<PAGE>
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 29, 1999
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 No. 0-19972
BRAUN'S FASHIONS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 06 - 1195422
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
2400 XENIUM LANE NORTH, PLYMOUTH, MINNESOTA
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
55441
(ZIP CODE)
(612) 551-5000
(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 / /
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
YES /X/ NO / /
As of June 25, 1999, 4,353,894 shares of the registrant's common stock
were outstanding.
<PAGE>
BRAUN'S FASHIONS CORPORATION
FORM 10-Q QUARTERLY REPORT
INDEX
PART I
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
----
<S> <C>
Item 1. Consolidated Condensed Financial Statements:
Consolidated Condensed Balance Sheet
As of May 29, 1999 and February 27, 1999 .................................... 3
Consolidated Condensed Income Statement
For the Quarters Ended May 29, 1999 and May 30, 1998 ........................ 4
Consolidated Condensed Statement of Cash Flows
For the Quarters Ended May 29, 1999 and May 30, 1998 ........................ 5
Notes to Consolidated Condensed Financial Statements ........................ 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ............................... 7
Item 3. Quantitative and Qualitative Disclosures
About Market Risk ........................................................... 10
PART II
OTHER INFORMATION
Item 1. Legal Proceedings ........................................................... 10
Item 2. Changes in Securities and Use of Proceeds ................................... 11
Item 3. Defaults Upon Senior Securities ............................................. 11
Item 4. Submission of Matters to a Vote of Security Holders ......................... 11
Item 5. Other Information ........................................................... 11
Item 6. Exhibits and Reports on Form 8-K ............................................ 11
Signatures .................................................................. 12
</TABLE>
2
<PAGE>
BRAUN'S FASHIONS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
May 29, February 27,
ASSETS 1999 1999
(Unaudited) (Audited)
-------------- ---------------
<S> <C> <C>
Current assets:
Cash and cash equivalents............................................. $ 9,186,250 $ 12,587,719
Accounts receivable................................................... 1,635,192 1,397,502
Merchandise inventory................................................. 12,158,298 10,799,046
Prepaid expenses...................................................... 1,190,579 547,947
Current deferred tax asset............................................ 275,493 275,493
-------------- ---------------
Total current assets.............................................. 24,445,812 25,607,707
Equipment and improvements, net............................................ 14,810,748 12,954,964
Other assets:
Long-term deferred tax asset.......................................... 1,468,101 1,468,101
Other ................................................................ 188,076 28,844
-------------- ---------------
Total other assets................................................ 1,656,177 1,496,945
-------------- ---------------
Total assets...................................................... $ 40,912,737 $ 40,059,616
-------------- ---------------
-------------- ---------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable...................................................... $ 2,312,401 $ 2,893,317
Accrued liabilities................................................... 4,745,715 5,471,811
Current maturities of long-term debt.................................. 277,419 271,592
Income taxes payable.................................................. 1,191,555 546,936
-------------- ---------------
Total current liabilities......................................... 8,527,090 9,183,656
Long-term liabilities:
Long-term debt........................................................ 5,038,898 5,073,604
Accrued rent obligation............................................... 1,084,022 1,072,590
-------------- ---------------
Total long-term liabilities....................................... 6,122,920 6,146,194
Stockholders' equity:
Preferred stock-$0.01 par value, 1,000,000 shares authorized;
none outstanding.................................................. -- --
Common stock-$0.01 par value, 9,000,000 shares authorized;
4,353,894 and 4,349,761 shares issued and outstanding at May 29,
1999 and February 27, 1999, respectively.......................... 47,219 47,178
Additional paid-in capital............................................ 29,317,006 29,304,648
Retained earnings (deficit)........................................... 73,463 (1,447,099)
-------------- ---------------
29,437,688 27,904,727
Common stock held in treasury, at cost (368,000 shares) .............. (2,999,961) (2,999,961)
Common stock subscriptions receivable................................. (175,000) (175,000)
-------------- ---------------
Total stockholders' equity........................................ 26,262,727 24,729,766
-------------- ---------------
Total liabilities and stockholders' equity........................ $ 40,912,737 $ 40,059,616
-------------- ---------------
-------------- ---------------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
