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): Aug. 13, 1997
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(Aug. 13, 1997)
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Bradlees, Inc.
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(Exact Name of Registrant As Specified In Its Charter)
Massachusetts
(State Or Other Jurisdiction of Incorporation)
1-11134 04-3156108
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(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
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(Former name or former address, if changed since last report)
Exhibit Index on Page 4
Page 1 of 8 (Including Exhibit)
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Item 5: OTHER EVENTS
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Beginning on August 13, 1997, Bradlees, Inc. (the
"Company") will distribute to its banks and other credit
providers summaries of its revised financial plan (the "Revised
Plan") for the fiscal year ending January 31, 1998 ("Fiscal
1997"), which incorporate forecasted results for the first half
of Fiscal 1997 comprised of actual results for the first quarter
and forecasted results for the second quarter. The Revised Plan
is attached hereto as Exhibit 20.
Certain revisions have been made to the original Fiscal
1997 plan filed on Form 8-K dated January 28, 1997 (the "Plan")
without affecting the original projected annual EBITDA (as
defined in Exhibit 20) of approximately $27 million. The
revisions to the Plan include adjustments for a projected annual
decline of 2.9% in comparable store sales (first half -6.9%;
second half +0.2%), a 0.2% increase in the planned annual gross
margin rate, and additional SG&A expense reductions of $15
million from the original Plan. The Company's previously
reported planned modifications to its merchandising, advertising
and operational strategies are either in place for the second
half of Fiscal 1997 or are in various stages of implementation
and are reflected in the planned improvements in operating
results.
The Company is distributing the Revised Plan to its
banks and other credit providers to facilitate their credit
analyses. THE REVISED PLAN SHOULD NOT BE RELIED UPON FOR ANY
OTHER PURPOSE and should be read in conjunction with the
Company's Form 10-Q for the first quarter ended May 3, 1997,
Form 10-K for the fiscal year ended February 1, 1997 (Fiscal
1996), and Form 8-K dated January 28, 1997. The Revised Plan 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 Revised Plan, the Company does not believe it is obligated
to subsequently update such information or to provide such
information indefinitely, and the Company may cease making such
disclosures at any time. The Revised Plan was not examined,
reviewed or compiled by the Company's independent public
accountants.
The Revised Plan was not prepared with a view toward
compliance with the guidelines established by the American
Institute of Certified Public Accountants or the rules and
regulations of the Securities and Exchange Commission regarding
financial projections. While presented with numerical
specificity, the Revised Plan contains forward looking
statements which are based upon a variety of assumptions
(including assumptions concerning the success of the Company's
modifications to its merchandising, advertising and operational
strategies and the related effects on sales and gross margin and
the achievement of expected expense reductions) that may not be
realized and are subject to significant business, economic and
competitive uncertainties and potential contingencies, many of
which are beyond the Company's control. Consequently, the
Revised Plan should not be regarded as a representation or
warranty by the Company, or any other person, that the
projections contained therein will be realized. The Revised
Plan may be subject to future adjustments as actual results may
vary substantially from those presented in the Revised Plan, and
such adjustments could materially affect the reported
information.
2
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Item 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
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Exhibit: 20 Fiscal 1997 Revised Summary Financial Plan
3
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit Page No.
- ---------- ------- --------
20 Fiscal 1997 Revised Summary Financial Plan 6
4
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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: August 13, 1997 By /s/ PETER THORNER
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Peter Thorner
Chairman and
Chief Executive Officer
Date: August 13, 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 3
BRADLEES, INC.
CONDENSED INCOME STATEMENT
MANAGEMENT FORMAT
(In Millions)
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FISCAL 1997 REVISED SUMMARY FINANCIAL PLAN
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FIRST HALF PROJECTED
FORECAST QTR 3 QTR 4 ANNUAL
---------- ----- ----- ----------
Owned Sales $561.6 $347.5 $457.0 $1,366.1
Food Service 3.3 1.7 1.9 6.9
Leased Department Sales 23.5 13.0 13.0 49.5
------- ------- ------- --------
Total 588.4 362.2 471.9 1,422.5
Gross Margin $ 172.6 102.2 138.6 413.4
Gross Margin %
(Based on Owned Sales) 30.7% 29.4% 30.3% 30.3%
SG&A Expenses (197.1) (96.8) (104.5) (398.4)
Other Income 5.5 3.2 3.3 12.0
Gain on Disp. of Properties 0.2 - - 0.2
------- ------- ------- --------
EBITDA (Loss) before
Restructuring ($18.8) $8.6 $37.4 $27.2
------- ------- ------- --------
Cash Impact from
Restructuring (3.2) (4.3) (0.8) (8.3)
------- ------- ------- --------
EBITDA (Loss) after
Restructuring ($22.0) $4.3 $36.6 $18.9
-------- ------- ------- --------
Less Gain on Dispos. of
Prop.(in Reorg. items) (0.2) - - (0.2)
Add back Cash Impact from
Restructuring 3.2 4.3 0.8 8.3
Deprec. & Amort. Expense (18.4) (9.5) (9.1) (37.0)
Interest and Debt Expense (7.0) (3.6) (3.1) (13.7)
Reorganization Items (4.8) (2.1) (2.9) (9.8)
------- ------- ------- --------
Net Income (Loss) ($49.2) ($6.6) $22.3 ($33.5)
======= ======= ======= ========
NOTE: EBITDA before restructuring is earnings (loss) before
interest and debt expense, income taxes, 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
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EXHIBIT 20
Page 2 of 3
BRADLEES, INC.
