<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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 3, 1997
------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended _______________________to _______________________
---------------------------------------------------------
Commission File No. 0-20234
--------
Today's Man, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-1743137
- --------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
835 Lancer Drive, Moorestown, NJ 08057
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number 609-235-5656
--------------------------------------------------
Not Applicable
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report
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, and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
------- -------
10,861,005 common shares were outstanding as of June 16, 1997
<PAGE>
TODAY'S MAN INC.
INDEX
PAGE
PART I. FINANCIAL INFORMATION:
Item 1. Condensed Financial Statements - Unaudited
Consolidated Balance Sheets
May 3, 1997 and February 1, 1997.................................1
Consolidated Statements of Operations
Thirteen weeks ended May 3, 1997 and May 4, 1996.................2
Consolidated Statements of Cash Flows
Thirteen weeks ended May 3, 1997 and May 4, 1996.................3
Notes to Consolidated Financial Statements......................4-6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.......................................7-9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...............................................10
Item 2. Changes in Securities...........................................10
Item 3. Defaults Upon Senior Securities.................................10
Item 4. Submission of Matters to a Vote of Security Holders.............10
Item 5. Other Information...............................................10
Item 6. Exhibits and Reports on Form 8-K................................10
Signatures...............................................................11
<PAGE>
TODAY'S MAN, INC.
(Debtor-In-Possession)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
May 3, 1997 February 1, 1997
----------- ----------------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 19,107,600 $ 22,926,000
Due from credit card companies and other receivables, net 3,066,500 2,299,400
Inventory 33,100,300 28,636,600
Prepaid expenses and other current assets 3,287,300 3,548,300
Prepaid inventory purchases 1,098,300 2,047,100
------------ ------------
Total current assets 59,660,000 59,457,400
Property and equipment, less accumulated depreciation and amortization 32,535,300 33,452,200
Loans to shareholders 228,400 228,400
Rental deposits and other noncurrent assets 2,462,600 2,258,700
------------ ------------
$ 94,886,300 $ 95,396,700
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 4,146,100 $ 3,801,800
Accrued expenses and other current liabilities 4,092,000 4,731,500
Current maturities of capital lease obligations 1,396,500 1,396,500
------------ ------------
Total current liabilities 9,634,600 9,929,800
Capital lease obligations, less current maturities 1,787,300 2,264,000
Deferred rent and other 4,692,700 4,580,300
Liabilities subject to settlement 63,358,300 63,367,900
------------ ------------
79,472,900 80,142,000
Shareholders' equity:
Preferred stock, no par value, 5,000,000 shares authorized, none issued
Common stock, no par value, 20,000,000 shares authorized, 10,861,005
shares issued and outstanding 38,269,100 38,269,100
Retained earnings (deficit) (22,855,700) (23,014,400)
------------ ------------
Total shareholders' equity 15,413,400 15,254,700
------------ ------------
$ 94,886,300 $ 95,396,700
============ ============
</TABLE>
See accompanying notes.
1
<PAGE>
TODAY'S MAN, INC.
(Debtor-In-Possession)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
FOR THIRTEEN WEEKS ENDED
MAY 3, 1997 MAY 4, 1996
----------- -----------
<S> <C> <C>
Net sales $ 43,928,900 $ 46,397,400
Cost of goods sold 27,997,800 33,179,800
----------------- ---------------
Gross profit 15,931,100 13,217,600
Selling, general and administrative expenses 15,062,100 16,098,000
----------------- ---------------
Income (loss) from operations 869,000 (2,880,400)
Reorganization items:
Professional fees and other 931,400 1,326,100
Interest income (277,800) (40,400)
----------------- ---------------
Net reorganization items 653,600 1,285,700
Interest expense and other income, net (excluding contractual interest 2,800 42,600
of $701,200 for the first quarter of fiscal 1997) ----------------- ---------------
Income (loss) before income tax expense 212,600 (4,208,700)
Income tax expense 53,900 -
----------------- ---------------
Net income (loss) $ 158,700 $ (4,208,700)
================= ===============
Net income (loss) per share $ 0.01 $ (0.39)
================= ===============
Weighted average shares outstanding 10,861,005 10,861,005
</TABLE>
See accompanying notes
2
<PAGE>
TODAY'S MAN, INC.
