<PAGE>
UNITED STATES
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 August 1, 1998
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 0-19149
FILENE'S BASEMENT CORP.
(Exact name of registrant as specified in its charter)
Massachusetts 04-3016733
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
40 Walnut Street, Wellesley, MA 02481
(Address of principal executive offices)
(Zip Code)
(617) 348-7000
(Registrant's telephone number, including area code)
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_____
The number of shares of common stock outstanding as of August 31,
1998 was 21,011,558 shares.
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FILENE'S BASEMENT CORP.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page No.
Item 1 - Financial Statements
Consolidated Balance Sheets as of 3
August 1, 1998, January 31, 1998
and August 2, 1997
Consolidated Statements of Operations 4
for the thirteen weeks ended
August 1, 1998 and August 2, 1997
Consolidated Statements of Operations 5
for the twenty-six weeks ended
August 1, 1998 and August 2, 1997
Consolidated Statements of Cash Flows 6
for the twenty-six weeks ended
August 1, 1998 and August 2, 1997
Notes to Consolidated Financial Statements 7
Item 2 - Management's Discussion and Analysis of 9
Financial Condition and Results of Operations
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of 15
Security Holders
Item 5 - Other Information 15
Item 6 - Exhibits and Reports on Form 8-K 16
2
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FILENE'S BASEMENT CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
August 1, January 31, August 2,
1998 1998 1997
---------- ---------- ----------
ASSETS (unaudited) (unaudited)
Current assets:
Cash and cash equivalents $ 740 $ 475 $ 475
Inventories 117,318 93,021 104,114
Other current assets 12,827 11,162 10,734
-------- -------- --------
Total current assets 130,885 104,658 115,323
Property, plant and equipment, net 51,938 48,341 54,355
Beneficial operating lease rights, net 12,840 13,497 14,155
Intangible assets, net and other 9,717 8,842 8,250
Assets held for sale - - 7,962
-------- -------- --------
$205,380 $175,338 $200,045
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 49,293 $ 42,698 $ 46,048
Accrued expenses 27,267 26,455 28,965
Short-term debt 25,800 3,100 23,600
Current portion of long-term debt 2,000 1,000 2,000
Obligations under capital leases 434 414 390
-------- -------- --------
Total current liabilities 104,794 73,667 101,003
Reserve for store closings 2,933 3,096 2,492
Deferred revenue 1,748 1,832 1,916
Long-term debt 10,500 11,500 2,000
Obligations under capital leases 2,554 2,777 2,989
Stockholders' equity:
Common stock, $.01 par value,
70,000 shares authorized,
21,012, 20,959 and
20,844 shares issued 210 210 208
Additional paid-in capital 87,063 86,933 86,603
Retained earnings(deficit) (4,406) (4,661) 2,850
Treasury stock, 75 shares (16) (16) (16)
-------- -------- --------
Total stockholders' equity 82,851 82,466 89,645
-------- -------- --------
$205,380 $175,338 $200,045
======== ======== ========
See Notes to Consolidated Financial Statements.
3
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FILENE'S BASEMENT CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
Thirteen Weeks Ended
(Unaudited)
(in thousands, except per share amounts)
August 1, August 2,
1998 1997
---------- ----------
Net sales $131,396 $126,329
Cost of sales, including buying,
receiving and occupancy costs 99,204 96,907
-------- --------
Gross profit 32,192 29,422
Selling, general and administrative
expenses 29,683 26,853
Amortization of intangible assets and
beneficial operating lease rights 366 367
-------- --------
Operating income 2,143 2,202
Interest expense, net 869 632
-------- --------
Income before income taxes 1,274 1,570
Income tax provision (Note 3) 278 377
-------- --------
Net income $ 996 $ 1,193
======== ========
Basic and diluted earnings $ 0.05 $ 0.06
per share (Note 4) ======== ========
See Notes to Consolidated Financial Statements.
