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): May 28, 1997
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(May 28, 1997)
Bradlees, Inc.
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(Exact Name of Registrant As Specified In Its Charter)
Massachusetts
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(State Or Other Jurisdiction of Incorporation)
1-11134 04-3156108
(Commission File Number) (IRS Employer Identification No.)
One Bradlees Circle; Braintree, Massachusetts
02184
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(Address Of Principal Executive Offices)
(Zip Code)
(617) 380-3000
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(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
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Beginning on May 28, 1997, Bradlees, Inc. (the
"Company") will distribute to its banks and other credit
providers summaries of its unaudited financial results for the
first quarter (thirteen weeks) ended May 3, 1997, including a
comparison to the Company's summary financial plan (the "Plan")
for the fiscal year ending January 31, 1998 ("Fiscal 1997")
filed on Form 8-K dated January 28, 1997. The Fiscal 1997 first
quarter results compared to the Plan are attached hereto as
Exhibit 20.
Total sales for the first quarter ended May 3, 1997
were $20.1 million below Plan. However, EBITDA before
restructuring (as defined in the exhibit) was $1.8 million
better than Plan, primarily due to an above-Plan gross margin
rate and below-Plan selling, store operating, administrative and
distribution (SG&A) expenses. The unfavorable sales variance in
the first quarter was due, in part, to the fact that the Company
has not yet benefited from modifications to its marketing
strategy and merchandise mix and presentation, which are in
varying stages of implementation. The favorable gross margin
rate was due primarily to higher-than-Plan allowances. SG&A
expenses were $2.9 million below Plan, primarily due to
favorable logistics ($1.6 million), occupancy ($.5 million) and
home office ($.4 million) expense variances.
Despite the sales shortfall, inventories were $9.6
million below Plan at May 3, 1997. Accounts Payable was $1.1
million above Plan, while borrowings under the Company's DIP
facility were $12.0 million under Plan.
The Company is distributing the quarterly performance
against its 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 January 28, 1997 and Form 10-K
for the fiscal year ended February 1, 1997 (fiscal 1996). 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
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Item 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
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Exhibit: 20 Summary Financial Results for the
13 Weeks Ended May 3, 1997.
3
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit Page No.
- ----------- ------- --------
20 Summary Financial Results for the 6
13 Weeks Ended May 3, 1997.
4
<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: May 28, 1997 By /s/ PETER THORNER
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Peter Thorner
Chairman and Chief Executive
Officer
Date: May 28, 1997 By /s/ CORNELIUS F. MOSES III
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Cornelius F. Moses III
Senior Vice President,
Chief Financial Officer
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<PAGE>
Exhibit 20
Page 1 of 2
BRADLEES INC.
FIRST QUARTER RESULTS VS PLAN
(UNAUDITED)
(IN MILLIONS)
FIRST QUARTER 1997
Actual Plan Last Year
------ ---- ---------
INCOME SUMMARY:
Owned Sales $265.8 $284.5 $335.6
Food Service Sales 1.5 1.6 2.1
Leased Department Sales 9.5 10.8 12.2
------- ------- -------
Total Sales 276.8 296.9 349.9
Gross Margin $ 79.7 80.6 102.5
Gross Margin % (based on owned sales) 30.0% 28.3% 30.5%
SG&A Expenses (98.5) (101.4) (137.9)
Other Income 2.1 2.4 2.7
Gain on Disposition of Properties 0.1 - -
------- ------- -------
EBITDA before Restructuring (16.6) (18.4) (32.7)
------- ------- -------
Cash Impact from Restructuring (1.6) (1.9) (2.6)
------- ------- -------
EBITDA after Restructuring (18.2) (20.3) (35.3)
------- ------- -------
Add back Cash Impact from Restructuring 1.6 1.9 2.6
Less Gain on Disp. of Prop.
(included in reorg. items) (0.1) - -
Depreciation & Amortization Expense (9.2) (9.1) (11.0)
Interest and Debt Expense (3.3) (3.2) (2.5)
Reorganization Items (2.8) (2.9) (7.5)
------- ------- -------
Net Loss ($32.0) ($33.6) ($53.7)
======= ======= =======
BALANCE SHEET SUMMARY:
Unrestricted Cash and Cash Equivalents $12.2 $1.0 $13.1
Restricted Cash and Cash Equivalents 9.2 9.9 7.2
Inventories 254.6 264.2 300.4
Other Current Assets 28.1 26.1 29.0
------- ------- -------
Total Current Assets 304.1 301.2 349.7
Net Fixed Assets * 160.1 175.3 193.7
Long Term Assets * 158.6 184.6 193.3
------- ------- -------
Total Assets $622.8 $661.1 $736.7
======= ======= =======
Accounts Payable $133.2 $132.1 $145.4
Short-Term Debt (DIP Facility) 80.5 92.5 -
Other Current Liabilities 51.9 41.8 47.1
------- ------- -------
Total Current Liabilities 265.6 266.4 192.5
Long-Term Debt 32.6 33.1 52.8
Other Long-Term Liabilities 51.8 47.9 50.6
Liabilities Subject to Settlement 568.0 569.5 539.4
Paid-In-Capital 137.3 137.2 136.9
Accumulated Deficit * (432.5) (393.0) (235.5)
------- ------- -------
Total Stockholders' Deficiency (295.2) (255.8) (98.6)
------- ------- -------
Total Liabilities and Stockholders'
Deficiency $622.8 $661.1 $736.7
======= ======= =======
* Actual 1997 balances are after the 1996 year-end
FAS#121 write-downs that were not included in the Plan.
NOTE: EBITDA before restructuring is earnings (loss)
before interest and debt expense, income taxes, non-cash
restructuring and non-recurring items, asset impairment charge,
reorganization and extraordinary items, and depreciation and
amortization expense. At the time cash is received or expended
for restructuring and non-recurring items, the cash amount is
included in the calculation of EBITDA after restructuring.
6
<PAGE>
Exhibit 20
Page 2 of 2
BRADLEES, INC.
FIRST QUARTER RESULTS VS. PLAN
(Unaudited)
(In Millions)
First Quarter 1997
Actual Plan
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CASH FLOW SUMMARY:
Beginning Unrestricted Cash & Cash
Equivalents $10.0 $1.0
Cash Provided by (Used in) Operations:
Net Loss (32.0) (33.6)
Depreciation & Amortization Expense 9.2 9.1
Other, Including Reorganization Items (1.3) 0.6
Changes in Working Capital:
Inventory Increase (17.6) (21.9)
Accounts Payable Increase 17.9 11.4
All Other (3.3) (9.6)
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Net Cash Used in Operations (27.1) (44.0)
Capital Spending (3.9) (5.0)
Increase in Restricted Cash & Cash Equivalents (0.1) (0.1)
Other:
Payments of Capital Leases (0.4) (0.4)
Payments of Liabilities Subject to Settlement* (2.5) (1.0)
Borrowings (Payments) under the DIP Facility 38.0 52.5
Deferred Financing Costs (1.8) (2.0)
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Total Other 33.3 49.1
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Increase in Unrestricted Cash &
Cash Equivalents 2.2 -
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Ending Unrestricted Cash & Cash Equivalents $12.2 $1.0
====== ======
* Actual 1997 payments include reclamation claim payments of
$1.5 million that were not included in the Plan.
7
