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): March 15, 2000
(March 15, 2000)
Bradlees, Inc.
(Exact Name of Registrant As
Specified In Its Charter)
Massachusetts (State Or Other
Jurisdiction of Incorporation)
1-11134
(Commission File Number) 04-3156108
(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 March 15, 2000, Bradlees, Inc. (the "Company") will
distribute to its banks and other credit providers summaries of
its fourth-quarter (13-week) and annual (52-week) financial
results ended January 29, 2000 ("fiscal 1999"), including a
comparison to the Company's summary financial plan for fiscal
1999 (the "Plan"). The fiscal 1999 fourth-quarter and annual
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 income and cash flow summaries
presented are not comparable in certain material respects to the
prior-year periods presented. In addition, the quarterly
results for fiscal 1999 have been restated to reflect the
adoption of SEC Staff Accounting Bulletin(SAB) No. 101 (revenue
recognition guidance) that affects the timing of the Company's
recording of layaway sales and associated gross margin. SAB No.
101 will also result in the exclusion of leased sales from the
Company's presentation of total sales in its results of
operations in the Form 10-K for fiscal 1999 and in other future
periodic filings.
Total sales for the fourth
quarter ended January 29, 2000 exceeded Plan by $16.5 million,
or 3.6%, 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.). This increase in total sales was
partially offset by the exclusion of January's layaway sales as
the result of the Company electing early to adopt SAB No. 101.
Comparable store sales increased 7.0% in the fourth quarter.
EBITDA(as defined in Exhibit 20) for the fourth quarter was $.1
million below Plan and net income in the fourth quarter was $1.6
million above Plan due primarily to an extraordinary gain of
$1.2 million from the early extinguishment of debt (convertible
notes).
Fiscal 1999 total
sales exceeded Plan by $103.5 million, or 7.2%, due primarily to
the same reasons stated above for the fourth quarter.
Comparable store sales increased 11.9%, with annual sales in
most softlines and hardlines merchandise divisions meeting or
exceeding Plan and all divisions exceeding last year's sales.
Annual EBITDA exceeded Plan by $6.0 million due primarily to the
beneficial impact of the above-Plan sales and associated gross
margin, partially offset by higher SG&A (selling, general,
administrative and distribution) expenses associated with the
increased sales volume and the related costs of staffing both
the stores and the distribution centers to service customer
demand. The annual net loss was $10.5 million below the Plan
net loss.
Cash was $1.3 million above Plan at January 29, 2000
and inventories at cost were $26.1 million or 11.8% above Plan
and 6.8% above last year's level due primarily to a higher level
of merchandise purchases to meet the sales demand as well as two
new stores not included in the Plan. Accounts payable was $32.0
million above Plan due primarily to increased purchases to
accommodate the higher sales levels and better-than-Plan vendor
payment terms. Outstanding borrowings were $2.8 million above
Plan due principally to the higher level of merchandise
purchases and the early payoff of the convertible notes,
partially offset by the above-Plan EBITDA. The lease financing
obligation, capital lease obligation, convertible notes payable,
net fixed asset and long-term asset variances to Plan all relate
primarily to the Yonkers' store lease financing transaction that
occurred in the second quarter and the associated paydown of the
convertible notes (which were paid off in the fourth quarter)
and reclassification of the prior long-term assets held for
sale.
The Company is distributing the quarterly and annual
performance in comparison to 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, July 31, 1999 and October
30, 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:
March 15, 2000 By /s/ PETER THORNER
Peter Thorner
Chairman and Chief Executive Officer
Date:
March 15, 2000 By /s/ CORNELIUS F. MOSES III
Cornelius F. Moses III
Senior Vice President, Chief Financial
Officer
<TABLE>
BRADLEES, INC. Exhibit 20
FOURTH QUARTER RESULTS VS. PLAN Page 1 of 2
(Unaudited)
(In Millions)
<CAPTION>
Fourth Quarter 1999 Fiscal Year 1999
Actual Plan* | Last Year| Actual Plan* | Last Year
<S> <C> <C> | <C> | <C> <C> |<C>
INCOME SUMMARY: ----------------|----------|------------------------|------------
Total Owned Sales $465.6 $449.2 | $429.1 | $1,486.5 $1,385.5 | $1,330.9