<PAGE>
BRAUN'S FASHIONS CORPORATION
CONSOLIDATED CONDENSED INCOME STATEMENT
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended
----------------------------------
May 29, May 30,
1999 1998
-------------- ---------------
<S> <C> <C>
Net sales....................................................................... $ 29,205,538 $ 25,002,626
Cost of sales:
Merchandise, buying and occupancy.......................................... 18,869,330 16,329,319
-------------- ---------------
Gross profit............................................................... 10,336,208 8,673,307
Selling, general and administrative expenses.................................... 7,109,368 6,158,688
Depreciation ................................................................... 724,906 659,158
-------------- ---------------
Operating income........................................................... 2,501,934 1,855,461
Interest, net................................................................... 29,476 116,571
-------------- ---------------
Income before income taxes................................................. 2,472,458 1,738,890
Income tax provision ........................................................... 951,896 660,778
-------------- ---------------
Net income ................................................................ $ 1,520,562 $ 1,078,112
-------------- ---------------
-------------- ---------------
Basic earnings per common share:
Net income................................................................. $ 0.35 $ 0.24
-------------- ---------------
-------------- ---------------
Weighted average common shares outstanding................................. 4,353,339 4,523,393
-------------- ---------------
-------------- ---------------
Diluted earnings per common share:
Net income ................................................................ $ 0.34 $ 0.22
-------------- ---------------
-------------- ---------------
Weighted average common and common equivalent shares outstanding........... 4,490,926 4,874,940
-------------- ---------------
-------------- ---------------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4
<PAGE>
BRAUN'S FASHIONS CORPORATION
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended
----------------------------------
May 29, May 30,
1999 1998
-------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income ................................................................ $ 1,520,562 $ 1,078,112
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization.............................................. 724,906 659,158
(Gain) loss on disposals of equipment, net................................. 46,228 (2,500)
Increase (decrease) in accrued rent obligation............................. 11,432 (9,795)
Changes in operating assets and liabilities:
(Increase) decrease in merchandise inventory,
prepaid expenses, receivables and other............................... (2,398,806) 552,419
Decrease in accounts payable,
accrued liabilities and income taxes payable.......................... (662,393) (1,716,393)
-------------- ---------------
Net cash provided by (used in) operating activities................... (758,071) 561,001
Cash flows from investing activities:
Purchase of equipment and improvements..................................... (2,626,918) (739,418)
Proceeds from sale of equipment............................................ -- 2,500
-------------- ---------------
Net cash used in investing activities................................. (2,626,918) (736,918)
Cash flows from financing activities:
Principal payments on long-term debt....................................... (65,752) (60,400)
Interest on 12% Senior Notes added to principal............................ 36,873 72,234
Exercise of stock options and related income tax benefit................... 12,399 8,498
-------------- ---------------
Net cash provided by (used in) financing activities................... (16,480) 20,332
-------------- ---------------
Net decrease in cash and cash equivalents....................................... (3,401,469) (155,585)
Cash and cash equivalents at beginning of year.................................. 12,587,719 15,848,439
-------------- ---------------
Cash and cash equivalents at end of period...................................... $ 9,186,250 $ 15,692,854
-------------- ---------------
-------------- ---------------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
5
<PAGE>
BRAUN'S FASHIONS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1 -- BASIS OF PRESENTATION
The financial statements included in this Form 10-Q have been prepared by
Braun's Fashions Corporation and subsidiary (the "Company"), without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed, or omitted, pursuant to such rules and regulations. These
financial statements should be read in conjunction with the financial statements
and related notes included in the Company's Annual Report on Form 10-K for the
fiscal year ended February 27, 1999.
The results of operations for the interim periods shown in this report are
not necessarily indicative of results to be expected for the fiscal year. In the
opinion of management, the information contained herein reflects all adjustments
necessary to make the results of operations for the interim periods a fair
statement of such operations. All such adjustments are of a normal recurring
nature.
