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): August 20, 1999
(August 20, 1999)
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 7 (Including Exhibit)
Item 5: OTHER EVENTS
Beginning on August 20, 1999, Bradlees, Inc. (the "Company")
will distribute to its banks and other credit providers
summaries of its second-quarter (13-week) and year-to-date
(26-week) financial results ended July 31, 1999, including a
comparison to the Company's summary financial plan (the "Plan")
for the fiscal year ended January 29, 2000 ("fiscal 1999"). The
fiscal 1999 second-quarter and year-to-date results compared to
the Plan are attached hereto as Exhibit 20. As a result of the
Company's adoption of fresh-start reporting as of January 30,
1999, the financial summaries presented are not comparable in
certain material respects to the prior-year periods presented.
Total sales for the second quarter ended July 31, 1999
exceeded Plan by $43.3 million, or 12.8%, due primarily to
favorable customer response to the Company's merchandising and
marketing initiatives and the first-quarter liquidation of one
of the Company's major competitors (Caldor Corp.). Comparable
store sales increased 19.2% in the second quarter. EBITDA (as
defined in Exhibit 20) exceeded Plan by $6.9 million in the
second quarter due to the above-Plan sales and associated gross
margin and an above-Plan gross margin rate (32.4% vs. 31.6%),
partially offset by above-Plan SG&A expenses (although the SG&A
expense rate as a percent of owned sales was 28.9% vs. planned
29.6%). The higher gross margin rate was due primarily to
lower-than-Plan clearance markdowns and above-Plan vendor
allowances, both as a result of the strong sales performance.
SG&A expenses were above Plan mostly due to certain incremental
expenses, such as store payroll and other store expenses and
logistics expenses incurred to handle the higher sales volume.
Net income in the second quarter exceeded Plan by $8.5 million.
Year-to-date total sales exceeded Plan by $72.5 million, or
11.4%, due primarily to the same reasons stated above for the
second quarter. Comparable store sales increased 16.1%, with
year-to-date sales in every softlines and hardlines merchandise
division exceeding Plan and last year. Year-to-date EBITDA was
$11.7 million ahead of Plan due primarily to the same factors
discussed above for the second quarter. The year-to-date net
loss was $14.1 million below the Plan net loss.
Cash was $3.3 million above Plan at July 31, 1999 and
inventories were $2.8 million below Plan. Accounts payable was
$14.9 million above Plan, while outstanding borrowings were
$23.6 million below Plan due principally to the above-Plan
EBITDA performance and accounts payable level. The lease
financing obligation, capital lease obligation, convertible
notes payable, net fixed asset and long-term asset variances to
Plan all relate to the Yonkers' store lease financing
transaction and associated paydown of the convertible notes and
reclassification of the prior assets held for sale.
The Company is distributing the quarterly
and year-to-date performance against its Plan (the "Quarterly
Performance Information") to its banks and other credit
providers to facilitate their credit analyses. The Quarterly
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 April 1, 1999, Form 10-Q for the quarterly period
ended May 1, 1999 and most recent Form S-1 and Form 10-K
filings. The Quarterly 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. The Quarterly Performance Information was not
examined, reviewed or compiled by the Company's independent
public accountants. Although the Company is publicly disclosing
the Quarterly Performance Information, 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 Quarterly
Performance Information may be subject to future adjustments and
such adjustments could materially affect the reported
information.
Item 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
Exhibit: 20 Quarterly Performance Information
INDEX TO EXHIBITS
Exhibit No. Exhibit Page No.
20 Quarterly Performance Information 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: August 20, 1999 By /s/ PETER THORNER
Peter Thorner
Chairman and
Chief Executive Officer
Date: August 20, 1999 By /s/ CORNELIUS F. MOSES III
Cornelius F. Moses III
Senior Vice President,
Chief Financial Officer
<TABLE>
<CAPTION>
BRADLEES, INC. Exhibit 20
SECOND QUARTER RESULTS VS. PLAN Page 1 of 2
(Unaudited)
(In Millions)
Second Quarter 1999 Year-to-Date 1999
