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): September 22, 1998
(September 22, 1998)
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)
(781) 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 8 (Including Exhibit)
Item 5: OTHER EVENTS
Beginning on September 22, 1998, Bradlees, Inc. (the "Company")
will distribute to its banks and other credit providers
summaries of its financial forecast (the
"Forecast") for the fiscal year ending January 30, 1999
("Fiscal 1998"), which incorporate actual results for the
first half of Fiscal 1998. The Forecast is attached hereto
as Exhibit 20 and shows comparisons with the summary
financial plan (the "Plan") for Fiscal 1998 filed on Form
8-K dated February 11, 1998 and with the annual financial
summary for last year (Fiscal 1997). The Forecast does not
incorporate any adjustments that will result from the
Company's expected year-end emergence from Chapter 11. The
Company's amended disclosure statement was approved by the
Bankruptcy Court on September 17, 1998.
The Forecast reflects an EBITDA (as defined in the exhibit)
of $35 million before restructuring and property gains for
Fiscal 1998 compared to $32 million in the Plan. Comparable
store sales are assumed to increase 6.3% compared to 3.5% in the
Plan(comparable store sales for the first half of Fiscal 1998
increased 8.6%). The beneficial impact on EBITDA from the higher
sales and associated gross margin is partially offset by an
expected lower gross margin rate (29.7% vs. 30.1%) and
slightly higher selling, general, administrative and
distribution ("SG&A") expenses, although the SG&A rate in
the Forecast is projected to be 28.1% of owned sales compared
to 28.6% of owned sales in the Plan.
The Company is distributing the Forecast to its banks and
other credit providers to facilitate their credit analyses.
THE FORECAST SHOULD NOT BE RELIED UPON FOR ANY OTHER PURPOSE
and should be read in conjunction with the Company's Form
10-Q for the second quarter ended August 1, 1998, Form 10-K
for the fiscal year ended January 31, 1998 (Fiscal 1997),
and Form 8-K dated February 11, 1998. The Forecast 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 Forecast, 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 Forecast was
not examined, reviewed or compiled by the Company's
independent public accountants.
The Forecast 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 Forecast contains forward looking statements which are
based upon a variety of assumptions (including assumptions
concerning the continued success of the Company's
merchandising and marketing strategies started in Fiscal
1997) that may not be realized and are subject to
significant business, economic, political, climatic
and competitive uncertainties
and potential contingencies, many of which are beyond the
Company's control. Consequently, the Forecast 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 Forecast may be subject to future
adjustments as actual results may vary substantially from
those presented in the Forecast, and such adjustments could
materially affect the reported information.
Item 7:FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
Exhibit: 20 Fiscal 1998 Summary Financial Forecast
INDEX TO EXHIBITS
Exhibit No. Exhibit Page No.
20.A,B,C Fiscal 1998 Summary Financial Forecast 6
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: September 22, 1998 By /s/ PETER THORNER
Peter Thorner
Chairman and Chief Executive
Officer
Date: September 22, 1998 By /s/ CORNELIUS F. MOSES III
Cornelius F. Moses III
Senior Vice President, Chief
Financial Officer
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BRADLEES, INC. Exhibit 20
CONDENSED INCOME STATEMENT Page 1 of 3
MANAGEMENT FORMAT
(IN MILLIONS)
FISCAL 1998 SUMMARY FINANCIAL FORECAST
First-Half Third Quarter Fourth Quarter Annual
Actuals Forecast Plan* Forecast Plan* Forecast Plan* Last Year
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME SUMMARY:
Owned Sales $591.2 : $327.9 $327.5 : $445.0 $439.3 : $1,364.1 $1,330.0 $1,337.6
Food Service Sales 3.0 : 1.7 1.7 : 1.8 1.8 : 6.5 6.7 6.8
Leased Department Sales 21.9 : 12.1 12.0 : 12.3 12.2 : 46.3 47.2 47.8
-------------:---------------------:----------------------:------------------------------
Total Sales 616.1 : 341.7 341.2 : 459.1 453.3 : 1,416.9 1,383.9 1,392.2
: : :
Gross Margin $ 176.3 : 98.4 97.6 : 130.7 131.0 : 405.3 400.0 399.3
