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 4, 1998
(JUNE 4, 1998)
BRADLEES INC.
(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)
(781) 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 3
Page 1 of 6 (Including Exhibit)
Item 5: OTHER EVENTS
Beginning on June 4, 1998, Bradlees, Inc. (the
"Company") will distribute to its banks and other credit
providers summaries of its financial results for the first
quarter (thirteen weeks) ended May 2, 1998, including a
comparison to the Company's summary financial plan (the "Plan")
for the fiscal year ending January 30, 1999 ("Fiscal 1998")
filed on Form 8-K dated February 11, 1998. The Fiscal 1998
first quarter results compared to the Plan are attached hereto
as Exhibit 20.
Total sales for the first
quarter ended May 2, 1998 were $17.4 million or 6.3% above
Plan due primarily to the favorable customer response to the
merchandising and marketing initiatives begun in 1997. Both
softlines and hardlines sales exceeded Plan. Comparable store
sales increased 10.0% in the first quarter. EBITDA before
restructuring (as defined in the exhibit) was $4.1 million
better than Plan due to the above-Plan sales and associated
gross margin and favorable selling, store operating,
administrative and distribution (SG&A) expenses. The gross
margin rate was below Plan in the first quarter due to a
slightly lower initial markup and above-Plan promotional
markdowns, partially offset by below-Plan clearance markdowns.
SG&A expenses were below Plan due principally to favorable home
office expenses.
The Company reported a net loss of $24.7 million for this
year's first quarter, compared to a planned net loss of $29.3
million and last year's first quarter net loss of $32.0 million.
Unrestricted cash was $1.3 million above Plan at May 2,
1998. Inventories were $6.3 million above Plan. Accounts
payable was $26.5 million above Plan and outstanding borrowings
under the Company's DIP facility were $13.2 million below Plan.
The net cash proceeds ($7.6 million) from the sale of an
undeveloped property that was held for sale were placed into
restricted cash and cash equivalents.
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
February 11, 1998, Form 10-Q for the first quarter ended May 2,
1998, and Form 10-K for the fiscal year ended January 31, 1998
(fiscal 1997). 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.
Item 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
Exhibit: 20 Summary Financial Results for the 13
Weeks Ended May 2, 1998.
2
INDEX TO EXHIBITS
EXHIBIT NO. EXHIBIT PAGE NO.
20 Summary Financial Results for the
13 Weeks Ended May 2, 1998. 4
3
BRADLEES, INC. Exhibit 20
FIRST QUARTER RESULTS VS. PLAN Page 1 of 2
(Unaudited)
(In Millions)
First Quarter 1998
Actual Plan* Last Year
------ ------ ---------
INCOME SUMMARY:
Owned Sales $282.4 $265.2 $265.8
Food Service Sales 1.5 1.5 1.5
Leased Department Sales 9.4 9.2 9.5
----- ----- -----
Total Sales 293.3 275.9 276.8
Gross Margin $ 79.7 76.2 79.7
Gross Margin % (based on owned sales) 28.2% 28.8% 30.0%
SG&A Expenses (92.5) (93.2) (98.3)
Other Income 2.8 2.6 2.3
Gain (loss) on Dispos. of Properties (0.3) - 0.1
------ ------ ------
EBITDA before Restructuring (10.3) (14.4) (16.2)
------ ------ ------
Cash Impact from Restructuring (2.1) (1.6) (1.6)
------ ------ ------
EBITDA after Restructuring (12.4) (16.0) (17.8)
------ ------ ------
Add back Cash Impact from Restruct. 2.1 1.6 1.6
Less Gain on Disp. of Prop.
(included in Reorg. Items) - - (0.1)
Depreciation & Amortization Expense (8.6) (9.0) (9.3)
Interest and Debt Expense (3.7) (3.8) (3.6)
Reorganization Items (2.1) (2.1) (2.8)
----- ------ ------
Net Loss ($24.7) ($29.3) ($32.0)
====== ====== ======
BALANCE SHEET SUMMARY:
Balance at End of Period
------------------------
Unrestricted Cash and Cash Equiv. $10.3 $9.0 $12.2
Restricted Cash and Cash Equivalents 24.5 16.9 9.2
Inventories 261.0 254.7 254.6
Other Current Assets 22.3 26.8 28.1
----- ----- -----
Total Current Assets 318.1 307.4 304.1
Net Fixed Assets 145.7 146.0 160.1
Long Term Assets 145.7 151.2 158.6
----- ----- -----
Total Assets $609.5 $604.6 $622.8
====== ====== ======
Accounts Payable $141.1 $114.6 $133.2
Short-Term Debt (DIP Facility) 116.1 129.3 80.5
Other Current Liabilities 31.4 37.8 51.9
----- ----- -----
Total Current Liabilities 288.6 281.7 265.6
Long-Term Debt 26.8 26.8 32.6
Other Long-Term Liabilities 43.8 49.8 51.8
Liabilities Subject to Settlement 560.9 561.1 568.0
Paid-In-Capital 137.1 137.3 137.3
Accumulated Deficit (447.7) (452.1) (432.5)
----- ----- -----
Total Stockholders' Deficiency (310.6) (314.8) (295.2)
----- ----- -----
Total Liabilities and
Stockholders' Deficiency $609.5 $604.6 $622.8
====== ====== ======
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.
* Plan amounts are from the Form 8-K dated
February 11, 1998 with reclassifications between other
current and long-term liabilities to be consistent with
this year's actual presentation.
4
Exhibit 20
Page 2 of 2
BRADLEES, INC.
FIRST QUARTER RESULTS VS. PLAN
(Unaudited)
(In Millions)
First Quarter 1998
Actual Plan*
------ -----
CASH FLOW SUMMARY:
Beginning Unrestricted
Cash & Cash Equivalents $10.9 $9.5
Cash Provided by (Used
in) Operations:
Net Loss (24.7) (29.3)
Depreciation & Amort. Expense 8.6 9.0
Amort. of Deferred Financing Costs 0.4 0.4
Changes in Working
Capital:
Inventory Increase (22.3) (18.4)
Accounts Payable Increase 16.7 9.4
All Other** (8.3) (4.2)
------ ------
Net Cash Used in Operations (29.6) (33.1)
------ ------
Investing Activities:
Capital Spending (1.6) (5.0)
Incr. in Rest. Cash and Cash Equiv. (7.8) (0.1)
Financing Activities:
Payments of Capital Leases and
Deferred Financing Costs (0.3) (0.5)
Proceeds from Sales of Properties 7.8 -
Pymts. of Liab. Subject to Settl. (1.0) (1.0)
Net Borrowings under the DIP Facility 31.9 39.2
---- ----
Total Financing Activities 38.4 37.7
---- ----
Decrease in Unrestricted Cash and
Cash Equivalents (0.6) (0.5)
---- ----
Ending Unrest. Cash and Cash Equiv. $10.3 $9.0
===== =====
* Plan amounts are from the Form 8-K dated February 11, 1998.
** Includes cash outlays associated with reorganization items.
5
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 4, 1998 By /s/ PETER THORNER
Peter Thorner Chairman and
Chief Executive Officer
Date: June 4, 1998 By /s/ CORNELIUS F. MOSES III
Cornelius F. Moses III
Senior Vice President,
Chief Financial Officer
6
