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 October 30, 1999
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 ___.
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN A BANKRUPTCY DURING THE PRECEDING
FIVE YEARS
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 ___.
27,014,635 common shares were outstanding as of December 13, 1999.
<PAGE>
TODAY'S MAN INC.
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Condensed Consolidated Financial Statements - Unaudited
Consolidated Balance Sheets
October 30, 1999 and January 30, 1999....................................................1
Consolidated Statements of Operations
Thirteen weeks ended October 30, 1999 and October 31, 1998...............................2
Consolidated Statements of Operations
Thirty-nine weeks ended October 30, 1999 and October 31, 1998............................3
Consolidated Statements of Cash Flows
Thirty-nine weeks ended October 30, 1999 and October 31, 1998............................4
Notes to Consolidated Financial Statements.............................................5-6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.............................................................7-10
Item 3. Quantitative and Qualitative Disclosures about Market Risks.............................11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings......................................................................11
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>
<PAGE>
TODAY'S MAN, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
October 30, January 30,
----------- -----------
1999 1999
----------- -----------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 126,200 $ 1,181,100
Due from credit card companies and other receivables, net 2,177,000 1,535,300
Inventory 45,863,800 34,636,600
Prepaid expenses and other current assets 4,351,200 3,903,800
Prepaid inventory purchases 2,112,100 3,038,600
----------- -----------
Total current assets 54,630,300 44,295,400
Property and equipment, less accumulated depreciation and
amortization $34,082,600 $32,664,800
Loans to shareholders 228,400 228,400
Rental deposits and other noncurrent assets 1,965,300 1,785,600
----------- -----------
$90,906,600 $78,974,200
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 9,532,600 $ 5,719,400
Accrued expenses and other current liabilities 3,481,700 5,827,200
Capital lease obligations 253,300 821,600
----------- -----------
Total current liabilities 13,267,600 12,368,200
Capital lease obligations, less current maturities -- 216,000
Deferred rent and other 4,580,600 4,750,000
Obligations under revolving credit facility 23,423,500 8,945,700
----------- -----------
41,271,700 26,279,900
Shareholders' equity:
Preferred stock, no par value, 5,000,000 shares authorized, none issued -- --
Common stock, no par value, 100,000,000 shares authorized,
27,014,635 and 27,014,485 shares issued and outstanding at
October 30, 1999 and January 30, 1999 respectively 48,451,600 48,451,200
Retained earnings 1,183,300 4,243,100
----------- -----------
Total shareholders' equity 49,634,900 52,694,300
----------- -----------
$90,906,600 $78,974,200
=========== ===========
</TABLE>
See accompanying notes.
1
<PAGE>
TODAY'S MAN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
FOR THIRTEEN WEEKS ENDED
Oct. 30, Oct. 31,
------------ ------------
1999 1998
------------ ------------
<S> <C> <C>
Net sales $ 42,090,900 $ 48,269,900
Cost of goods sold 26,178,100 29,334,300
------------ ------------
Gross profit 15,912,800 18,935,600
Selling, general and administrative expenses 18,079,600 16,933,900
------------ ------------
Income (loss) from operations (2,166,800) 2,001,700
Interest expense and other income, net 364,400 1,172,800
------------ ------------
Income (loss) before income taxes (2,531,200) 828,900
Income taxes (benefit) (936,700) 307,000
------------ ------------
Net income (loss) $ (1,594,500) $ 521,900
============ ============
Earnings (loss) per share - basic $ (0.06) $ 0.02
============ ============
Weighted average shares outstanding 27,014,635 27,278,687
Earnings (loss) per share, assuming dilution $ (0.06) $ 0.02
============ ============
Weighted average shares outstanding, assuming dilution 27,014,635 27,278,687
</TABLE>
See accompanying notes.
2
<PAGE>
TODAY'S MAN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
FOR THIRTY-NINE WEEKS ENDED
Oct. 30, Oct. 31,
------------- -------------
1999 1998
------------- -------------
<S> <C> <C>
Net sales $ 134,493,200 $ 146,103,400
Cost of goods sold 85,973,500 92,474,900
------------- -------------
Gross profit 48,519,700 53,628,500
Selling, general and administrative expenses 52,379,600 48,289,800
------------- -------------
Income (loss) from operations (3,859,900) 5,338,700
Interest expense and other income, net 899,100 2,704,500
------------- -------------
Income (loss) before income taxes (4,759,000) 2,634,200
Income taxes (benefit) (1,699,200) 975,000
------------- -------------
Net income (loss) $ (3,059,800) $ 1,659,200
============= =============
Earnings (loss) per share - basic $ (0.11) $ 0.06
============= =============
Weighted average shares outstanding 27,014,601 27,281,646
Earnings (loss) per share, assuming dilution $ (0.11) $ 0.06
============= =============
Weighted average shares outstanding, assuming dilution 27,014,601 27,281,646
</TABLE>
See accompanying notes.
