UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 4, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-10738
ANNTAYLOR STORES CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3499319
- - --------------------------------- --------------------------------------
(State of other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
142 West 57th Street, New York, NY 10019
- - --------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
(212) 541-3300
---------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether 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.
Outstanding as of
Class May 31, 1996
------ ------------------
Common Stock, $.0068 par value 23,087,334
=========================================================================
INDEX TO FORM 10-Q
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations
for the Quarters Ended May 4, 1996
and April 29, 1995................................. 3
Condensed Consolidated Balance Sheets at
May 4, 1996 and February 3, 1996................... 4
Condensed Consolidated Statements of Cash Flows
for the Quarters Ended May 4, 1996 and
April 29, 1995..................................... 5
Notes to Condensed Consolidated Financial Statements..6
Item 2. Management's Discussion and Analysis of
Operations......................................10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................14
Item 4. Submission of Matters to a Vote of Security
Holders........................................14
Item 6. Exhibits and Reports on Form 8-K..................15
===============================================================
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ANNTAYLOR STORES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Quarters Ended May 4, 1996 and April 29, 1995
(unaudited)
Quarters Ended
----------------------------
May 4, 1996 April 29, 1995
------------ ---------------
(in thousands, except per share amounts)
Net sales $184,467 $168,306
Cost of sales 101,313 91,355
------- -------
Gross profit 83,154 76,951
Selling, general and administrative expenses 70,254 62,451
Amortization of goodwill 2,377 2,377
------- -------
Operating income 10,523 12,123
Interest expense 6,121 4,498
Other (income) expense, net (131) 57
------- -------
Income before income taxes 4,533 7,568
Income tax provision 2,721 4,077
------- -------
Net income $ 1,812 $ 3,491
======= =======
Net income per share of common stock $ .08 $ .15
======= =======
Weighted average number of shares and
share equivalents outstanding 23,220 23,499
======= =======
See accompanying notes to condensed consolidated financial statements.
===========================================================================
ANNTAYLOR STORES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
May 4, 1996 and February 3, 1996
May 4, 1996 Feb. 3,1996
----------- -----------
(unaudited)
(in thousands)
ASSETS
Current assets
Cash $ 1,296 $ 1,283
Accounts receivable, net 72,615 70,395
Merchandise inventories 98,185 102,685
Prepaid expenses and other
current assets 12,457 12,808
Prepaid tenancy 7,974 8,099
Deferred income taxes 3,400 3,400
------- -------
Total current assets 195,927 198,670
Property and equipment
Land and building 8,923 8,923
Leasehold improvements 76,723 73,677
Furniture and fixtures 101,502 99,548
Construction in progress 11,291 14,190
------- -------
198,439 196,338
Less accumulated depreciation
and amortization 48,236 42,443
------- -------
Net property and equipment 150,203 153,895
Goodwill, net of accumulated amortization
of $69,102,000 and $66,725,000,
respectively 311,148 313,525
Investment in CAT 5,750 5,438
Deferred financing costs, net of
accumulated amortization of
$2,349,000 and $1,960,000,
respectively 3,569 3,933
Other assets 3,222 3,248
------- -------
Total assets $669,819 $678,709
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 40,208 $ 42,909
Accrued expenses 31,452 29,018
Current portion of long-term debt 36,269 40,266
------- -------
Total current liabilities 107,929 112,193
Long-term debt 142,124 232,192
Deferred income taxes 1,300 1,300
Other liabilities 7,564 7,336
Commitments and contingencies
Company-Obligated Mandatorily
Redeemable Convertible
Preferred Securities of
AnnTaylor Finance Trust
Holding Solely Convertible Debentures 83,350 ---
Stockholders' equity
Common stock, $.0068 par value;
40,000,000 shares authorized;
23,131,419 and 23,127,743
shares issued, respectively 157 157
Additional paid-in capital 311,336 311,284
Warrants to acquire 35,707 and
36,605 shares of
common stock, respectively 582 596
Retained earnings 15,932 14,120
Deferred compensation on
restricted stock (25) (33)
------- -------
327,982 326,124
Less treasury stock, 44,085 and
44,983 shares, respectively,
at cost (430) (436)
------- -------
Total stockholders' equity 327,552 325,688
------- -------
Total liabilities and
stockholders' equity $669,819 $678,709
======= =======
See accompanying notes to condensed consolidated financial statements.
