<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: January 31, 2000
SERVICE MERCHANDISE COMPANY, INC.
(Debtor-in-Possession as of March 27, 1999)
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Tennessee 1-9223 62-0816060
- ---------------------------- ------------------------ ----------------
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
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 January 31, 2000 and ending February
27, 2000 (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 perspective 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: approval of plans and activities by the Bankruptcy Court,
including the proposed extension of the exclusivity period; 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; risks associated with third parties
seeking and obtaining Court action to terminate or shorten the exclusivity
period; the ability of the Company to operate successfully under a Chapter 11
proceeding, achieve planned sales and margin, and create and have approved a
reorganization plan in the Chapter 11 Cases; potential adverse developments with
respect to the Company's liquidity or results of operations; the ability of the
Company to obtain shipments, negotiate and maintain terms with vendors and
service providers for current orders; the ability to develop, fund and execute a
Year 2000 Business Plan; the ability of the Company to attract, retain and
compensate 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 seasonal nature of the Company's
business 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; real estate occupancy and development costs, including the
substantial fixed investment costs associated with opening, maintaining or
closing a Company store; uncertainties with respect to continued public trading
in the Company's securities; and the ability to effect conversions to new
technological systems.
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: April 5, 2000 By: /s/ C. Steven Moore
-------------------------------------
C. Steven Moore
Senior Vice President, Chief
Administrative Officer, Secretary and
General Counsel
4
<PAGE> 5
EXHIBIT INDEX
-------------
No. Exhibit
- -------- --------------------------------------------------------
99 Operating Report for the period ending February 27, 2000
<PAGE> 1
EXHIBIT 99
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF TENNESSEE
In re: Case No.: 399-02649
-----------------
SERVICE MERCHANDISE COMPANY, INC. THROUGH 399-02680
--------------------------------- -----------------
Judge: PAINE
-----------------
Chapter 11
Debtor(s)
MONTHLY OPERATING REPORT FOR PERIOD ENDING February 27, 2000
-----------------
COMES NOW, SERVICE MERCHANDISE COMPANY, INC.
---------------------------------
Debtor-In-Possession, and hereby submits its Monthly Operating Report for
the period commencing January 31, 2000 and ending February 27, 2000 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: 3-20-00 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
<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: JANUARY 31, 2000 THROUGH FEBRUARY 27, 2000
1. Payroll
<TABLE>
<CAPTION>
WAGES TAXES
OFFICERS TITLE GROSS NET DUE PAID
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SAM CUSANO CHIEF EXECUTIVE OFFICER 245,000.00 163,304.96 4,515.26 70,558.98
STEVE MOORE SENIOR VICE PRESIDENT, CHIEF ADMINISTRATIVE OFFICER,
GENERAL COUNSEL AND SECRETARY 172,127.87 111,268.59 2,174.49 49,916.69
TOM GARRETT SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER 139,277.03 89,562.99 1,523.52 39,555.55
GARY SEASE SENIOR VICE PRESIDENT, LOGISTICS 140,880.22 88,977.26 1,804.37 40,963.30
CHARLES SEPTER PRESIDENT AND CHIEF OPERATING OFFICER 192,487.52 124,788.19 3,601.49 55,842.58
KENNETH BRAME SENIOR VICE PRESIDENT, INFORMATION SERVICES AND
CHIEF INFORMATION OFFICER 123,781.86 78,333.48 380.34 37,265.66
ROBERT J. PINDRED VICE PRESIDENT AND TREASURER 50,688.08 31,228.64 672.91 15,553.93
JOE M. ELLIOTT ASSISTANT VICE PRESIDENT, PROPERTY ADMINISTRATION 36,629.92 22,074.82 806.49 10,856.09
ERIC KOVATS VICE PRESIDENT, STORES 82,576.11 51,424.40 1,482.83 24,880.01
KARREN PRASIFKA ASSISTANT GENERAL COUNSEL VICE PRESIDENT 61,570.74 39,424.59 1,130.37 20,920.33
BILLY STEWART ASSISTANT TAX VICE PRESIDENT, TAX 24,801.03 15,626.17 328.67 7,195.85
KENNETH A CONWAY VICE PRESIDENT AND CONTROLLER 57,935.33 37,983.31 846.69 18,764.63
</TABLE>
Note: The above amounts reflect incentive and stay bonuses paid in
January, 2000.
