SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
FORM 10-Q
Quarterly Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended August 3, 1996
Commission file number 33-27126
PEEBLES INC.
Virginia 54-0332635
(State of Incorporation) (I.R.S. EmployerIdentification No.)
One Peebles Street
South Hill, Virginia 23970-5001 (804) 447-5200
(Address of principal executive offices) (Telephone Number)
Securities registered pursuant to Section 12 (b) of the Act: NONE
Securities registered pursuant to Section 12 (g) of the Act: NONE
Indicate by check (x) 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_____.
As of August 3, 1996 1,000 shares of common stock of Peebles Inc.
were outstanding.
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
CONDENSED BALANCE SHEET
PEEBLES INC.
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
August 3, 1996 February 3, 1996 July 29, 1995
(Unaudited) (Unaudited)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 48 $ 193 $ 52
Accounts receivable, net 27,246 28,534 24,729
Merchandise inventories 49,793 42,684 44,273
Prepaid expenses 1,002 386 358
Refundable income taxes -- -- 1,350
Other 466 62 88
------ -------- --------
TOTAL CURRENT ASSETS 78,555 71,859 70,850
PROPERTY AND EQUIPMENT, net 35,566 32,248 28,987
BUILDINGS UNDER CAPITAL LEASES, net 978 1,060 1,135
OTHER ASSETS
Excess of cost over net assets
acquired, net 53,135 51,129 51,162
Deferred financing costs 3,219 3,659 3,813
Other 6,045 5,598 6,143
------ ------ ------
62,399 60,386 61,118
------ ------ ------
$177,498 $165,553 $162,090
======== ======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $9,614 $9,957 $8,460
Accrued compensation and other
expenses 3,491 3,955 5,468
Income taxes payable 1,037 855 --
Deferred income taxes 2,788 2,788 1,781
Current maturities of long-term
debt 8,383 5,377 7,050
Other 455 532 202
------- -------- --------
TOTAL CURRENT LIABILITIES 25,768 23,464 22,961
LONG-TERM DEBT 78,975 69,774 72,375
LONG-TERM CAPITAL LEASE
OBLIGATIONS 1,507 1,627 1,764
DEFERRED INCOME TAXES 6,350 6,350 5,224
STOCKHOLDERS' EQUITY
Common stock--par value $.10 per
share, authorized 5,000,000
shares, issued and outstanding
1,000, shares , respectively 1 1 1
Additional capital 59,307 59,307 59,307
Retained earnings: accumulated
from May 27, 1995 5,590 5,030 59,307
------- -------- --------
64,898 64,338 59,766
------- -------- --------
$177,498 $ 165,553 $162,090
======== ========= ========
</TABLE>
See notes to condensed financial statements
<PAGE>
CONDENSED STATEMENT OF OPERATIONS
PEEBLES INC.
(dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three- Two- One- Six- Two- Four-
Month Month Month Month Month Month
Period Period Period Period Period Period
Ended Ended Ended Ended Ended Ended
August 3, July 29, May 27, August July 29, May
1996 1995 1995 3, 1996 1995 27,1995
(Prior to (Prior to
1995 1995
Acquisition) Acquisition)
<S> <C> <C> <C> <C> <C> <C>
NET SALES $42,366 $26,318 $12,645 $80,421 $26,318 $49,163
COSTS AND EXPENSES
Cost of sales 24,805 15,158 8,350 47,412 15,158 29,935
Selling, general and
administrative 12,984 7,667 3,800 24,525 7,667 14,639
expenses
Stock option settlement -- -- 3,089 -- -- 3,089
Depreciation and
amortization 1,820 1,178 596 3,544 1,178 2,349
------- ------- ------- -------- -------- ---------
39,609 24,003 15,835 75,481 24,003 50,012
------- ------- ------- -------- -------- ---------
OPERATING INCOME (LOSS) 2,757 2,315 (3,190) 4,940 2,315 (849)
OTHER INCOME 91 79 -- 145 79 77
INTEREST EXPENSE 2,272 1,630 357 4,152 1,630 1,414
------- ------- ------- -------- -------- ---------
INCOME (LOSS) BEFORE
INCOME TAXES (BENEFIT) 576 764 (3,547) 933 764 (2,186)
INCOME TAXES (BENEFIT)
Federal, state and
deferred 230 306 (1,399) 373 306 (874)
------- ------- ------- -------- -------- ---------
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM 346 458 (2,148) 560 458 (1,312)
------- ------- ------- -------- -------- ---------
EXTRAORDINARY ITEM-DEBT
REFINANCE -- -- (216) -- -- (216)
------- ------- ------- -------- -------- ---------
NET INCOME (LOSS) $ 346 $458 $(2,364) $ 560 $ 458 $ (1,528)
======= ======= ======== ======== ======== =========
EARNINGS (LOSS) PER
SHARE $ 346 $458 $ (.80) $ 560 $ 458 $ (.52)
======= ======= ======== ======== ======== =========
Average common stock and
common stock equivalents 1,000 1,000 2,942,785 1,000 1,000 2,942,785
outstanding
======= ======= ======== ======== ======== =========
</TABLE>
See notes to condensed financial statements
<PAGE>
CONDENSED STATEMENT OF CASH FLOWS
PEEBLES INC.
(dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six-Month
Period Ended
August 3, July 29,
1996 1995
<S> <C> <C>
OPERATING ACTIVITIES
Net Income (loss) $ 560 $ (1,070)
Adjustments to reconcile net income (loss)
to net cash provided
by operating activities:
Depreciation 2,265 2,162
Amortization 1,739 1,570
Provision for doubtful accounts 509 336
Extraordinary loss -- 216
LIFO Reserve adjustment 50 833
Changes in operating assets and liabilities
net of effects from acquisition adjustments:
Accounts receivable 3,915 3,747
Merchandise inventories (3,471) (3,505)
Accounts payable (343) (262)
Other assets and liabilities (762) (2,505)
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 4,462 1,522
INVESTING ACTIVITIES
Acquisition of Peebles Inc. -- (90,642)
Acquisition of Carlisle Retailers, Inc. (9,769) --
Acquisition Fees - Carlisle Retailers, Inc. (1,780) --
Purchase of property and equipment (5,342) (3,022)
Other 77 --
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (16,814) (93,664)
FINANCING ACTIVITIES
Proceeds from revolving facilities 123,913 155,777
Reduction in revolving facilities and long-
term debt (121,919) (151,965)
Proceeds from revolving facilities-
Acquisition of Carlisle Retailers, Inc 10,213 --
Proceeds from 1995 Acquisition debt -- 76,390
Retirement of pre-1995 Acquisition debt -- (40,917)
Financing and acquisition fees, 1995 Acquisition -- (6,807)
Proceeds from equity -- 59,308
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 12,207 91,786
--------- ---------
DECREASE IN CASH AND CASH EQUIVALENTS (145) (356)
Cash and cash equivalents beginning of period 193 408
--------- ---------
CASH AND CASH EQUIVALENTS END OF PERIOD $ 48 $ 52
========= =========
See notes to condensed financial statements
</TABLE>
<PAGE>
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
PEEBLES INC.
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Common Stock
Par Additional Retained
Shares Value Capital Earnings
<S> <C> <C> <C> <C>
Balance January 28, 1995 2,942,690 $ 294 $64,390 $17,550
Net (loss) -- -- -- (1,528)
--------- ---- ------- --------
Balance May 27, 1995, prior to
1995 Acquisition 2,942,690 294 64,390 16,022
1995 Acquisition adjustments (2,941,690) (293) (5,083) (16,022)
--------- ----- ------- --------
Balance May 27, 1995 following
1995 Acquisition 1,000 1 59,307 --
Net Income -- -- -- 458
--------- ----- ------- --------
Balance July 29, 1995 1,000 1 59,307 458
Net Income -- -- -- 4,572
--------- ---- ------ --------
Balance February 3, 1996 1,000 1 59,307 5,030
Net Income -- -- -- 560
--------- ---- ------ --------
Balance August 3, 1996 1,000 $ 1 $59,307 $ 5,590
========= ====== ======= =======
See notes to condensed financial statements
</TABLE>
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS
PEEBLES INC.
August 3, 1996
(dollars in thousands, except per share amounts)
NOTE A_BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with
instructions to Form 10-Q and Article 10 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 and recurring accruals)
considered necessary for a fair presentation have been included.
