46
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Total operating expenses 21,111 82,080
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Earnings (loss) from operations (2,727) (14,848)
Interest expense (380) (1,977)
Other income, net (3) 38
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Earnings (loss) before income tax (3,110) (16,787)
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Income tax expense 0 0
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Net earnings (loss) $ (3,110) $(16,787)
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</TABLE>
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Exhibit 99.2
[COSMETIC CENTER LOGO]
Contact: Wendi Kopsick
Kekst and Company
(212) 521-4800
FOR IMMEDIATE RELEASE
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COSMETIC CENTER TO WIND DOWN OPERATIONS
-- GOING-OUT-OF-BUSINESS SALES TO COMMENCE LATER THIS MONTH --
COLUMBIA, MARYLAND, JULY 9, 1999 -- The Cosmetic Center, Inc. today announced
that, based on the increasingly competitive marketplace for its products and its
current financial position, the Company has decided to proceed with an orderly
wind-down of its operations, subject to Bankruptcy Court approval.
The Company plans to liquidate its inventory through Going-out-of-Business
sales, which are expected to begin by the end of July, after selection of a
Court-approved liquidator. These sales are anticipated to continue up to sixteen
weeks, or until the middle of November, depending upon the location.
Cosmetic Center expects to retain many of its store-based associates and a
portion of its corporate associates as the business is phased down, and
anticipates that its Columbia, Maryland headquarters will be closed by the end
of the year. The Company noted that it will continue its efforts to locate a
strategic buyer for the business as the wind-down proceeds.
Cosmetic Center filed for Court protection under Chapter 11 of the Bankruptcy
Code on April 16, 1999. The Company, which employs approximately 1,200 people,
currently operates 31 Cosmetic Center stores primarily in Maryland and Virginia
and 93 Prestige Fragrances & Cosmetics outlet stores in 27 states.
Certain statements contained in this press release are "forward-looking"
statements within the meaning of the Private Securities Litigation Reform Act of
1995, such as statements referring to future business development activities,
and are thus prospective. Such forward-looking statements are subject to risks,
uncertainties and other factors which could cause actual results to differ
materially from future results expressed or implied by such forward-looking
statements. Potential risks and uncertainties include, but are not limited to,
economic conditions, competition and other uncertainties detailed from time to
time in the Company's Securities and Exchange Commission filings.
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