<PAGE> 3
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE CONPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: January 31, 2000 THROUGH February 27, 2000
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 Fireman's Fund Insurance Co $5 Million CCIPW12011 12/31/00 $1,441,249 12/31/00
Royal $5 Million RHD314289 12/31/00 $ 100,000 12/31/00
Westchester Fire $15 Million 1XA394310 12/31/00 $ 50,100 12/31/00
Allianz Insurance Co $12 Million CLP1034720 12/31/00 $ 20,040 12/31/00
TIG Insurance Co $13 Million XPT38797667 12/31/00 $ 32,500 12/31/00
Westchester Fire $20 Million 1XA394311 12/31/00 $ 10,020 12/31/00
Allianz Insurance Co $30 Million CLP1034720 12/31/00 $ 15,030 12/31/00
Allianz Insurance Co $25 Million CLP1034720 12/31/00 $ 6,680 12/31/00
Boiler & Machinery Hartford Steam Boiler $10 Million BMTBD 05/01/00 $ 11,900 05/01/00
Transit Security Ins Co of Hartford $1 Million CCIMG72820 05/01/00 $ 10,000 05/01/00
Ocean Cargo Phoenix Assurance Co of NY $10 Million CR37211 05/01/00 $ 40,000 05/01/00
Special Crime Reliance Insurance Co $25 Million NFK1951937 05/01/02 $ 13,458 05/01/02
Crime National Union Fire Ins Co $10 Million 858-0797 03/01/00 $ 56,505 03/01/00
Fiduciary National Union Fire Ins Co $10 Million 267-81-30 03/01/00 $ 19,462 03/01/00
Employment Practices Chubb Insurance Co $10 Million 81278901A 03/01/00 $ 221,575 03/01/00
Liability Royal Insurance Co $10 Million PSF000010 03/01/00 $ 88,200 03/01/00
Directors & Officers Continental Insurance Co $10 Million 300714943 03/01/01 $ 453,500 03/01/01
Chubb Insurance Co $10 Million 81278902-A 03/01/01 $ 266,666 03/01/01
Royal Insurance Co $10 Million PSF000009 03/01/01 $ 133,000 03/01/01
Umbrella Federal Insurance Co $50 Million 79763295 12/31/01 $ 63,357 12/31/00
Excess Liability American Guarantee & Liab $50 Million AEC287610700 12/31/00 $ 25,000 12/31/00
International Ace American Ins Co $1 Million PHF051491 12/31/00 $ 2,500 12/31/00
Punitive Damages Chubb Atlantic Indemnity $50 Million (00) 3310-05-98 12/31/00 $ 17,160 12/31/00
Punitive Damages - Excess Zurich International Bermuda $50 Million ZGEB-091 PD 12/31/00 $ 5,000 12/31/00
General Liability Ace American Ins Co $5 Million XSLG19903254 12/31/00 $ 11,032 02/28/00
Workers' Compensation Pacific Employers Ins Co Statutory WLRC42662112 12/31/00 $ 19,978 02/28/00
WC Excess Ace American Ins Co Statutory XWC011950 12/31/00 $ 1,601 02/28/00
WC Contractual Indemnity Illinois Union Insurance Co Statutory CTPG19903461 12/31/00 $ 2,083 02/28/00
WC Nevada Ace American Ins Co Statutory NWCC42662173 12/31/00 $ 1,737 02/28/00
Auto Pacific Employers Ins Co $1 Million ISAH07571008 12/31/00 $ 2,083 02/28/00
</TABLE>
<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: JANUARY 31, 2000 THROUGH FEBRUARY 27, 2000
3. BANK ACCOUNTS
<TABLE>
<S> <C>
TOTAL CASH AND CASH EQUIVALENTS
CASH IN STORES AND HOME OFFICE
HOME OFFICE $ 11,250
RETAIL SAFE FUNDS 1,929,380
CORPORATE ACCOUNTS 6,833,699
STORE DEPOSITORY ACCOUNTS
FIRST TENNESSEE 1,217,112
FIRSTAR 39,057
SOCIETY NATIONAL BANK 456,092
BANK OF BOSTON 506,964
BANK OF BOSTON CONNECTICUT 283,731
MERCANTILE BANK 48,240
FIRST UNION 4,222,120
HARRIS TRUST 857,225
BANK ONE LOUISIANA 588,483
ABN - AMRO BANK 278,853
