<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
-----------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 1995 .
------------------------------------------
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 1-9169
BERNARD CHAUS, INC.
(Exact Name of Registrant as Specified in its Charter)
New York 13-2807386
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) number)
1410 Broadway, New York, New York 10018
- ---------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 354-1280
- -----------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days Yes X No ____.
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Date Class Shares Outstanding
October 27, 1995 Common Stock, $0.01 par value 21,133,641
- ---------------- ----------------------------- ----------------
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1 Financial Statements (Unaudited) PAGE
Condensed Consolidated Balance Sheets as of
September 30, 1995, June 30, 1995 and
September 30, 1994 3
Condensed Consolidated Statements of Operations
for the Quarters ended September 30, 1995 and 1994 4
Condensed Consolidated Statements of Cash Flows
for the Quarters ended September 30, 1995 and 1994 5
Notes to Condensed Consolidated Financial Statements 6 - 8
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 - 13
PART II OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K 14
SIGNATURES 15
</TABLE>
2
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
BERNARD CHAUS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
September 30, June 30, September 30,
1995 1995 1994
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 217 $ 418 $ 798
Accounts receivable, net 28,025 7,646 34,366
Inventories 22,083 16,203 23,904
Prepaid expenses and other current assets 908 1,523 2,219
-------- -------- --------
Total current assets 51,233 25,790 61,287
Fixed assets - net 2,246 2,392 3,445
Other assets 543 478 557
-------- -------- --------
$54,022 $28,660 $65,289
======= ======= =======
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities
Notes payable - banks $36,307 $18,698 $29,958
Accounts payable 21,427 12,922 19,319
Accrued expenses 5,568 5,549 6,991
Accrued restructuring expenses 1,594 2,535 2,549
------- ------- -------
Total current liabilities 64,896 39,704 58,817
Subordinated promissory notes 21,678 21,066 19,354
Accrued restructuring expenses 108 269 2,242
------- ------- -------
86,682 61,039 80,413
STOCKHOLDERS' DEFICIENCY
Preferred stock, $.01 par value,
authorized shares -- 1,000,000;
outstanding shares -- none
Common stock, $.01 par value; authorized shares --
50,000,000; issued shares -- 21,108,641 at
September 30, 1995, 21,073,081 at
June 30, 1995 and 20,904,531 at
September 30, 1994 211 211 209
Additional paid-in capital 49,479 49,353 47,632
Deficit (80,870) (80,463) (61,485)
Less: Treasury stock, at cost --
622,700 shares (1,480) (1,480) (1,480)
-------- -------- --------
Total stockholders' deficiency (32,660) (32,379) (15,124)
-------- -------- --------
$ 54,022 $ 28,660 $ 65,289
======== ======== ========
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
3
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
BERNARD CHAUS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED
September 30, September 30,
1995 1994
---- ----
<S> <C> <C>
Net sales $48,885 $65,391
Cost of goods sold 38,141 51,702
------ ------
Gross profit 10,744 13,689
Selling, general and administrative expenses 9,764 12,200
Restructuring expenses - 1,200
Unusual expenses - 7,833
------- ------
980 (7,544)
Interest expense (1,419) (1,350)
Interest and other income, net 108 35
------- --------
Loss before provision for income taxes (331) (8,859)
Provision for income taxes 76 76
------- -------
Net loss ($ 407) ($ 8,935)
======== ========
Net loss per share ($0.02) ($ 0.48)
======== --------
Weighted average number of common
shares outstanding 20,461,000 18,718,000
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
4
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
BERNARD CHAUS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED
September 30, September 30,
1995 1994
--------- -------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss ($407) ($8,935)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 284 158
Provision for losses on accounts receivable 45 45
Non-cash interest expense 612 736
Changes in operating assets and liabilities:
Accounts receivable (20,424) (16,654)
Inventories (5,880) 1,599
Prepaid expenses and other assets 550 1,503
Accounts payable 8,505 5,029
Accrued expenses 19 281
Accrued restructuring expenses (1,102) 712
-------- ---------
Net Cash Used In Operating Activities (17,798) (15,526)
INVESTING ACTIVITIES
Purchases of fixed assets - net of disposal (138) 9