3
<PAGE>
TODAY'S MAN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
FOR THIRTY-NINE WEEKS ENDED
Oct. 30, Oct. 31,
------------- -------------
1999 1998
------------- -------------
<S> <C> <C>
Operating activities
Net income (loss) $ (3,059,800) $ 1,659,200
Adjustments to reconcile net income (loss) to net cash in
operating activities:
Depreciation and amortization 2,685,600 2,256,400
Accretion of debt discount -- 713,600
Deferred credits (169,400) 892,000
Tax benefit of net operating loss carryforward -- 975,000
Changes in operating assets and liabilities:
Decrease (increase) in receivables (641,700) 107,900
Increase in inventory (11,227,200) (8,292,400)
Decrease (increase) in prepaid expenses and other current assets 479,100 (2,645,800)
Decrease (increase) in rental deposits and other non current
assets (179,700) 526,500
Increase (decrease) in payables, accrued expenses and
liabilities subject to
settlement 1,467,700 (9,306,300)
Decrease in restricted cash -- 8,720,500
------------- -------------
Total adjustments (7,585,600) (6,052,600)
------------- -------------
Net cash used in operating activities (10,645,400) (4,393,400)
Cash flow used in investing activities:
Capital expenditures (2,333,400) (2,871,700)
Fixtures and equipment in process (1,770,000) --
------------- -------------
Net cash used in investing activities (4,103,400) (2,871,700)
Cash flow provided by financing activities:
Repayment of capital leases (784,300) (1,029,600)
Borrowings under revolving credit facility 130,775,800 47,885,000
Repayment of term loan and revolving credit facility (116,298,000) (39,697,600)
Proceeds from exercise of stock options and common stock
purchase warrants 400 12,800
------------- -------------
Net cash provided by financing activities 13,693,900 7,170,600
Net decrease in cash and cash equivalents (1,054,900) (94,500)
Cash and cash equivalents at beginning of period 1,181,100 219,500
------------- -------------
Cash and cash equivalents at end of period $ 126,200 $ 125,000
============= =============
</TABLE>
See accompanying notes.
4
<PAGE>
TODAY'S MAN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. 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, operating results for the interim period are not necessarily
indicative of results that may be expected for the fiscal year ending January
29, 2000. For further information, refer to the consolidated financial
statements and footnotes thereto which are included in the Company's Annual
Report on Form 10-K for the fiscal year ended January 30, 1999.
As of January 31, 1998, the Company effected a quasi-reorganization through
the application of $27,316,200 of its $74,115,700 Common Stock account to
eliminate its retained deficit. The Company's Board of Directors decided to
effect a quasi-reorganization given that the Company had completed its
restructuring, obtained long-term financing and successfully emerged from
bankruptcy. The Company's retained deficit at January 31, 1998 was related to
operations that resulted in the restructuring of the Company and the losses
incurred during the Chapter 11 proceeding and was not, in management's view,
reflective of the Company's then current financial condition.
2. Use of Estimates
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.
3. Earnings (Loss) per Common Share
Earnings (loss) per share is calculated following Financial Accounting
Standards Board Statement No. 128 Earnings per Share. Statement 128 requires
companies to present basic and diluted earnings per share. Basic earnings per
share excludes any dilutive effect of outstanding stock options whereas diluted
earnings per share includes the effect of such items. There is no difference
between basic and diluted earnings per share for the current period because the
effect of the Company's common share equivalents would be anti-dilutive.
4. Recent Accounting Pronouncements
In June 1998, the FASB issued Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities, which is required to be adopted in fiscal
2000. The Company expects to adopt the new Statement effective February 2, 2002.
The Statement will require the Company to recognize all derivatives on the
balance sheet at fair value. Derivatives that are not hedges must be adjusted to
fair value through income. If a derivative is a hedge, depending on the nature
of the hedge, changes in the fair value of the derivative will either be offset
against the change in fair value of the hedged asset, liability, or firm
commitment through earnings, or recognized in other comprehensive income until
the hedged item is recognized in earnings. The ineffective portion of a
derivative's change in fair value will be immediately recognized in earnings.
The Company does not anticipate that the adoption of this Statement will have a
significant effect on its results of operations or financial position.