Food Service Sales 1.7 1.8 | 1.7 | 6.7 6.7 | 6.3
Leased Department Sales 12.4 12.2 | 11.1 | 47.8 45.3 | 43.9
----------------|----------|------------------------|------------
Total Sales 479.7 463.2 | 441.9 | 1,541.0 1,437.5 | 1,381.1
| | |
Gross Margin 136.9 131.3 | 122.1 | 448.7 415.6 | 393.1
Gross Margin % (based on owned sales) 29.4% 29.2%| 28.5% | 30.2% 30.0%| 29.5%
| | |
SG&A Expenses (108.9) (103.2)| (92.3) | (416.4) (388.4)| (373.2)
Emergence-Related Provision (a) - - | (4.4) | - - | (4.4)
Other Income 3.7 3.7 | 3.2 | 13.8 12.9 | 12.5
Loss on Disposition of Properties - - | - | - - | (0.2)
----------------|----------|------------------------|------------
EBITDA (Loss) 31.7 31.8 | 28.6 | 46.1 40.1 | 27.8
----------------|----------|------------------------|------------
Depreciation & Amortization Expense (6.6) (6.9)| (7.9) | (27.7) (29.3)| (32.2)
Interest and Debt Expense (7.3) (7.5)| (4.4) | (29.1) (30.7)| (16.4)
Reorganization Items - - | (7.1) | 0.7 - | (4.6)
Cumulative Effect of Accounting Change - - | - | (0.6) - |
Fresh-Start Revaluation - - | (108.4) | - - | (108.4)
Extraordinary Gain on Debt Discharge 1.2 - | 419.7 | 1.2 - | 419.7
----------------|----------|------------------------|------------
Net Income (Loss) $19.0 $17.4 | $320.5 | ($9.4) ($19.9)| $285.9
===========================|========================|============
BALANCE SHEET SUMMARY: |
Cash and Cash Equivalents $9.8 $8.5 | $9.5
Inventories 248.2 222.1 | 232.3
Other Current Assets 21.4 19.3 | 22.0
-----------------------|-----------
Total Current Assets 279.4 249.9 | 263.8
Net Fixed Assets 114.9 98.7 | 103.4
Long-Term Assets 79.0 90.5 | 96.6
-----------------------|-----------
Total Assets $473.3 $439.1 | $463.8
=======================|===========
Accounts Payable $143.1 $111.1 | $119.3
Revolver Borrowings 129.9 127.1 | 114.4
Other Current Liabilities 34.3 30.7 | 37.9
-----------------------|-----------
Total Current Liabilities 307.3 268.9 | 271.6
Long-Term Capital Lease Obligations 26.1 23.6 | 25.3
Lease Financing Obligation 17.5 - | -
Convertible Notes Payable - 29.0 | 29.0
Unfavorable Lease Liability 45.2 45.9 | 44.6
Other Long-Term Liabilities 30.7 36.6 | 38.3
|
Common Stock 55.9 55.0 | 55.0
Accumulated Deficit (9.4) (19.9)| -
-----------------------|-----------
Total Stockholders' Equity 46.5 35.1 | 55.0
-----------------------|-----------
Total Liabilities and Stockholders' Equity $473.3 $439.1 | $463.8
===================================
* Plan amounts are from the Form 8-K dated April 1, 1999. (a) Allowed to be excluded
from EBITDA calculation per bank agreement in fiscal year 1998.
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 (b) 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 such or any prior
period.
</TABLE>
<TABLE>
Exhibit 20
Page 2 of 2
BRADLEES, INC.
FOURTH QUARTER RESULTS VS. PLAN
(Unaudited)
(In Millions)
Fourth Quarter 1999| Fiscal Year 1999
|
Actual Plan* | Actual Plan*
<S> <C> <C> | <C> <C>
CASH FLOW SUMMARY: |
Beginning Cash & Cash Equivalents $11.2 $11.2 | $9.5 $9.5
|
Cash Provided by (Used in) Operations: |
Net Income (Loss) 19.0 17.4 | (9.4) (19.9)
Depreciation & Amortization Expense 6.6 6.9 | 27.7 29.3
Amortization of Deferred Financing Costs 0.3 0.3 | 1.4 1.4
|
Inventory (Increase) Decrease 78.0 98.4 | (15.9) 10.2
Accounts Payable Increase (Decrease) (58.0) (49.1)| 23.8 (8.2)
|
Other ** (1.1) 4.2 | (5.4) (4.1)
---------------------| ------------------------
Net Cash Provided by (Used in) Operations 44.8 78.1 | 22.2 8.7
---------------------| ------------------------
Investing Activities: |
Capital Spending (5.1) (5.0)| (22.2) (20.0)
Lease Aquisition Costs - - | (1.3) -
---------------------| ------------------------
Net Investing Activities (5.1) (5.0)| (23.5) (20.0)
|
Financing Activities: |
Net Borrowings (Payments) Under Revolver (28.3) (75.2)| 15.4 12.7
Proceeds from Lease Financing - - | 17.5 -
Payments on Convertible Notes (12.0) - | (29.0) -
Payments on Notes and Capital Lease Obligations (0.9) (0.6)| (2.8) (2.4)
Other 0.1 - | 0.5 -
---------------------| ------------------------
Total Financing Activities (41.1) (75.8)| 1.6 10.3
---------------------| ------------------------
Increase(Decrease) in Cash and Cash Equivalents (1.4) (2.7)| 0.3 (1.0)
---------------------| ------------------------
---------------------| ------------------------
Ending Cash and Cash Equivalents $9.8 $8.5 | $9.8 $8.5
=====================| ========================
* Plan amounts are from the Form 8-K dated April 1, 1999 and include a reclassification
for planned payments on notes.
** Includes cash outlays associated with reorganization items.
</TABLE>
