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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
October 11, 1996
PROFFITT'S, INC.
(Exact name of registrant as specified in its charter)
Tennessee 0-15907 62-0331040
(State of (Commission File (I.R.S. Employer
incorporation) Number) Identification No.)
P.O. Box 9388
Alcoa, Tennessee 37701
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (423) 983-7000
N/A
(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets
On October 11, 1996, the registrant, Proffitt's, Inc., a
Tennessee corporation ("Proffitt's), completed a merger with
Parisian, Inc, an Alabama corporation ("Parisian") in which a
wholly owned subsidiary of Proffitt's was merged with and into
Parisian, with Parisian surviving the merger as a wholly owned
subsidiary of Proffitt's. In connection with the merger, each
outstanding common share $0.01 par value of Parisian was converted
into a right to receive $15.00 in cash and .4006 shares of the
common stock, $.10 par value, of Proffitt's (the "Proffitt's Common
Stock"), for an aggregate consideration of approximately $110
million in cash and approximately 2.9 million shares of Proffitt's
Common Stock.
Parisian is a regional specialty department store company
which operates 38 stores in Alabama, Florida, Georgia, Indiana,
Michigan, Ohio, South Carolina, and Tennessee.
In connection with the merger, Proffitt's issued its Guaranty
of the $125 million in outstanding principal amount of the 9 7/8%
Senior Subordinated Notes due 2003 of Parisian (the "Notes"),
pursuant to a Supplemental Indenture, dated as of October 11, 1996
among Proffitt's, Parisian and AmSouth Bank of Alabama, as trustee.
Proffitt's paid to each holder of a Note consenting to approval of
the Supplemental Indenture, $10.00 per $1,000 of principal amount
of such holder's Notes for an aggregate payment of approximately
$1.2 million.
Funds for the cash consideration paid to Parisian
shareholders, the consent payments to holders of Notes and certain
expenses and investment advisory fees in the aggregate amount of
approximately $4.3 million incurred in connection with the merger
were provided by borrowing under a $275 million credit facility
pursuant to a Credit Facilities and Reimbursement Agreement dated
October 11, 1996, by and among Proffitt's, certain lenders, and
NationsBank of Texas, National Association.
Item 7. Financial Statements and Exhibits
7(a). The audited financial statements of Parisian required
by this Item have been previously reported (as defined in Rule 12b-2 under
the Securities Exchange Act of 1934). The following
unaudited financial statements of Parisian included herein have
been derived from the financial statements provided in Parisian's
Quarterly Report on Form 10-Q for the quarter ended August 3, 1996:
Consolidated Balance Sheet as of August 3, 1996
Consolidated Statements of Operations for the periods from
January 29, 1995 through July 29, 1995 and February
4, 1996 through August 3, 1996
Consolidated Statements of Changes in Shareholders' Equity for
the periods from January 29,1995 through July 29, 1995
and February 4, 1996 through August 3, 1996
Consolidated Statements of Cash Flows for the periods from
January 29, 1995 through July 29, 1995 and February 4,
1996 through August 3, 1996
Notes to Consolidated Financial Statements
7(b). The pro forma statement of income for the fiscal
year ended February 3, 1996 required by this Item has been
previously reported. The following pro forma financial information
is included herein:
Pro Forma Condensed Combined Income Statement (Unaudited) For
the Six Months Ended August 3, 1996
Notes to Pro Forma Condensed Combined Income Statement
Pro Forma Condensed Combined Balance Sheet (Unaudited) as of
August 3, 1996
Notes to Pro Forma Condensed Combined Balance Sheet
7(c). The following exhibits are furnished as required by
Item 7(c):
Exhibit
Number
Description
2* Agreement and Plan of Merger dated July 8, 1996, among
Proffitt's, Inc., Casablanca Merger Corp. and Parisian,
Inc. (Incorporated by reference to Exhibit 2 to the
Registrant's Current Report on Form 8-K filed July 18,
1996).
