<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: September 22, 1999
SERVICE MERCHANDISE COMPANY, INC.
(Debtor-in-Possession as of March 27, 1999)
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Tennessee 1-9223 62-0816060
- ---------------------------------------------- ------------------------ -------------------
(State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
</TABLE>
7100 Service Merchandise Boulevard, Brentwood, TN 37027
- ------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
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 August 2, 1999 and ending August 29,
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: September 22, 1999 By: /s/ C. Steven Moore
-----------------------------
C. Steven Moore
Vice President
4
<PAGE> 5
EXHIBIT INDEX
No. Exhibit
- ---------- -----------------------------------------------------------
99 Operating Report for the period ending August 29, 1999
<PAGE> 1
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)
</TABLE>
MONTHLY OPERATING REPORT FOR PERIOD ENDING August 29, 1999
-----------------------
COMES NOW, SERVICE MERCHANDISE COMPANY, INC.
----------------------------------------------------------
Debtor-In-Possession, and hereby submits its Monthly Operating Report for the
period commencing August 2, 1999 and ending August 29, 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: DEBTOR - IN - POSSESSION
-------------
By:
-----------------------------------------------
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
<PAGE> 2
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: AUGUST 2, 1999 THROUGH AUGUST 29, 1999
1. Payroll
<TABLE>
<CAPTION>
WAGES TAXES
OFFICERS TITLE GROSS NET DUE PAID
<S> <C> <C> <C> <C> <C>
SAM CUSANO CHIEF EXECUTIVE OFFICER 50,188.10 31,788.27 4,515.26 13,314.15
STEVE MOORE SENIOR VICE PRESIDENT, CHIEF
ADMINISTRATIVE OFFICER, GENERAL
COUNSEL & SECRETARY 27,693.91 18,573.95 2,198.69 6,750.47
TOM GARRETT SENIOR VICE PRESIDENT & CFO 25,088.38 18,068.01 1,648.99 5,075.39
STEVE MCCANN SENIOR VICE PRESIDENT, FINANCE
& CHIEF ACCOUNTING OFFICER 245,923.00 174,445.52 -- 71,477.96
GARY SEASE SENIOR VICE PRESIDENT, LOGISTICS 25,160.45 15,907.33 2,054.12 5,974.23
CHARLES SEPTER PRESIDENT & CHIEF OPERATING OFFICER 39,229.81 24,613.39 3,417.43 10,259.94
KENNETH BRAME SENIOR VICE PRESIDENT, INFORMATION
SERVICES & CHIEF INFORMATION OFFICER 23,118.27 15,557.34 1,762.74 5,341.50
ROBERT J. PINDRED VICE PRESIDENT AND TREASURER 12,370.13 8,347.91 458.18 1,822.18
SANDRA CARY VICE PRESIDENT, ASST. TAX: FIN 53,727.01 37,913.67 -- 15,813.34
JOE M. ELLIOTT AVP, PROPERTY ADMINISTRATION 8,139.03 5,574.22 363.54 1,057.12
ERIC KOVATS VICE PRESIDENT, REGIONAL: STORES 17,368.47 11,610.37 1,103.20 3,241.35
BARBARA SPRINGER ASSISTANT TREASURER 7,097.52 5,048.89 857.20 912.09
KARREN PRASIFKA ASSISTANT GENERAL COUNSEL VP 13,587.24 8,518.89 1,221.61 3,846.74
SUZY WILSON ASSISTANT LEGAL VICE PRESIDENT 7,707.82 5,896.69 394.17 1,168.84
BILLY STEWART ASSISTANT TAX VICE PRESIDENT 6,453.13 4,435.61 316.98 908.91
The associates listed below received severance payments.