As a result of the 1995 Acquisition, the financial statements and
related footnote amounts for periods prior to the acquisition are
not comparable to the current period. In addition, the operating
results for the current fiscal periods are not necessarily
indicative of the results that may be expected for the fiscal
year ended February 1, 1997, due to the seasonal nature of the
business of Peebles. For further information, refer to the
financial statements and footnotes thereto included in Peebles'
annual report on Form 10-K for the fiscal year ended February 3,
1996.
NOTE B_ACQUISITION OF PEEBLES INC.
1995 Acquisition (the "1995 Acquisition"): On June 9, 1995, PHC
Retail Holding Company ("PHC Retail") acquired the entire equity
interest of Peebles Inc. ("Peebles" or the "Company") for
approximately $136 million, which included acquisition related
expenses of approximately $5.6 million and the refinancing of
existing debt. PHC Retail is an affiliate of Kelso & Company
("Kelso"), an investment firm located in New York, New York. PHC
Retail has no significant assets other than the shares of Peebles
common stock, $.10 par value (the "Common Stock") and had no
operations prior to the 1995 Acquisition.
The 1995 Acquisition has been accounted for using the purchase
method of accounting with an effective date of May 27, 1995, and
accordingly, a new accounting basis was begun. The 1995
Acquisition cost has been allocated to the assets and liabilities
of Peebles as follows:
Cash purchase price $135,558
Pre-acquisition debt refinanced (40,917)
Adjusted purchase price 94,641
Tangible net assets at historical cost (63,840)
Incremental acquisition debt 35,474
Purchase price to be allocated 66,275
Purchase price allocations:
Merchandise inventories $7,436
Buildings 1,133
Land 1,411
Beneficial leaseholds 3,232
Pension asset 533
------
13,745
-------
Excess of cost over net assets acquired $ 52,530
The excess of cost over net assets acquired is being amortized on
a straight-line basis over 25 years beginning May 27, 1995.
Beneficial leaseholds are amortized on a straight-line basis over
the composite useful lives of the related leases. Buildings are
amortized on a straight-line basis over the their estimated
useful lives.
As a result of the 1995 Acquisition, the Company recorded an
extraordinary loss, net of tax, of $216 related to the write-off
of financing costs capitalized in periods prior to the 1995
Acquisition.
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)
PEEBLES INC.
NOTE C_ACQUISITION OF CARLISLE RETAILERS, INC.
On May 20, 1996, a merger (the "CRI Merger") was consummated
whereby Carlisle Retailers, Inc. ("Carlisle"), an Ohio
corporation, became a wholly owned subsidiary of Peebles Inc.
The CRI Merger provides Peebles with five store locations in
northeastern Ohio, the Company's first Ohio stores, and two store
locations in northwestern Pennsylvania. The $11,549 purchase
price included $6,311 to common shareholders of Carlisle, $3,458
to a financial services company for the majority of the
outstanding Carlisle proprietary credit card accounts receivable
portfolio, and $1,780 in acquisition expenses. The acquisition
was funded primarily by proceeds from the Senior Revolving
Facility.
The CRI Merger has been accounted for using the purchase method
of accounting. The allocation of the purchase price is as
follows:
Purchase price $11,549
Tangible net assets acquired:
Accounts receivable, net $3,330
Merchandise inventories, net 4,038
Fixed assets, net 244
Other assets 1,702
Operating liabilities (849)
------
Total tangible net assets 8,465
------
Excess of cost over net assets acquired $3,084
The excess of cost over net assets acquired is being amortized
over a twenty-five year period beginning May 20, 1996.
NOTE D_ACCOUNTS RECEIVABLE
Accounts receivable are shown net of $1,087, $960 and $930
representing the allowance for uncollectible accounts at August
3, 1996, February 3, 1996 and July 29, 1995, respectively. As a
service to its customers, the Company offers credit through the
use of its own charge card, certain major credit cards and a
layaway plan. The Peebles' customer typically resides in the
local community immediately surrounding the store location.
Peebles stores serve these local customers in Virginia, Maryland,
North Carolina, South Carolina, Tennessee, Kentucky, Delaware,
New Jersey, Pennsylvania, New York and Ohio. The Company does
not require collateral from its customers.