4
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FILENE'S BASEMENT CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
Twenty-Six Weeks Ended
(Unaudited)
(in thousands, except per share amounts)
August 1, August 2,
1998 1997
---------- ----------
Net sales $259,043 $246,780
Cost of sales, including buying,
receiving and occupancy costs 196,376 188,116
-------- --------
Gross profit 62,667 58,664
Selling, general and administrative
expenses (Note 2) 60,097 54,451
Amortization of intangible assets and
beneficial operating lease rights 733 734
-------- --------
Operating income 1,837 3,479
Interest expense, net 1,513 1,176
-------- --------
Income before income taxes 324 2,303
Income tax provision(Note 3) 69 553
-------- --------
Net income $ 255 $ 1,750
======== ========
Basic and diluted earnings $ 0.01 $ 0.08
per share (Note 4) ======== ========
See Notes to Consolidated Financial Statements.
5
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FILENE'S BASEMENT CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Twenty-Six Weeks Ended
(Unaudited)
(in thousands)
August 1, August 2,
1998 1997
---------- ---------
- -
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 255 $ 1,750
Adjustments to reconcile net income
to net cash used in operations:
Depreciation and amortization 6,716 5,787
Deferred income taxes - (385)
Increase in inventories (24,297) (15,351)
Increase in other current assets (1,665) (3,477)
Increase in accounts payable 6,595 1,158
Increase (decrease) in accrued expenses
and other liabilities 649 (2,454)
Other (84) (83)
--------- --------
Net cash used in operating activities (11,831) (13,055)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (9,579) (6,104)
Sale of leasehold interests - 2,106
Other (952) 306
--------- --------
Net cash used in investing activities (10,531) (3,692)
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net 22,700 22,600
Payments of capital lease obligation (203) (249)
Net payments of long-term debt - (6,000)
Proceeds from common stock issuance 130 409
-------- --------
Net cash provided by
financing activities 22,627 16,760
-------- --------
Net increase in cash
and cash equivalents 265 13
Cash and cash equivalents:
Beginning of period 475 462
-------- --------
End of period $ 740 $ 475
======== ========
See Notes to Consolidated Financial Statements.
6
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FILENE'S BASEMENT CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements are
presented in accordance with the requirements of Form 10-Q and
consequently do not include all the disclosures normally required
by generally accepted accounting principles or those normally
made in the Company's Form 10-K filing. Reference should be made
to the Company's Annual Report on Form 10-K for additional
disclosures, including a summary of the Company's accounting
policies. Certain prior year amounts have been reclassified to
conform to the current year presentation. The results of the
periods ended August 1, 1998 and August 2, 1997 are not
necessarily indicative of the results for a full fiscal year
because the Company's business, in common with the businesses of
retailers generally, is subject to seasonal influences, with
higher levels of sales and income generally realized in the fall
season. The information furnished, in the opinion of management,
includes all normal recurring adjustments necessary for a fair
presentation of the results of operations for the periods
reported.
2. DISTRIBUTION CENTER FIRE
During February 1998, the Company had a fire in its Auburn
Distribution Center. The Company expects that its property and
business interruption insurance will fully cover all losses
incurred by the Company in connection with the fire. The results
for the six months ended August 1, 1998 include an inventory loss
for the cost of merchandise destroyed and an offsetting gain from
the Company's partial settlement of the property portion of its
claim with the insurance carrier. The Company has prepared the
claim for lost profits, and anticipates that its claim will be
reimbursed during the remainder of fiscal 1998. Gains from the
settlement of any business interruption claim will be recorded by
the Company when finalized with its insurance carrier.
3. INCOME TAXES
The Company is using an effective tax rate of approximately 22%
to compute taxes for the current fiscal year, reflecting the
realization of certain deferred tax assets, which were not
previously expected to be realized in prior years.
4. EARNINGS PER SHARE
In accordance with Statement of Financial Accounting Standards
(SFAS) No. 128, "Earnings per Share", basic earnings per share is
computed using the weighted average number of shares outstanding
during each period.
7
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FILENE'S BASEMENT CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. EARNINGS PER SHARE (CONTINUED)
Diluted earnings per share is computed using the weighted number
of outstanding shares plus the weighted average number of
dilutive common equivalent shares outstanding during each period.