4.1* Credit Facilities and Reimbursement Agreement by and
among Proffitt's, Inc., certain lenders and NationsBank
of Texas, National Association, as Agent.
4.2* Registration Rights Agreement (incorporated by
reference to Appendix III to the prospectus dated
August 16, 1996, included in the Registrant's
Registration Statement on Form S-4, Reg. No. 333-09043).
4.3* Form of Supplemental Indenture (incorporated by
reference to Exhibit 4(d) to the Registrant's
Registration Statement on Form S-3, Reg. No. 333-09941).
___________________________
* Previously filed
[SPACE INTENTIONALLY LEFT BLANK]
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 hereunto duly authorized.
PROFFITT'S, INC.
Date: December 16, 1996
By: /s/ R. Brad Martin
R. Brad Martin, Chairman of the
Board and Chief Executive Officer
<TABLE>
<CAPTION>
Parisian, Inc. and Subsidiaries
Consolidated Balance Sheet (Unaudited)
August 3, 1996
<S> <C>
ASSETS
Cash and cash equivalents $ 996,881
Restricted cash and short term investments 1,860,000
Accounts receivable, net 31,933,816
Merchandise inventories 147,083,285
Prepaid expenses 8,450,984
Deferred income taxes 3,668,660
Federal and state income tax receivable 3,531,082
------------------
Total current assets 197,524,708
Property and equipment, less accumulated depreciation
and amortization 72,175,978
Goodwill, net 59,334,112
Deferred financing costs, net 3,309,739
Other 11,923,914
------------------
Total assets $ 344,268,451
===========
LIABILITIES
Short-term debt, including current portion of long-term debt $ 3,031,800
Accounts payable 44,040,585
Accrued store rent 1,314,336
Sales tax payable 5,460,444
Other 12,308,667
------------------
Total current liabilities 66,155,832
Long-term debt, less current portion above 158,179,900
Deferred income taxes 8,287,214
Store opening reimbursements 27,202,044
Other 3,542,100
------------------
Total liabilities 263,367,090
------------------
SHAREHOLDER'S EQUITY
Convertible preferred stock, par value $.01 per share, 12,000,000 shares, none issued
Common stock, par value $.01 per share, authorized 65,000,000 shares, issued and
outstanding 7,355,846 shares 73,558
Paid-in capital 87,959,792
Accumulated deficit (7,131,989)
-----------------
Total shareholders' equity 80,901,361
-----------------
Total liabilities and shareholders' equity $ 344,268,451
===========
See notes to unaudited consolidated financial statements
</TABLE>
<TABLE>
<CAPTION>
Parisian, Inc. and Subsidiaries
Consolidated Statements of Operations (1)
(Unaudited)
For the period from:
-----------------------------
January 29, February 4,
1995 1996
through through
July 29, 1995 August 3, 1996
------------------------------------
<S> <C> <C>
Net sales, including lease departments
$ 288,552,429 $ 307,954,521
Costs and expenses:
Cost of sales 176,540,248 192,560,187
Selling, general and administrative expenses 76,815,462 80,745,008
Other operating expenses:
Property and equipment rentals 14,006,873 15,376,770
Depreciation and amortization 6,533,587 5,896,682
Taxes other than income taxes 6,819,942 6,958,069
---------------- ----------------
Operating Income 7,836,317 6,417,805
Other income (expense):
Finance charge income 3,529,729 4,196,543
Interest expense (8,876,993) (8,505,999)
Other income , net 1,182,599 276,777
---------------- ----------------
Income before provision for income taxes 3,671,652 2,385,126
Provision for income taxes 1,766,590 1,414,602
---------------- ----------------
Net income $ 1,905,062 $ 970,524
=========== ==========
Net income per common and common equivalent share $ 0.26 $ 0.13
=========== ==========
Weighted average common and common equivalent shares 7,355,846 7,355,846
=========== ==========
See notes to unaudited consolidated financial statements
</TABLE>
<TABLE>
<CAPTION>
Parisian, Inc. and Subsidiaries
Consolidated Statement of Changes in Shareholders' Equity (Unaudited)