============================================================================
ANNTAYLOR STORES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Quarters Ended May 4, 1996 and April 29, 1995
(unaudited)
Quarters Ended
---------------------------
May 4, 1996 April 29, 1995
----------- --------------
(in thousands)
Operating activities:
Net income $ 1,812 $ 3,491
Adjustments to reconcile net income to
net cash (used by) provided by
operating activities:
Equity earnings in CAT (312) (247)
Provision for loss on accounts receivable 360 122
Depreciation and amortization 6,002 3,566
Amortization of goodwill 2,377 2,377
Amortization of deferred financing costs 389 193
Amortization of deferred compensation 8 26
Loss on disposal of property and equipment 81 277
(Increase) decrease in:
Receivables (2,580) (7,932)
Merchandise inventories 4,500 (16,608)
Prepaid expenses and other current assets 476 (401)
Increase (decrease) in:
Accounts payable (2,701) 2,778
Accrued expenses 2,434 1,274
Other non-current assets and liabilities,
net 254 312
------- -------
Net cash provided by (used by) operating
activities 13,100 (10,772)
Investing activities:
Purchases of property and equipment (2,391) (16,412)
------- -------
Net cash used by investing activities (2,391) (16,412)
Financing activities:
Increase in bank overdrafts --- 1,385
(Repayments) borrowings under revolving
credit agreement (90,000) 27,000
Payments on mortgage (65) ---
Net proceeds from issuance of Preferred
Securities 83,350 ---
Exercise of stock options 44 80
Net repayments under receivables facility (4,000) (1,700)
Payment of financing costs (25) ---
------- -------
Net cash (used by) provided by financing
activities (10,696) 26,765
------- -------
Net increase (decrease) in cash 13 (419)
Cash, beginning of period 1,283 1,551
------- -------
Cash, end of period $ 1,296 $ 1,132
======= =======
Supplemental Disclosures of Cash Flow
Information:
Cash paid during the period for interest $ 3,357 $ 1,489
======= =======
Cash paid during the period for income taxes $ 116 $ 1,587
======= =======
See accompanying notes to condensed consolidated financial statements.
=========================================================================
ANNTAYLOR STORES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of Presentation
---------------------
The condensed consolidated financial statements are unaudited
but, in the opinion of management, contain all adjustments (which
are of a normal recurring nature) necessary to present fairly the
financial position, results of operations and cash flows for the
periods presented. All significant intercompany accounts and
transactions have been eliminated.
The results of operations for the 1996 interim period shown in
this report are not necessarily indicative of results to be
expected for the fiscal year.
The February 3, 1996 condensed consolidated balance sheet
amounts have been derived from the previously audited
consolidated balance sheet of AnnTaylor Stores Corporation.
Certain fiscal 1995 amounts have been reclassified to conform
to the 1996 presentation.
It is not considered necessary to include detailed footnote
information as of May 4, 1996 and April 29, 1995. The financial
information set forth herein should be read in conjunction with
the Notes to the Company's Consolidated Financial Statements
contained in the AnnTaylor Stores Corporation 1995 Annual Report
to Stockholders.
2. Income Per Share
----------------
Net income per share is calculated by dividing net income by
the total of the weighted average number of common shares and
common share equivalents outstanding, assuming the exercise of
outstanding warrants and the dilutive effect of outstanding stock
options, computed in accordance with the treasury stock method.
The number of shares used in the calculation was as follows:
Quarters Ended
-----------------------------
May 4, 1996 April 29, 1995
(in thousands)
Common shares......................... 23,086 23,045
Warrants.............................. 36 57
Stock options......................... 98 397
------ ------
23,220 23,499
====== ======
Fully diluted income per share, assuming the conversion into
common stock of the 8-1/2% Convertible Trust Originated Preferred
Securities described below is not presented for the quarter ended
May 4, 1996 due to the anti-dilutive effect of the assumed
conversion.
