<PAGE> 1
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: August 26, 1999
SERVICE MERCHANDISE COMPANY, INC.
(Debtor-in-Possession as of March 27, 1999)
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Tennessee 1-9223 62-0816060
- ---------------------------------------------------- --------------------------- ---------------------
(State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
7100 Service Merchandise Boulevard, Brentwood, TN 37027
- ------------------------------------------------------------------ -------------------
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (615) 660-6000
Not Applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
Item 5. Other Events
- --------------------------------------------------------------------------------
Service Merchandise Company, Inc. (the "Company") has filed its monthly
operating report for the period commencing July 5, 1999 and ending August 1,
1999 (the "Operating Report") with the United States Bankruptcy Court for the
Middle District of Tennessee, a copy of which is attached hereto as Exhibit 99,
in connection with its voluntary petitions for reorganization under Chapter 11
of title 11 of the United States Bankruptcy Code in Case No. 399-02649.
The Company cautions investors or potential investors not to place
undue reliance upon the information contained therein. The Operating Report
contains unaudited information, and is in a format, prescribed by the applicable
bankruptcy laws. There can be no assurance that, from the prospective of an
investor or potential investor in the Company's securities, the Operating Report
is complete. The Operating Report also contains information for periods which
may be shorter or otherwise different from those contained in the Company's
reports pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Such information may not be indicative of the Company's
financial condition or operating results for the periods reflected in the
Company's financial statements or in its reports pursuant to the Exchange Act
and investors and potential investors in the Company's securities are cautioned
to refer to the Exchange Act filings. Moreover, the Operating Report and other
communications from the Company may include forward-looking statements subject
to various assumptions regarding the Company's operating performance that may
not be realized and subject to significant business, economic and competitive
uncertainties and contingencies, including those described in this report, many
of which are beyond the Company's control. Consequently such matters should not
be regarded as a representation or warranty by the Company that such matters
will be realized or are indicative of the Company's financial condition or
operating results for future periods or the periods covered in the Company's
reports pursuant to the Exchange Act. Actual results for such periods may differ
materially from the information contained in the Operating Report and the
Company undertakes no obligation to update or revise such Operating Report.
The Operating Report includes a Rolling Revised Cash Flow Forecast
which is a forward-looking statement subject to various assumptions regarding
the Company's business, operating performance and other factors including
revenues, expenses, asset dispositions, trade terms and capital expenditures,
and various risks and uncertainties including those set forth below. This
information should be read in conjunction with the Company's reports filed
pursuant to the Exchange Act. Investors and potential investors in the Company's
securities are cautioned that such information is being reported publicly
because it is being distributed to a large number of the Company's vendors for
purposes of their credit analyses. The Company undertakes no obligation to
update such information or to disclose similar information in future Operating
Reports. The Rolling Revised Cash Flow Forecast was not examined, reviewed or
compiled by the Company's independent public accountants. The Rolling Revised
Cash Flow Forecast is subject to future adjustments, if any, that could
materially affect such information.
2
<PAGE> 3
The Company's liquidity, capital resources and results of operations
are subject to a number of risks and uncertainties including, but not limited
to, the following: the ability of the Company to continue as a going concern;
the ability of the Company to operate pursuant to the terms of the DIP Facility;
the ability of the Company to operate successfully under a Chapter 11
proceeding; approval of plans and activities by the Bankruptcy Court; risks
associated with operating a business in Chapter 11; the ability of the Company
to create and have approved a reorganization plan in the Chapter 11 Cases;
adverse developments with respect to the Company's liquidity or results of
operations; the ability of the Company to obtain shipments and negotiate terms
with vendors and service providers for current orders; the ability to conduct
inventory liquidation sales to improve liquidity; the ability to develop, fund
and execute an operating plan for the Company; the ability of the Company to
attract and retain key executives and associates; competitive pressures from
other retailers, including specialty retailers and discount stores, which may
affect the nature and viability of the Company's business strategy; trends in
the economy as a whole which may affect consumer confidence and consumer demand
for the types of goods sold by the Company; the ability to maintain gross profit
margins; the seasonal nature of the Company's business (including risks related
to seasonal inventory increases) and the ability of the Company to predict
consumer demand as a whole, as well as demand for specific goods; the ability of
the Company to attract and retain customers; costs associated with the shipping,
handling and control of inventory and the Company's ability to optimize its
supply chain; potential adverse publicity; availability and cost of management
and labor employed; real estate occupancy and development costs, including the
substantial fixed investment costs associated with opening, maintaining or
closing a Company store; the potential delisting of the Company's securities and
the absence of an active public trading market; the ability of the Company to
provide a private label credit card; and the ability to effect conversions to
new technological systems, including becoming Year 2000 compliant.