STEVE MCCANN 235,000.00
SANDRA CARY 50,000.08
</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: AUGUST 2, 1999 THROUGH AUGUST 29, 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 1/1/01 $ 25,000 1/1/01
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 - Va. Beach Hartford Fire Insurance Co $2 Million 20UENTBD 1/1/00 $ 8,020 1/1/00
General Liability Cigna Insurance Co $5 Million XSLG19307931 1/1/00 $ 13,225 9/30/99
Workers' Compensation Pacific Employers Ins Co Statutory WLRC42316830 1/1/00 $ 17,797 9/30/99
WC Excess Cigna Insurance Co Statutory XWCO11865 1/1/00 $ 1,748 9/30/99
WC Contractual Indemnity Illinois Union Insurance Co Statutory CTPG19307992 1/1/00 $ 4,990 9/30/99
Auto Pacific Employers Ins Co $1 Million ISAHO7569488 1/1/00 $ 2,742 9/30/99
</TABLE>
<PAGE> 4
CASH NAME: SERVICE MERCHANDISE COMPANY, INC. et. A1.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: AUGUST 2, 1999 - AUGUST 29, 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 $ 2,108,026
CORPORATE ACCOUNTS $ 4,690,652
STORE DEPOSITORY ACCOUNTS
FIRST TENNESSEE $ 1,504,314
FIRSTAR $ 93,809
SOCIETY NATIONAL BANK $ 610,801
BANK OF BOSTON $ 433,193
BANK OF BOSTON CONNECTICUT $ 233,127
MERCANTILE BANK $ 135,665
FIRST UNION $ 3,109,726
HARRIS TRUST $ 1,389,218
BANK ONE LOUISIANA $ 761,600
FLEET $ 113,412
ABN - AMRO BANK $ 561,653
COMERICA BANK $ 349,193
AM SOUTH $ 246,456
BANK OF AMERICA CALIFORNIA $ 145,744
FIRST AMERICAN NATIONAL BANK $ 132,619
HERITAGE BANK OF NEVADA $ 2,077
BANK OF OKLAHOMA $ 176,171
CHASE BANK OF TEXAS $ 1,129,796
HIBERNIA $ 133,650
SINGLE STORE DEPOSITORY ACCOUNTS $ 485,362
</TABLE>
<PAGE> 5
CASH NAME: SERVICE MERCHANDISE COMPANY, INC. et. A1.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: AUGUST 2, 1999 - AUGUST 29, 1999
3. BANK ACCOUNTS
<TABLE>
<S> <C>
TOTAL CASH AND CASH EQUIVALENTS
FIRST NATIONAL BANK OF MARYLAND $ 97,990
FIFTH THIRD BANK $ 54,781
WELLS FARGO BANK $ 139,739
NATIONSBANK $ 1,409,048
NBD $ 310,525
PNC BANK $ 985,293
BANK ONE, TEXAS $ 58,872
CREDIT CARD CASH ACCOUNTS (SALES PROCESSED BY CREDIT CARD COMPANY) $13,759,567
OTHER DEPOSITORY ACCOUNTS
SERVICE MERCHANDISE - MUSCULAR DYSTROPHY ASSOC. $ 766,465
OTHER CASH ACCOUNTS $ 728,445
TOTAL CASH PER GENERAL LEDGER 36,868,939
</TABLE>
<PAGE> 6
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. AL.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: AUGUST 2, 1999 THROUGH AUGUST 29, 1999
4. Payments to Professionals August 2, 1999 through August 29, 1999
<TABLE>
<CAPTION>
Vendor # Vendor Name Check Amt. Check Date Check #
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
H998 Vorys, Sater, Seymour and Pease $73.50 8/3/99 30012273
99459 Robert L. Berger & Associates $11,313.29 8/4/99 B0018805
67017 Barkley & Thompson $2,866.65 8/9/99 30012915
84573 Buchanan & Ingersoll $214.95 8/9/99 30012922
96221 Holt & Babbington $100.52 8/9/99 30012930
97660 Schnader, Harrison, Segal & Lewis $533.03 8/9/99 30012931
57117 Deloitte & Touche $78,799.00 8/10/99 30013108
67017 Barkley & Thompson $187.50 8/10/99 30013109
84573 Buchanan & Ingersoll $19.00 8/10/99 30013111
86237 Brusniak, Clement, Harrison & McCool, PC $100.54 8/10/99 30013113
96221 Holt & Babbington $29.99 8/10/99 30013118
63078 Weil, Gotshal & Manges, LLP $78,124.23 8/12/99 B0018890
67017 Barkley & Thompson $1,159.98 8/17/99 30013809
84573 Buchanan & Ingersoll $366.00 8/17/99 30013810
96221 Holt & Babbington $527.61 8/17/99 30013819
96683 Gorr, Moser, Dell & Loughney $420.96 8/17/99 30013820
97660 Schnader, Harrison, Segal & Lewis $385.18 8/17/99 30013822
99459 Robert L. Berger & Associates $24,684.30 8/17/99 B0018964
96707 Robinson Dilando & Whitaker $317.44 8/18/99 30014452
H998 Vorys, Sater, Seymour and Pease $369.28 8/20/99 30014669
63010 Rives & Peterson $449.38 8/24/99 30015032
</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: AUGUST 2, 1999 TO AUGUST 29, 1999
RECEIPTS AND DISBURSEMENTS
PERIOD: AUGUST 2, 1999 TO AUGUST 29, 1999
(Dollars in Thousands)
<TABLE>
<CAPTION>
Actual Actual Actual Actual Total
Monday 8/2/99 8/9/99 8/16/99 8/23/99 8/2/99
Sunday 8/8/99 8/15/99 8/22/99 8/29/99 8/29/99
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RECEIPTS:
Sales Receipts $ 27,774 $ 28,860 $ 27,194 $ 29,218 $113,046
Miscellaneous Receipts -- 3,225 1,490 -- 4,715
-------------------------------------------------------------------
Total Available collections 27,774 32,085 28,684 29,218 117,761
