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): November 23, 1999
(November 23, 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 November 23, 1999, Bradlees, Inc. (the "Company") will
distribute to its banks and other credit providers summaries of
its third-quarter (13-week) and year-to-date (39-week)
financial results ended October 30, 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 third-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 third quarter ended October 30, 1999 exceeded Plan
by $18.4 million, or 5.4%, 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 10.5% in the third quarter. EBITDA (as
defined in Exhibit 20), although $5.3 million ahead of last
year, fell short of Plan by $5.0 million in the third
quarter due principally to above-Plan SG&A expenses associated with
the increased sales volumes and the related costs of staffing both the
stores and the distribution centers to service customer demand.
In addition, the Company incurred $1.2 million of pre-opening expenses
for two new stores opened in October that were not in the Plan.
The gross margin rate (30.7% vs. 31.3%) was below Plan primarily
as a result of a higher mix of hardlines sales, while gross
margin dollars benefited from the above-Plan sales.
The net loss in the third quarter was $0.3 million less than
last year ($3.0 million lower than last year prior to reorganization
items) but exceeded the Plan net loss by $3.9 million.
Year-to-date total sales exceeded Plan
by $90.9 million, or 9.3%, due primarily to the same
reasons stated above for the third quarter. Comparable
store sales increased 14.2%, with year-to-date sales in every
softlines and hardlines merchandise division meeting or
exceeding Plan and exceeding last year. Year-to-date EBITDA was
$6.8 million ahead of Plan and $15.6 million above last year
due primarily to the beneficial impact of the above-Plan sales
and associated gross margin, partially offset by higher SG&A
expenses resulting principally from the same factors discussed
above for the third quarter. The year-to-date net loss was
$10.2 million below the Plan net loss and $7.4 million less than
the 1998 year-to-date net loss.
Cash was on Plan at
October 30, 1999 and inventories were $3.0 million above
Plan due primarily to the two new stores. Accounts payable was
$40.9 million above Plan due primarily to increased
purchases to accommodate the higher sales levels and
better-than-Plan payment terms. Outstanding borrowings were
$44.1 million below Plan due principally to the above-Plan
accounts payable and EBITDA levels. 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 that
occurred in the second quarter and the 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 filings for the
quarterly periods ended May 1, 1999 and July 31, 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: November 22, 1999 By /s/ PETER THORNER
-----------------
Peter Thorner
Chairman and Chief Executive
Officer
Date: November 22, 1999 By /s/ CORNELIUS F. MOSES III
--------------------------
Cornelius F. Moses III
Senior Vice President
Chief Financial Officer
<TABLE>
BRADLEES, INC. Exhibit 20
THIRD QUARTER RESULTS VS. PLAN Page 1 of 2
(Unaudited)
(In Millions)
<CAPTION>
Third 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 $345.0 $327.2 | $310.5 | $1,024.7 $936.3 | $901.8
Food Service Sales 1.7 1.7 | 1.6 | 5.0 4.9 | 4.6
Leased Department Sales 11.7 11.1 | 11.0 | 35.5 33.1 | 32.8
-------- --------|--------| ---------- --------|---------
Total Sales 358.4 340.0 | 323.1 | 1,065.2 974.3 | 939.2
| | |
Gross Margin $ 105.8 102.5 | 94.7 | 312.5 284.2 | 271.0
Gross Margin % (based on owned 30.7% 31.3%| 30.5%| 30.5% 30.4%| 30.1%
sales) | | |
| | |
SG&A Expenses (100.5) (93.2)| (95.2)| (306.3) (285.3)| (279.9)
Pre-Opening Expenses (1.2) - | (0.5)| (1.3) - | (0.9)
Other Income 3.4 3.2 | 3.2 | 10.1 9.3 | 9.2
-------- --------|--------| ---------- --------|---------
EBITDA (Loss) 7.5 12.5 | 2.2 | 15.0 8.2 | (0.6)
-------- --------|--------| ---------- --------|---------
Loss on Dispos. of Properties - - | - | - - | (0.2)
Depreciation & Amortization Exp. (6.6) (7.4)| (7.8)| (21.2) (22.5)| (24.4)