3
<PAGE> 4
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
SERVICE MERCHANDISE COMPANY, INC.
Date: August 26, 1999 By: /s/ C. Steven Moore
--------------------------------------
C. Steven Moore
Vice President
4
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
No. Exhibit
- --------- -------------------------------------------------------------
<S> <C>
99 Operating Report for the period ending August 1, 1999
</TABLE>
<PAGE> 1
EXHIBIT 99
OPERATING REPORT
<PAGE> 2
EXHIBIT 99
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF TENNESSEE
<TABLE>
<S> <C>
In re: Case No.: 399-02649 THROUGH 399-02680
---------------------------------------------------
SERVICE MERCHANDISE COMPANY, INC.
-------------------------------------------------------
Judge: PAINE
---------------------------------------------------
Chapter 11
Debtor(s)
MONTHLY OPERATING REPORT FOR PERIOD ENDING August 1, 1999
--------------------------
COMES NOW, SERVICE MERCHANDISE COMPANY, INC.
--------------------------------------------------------------------------------
Debtor-In-Possession, and hereby submits its Monthly Operating Report for the period commencing July 5, 1999
---------------------------
and ending August 1, 1999 as shown by the report and exhibits consisting of 16 pages and
--------------------- ------------------
containing the following as indicated:
X Monthly Reporting Questionnaire (Attachment 1)
-----
X Comparative Balance Sheets (Forms OPR-1 & OPR-2)
-----
N/A Summary of Accounts Receivable (Form OPR-3)
-----
X Schedule of Postpetition Liabilities (Form OPR-4)
-----
X Statement of Income (Loss) (Form OPR-5)
-----
I declare under penalty of perjury that this report and all the attachments are true and correct to the best of
my knowledge and belief. I also hereby certify that the original Monthly Operating Report was filed with the Bankruptcy
Court Clerk and a copy delivered to the U.S. Trustee.
Date: 8/23/99 DEBTOR - IN - POSSESSION
------------------------
By: /s/ Tom Garrett
---------------------------------------------------------
Name and Title: TOM GARRETT, SENIOR VICE PRESIDENT & CFO
---------------------------------------------------------
Address: 7100 SERVICE MERCHANDISE DRIVE
---------------------------------------------------------
BRENTWOOD, TENNESSEE 37027
---------------------------------------------------------
Telephone No: 660-3477
---------------------------------------------------------
Note: Report subject to further verification and account reconciliation procedures
</TABLE>
<PAGE> 3
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: JULY 5, 1999 THROUGH AUGUST 1, 1999
<TABLE>
<CAPTION>
1. Payroll
WAGES TAXES
OFFICERS TITLE GROSS NET DUE PAID
<S> <C> <C> <C> <C> <C>
SAM CUSANO CHIEF EXECUTIVE OFFICER 245,012.54 169,432.85 4,515.26 70,669.57
STEVE MOORE SENIOR VICE PRESIDENT, CHIEF ADMINISTRATIVE
OFFICER, GENERAL COUNSEL & SECRETARY 105,718.94 73,593.64 2,198.69 29,709.96
TOM GARRETT SENIOR VICE PRESIDENT & CFO 83,299.23 59,223.50 1,648.99 22,211.65
STEVE MCCANN SENIOR VICE PRESIDENT, FINANCE
& CHIEF ACCOUNTING OFFICER 19,345.81 12,020.27 1,463.96 4,718.17