5
<PAGE>
TODAY'S MAN, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
(Unaudited)
In March, 1998, the American Institute of Certified Public Accountants
(AICPA) issued Statement of Position (SOP) No. 98-1 "Accounting for the Costs of
Computers Software Developed or Obtained for Internal Use." The Company followed
the SOP in accounting for the costs of computer software obtained for internal
use during 1998. SOP 98-1 is consistent with the Company's prior accounting
policies in all material aspects.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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
January 30, 1999, a copy of which can be obtained, without charge except for
exhibits to the Report, upon written request to Mr. Frank E. Johnson, Executive
Vice President and Chief Financial Officer, Today's Man, Inc., 835 Lancer Drive,
Moorestown, New Jersey 08057.
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 1999, new store openings, estimated costs of new systems, and the costs to
address year 2000 compliance issues, 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 arising from the
Company's growth strategy, small store base and geographic concentration,
declining unit sales of men's tailored clothing, control by principal
shareholder, year 2000 compliance issues, the Company's relationship with its
suppliers, foreign currency fluctuations, dependence on senior management,
seasonality and general economic conditions and competition and the other risks
detailed from time to time in the Company's filings with the Securities and
Exchange Commission, including, 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. See "Investment
Considerations," above, for instructions on how to receive a copy of the
Company's Annual Report.
RESULTS OF OPERATIONS:
The following table sets forth, as a percentage of net sales, certain items
appearing in the consolidated statements of operations for the thirteen week and
thirty-nine periods ended October 30, 1999 and October 31, 1998, respectively.
<TABLE>
<CAPTION>
PERCENTAGE OF NET SALES
THIRTEEN THIRTY-NINE
WEEKS ENDED WEEKS ENDED
Oct. 30, Oct. 31, Oct. 30, Oct. 31,
1999 1998 1999 1998
---------------- ---------------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 62.2 60.8 63.9 63.3
---------------- ---------------
Gross profit 37.8 39.2 36.1 36.7
Selling, general and administrative expenses 42.9 35.1 39.0 33.0
---------------- ---------------
Income (loss) from operations (5.1) 4.1 (2.9) 3.7
Interest expense and other income, net .9 2.4 .6 1.9
---------------- ---------------
Income (loss) before income taxes (6.0) 1.7 (3.5) 1.8
Income taxes (benefit) (2.2) 0.6 (1.2) 0.7
---------------- ---------------
Net income (loss) (3.8)% 1.1% (2.3)% 1.1%
================ ===============
</TABLE>
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
THIRTEEN WEEKS ENDED OCTOBER 30, 1999 AND OCTOBER 31, 1998:
NET SALES. Net sales decreased $6,179,000 or 12.8% in the third quarter of
fiscal 1999 compared to the year ago period. Comparative store sales decreased
$6,608,000 or 13.8% in the third quarter of fiscal 1999. The decrease in net
sales is a result of the decline in foot traffic the Company experienced. There
were 29 and 25 superstores in operation at October 30, 1999 and October 31,
1998, respectively.
GROSS PROFIT. Gross profit as a percentage of net sales decreased to 37.8% for
the third quarter of 1999 compared to 39.2% for the third quarter of 1998. The
decrease in the gross profit percentage is a result of the decline in foot
traffic causing more markdowns to be taken in order to cleanse seasonal
inventories.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $1,145,700 or 6.8% in the third quarter of
fiscal 1999, and increased as a percentage of sales to 42.9% from 35.1% in the
third quarter of fiscal 1998. The dollar increase is primarily due to increased
advertising costs associated with the Company's branding campaign. Additionally,
the Company incurred $244,200 of new store expenses attributable to the opening
of four new stores in the Baltimore, Maryland and Washington D.C. markets. Store
payroll, occupancy and advertising costs increased by $1,303,000 or 13.1% in the
third quarter of fiscal 1999, and represented 26.6% of sales compared with 21.6%
of sales for the year ago period.
INTEREST EXPENSE AND OTHER INCOME, NET. Interest expense, interest income and
other expense, net decreased by $808,400 for the third quarter of fiscal 1999.
The decrease in interest expense is attributable to the lower interest rate
obtained by the refinancing of the Company's revolving credit facility with
Mellon Bank on December 4, 1998 which bears interest at prime (8.25% at October
30, 1999). The Mellon Bank facility permits the Company to have one or more
portions of the outstanding balance of its loan accrue interest at LIBOR rate
plus applicable margin. The Company elected to have $9,500,000 accrue interest
at LIBOR rate plus applicable margin (7.72%) effective June 25, 1999 for a
period of 90 days. On September 27, 1999 the Company elected to have $18,000,000
accrue interest at LIBOR plus applicable margin (7.94%) for a period of 60 days.