The following is a reconciliation of the outstanding shares used
in calculating earnings per share for the thirteen week and
twenty-six week periods ended August 1, 1998 and August 2, 1997
(in thousands):
Thirteen Weeks Ended
August 1, August 2,
1998 1997
--------- --------
Basic shares outstanding 20,917 20,727
Options 658 642
------- -------
Dilutive shares outstanding 21,575 21,369
======= =======
Twenty-Six Weeks Ended
August 1, August 2,
1998 1997
--------- --------
Basic shares outstanding 20,906 20,675
Options 669 713
------- -------
Dilutive shares outstanding 21,575 21,388
======= =======
5. NEW ACCOUNTING PRONOUNCMENT
The Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related
Information", in June 1997. The statement establishes standards
for the way public business enterprises report information and
operating segments in annual financial statements and requires
reporting of selected information in interim financial reports.
The required disclosures for SFAS No. 131, which is effective for
fiscal years beginning after December 15, 1997, will be included
in the Company's annual report on Form 10-K for the fiscal year
ended January 30, 1999.
8
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FILENE'S BASEMENT CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
For the quarter ended August 1, 1998 net sales were $131.4
million, up 4.0% from last year's second quarter sales of $126.3
million. Comparable store sales for the second quarter were up
1.9% versus last year. Net sales and comparable store sales for
the twenty-six week period ended August 1, 1998 were up 5.0% and
2.9%, respectively, versus last year. These comparable store
increases were primarily due to increases in sales in the home
goods category. Additionally, the increase in net sales for the
thirteen and twenty-six week periods ended August 1, 1998 was due
in part to the opening of two new stores in the first quarter of
fiscal 1998. The total number of stores in operation on August
1, 1998 and August 2, 1997 were 47 and 45, respectively.
Cost of sales as a percentage of sales was 75.5% and 75.8% for
the thirteen and twenty-six week periods ended August 1, 1998
compared to 76.7% and 76.2% for the corresponding periods in the
prior year. These decreases were primarily attributable to a
decrease in markdowns.
Selling, general and administrative expenses for the second
quarter of 1998 were $29.7 million, or 22.6% of sales, compared
to $26.9 million, or 21.3% of sales, for the same period last
year. The increase in selling, general and administrative
expenses, in absolute terms, was primarily the result of the
opening of new stores in the first quarter of 1998. Payroll as a
percentage of sales increased primarily due to incentive bonuses
related to a new compensation plan implemented in 1998. In
addition, depreciation and equipment leasing costs increased as a
percentage of sales primarily due to the Company's ongoing
efforts to replace or repair systems affected by the "Year 2000"
problem. (See Financial Condition, Liquidity and Capital
Resources.) Selling, general and administrative expenses for the
twenty-six weeks ended August 1, 1998 were $60.1 million, or
23.2% of sales, compared to $54.5 million or 22.1% of sales in
the prior year period. In addition to the reasons stated above,
the Company incurred approximately $0.8 million of expenses in
the first quarter in connection with a fire that took place at
its Auburn Distribution Center. In addition, the Company
received approximately $0.6 million of proceeds on notes
receivable in excess of their book value during the first quarter
of 1997.
The Company expects that its property and business interruption
insurance will fully cover all losses incurred by the Company in
connection with the fire mentioned above. The results for the
six months ended August 1, 1998 include an inventory loss for the
cost of merchandise destroyed and an offsetting gain from the
Company's settlement of the property portion of its claim with
the insurance
9
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FILENE'S BASEMENT CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
carrier. The Company has prepared the claim for lost profits,
and anticipates that its claim will be reimbursed during the
remainder of fiscal 1998. Gains from any settlement of the
business interruption claim will be recorded by the Company when
finalized with its insurance carrier.
Net interest expense for the quarter ended August 1, 1998 was
$0.9 million compared to $0.6 million last year. Net interest
expense for the twenty-six weeks ended August 1, 1998 was $1.5
million, compared to $1.2 million last year. The increase in net
interest expense was due in part to higher average outstanding
borrowings under the Company's Revolving Credit and Term Loan
Agreement. (See Financial Condition, Liquidity and Capital
Resources.)