GARY SEASE SENIOR VICE PRESIDENT, LOGISTICS 84,646.99 58,086.14 2,054.12 23,471.08
CHARLES SEPTER PRESIDENT & CHIEF OPERATING OFFICER 189,229.81 130,493.34 3,417.43 54,380.08
KENNETH BRAME SENIOR VICE PRESIDENT, INFORMATION SERVICES &
CHIEF INFORMATION OFFICER 77,359.59 53,765.68 1,762.74 21,190.47
ROBERT J. PINDRED VICE PRESIDENT AND TREASURER 33,573.63 19,041.26 1,596.95 8,307.26
SANDRA CARY VICE PRESIDENT, ASST. TAX: FIN 7,703.17 5,526.02 523.59 1,554.71
J0E M. ELLIOTT AVP, PROPERTY ADMINISTRATION 19,945.61 12,883.34 363.54 4,884.96
ERIC KOVATS VICE PRESIDENT, REGIONAL: STORES 47,686.82 31,967.69 1,103.21 11,740.32
BARBARA SPRINGER ASSISTANT TREASURER 14,988.34 9,689.77 374.86 3,980.29
KARREN PRASIFKA ASSISTANT GENERAL COUNSEL VP 33,352.56 21,294.01 1,390.81 10,736.35
SUZY WILSON ASSISTANT LEGAL VICE PRESIDENT 18,942.34 12,802.47 394.18 5,513.09
</TABLE>
The associates listed below received a retention bonus which is included in the
amounts above
SAM CUSANO 195,000.00
STEVE MOORE 78,750.01
TOM GARRETT 59,062.58
GARY SEASE 59,675.66
CHARLES SEPTER 150,000.00
KENNETH BRAME 54,375.07
ROBERT PINDRED 18,900.02
JOE ELLIOTT 11,847.83
ERIC KOVATS 30,375.05
BARBARA SPRINGER 8,437.51
KARREN PRASIFKA 22,950.07
SUZY WILSON 11,250.02
<PAGE> 4
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: JULY 5, 1999 THROUGH AUGUST 1, 1999
2. INSURANCE
<TABLE>
<CAPTION>
COVERAGE POLICY EXPIRATION PREMIUM DATE COVERAGE
TYPE NAME OF CARRIER AMOUNT NUMBER DATE AMOUNT PAID THRU
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Property Security Ins Co of Hartford $5 Million CCIPW12011 5/1/00 $921,750 5/1/00
Commonwealth $5 Million US2387 5/1/00 $92,419 5/1/00
Westchester Fire $15 Million 1XA394310 5/1/00 $75,000 5/1/00
Allianz Insurance Co $12 Million CLP1034720 5/1/00 $30,000 5/1/00
TIG Insurance Co $13 Million XPT38797554 5/1/00 $32,500 5/1/00
Westchester Fire $30 Million 1XA394311 5/1/00 $15,000 5/1/00
Allianz Insurance Co $12 Million CLP1034720 5/1/00 $22,500 5/1/00
Allianz Insurance Co $25 Million CLP1034720 5/1/00 $10,000 5/1/00
Boiler & Machinery Hartford Steam Boiler $10 Million BMTBD 5/1/00 $11,900 5/1/00
Transit Security Ins Co of Hartford $1 Million CCIMG72820 5/1/00 $10,000 5/1/00
Ocean Cargo Phoenix Assurance Co of NY $10 Million CR37211 5/1/00 $40,000 5/1/00
Special Crime Reliance Insurance Co $25 Million NFK1951937 5/1/02 $13,458 5/1/02
Crime National Union Fire Ins Co $10 Million 858-0797 3/1/00 $56,505 3/1/00
Fiduciary National Union Fire Ins Co $10 Million 267-81-30 3/1/00 $19,462 3/1/00
Employment Practices Chubb Insurance Co $10 Million 81278901A 3/1/00 $221,575 3/1/00
Liability Royal Insurance Co $10 Million PSF000010 3/1/00 $88,200 3/1/00
Directors & Officers Continental Insurance Co $10 Million 300714943 3/1/01 $453,500 3/1/01
Chubb Insurance Co $10 Million 81278902-A 3/1/01 $266,666 3/1/01
Royal Insurance Co $10 Million PSF000009 3/1/01 $133,000 3/1/01
Umbrella Federal Insurance Co $50 Million 79763295 1/1/02 $79,196 1/1/02
Excess Liability American Guarantee & Liab $50 Million EUO2876107-01 1/1/02 $25,000 1/1/02
International Cigna Insurance Co $1 Million PHFTBD 1/1/00 $2,500 1/1/00