For the periods from January 29, 1995 through July 29, 1995
and February 4, 1996 through August 3, 1996
Total
Common Paid-In AccumulatedShareholders'
Stock Capital Deficit Equity
------------- ------------- ------------------------
<S> <C> <C> <C> <C>
Balance, January 29, 1995 $ 73,558 $ 87,959,792 $ (16,880,517) $ 71,152,833
Net loss 1,905,062 1,905,062
--------------- ------------------------------ ---------------
Balance, July 29, 1995 $ 73,558 $ 87,959,792 $ (14,975,455) $ 73,057,895
========= ========== ========== =========
Balance, February 4, 1996 $ 73,558 $ 87,959,792 $ (8,102,513) $ 79,930,837
Net income 970,524 970,524
--------------- ------------ ------------- ------------
Balance, August 3, 1996 $ 73,558 $ 87,959,792 $ (7,131,989) $ 80,901,361
========= ========= ========== =========
See notes to unaudited consolidated financial statements
</TABLE>
<TABLE>
<CAPTION>
Parisian, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
For the period from:
--------------------------------
January 29, February 4,
1995 1996
through through
July 29, 1995 August 3, 1996
-------------------- ------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,905,062 $ 970,524
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 6,533,587 5,895,950
Amortization of deferred financing costs 535,641 377,871
Provision for losses on accounts receivable 1,591,688 2,350,601
Gain on sale of property and equipment (930,393) (2,900)
Deferred compensation 99,046 101,151
Change in assets and liabilities:
(Increase) decrease in:
Accounts receivable (1,614,020) 4,921,197
Merchandise inventory (13,166,319) (4,038,167)
Prepaid expenses (1,861,582) (3,075,642)
Other assets (2,271,739) (643,835)
Increase (decrease) in:
Accounts payable 5,477,887 1,884,500
Accrued store rent 138,661 (528,347)
Federal and state income taxes payable 3,840,940 (4,716,031)
Sales tax payable (847,361) (1,016,030)
Deferred income taxes 30,000 120,000
Other liabilities 1,363,407 1,108,284
----------------- ----------------
Total adjustments (1,080,557) 2,738,602
----------------- ----------------
Net cash provided by operating activities 824,505 3,709,126
----------------- ----------------
Cash flows from investing activities:
Decrease in restricted cash and short-term investments 410,000 160,000
Proceeds from sale of property and equipment 1,587,620 2,900
Increase in cash value of life insurance (180,000) (180,000)
Capital expenditures (675,927) (3,426,020)
Store opening reimbursements 6,271,837 394,604
--------------- ---------------
Net cash provided by (used in)
investing activities 7,413,530 (3,048,516)
----------------- ----------------
Cash flows from financing activities:
Borrowings under revolving credit agreements 12,000,000
Payments under revolving credit agreements (14,000,000)
Principal payments of long-term debt (5,326,775) (1,521,202)
Payment of financing costs (223,817) (1,068)
---------------- ----------------
Net cash used in investing activities (7,550,592) (1,522,270)
----------------- ----------------
Net increase (decrease) in cash and cash equivalents 687,443 (861,660)
Cash and cash equivalents, beginning of period 394,377 1,858,541
---------------- ----------------
Cash and cash equivalents, end of period $ 1,081,820 $ 996,881
========== ==========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 8,581,398 $ 8,106,643
========== ==========
Income taxes $ 1,260,710 $ 6,563,175
========== ==========
See notes to unaudited consolidated financial statements
</TABLE>
Parisian, Inc. and Subsidiaries
Notes to Unaudited Consolidated Financial Statements
For the period from February 4, 1996 to August 3, 1996
(1) In Management's opinion, all adjustments are included to
fairly present quarterly results and all such adjustments are
of a normal and recurring nature. The results of the interim
periods are not necessarily indicative of the results for a
full year's operations.
