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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
May 7, 1997
Date of Report (Date of earliest event reported)
UNIVERSAL INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 0-18823 41-0776502
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
5000 Winnetka Avenue North
New Hope, Minnesota 55428
(Address of principal executive offices)
(612) 533-1169
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
The Company issued a press release relating to (i) fourth quarter and
year-end results, (ii) April 1997 same store sales, (iii) restructuring of
wholesale operations and (iv) status of negotiations with lenders for
replacement financing for the Company. A copy of the press release is
attached as Exhibit 99.1.
The Company also issued a press release relating to retaining the
corporate finance group of Price Waterhouse LLP with respect to seeking
financing for the previously announced proposed acquisition of Perry
Brothers, Inc. of Lufkin, Texas. A copy of the press release is attached as
Exhibit 99.2.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Filed herewith are the following exhibits:
99.1 Press release dated May 7, 1997
99.2 Press release dated May 7, 1997
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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.
UNIVERSAL INTERNATIONAL, INC.
(Registrant)
Dated: May 12, 1997 By /s/ James A. Patineau
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James A. Patineau
Its Chief Financial Officer
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[LETTERHEAD]
NEWS RELEASE
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CONTACT: Mark Ravich
(612) 533-1169
FOR IMMEDIATE RELEASE
(Minneapolis, MN) May 7, 1997 - Universal International, Inc. today announced
its fourth quarter and year end results for 1996; April, 1997, comparable
store sales; restructuring of wholesale operations; and status of
negotiations with potential lenders.
Revenues in the fourth quarter increased 19.4% to $31,722,000 versus
$26,564,000 in the same period last year. A net loss was reported in the
fourth quarter of 1996 in the amount of $599,000 compared to a net income of
$1,609,000 in the same period last year. The Company reported a loss of $.12
per share in the fourth quarter of 1996 compared to income of $.31 per share
in the same period of 1995.
1996 revenues increased 13.8% to $87,630,000 versus $76,970,000 in 1995 with
a net loss of $4,301,000 reported in 1996 compared to a net income of
$1,310,000 in 1995. The loss in 1996 was $.88 per share compared to a primary
net income of $.26 per share in 1995.
The net loss in 1996 was primarily due to costs incurred to build the
infrastructure necessary to implement the significant increase in retail
stores, costs incurred to open 21 new Only Deals stores in 1996, lower than
planned retail sales and gross margins, and lower wholesale net sales.
The Company also announced that sales for the month of April 1997 for its
Only Deals and Odd's-N-End's retail stores were up 18.8% to $4,260,000 versus
$3,586,000 in 1996. Sales for the four months ended April 30, 1997 increased
27.6% to $17,839,000 versus $13,976,000 in 1996. Comparable store sales for
the retail stores were down 3.6% for the month of April and were down 3.5%
for the first four months of 1997. Comparable store sales are based on the
operation of stores open more than 13 full months.
The Company has been in the process, since early March, 1997, of
substantially reducing wholesale inventories and restructuring and downsizing
wholesale operations. The ultimate scope and size of future wholesale
operations remains uncertain but the Company intends to focus most of its
resources on retail operations and
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to consolidate distribution operations from three leased facilities into its
primary warehouse by December 31, 1997. While the Company anticipates that
future wholesale operations will be significantly scaled-down from current
levels and will take a much smaller proportion of corporate operating
expenses to run, the Company expects to incur significant expenses in
reducing its wholesale business throughout the remainder of 1997.
The Company also is continuing the process of negotiating a new line of
credit with a number of new potential lenders to replace its current credit
line. The Company's current lender, BankAmerica Business Credit, Inc.
("Lender"), is allowing the Company to remain in technical default of several
provisions of its current loan agreement while the Company seeks new
financing. The Company and the Lender have negotiated a reduction in the size
of the current line of credit to $11,000,000 from $12,500,000 effective April
30, 1997, and a reduction in the advance rate against wholesale inventories
effective in early May, 1997.
Universal International, Inc. buys and sells quality "close-out" merchandise
in both its wholesale business and its Only Deals and Odd's-N-End's retail
store chains. Through its subsidiary, Universal Asset-Based Services, Inc.,
it also provides inventory valuation and liquidation services. Universal
International, Inc.'s shares are traded on The NASDAQ Stock Market under the
symbol UNIV.
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[LETTERHEAD]
NEWS RELEASE
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CONTACT: Mark Ravich
(612) 533-1169
FOR IMMEDIATE RELEASE
UNIVERSAL INTERNATIONAL, INC. ANNOUNCES RETENTION OF PRICE
WATERHOUSE L.L.P. WITH RESPECT TO PROPOSED ACQUISITION
(Minneapolis, MN) May 7, 1997 - Universal International, Inc. today announced
that it has retained Price Waterhouse L.L.P. to assist in raising equity from
investors to finance the previously announced agreement to purchase certain
assets and leases of Perry Brothers, Inc. ("Perry") of Lufkin, TX. The
proposed acquisition involves approximately 90 retail locations and the
warehouse of Perry. Substantially all of the stores are located in Texas.
Universal intends to convert these stores into close-out stores similar to
the Company's Only Deals store concept. Management believes Perry has
attractive real estate locations and that the Company presently has the
infrastructure necessary to manage an enlarged store base.
The Company is seeking approximately $12 million of equity financing to
complete the purchase of Perry and expects to accomplish this by offering a
significant equity interest in Universal.
Price Waterhouse L.L.P. is a leading worldwide organization of financial
professionals providing a wide variety of auditing, tax advisory and
management consulting services through 450 offices located in 115 countries.
For additional information interested parties should contact Mark Ravich at
612-533-1169.
Universal International, Inc. buys and sells quality "close-out" merchandise
in both its wholesale business and its Only Deals and Odd's-N-End's retail
store chains. Through its subsidiary, Universal Asset-Based Services, Inc.,
it also provides inventory valuation and liquidation services. Universal
International, Inc.'s shares are traded on The NASDAQ Stock Market under the
symbol UNIV.