The Company had average borrowings under its revolving credit facility of
$18,505,700 during the quarter ended October 30, 1999.
THIRTY-NINE WEEKS ENDED OCTOBER 30, 1999 AND OCTOBER 31, 1998:
NET SALES. Net sales decreased $11,610,200 or 7.9% for the first nine months of
fiscal 1999 compared to the year ago period. Comparative store sales decreased
8.2%. The decrease in net sales is a result of the decline in foot traffic the
Company experienced. There were 29 and 25 superstores in operation at October
30, 1999 and October 31, 1998, respectively.
GROSS PROFIT. Gross profit as a percentage of net sales decreased to 36.1% for
the first nine months of 1999 compared to 36.7% for the first nine months of
1998. The decrease in gross profit percentage is a result of the decline in foot
traffic causing more markdowns to be taken in order to cleanse seasonal
inventories.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased $4,089,800 or 8.5% in the first nine months of
fiscal 1999, and increased as a percentage of sales to 39.0% from 33.0% in the
third quarter of fiscal 1998. The dollar increase is due primarily to
advertising costs related to the Company's branding campaign. Additionally, the
Company incurred $267,000 of new store expenses attributable to the opening of
four new stores in the Baltimore, Maryland and Washington D.C. markets. Store
payroll, occupancy, and advertising costs increased $3,574,500 or 12.7% for the
first nine months of fiscal 1999, and represented 23.5% of sales compared with
19.2% of sales for the year ago period.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
INTEREST EXPENSE AND OTHER INCOME, NET. Interest expense, interest income and
other expense, net decreased by $1,805,400 from the first nine months of fiscal
1998. The decrease in interest expense is attributable to the lower interest
rate obtained by the refinancing of the Company's revolving credit facility with
Mellon Bank on December 4, 1998, which bears interest at prime (8.25% at October
30, 1999). The Mellon bank facility permits the Company to have one or more
portions of the outstanding balance of its loan accrue interest at LIBOR rate
plus applicable margin. The Company elected to have $9,500,000 accrue interest
at LIBOR plus applicable margin (7.72%) effective June 25, 1999 for a period of
90 days. On September 27, 1999 the Company elected to have $18,000,000 accrue
interest at LIBOR plus applicable margin (7.94%) for a period of 60 days. The
Company had average borrowings under its revolving credit facility of
$15,118,900 during the nine month period ended October 31,1999. The Company had
average borrowings under its revolving credit facility of $15,118,900 during the
nine months ended October 30, 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of working capital are cash flow from
operations and borrowings under the revolving credit facility. At October 30,
1999, the Company had working capital of $41,616,000 as compared with
$31,927,200 at January 30, 1999.
On December 4, 1998, the Company entered into a Loan and Security Agreement
with Mellon Bank, N. A., ("Mellon") individually and as agent. The Loan and
Security Agreement provides for a $45.0 million revolving credit facility. The
Company has granted Mellon a lien on its tangible and intangible assets to
secure this term loan and revolving credit facility. Proceeds from this loan
were used to refinance the Company's previous revolving credit facility and term
loan from Foothill Capital Corporation. As a result of this refinancing, the
Company incurred a prepayment penalty of approximately $720,000 and wrote off
approximately $640,000 of unamortized debt issuance costs. These amounts were
partially offset by approximately $315,000 in accrued debt discount and related
liabilities and approximately $387,000 in income tax benefits related to this
extraordinary item.
The Mellon revolving credit facility bears interest at the option of the
Company at prime (8.25% at October 30, 1999) or LIBOR plus a margin ranging from
1.75% to 3.25% depending upon the Company's EBITDA, has a term of five years and
includes a $20.0 million sublimit for letter of credit advances. Availability
under the revolver is determined by a formula based on inventory and credit card
receivables, less applicable reserves.
The Mellon Loan and Security Agreement contains financial covenants
including tangible net worth, indebtedness to tangible net worth and fixed
charge coverage ratios, and limitations on new store openings and capital
expenditures as well as restrictions on the payment of dividends. In April 1999,
the company and Mellon amended the Loan Agreement to allow for the inclusion of
participant lenders and to modify certain other provisions, including the
tangible net work and fixed charge coverage ratio covenant. The Company was in
compliance with all covenants as of and for the quarter ended October 30, 1999.