3. Long-Term Debt
---------------
The following summarizes long-term debt outstanding at May 4,
1996:
(in thousands)
Revolving Credit Facility $11,000
Term Loan 24,500
8-3/4% Notes 100,000
Receivables Facility 36,000
Mortgage 6,893
-------
Total debt 178,393
Less current portion 36,269
-------
Total long-term debt $142,124
=======
On April 25, 1996, the Company completed the sale (the
"Initial Sale") of $87,500,000 8-1/2% Convertible Trust Originated
Preferred Securities ("Preferred Securities") issued by its
financing vehicle, AnnTaylor Finance Trust, a Delaware business
trust (the "Trust"). On May 17, 1996, the Trust issued an
additional $13,125,000 of Preferred Securities pursuant to the
exercise of an over-allotment option (the "Over-allotment Sale")
granted to the Initial Purchasers (as defined herein) under the
terms of the Purchase Agreement (the "Purchase Agreement")
between the Company and the Initial Purchasers. The Preferred
Securities have a liquidation preference of $50 per security
($100,625,000 in the aggregate) and are convertible at the option
of the holders thereof into the Company's common stock at a
conversion rate of 2.545 shares of common stock for each
Preferred Security (equivalent to $19.65 per share of common
stock, which represented a 20% premium to the $16.375 closing
price of the common stock on the New York Stock Exchange at the
date of the execution of the Purchase Agreement). A total of
2,012,500 Preferred Securities were issued, and are convertible
into an aggregate of 5,121,812 shares of common stock.
The sale of the Preferred Securities enabled the Company to
pay down $94,000,000 of outstanding borrowings under its
revolving credit facility, without reduction of the commitment
thereunder. $83,000,000 of outstanding borrowings were paid down
during the quarter ended May 4, 1996 with the net proceeds of the
Initial Sale and $11,000,000 of outstanding borrowings were paid
down on May 20, 1996 with the net proceeds of the Over-allotment
Sale.
The Preferred Securities were sold through Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, CS First
Boston Corporation, Donaldson, Lufkin & Jenrette Securities
Corporation and Robertson, Stephens & Company, LLC (collectively,
the "Initial Purchasers") in the United States and outside the
United States in a private placement under Rule 144A and
Regulation S, respectively, under the Securities Act of 1933.
4. CAT/Cygne Transaction
------------------------
In Fiscal 1995, the Company purchased approximately 16% of its
merchandise directly from Cygne Designs, Inc. ("Cygne") and an
additional 38% of its merchandise through the Company's direct
sourcing joint venture with Cygne known as CAT. In April 1996,
the Company announced that it had entered into an agreement in
principle, dated as of April 8, 1996, pursuant to which the
Company will purchase from Cygne all the shares of CAT owned by
Cygne and the assets of the Ann Taylor Woven Division of Cygne
that are used in sourcing merchandise for the Company (the
"CAT/Cygne Transaction"). On June 7, 1996 the Company and its
wholly owned subsidiary AnnTaylor, Inc. ("Ann Taylor") entered
into a definitive purchase agreement with Cygne and its wholly
owned subsidiary Cygne Group (F.E.) Limited, providing for the
CAT/Cygne Transaction. The purchase price for Cygne's interest
in CAT and the Ann Taylor Woven Division assets will consist of
shares of common stock of the Company having a market price,
based on the price of the Company's common stock for the ten
trading days prior to the closing of the transaction, of $36
million (provided that in no event will the Company be required
to issue more than 2.5 million shares) and a cash payment in an
amount equal to the tangible net book value of the fixed assets
(but not to exceed $2,646,000), plus the tangible net book value
of the inventory of the Ann Taylor Woven Division, less the
amount of certain liabilities of the Division to be assumed by
Ann Taylor. The Company will also pay cash in respect of an
obligation under an existing employment agreement with CAT. The
Company has agreed to register the shares to be issued to Cygne
for resale, although Cygne will be subject to certain
restrictions on the timing of sales and the amount of shares
which can be sold at any one time.
The Company has received the consent of its lenders to the
CAT/Cygne Transaction and CAT has received a written commitment
of HongKong and Shanghai Banking Corporation to the continuation
of CAT's existing $40 million credit facility.
The closing of the CAT/Cygne Transaction is subject to various
other conditions, including (i) the approval of the transaction
by Cygne's stockholders and (ii) the consent and release of liens
by certain lenders to Cygne. It is currently anticipated that
the transaction will close in August 1996 following approval by
Cygne's stockholders. There can be no assurance, however, that
the conditions referred to above will be satisfied, that the
transaction will be consummated or, if consummated, that it will
be consummated within the currently anticipated time frame.
