<PAGE> 1
EXHIBIT 99
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF TENNESSEE
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 27, 2000
---------------
COMES NOW, SERVICE MERCHANDISE COMPANY, INC.
---------------------------------
Debtor-In-Possession, and hereby submits its Monthly Operating Report for the
period commencing July 31, 2000 and ending August 27, 2000 as shown by the
report and exhibits consisting of 15 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: September 18, 2000
------------------
DEBTOR-IN-POSSESSION
By: /s/ KENNETH A. CONWAY
-----------------------------------------------------
Name and Title: KENNETH A. CONWAY, VICE PRESIDENT AND CONTROLLER
-----------------------------------------------------
Address: 7100 SERVICE MERCHANDISE DRIVE
-----------------------------------------------------
BRENTWOOD, TENNESSEE 37027
-----------------------------------------------------
Telephone No: (615) 660-3340
-----------------------------------------------------
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: JULY 31, 2000 THROUGH AUGUST 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 257,876.20 177,561.24 4,500.54 75,198.02
C. STEVEN MOORE SENIOR VICE PRESIDENT, CHIEF ADMINISTRATIVE OFFICER,
GENERAL COUNSEL AND SECRETARY 113,292.59 78,658.87 2,185.87 32,089.75
THOMAS L. GARRETT, JR SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER 90,297.41 63,138.33 1,836.10 24,857.28
CHARLES K. SEPTER PRESIDENT AND CHIEF OPERATING OFFICER 199,613.45 136,575.99 3,595.08 57,821.66
ROBERT J. PINDRED VICE PRESIDENT AND TREASURER 34,038.93 24,973.13 615.94 8,208.71
JOE M. ELLIOTT VICE PRESIDENT, PROPERTY ADMINISTRATION 32,995.16 2,204.52 647.08 7,566.84
KARREN PRASIFKA ASSISTANT GENERAL COUNSEL VICE PRESIDENT 40,164.78 27,854.81 1,169.98 10,950.84
BILLY STEWART ASSISTANT TAX VICE PRESIDENT 19,205.80 13,594.86 310.71 3,886.03
KENNETH A. CONWAY VICE PRESIDENT AND CONTROLLER 47,845.76 23,058.60 506.09 10,634.02
ERIC A. KOVATS SENIOR VICE PRESIDENT, STORES 71,864.74 49,633.65 1,536.49 19,620.15
ROSE C. SEPTER SENIOR VICE PRESIDENT, JEWELRY MERCHANDISING 63,393.46 44,242.20 1,647.15 17,271.81
JERRY E. FOREMAN SENIOR VICE PRESIDENT, MERCHANDISING 93,139.53 64,542.45 2,022.84 26,152.84
GARY SEASE SENIOR VICE PRESIDENT, LOGISTICS 1,089,402.18 768,157.10 -- 320,706.05
</TABLE>
STAY BONUS PAYMENTS WERE MADE TO THE FOLLOWING AND ARE INCLUDED IN THE AMOUNTS
ABOVE.