Punitive Damages Chubb Atlantic Indemnity $50 Million PUNTBD1 1/1/00 $17,160 1/1/00
Punitive Damages - Excess Zurich International Bermuda $50 Million PUNTBD2 1/1/00 $5,000 1/1/00
General Liability - Hartford Fire Insurance Co $2 Million 20UENTBD 1/1/00 $8,020 1/1/00
Va. Beach
General Liability Cigna Insurance Co $5 Million XSLG19307931 1/1/00 $13,225 8/31/99
Workers' Compensation Pacific Employers Ins Co Statutory WLRC42316830 1/1/00 $17,797 8/31/99
WC Excess Cigna Insurance Co Statutory XWCO11865 1/1/00 $1,748 8/31/99
WC Contractual Indemnity Illinois Union Insurance Co Statutory CTPG19307992 1/1/00 $4,990 8/31/99
Auto Pacific Employers Ins Co $1 Million ISAHO7569488 1/1/00 $2,742 8/31/99
</TABLE>
<PAGE> 5
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASH NAME: SERVICE MERCHANDISE COMPANY, INC. et. A1.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: JULY 5, 1999 - AUGUST 1, 1999
3. BANK ACCOUNTS
<TABLE>
<S> <C>
TOTAL CASH AND CASH EQUIVALENTS
CASH IN STORES AND HOME OFFICE
HOME OFFICE $ 11,950
RETAIL SAFE FUNDS $ 2,213,448
CORPORATE ACCOUNTS $ 1,876,381
STORE DEPOSITORY ACCOUNTS
FIRST TENNESSEE $ 1,944,731
FIRSTAR $ 46,814
SOCIETY NATIONAL BANK $ 405,959
BANK OF BOSTON $ 425,318
BANK OF BOSTON CONNECTICUT $ 279,712
MERCANTILE BANK $ 123,853
FIRST UNION $ 2,589,641
HARRIS TRUST $ 1,031,764
BANK ONE LOUISIANA $ 536,024
FLEET $ (17,736)(1)
ABN - AMRO BANK $ 290,907
COMERICA BANK $ 293,228
AM SOUTH $ 245,935
BANK OF AMERICA CALIFORNIA $ 120,636
FIRST AMERICAN NATIONAL BANK $ 80,517
HERITAGE BANK OF NEVADA $ 2,077
BANK OF OKLAHOMA $ 146,811
CHASE BANK OF TEXAS $ 873,422
HIBERNIA $ 22,784
SINGLE STORE DEPOSITORY ACCOUNTS $ 175,668
FIRST NATIONAL BANK OF MARYLAND $ 96,353
FIFTH THIRD BANK $ 42,868
WELLS FARGO BANK $ 25,891
NATIONSBANK $ 1,226,453
NBD $ 207,100
PNC BANK $ 60,664
BANK ONE, TEXAS $ 42,605
CREDIT CARD CASH ACCOUNTS (SALES PROCESSED BY CREDIT CARD COMPANY) $11,667,541
OTHER DEPOSITORY ACCOUNTS
SERVICE MERCHANDISE - MUSCULAR DYSTROPHY ASSOC. $ 649,243
OTHER CASH ACCOUNTS $ 313,452
TOTAL CASH PER GENERAL LEDGER $28,052,014
</TABLE>
(1) - Overpayment - Fleet Bank
<PAGE> 6
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASED NAME: SERVICE MERCHANDISE CONPANY, INC. et. AL.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: JULY 5, 1999 THROUGH AUGUST 1, 1999
4. Payments to Professionals July 5, 1999 through August 1, 1999
<TABLE>
<CAPTION>
Vendor # Vendor Name Check Amt. Check Date Check #
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
57117 Deloitte & Touche $78,799.00 7/13/99 30009289
3323 AvTax $7,501.25 7/13/99 30009423
50995 Brann & Issacson, LLP $235.00 7/13/99 30009435
71403 Seyfarth, Shaw, Fairweather & Geraldson $547.74 7/13/99 30009439
99277 Rosemont & Associates Inc $19,537.50 7/13/99 30009452
57117 Deloitte & Touche $29,650.00 7/15/99 30009684
57117 Deloitte & Touche $9,492.00 7/15/99 30009688
50995 Brann & Issacson, LLP $303.99 7/16/99 30009856
86237 Brusniak Clement Harrison & McCool, PC Inc. $528.05 7/16/99 30009857
H998 Vorys, Sater, Seymour and Pease $212.78 7/19/99 30010050
71217 Bass, Berry & Sims, PLC $5,709.39 7/20/99 20000178