NOTE 2 -- NET INCOME PER SHARE
The Company has adopted the provisions of Statement of Financial Accounting
Standards No. 128, "Earnings Per Share" ("SFAS No. 128"). Under SFAS No. 128,
basic earnings per share ("EPS") is computed based on the weighted average
number of shares of common stock outstanding during the applicable periods while
diluted EPS is computed based on the weighted average number of common and
common equivalent shares (dilutive stock options) outstanding.
The following is a reconciliation of the number of shares (denominator)
used in the basic and diluted EPS computations:
<TABLE>
<CAPTION>
Quarter Ended
-----------------------------------------------------
May 29, 1999 May 30, 1998
----------------------- ---------------------
Net Net
Shares Income Shares Income
--------- ------- --------- --------
<S> <C> <C> <C> <C>
Basic EPS 4,353,339 $ 0.35 4,523,393 $ 0.24
Effect of dilutive stock options 137,587 (0.01) 351,547 (0.02)
--------- ------- --------- --------
Diluted EPS 4,490,926 $ 0.34 4,874,940 $ 0.22
--------- ------- --------- --------
--------- ------- --------- --------
</TABLE>
NOTE 3 -- ACCOUNTING PRONOUNCEMENT
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS No. 133"), effective for
fiscal years beginning after June 15, 1999, establishes standards for the
recognition and measurement of derivatives and hedging activities. The Company
does not currently engage in these types of risk management or investment
activities. Therefore, SFAS No. 133 is not anticipated to have any impact on the
Company's financial position or results of operations.
6
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Braun's Fashions Corporation is a Minneapolis-based regional retailer of
women's specialty apparel, which operates through its wholly-owned subsidiary,
Braun's Fashions, Inc. As of June 25, 1999, the Company operated 208 stores in
24 states, primarily in the upper Midwest. The Company's stores offer
coordinated assortments of exclusively designed sportswear, sweaters, dresses
and accessories.
During the first quarter of fiscal 2000 the Company opened seven new
Christopher & Banks stores. All fiscal 2000 new store openings will adopt the
name Christopher & Banks, thereby identifying the store name with the Company's
brand name merchandise. During the quarter, in conjunction with store remodels,
the Company also changed the name of six of its mature stores to Christopher &
Banks.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain items
from the Company's operating statement data expressed as a percentage of net
sales.
<TABLE>
<CAPTION>
Quarter Ended
----------------------------------
May 29, 1999 May 30, 1998
------------ ------------
<S> <C> <C>
Net sales........................................... 100.0% 100.0%
Merchandise, buying and occupancy................... 64.6 65.3
----- -----
Gross profit........................................ 35.4 34.7
Selling, general and administrative................. 24.3 24.6
Depreciation and amortization....................... 2.5 2.7
----- -----
Operating income ................................... 8.6 7.4
Interest, net....................................... 0.1 0.5
----- -----
Income before income taxes ......................... 8.5 6.9
Income tax provision................................ 3.3 2.6
----- -----
Net income ......................................... 5.2% 4.3%
----- -----
----- -----
</TABLE>
QUARTER ENDED MAY 29, 1999 COMPARED TO QUARTER ENDED MAY 30, 1998.
NET SALES. Net sales for the quarter ended May 29, 1999 were $29.2 million,
an increase of 17% from $25.0 million for the quarter ended May 30, 1998. The
increase in sales was attributable to a 9% increase in same-store sales combined
with an increase in the number of stores operated by the Company. The Company
operated 200 stores at May 29, 1999 compared to 186 at May 30, 1998.
GROSS PROFIT. Gross profit, which is net sales less cost of merchandise,
buying and occupancy expenses, was $10.3 million or 35.4% of net sales during
the first quarter of fiscal 2000 compared to $8.7 million or 34.7% of net sales
during the same period in fiscal 1999. The increase in gross margin as a percent
of net sales was a result of improved merchandise margins, primarily resulting
from lower pricing obtained from overseas vendors, offset by a slight increase
in occupancy expenses as a percent of sales.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the first quarter of fiscal 2000 were $7.1 million
or 24.3% of net sales compared to $6.2 million or 24.6% of net sales in the
first quarter of fiscal 1999. The decrease as a percent of net sales was a
result of leveraging associated with increased sales.