-------- ---------
Net Cash Used In Investing Activities (138) 9
FINANCING ACTIVITIES
Net proceeds from short-term bank borrowings 17,609 8,843
Principal payments on subordinated
promissory notes - (250)
Proceeds from issuance of subordinated
promissory notes - 7,200
Net proceeds from exercise of options 126 54
------- -------
Net Cash Provided By Financing Activities 17,735 15,847
------ ------
(Decrease) increase in cash and cash equivalents (201) 330
Cash and Cash Equivalents, Beginning of Quarter 418 468
------ ------
Cash and Cash Equivalents, End of Quarter $ 217 $ 798
====== ======
Cash Paid for:
Taxes 11 5
Interest 888 575
Supplemental schedule of non-cash financing activities:
Exchange of subordinated promissory notes for
common stock - 7,200
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
5
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Quarters Ended September 30, 1995 and September 30, 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation: The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results in the quarter ended September 30, 1995 are not necessarily
indicative of the results that may be expected for the year ending June 30,
1996 or any other period. The balance sheet at June 30, 1995 has been derived
from the audited financial statements at that date. For further information,
refer to the financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the year ended June 30, 1995.
Net Loss Per Share: Net loss per share has been computed by dividing the
applicable net loss by the weighted average number of common shares
outstanding. Common equivalent shares were not included as their inclusion
would have been antidilutive.
Reclassifications: Certain reclassifications were made to the September
30, 1994 financial information to conform to the September 30, 1995
presentation.
2. INVENTORIES
Inventories (principally finished goods) are stated at the lower of cost,
using the first-in first-out (FIFO) method, or market. Included in inventories
is merchandise in transit of approximately $8.4 million at September 30, 1995,
$4.8 million at June 30, 1995 and $9.7 million at September 30, 1994.
3. FINANCIAL AGREEMENTS
An amended and restated financing agreement with BNY Financial Corporation
(BNYF), a wholly owned subsidiary of The Bank of New York, originally entered
into in July 1991, amended and restated effective as of February 21, 1995, and
further amended effective as of September 28, 1995 (the Amended Financing
Agreement), provides the Company with a $60 million credit facility for
letters of credit and direct borrowings, with a sublimit for loans and
advances of $40 million ($47 million for the period from October 1, 1995
through November 30, 1995). At September 30, 1995, the Company was in an
overadvance position of approximately $5.9 million, with the Amended Financing
Agreement permitting overadvances up to $6.0 million. The amount of financing
available is based upon a formula incorporating eligible receivables and
inventory, cash balances, other collateral, and permitted overadvances, all as
defined in the Amended Financing Agreement. The Amended Financing Agreement is
6
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
collateralized by substantially all of the Company's assets, including
accounts receivable and inventory. Interest on direct borrowings is payable
monthly at an annual rate equal to the higher of (i) The Bank of New York's
prime rate (8.75% at September 30, 1995) plus 0.5% (The Bank of New York prime
rate plus 1.5% in the event the Company's overadvance position exceeds the
allowable overadvances) or (ii) the Federal Funds Rate in effect plus 1%
(Federal Funds Rate plus 2% in the event the Company's overadvance position
exceeds the allowable overadvances). There is a commitment fee of 0.375% of
the unused portion of the line, payable monthly, and letter of credit fees
equal to 0.125% of the outstanding letter of credit balance, payable monthly.
The Amended Financing Agreement requires the payment of a due diligence and
facility fee aggregating $0.6 million. In addition, the Amended Financing
Agreement provides for the payment of minimum service charges of $0.6 million
per annum. The Company may terminate the Amended Financing Agreement upon 90
days' prior written notice at any time, subject to termination fees. BNYF may
terminate after February 21, 1998, upon 60 days' written notice to the
Company.
The Amended Financing Agreement contains covenants relative to minimum levels
of working capital and net worth and a cap on personal property leases. The
Company is also prohibited from declaring or paying dividends, or making other
distributions on its capital stock, with certain exceptions.