COMERICA BANK 324,661
AM SOUTH 528,152
BANK OF AMERICA CALIFORNIA 378,421
FIRST AMERICAN NATIONAL BANK 177,375
HERITAGE BANK OF NEVADA 775
BANK OF OKLAHOMA 205,671
CHASE BANK OF TEXAS 1,191,447
HIBERNIA 43,872
SINGLE STORE DEPOSITORY ACCOUNTS 2,872,897
FIRST NATIONAL BANK OF MARYLAND 397,179
WELLS FARGO BANK 89,404
NATIONSBANK 248,000
BANK ONE, IN 121,517
PNC BANK 843,126
BANK ONE , TEXAS 45,889
CREDIT CARD CASH ACCOUNTS (SALES PROCESSED BY CREDIT CARD COMPANY) 12,250,861
OTHER DEPOSITORY ACCOUNTS
SERVICE MERCHANDISE - MUSCULAR DYSTROPHY ASSOC 28,792
OTHER CASH ACCOUNTS 989,986
-----------
TOTAL CASH PER GENERAL LEDGER $38,010,231
===========
</TABLE>
<PAGE> 5
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: JANUARY 31, 2000 THROUGH FEBRUARY 27, 2000
RECEIPTS AND DISBURSEMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ACTUAL ACTUAL ACTUAL ACTUAL TOTAL
Monday 1/31/00 2/7/00 2/14/00 2/21/00 1/31/00
Sunday 2/6/00 2/13/00 2/20/00 2/27/00 2/27/00
-------- ------- ------- -------- ---------
<S> <C> <C> <C> <C> <C>
Receipts:
Sales Receipts $ 26,818 $35,605 $55,763 $ 28,164 $ 146,350
Miscellaneous Receipts 330 -- -- -- 330
-------- ------- ------- -------- ---------
Total Available collections 27,148 35,605 55,763 28,164 146,680
Disbursements:
Merchandise disbursements 21,327 17,567 17,206 17,615 73,715
Non-merchandise disbursements 27,184 15,926 17,697 17,160 77,967
-------- ------- ------- -------- ---------
Total Disbursements: 48,511 33,493 34,903 34,775 151,682
-------- ------- ------- -------- ---------
Net Receipts/(Disbursements) $(21,363) $ 2,112 $20,860 $ (6,611) $ (5,002)
======== ======= ======= ======== =========
</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: JANUARY 31, 2000 THROUGH FEBRUARY 27, 2000
ROLLING REVISED CASH FLOW FORECAST
(Dollars in Thousands)
<TABLE>
<CAPTION>
Actual Actual Forecast Forecast
2/27/00 3/12/00 4/2/00 4/30/00
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Ending Total Revolver Balance $ 86,232 $ 85,883 $ 97,145 $125,309
Term Loan 99,250 99,250 99,250 99,000
Standby Letters of Credit 27,097 27,056 27,056 27,056
Trade Letters of Credit 33,789 30,751 25,484 19,890
-------- -------- -------- --------
Total Extensions of Credit 246,368 242,940 248,935 271,255
Borrowing Base 519,939 512,088 516,826 510,872
-------- -------- -------- --------
Availability $273,571 $269,148 $267,891 $239,617
======== ======== ======== ========
</TABLE>
<PAGE> 7
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE CONPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: January 31, 2000 THROUGH February 27, 2000
4. Payments to Professionals January 31, 2000 through February 27, 2000
<TABLE>
<CAPTION>
Vendor # Vendor Name Check Amt. Check Date Check #
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
98378 Skadden Arps Slate, Meagher & Flom $512,152.00 2/25/00 B0021136
71217 Bass, Berry & Sims $88,757.54 2/25/00 B0021133
99104 Jay Alix & Associates $99,799.12 2/25/00 B0021137
99459 Robert L. Berger & Associates $10,640.84 2/11/00 B0021002
99444 Sitrick & Company $57,847.85 2/25/00 B0021139
100906 Peter J. Solomon $114,191.97 2/25/00 B0021129
3323 Avtax $17,778.73 2/1/00 30035853
H998 Vory's, Sater, Seymour and Pease $44.83 2/23/00 30038182