OPERATING INCOME. Operating income for the quarter ended May 29, 1999 was
$2.5 million or 8.6% of net sales compared to operating income of $1.9 million
or 7.4% of net sales in the quarter ended May 30, 1998.
7
<PAGE>
INTEREST, NET. Net interest decreased by $87,095 from $116,571 in the
first quarter of fiscal 1999 to $29,476 in the current year's first quarter.
This decrease was primarily due to a reduction in the Company's long-term
debt. In fiscal 1999 the Company repurchased and retired approximately $4.7
million original principal face amount of its Senior Notes due 2005.
INCOME TAXES. Income tax expense in the first quarter of fiscal 2000 was
$951,896 compared to $660,778 in the first quarter of fiscal 1999.
NET INCOME. As a result of the foregoing factors, net income for the
quarter ended May 29, 1999 was $1.5 million or 5.2% of net sales compared to
$1.1 million or 4.3% of net sales for the quarter ended May 30, 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal on-going cash requirements are to finance the
construction of new stores and the remodeling of certain existing stores, to
purchase merchandise inventories and to fund other working capital requirements.
Merchandise purchases vary on a seasonal basis, peaking in the fall. As a
result, the Company's cash requirements historically reach their peak in October
and November. Conversely, cash balances reach their peak in January, after the
holiday season is completed.
Net cash used by operating activities totaled $758,071 for the first three
months of fiscal 2000. Cash was also used to finance $2.6 million of capital
expenditures to open seven new stores and to substantially complete six major
store remodelings. During the remainder of the fiscal year the Company intends
to spend approximately $5.5 million to open at least 25 additional new stores
under the name Christopher & Banks, to complete three major remodels and for
various expenditures for its headquarters facility. Management expects its cash
on hand combined with cash flow from operations to be sufficient to meet its
capital expenditure and working capital requirements and its other needs for
liquidity during the remainder of the year.
In March 1999, the Company entered into an Amended and Restated Revolving
Credit and Security agreement with Norwest Bank Minnesota, National Association
(the "Norwest Revolver"). The Norwest Revolver will expire on June 30, 2002 and
replaced the Company's previous credit agreement with Norwest Bank. The Norwest
Revolver provides the Company with revolving credit loans and letters of credit
up to $12 million, subject to a borrowing base formula tied to inventory levels.
Loans under the Norwest Revolver bear interest at Norwest's base rate plus
1/4%. Interest is payable monthly in arrears. The Norwest Revolver carries a
facility fee of 1/4% on the unused portion of the Norwest Revolver as defined in
the Norwest Revolver. This facility is secured by substantially all of the
Company's assets. The borrowing base at June 25, 1999, was $7.9 million. As of
June 25, 1999, the Company had no borrowings and outstanding letters of credit
in the amount of $5.9 million under the Norwest Revolver. Accordingly, the
availability of revolving credit loans under the Norwest Revolver was $2.0
million at that date.
The Norwest Revolver contains certain restrictive covenants including
restrictions on incurring additional indebtedness, limitations on certain types
of investments and prohibitions on paying dividends, as well as requiring the
maintenance of certain financial ratios. As of May 29, 1999, the most recent
measurement date, the Company was in compliance with all covenants of the
Norwest Revolver.
In January 1997, the Company issued $10,300,200 of debt in the form of 12%
Senior Notes (the "Senior Notes") due January 2005, pursuant to an Indenture
dated as of December 2, 1996. The principal amount of the Senior Notes bears
interest at the rate of 12% per annum. Interest at the rate of 9% per annum on
the outstanding principal amount is due monthly. Interest at the rate of 3% per
annum on the outstanding principal amount accrues monthly and upon accrual is
treated as principal for all purposes, including without limitations, the
calculation of all interest payments due thereafter, and is payable in full on
January 1, 2005.
The Senior Notes are general unsecured senior obligations of the Company.
The Indenture for the Senior Notes ("the Indenture") contains certain covenants
which, among other things, limit the ability of the Company to incur liens and
additional indebtedness. As of May 29, 1999, the most recent measurement date,
the Company was in compliance with all covenants of the Indenture. In November
1998, the Company received consent from the holders of a majority, by principal
face amount, of its Senior Notes. This consent eliminated a restrictive covenant
under the Indenture which, among other things, prohibited the Company from
repurchasing its equity securities and paying dividends.