DISBURSEMENTS:
Merchandise disbursements 24,645 22,681 32,643 33,765 113,734
Non-merchandise disbursements 21,900 14,784 14,636 17,655 68,975
-------------------------------------------------------------------
TOTAL DISBURSEMENTS: $ 46,545 $ 37,465 $ 47,279 $ 51,420 $182,709
-------------------------------------------------------------------
CHANGE IN CASH $(18,771) $ (5,380) $(18,595) $(22,202) $(64,948)
-------------------------------------------------------------------
</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: AUGUST 2, 1999 THROUGH AUGUST 29, 1999
Rolling Revised Cash Flow Forecast
(Dollars in Thousands)
<TABLE>
<CAPTION>
Actual Forecast Forecast Forecast Forecast
Monday 9/6/99 9/13/99 10/11/99 11/8/99 12/6/99
Sunday 9/12/99 9/19/99 10/17/99 11/14/99 12/12/99
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ending Total Revolver Balance $ 128,706 $ 176,713 $ 256,540 $ 365,714 $ 310,646
-------------------------------------------------------------------------------
Term Loan 99,750 99,750 99,500 99,500 99,500
Standby Letters of Credit 27,183 27,183 27,183 27,183 27,183
Trade Letters of Credit 78,179 94,124 68,142 28,617 26,349
-------------------------------------------------------------------------------
Total Extensions of Credit $ 333,818 $ 397,770 $ 451,365 $ 521,014 $ 463,678
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Borrowing Base (Before Interim Reserve) $ 563,959 $ 568,069 $ 617,672 $ 684,739 $ 667,937
-------------------------------------------------------------------------------
Availability (Before Interim Reserve) * $ 230,141 $ 170,299 $ 166,307 $ 163,725 $ 204,259
</TABLE>
* Borrowing Base and Availability calculated before deduction of Interim
Reserve Amount ($50 million until a business plan is accepted and financial
covenants are negotiated.)
<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 29, August 1,
1999 1999
---------- ----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 36,869 $ 28,052
Accounts receivable 14,428 13,878
Inventories 662,533 578,578
Prepaid expenses and other assets (a) 64,064 84,700
---------- ----------
TOTAL CURRENT ASSETS 777,895 705,208
---------- ----------
PROPERTY AND EQUIPMENT
Owned assets, net of accumulated depreciation 362,727 361,231
Capitalized leases, net of accumulated amortization 15,453 17,336
---------- ----------
TOTAL PROPERTY AND EQUIPMENT 378,180 378,567
---------- ----------
Other assets and deferred charges (b) 80,002 68,134
---------- ----------
TOTAL ASSETS $1,236,077 $1,151,909
========== ==========
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Liabilities Not Subject To Compromise
Current Liabilities:
Notes payable to banks $ 120,714 $ 53,891
Accounts payable 62,140 46,543
Accrued expenses 142,281 138,241
Sales & local sales tax 14,945 12,883
Current maturities of long-term debt 1,000 1,000
---------- ----------
TOTAL CURRENT LIABILITIES 341,080 252,558
</TABLE>
<PAGE> 10
FORM OPR- 1 AND 2
SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
(Debtor-in-Possession)
(In thousands)
<TABLE>
<S> <C> <C>
Long-Term Liabilities:
Accrued restructuring-Noncurrent (27) -
Long-term debt 98,750 98,750
Liabilities Subject To Compromise:
Accrued restructuring costs 67,729 69,846
Capitalized lease obligations 33,754 42,049
Long-term debt 465,055 465,055
Accounts payable 193,424 192,074
Accrued expenses 81,588 83,794
---------- ----------
Total Liabilities Subject To Compromise 841,551 852,818
TOTAL LIABILITIES 1,281,353 1,204,126
---------- ----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' (DEFICIT) EQUITY
Common stock 50,024 50,049
Additional paid-in-capital 6,562 6,756
Deferred compensation (897) (1,060)
Accumulated other comprehensive loss (869) (869)
Retained (deficit) earnings (100,096) (107,093)
---------- ----------
TOTAL SHAREHOLDERS' (DEFICIT) EQUITY (45,276) (52,217)
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY $1,236,077 $1,151,909
========== ==========
</TABLE>
(a) Auction property contracts of approximately $10,000 closed in August, and
reduced assets available for sale. Cash in advance payments decreased by
approximately $14,000, reducing prepaid expenses and other assets.
(b) Auction proceeds of approximately $15,000 were recorded as restricted cash
and included in the line other assets and deferred charges, pending a
final accounting and release of these funds.