(Debtor-In-Possession)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
FOR THIRTEEN WEEKS ENDED
MAY 3, 1997 MAY 4, 1996
----------- -----------
<S> <C> <C>
Operating activities
Net income (loss) $ 158,700 $ (4,208,700)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,074,300 1,352,000
Deferred credits 112,400 198,700
Changes in operating assets and liabilities:
Increase in receivables (767,100) (37,000)
(Increase) decrease in inventory (4,463,700) 3,134,200
Decrease (increase) in prepaid expenses and other current assets 1,209,800 (416,500)
Decrease in rental deposits and other non current assets (203,900) (532,600)
Increase (decrease) in payables, accrued expenses and
liabilities subject to settlement (208,900) 2,149,400
Charges due to reorganization activities:
Reorganization costs 653,600 1,285,700
Payment of reorganization costs (749,500) (290,000)
------------ ------------
Total adjustments (3,343,000) 6,843,900
------------ ------------
Net cash (used in) provided by operating activities (3,184,300) 2,635,200
Cash flow used in investing activities:
Capital expenditures (157,400) (278,800)
------------ ------------
Net cash used in investing activities (157,400) (278,800)
Cash flow used in financing activities:
Repayment of capital leases (476,700) (428,000)
------------ ------------
Net cash used in financing activities (476,700) (428,000)
Net increase (decrease) in cash and cash equivalents (3,818,400) 1,928,400
Cash and cash equivalents at beginning of period 22,926,000 1,385,400
------------ ------------
Cash and cash equivalents at end of period $ 19,107,600 $ 3,313,800
============ ============
</TABLE>
See accompanying notes
3
<PAGE>
TODAY'S MAN, INC.
(Debtor-In-Possession)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Chapter 11 Proceedings
On February 2, 1996 Today's Man, Inc. ("the Company") and certain of its
subsidiaries filed voluntary petitions in the United States Bankruptcy Court for
the District of Delaware (the "Bankruptcy Court") seeking to reorganize under
Chapter 11 of the U.S. Bankruptcy Code. Under Chapter 11, certain claims against
the Company in existence prior to the filing of the petition for relief under
federal bankruptcy law are stayed while the Company continues business
operations as debtor-in-possession. These claims are reflected in the
accompanying Consolidated Balance Sheet as "liabilities subject to settlement."
In addition, the filing of a voluntary petition under Chapter 11 was an event of
default under all of the Company's loan agreements. One subsidiary was not
included in the Chapter 11 filings. The results of its operations and financial
position are not material to the Consolidated Financial Statements.
On March 11, 1996 by order of the Bankruptcy Court, the Company received
final approval for a $20 million Debtor-In-Possession Revolving Credit Facility
(the "DIP Facility") with the CIT Group/Business Credit, Inc. The DIP Facility
permits borrowings of up to $20 million, including a letter of credit sublimit
of $15.0 million, through the earlier of February 13, 1998 or the date of
substantial consummation of a plan of reorganization. Borrowings under the DIP
Facility will be subject to availability under a borrowing base formula.
Interest is payable monthly at the prime rate plus 0.5%. The Company has had no
borrowings under this DIP Facility since the inception of the loan. Loans under
the DIP Facility will have a superpriority administrative expense claims status
under the Bankruptcy Code, subject to certain exceptions.
The accompanying Consolidated Financial Statements have been prepared in
accordance with generally accepted accounting principles applicable to a company
on a "going concern" basis, which, except as otherwise noted, contemplates the
realization of assets and the liquidation of liabilities in the ordinary course
of business; however, as a result of the Chapter 11 proceedings, and
circumstances relating to this event, including the Company's debt structure,
its operating losses, and current economic conditions, such realization of
assets and liquidation of liabilities are subject to significant uncertainties.
As reflected in the Consolidated Financial Statements, the Company experienced
significant net losses in each of fiscal year 1996 and 1995, respectively.
During the Chapter 11 proceedings, the Company has incurred and will continue to
incur substantial reorganization costs. The Company's ability to continue as a
going concern is dependent upon the confirmation of a plan of reorganization by
the Bankruptcy Court, the ability to secure adequate exit financing and to
maintain compliance with all debt covenants under the post-petition financing,
combined with the achievement of profitable operations. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
A plan of reorganization, as finally approved by the Bankruptcy Court,
could materially change the currently recorded amounts of assets and
liabilities. These financial statements do not reflect further adjustments to
the carrying value of assets and the amounts and classifications of liabilities
or shareholders' equity that might be necessary as a consequence of the
bankruptcy proceedings. Events completed in relation to the Company's ongoing
operational restructuring include the closing of ten underperforming locations
and its outlet center and reductions in store operating expenses and corporate
overhead. Additional components of the operational restructuring include ongoing
evaluation of store operations, review of both corporate and store expenses and
a refocusing of the Company's merchandising and marketing strategies.