Actual Plan* : Last Year : Actual Plan* : Last Year
INCOME SUMMARY: : : :
<S> <C> <C> <C> <C> <C> <C>
Owned Sales $365.8 $323.9 : $308.8 : $679.7 $609.0 : $591.2
Food Service Sales 1.9 1.7 : 1.6 : 3.3 3.2 : 3.0
Leased Department Sales 14.2 13.0 : 12.4 : 23.8 22.1 : 21.9
-------- -------- : -------- : ---------- --------: ---------
Total Sales 381.9 338.6 : 322.8 : 706.8 634.3 : 616.1
: : :
Gross Margin $ 118.5 102.3 : 96.6 : 206.7 181.8 : 176.3
Gross Margin % (based on owned 32.4% 31.6% : 31.3% : 30.4% 29.9%: 29.8%
sales) : : :
: : :
SG&A Expenses (105.6) (95.9) : (92.4) : (205.8) (192.1): (185.2)
Other Income 3.9 3.5 : 3.1 : 6.6 6.1 : 6.1
-------- -------- : -------- : ---------- --------: ---------
EBITDA (Loss) 16.8 9.9 : 7.3 : 7.5 (4.2): (2.8)
-------- -------- : -------- : ---------- --------: ---------
Gain(Loss) on Dispos. of Prop. - - : - : - - : (0.2)
Depreciation & Amortization Exp. (7.2) (7.5) : (8.0) : (14.5) (15.1): (16.6)
Interest and Debt Expense (7.1) (7.7) : (3.9) : (14.0) (15.1): (7.6)
Reorganization Items 0.7 - : 1.9 : 0.7 - : (0.2)
-------- -------- : -------- : ---------- --------: ---------
Net Income (Loss) $3.2 ($5.3) : ($2.7) : ($20.3) ($34.4): ($27.4)
======== ======== : ======== : ========== ========: =========
BALANCE SHEET SUMMARY: Balance at End of Period
Cash and Cash Equivalents $11.5 $8.2 : $8.1
Restricted Cash and Cash Equivalents - - : 24.9
Inventories 244.3 247.1 : 239.5
Other Current Assets 21.2 16.0 : 16.1
---------- --------: ---------
Total Current Assets 277.0 271.3 : 288.6
Net Fixed Assets 114.5 100.6 : 142.8
Long-Term Assets 80.9 93.5 : 143.9
---------- --------: ---------
Total Assets $472.4 $465.4 : $575.3
========== ========: =========
Accounts Payable $138.4 $123.5 : $121.2
Revolver/DIP Borrowings 132.1 155.7 : 111.6
Other Current Liabilities 28.7 29.5 : 31.8
---------- --------: ---------
Total Current Liabilities 299.2 308.7 : 264.6
Long-Term Capital Lease Obligations 27.4 24.5 : 26.5
Lease Financing Obligation 17.5 - : -
Convertible Notes Payable 12.0 29.0 : -
Unfavorable Lease Liability 44.9 45.3 : -
Other Long-Term Liabilities 36.4 37.3 : 43.1
:
Liabilities Subject to Settlement - - : 554.4
:
Common Stock 55.3 55.0 : 137.1
Accumulated Deficit (20.3) (34.4): (450.4)
---------- --------: ---------
Total Stockholders' Equity (Deficiency) 35.0 20.6 : (313.3)
---------- --------: ---------
Total Liabilities and Stockholders' Equity (Deficiency) $472.4 $465.4 : $575.3
========== ========: =========
NOTE: EBITDA is earnings (loss) before interest and debt expense,
income taxes, restructuring and non-recurring items, gains and losses on dispositions of
properties, reorganization and extraordinary items, and depreciation and amortization expense.
* Plan amounts are from the Form 8-K dated April 1, 1999.
</TABLE>
<TABLE>
<CAPTION>
BRADLEES, INC. Exhibit 20
SECOND QUARTER RESULTS VS. PLAN Page 2 of 2
(Unaudited)
(In Millions)
Second Quarter 1999 Year-to-Date
Actual Plan* : Actual Plan*
:
CASH FLOW SUMMARY: :
<S> <C> <C> : <C> <C>
Beginning Cash & Cash Equivalents $10.3 $10.3 : $9.5 $9.5
:
Cash Provided by (Used in) Operations: :
Net Income (Loss) 3.2 (5.3): (20.3) (34.4)
Depreciation & Amortization Expense 7.2 7.5 : 14.5 15.1
Amortization of Deferred Financing Costs 0.3 0.3 : 0.7 0.7
:
Inventory (Increase) Decrease 17.2 13.5 : (11.9) (14.7)
Accounts Payable Increase (Decrease) (18.3) (6.8): 19.1 4.2
:
Other** (1.4) 3.1 : (7.5) (2.2)
------- -------: ------- -------
Net Cash Provided by (Used in) Operations 8.2 12.3 : (5.4) (31.3)
------- -------: ------- -------
Investing activities: :
Capital spending (5.3) (5.0): (8.2) (10.0)
Lease aquisition costs (1.3) - : (1.3) -
------- -------: ------- -------
Net Investing Activities (6.6) (5.0): (9.5) (10.0)
:
Financing activities: :
Net borrowings (payments) under revolver (0.3) (8.8): 17.7 41.2
Proceeds from lease financing 17.5 - : 17.5 -
Payments of convertible notes (17.0) - : (17.0) -
Payments of notes and capital lease obligations (0.6) (0.6): (1.3) (1.2)
------- -------: ------- -------
Total Financing Activities (0.4) (9.4): 16.9 40.0
------- -------: ------- -------
Increase (Decrease) in Cash and Cash Equivalents 1.2 (2.1): 2.0 (1.3)
------- -------: ------- -------
Ending Cash and Cash Equivalents $11.5 $8.2 : $11.5 $8.2
======= =======: ======= =======
* Plan amounts are from the Form 8-K dated April 1, 1999 and include a reclassification
from "Other" for planned payments on notes.
** Includes cash outlays associated with reorganization items.
</TABLE>