4. SUBORDINATED PROMISSORY NOTES
The Company had outstanding at September 30, 1995, $21.7 million of
subordinated promissory notes payable to Josephine Chaus, certain of which
were originally issued on June 30, 1986 and the remainder of which were issued
in February and March 1991 (the Subordinated Notes). The Company has been
prohibited from making payments of principal or interest on the Subordinated
Notes since 1993 (with the exception of principal payments of approximately
$0.5 million, $0.3 million and $0.3 million in November 1993, February 1994
and August 1994, respectively) as a result of restrictive covenants under the
Amended Financing Agreement. In connection with the proposed public offering
(see Note 6), Ms. Chaus agreed to extend the maturity date of the Subordinated
Notes (which were to mature on July 1, 1996) to July 1, 1998, subject to the
consummation of such offering, and to October 1, 1996 if the offering is not
consummated.
In September 1994, Josephine Chaus loaned $7.2 million to the Company in
exchange for subordinated promissory notes bearing interest at 12% per annum.
Proceeds of such cash infusion were used for costs and associated expenses
related to the signing of the Company's new Chief Executive Officer. In
November 1994, in order to provide additional equity to the Company, to
enhance the Company's balance sheet and to accommodate BNYF, subject to
stockholder approval, Josephine Chaus agreed, at the request of a special
committee consisting of disinterested members of the Board of Directors of the
Company (the Special Committee), to exchange such notes for shares of Common
Stock of the Company on terms determined by
7
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
the Special Committee. In November 1994, Josephine Chaus advised the Company
that she intended to vote all of her shares in favor of such exchange.
Josephine Chaus possesses the power to vote more than 50% of the outstanding
shares of Common Stock. Consequently, the affirmative vote of Josephine Chaus
for the exchange of such subordinated promissory notes for equity was
sufficient to approve such exchange without the vote of any other
stockholders. As a result, the Company reflected the exchange of such
subordinated promissory notes, including accrued interest thereon ($0.2
million), for 1,914,500 shares of Common Stock (based upon a purchase price of
$3.85 per share), at September 30, 1994. The purchase price was determined by
the Special Committee and the purchase was approved by the Company's
stockholders at the November 22, 1994 Annual Meeting of Stockholders.
5. RESTRUCTURING AND UNUSUAL EXPENSES
During the first quarter of fiscal 1995, the Company recorded unusual expenses
of $7.8 million, primarily related to costs associated with the signing of the
Company's new Chief Executive Officer, and $1.2 million in restructuring
expenses related to employee severance.
6. PROPOSED PUBLIC OFFERING
The Company filed a Registration Statement on Form S-2 on October 10, 1995
with respect to a proposed underwritten public offering of 5,000,000 shares of
Common Stock (plus up to an additional 750,000 shares of Common Stock which
the underwriters thereof have an option to purchase to cover over-allotments,
if any).
8
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Operating results for the quarter ended September 30, 1995 are not necessarily
indicative of the results that may be expected for the year ending June 30,
1996 or any other period.
In the quarter ended September 30, 1995, net sales decreased by $16.5 million
or 25.2% compared to the quarter ended September 30, 1994. This sales decrease
was primarily due to a reduction in the number of units sold and higher sales
incentive discounts, partially offset by higher standard selling prices, lower
promotional allowances, lower term discounts and lower returns.
In the quarter ended September 30, 1995, gross profit as a percentage of net
sales increased to 22.0% from 20.9% in the quarter ended September 30, 1994.
The increase in gross profit, as a percentage of net sales, was attributable
to a decrease in promotional allowances and higher standard selling prices,
partially offset by higher sales incentive discounts.
Selling, general and administrative expenses decreased by $2.4 million in the
quarter ended September 30, 1995 as compared to the quarter ended September
30, 1994, which was primarily attributable to the implementation of cost
reduction programs under a corporate restructuring which was initiated toward
the end of fiscal 1994. As a percentage of net sales, selling, general and
administrative expenses increased to 20.0% in the quarter ended September 30,
1995 from 18.7% in the quarter ended September 30, 1994.