(2) Statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation was issued during
1995. Parisian, Inc. and its subsidiaries (the "Company")
anticipates that the adoption of this accounting standard
during the 1996 fiscal year will not be material to its
financial condition. Statement of Financial Accounting
Standards No. 125, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities was issued
during 1996. The Company anticipates that the adoption of
this accounting standard during the fourth quarter of the 1996
fiscal year will not be material to its financial condition.
<TABLE>
<CAPTION>
Pro Forma Condensed Combined Income Statement (Unaudited)
For The Six Months Ended August 3, 1996
(in Thousands, Except Per Share Amounts)
Pro Forma
Acquisition Pro Forma
Proffitt's Parisian Adjustments(7) Total
----------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
Net sales $568,277 $307,954 $876,231
Costs and expenses:
Cost of sales 366,624 192,560 500 (1) 559,684
Selling, general and administrative expenses 141,485 80,745 (700)(1) 221,530
Other operating expenses 48,081 28,232 (900)(2) 76,513
1,100 (3)
Merger, restructuring and integration costs 4,270 4,270
Gain on sale of assets (2,260) (2,260)
------------- -------- -------- -----------
Operating income 10,077 6,417 0 16,494
Other income (expense):
Finance charge income, net of allocation
to purchasers of accounts receivable 14,879 4,197 19,076
Interest expense (8,608) (8,506) (4,400)(4) (21,514)
Other income, net 440 277 717
------------- ---------- ----------
Income before provision for income taxes 16,788 2,385 (4,400) 14,773
Provision for income taxes 6,995 1,414 (900)(5) 7,509
------------- ---------- -----------
Net income 9,793 971 (3,500) 7,264
Preferred stock dividends 796 796
Payment for early conversion of preferred stock 3,032 3,032
------------- ----------- -----------
Net income available to common shareholders $5,965 $971 ($3,500) $3,436
======== ======== ======== ========
Earnings per common share:
Primary $0.30 $0.15
======== ========
Fully diluted $0.46 $0.30
======== ========
Weighted average common shares:
Primary 20,186 3,147 (6) 23,333
======== ======== ========
Fully diluted 21,414 3,147 (6) 24,561
======== ======== ========
See Notes to Pro Forma Condensed Combined Income Statement
</TABLE>
Proffitt's, Inc.
Notes to Pro Forma Condensed Combined Income Statement
(in Thousands)
(1) To conform Parisian's direct cost method of accounting for
inventory to the full cost method used by Proffitt's and to
conform Parisian's presentation of certain expenses with that
of Proffitt's.
(2) To conform Parisian's accounting method for store preopening
costs of deferral and amortization over twelve months to
Proffitt's accounting method of expensing such costs as
incurred.
(3) To reflect the increase in depreciation and amortization
resulting from the preliminary purchase price allocation for
the Parisian acquisition.
(4) To reflect interest expense on acquisition debt of
approximately $118,900 at 7.4% for the period ended August 3,
1996, assuming that the debt was outstanding throughout the
period.
(5) To reflect the income tax impact of the pro forma acquisition
adjustments using an effective rate of 40%.
(6) To reflect the Proffitt's Common Shares and Equivalents issued
to the Parisian shareholders and option holders.
(7) Pro forma adjustments do not include any charges or benefits
related to the integration of the operations of the businesses
of Proffitt's and Parisian.