<TABLE>
<S> <C>
SAM CUSANO 195,000.00
C. STEVEN MOORE 78,750.01
THOMAS L. GARRETT, JR. 59,062.58
CHARLES K. SEPTER 150,000.00
ROBERT J. PINDRED 19,575.03
JOE M. ELLIOTT 18,454.76
KARREN PRASIFKA 22,950.06
BILLY STEWART 9,562.50
KENNETH A. CONWAY 21,600.05
ERIC A. KOVATS 44,500.06
ROSE C. SEPTER 36,718.81
JERRY E. FOREMAN 60,937.50
GARY SEASE 69,621.60
SEVERANCE PAYMENT INCLUDED IN THE AMOUNT ABOVE
GARY SEASE 1,010,826.04
RELOCATION PAYMENT INCLUDED IN THE AMOUNT ABOVE
KENNETH A. CONWAY 10,806.06
</TABLE>
Page 2
<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: July 31, 2000 THROUGH August 27, 2000
2. INSURANCE
<TABLE>
<CAPTION>
DATE
COVERAGE POLICY EXPIRATION PREMIUM 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 4914539 12/31/00 $8,383 12/31/00
Transit Fireman's Fund Insurance Co $1 Million CCIMG72820 12/31/00 $8,525 12/31/00
Ocean Cargo Fireman's Fund Insurance Co $10 Million CR37211 12/31/00 $25,000 12/31/00
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 03/01/01 $56,505 03/01/01
Fiduciary National Union Fire Ins Co $10 Million 267-81-30 03/01/01 $19,140 03/01/01
Employment Practices Chubb Insurance Co $10 Million 81278901A 03/01/01 $130,845 03/01/01
Liability Royal Insurance Co $10 Million PSF000010 03/01/01 $56,364 03/01/01
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 12/31/00
Workers' Compensation Pacific Employers Ins Co Statutory WLRC42662112 12/31/00 $19,978 12/31/00
WC Excess Ace American Ins Co Statutory XWC011950 12/31/00 $1,601 12/31/00
WC Contractual Indemnity Illinois Union Insurance Co Statutory CTPG19903461 12/31/00 $2,083 12/31/00
WC Nevada Ace American Ins Co Statutory NWCC42662173 12/31/00 $1,737 12/31/00
Auto Pacific Employers Ins Co $1 Million ISAH07571008 12/31/00 $2,083 12/31/00
</TABLE>
Page 3
<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 31, 2000 THROUGH AUGUST 27, 2000
3. BANK ACCOUNTS
TOTAL CASH AND CASH EQUIVALENTS
<TABLE>
CASH IN STORES AND HOME OFFICE
------------------------------
<S> <C>
HOME OFFICE $ 8,250
RETAIL SAFE FUNDS 1,932,096
CORPORATE ACCOUNTS 2,852,061
------------------ ---------
STORE DEPOSITORY ACCOUNTS
-------------------------
FIRST TENNESSEE 790,124
KEY NATIONAL BANK 371,557
BANK OF BOSTON 285,089
BANK OF BOSTON CONNECTICUT 144,440
FIRST UNION 2,013,640
HARRIS TRUST 505,410
BANK ONE LOUISIANA 500,619
ABN - AMRO BANK 145,330
COMERICA BANK 212,075
AM SOUTH 1,713
BANK OF AMERICA CALIFORNIA 290,729
BANK OF OKLAHOMA 139,526
CHASE BANK OF TEXAS 599,486
SINGLE STORE DEPOSITORY ACCOUNTS 263,548
WELLS FARGO BANK 67,583
BANK OF AMERICA 199,378
BANK ONE, IN 168,878
PNC BANK 584,757
CREDIT CARD CASH ACCOUNTS (SALES PROCESSED BY CREDIT CARD COMPANY) 8,953,869
------------------------------------------------------------------
OTHER DEPOSITORY ACCOUNTS
SERVICE MERCHANDISE - MUSCULAR DYSTROPHY ASSOC. 80,351
OTHER CASH ACCOUNTS 889,202
-----------
TOTAL CASH PER GENERAL LEDGER $21,999,710
===========
</TABLE>
Page 4
<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: JULY 31, 2000 THROUGH AUGUST 27, 2000
RECEIPTS AND DISBURSEMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ACTUAL ACTUAL ACTUAL ACTUAL TOTAL
Monday 07/31/00 08/07/00 08/14/00 08/21/00 07/31/00
Sunday 08/06/00 08/13/00 08/20/00 08/27/00 08/27/00
-------- ------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Receipts:
Sales receipts $ 25,021 $27,104 $ 25,619 $ 22,251 $ 99,995
Miscellaneous receipts -- 479 -- -- 479
-------- ------- -------- -------- ---------
Total available collections 25,021 27,583 25,619 22,251 100,474
Disbursements:
Merchandise disbursements 10,071 10,599 10,940 14,347 45,957
Non-merchandise disbursements 22,606 12,901 18,685 14,126 68,318