8
<PAGE>
In fiscal 1999 and fiscal 1998, the Company repurchased $4,676,000 and
$1,033,000 respectively, of principal face amount of its Senior Notes at a
discount from par. These purchases satisfied all of the annual mandatory
redemption requirements through January 1, 2004, leaving no additional mandatory
payments due until maturity on January 1, 2005.
The Company is unaware of any environmental liability that would have a
material adverse effect on the financial position or the results of operations
of the Company.
The Company anticipates that approximately 55% of its merchandise purchased
in fiscal 2000 will be directly from overseas vendors. Since the Company
purchases this merchandise using letters of credit denominated in U.S. dollars,
primarily from vendors in countries whose currency is pegged to the U.S. dollar,
management does not believe the Company will be materially affected by foreign
currency fluctuations.
SEASONALITY
The Company's sales reflect seasonal variation as sales in the third and
fourth quarters, which include the fall and holiday season, generally have been
higher than sales in the first and second quarters. Sales generated during the
fall and holiday season have a significant impact on the Company's annual
results of operations. Quarterly results may fluctuate significantly depending
on a number of factors including adverse weather conditions, shifts in the
timing of certain holidays and promotional events, timing of new store openings,
and customer response to the Company's seasonal merchandise mix.
INFLATION
Although the operations of the Company are influenced by general economic
conditions, the Company does not believe that inflation has had a material
effect on the results of operations during the quarters ended May 29, 1999, and
May 30, 1998.
YEAR 2000 MATTERS
The year 2000 issue results from computer programs being written using two
digits rather than four to define the applicable year. Certain of the Company's
computer information systems and their associated software ("IT Systems") and
other equipment using microchips or embedded technology ("Non-IT Systems") may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in system failures or miscalculations causing disruptions of
operations including, but not limited to, a temporary inability to process
transactions or to engage in similar business activities.
READINESS FOR YEAR 2000. The Company has been in the process of addressing
the year 2000 issue with regard to its IT and Non-It Systems since the beginning
of calendar 1998. In connection with a general upgrade of its IT Systems, the
Company completed the installation of new merchandise and financial system
software packages in February 1999. The Company began using these systems in
March 1999. In addition to being year 2000 compliant, management believes the
new merchandise systems allow for improved merchandise planning, sales tracking
and trend analysis. Further, the Company also expects these systems will allow
for improved distribution center processing and more flexible allocations of
merchandise to the Company's stores.
The Company has employed a consultant to upgrade the Company's
point-of-sale systems to be year 2000 compliant. The final stages of this
project, including testing, are estimated to be complete by August 1999. The
Company has also evaluated its Non-IT Systems and determined that all Non-IT
Systems that are critical to the Company's operations have been addressed
regarding year 2000 compliance.
COSTS TO ADDRESS YEAR 2000 ISSUES. In February 1999 the Company installed
new year 2000 compliant software packages. These software packages and related
hardware improvements, which the Company previously planned to install
irrespective of any year 2000 considerations, cost approximately $1.0 million,
of which approximately $50,000 was expensed and the remainder was capitalized.
In addition, the Company intends to spend approximately $300,000 over the next
twelve to eighteen months for hardware costs related to the new software
packages. Other internal costs associated with the year 2000 issues, which are
not separately tracked by the Company, consist primarily of payroll and related
expenses for the Company's Management Information Systems department. All costs
related to year 2000 compliant issues have been, or will be funded through cash
flows from operations.
9
<PAGE>
RISKS OF YEAR 2000 ISSUES. The Company expects to implement all changes
necessary to address the year 2000 issue by December 1999. The Company presently
believes that, with the conversions to new software and modifications to
existing IT and Non-IT Systems, the year 2000 issue will not pose significant
operational problems for the Company's IT and Non-IT Systems and thus will not
have a materially adverse effect on the Company's operations. However, the year
2000 issue is pervasive and complex and can potentially affect any computer
process. Accordingly, no assurance can be given that year 2000 compliance can be
achieved without additional unanticipated expenditures and uncertainties that
might affect future financial results.