Non-Recurring GOB Provision - : - - : - - : - - (2.9)
-------------:---------------------:----------------------:------------------------------
Adjusted Gross Margin 176.3 : 98.4 97.6 : 130.7 131.0 : 405.3 400.0 396.4
Gross Margin % (based on owned sales) 29.8%: 30.0% 29.8%: 29.4% 29.8%: 29.7% 30.1% 29.6%
: : :
SG&A Expenses (184.8): (97.3) (93.9): (101.0) (99.2): (383.0) (380.7) (382.9)
: : :
Other Income 5.7 : 3.5 3.2 : 3.5 3.4 : 12.7 12.7 12.1
Add Back Non-Recurring GOB Provision - : - - : - - : - - 2.9
-------------:---------------------:----------------------:------------------------------
EBITDA before Restruct. and Property Gains (2.8): 4.6 6.9 : 33.2 35.2 : 35.0 32.0 28.5
: : :
Gain on Disposition of Properties 1.6 : - - : - - : 1.6 - 6.6
-------------:---------------------:----------------------:------------------------------
EBITDA before Restructuring (1.2): 4.6 6.9 : 33.2 35.2 : 36.6 32.0 35.1
Cash Impact from Restructuring (2.6): (0.4) (0.2): (0.4) (0.1): (3.5) (2.2) (7.2)
-------------:---------------------:----------------------:------------------------------
EBITDA after Restructuring (3.8): 4.2 6.7 : 32.8 35.1 : 33.1 29.8 27.9
-------------:---------------------:----------------------:------------------------------
Add back Cash Impact from Restructuring 2.6 : 0.4 0.2 : 0.4 0.1 : 3.5 2.2 7.2
Less Gain on Dispos. of : : :
Property (in Reorg. Items) (1.9): - - : - - : (1.9) - (1.2)
Less Non-Recurring GOB Provision - : - - : - - : - - (2.9)
Depreciation & Amortization Expense (16.5): (7.9) (8.5): (7.7) (8.1): (32.1) (34.4) (36.2)
Interest and Debt Expense (7.6): (4.5) (4.6): (4.4) (4.4): (16.5) (16.8) (16.6)
Reorganization Items (0.2): (2.1) (2.1): (2.0) (2.1): (4.3) (8.3) (0.8)
-------------:---------------------:----------------------:------------------------------
Net Income (Loss) ($27.4): ($9.9) ($8.3): $19.1 $20.6 : ($18.2) ($27.5) ($22.6)
=========================================================================================
* From the Form 8-K dated February 11, 1998.
NOTE: EBITDA before restructuring and property gains is earnings (loss) before gains on disposition of properties, 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.
</TABLE>
<TABLE>
<CAPTION>
BRADLEES, INC. Exhibit 20
CONDENSED BALANCE SHEET Page 2 of 3
MANAGEMENT FORMAT
(In Millions)
FISCAL 1998 SUMMARY FINANCIAL FORECAST
First-Half : Third Quarter : Fourth Quarter
Actuals : Forecast Plan* : Forecast Plan* Last Year
ASSETS : :
<S> <C> :<C> <C> :<C> <C> <C>
Current Assets: : :
Unrestricted cash & cash equivalents $8.1 : $11.2 $11.3 : $8.2 $8.8 $10.9
Restricted cash 24.9 : 25.1 25.1 : 25.2 25.4 16.8
-------------:---------------------:---------------------------------
Total Cash & Cash Equivalents 33.0 : 36.3 36.4 : 33.4 34.2 27.7
: :
Inventories 239.5 : 310.4 326.6 : 227.8 224.6 238.6
Other current assets 16.1 : 23.4 23.5 : 16.0 15.9 26.5
-------------:---------------------:---------------------------------
Total Current Assets 288.6 : 370.1 386.5 : 277.2 274.7 292.8
: :
Net Fixed Assets 142.8 : 143.9 142.2 : 145.2 140.9 150.5
: :
Long-Term Assets 143.9 : 141.7 147.0 : 139.6 144.8 151.9
-------------:---------------------:---------------------------------
Total Assets $575.3 : $655.7 $675.7 : $562.0 $560.4 $595.2
=============:=====================:=================================
LIABILITIES : :
Current Liabilities : :
Accounts payable $121.2 : $155.2 $163.3 : $113.9 $101.1 $124.4
DIP borrowings 111.6 : 171.9 185.0 : 103.3 106.9 84.2
Other current liabilities 31.8 : 31.4 37.5 : 31.1 43.2 38.1
-------------:---------------------:---------------------------------
Total Current Liabilities 264.6 : 358.5 385.8 : 248.3 251.2 246.7
: :
Long-Term Liabilities 69.6 : 67.1 64.4 : 65.5 64.2 72.3
: :
Liabilities Subject to Settlement 554.4 : 553.4 559.1 : 552.4 558.0 562.1
: :
STOCKHOLDERS' DEFICIENCY : :
Common stock 137.1 : 137.1 137.3 : 137.1 137.3 137.2
Accumulated deficiency (450.4): (460.4) (470.9): (441.3) (450.3) (423.1)
-------------:---------------------:---------------------------------
Total Stockholders' Deficiency (313.3): (323.3) (333.6): (304.2) (313.0) (285.9)
-------------:---------------------:---------------------------------
Total Liabilities & Deficiency $575.3 : $655.7 $675.7 : $562.0 $560.4 $595.2
=============:=====================:=================================
* From the Form 8-K dated February 11, 1998.