Since the commencement of the Chapter 11 filing, the Company has had the
exclusive right to file a plan of reorganization. The period of exclusivity
granted to the Company has been extended and is now scheduled to expire on June
24, 1997. The Company has agreed that it will not seek an extension of the
period of exclusivity without the prior written consent of the Creditor's
Committee. Any extension is within the discretion of the Bankruptcy Court.
Under the Bankruptcy Code, the Company may elect to assume or reject real
estate leases, employment contracts, personal property leases, service contracts
and other unexpired executory pre-petition contracts, subject to Bankruptcy
Court approval. Certain leases and contracts have been rejected in connection
with the Chapter 11 proceedings. Obligations related to these rejected items
have been included in liabilities subject to settlement in amounts pursuant to
the Bankruptcy Code. The ultimate amount of such claims is subject to adjustment
based on the finalization of a reorganization plan. Accordingly, the Company
cannot presently determine the ultimate liability which may result from the
filing of claims for any contracts which have been or may subsequently be
rejected in the Chapter 11 proceedings.
The Court established September 3, 1996 (the "Bar Date") as the deadline
for filing proofs of claim in the Chapter 11 proceedings. The Company has
notified all known claimants for the purposes of identifying all pre-petition
claims against the Company.
4
<PAGE>
TODAY'S MAN, INC.
(Debtor-In-Possession)
NOTES TO FINANCIAL STATEMENTS (Continued)
(Unaudited)
There are approximately 4,000 scheduled liabilities and filed proofs of
claim against the Company. Included among the claims filed have been claims of
unspecified amounts. The aggregate amount of those claims which specified
amounts was approximately $270,000,000. The Company considers this amount to be
highly inflated and a totally unreliable estimate of its liabilities. The
Company intends to request the Bankruptcy Court to approve reductions of, or to
expunge, overstated, duplicate or amended claims. The ultimate amount of and
settlement terms for such liabilities will be subject to an approved plan of
reorganization and, accordingly, are not presently determinable. Therefore, no
provision has been made for the differences between the amounts filed with the
court and the balances reflected in the accompanying Consolidated Financial
Statements.
2. Basis of Financial Statement Presentation
The accompanying unaudited consolidated financial statements, which include
the accounts of the Company and its wholly owned subsidiaries, have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. All significant intercompany transactions and accounts
have been eliminated in consolidation. In the opinion of management, all
adjustments (consisting only of normal recurring accruals) considered necessary
for a fair presentation have been included. Due to the seasonal nature of the
Company's sales and the Chapter 11 filing, operating results for the interim
period are not necessarily indicative of results that may be expected for the
fiscal year ending January 31, 1998. For further information, refer to the
financial statements and footnotes thereto which are included in the Company's
Annual Report on Form 10-K for the fiscal year ended February 1, 1997. The
Company has adopted the provisions of the American Institute of Certified Public
Accountants Statement of Position 90-7, "Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code."
3. Segregated Cash
The Company, in connection with the November 1995 Amendment and Restatement
of its Credit Agreement (the "Amended and Restated Credit Agreement"), granted
the bank lenders a security interest in certain non-inventory assets. Included
in Cash and cash equivalents is approximately $1.0 million representing the
proceeds from receivables related to credit card sales in the three days
preceeding the Chapter 11 filing which have been separated from the Company's
operating bank accounts for the potential benefit of the bank lenders if it is
ultimately determined that they have valid liens.
The Company's fiscal 1995 loss was carried back and generated a refund of
previously paid taxes of approximately $5,800,000. The bank lenders have, under
the terms of the Amended and Restated Credit Agreement, asserted a lien on the
amounts of such refunds. While the Company believes this assertion is without
merit, if the lenders' assertion was deemed successful any refund would be
applied as a reduction of the Company's pre-petition liability to the lenders.
The proceeds from the tax refund have been separated from operating bank
accounts for the potential benefit of the bank lenders, if it is ultimately
determined that they have valid liens.