NOTE E_MERCHANDISE INVENTORIES
Merchandise inventories are accounted for by the retail inventory
method applied on a last in, first out ("LIFO") basis. The 1995
Acquisition was accounted for using the purchase method of
accounting with an effective date of May 27, 1995. Consistent
with the purchase method of accounting, the LIFO reserve was
eliminated, the recorded value of merchandise inventories was
increased to fair value (the "Fair Value Adjustment") and a new
LIFO base year was established at May 27, 1995. Merchandise
inventories consisted of the following:
August 3, February 3, July 29,
1996 1996 1995
Merchandise inventories at
lower of cost (FIFO) or market $ 43,121 $ 35,662 $ 36,837
Fair Value Adjustment 7,436 7,436 7,436
LIFO reserve 138 449 --
-------- --------- --------
Merchandise inventories at
LIFO cost 50,695 43,547 44,273
Market reserve (902) (863) --
-------- --------- --------
Merchandise inventories at
lower of cost or market $ 49,793 $ 42,684 $ 44,273
======== ========= ========
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)
PEEBLES INC.
NOTE F_LEASES
The Company leases substantially all of its store locations under
capital and operating leases with initial terms ranging from 1 to
25 years and renewal options ranging from 1 to 5 years expiring
at various dates through 2033. The Company has signed or
obtained noncancelable operating leases for fourteen new store
locations opening in the fiscal year ended February 1, 1997.
Included are i) five stores in Ohio and two stores in
Pennslyvania obtained in the CRI Merger; ii) two stores in
Alabama and one store in Tennessee to which Peebles has entered
into a purchase agreement, effective September 9, 1996, with Belk
Companies; and iii) four new Peebles stores in North Carolina,
New York, Alabama and Tennessee, two of which opened August 22,
1996 and the others opening in October and November of the
current year. The annual aggregate base rent for these locations
is approximately $1.12 million with initial lease terms ranging
from 1 to 21 years.
NOTE G_INCOME TAXES
Differences between the effective rate of income taxes and the
statutory rate arise principally from the state income taxes and
non-deductible amortization related to certain purchase
accounting adjustments.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(dollars in thousands, except per share amounts)
The following management's discussion and analysis provides
information with respect to the results of operations for the
three-month period ("Fiscal Quarter") and six-month period ended
August 3, 1996 in comparison with the three-month period and six-
month period ended July 29, 1995. The 1995 Acquisition has been
accounted for using the purchase method of accounting.
Accordingly, a new basis of accounting was begun on May 27, 1995.
As a result, financial statements for periods prior to the 1995
Acquisition are not comparable to periods subsequent thereto.
The three-month period ended July 29, 1995 includes amounts both
prior and subsequent to the 1995 Acquisition, and as a result,
certain operating components of that Fiscal Quarter discussed
below have been significantly affected by the acquisition
transactions, purchase accounting adjustments or a combination
thereof.
Net sales for the three-month period ended totaled $42,366, an
8.7% increase over the $38,963 for the three-month period ended
July 29, 1995. For the six-month periods ended August 3 1996 and
July 29, 1995, net sales were $80,421 and $75,481, respectively,
an increase of 6.5%. In the twelve-month period subsequent to
July 29, 1995, the Company opened thirteen new store locations,
including the seven Carlisle store locations acquired in the CRI
Merger, effective May 20, 1996. These new stores accounted
entirely for the increases in net sales. Net sales at comparable
stores were $37,088 in the current Fiscal Quarter, down $729 or
1.9% in comparison to the prior year Fiscal Quarter, where
comparable store sales were $37,817. Comparable store sales in
July were down $728, or 6.9% , representing the entire decrease
for the second Fiscal Quarter. In the current year six-month
period, comparable store sales were $72,768, down $1,012 or 1.4%
in comparison to the prior year six month period ended July 29,
1995. Although management anticipates apparel sales to remain
soft throughout the third and fourth Fiscal Quarters, the July
decrease in consumer spending on apparel was considered unusual
and is not expected to be indicative of a significant downward
trend. Comparable store sales are expected to recover slightly
through the third and fourth Fiscal Quarters to finish the
current fiscal year flat with the prior fiscal year. The
Company's sales growth in the current fiscal year will therefore
come from the new store locations.