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<CAPTION>
BRADLEES, INC. Exhibit 20 Exhibit 20
CONDENSED CASH FLOW Page 3 of 3 Page 3 of 3
MANAGEMENT FORMAT
(In Millions)
FISCAL 1998 SUMMARY FINANCIAL FORECAST
First-Half : Third Quarter : Fourth Quarter : Annual
Actuals : Forecast Plan* : Forecast Plan* : Forecast Plan* Last Year
<S> <C> :<C> <C> :<C> <C> :<C> <C> <C>
Beginning Unrestricted Cash & Cash : : :
Equivalents $10.9 : $8.1 $10.0 : $11.2 $11.3 : $10.9 $9.5 $10.0
Cash Used in Operations: : : :
Net Income (Loss) (27.4): (9.9) (8.3): 19.1 20.6 : (18.2) (27.5) (22.6)
Depreciation & Amortization Expense 16.5 : 7.9 8.5 : 7.7 8.1 : 32.1 34.4 36.2
Amortization of Deferred Financing Costs 0.8 : 0.4 0.4 : 0.4 0.3 : 1.5 1.4 3.7
: : :
Inventory (Increase) Decrease (0.8): (70.9) (82.3): 82.6 102.0 : 10.9 11.7 (1.7)
Accounts Payable Increase (Decrease) (3.2): 34.0 53.3 : (41.3) (62.2): (10.4) (4.1) 9.0
: : :
Other, Including Reorganization Items (8.7): (10.0) (13.5): 5.8 13.2 : (12.8) (7.4) (33.7)
------------:---------------------:----------------------:------------------------------
Net Cash Provided by (Used in) Operations (22.8): (48.5) (41.9): 74.3 82.0 : 3.1 8.5 (9.1)
: : :
Investing Activities: : : :
Capital Spending (5.5): (7.2) (5.0): (7.2) (5.0): (20.0) (20.0) (19.6)
Increase in Restricted Cash and : : :
Cash Equivalents (8.1): (0.2) (0.2): (0.2) (0.2): (8.5) (8.5) (7.6)
Financing Activities: : : :
Payments of Capital Leases & Deferred Financing : : :
Costs (0.6): (0.3) (0.3): (0.3) (0.3): (1.1) (1.4) (5.9)
Proceeds from Disposition of Properties 12.0 : - - : - - : 12.0 7.8 7.9
Payments of Liabilities Subject to Settlement (5.2): (1.0) (1.0): (1.0) (1.0): (7.2) (4.1) (6.5)
Net Borrowings (Payments) under the : : :
DIP Facility 27.4 : 60.3 49.7 : (68.6) (78.0): 19.1 16.9 41.7
-------------:---------------------:----------------------:------------------------------
Total Financing Activities 33.6 : 59.0 48.4 : (69.9) (79.3): 22.8 19.2 37.2
: : :
Increase (Decrease) in Unrestricted : : :
-------------:---------------------:----------------------:------------------------------
Cash and Cash Equivalents (2.8): 3.1 1.3 : (3.0) (2.5): (2.6) (0.8) 0.9
-------------:---------------------:----------------------:------------------------------
Ending Unrest. Cash and Cash Equivalents $8.1 : $11.2 $11.3 : $8.2 $8.8 : $8.3 $8.7 $10.9
=============:=====================:======================:==============================
* From the Form 8-K dated February 11, 1998 with a reclassification of planned annual proceeds from
disposition of properties from "Other, Including Reorganization Items" to "Financing Activities"
to be consistent with the annual actual presentation.
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