CONDENSED BALANCE SHEET
MANAGEMENT FORMAT
(In Millions)
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FISCAL 1997 REVISED SUMMARY FINANCIAL PLAN
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FIRST HALF
FORECAST QTR 3 QTR 4
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Assets
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Current Assets:
Unrestricted cash &
cash equivalents $9.9 $10.0 $10.0
Restricted cash 9.3 9.4 9.5
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Total cash & cash
equivalents 19.2 19.4 19.5
Inventories 255.6 330.7 240.4
Other current assets 29.0 28.8 23.1
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Total Current Assets 303.8 378.9 283.0
Net Fixed Assets 158.5 155.8 153.6
Long Term Assets 156.2 154.0 151.7
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Total Assets $618.5 $688.7 $588.3
======= ======= =======
FIRST HALF
FORECAST QTR3 QTR 4
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Liabilities
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Current Liabilities:
Accounts payable $145.0 $208.3 $120.2
DIP borrowings 87.0 104.1 68.7
Other current liabilities 47.7 46.3 48.6
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Total Current Liab. 279.7 358.7 237.5
Long-term capital lease
obligations 33.2 32.8 32.3
Other long-term liabilities 50.6 50.7 50.7
Liabilities subject to
settlement 567.4 565.5 564.5
Stockholders' Deficit
- ---------------------
Common stock 137.3 137.3 137.3
Accumulated deficit (449.7) (456.3) (434.0)
------- ------- -------
Total Stockholders' Deficit (312.4) (319.0) (296.7)
------- ------- -------
Total Liabilities & Deficit $618.5 $688.7 $588.3
======= ======= =======
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EXHIBIT 20
Page 3 of 3
BRADLEES, INC.
CONDENSED CASH FLOW
MANAGEMENT FORMAT
(In Millions)
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FISCAL 1997 REVISED SUMMARY FINANCIAL PLAN
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FIRST HALF PROJECTED
FORECAST QTR 3 QTR 4 ANNUAL
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Beginning unrestricted cash
& cash equivalents $10.0 $9.9 $10.0 $10.0
Cash generated from (used in)
operations:
Net income (loss) (49.2) (6.6) 22.3 (33.5)
Depreciation & amortization 18.4 9.5 9.1 37.0
Amort. of deferred financing
costs 1.6 0.4 0.4 2.4
Reorganization items 4.8 2.1 2.9 9.8
Changes in working capital:
Inventory (increase) decrease (18.6) (75.2) 90.4 (3.4)
Accts payable increase(decrease) 29.7 63.3 (88.1) 4.9
All other (6.8) (3.4) 8.6 5.2
------- ------- ------- -------
Net cash provided (used) by
operating activities before
reorganization items (20.1) (3.1) 45.6 22.4
Reorganization items:
Interest income 0.2 0.1 0.1 0.4
Chapter 11 professonal fees (5.2) (2.3) (3.0) (10.5)
Other reorg. expenses paid,net (3.2) (4.3) (0.8) (8.3)
------- ------- ------- -------
Net cash used by reorg. items (8.2) (6.5) (3.7) (18.4)
Net cash provided by (used in)
operations after reorg. items (28.3) (9.6) 41.9 4.0
Capital spending (10.0) (5.0) (5.0) (20.0)
Increase in restricted cash (0.2) (0.1) (0.1) (0.4)
Other:
Payments of liabilities subject
to settlement (3.5) (1.9) (1.0) (6.4)
Net change in DIP borrowings 44.5 17.1 (35.4) 26.2
Payments of capital leases &
financing costs (2.6) (0.4) (0.4) (3.4)
------- ------- ------- -------
Total other 38.4 14.8 (36.8) 16.4
------- ------- ------- -------
Increase (decrease) in
unrestricted cash & cash equiv. (0.1) 0.1 - -
------- ------- ------- -------
Ending unrestricted cash &
cash equivalents $9.9 $10.0 $10.0 $10.0
======= ======= ======= =======
8