5. Legal Proceedings
-----------------
On April 26, 1996, certain alleged stockholders of AnnTaylor
Stores Corporation (the "Company"), filed a purported class
action lawsuit in the United States District Court Southern
District of New York against the Company, Ann Taylor, certain
officers and directors of the Company and Ann Taylor, Merrill
Lynch & Co. ("Merrill") and certain affiliates of Merrill (Novak
v. Kasaks, et. al., No. 96 CIV 3073 (S.D.N.Y. 1996)). The
complaint alleges causes of action under Section 10(b) and
Section 20(a) of the Securities Exchange Act of 1934, as amended,
by alleging that the Company and the other defendants engaged in
a fraudulent scheme and course of business that operated a fraud
or deceit on purchasers of the Company's common stock during the
period commencing February 3, 1994 through May 4, 1995 due to
false and misleading statements about the Company and Ann Taylor.
The complaint seeks, among other things, certification as a class
action on behalf of all purchasers of common stock during the
period commencing February 3, 1994 through May 4, 1995, the
awarding of compensatory damages to the plaintiffs and purported
members of the class, the awarding of costs, including pre-
judgment post-judgment interest, reasonable attorneys' fees and
expert witness fees to the plaintiffs and purported members of
the class and equitable and/or injunctive relief. The Company
believes that the complaint is without merit and intends to
defend the action vigorously.
======================================================================
Item 2. Management's Discussion and Analysis of Operations
Results of Operations
Quarters Ended
---------------------------
May 4, 1996 April 29, 1995
Number of Stores:
Open at beginning of period 306 262
Opened during period 4 15
Expanded during period* --- 12
Closed during period 3 2
Open at end of period 307 275
Type of Stores Open at End of Period:
Ann Taylor Stores 258 240
Ann Taylor Factory Stores 23 23
Ann Taylor Loft stores 17 6
Ann Taylor Studio stores 9 6
-------------------
* Expanded stores are excluded from comparable store sales for
the first year following expansion.
Quarter Ended May 4, 1996 Compared to Quarter Ended April 29, 1995
- - --------------------------------------------------------------------
The Company's net sales in the first quarter of 1996 increased
to $184,467,000 from $168,306,000 in the first quarter of 1995,
an increase of $16,161,000 or 9.6%. The increase in net sales
was attributable to the opening of new stores and the expansion
of existing stores, offset by a 6.0% decrease in comparable store
sales in the first quarter of 1996. Management believes that the
decrease in comparable store sales was due primarily to the
Company's reduced inventory position. During the first quarter
of 1996, inventories were down approximately 25% on a per square
foot basis compared to the same period of the prior fiscal year.
Gross profit as a percentage of net sales decreased to 45.1%
in the first quarter of 1996 from 45.7% in the first quarter of
1995. This decrease was attributable to increased cost of goods
sold resulting from lower initial markups and to higher markdowns
associated with increased promotional activity.
Selling, general and administrative expenses represented 38.1%
of net sales in the first quarter of 1996, compared to 37.1% of
net sales in the first quarter of 1995. The increase is
primarily attributable to higher tenancy, store maintenance and
store selling costs.
As a result of the foregoing, the Company had operating income
of $10,523,000, or 5.7% of net sales, in the first quarter of
1996, compared to operating income of $12,123,000, or 7.2% of net
sales, in the first quarter of 1995. Amortization of goodwill
was $2,377,000 in the first quarter of 1996 and $2,377,000 in the
first quarter of 1995. Operating income, without giving effect
to such amortization in either year, was $12,900,000, or 7.0% of
net sales, in the 1996 period and $14,500,000, or 8.6% of net
sales, in the 1995 period.
Interest expense was $6,121,000 in the first quarter of 1996
and $4,498,000 in the first quarter of 1995. The increase in
interest expense is attributable to higher interest rates
applicable to the Company's debt obligations and higher
outstanding indebtedness in 1996.
The income tax provision was $2,721,000, or 60.0% of income
before income taxes, in the first quarter of 1996 compared to
$4,077,000, or 53.9% of income before income taxes, in the first
quarter of 1995. The effective income tax rate for both periods
differed from the statutory rate primarily because of non-
deductible goodwill amortization.
As a result of the foregoing factors, the Company had net
income of $1,812,000, or 1.0% of net sales, for the first quarter
of 1996 compared to net income of $3,491,000, or 2.1% of net
sales, for the first quarter of 1995.
AnnTaylor Stores Corporation conducts no business other than
the management of Ann Taylor.