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 1999.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Year 2000 Compliance
The Company has conducted a comprehensive review of its information
technology and non information technological systems to determine which systems
will require modification to enable processing of transactions related to the
year 2000 and beyond. The primary information technology systems upon which the
Company relies for its daily operations are the point of sale register systems,
its merchandising system and its general ledger accounting systems. The Company
has completed testing of its point of sale and existing general ledger system
and concluded that these systems are capable of processing transactions in the
year 2000 and beyond. The Company has completed testing its merchandising system
and such system will require remediation that is estimated to cost less than
$250,000. A further and complete analysis of the Company's internal systems has
indicated that despite the systems' ability to properly process transactions
related to the year 2000 and beyond, the Company's overall operations would be
better served by replacing the existing general ledger and merchandising
systems. As of January 30, 1999, the Company has completed the installation of
its new general ledger system. The Company's new merchandising system has been
warranted to be a year 2000 compliant system by the supplier, and installation
is currently in progress. A contingency plan to remediate the existing
merchandising system was completed by October 16, 1999. The Company estimates
that it will spend an additional $100,000 to $125,000 of budgeted funds through
the end of the fiscal year ending January 30, 2000 ("Fiscal 1999") to replace
its existing merchandise and financial accounting systems. Included in fixtures
and equipment in process for the quarter ended October 30, 1999 is approximately
$1,347,800 of new system costs and $49,500 of year 2000 compliance
modifications. One of the primary requirements imposed by the Company on its new
systems vendors is certification of year 2000 compliance and compatibility. The
costs for new systems will be capitalized and depreciated, to the extent
permitted by generally accepted accounting principles, in accordance with the
Company's fixed asset policy.
In an effort to determine and ensure that there would be no material and
adverse impact on the results of the Company's operations caused by non
informational technological systems, an internal committee was developed using a
cross section of all disciplines within the Company. All of the Company's
vendors and suppliers were polled and asked to evaluate and confirm their
abilities to process transactions in the year 2000 and beyond. This committee,
which reports directly to the Company's Chief Financial Officer, is currently
evaluating responses from vendors and has preliminarily identified all mission
critical non-information technological systems. These systems will be tested and
contingency plans will be developed for those systems deemed to be
non-compliant. It is the committee's intention to complete its testing and
contingency planning before December 20, 1999.
If the Company's present efforts to address year 2000 compliance issues are
not successful, or if the systems of its suppliers are not compliant, the
Company may be unable to engage in normal business activities for a period of
time after January 1, 2000. As a result the Company would be unable to recognize
income. The Company also may lose existing or potential clients and its
reputation in the industry might be damaged.
10
<PAGE>
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The Company is a retail company doing business within the United States.
Its primary market risk is exposure to interest rates fluctuations on its debt
instruments. The Company's bank revolving credit facility bears interest at
variable rates. The variable interest rate is the rate in effect at the quarter
ended July 31, 1999, and it fluctuates with the lending bank's prime rate or
LIBOR rates.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None - not applicable
Item 2. Changes in Securities and Use of Proceeds
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
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.
TODAY'S MAN, INC.
(Registrant)
Date: December 13, 1999 /s/ David Feld
-----------------------------------------
David Feld
Chairman of the Board and
Chief Executive Officer
Date: December 13, 1999 /s/ Frank E. Johnson
-----------------------------------------
Frank E. Johnson
Executive Vice President, Chief Financial
Officer and Treasurer
Principal Financial Officer
Date: December 13, 1999 /s/ Barry S. Pine
-----------------------------------------
Barry S. Pine
Vice President and Controller
Principal Accounting Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Balance Sheets at October 30, 1999 and the Condensed
Consolidated Statements of Operations for the thirty- nine weeks ended October
30, 1999 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> JAN-29-2000
<PERIOD-END> OCT-30-1999
<CASH> 126,200
<SECURITIES> 0
<RECEIVABLES> 2,187,800
<ALLOWANCES> (10,800)
<INVENTORY> 45,863,800
<CURRENT-ASSETS> 54,630,300
<PP&E> 53,610,600
<DEPRECIATION> (19,528,000)
<TOTAL-ASSETS> 90,906,600
<CURRENT-LIABILITIES> 13,267,600
<BONDS> 0
0
0
<COMMON> 48,451,600
<OTHER-SE> 1,183,300
<TOTAL-LIABILITY-AND-EQUITY> 90,906,600
<SALES> 134,493,200
<TOTAL-REVENUES> 134,493,200
<CGS> 85,973,500
<TOTAL-COSTS> 85,973,500
<OTHER-EXPENSES> 52,379,600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 899,100
<INCOME-PRETAX> (4,759,000)
<INCOME-TAX> (1,699,200)
<INCOME-CONTINUING> (3,059,800)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,059,800)
<EPS-BASIC> (0.11)
<EPS-DILUTED> (0.11)
</TABLE>