H998 Vorys, Sater, Seymour and Pease $277.55 7/20/99 30010314
63078 Weil, Gotshal & Manges, LLP $165,863.69 7/20/99 B0018519
57117 Deloitte & Touche $78,799.00 7/21/99 30010453
H998 Vorys, Sater, Seymour and Pease $83.70 7/23/99 30010813
99329 The Aegis Group $16,312.50 7/23/99 30010814
99391 Otterbourg, Steindler, Houston & Rosen, P.C. $205,682.83 7/23/99 B0018595
99454 Harwell, Howard, Hyne, Gabbert & Manner, P.C. $15,972.67 7/23/99 B0018596
99104 Jay Alix & Associates $324,260.86 7/23/99 B0018597
98378 Skadden, Arps, Slate, Meagher, & Flom $566,602.00 7/23/99 B0018598
79108 Ernst & Young LLP $100,053.00 7/23/99 B0018599
71217 Bass, Berry & Sims, PLC $138,072.12 7/23/99 B0018600
99459 Robert L. Berger & Associates $19,344.27 7/23/99 B0018605
</TABLE>
<PAGE> 7
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASH NAME: SERVICE MERCHANDISE COMPANY, INC. et. A1.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: JULY 5, 1999 THROUGH AUGUST 1, 1999
RECEIPTS AND DISBURSEMENTS
JULY 5, 1999 - AUGUST 1, 1999
(Dollars in Thousands)
<TABLE>
<CAPTION>
Actual Actual Actual Actual Total
Monday 7/5/99 7/12/99 7/19/99 7/26/99 7/5/99
Sunday 7/11/99 7/18/99 7/25/99 8/1/99 8/1/99
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Receipts:
Sales Receipts $ 26,904 $ 37,959 $ 32,775 $ 25,239 $122,877
Miscellaneous Receipts 2,596 30 7,587 -- 10,213
------------------------------------------------------------------------------
Total Available collections 29,500 37,989 40,362 25,239 133,090
Disbursements:
Merchandise disbursements 7,849 23,436 25,303 28,719 85,307
Non-merchandise disbursements 16,424 15,081 19,095 17,374 67,974
------------------------------------------------------------------------------
Total Disbursements: $ 24,273 $ 38,517 $ 44,398 $ 46,093 $153,281
------------------------------------------------------------------------------
Cash Receipts less Cash Disbursements $5,227 $ (528) $ (4,036) $(20,854) $(20,191)
------------------------------------------------------------------------------
</TABLE>
<PAGE> 8
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASH NAME: SERVICE MERCHANDISE COMPANY, INC. et. A1.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: JULY 5, 1999 THROUGH AUGUST 1, 1999
ROLLING REVISED CASH FLOW FORECAST
(in millions)
<TABLE>
<CAPTION>
Actual Forecast Forecast Forecast Forecast
8/8/99 8/15/99 9/12/99 10/10/99 11/7/99
------ ------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Ending Total Revolver Balance $ 72.7 $ 88.6 $ 142.1 $ 230.9 $ 349.9
Term Loan 99.8 99.8 99.8 99.5 99.5
Standby Letters of Credit 29.1 29.1 29.1 29.1 29.1
Trade Letters of Credit 79.9 70.0 53.0 40.0 33.0
-------- -------- -------- -------- --------
Total Extensions of Credit $ 281.4 $ 287.4 $ 323.9 $ 399.5 $ 511.5
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Borrowing Base* $ 491.6 $ 510.3 $ 527.4 $ 577.6 $ 655.9
-------- -------- -------- -------- --------
Availability* $ 210.3 $ 223.0 $ 203.5 $ 178.1 $ 144.4
</TABLE>
Notes:
(1) Borrowing Base and Availability calculated before deduction of Interim
Reserve Amount ($50 million until a business plan is accepted and financial
covenants are negotiated.)