During the first quarter of fiscal 1995, the Company recorded unusual expenses
of $7.8 million, primarily related to costs associated with the signing of the
Company's new Chief Executive Officer, and $1.2 million in restructuring
expenses related to employee severance.
Interest expense in the quarter ended September 30, 1995 increased as compared
with the comparable quarter of the prior fiscal year, primarily due to higher
average bank borrowings at higher rates.
Financial Position, Liquidity and Capital Resources
General
Net cash used in operating activities was $17.8 million in the quarter ended
September 30, 1995 as compared to $15.5 million in the quarter ended September
30, 1994. The net cash used in
9
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
operating activities during the quarter ended September 30, 1995 resulted
primarily from increases in accounts receivable ($20.4 million), increases in
inventory ($5.9 million), and decreases in accrued restructuring expenses
($1.1 million), offset partially by increases in accounts payable ($8.5
million).
Amended Financing Agreement
The Company and BNY Financial Corporation ("BNYF") entered into a financing
agreement in July 1991, which was amended and restated effective as of
February 21, 1995, and further amended effective as of September 28, 1995 (the
"Amended Financing Agreement"). The September 28, 1995 amendment to the
Amended Financing Agreement is sometimes referred to herein as the "September
Amendment." The Amended Financing Agreement provides the Company with a $60
million credit facility for letters of credit and direct borrowings, with a
sublimit for loans and advances of $40 million ($47 million for the period
from October 1, 1995 to November 30, 1995). The amount of financing available
is based upon a formula incorporating eligible receivables and inventory, cash
balances, other collateral, and permitted overadvances, all as defined in the
Amended Financing Agreement. At September 30, 1995, the Company had an
overadvance position of approximately $5.9 million under the Amended Financing
Agreement, with the Amended Financing Agreement permitting overadvances up to
$6.0 million. The Amended Financing Agreement is collateralized by
substantially all of the Company's assets, including accounts receivable and
inventory.
Credit Support
Josephine Chaus has arranged for a letter of credit (the "Letter of Credit")
in various amounts since April 1994 in return for which BNYF has increased the
availability under the Amended Financing Agreement. As part of the
negotiations with BNYF in connection with the Amended Financing Agreement, in
February 1995 Josephine Chaus increased the Letter of Credit to $10.0 million
and extended its term until October 31, 1995 (the "February
Increase/Extension"). In September 1995, Ms. Chaus further extended the term
of the Letter of Credit to January 31, 1996 (the "September Extension").
Subsequently, in connection with the September Amendment, Ms. Chaus provided
the Company with an option to further extend the Letter of Credit to July 31,
1996 (the "July Option"), subject to the consummation of the Company's
proposed public offering (see "-- Nautica License Agreement/Future Financing
Requirements"). In addition, in February 1995, Ms. Chaus provided a $5.0
million personal guarantee (the "Guarantee"), to be in effect during the
Amended Financing Agreement's three-year term.
In consideration of the February Increase/Extension, the Guarantee and the
September Extension, a special committee consisting of disinterested members
of the Board of Directors of the Company (the "Special Committee") authorized
the issuance, subject to approval of the stockholders of the Company at its
November 15, 1995 Annual Meeting of Stockholders, of
10
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
warrants to purchase an aggregate of 1,580,000 shares of Common Stock at
prices ranging between $4.05 and $6.75 per share. Because Ms. Chaus possesses
the power to vote more than 50% of the outstanding shares of Common Stock, Ms.
Chaus's affirmative vote in favor of the issuance of such warrants to her is
sufficient to approve such issuance without the vote of any other
stockholders. Ms. Chaus has advised the Company that she intends to vote all
of her shares in favor of such issuance. As a result, the Company reflected
the issuance of the warrants for the February Increase/Extension and the
Guarantee at June 30, 1995. The value of such warrants ($0.7 million) was
included as a charge to interest expense with a corresponding increase to
additional paid-in capital. Ms. Chaus received warrant compensation for her
provision of the Guarantee only through October 31, 1995. Thereafter, for each
three month period of the Guarantee, she will receive cash compensation of
$50,000. The issuance of the warrants for the September Extension will be
recorded in the second quarter of fiscal 1996 at a value of $0.2 million to be
included as a charge to interest expense with a corresponding increase to
additional paid-in capital. In the event the Company (upon a determination by
the Special Committee) exercises the July Option, Ms. Chaus will be entitled
to certain additional warrants (in an amount and upon terms to be determined
by the Special Committee in a manner consistent with past practices, and
subject to stockholder approval and receipt of a letter of a nationally
recognized investment banking firm as to the commercial reasonableness
thereof).