<PAGE> 11
CHAPTER 11
MONTHLY OPERATING REPORT
CASH NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: AUGUST 2, 1999 THROUGH AUGUST 29, 1999
SUMMARY OF ACCOUNTS RECEIVABLE
Month Ended: 08/29/99
FORM OPR-3 NOT APPLICABLE
<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: AUGUST 2, 1999 THROUGH AUGUST 29, 1999
SCHEDULE OF POST PETITION LIABILITIES-ACCOUNTS PAYABLE
Month Ended: 08/29/99
FORM OPR-4
<TABLE>
<CAPTION>
Total current
----- -------
<S> <C> <C>
Trade Accounts Payable (Merchandise) $ 62,140,000 $ 62,140,000
<CAPTION>
Total current
----- -------
<S> <C> <C>
Expense & other payables $ 142,281,000 $ 142,281,000
</TABLE>
<PAGE> 13
CHAPTER 11
MONTHLY OPERATING REPORT
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. Al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: AUGUST 2, 1999 THROUGH AUGUST 29, 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 (62,257) (62,257)
---------------------------
SUBTOTAL * 8,364,065 8,364,065
---------------------------
Sales/Use Tax Various Various 14,944,953 14,944,953
---------------------------
Personal Property Tax * Various Various 747,551 747,551
Real Estate Taxes * Various Various 6,902,532 6,902,532
Inventory Taxes * Various Various 1,460,786 1,460,786
Gross Receipts/Bus Licenses * Various Various 212,449 212,449
Franchise Taxes * Various Various 147,720 147,720
--------------------------
SUBTOTAL 9,471,038 9,471,038
--------------------------
==========================
TOTAL TAXES PAYABLE 32,780,056 32,780,056
==========================
</TABLE>
* liability included in accrued expenses on OPR-2
** tax reserve
<PAGE> 14
CHAPTER 11
MONTHLY OPERATING REPORT
CASH NAME: SERVICE MERCHANDISE COMPANY, INC. et. A1.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: AUGUST 2, 1999 THROUGH AUGUST 29, 1999
SCHEDULE OF POST PETITION LIABILITIES
FORM OPR-4
($ IN THOUSANDS)
<TABLE>
<CAPTION>
DATE TOTAL DUE
INCURRED DATE DUE (8/29/99 Balance)
<S> <C> <C> <C>
POST PETITION SECURED DEBT
Revolver Borrowings 3/27/99 6/30/01 120,714
Facility Standby Letters of Credit 3/27/99 6/30/01 27,183
Facility Trade Letters of Credit 3/27/99 6/30/01 80,120
Term Loans 3/27/99 6/30/01 99,750
---------
TOTAL EXTENSIONS OF CREDIT 327,767
POST PETITION UNSECURED DEBT --
ACCRUED INTEREST PAYABLE $ 1,718
</TABLE>
<PAGE> 15
FORM OPR-5 SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DEBTOR - IN - POSSESSION)
(IN THOUSANDS)
<TABLE>
<CAPTION>
ACTIVITY
AUGUST 2, 1999
THROUGH
AUGUST 29, 1999
---------------
<S> <C>
Net Sales $ 110,158
Costs of merchandise sold and buying and occupancy expense 87,668
---------
Gross margin after cost of merchandise sold and buying
and occupancy expenses 22,489
Selling, General and Administrative Expenses:
Net Employment Expense 18,151
Net Advertising 3,804
Banking and Other Fees 1,483
Real Estate and Other Taxes 1,634
Supplies 829
Communication and Equipment 589
Travel 426
UCC and Other Services (a) (2,188)
Legal and Professional 164
Sales and Shipping --
Insurance 793
Miscellaneous (b) (2,495)
Credit Card Services (124)
---------
Total Selling, General and Administrative Expenses 23,067
</TABLE>
<PAGE> 16
FORM OPR-5 SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DEBTOR - IN - POSSESSION)
(IN THOUSANDS)
<TABLE>
<CAPTION>
ACTIVITY
AUGUST 2, 1999
THROUGH
AUGUST 29, 1999
---------------
<S> <C>
Other income, net (c) (16,419)
Restructuring charge --
Depreciation and amortization 2,892
--------
Earnings (loss) before interest, reorganization items,
and income tax 12,949
Interest expense - debt 3,311
Interest expense - capitalized leases 516
--------
Earnings (loss) before reorganization items, and income tax 9,122
Reorganization Items:
Legal and Professional 1,994
Miscellaneous fees 133
--------
Reorganization items 2,126
Earnings (loss) before income tax 6,996
Income tax benefit --
--------
Net earnings (loss) $ 6,996
========
</TABLE>
Notes:
(a) Includes Uniform Inventory Cost Capitalization adjustment to reflect
revised estimate of inventoriable costs.
(b) Records income from proceeds received to terminate and exit certain
operating leases.
(c) Includes gains on auctioned real estate property contracts which closed in
August.