Net income for the quarter ended August 1, 1998 was $1.0 million,
or $0.05 per share, on 21.6 million weighted average shares
outstanding, compared to net income of $1.2 million, or $0.06 per
share, on 21.4 million weighted average shares outstanding for
the quarter ended August 2, 1997. Net income for the twenty-six
weeks ended August 1, 1998 was $0.3 million, or $0.01 per share,
on 21.6 million weighted average shares outstanding, compared to
net income of $1.8 million, or $0.08 per share, on 21.4 million
weighted average shares outstanding for the twenty-six weeks
ended August 2, 1997.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
On January 30, 1998, the Company entered into an Amended and
Restated Revolving Credit and Term Loan Agreement (the
"Agreement"), which replaced the Revolving Credit and Term Loan
Agreement dated May 23, 1996 as amended June 28, 1996. The new
facility expires on February 3, 2001 and includes a $65.0 million
revolving credit facility and a $12.5 million term loan.
Principal payments of the term loan are due in nine quarterly
installments of $500,000 commencing on October 31, 1998, with a
final payment due at maturity.
During the six months ended August 1, 1998, average borrowings
under the Agreement were approximately $27.5 million at an
average interest rate of 7.94%. During the same period last
year, average borrowings were $23.2 million at an average
interest rate of 7.95%. Excess credit availability at August 1,
1998 was approximately $25.5 million compared to approximately
$24.2 million at August 2, 1997.
10
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FILENE'S BASEMENT CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES(CONTINUED)
The Agreement contains financial covenants, which require
cumulative minimum earnings before interest, taxes, depreciation
and amortization and a minimum cash flow to fixed obligations
ratio for specified periods during the term of the Agreement.
During the quarter ended August 1, 1998, the Company was in
compliance with all covenants of the Agreement.
Net cash used in operating activities was $11.8 million for the
twenty-six weeks ended August 1, 1998 versus cash used of $13.1
million during the same period last year. The $1.3 million
decrease in cash used by operations was primarily due to
decreased payments in the six months ended August 1, 1998
relating to store closing charges, the payment of approximately
$1.8 million of performance-based bonuses in the first quarter of
1997 related to fiscal 1996 results, and a tax refund of $1.2
million received in 1998. These reductions in cash used from
year to year were offset by increased purchases of inventory
primarily for the new stores.
Net cash used in investing activities during fiscal 1998
increased $6.8 million over the comparable period in fiscal 1997
primarily as a result of increased capital expenditures of $3.5
million for the new stores. In addition, in 1997, the Company
received proceeds from the sale of leasehold interests totaling
$2.1 million.
Net cash provided by financing activities during the six months
ended August 1, 1998 was $22.6 million as compared to $16.8
million in the same period of the prior year. The $5.8 million
increase was primarily due to long-term debt repayments made in
the prior year.
The Company believes that internally generated working capital,
existing vendor and third party factor arrangements and funds
available under the Agreement will be adequate to meet its
merchandise inventory and normal operating expense needs, as well
as presently anticipated capital expenditure requirements, for
the remainder of the fiscal year. However, the Company's
operating results and the adequacy of its working capital could
be adversely affected if, for any reason, the Company's borrowing
base was to become impaired, or otherwise be deemed ineligible,
thereby diminishing the level of available funds. During fiscal
1998, capital expenditures are expected to approximate $30
million.
The Company's business is seasonal, reflecting increased consumer
demand in the fall season. The second half of each fiscal year
provides a greater portion of the Company's annual sales and
operating profit.
11
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FILENE'S BASEMENT CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES(CONTINUED)
YEAR 2000
The Company utilizes software and related technologies throughout
its business that will be affected by the "Year 2000" problem,
which is common to most corporations, and concerns the inability
of information systems, primarily computer software programs, to
properly recognize and process date sensitive information as the
year 2000 approaches.
The Company's State of Readiness
The Company has completed a review of its computer systems to
identify the systems that could be affected by the "Year 2000"
problem and has developed an implementation plan to resolve the
issue. As part of this plan, most non-compliant systems will be
replaced with new systems that will provide certain competitive
benefits as well as ensure "Year 2000" compliance in time to
minimize any disruptive effects on operations. The Company is
currently in the process of modifying and testing these new
systems. The Company is also in the process of inventorying and
assessing potential problem areas in its non-information
technology systems that use embedded technology, such as
microprocessors. This evaluation is expected to be completed in
the third quarter of 1998.