<TABLE>
<CAPTION>
Pro Forma Condensed Combined Balance Sheet (Unaudited)
August 3,1996
(in Thousands)
Pro Forma
Acquisition Pro Forma
Proffitt's Parisian Adjustments Total
----------- --------- ---------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $2,022 $997 $3,019
Restricted cash and short term investments 1,860 1,860
Net trade accounts receivable, less
receivables sold to third parties 25,817 31,934 500 (1) 58,251
Merchandise inventories 307,806 147,083 (14,800)(1) 440,089
Deferred income taxes 8,755 3,669 17,600 (1) 30,024
Other current assets 21,685 11,982 (500)(1) 33,167
----------- --------- ---------- --------
Total current assets 366,085 197,525 2,800 566,410
Property and equipment, net 387,774 72,176 9,100 (1) 469,050
Goodwill 52,063 59,334 175,899 (1) 287,296
Other assets 21,264 15,233 (11,600)(1) 24,897
-------------- -------- ---------- --------
$827,186 $344,268 $176,199 $1,347,653
========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable $79,628 $44,041 $123,669
Accrued expenses 65,041 19,083 33,000 (1) 117,124
Current portion of long-term debt and
capital lease obligations 16,949 3,032 19,981
-------------- --------- ---------- --------
Total current liabilities 161,618 66,156 33,000 260,774
Real estate and mortgage notes 83,234 33,180 116,414
Notes payable 37,588 115,800 (2) 153,388
Capital lease obligations 10,584 10,584
Deferred income taxes 53,657 8,287 (3,000)(1) 58,944
Other long-term liabilities 14,751 30,744 5,000 (1) 50,495
Subordinated debt 100,634 125,000 225,634
Shareholders' equity 365,120 80,901 106,300 (1) 471,420
(80,901)(1)
-------------- ---------- ---------- --------
$827,186 $344,268 $176,199 $1,347,653
========= ========= ========= =========
See Notes to Pro Forma Condensed Combined Balance Sheet
</TABLE>
<TABLE>
<CAPTION>
Proffitt's, Inc.
Notes to Pro Forma Condensed Combined Balance Sheet
(In Thousands)
(1) The acquisition of Parisian will be accounted for as a
purchase in accordance with Accounting Principles Board
Opinion No. 16, "Business Combinations." The purchase price
is being allocated first to tangible and identifiable
intangible assets and liabilities of Parisian based on
preliminary estimates of their fair values, with the remainder
allocated to goodwill and other assets to be identified. The
purchase price and the preliminary purchase price allocation
are as follows:
<S> <C>
Cash consideration paid $110,340
Common stock and common stock equivalents 106,300
Transaction expenses 5,460
--------------
Purchase price 222,100
Historical book value of net assets acquired (80,901)
--------------
Excess of purchase price over historical
book value of assets acquired $141,199
=========
Allocation of excess purchase price:
Adjust trade accounts receivable to
fair value $ 500
Decrease inventories to preliminary
estimate of fair value (14,800)
Adjust miscellaneous current assets
to fair value (500)
Increase property and equipment to
fair value 9,100
Increase in goodwill and other assets
to be identified 175,899
Write-off duplicate assets to be abandoned
and existing deferred store preopening
costs, and decrease other assets to
fair value (11,600)
Accrue preliminary estimate of merger and
integration costs (33,000)
Adjust lease commitments to fair value (5,000)
Changes in deferred income taxes for tax
effect of the aforementioned adjustments:
Increase in deferred tax assets - current 17,600
Decrease in deferred tax liabilities -
noncurrent 3,000
--------------
$141,199
========
(2) To reflect acquisition debt.
</TABLE>
EXHIBIT INDEX
Exhibit Page
Number Description Number
2* Agreement and Plan of Merger dated July 8,
1996, among Proffitt's, Inc., Casablanca
Merger Corp. and Parisian, Inc. (Incorporated
by reference to Exhibit 2 to the Registrant's
Current Report on Form 8-K filed July 18,
1996).
4.1* Credit Facilities and Reimbursement Agreement
by and among Proffitt's, Inc., certain lenders
and NationsBank of Texas, National
Association, as Agent.
4.2* Registration Rights Agreement (incorporated by
reference to Appendix III to the prospectus
dated August 16, 1996, included in the
Registrant's Registration Statement on Form S-4,
Reg. No. 333-09043).
4.3* Form of Supplemental Indenture (incorporated
by reference to Exhibit 4(d) to the
Registrant's Registration Statement on Form S-3,
Reg. No. 333-09941).
________________________________
* Previously filed