4. Use of Estimates
In addition to the uncertainties related to the Chapter 11 proceedings, the
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
5. Income Taxes
There are no additional taxes paid in prior years which are available for
refund. As such, the remaining net operating loss carryforward of $16,773,500
and AMT credit carryforward of $412,900 are available to offset future tax
liabilities, subject to any applicable limitations under Internal Revenue Code
Section 382 and can be affected by the ultimate treatment of liabilities subject
to settlement. These carryforwards are fully offset by a valuation allowance.
The federal net operating loss carryforwards expire in 2010 and 2011.
5
<PAGE>
TODAY'S MAN, INC.
(Debtor-In-Possession)
NOTES TO FINANCIAL STATEMENTS (Continued)
(Unaudited)
6. Net Income (Loss) Per Share
Net income (loss) per share is computed using the weighted average number
of common shares and common share equivalents outstanding during each period.
The calculation of net income (loss) per common share does not include share
equivalents in determining the weighted average shares outstanding as the result
would be antidilutive. In February 1997, the Financial Accounting Standards
Board issued Statement No. 128, "Earnings Per Share", which is required to be
adopted on January 31, 1998. At that time, the Company will be required to
change the method currently used to compute earnings per share and to restate
all prior periods. Under the new requirements for calculating primary earnings
per share, the dilutive effect of stock options, if any, will be excluded. The
impact of Statement 128 is not expected to be material.
7. Investment Considerations
In analyzing whether to make, or to continue, an investment in the Company,
investors should consider, among other factors, certain investment
considerations more particularly described in "Item 1: Business - Investment
Considerations" in the Company's Annual Report on Form 10-K for the year ended
February 1, 1997, a copy of which can be obtained upon written request to Mr.
Frank E. Johnson, Chief Financial Officer, Today's Man, Inc., 835 Lancer Drive,
Moorestown, New Jersey 08057.
8. Safe Harbor Statement under Private Securities Litigation Reform Act of
1995
Certain statements in this Form 10-Q which are not historical facts,
including, without limitation, statements as to the Company's planned results
for 1997 or as to management's beliefs, expectations, or opinions, are forward
looking statements that involve risks and uncertainties and are subject to
change at any time. Certain factors, including, without limitation the risk that
the assumptions upon which the forward-looking statements are based ultimately
may prove incorrect, risks associated with the Company's Chapter 11 petition,
and the other risks detailed from time to time in the Company's filings with the
Securities and Exchange Commission, included, without limitation, its Annual
Report on Form 10-K, can cause actual results and developments to be materially
different from those expressed or implied by such forward-looking statements.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
On February 2, 1996, the Company and certain of its subsidiaries filed
voluntary petitions in the United States Bankruptcy Court for the District of
Delaware seeking to reorganize under Chapter 11 of the U.S. Bankruptcy Code.
The accompanying Consolidated Financial Statements have been prepared
in accordance with generally accepted accounting principles applicable to a
company on a "going concern" basis, which, except as otherwise noted,
contemplates the realization of assets and the liquidation of liabilities in the
ordinary course of business; however, as a result of the Chapter 11 proceedings,
and circumstances relating to this event, including the Company's debt
structure, its operating losses, and current economic conditions, such
realization of assets and liquidation of liabilities are subject to significant
uncertainties. These conditions raise substantial doubt about the Company's
ability to continue as a going concern. As reflected in the Consolidated
Financial Statements included in the Company's Annual Report on Form 10-K, the
Company experienced significant net losses in fiscal 1996 and 1995,
respectively. During the Chapter 11 proceedings, the Company has incurred and
will continue to incur substantial reorganization costs. The Company's ability
to continue as a going concern is dependent upon the confirmation of a plan of
reorganization by the Bankruptcy Court, the ability to secure adequate exit
financing and to maintain compliance with all debt covenants under the
post-petition financing, combined with the achievement of profitable operations.
A plan of reorganization, as finally approved by the Bankruptcy Court,
could materially change the currently recorded amounts. These financial
statements do not reflect further adjustments to the carrying value of assets
and the amounts and classifications of liabilities or shareholders' equity that
might be necessary as a consequence of these bankruptcy proceedings. Events
completed in relation to the Company's ongoing operational restructuring include
the closing of ten underperforming locations and its outlet center and
reductions in store operating expenses and corporate overhead. Additional
components of the operational restructuring include ongoing evaluation of store
operations, review of both corporate and store expenses and a refocusing of the
Company's merchandising and marketing strategies.