Additionally, in its normal course of operations the Company relies upon
vendors, government agencies, utility companies, telecommunications companies,
shipping companies, suppliers and other third party service providers over which
it can assert little control. The Company's ability to conduct its business is
dependent upon the ability of these third parties to avoid year 2000 related
disruptions. The Company has contacted and will continue to contact its key
suppliers and other third party service providers to inquire as to their year
2000 readiness. If these parties do not adequately address their year 2000
issues the Company's business may be affected, which could result in a
materially adverse effect on the results of operations and financial position of
the Company.
CONTINGENCY PLANS. In addition to the above plans, the Company's
contingency plans involve addressing operational issues that may arise due to
the failure of the Company's or third parties' IT and Non-IT Systems. The
Company is currently assessing such issues and estimates these plans will be
completed by December 1999.
FORWARD LOOKING INFORMATION
Information contained in this Form 10-Q contains "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, which can be identified by the use of forward-looking terminology such
as "may", "will", "expect", "plan", "anticipate", "estimate" or "continue" or
the negative thereof or other variations thereon or comparable terminology.
There are certain important factors that could cause results to differ
materially from those anticipated by some of these forward-looking statements.
Investors are cautioned that all forward-looking statements involve risks and
uncertainty. The factors, among others, that could cause actual results to
differ materially include: consumers' spending and debt levels; the Company's
ability to execute its business plan; the acceptance of the Company's
merchandising strategies by its target customers; the ability of the Company to
anticipate marketing trends and consumer needs; continuity of a relationship
with or purchases from major vendors, particularly those from whom the Company
imports merchandise; competitive pressures on sales and pricing; increases in
other costs which cannot be recovered through improved pricing of merchandise;
and the adverse effect of weather conditions from time to time on consumers'
ability or desire to purchase new clothing.
ITEM 3.
QUANTITATIVE AND QUALITATIVE
DISCLOSURE ABOUT MARKET RISK
Not Applicable.
PART II.
ITEM 1.
LEGAL PROCEEDINGS
There are no material legal proceedings pending against the Company.
10
<PAGE>
ITEM 2.
CHANGES IN SECURITIES
AND USE OF PROCEEDS
There have been no material modifications to the Company's registered
securities.
ITEM 3.
DEFAULTS UPON
SENIOR SECURITIES
There has been no default with respect to any indebtedness of the Company.
ITEM 4.
SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
first quarter of fiscal 2000.
ITEM 5.
OTHER INFORMATION
None.
ITEM 6.
EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit
Exhibit 27 -- Financial Data Schedules (submitted for SEC use only)
(b) Reports on Form 8-K
None
11
<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.
Dated: July 9, 1999
BRAUN'S FASHIONS CORPORATION
By /s/ ANDREW K. MOLLER
--------------------------
Andrew K. Moller
Senior Vice President and
Chief Financial Officer
Signing on behalf of the
registrant and as principal
financial officer.
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S 10Q FOR THE QUARTER ENDED MAY 29, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-26-2000
<PERIOD-START> FEB-28-1999
<PERIOD-END> MAY-29-1999
<CASH> 9,186,250
<SECURITIES> 0
<RECEIVABLES> 1,635,192
<ALLOWANCES> 0
<INVENTORY> 12,158,298
<CURRENT-ASSETS> 24,445,812
<PP&E> 28,426,857
<DEPRECIATION> 13,616,109
<TOTAL-ASSETS> 40,912,737
<CURRENT-LIABILITIES> 8,527,089
<BONDS> 4,941,067
0
0
<COMMON> 47,219
<OTHER-SE> 26,215,509
<TOTAL-LIABILITY-AND-EQUITY> 40,912,737
<SALES> 29,205,538
<TOTAL-REVENUES> 29,205,538
<CGS> 18,869,330
<TOTAL-COSTS> 18,869,330
<OTHER-EXPENSES> 7,834,274
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29,476
<INCOME-PRETAX> 2,472,458
<INCOME-TAX> 951,896
<INCOME-CONTINUING> 1,520,562
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,520,562
<EPS-BASIC> 0.35
<EPS-DILUTED> 0.34
</TABLE>
