UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): Dec. 17, 1996
--------------
(Dec. 17, 1996)
Bradlees, Inc.
(Exact Name of Registrant As Specified In Its Charter)
Massachusetts
(State Or Other Jurisdiction of Incorporation)
1-11134 04-3156108
- ------- ---------
(Commission File Number) (IRS Employer Identification No.)
One Bradlees Circle; Braintree, Massachusetts 02184
(Address Of Principal Executive Offices) (Zip Code)
(617) 380-3000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Exhibit Index on Page 4
Page 1 of 7 (Including Exhibit)
Item 5: OTHER EVENTS
Beginning on December 17, 1996, Bradlees, Inc. (the
"Company") will distribute to its banks and other credit
providers summaries of its unaudited financial results for the
thirteen and thirty-nine weeks ended November 2, 1996, including
a comparison to the Company's revised summary financial plan
(the "Revised Plan") for the fiscal year ending February 1, 1997
("Fiscal 1996") filed on Form 8-K dated September 17, 1996. The
Revised Plan incorporates the actual results for the first half
of Fiscal 1996. The Fiscal 1996 third quarter and year-to-date
results compared to the Revised Plan are attached hereto as
Exhibit 20.
Total sales for the 13 weeks (third quarter) and 39 weeks
(year-to-date) ended November 2, 1996 were both $8.4 million
below the Revised Plan. EBITDA (as defined in the exhibit)
after restructuring for the same periods was $7.2 million below
the Revised Plan, primarily due to the lower gross margin rate
in the third quarter, partially offset by lower selling, store
operating, administrative and distribution expenses ("SG&A
expenses"). The lower-than-planned gross margin rate was due
primarily to higher-than-planned ad markdowns associated with
increased promotional activity. SG&A expenses were $1.7 million
below the Revised Plan, primarily due to a $4.3 million
favorable adjustment to insurance reserves, partially offset by
unfavorable variances in advertising expenses ($1.5 million) and
store labor expenses ($1.1 million).
As of November 2, 1996, accounts payable was $33.7 million
above Plan, due primarily to continued vendor terms support,
while borrowings under the Company's DIP facility were $27.6
million under the Revised Plan. Inventories were $3.1 million
above the Revised Plan at November 2, 1996.
The Company is distributing the quarterly performance
against its Revised Plan (the "Plan Performance Information") to
its banks and other credit providers to facilitate their credit
analyses. THE PLAN PERFORMANCE INFORMATION SHOULD NOT BE RELIED
UPON FOR ANY OTHER PURPOSE and should be read in conjunction
with the Company's Form 8-K dated September 17, 1996, Form 10-Q
for the first, second and third quarters ended May 4, 1996,
August 3, 1996 and November 2, 1996, respectively, and Form 10-K
for the fiscal year ended February 3, 1996 (fiscal 1995). The
Plan Performance Information is being reported publicly solely
because it is being distributed to a large number of the
Company's vendors for purposes of their credit analyses.
Although the Company is publicly disclosing the Plan Performance
Information, the Company does not believe it is obligated to
provide such information indefinitely, and the Company may cease
making such disclosures and updates at any time. The Plan
Performance Information was not examined, reviewed or compiled
by the Company's independent public accountants. The Company is
not obligated to update the Plan Performance Information to
reflect subsequent events or developments. The Plan Performance
Information is subject to future adjustments, if any, that could
materially affect such information.
2
Item 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
Exhibit: 20 Summary Financial Results for the
13 and 39 Weeks Ended November 2, 1996
3
INDEX TO EXHIBITS
Exhibit No. Exhibit Page No.
20 Summary Financial Results for the 13 and 6
39 Weeks Ended November 2, 1996
4
BRADLEES, INC.
AND SUBSIDIARIES
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.
BRADLEES, INC.