Issuance of Stock in Exchange for Debt
In September 1994, Josephine Chaus loaned $7.2 million to the Company in
exchange for subordinated promissory notes bearing interest at 12% per annum.
Proceeds of such cash infusion were used for costs and associated expenses
related to the signing of the Company's new Chief Executive Officer. In
November 1994, upon the request of the Special Committee, in order to provide
additional equity to the Company, to enhance the Company's balance sheet and
to accommodate BNYF, Josephine Chaus exchanged such subordinated promissory
notes, including accrued interest thereon of $0.2 million, for 1,914,500
shares of the Company's Common Stock (based upon a purchase price of $3.85 per
share).
Subordinated Debt
The Company had outstanding at September 30, 1995, $21.7 million of
subordinated notes payable to Josephine Chaus (the "Subordinated Notes"). In
connection with the Company's proposed public offering (see "--Nautica License
Agreement/Future Financing Requirements"), Josephine Chaus agreed to extend
the maturity date of the Subordinated Notes (which were to mature on July 1,
1996) to July 1, 1998, subject to the consummation of such offering, and to
October 1, 1996 if the offering is not consummated. The Company has been
unable to pay principal or interest, with certain exceptions, under the
Subordinated Notes as a result of covenants in the Amended Financing
Agreement. See Notes 3 and 4 to Notes to the Company's Condensed Consolidated
Financial Statements.
11
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
Nautica License Agreement/Future Financing Requirements
In September 1995, the Company entered into a license agreement (the "Nautica
License Agreement") with Nautica Apparel Inc. ("Nautica"), pursuant to which
the Company will arrange for the manufacture of, market, distribute and sell a
new women's career and casual sportswear line under the Nautica name. The
Nautica License Agreement runs through December 31, 1999 and is contingent
upon the Company raising a minimum of $10.0 million in equity capital by
December 31, 1995. Additionally, the Company is required to devote at least
$7.0 million to the fulfillment of the Company's obligations under the Nautica
License Agreement, including related capital expenditures. The Company's
obligations also include minimum royalty and advertising payments and the
construction of a separate showroom for the display of the Company's licensed
Nautica products.
The Company filed a Registration Statement on Form S-2 on October 10, 1995
with respect to a proposed underwritten public offering of 5,000,000 shares of
Common Stock (plus up to an additional 750,000 shares of Common Stock which
the underwriters thereof have an option to purchase to cover over-allotments,
if any). The Company anticipates that such offering will be consummated prior
to December 31, 1995, although there can be no assurance as to the successful
consummation of such offering or the timing thereof. The Company intends to
use approximately $7.0 million of the net proceeds from the offering to
develop and market the Company's licensed Nautica product line, and the
remaining net proceeds to support the growth of the Company's existing product
lines.
At September 30, 1995, the Company had a working capital deficiency of $13.7
million. The Company requires the availability of sufficient cash flow and
borrowing capacity to finance its existing product lines and to develop and
market its licensed Nautica product lines. The Company expects to satisfy such
requirements through cash flow from operations, its line of credit under the
Amended Financing Agreement, the proceeds of the proposed public offering,
and, in the near term, continued credit support from Josephine Chaus.
The Company will seek to satisfy its operating requirements without utilizing
continued credit support from Ms. Chaus, although there can be no assurance
that it will be successful in doing so. The Company has no understanding with
Ms. Chaus pursuant to which Ms. Chaus would extend the Letter of Credit beyond
July 31, 1996. If the proposed public offering is not consummated, the Company
would require a further extension of the Letter of Credit, or an alternative
source of financing, to satisfy its operating requirements after July 31,
1996. In addition, although BNYF historically has waived compliance with
certain covenants and permitted certain overadvances and has, pursuant to the
September Amendment, agreed to relax such covenants and permit specified
levels of overadvances through June 30, 1996, there can be no assurance that
it will continue to do so in the future. Moreover, growth of the Company's
existing product lines and/or the development of the Company's licensed
Nautica product line
12
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
could increase the amount of the potential shortfall in borrowing availability
after the current fiscal year. If the proposed public offering is not
consummated by December 31, 1995 and no alternative source of equity is raised
to satisfy the requirements under the Nautica license, Nautica would have the
right to terminate the Nautica License Agreement.