The following table sets forth, as a percentage of net sales, certain items
appearing in the consolidatd statements of operations for the thirteen week
periods ended May 3, 1997 and May 4, 1996, respectively.
<TABLE>
<CAPTION>
PERCENTAGE OF NET SALES
THIRTEEN WEEKS
ENDED
MAY 3, MAY 4,
1997 1996
--------------------------
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of goods sold 63.7 71.5
--------------------------
Gross profit 36.3 28.5
Selling, general and administrative expenses 34.3 34.7
--------------------------
Income (loss) from operations 2.0 (6.2)
Reorganization items, net 1.5 2.8
Interest expense and other income, net - 0.1
--------------------------
Income (loss) before income taxes 0.5 (9.1)
Income taxes 0.1 -
==========================
Net income (loss) 0.4% (9.1)%
==========================
</TABLE>
7
<PAGE>
THIRTEEN WEEKS ENDED MAY 3, 1997 AND MAY 4, 1996:
NET SALES. Net sales decreased $2,468,500 or 5.3% in the first quarter of fiscal
1997 compared to the year ago period. Comparative store sales increased 3.2%.
During the first quarter of fiscal 1996, the Company closed 10 underperforming
superstores and one outlet store. Those stores produced approximately $3.8
million in net sales during the quarter in which they were closed. This decrease
was offset by improved sales in fiscal 1997 due to better in-stock positions,
enhanced merchandise assortment and the fact that the licensed shoe departments
that were in all locations in fiscal 1997, but in only 9 locations during the
first quarter of fiscal 1996. Sales from licensed shoe departments increased
$1,819,000 to $2,760,100 for the first quarter of fiscal 1997. There were 25
superstores in operation at May 3, 1997.
GROSS PROFIT. Gross profit as a percentage of net sales increased to 36.3% for
the first quarter of fiscal 1997 from 28.5% in the year ago period. The
improvement in gross margin is primarily attributable to the Company's ability
to operate with less promotional sales and markdowns than the year ago period.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses decreased $1,035,900 or 6.4% in the first quarter of
fiscal 1997, and decreased as a percentage of sales to 34.3% from 34.7% in the
first quarter of fiscal 1996. The decrease was the result of the cost savings
obtained by operating eleven fewer locations. Store payroll, occupancy and
advertising costs decreased by $824,600 or 7.9% in the first quarter of fiscal
1997, and represented 21.8% of sales compared with 22.4% of sales for the year
ago period.
INTEREST EXPENSE, INTEREST INCOME AND OTHER EXPENSE, NET. Interest expense,
interest income and other expense, net, decreased by $39,800 from the first
quarter of fiscal 1996. The Company has not accrued interest on its pre-petition
debt due to the stay imposed pursuant to the Chapter 11 filing which precludes
the payment of principal and interest on pre-petition obligations during the
reorganization period.
REORGANIZATION ITEMS, NET. Reorganization items consist of legal and financial
advisory services incurred by the Company and the official Creditors' Committee
in the administration of the Chapter 11 proceedings. Also included in this
amount is the charge for the Retention Bonus Plan, as well as, interest income
earned on accumulated cash balances. The reorganization items, net decreased by
$632,100 from the prior year due to reduced professional fees and an increase in
interest income due to higher invested balances.
8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Under Chapter 11, actions to enforce certain claims against the Company are
stayed if the claims arose, or are based on, events that occurred on or before
the petition date of February 2, 1996. The ultimate terms of settlement of these
claims will be determined in accordance with a plan of reorganization which
requires the approval of the impaired prepetition creditors and shareholders and
confirmation by the Bankruptcy Court. Other liabilities may arise or be subject
to compromise as a result of rejection of executory contracts and unexpired
leases, or the Bankruptcy Court's resolution of claims for contingencies and
other disputed amounts. The ultimate resolution of such liabilities, all of
which are subject to compromise, will be part of a plan of reorganization.
Until a plan of reorganization is confirmed by the Bankruptcy Court, only such
payments on prepetition obligations that are approved or required by the
Bankruptcy Court will be made. Except for payments for certain property and
equipment under lease, principal and interest payments on pre-petition debt have
not been made since the filing date and will not be made without the Bankruptcy
Court's approval or until a plan of reorganization, defining the repayment
terms, has been confirmed by the Bankruptcy Court. There is no assurance at this
time that a plan of reorganization will be proposed by the Company and approved
or confirmed by the Bankruptcy Court.