==================================================================
Financial Condition
- - -------------------
For the first quarter of 1996, net cash provided by operating
activities totaled $13,100,000, primarily as a result of net
income and non-cash operating expenses. Cash used for investing
activities during the first quarter of 1996 amounted to
$2,391,000, for the purchase of property and equipment. Cash
used by financing activities during the first quarter of 1996
amounted to $10,696,000, primarily as a result of repayments
under the revolving credit agreement and the receivables
facility, partially offset by net proceeds from the issuance of
Preferred Securities.
Accounts receivable increased to $72,615,000 at May 4, 1996
from $70,395,000 at February 3, 1996, an increase of $2,220,000
or 3.2%. This increase was primarily attributable to Ann Taylor
credit card receivables, which increased approximately
$1,587,000.
Merchandise inventories were $98,185,000 at May 4, 1996,
compared to inventories of $102,685,000 at February 3, 1996.
Total square footage increased to 1,666,000 square feet at May 4,
1996 from 1,651,000 square feet at February 3, 1996.
At May 4, 1996, $11,000,000 was outstanding under the
revolving credit agreement and $36,000,000 was outstanding under
AnnTaylor Funding, Inc.'s receivables facility. Ann Taylor can
borrow up to $122,000,000 under the revolving credit agreement
and AnnTaylor Funding, Inc. can borrow up to $40,000,000 under
the receivables facility, depending upon its accounts receivable
balance. The receivables facility matures in January 1997. The
Company expects to negotiate an extension of the maturity of this
facility.
On April 25, 1996, the Company completed the sale of
$87,500,000 of Preferred Securities issued by its financing
vehicle, AnnTaylor Finance Trust, a Delaware business trust. On
May 17, 1996, the Trust issued an additional $13,125,000 of
Preferred Securities pursuant to the exercise of an Over-
allotment Sale granted to the Initial Purchasers under the terms
of the Purchase Agreement between the Company and the Initial
Purchasers. The Preferred Securities have a liquidation
preference of $50 per security and are convertible at the option
of the holders thereof into common stock at a conversion rate of
2.545 shares of common stock for each Preferred Security.
A total of 2,012,500 Preferred Securities were issued, and are
convertible into an aggregate of 5,121,812 shares of common
stock, representing approximately 22% of the outstanding common
stock as of May 31, 1996. The sale of the Preferred Securities
enabled the Company to pay down $94,000,000 of outstanding
borrowings under its revolving credit facility, without reduction
of the commitment thereunder.
The Company's capital expenditures, which are primarily
attributable to the Company's store expansion, renovation and
refurbishment programs, totaled $2,391,000 in the first quarter
of 1996. The Company now expects to open 11 new Ann Taylor
Stores, 4 new Ann Taylor Loft Stores and expand 5 existing Ann
Taylor Stores in fiscal 1996. Total capital expenditures for
1996 are expected to be approximately $13,500,000.
Dividends and distributions from Ann Taylor to the Company are
restricted by the Bank Credit Agreement, the Receivables Facility
and the Indenture for the 8-3/4% Notes. The payment of cash
dividends by the Company on its capital stock is also subject to
certain restrictions contained in the Company's guarantee of Ann
Taylor's obligations under the Bank Credit Agreement. Any
determination to pay cash dividends in the future will be at the
discretion of the Company's Board of Directors and will be
dependent upon the Company's results of operations, financial
condition, contractual restrictions and other factors deemed
relevant at that time by the Company's Board of Directors.
Distributions on the Preferred Securities accrue from the date
of the original issuance of the Preferred Securities and will be
payable at the annual rate of 8-1/2% of the liquidation amount of
$50 per Preferred Security. Subject to certain distribution
deferral provisions, distributions on the Preferred Securities
will be payable quarterly in arrears on each January 15, April
15, July 15 and October 15, commencing July 15, 1996. Payment of
distributions on the Preferred Securities by the Trust is
dependent upon receipt of payment of interest by the Company on
its 8-1/2% Convertible Subordinated Debentures held by the Trust.
The Company's ability to make such interest payments is dependent
upon its receipt of dividends or other distributions from Ann
Taylor. As indicated above, the payment of dividends and
distributions from Ann Taylor to the Company is subject to
certain restrictions contained in the Bank Credit Agreement and
the Indenture for the 8-3/4% Notes. The Company currently believes
that Ann Taylor will be able to make such distributions to the
Company in the foreseeable future within the limitations set
forth in the Indenture for the 8-3/4% Notes. In addition, provided
that Ann Taylor is not then in default under the Bank Credit
Agreement at the time of any such distribution, the lenders under
the Bank Credit Agreement have consented to quarterly
distributions by Ann Taylor to the Company equal to the amount of
interest due on the Convertible Subordinated Debentures.
