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): June 7, 1996
---------------
(June 7, 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) (I.R.S. Employer Identification Number)
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)
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ITEM 5: OTHER EVENTS
Beginning on June 7, 1996, Bradlees, Inc. (the "Company")
will distribute to its banks and other credit providers
summaries of its unaudited financial results for the thirteen
weeks (first quarter) ended May 4, 1996, including a comparison
to the Company's fiscal 1996 summary financial plan for the year
ending February 1, 1997 (the "Plan"). The quarterly performance
against Plan (the "Plan Performance Information") is attached
hereto as Exhibit 20.
Effective October 28, 1995, the Company completed the
conversion of its financial systems and changed its quarterly
financial reporting calendar to conform to the common retail
presentation of 13 week ("4-5-4") quarters. Last year's amounts
for the first quarter were restated accordingly.
Total sales for the first quarter were $52.9 million below
Plan, primarily due to difficulties in promptly offsetting sales
losses from discontinued merchandise categories, unfavorable
weather conditions and management's decision to extend the
duration of the store closing sales. EBITDA (as defined in
Exhibit 20) for the same period was $2.6 million below Plan
primarily due to the lower sales and associated gross margin
shortfall. Gross margin was $7.6 million below Plan, however
the gross margin rate was 2.1% higher than Plan due primarily to
a higher-than-planned overall initial markup and merchandise
allowances, partially offset by higher-than-planned markdowns.
The increase in markup is a function of the move toward
higher-quality, higher-margin apparel and home decor. Selling,
general, administrative and distribution ("SG&A") expenses were
$4.0 million below Plan for the quarter. Store, logistics,
advertising and home office expenses were all below Plan.
As of May 4, 1996, unrestricted cash and cash equivalents
were $1.9 million above Plan, due primarily to the early receipt
of a federal income tax refund and lower-than-planned accounts
receivable and capital spending, partially offset by
higher-than-planned inventory and restricted cash and
lower-than-planned accounts payable and accrued expenses. The
federal income tax refund received of $24.5 million is included
in "Changes in Working Capital" in the cash flow summary.
Inventory at May 4,1996 was $12.4 million above Plan due
primarily to the sales shortfall and the extended duration of
the store closing sales. Accounts payable was $6.7 million
below Plan due to a curtailment in purchases in March and April
in response to the lower-than-planned sales. There have been no
borrowings in fiscal 1996, exclusive of outstanding letters of
credit, under the Company's DIP facility.
The Company is distributing 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
March 29, 1996, Form 10-Q for the first quarter ended May 4,
1996 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
<PAGE>
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. Moreover, the Company
does not believe that it is 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.
Item 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
Exhibit 20 Plan Performance Information
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INDEX TO EXHIBITS
Exhibit No. Exhibit Page No.
20 Plan Performance Information 6
<PAGE>
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: June 6, 1996 By /s/ MARK A. COHEN
-------------------------------
Mark A. Cohen
Chairman and
Chief Executive Officer
Date: June 6, 1996 By /s/ PETER THORNER
-------------------------------
Peter Thorner
President, Director,
Chief Operating Officer and
Acting Chief Financial Officer
Date: June 6, 1996 By /s/ CORNELIUS F. MOSES III
-------------------------------
Cornelius F. Moses III
Senior Vice President, Finance
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Exhibit 20
Page 1 of 2
BRADLEES, INC.
FIRST QUARTER RESULTS VS. PLAN
(Unaudited)
(In Millions)
First Quarter 1996
-------------------------------
Actual Plan Last Year
-------------------------------
INCOME SUMMARY:
Owned Sales $335.6 $387.3 $377.4
Food Service Sales 2.1 1.9 2.2
Leased Department Sales 12.2 13.6 12.8
------ ------- -------
Total Sales 349.9 402.8 392.4
Gross Margin $ 102.5 110.1 99.5
Gross Margin % (based on owned sales) 30.5% 28.4% 26.4%
SG&A Expenses (137.9) (141.9) (134.7)
Cash Impact from Restructuring (2.6) (3.9) -
Other Income 2.7 3.0 3.4
------------------------------
EBITDA (35.3) (32.7) (31.8)
------------------------------
Add back Cash Impact from Restructuring 2.6 3.9 -
Depreciation & Amortization (11.0) (10.6) (13.3)
Interest Expense (2.5) (2.3) (9.8)
Reorganization Items (7.5) (6.4) -
Income Tax Benefit - - 22.5
------------------------------
Net Loss ($53.7) ($48.1) ($32.4)
===============================
BALANCE SHEET SUMMARY: Balance at End of Period
------------------------------
Unrestricted Cash and Cash Equivalents $4.9 $3.0 $3.2
Restricted Cash and Cash Equivalents 7.2 1.2 -
Inventories 300.4 288.0 357.3
Other Current Assets 29.1 66.0 42.9
------------------------------
Total Current Assets 341.6 358.2 403.4
Net Fixed Assets 193.7 211.3 281.2
Long Term Assets 193.3 188.3 254.2
------------------------------
Total Assets $728.6 $757.8 $938.8
===============================
Accounts Payable $137.3 $144.0 $240.6
Short-Term Debt (Revolver) - - 93.0
Other Current Liabilities 62.8 77.5 62.6
------------------------------
Total Current Liabilities 200.1 221.5 396.2
Long-Term Debt - - 230.1
Other Long-Term Liabilities 87.7 90.6 182.8
Liabilities Subject to Settlement 539.4 538.8 -
Paid-In-Capital 136.9 136.8 136.5
Accumulated Deficit (235.5) (229.9) (6.8)
-----------------------------
Total Stockholders'Equity (Deficiency) (98.6) (93.1) 129.7
-----------------------------
Total Liabilities and Stockholders'
Equity (Deficiency) $728.6 $757.8 $938.8
=============================
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 EBITDA.
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Exhibit 20
Page 2 0f 2
BRADLEES, INC.
FIRST QUARTER RESULTS VS. PLAN
(Unaudited)
(In Millions)
First Quarter 1996
------------------
Actual Plan
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CASH FLOW SUMMARY:
Beginning Unrestricted Cash & Cash Equivalents $63.0 $63.0
Cash Provided by (Used in) Operations:
Net Loss (53.7) (48.1)
Depreciation & Amortization 11.0 10.6
Other 0.6 0.4
Changes in Working Capital:
Inventory Increase (18.1) (5.7)
Accounts Payable Decrease (11.6) (4.9)
All Other 25.5 1.8
-----------------------
Net Cash Used in Operations (46.3) (45.9)
Capital Spending (3.9) (12.5)
Increase in Restricted Cash and Cash Equivalents (6.0) -
Other:
Payments of Capital Leases & Other (0.7) (0.7)
Payments of Liabilities Subject to Settlement (0.9) (0.9)
Deferred Financing Costs (0.3) -
-----------------------
Total Other (1.9) (1.6)
-----------------------
Decrease in Unrestricted Cash and Cash Equivalents (58.1) (60.0)
-----------------------
Ending Unrestricted Cash and Cash Equivalents $4.9 $3.0
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