The Company's primary sources of working capital are cash flow from operations.
At May 3, 1997, the Company had working capital of $50,025,400 as compared with
$49,527,600 at February 1, 1997.
On March 11, 1996 by order of the Bankruptcy Court, the Company received final
approval for a $20 million Debtor-In-Possession Revolving Credit Facility (the
"DIP Facility") with the CIT Group/Business Credit, Inc. The DIP Facility
permits borrowings of up to $20 million, including a letter of credit sublimit
of $15 million, through the earlier of February 13, 1998 or the date of
substantial consummation of a plan of reorganization. Borrowings under the DIP
Facility are subject to availability under a borrowing base formula. Interest is
payable monthly at the bank's prime rate plus 0.5%. The Company has had no
direct borrowings under this DIP Facility since the inception of the loan. Loans
under the DIP Facility will have a super priority administrative expense claims
status under the Bankruptcy Code, subject to certain exceptions.
Inherent in a successful plan of reorganization is a capital structure which
permits the Company to generate sufficient cash flow after reorganization to
meet its restructured obligations and fund the current obligations of the
reorganized Company. Under the Bankruptcy Code, the rights of and ultimate
payment to prepetition creditors may be substantially altered and, as to some
classes, eliminated. At this time, the Company cannot predict the outcome of the
Chapter 11 filing, in general, or its effect on the future business of the
Company or on the ultimate interests of creditors or shareholders.
The Company believes that the sources of capital above and internally generated
funds will be adequate to meet the Company's anticipated needs through fiscal
1997; however, as a result of the Company's Chapter 11 proceedings and the other
events described above, no assurance can be given with respect to the Company's
liquidity. The Company currently is evaluating various alternatives for a Plan
of Reorganization, including various forms of financing, and intends to file a
Plan of Reorganization by June 24, 1997. Upon emergence from the Chapter 11
proceedings, the Company will need to replace the DIP Agreement with a suitable
financing structure to meet its plan of reorganization.
9
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On February 2, 1996 Today's Man, Inc. ("the Company") and certain of its
subsidiaries filed voluntary petitions in the United States Bankruptcy Court for
the District of Delaware (the "Bankruptcy Court") seeking to reorganize under
Chapter 11 of the U.S. Bankruptcy Code. See Item 1. "Business - Chapter 11
Proceedings."
Item 2. Changes in Securities
None - not applicable
Item 3. Defaults Upon Senior Securities
None - not applicable
Item 4. Submission of Matters to a Vote of Shareholders
None - not applicable
Item 5. Other Information
None - not applicable
Item 6. Exhibits and Reports on Form 8-K
Exhibits
None - not applicable
Reports on Form 8-K
None - not applicable
10
<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.
TODAY'S MAN, INC.
(Registrant)
Date: June 16, 1997 /s/David Feld
------------------------
David Feld
Chairman of the Board and
Chief Executive Officer
Date: June 16, 1997 /s/Frank E. Johnson
------------------------
Frank E. Johnson
Executive Vice President, Chief Financial
Officer and Treasurer
Principal Financial Officer
Date: June 16, 1997 /s/Barry S. Pine
------------------------
Barry S. Pine
Vice President and Controller
Principal Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheets at May 3, 1997 and the Consolidated Statements of
Operations for the thirteen weeks ended May 3, 1997 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> MAY-03-1997
<CASH> 19,107,000
<SECURITIES> 0
<RECEIVABLES> 3,350,500
<ALLOWANCES> 284,000
<INVENTORY> 33,100,300
<CURRENT-ASSETS> 59,660,000
<PP&E> 47,041,500
<DEPRECIATION> (14,506,200)
<TOTAL-ASSETS> 94,886,300
<CURRENT-LIABILITIES> 9,634,600
<BONDS> 0
0
0
<COMMON> 38,269,100
<OTHER-SE> (22,855,700)
<TOTAL-LIABILITY-AND-EQUITY> 94,886,300
<SALES> 43,928,900
<TOTAL-REVENUES> 43,928,900
<CGS> 27,997,800
<TOTAL-COSTS> 27,997,800
<OTHER-EXPENSES> 15,062,100
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,800
<INCOME-PRETAX> 212,600
<INCOME-TAX> 53,900
<INCOME-CONTINUING> 158,700
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 158,700
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