Date: December 16, 1996 By /s/ MARK A. COHEN
Mark A. Cohen
Chairman and
Chief Executive Officer
Date: December 16, 1996 By /s/ PETER THORNER
Peter Thorner
President, Director
and Chief Operating Officer
Date: December 16, 1996 By /s/ CORNELIUS F. MOSES III
Cornelius F. Moses III
Senior Vice President,
Chief Financial Officer
5
BRADLEES, INC. Exhibit 20
THIRD QUARTER RESULTS VS. REVISED PLAN Page 1 0f 2
(Unaudited)
(In Millions)
Third Quarter 1996 Year-to-Date 1996
Revised Revised
Actual Plan* LY Actual Plan* LY
INCOME SUMMARY:
Owned Sales $402.4 $413.3 $401.7 $1,105.3 $1,116.2 $1,198.1
Food Service Sales 2.0 2.0 2.4 6.4 6.4 7.1
Leased Dept Sales 15.9 13.4 14.5 44.7 42.2 43.3
----- ----- ----- ------- ------- -------
Total Sales 420.3 428.7 418.6 1,156.4 1,164.8 1,248.5
Gross Margin $ 113.1 123.6 115.7 322.8 333.4 339.7
Non-Recurring GOB Reserve 0.0 0.0 0.0 (5.9) (5.9) 0.0
----- ----- ----- ----- ----- -----
Adjusted GM 113.1 123.6 115.7 316.9 327.5 339.7
GM%(based on owned sales)** 28.1% 29.9% 28.8% 29.2% 29.9% 28.4%
SG&A Exp (120.7)(122.4)(141.7) (392.7) (394.4) (419.7)
Other Income 3.4 2.9 3.5 9.9 9.4 10.5
Gain on Disp. of Property 1.7 1.5 0.0 1.7 1.5 0.0
Addback NonRecur. GOB Res. 0.0 0.0 0.0 5.9 5.9 0.0
---- ---- ----- ----- ----- -----
EBITDA before Restructuring (2.5) 5.6 (22.5) (58.3) (50.1) (69.5)
Cash Impact from Restruct. (4.4) (5.3) 0.0 (9.0) (10.0) 0.0
---- ---- ----- ----- ----- -----
EBITDA after Restructuring (6.9) 0.3 (22.5) (67.3) (60.1) (69.5)
Addback Cash Restructuring 4.4 5.3 0.0 9.0 10.0 0.0
Less NonRecur. GOB Res. 0.0 0.0 0.0 (5.9) (5.9) 0.0
Depr. & Amort. Expense (10.6) (10.6) (12.8) (32.1) (32.1) (39.2)
Interest Expense (1.9) (3.2) (2.6) (6.8) (8.1) (19.6)
Reorganization Items (8.1) (7.7) (13.1) (56.5) (56.2) (21.0)
Income Tax Benefit 0.0 0.0 12.4 0.0 0.0 50.8
----- ----- ----- ------ ------ -----
Net Loss ($23.1)($15.9)($38.6) ($159.6) ($152.4) ($98.5)
===== ===== ===== ====== ====== =====
BALANCE SHEET SUMMARY: Balance at End of Period
------------------------
Unrestricted Cash and Cash Equivalents $ - $3.0 $65.9
Restricted Cash and Cash Equivalents 9.0 8.9 1.1
Inventories 339.2 336.1 413.2
Other Current Assets 37.0 34.8 55.0
----- ----- -----
Total Current Assets 385.2 382.8 535.2
Net Fixed Assets 176.2 180.2 269.8
Long-Term Assets 194.0 193.4 241.8
----- ----- -------
Total Assets $755.4 $756.4 $1,046.8
===== ===== =======
Accounts Payable $218.6 $184.9 $266.1
Other Current Liabilities 90.7 119.5 60.3
----- ----- -----
Total Current Liabilities 309.3 304.4 326.4
Long-Term Liabs. 80.8 80.3 134.8
Liabs. Subject to Settlement 569.6 568.9 521.9
Paid-In-Capital 137.1 137.0 136.6
Accumulated Deficit (341.4) (334.2) (72.9)
----- ----- -----
Total Stockholders Equity (Deficit) (204.3) (197.2) 63.7
----- ----- -------
Total Liabs. and Stockhld. Eq. (Def.) $755.4 $756.4 $1,046.8
===== ===== =======
* As filed on Form 8-K dated September 17, 1996. ** Calculated prior to
the non-recurring GOB (going-out-of-business) reserve established for 14
closed stores.
NOTE: EBITDA is earnings (loss) before interest expense, income taxes,
non-cash restructuring and non-recurring items, asset impairment charge,
reorganization and extraordinary items, and depreciation and
amortization. At the time cash is received or expended for
restructuring and non-recurring items, the cash amount is included in the
calculation of EDITDA.
6
Exhibit 20
Page 2 of 2
BRADLEES, INC.
THIRD QUARTER RESULTS VS. REVISED PLAN
(Unaudited)
(In Millions)
Third Quarter 1996 YTD 1996
Revised Revised
Actual Plan* Actual Plan*
CASH FLOW SUMMARY:
Beg. Unrestricted Cash & Cash Equiv. $17.3 $17.3 $63.0 $63.0
Cash Used in Operations:
Net Loss (23.1) (15.9) (159.6) (152.4)
Depr. & Amort. Expense 10.6 10.6 32.1 32.1
Other, Including Reorg. Items 1.6 3.4 41.8 43.5
Changes in Working Capital:
Inventory Increase (82.8) (79.7) (56.9) (53.8)
Accounts Payable Increase 71.5 37.6 69.7 35.9
All Other (6.2) (5.8) 18.1 18.5
---- ---- ---- ----
Net Cash Used in Operations ** (28.4) (49.8) (54.8) (76.2)
Capital Spending (9.2) (13.1) (18.6) (22.5)
Incr. in Restricted Cash & Cash Equiv. (1.6) (1.5) (7.8) (7.7)
Other:
Payments of Capital Leases (0.7) (0.5) (2.0) (1.8)
Payments of Liabs. Subj. to Settl. (1.1) (1.0) (3.2) (3.1)
Deferred Financing Costs (0.3) 0.0 (0.6) (0.3)
Net Borrowings under DIP Facility 24.0 51.6 24.0 51.6
---- ---- ---- ----
Total Other 21.9 50.1 18.2 46.4
Decr. in Unrest. Cash & Cash Equiv. (17.3) (14.3) (63.0) (60.0)
Ending Unrest. Cash & Cash Equiv. $ - $3.0 $ - $3.0
==== ==== ==== ====
* As filed on Form 8-K dated September 17, 1996.
** Includes cash outlays associated with reorganization items.