The replaced systems generally fall into three major categories:
merchandise management systems, store operating systems and
supporting network and sub-systems. The installation phase of the
merchandise management systems has begun, with final testing and
implementation expected to take place in the spring of 1999. The
store operating systems, which primarily consist of point of
sales systems, are in the initial assessment phase with a planned
rollout of the new systems in the third quarter of fiscal 1999. Supporting
network and other sub-systems implementation is scheduled over 1998 and 1999.
The Company will communicate with most of its key vendors and
other business partners seeking their assurances they will be
Year 2000 compliant. Based on responses, the Company will develop
contingency plans for those areas which pose significant risk
from the Year 2000 problem, however the Company could potentially
experience disruptions to some aspects of its operations from non-
compliant systems utilized by unrelated third party governmental
and business entities.
12
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FILENE'S BASEMENT CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES(CONTINUED)
The Costs to Address the Year 2000 Issue
While it is not possible at this time to predict the total cost
of this effort, the investment, whether leased, purchased or
expensed, in new software and equipment needed to achieve "Year
2000" compliance and enhance existing systems, is currently
estimated at approximately $31.0 million, of which $5.6 million
had been incurred through August 1, 1998. The expense portion of
the total project is estimated at $12.6 million of which $3.5
million and $5.1 million is expected to be incurred in fiscal
1998 and fiscal 1999, respectively. Through August 1, 1998, $0.9
million has been expensed. Funding requirements have been
incorporated into the Company's capital and operating plans and
are not expected to have a material adverse impact on the
Company's financial condition or liquidity.
Risk Analysis
Like most large business enterprises, the Company is dependent
upon its own internal computer technology and relies upon timely
performance by its business partners. As noted above, a large-
scale Year 2000 failure could impair the Company's ability to
timely deliver product to stores, resulting in potential lost
sales opportunities and additional expenses. The Company's Year
2000 program seeks to identify and minimize this risk and
includes testing of its systems and purchased hardware and
software, to ensure, to the extent feasible, all such systems
will function before and after the Year 2000. The Company is
continually refining its understanding of the risk the Year 2000
poses to its significant business partners based upon information
obtained through its surveys and interviews. That refinement
will continue throughout 1998 and 1999.
Contingency Plans
Following its risk analysis, the Company's plans to design a
contingency plan in which appropriate backup plans will be made
to attempt to minimize disruption to the Company's operations in
the event of a Year 2000 failure. The level of planning required
is a function of the risks ascertained through the Company's
investigative efforts. The Company anticipates contingency
planning across the enterprise will be completed by the summer of
1999.
13
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FILENE'S BASEMENT CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES(CONTINUED)
Because of the Company's extensive efforts to formulate and carry-
out an effective Year 2000 program, the Company believes its
program will be completed on a timely basis and should
effectively minimize disruption to the Company's operations,
however, there can be no assurance that the Company will be
successful in this respect.
OUTLOOK
The Company is planning pilot programs to determine the
feasibility of new retail formats to supplement the traditional
Filene's Basement specialty stores. Principal elements are
expected to include larger stores, with variable operating times.
Merchandise would be warehoused at these units, reducing the
current lead time between vendor and point of sale, and providing
greater volume of merchandise at the store. The new format would
leverage the current Filene's Basement infrastructure, vendor
relations and name recognition. The capital required to open
stores of this kind would be significantly less than required for
a traditional Filene's Basement specialty store.
The programs are still in the preliminary stages, and the
objective is to test the concept of increasing sales through such
new stores, with a goal of reducing costs and improving operating
margins. The Company intends to open additional specialty stores
of the traditional format as well. Due to the factors discussed
below, there is no guarantee that the Company will achieve these
expectations.
This Quarterly Report on Form 10-Q contains forward-looking
statements. For this purpose, any statements contained herein
that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, the
words "believes", "anticipates", "plans", "expects" and similar
expressions are intended to identify forward-looking statements.
Factors which may cause actual results to differ materially from
those indicated by such forward-looking statements include, among
others: (i) economic and weather conditions which affect the
buying patterns of the Company's customers, (ii) actions of the
Company's competitors and the Company's ability to respond to
such actions, (iii) the continued support of the Company's
numerous providers of goods and services, (iv) the continued
success of the Company's efforts to implement planned strategic
initiatives, (v) unexpected store closings and the related higher
markdowns associated with inventory liquidations and (vi) the
unanticipated impact of the "Year 2000" problem.