13
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Attached hereto as Exhibits are the following:
10.67 Agreement dated October 27, 1995
between the Company and Josephine
Chaus extending the due dates on
subordinated promissory notes.
27 Financial Data Schedule.
(b) The Company filed no reports on Form 8-K during the
quarter ended September 30, 1995.
14
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
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.
BERNARD CHAUS, INC.
(Registrant)
Date: October 31, 1995 By: /s/Josephine Chaus
------------------
JOSEPHINE CHAUS
Chairwoman of the Board and
Office of the Chairman
Date: October 31, 1995 By: /s/Andrew Grossman
------------------
ANDREW GROSSMAN
Chief Executive Officer and
Office of the Chairman
Date: October 31, 1995 By: /s/Wayne S. Miller
------------------
WAYNE S. MILLER
Executive Vice President -
Finance and Administration and
Chief Financial Officer
15
<PAGE>
BERNARD CHAUS, INC. AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit
Number Description Page
- -------- ------------ ----
10.67 Agreement dated October 27, 1995 between
the Company and Josephine Chaus extending
the due dates on subordinated promissory notes.
27 Financial Data Schedule.
16
JOSEPHINE CHAUS
October 27, 1995
Board of Directors
Bernard Chaus, Inc.
1410 Broadway
New York, NY 10018
Re: Subordinated Notes of Bernard Chaus, Inc. (the "Company")
Gentlemen:
Reference is made to the Subordinated Notes payable to me by the Company
which are set forth on Schedule A (the "Notes"), each of which become due and
payable on July 1, 1996. In order to facilitate the proposed underwritten
public offering by the Company of approximately 5,000,000 shares of the
Company's Common Stock (the "Public Offering"), by letter agreement dated
October 9, 1995 (the "Letter Agreement"), I agreed to extend the maturity date
of the Notes until July 1, 1998.
The Letter Agreement constituted an amendment to each of the Notes to
extend the due date thereof until July 1, 1998. The effectiveness of the
amendments to the Notes contained in the Letter Agreement was expressly
conditioned upon the consummation of the Public Offering. In the event that the
Public Offering is not consummated, in lieu of the agreements contained in the
Letter Agreement, the maturity date of the Notes shall extend to October 1,
1996.
Except as expressly modified herein, all of the provisions, terms and
conditions contained in the Notes, as they may have been previously amended,
shall remain in full force and effect.
Very truly yours,
\s\ Josephine Chaus
Josephine Chaus
Accepted and Agreed To:
BERNARD CHAUS, INC.
By: \s\ Wayne Miller
Name: Wayne Miller
Title: Executive Vice President - Finance
and Administration and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000793983
<NAME> BERNARD CHAUS, INC.
<MULTIPLIER> 1,000
<CURRENCY> US DOLLAR
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-1-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 217
<SECURITIES> 0
<RECEIVABLES> 33,002
<ALLOWANCES> 4,977
<INVENTORY> 22,083
<CURRENT-ASSETS> 51,233
<PP&E> 19,681
<DEPRECIATION> 17,435
<TOTAL-ASSETS> 54,022
<CURRENT-LIABILITIES> 64,896
<BONDS> 0
<COMMON> 211
0
0
<OTHER-SE> (32,871)
<TOTAL-LIABILITY-AND-EQUITY> (54,022)
<SALES> 48,885
<TOTAL-REVENUES> 48,885
<CGS> 38,141
<TOTAL-COSTS> 47,905
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,311
<INCOME-PRETAX> (331)
<INCOME-TAX> 76
<INCOME-CONTINUING> (407)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (407)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