Interest and Debt Expense (7.8) (8.1)| (4.4)| (21.8) (23.1)| (12.0)
Reorganization Items - - | 2.8 | 0.8 - | 2.6
-------- --------|--------| ---------- --------|---------
Net Loss ($6.9) ($3.0)| ($7.2)| ($27.2) ($37.4)| ($34.6)
======== ========|========| ========== ========|=========
BALANCE SHEET SUMMARY: Balance at End of Period
Cash and Cash Equivalents $11.2 $11.2 | $11.0
Restricted Cash and Cash Equivalents - - | 25.1
Inventories 323.5 320.5 | 318.9
Other Current Assets 23.1 22.8 | 22.9
---------- --------|---------
Total Current Assets 357.8 354.5 | 377.9
Net Fixed Assets 116.3 99.4 | 141.6
Long-Term Assets 79.6 92.0 | 141.9
---------- --------|---------
Total Assets $553.7 $545.9 | $661.4
========== ========|=========
Accounts Payable $201.1 $160.2 | $179.4
Revolver/DIP Borrowings 158.2 202.3 | 157.4
Other Current Liabilities 27.9 30.1 | 30.3
---------- --------|---------
Total Current Liabilities 387.2 392.6 | 367.1
Long-Term Capital Lease Obligations 27.1 24.1 | 26.2
Lease Financing Obligation 17.5 - | -
Convertible Notes Payable 12.0 29.0 | -
Unfavorable Lease Liability 45.1 45.6 | -
Other Long-Term Liabilities 36.3 37.0 | 39.9
|
Liabilities Subject to Settlement - - | 548.8
|
Common Stock 55.7 55.0 | 137.1
Accumulated Deficit (27.2) (37.4)| (457.7)
---------- --------|---------
Total Stockholders' Equity (Deficiency) 28.5 17.6 | (320.6)
---------- --------|---------
Total Liabilities and Stockholders' Equity (Deficiency) $553.7 $545.9 | $661.4
========== ========|=========
NOTE: EBITDA means, for any period, all as determined in accordance with generally accepted accounting
principles (GAAP), the net income or net loss for such period, plus (to the extent taken into account in determining
such net income or net loss) (a) the sum of (i) depreciation and amortization expense, (ii) provision for LIFO
adjustment, (iii) net total Federal, state and local income tax expense, (iv) gross interest expense for such period less
gross interest income for such period, (v) any non-recurring charge or restructuring charge which in accordance with
GAAP is excluded from operating income, (vi) the cumulative effect of any change in accounting principles, (vii)
extraordinary losses and (viii) "Chapter 11 expenses" as shown on the statement of income for such period minus
extraordinary gains, and plus (c) the amount of cash received (and minus the amount of cash expended) in such period
in respect of any amount which, under clause (v) above, was taken into account in determining EBITDA for
any prior period.
* Plan amounts are from the Form 8-K dated April 1, 1999.
</TABLE>
<TABLE>
Exhibit 20
Page 2 of 2
BRADLEES, INC.
THIRD QUARTER RESULTS VS. PLAN
(Unaudited)
(In Millions)
<CAPTION>
Third Quarter 1999 Year-to-Date
Actual Plan* Actual Plan*
CASH FLOW SUMMARY: |
<S> <C> <C> | <C> <C>
Beginning Cash & Cash Equivalents $11.5 $8.2 | $9.5 $9.5
|
Cash Provided by (Used in) Operations: |
Net Loss (6.9) (3.0)| (27.2) (37.4)
Depreciation & Amortization Expense 6.6 7.4 | 21.2 22.5
Amortization of Deferred Financing Costs 0.4 0.4 | 1.1 1.1
|
Inventory (Increase) Decrease (79.2) (73.4)| (91.2) (88.2)
Accounts Payable Increase (Decrease) 62.7 36.7 | 81.8 41.0
|
Other** (0.9) (6.1)| (8.3) (8.4)
-------- --------| ---------- --------
Net Cash Provided by (Used in) Operations (17.3) (38.0)| (22.6) (69.4)
|
Investing activities: |
Capital spending (8.9) (5.0)| (17.1) (15.0)
Lease aquisition costs - - | (1.3) -
-------- --------| ---------- --------
Net Investing Activities (8.9) (5.0)| (18.4) (15.0)
|
Financing activities: |
Net borrowings under revolver 26.1 46.6 | 43.7 87.9
Proceeds from lease financing - - | 17.5 -
Payments on convertible notes - - | (17.0) -
Payments on notes and capital leases (0.6) (0.6)| (1.9) (1.8)
Other 0.4 - | 0.4 -
-------- --------| ---------- --------
Total Financing Activities 25.9 46.0 | 42.7 86.1
|
-------- --------| ---------- --------
Increase (Decr.) in Cash and Cash Equivs. (0.3) 3.0 | 1.7 1.7
-------- --------| ---------- --------
Ending Cash and Cash Equivalents $11.2 $11.2 | $11.2 $11.2
======== ========| ========== ========
* 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>