14
<PAGE>
PART II - OTHER INFORMATION
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Stockholders of Filene's Basement Corp. was
held on June 25, 1998, for the purpose of electing three Class I
Directors of the Company to serve until the year 2001 Annual
Meeting of Stockholders or until their successors are duly
elected and qualified. The following sets forth the results of
shareholder voting:
Election of Class I Directors:
Votes in Votes
Favor Withheld
-------- --------
Election of Samuel J. Gerson
as Class I Director 18,503,119 367,159
Election of Robert P. Henderson
as Class I Director 18,503,685 366,593
Election of Paul D. Pagnucci
as Class I Director 18,504,385 365,893
ITEM 5 OTHER INFORMATION
Stockholder Proposals for 1999 Annual Meeting
Stockholder proposals submitted pursuant to Rule 14a-8 under the
Securities and Exchange Act of 1934, as amended (the "Exchange
Act"), and intended to be presented at the Company's 1999 Annual
Meeting of Stockholders must be received by the Company not later
than January 20, 1999 in order to be considered for inclusion in
the Company's proxy materials for that meeting.
In addition, in accordance with recent amendments to Rules 14a-4,
14a-5 and 14a-8 under the Exchange Act, written notice of
stockholder proposals submitted outside the processes of Rule 14a-
8 for consideration at the 1999 Annual Meeting of Stockholders
must be received by the Company on or before April 5, 1999 in
order to be considered timely for purposes of Rule 14a-4.
In addition, the Company's Restated By-Laws also establish an
advance notice procedure with respect to stockholder nomination
of candidates for election as directors. A notice regarding
stockholder nominations for director must be accompanied by a
petition signed by at least 100 record holders representing in
the aggregate at least 1% of the outstanding shares entitled to
vote for directors. Such notice must be received by the clerk of
the Company not less than 60 days or more than 90 days prior to
the applicable stockholder meeting, provided, however, that, in
the event the date of the meeting is not publicly announced by
the Company more than 70 days prior to the meeting, the notice
must be received by the Company not later than the close of
business on the
15
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PART II - OTHER INFORMATION
ITEM 5 OTHER INFORMATION (CONTINUED)
tenth day following the day on which such announcement of the
date of the meeting is made. Any such notice must be written and
contain certain specified information concerning the persons to
be nominated and
the stockholder submitting the nomination, all as set forth in
the Company's Restated By-Laws. The presiding officer of the
meeting may refuse to acknowledge any director nomination not
made in compliance with such advance notice requirements. The
Company has not yet publicly announced the date of the 1999
Annual Meeting. The advance notice provisions of the Company's
Restated By-Laws supersede the notice requirements contained in recent
amendments to Rule 14a-14 under the Exchange Act.
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
None
16
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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, being
also its principal financial officer.
FILENE'S BASEMENT CORP.
\s\ Steven Siegel
---------------------
Steven Siegel
Executive Vice President
& Chief Financial Officer
DATE: September 15, 1998
17
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EXHIBIT INDEX
Pursuant to Item 601 of Regulation S-K
Exhibit Title
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-END> AUG-01-1998
<CASH> 740
<SECURITIES> 0
<RECEIVABLES> 6,911
<ALLOWANCES> 98
<INVENTORY> 117,318
<CURRENT-ASSETS> 130,885
<PP&E> 121,863
<DEPRECIATION> 69,925
<TOTAL-ASSETS> 205,380
<CURRENT-LIABILITIES> 104,794
<BONDS> 13,054
0
0
<COMMON> 210
<OTHER-SE> 82,641
<TOTAL-LIABILITY-AND-EQUITY> 205,380
<SALES> 259,043
<TOTAL-REVENUES> 259,043
<CGS> 196,376
<TOTAL-COSTS> 196,376
<OTHER-EXPENSES> 60,816
<LOSS-PROVISION> 14
<INTEREST-EXPENSE> 1,513
<INCOME-PRETAX> 324
<INCOME-TAX> 69
<INCOME-CONTINUING> 255
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 255
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