H998 Vory's, Sater, Seymour and Pease $1,990.59 2/23/00 30038183
H998 Vory's, Sater, Seymour and Pease $404.79 2/23/00 30038184
79108 Ernst & Young $13,783.00 2/25/00 B0021134
99391 Otterbourg, Steindler, Houston & Rosen, PC $127,736.95 2/25/00 B0021138
99454 Harwell, Howard, Hyne, Gabbert & Manner, PC $29,102.00 2/25/00 B0021140
63078 Weil, Gotshal & Manges, LLP $7,996.64 2/25/00 B0021131
</TABLE>
Note: Schedule is an a cash basis
<PAGE> 8
FORM OPR- 1 AND 2
SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DEBTOR-IN-POSSESSION)
(IN THOUSANDS)
<TABLE>
<CAPTION>
FEBRUARY 27, JANUARY 30,
2000 2000
----------- -----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 38,010 $ 28,695
Accounts receivable 7,028 11,113
Inventories 662,722 675,440
Prepaid expenses and other assets 24,851 26,080
----------- -----------
TOTAL CURRENT ASSETS 732,611 741,328
----------- -----------
PROPERTY AND EQUIPMENT
Owned assets, net of accumulated depreciation 348,136 351,000
Capitalized leases, net of accumulated amortization 14,464 14,673
----------- -----------
TOTAL PROPERTY AND EQUIPMENT 362,600 365,673
----------- -----------
Other assets and deferred charges 44,937 45,389
----------- -----------
TOTAL ASSETS $ 1,140,148 $ 1,152,390
=========== ===========
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Liabilities Not Subject To Compromise
Current Liabilities:
Notes payable to banks $ 86,232 $ 81,313
Accounts payable 62,075 71,070
Accrued expenses 159,569 166,391
State & local sales tax 13,319 9,743
Current maturities of long-term debt 1,000 1,000
Current maturities capitalized leases 85 86
----------- -----------
TOTAL CURRENT LIABILITIES 322,281 329,601
Long -Term Liabilities:
Long-term debt 98,250 98,250
Capitalized lease obligations 2,474 2,482
Liabilities Subject To Compromise:
Accrued restructuring costs 45,841 45,689
Capitalized lease obligations 27,305 27,687
Long-term debt 428,232 428,869
Accounts payable 191,673 190,839
Accrued expenses 59,939 60,905
----------- -----------
Total Liabilities Subject To Compromise 752,990 753,991
TOTAL LIABILITIES 1,175,995 1,184,323
----------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' (DEFICIT) EQUITY
Common stock 49,989 50,006
Additional paid-in-capital 6,288 6,424
Deferred compensation (587) (688)
Accumulated other comprehensive loss -- --
Retained (deficit) earnings (91,537) (87,676)
----------- -----------
TOTAL SHAREHOLDERS' (DEFICIT) EQUITY (35,847) (31,933)
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY $ 1,140,148 $ 1,152,390
=========== ===========
</TABLE>
<PAGE> 9
CHAPTER 11
MONTHLY OPERATING REPORT
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: JANUARY 31, 2000 THROUGH FEBRUARY 27, 2000
SUMMARY OF ACCOUNTS RECEIVABLE
Month Ended: 02/27/00
FORM OPR-3 NOT APPLICABLE
<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: JANUARY 31, 2000 THROUGH FEBRUARY 27, 2000
SCHEDULE OF POST PETITION LIABILITIES-ACCOUNTS PAYABLE
Month Ended: 02/27/2000
FORM OPR-4
<TABLE>
<CAPTION>
Total Current
-------- --------
<S> <C> <C>
Trade Accounts Payable (Merchandise) $ 62,075 $ 62,075
</TABLE>
<TABLE>
<CAPTION>
Total Current
-------- --------
<S> <C> <C>
Expense & other payables $159,569 $159,569