In order to finance its operations and capital requirements,
the Company expects to use internally generated funds, trade
credit, and funds available to it under the revolving credit
facility and the receivables facility. The Company believes that
cash flow from operations and funds available under the revolving
credit facility and the receivables facility are sufficient to
enable it to meet its ongoing cash needs for the foreseeable
future.
=================================================================
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
On April 26, 1996, certain alleged stockholders of the Company
filed a purported class action lawsuit in the United States
District Court Southern District of New York against the Company,
Ann Taylor, certain officers and directors of the Company and Ann
Taylor, Merrill and certain affiliates of Merrill (Novak v.
Kasaks, et. al., No. 96 CIV 3073 (S.D.N.Y. 1996)). The
allegations in the complaint are described above in Footnote 5 to
the Condensed Consolidated Financial Statements in this filing.
The Company believes that the complaint is without merit and
intends to defend the action vigorously.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
AnnTaylor Stores Corporation's 1995 Annual Meeting of
Stockholders was held on June 14, 1996. The following matters
were voted upon and approved by the Company's stockholders at the
meeting:
1. Ms. Sally Frame Kasaks and Mr. James J. Burke, Jr. were
reelected as Class I Directors of the Company, for terms
expiring in 1999. 21,604,678 and 21,604,548 shares were voted
in favor of, and 266,143 and 266,273 shares were voted against
or abstained from voting on the proposal for the re-election
of Ms. Kasaks and Mr. Burke, respectively. Mr. Gerald S.
Armstrong, Mr. Paul E. Francis and Ms. Hanne M. Merriman
continued as Class II Directors, with terms expiring in 1997,
and Ms. Rochelle B. Lazarus, Mr. Robert C. Grayson and Mr. J.
Patrick Spainhour continued as Class III Directors with terms
expiring in 1998.
2. The appointment of Deloitte & Touche LLP as the Company's
independent accountants for the 1996 fiscal year was ratified.
21,805,010 shares were voted in favor of, and 65,811 shares
were voted against or abstained from voting on, this proposal.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
None
(b) Reports on Form 8-K:
The Company filed a report with the Commission on
Form 8-K dated April 8, 1996 announcing the
proposed acquisition by the Company of (i) Cygne
Designs, Inc.'s ("Cygne") entire interest in the
Company's direct sourcing joint venture with
Cygne, known as CAT US, Inc. and C.A.T. (Far East)
Limited, and (ii) the assets of Cygne's AnnTaylor
Woven Division that are used for sourcing
merchandise for Ann Taylor.
The Company filed a report with the Commission on
Form 8-K dated May 3, 1996 with respect to a
purported class action lawsuit filed in the United
States District Court Southern District of New
York State filed against the Company, its wholly
owned subsidiary Ann Taylor, certain officers and
directors of the Company and Ann Taylor, Merrill
and certain affiliates of Merrill on April 26,
1996 by certain alleged stockholders of the
Company.
The Company filed a report with the Commission on
Form 8-K dated June 10, 1996 with respect to the
execution by the Company and Ann Taylor of a
definitive purchase agreement with Cygne and its
wholly owned subsidiary Cygne Group (F.E.)
Limited, providing for the Company's previously
announced proposed acquisition of Cygne's interest
in the Company's direct sourcing joint venture
with Cygne and the assets of the Ann Taylor Woven
Division of Cygne that sources merchandise for Ann
Taylor.
==================================================================
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.
AnnTaylor Stores Corporation
Date: June 18, 1996 By: /s/ J. Patrick Spainhour
------------------------ --------------------------
J. Patrick Spainhour
President and Chief
Operating Officer
Date: June 18, 1996 By: /s/ Walter J. Parks
------------------------ ---------------------------
Walter J. Parks
Senior Vice President -
Finance
(Principal Accounting
Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated statements of operations and condensed consolidated
balance sheets and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000874214
<NAME> ANN TAYLOR STORES CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-01-1997
<PERIOD-END> MAY-04-1996
<CASH> 1,296
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0
0
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</TABLE>