Cost of sales as a percentage of net sales for the three-month
periods ended August 3, 1996 and July 29, 1995 were 58.5% and
60.3%, respectively. For the comparable six-month periods, the
cost of sales as a percentage of net sales was 59.0% and 59.7%,
respectively. These decreases are primarily attributable to LIFO
reserve adjustments, and the stability of the cost of sales
during periods of new store growth is a result of consistent
inventory management and the Company's less promotional pricing
strategy. With a new LIFO base year established at May 27, 1995,
the Fiscal Quarter ended July 29, 1995 was impacted significantly
by an increase in the LIFO reserve. Without the impact of LIFO,
cost of goods sold as a percentage of net sales would have been
58.6%. for both the three-month period and six-month period ended
July 29, 1995. At the thirteen new store locations opened
subsequent to July 29, 1995 cost of sales as a percentage of net
sales was 62.7% in the six-month period ended August 3, 1996.
Typically, new stores show a higher cost of sales percentage,
resulting primarily from opening promotions and adjustments to
inventory levels in response to actual sales versus planned.
However, even with this significant number of new store
locations, cost of sales has remained stable overall as inventory
levels were in line with plans throughout the six-month period
ended August 3, 1996, and the Company remained committed to its
strategy of offering consistent fair pricing every day rather
than high-low promotions.
Selling, general and administrative expenses ("SG&A"), including
depreciation and amortization, was 34.9% as a percentage of net
sales for both the three-month and six-month periods ended August
3, 1996. In the prior year comparable three-month and six-month
periods ended July 29, 1995 SG&A was 34.0% and 34.4%,
respectively, as a percentage of net sales. This increase is
primarily attributed to the additional expenses incurred in the
opening of thirteen new store locations, including the seven
stores acquired in the CRI Merger. New stores typically have
higher occupancy, payroll, and advertising expenses as a
percentage of net sales as compared to mature stores. The
Company has been successful in controlling expenses during growth
periods, and expects to realize efficiencies through economies of
scale in succeeding Fiscal Quarters. During the Fiscal Quarter
ended July 29, 1995, approximately $3.1 million was paid to
settle the 1993 Stock Option Plan as a pre-requisite to closing
the 1995 Acquisition. This non-recurring expense, considered
additional compensation expense, is included in the one-month
period ended May 27, 1995.
Interest expense for the Fiscal Quarters ended August 3, 1996 and
July 29, 1995 was $2,272 and 1,987, respectively, and $4,152 and
$3,044, respectively for the six-month periods then ended. These
increases result primarily from the increased debt assumed in
connection with both the 1995 Acquisition and the CRI Merger.
The 1995 Credit Agreement increased outstanding borrowings at the
date of the 1995 Acquisition by approximately $35.5 million. The
Company increased the outstanding balance on the Senior Revolving
Facility by approximately $10.2 million to consummate the CRI
Merger.
Income tax expense totaled $230 and $373 for the three-month and
six-month periods ended August 3, 1996, respectively, compared to
an income tax benefit of $1,093 and $568, respectively, for the
three-month and six-month periods ended July 29,1995. The
effective income tax and benefit rates for the respective periods
differ from the statutory rate primarily due to state income
taxes and nondeductible amortization related to certain purchase
accounting adjustments.
The Company recorded an extraordinary loss, net of tax, of $216
in the one-month period ended May 27, 1995 related to the write-
off of unamortized financing costs related to the pre-1995
Acquisition Credit Agreement.
As a result of the changes discussed above, the Company had net
income of $346 and $560 for the three and six month periods ended
August 3, 1996, respectively. In the prior year comparable
periods ended July 29, 1995, the Company showed net losses of
$1,906 and $1,070, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary cash requirements are for capital
expenditures in connection with both the Company's new store
expansion and remodeling program and for working capital needs.
The Company's primary sources of funds are cash flow from
continuing operations, borrowings under the Credit Agreement and
trade accounts payable. The Company's inventory levels typically
build throughout the fall, peaking during the Christmas selling
season, while accounts receivable peak during December and
decrease during the first quarter. Capital expenditures
typically occur evenly throughout the first three quarters of
each year.
For the six-month periods ended August 3, 1996 and July 29, 1995,
operating activities provided cash of $4,462 and $1,522,
respectively. In the prior year six-month period, cash was used
to pay $3,089 in settlement of the 1993 Stock Option Plan. In
both the current year and prior year six-month periods, net
operating cash was produced as net collections of accounts
receivable were greater than net increase in merchandise
inventories. The Company had working capital of $52,787 and
$47,889 at August 3, 1996 and July 29, 1995, respectively. The
increase is due primarily to merchandise inventory and accounts
receivable acquired in the CRI Merger. Net cash provided by
operations was adversely affected by the increased interest
expense resulting from incremental debt assumed to facilitate
both the 1995 Acquisition and the CRI Merger.