(2) The anticipated increase in revolver borrowings and decrease in
availability in September, October and November reflects, among other
things, seasonal inventory increases relating to the Fall selling seasons.
The above projections do not include the potential increase in availability
related to the collection of net proceeds of the real estate auction and
the addition of $25 million to the borrowing base related to under market
leases.
<PAGE> 9
FORM OPR-1 AND 2
SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DEBTOR - IN - POSSESSION)
(IN THOUSANDS)
<TABLE>
<CAPTION>
August 1, July 4,
1999 1999
------------ -----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 28,052 $ 37,858
Accounts receivable 13,878 16,565
Inventories 578,578 553,711
Prepaid expenses and other assets 84,700 86,974
----------- -----------
TOTAL CURRENT ASSETS 705,208 695,108
----------- -----------
PROPERTY AND EQUIPMENT
Owned assets, net of accumulated depreciation 361,231 364,581
Capitalized leases, net of accumulated amortization 17,336 17,588
----------- -----------
TOTAL PROPERTY AND EQUIPMENT 378,567 382,169
----------- -----------
Other assets and deferred charges (a) 68,134 49,844
----------- -----------
TOTAL ASSETS $ 1,151,908 $ 1,127,121
=========== ===========
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Liabilities Not Subject To Compromise
Current Liabilities:
Notes payable to banks $ 53,891 $ 33,624
Accounts payable 46,543 26,435
Accrued expenses 138,241 134,199
State & local sales tax 12,883 15,233
Current maturities of long-term debt 1,000 1,000
----------- -----------
TOTAL CURRENT LIABILITIES 252,558 210,491
Long-Term Liabilities:
Long-term debt 98,750 98,750
Liabilities Subject To Compromise:
Accrued restructuring costs 69,846 73,096
Capitalized lease obligations 42,049 43,752
Long-term debt 465,055 465,317
Accounts payable 192,074 191,406
Accrued expenses 83,793 87,502
----------- -----------
Total Liabilities Subject To Compromise 852,817 861,073
TOTAL LIABILITIES 1,204,125 1,170,314
----------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' (DEFICIT) EQUITY
Common stock 50,049 50,049
Additional paid-in-capital 6,756 6,756
Deferred compensation (1,060) (1,086)
Accumulated other comprehensive loss (869) (869)
Retained (deficit) earnings (107,093) (98,043)
----------- -----------
TOTAL SHAREHOLDERS' (DEFICIT) EQUITY (52,217) (43,193)
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY $ 1,151,908 $ 1,127,121
=========== ===========
</TABLE>
Note:
(a) Auction proceeds of approximately $20,000 were received and recorded as
restricted cash as part of Other Assets & Deferred Charges
<PAGE> 10
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: JULY 5, 1999 THROUGH AUGUST 1, 1999
SUMMARY OF ACCOUNTS RECEIVABLE
Month Ended: 08/01/99
FORM OPR-3 NOT APPLICABLE
<PAGE> 11
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: JULY 5, 1999 THROUGH AUGUST 1, 1999
SCHEDULE OF POST PETITION LIABILITIES-ACCOUNTS PAYABLE
Month Ended: 08/01/99
FORM OPR-4
<TABLE>
<CAPTION>
Total current
-------------- --------------
<S> <C> <C>
Trade Accounts Payable (Merchandise) $ 46,543,000 $ 46,543,000
<CAPTION>
Total current
-------------- -------------
<S> <C> <C>
Expense & other payables $ 138,241,000 $ 138,241,000
</TABLE>
<PAGE> 12