</TABLE>
<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: JANUARY 31, 2000 THROUGH FEBRUARY 27, 2000
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 $ 7,811,842.00 $ 7,811,842.00
State income tax Various Various (3,253) (3,253)
--------------- ---------------
SUBTOTAL 7,808,589 7,808,589
--------------- ---------------
Sales/use tax SUBTOTAL * Various Various 13,318,975 13,318,975
--------------- ---------------
Personal property tax * Various Various 1,608,588 1,608,588
Real estate taxes * Various Various 7,677,785 7,677,785
Inventory taxes * Various Various 0 0
Gross receipts/bus. licenses * Various Various (20,232) (20,232)
Franchise taxes * Various Various 618,726 618,726
--------------- ---------------
SUBTOTAL 9,884,867 9,884,867
--------------- ---------------
--------------- ---------------
TOTAL TAXES PAYABLE $ 31,012,431.00 $ 31,012,431.00
=============== ===============
</TABLE>
* liability included in accrued expenses on OPR-2
** tax reserve
<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: JANUARY 31, 2000 THROUGH FEBRUARY 27, 2000
SCHEDULE OF POST PETITION LIABILITIES
FORM OPR-4
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DATE TOTAL DUE
INCURRED DATE DUE (2/27/00 BALANCE)
---------------------------------------------------------------
<S> <C> <C> <C>
POST PETITION SECURED DEBT
Revolver Borrowings 3/27/99 6/30/01 $ 86,232
Facility Standby Letters of Credit 3/27/99 6/30/01 27,097
Facility Trade Letters of Credit 3/27/99 6/30/01 33,789
Term Loans 3/27/99 6/30/01 99,250
--------
TOTAL EXTENSIONS OF CREDIT $246,368
========
ACCRUED INTEREST PAYABLE $ 938
========
</TABLE>
<PAGE> 13
FORM OPR-5
SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DEBTOR-IN-POSSESSION)
(IN THOUSANDS)
<TABLE>
<CAPTION>
ACTIVITY
JANUARY 1, 2000
THROUGH
FEBRUARY 27, 2000
-----------------
<S> <C>
Net Sales $ 137,923
Costs of merchandise sold and buying and occupancy expense 96,230
---------
Gross margin after cost of merchandise sold and buying and occupancy expenses 41,693
Selling, General and Administrative Expenses:
Net Employment Expense 23,402
Net Advertising 8,771
Banking and Other Fees 1,821
Real Estate and Other Taxes 1,822
Supplies 919
Communication and Equipment 430
Travel 463
UCC and Other Services (a) (1,138)
Legal and Professional 247
Sales and Shipping 70
Insurance 399
Miscellaneous (337)
Credit Card Services (49)
---------
Total Selling, General and Administrative Expenses 36,819
Other expense/(income), net 947
Restructuring charge --
Depreciation and amortization 2,843
---------
Earnings (loss) before interest, reorganization items, and income tax 1,084
Interest expense - debt 3,171
Interest expense - capitalized leases 308
---------
Earnings (loss) before reorganization items, and income tax (2,394)
Reorganization Items:
Legal and Professional 1,336
Miscellaneous fees 133
Close Store Charges --
---------
Total Reorganization Items 1,468
Earnings (loss) before income tax (3,863)
Income tax benefit --
Cumulative Effect of Change in Accounting Principles --
---------
Net earnings (loss) $ (3,863)
=========
</TABLE>
Note:
(a) Includes Uniform Inventory Cost Capitalization adjustment to reflect
revised estimate of inventoriable costs.