Net cash used in investing activities, exclusive of the CRI
Merger and 1995 Acquisition, was $5,265 and $3,022 for the six-
month periods ended August 3, 1996 and July 29, 1995,
respectively. This cash was used primarily for capital
expenditures. The increase in the current year is primarily
attributable to the expansion of the distribution center in South
Hill and new cash registers for the stores acquired in the CRI
Merger. The Company expects capital expenditures to total
approximately $11.7 million in fiscal 1996, with some $2.0
million allocated to the distribution center. New store openings,
will also require funding of additional working capital of which
the Company must depend on internally generated funds and
borrowings under the New Credit Agreement.
The CRI Merger provided the Company with five store locations in
northeastern Ohio and two stores in northwestern Pennsylvania.
The Ohio locations are the Company's first stores in Ohio. These
stores began operation as Carlisle/Peebles on May 20, 1996 and
increased the gross square footage of the Company by
approximately 180,000 square feet. In June 1996, the Company
signed a purchase agreement with the Belk Companies ("Belk") to
allow Peebles to purchase two stores in Alabama and one store in
Tennessee from Belk, and sell one store in Virginia to Belk. The
Company paid $1.5 million for the acquired inventory and fixtures
and received $.4 million for the fixtures remaining in the store
sold. The agreement was effective September 9, 1996, and the
stores will re-open as Peebles stores on September 13, 1996.
These stores will be the Company's first locations in Alabama.
During the third and early fourth fiscal quarters of the current
year, the Company will open four new Peebles stores in Edenton,
North Carolina (17,000 gross square feet); 2) Rochester, New York
(25,000); 3) Albertville, Alabama (25,000); and 4). Winchester,
Tennessee (21,000). Based on historical experience, the Company
estimates that the cost of opening a new store will include
capital expenditures of approximately $425 for leasehold
improvements and fixtures and approximately $425 for initial
inventory, approximately one-third of which is normally financed
through vendor credit. Accounts receivable for new stores
typically build to 15% of net sales or approximately $300 within
24 months of the store opening.
The Company finances its operations, capital expenditures, and
debt service payments with funds available under the Senior
Revolving Facility. The maximum amount available under the
Senior Revolving Facility is $65 million less amounts outstanding
under letters of credit. The actual amount available is
determined by an asset based formula, adjusted for seasonal
working capital requirements. The Company believes the cash flow
generated from operating activities together with funds available
under the New Revolving Facility will be sufficient to fund the
investing activities and the required payments under the New
Credit Agreement.
<PAGE>
PART II
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
27. Financial Data Schedule.
b. Reports on Form 8-K
None
<PAGE>
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.
PEEBLES INC.
Date: September 12, 1996 By /s/ Michael F. Moorman
----------------------------
Michael F. Moorman
President and Chief
Executive Officer (Principal
Executive Officer)
By /s/ E. Randolph Lail
--------------------------
E. Randolph Lail
Chief Financial Officer, Senior
Vice President-Finance,
Treasurer and Secretary
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> FEB-01-1997 FEB-01-1997
<PERIOD-END> AUG-03-1996 AUG-03-1996
<CASH> 48 48
<SECURITIES> 0 0
<RECEIVABLES> 28,333 28,333
<ALLOWANCES> 1,087 1,087
<INVENTORY> 49,793 49,793
<CURRENT-ASSETS> 78,555 78,555
<PP&E> 56,995 56,995
<DEPRECIATION> 21,429 21,429
<TOTAL-ASSETS> 177,498 177,498
<CURRENT-LIABILITIES> 25,768 25,768
<BONDS> 80,482 80,482
<COMMON> 1 1
0 0
0 0
<OTHER-SE> 64,897 64,897
<TOTAL-LIABILITY-AND-EQUITY> 177,498 177,498
<SALES> 42,366 80,421
<TOTAL-REVENUES> 42,366 80,421
<CGS> 24,805 47,412
<TOTAL-COSTS> 39,609 75,481
<OTHER-EXPENSES> (91) (145)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 2,272 4,152
<INCOME-PRETAX> 576 933
<INCOME-TAX> 230 373
<INCOME-CONTINUING> 346 560
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 346 560
<EPS-PRIMARY> 346 560
<EPS-DILUTED> 346 560
</TABLE>