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: JULY 5, 1999 THROUGH AUGUST 1, 1999
SCHEDULE OF POST PETITION LIABILITIES
FORM OPR-4
<TABLE>
<CAPTION>
Date Date Total 0-30
TAXES PAYABLE Incurred Due Due Days
-------------------------------------------------
<S> <C> <C> <C> <C>
Federal Income Tax ** Various Various 8,426,322 8,426,322
State Income Tax Various Various (144,971) (144,971)
---------------------------
SUBTOTAL * 8,281,351 8,281,351
---------------------------
Sales/Use Tax Various Various 12,883,072 12,883,072
---------------------------
Personal Property Tax * Various Various 686,299 686,299
Real Estate Taxes * Various Various 6,888,754 6,888,754
Inventory Taxes * Various Various 1,398,231 1,398,231
Gross Receipts/Bus Licenses * Various Various 188,158 188,158
Franchise Taxes * Various Various 95,517 95,517
---------------------------
SUBTOTAL 9,256,959 9,256,959
---------------------------
---------------------------
TOTAL TAXES PAYABLE 30,421,382 30,421,382
===========================
</TABLE>
* liability included in accrued expenses on OPR-2
** tax reserve
<PAGE> 13
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASH NAME: SERVICE MERCHANDISE COMPANY, INC. et. A1.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: JULY 5, 1999 THROUGH AUGUST 1, 1999
SCHEDULE OF POST PETITION LIABILITIES
FORM OPR-4
($ IN THOUSANDS)
<TABLE>
<CAPTION>
DATE TOTAL DUE
INCURRED DATE DUE (8/1/99 Balance)
-----------------------------------------
<S> <C> <C> <C>
POST PETITION SECURED DEBT
Revolver Borrowings 3/27/99 6/30/01 53,891
Facility Standby Letters of Credit 3/27/99 6/30/01 41,182
Facility Trade Letters of Credit 3/27/99 6/30/01 76,168
Term Loans 3/27/99 6/30/01 99,750
---------
TOTAL EXTENSIONS OF CREDIT $ 270,991
POST PETITION UNSECURED DEBT --
ACCRUED INTEREST PAYABLE $ 594
</TABLE>
<PAGE> 14
FORM OPR-5
SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DEBTOR - IN POSSESSION)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Activity
July 5, 1999
through
August 1, 1999
--------------
<S> <C>
Net Sales $ 103,094
Costs of merchandise sold and buying and occupancy expense 82,258
---------
Gross margin after cost of merchandise sold and buying
and occupancy expenses 20,836
Selling, General and Administrative Expenses:
Net Employment Expense 22,736
Net Advertising 2,782
Banking and Other Fees 1,770
Real Estate and Other Taxes 2,328
Supplies 816
Communication and Equipment 696
Travel 478
Security and Other Services (155)
Legal and Professional 632
Sales and Shipping --
Insurance 672
Miscellaneous (a) (2,704)
Credit Card Services 398
---------
Total Selling, General and Administrative Expenses 30,450
Other income, net (b) (8,821)
Restructuring charge --
Depreciation and amortization 3,121
---------
Earnings (loss) before interest, reorganization items,
and income tax (3,915)
Interest expense - debt 2,977
Interest expense - capitalized leases 436
---------
Earnings (loss) before reorganization items, and income tax (7,327)
Reorganization Items:
Legal and Professional 1,590
Miscellaneous fees 133
---------
Reorganization items 1,722
Earnings (loss) before income tax (9,050)
Income tax benefit --
---------
Net earnings (loss) $ (9,050)
=========
</TABLE>
(a) Includes proceeds received to exit certain operating leases.
(b) Includes gains of auctioned properties which closed in July.