-------- ------- -------- -------- ---------
Total disbursements 32,677 23,500 29,625 28,473 114,275
-------- ------- -------- -------- ---------
Net receipts/(disbursements) $ (7,656) $ 4,083 $ (4,006) $ (6,222) $ (13,801)
======== ======= ======== ======== =========
</TABLE>
Page 5
<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: JULY 31, 2000 THROUGH AUGUST 27, 2000
ROLLING REVISED CASH FLOW FORECAST
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Actual Forecast Forecast Forecast
09/10/00 10/01/00 10/29/00 11/26/00
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Ending total revolver balance $101,991 $169,746 $230,290 $283,251
Term loan 60,000 60,000 60,000 60,000
Standby letters of credit 25,902 25,851 25,810 27,269
Trade letters of credit 40,960 34,572 12,412 19,911
-------- -------- -------- --------
Total extensions of credit 228,853 290,169 328,512 390,431
Borrowing base 455,526 466,716 484,578 535,644
-------- -------- -------- --------
Availability $226,673 $176,547 $156,066 $145,213
======== ======== ======== ========
</TABLE>
Page 6
<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: July 31, 2000 THROUGH August 27, 2000
4. Payments to Professionals July 31, 2000 through August 27, 2000
<TABLE>
<CAPTION>
Vendor # Vendor Name Check Amt. Check Date Check #
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
80443 Coudert Brothers $1,467.20 08/01/00 50011156
80443 Coudert Brothers $2,954.95 08/01/00 50011157
63078 Weil, Gotshal & Mangers, LLP $312.39 08/02/00 50011293
57117 Deloitte & Touche LLP $249,712.00 08/03/00 50011399
102136 Deloitte & Touche LLP $50,000.00 08/15/00 50012974
57117 Deloitte & Touche LLP $12,619.09 08/15/00 50012984
101625 D G Hart Associates, Inc. $44,242.87 08/15/00 B0022563
98378 Skadden, Arps, Slate, Meagher & Flom $585,158.00 08/15/00 B0022565
57117 Deloitte & Touche LLP $199,107.00 08/22/00 50014472
57117 Deloitte & Touche LLP $106,250.00 08/22/00 50014473
50995 Brann & Isaacson $284.68 08/22/00 50014511
50995 Brann & Isaacson $622.81 08/22/00 50014512
99329 The Aegis Group $14,456.25 08/22/00 50014516
57117 Deloitte & Touche LLP $19,976.09 08/23/00 50014711
99459 Robert L.Beger & Associates $31,982.28 08/24/00 B0022643
101232 E & Y Restructuring, LLC $86,823.00 08/25/00 B0022661
101993 Rothchild, Inc. $85,121.87 08/25/00 B0022662
71217 Bass, Berry & Sims $117,507.16 08/25/00 B0022664
99104 Jay Alix & Associates $134,114.07 08/25/00 B0022665
99391 Otterbourg, Steindler, Houston, & Rosen, PC $147,458.41 08/25/00 B0022666
99444 Sitrick and Company $38,371.27 08/25/00 B0022667
99454 Harwell, Howard, Hyne, Gabbert & Manner, PC $39,562.27 08/25/00 B0022668
</TABLE>
Page 7
<PAGE> 8
SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DEBTOR-IN-POSSESSION)
(IN THOUSANDS)
<TABLE>
<CAPTION>
AUGUST 27, JULY 30,
2000 2000
----------- -----------
<S> <C> <C>
Cash and cash equivalents $ 22,000 $ 26,293
Accounts receivable 6,920 7,664
Inventories 481,408 476,090
Prepaid expenses and other assets 14,213 12,829
----------- -----------
TOTAL CURRENT ASSETS 524,541 522,875
----------- -----------
Owned assets, net of accumulated depreciation 353,353 352,438
Capitalized leases, net of accumulated amortization 13,135 13,359
----------- -----------
TOTAL PROPERTY AND EQUIPMENT 366,489 365,797
----------- -----------
Other assets and deferred charges 48,261 50,552
----------- -----------
TOTAL ASSETS $ 939,291 $ 939,224
=========== ===========
Notes payable to banks $ 85,923 $ 72,167
Accounts payable 66,305 43,745
Accrued expenses 149,637 155,423
State & local sales tax 12,108 12,671
Current maturities of long-term debt -- --
Current maturities capitalized leases 90 280
----------- -----------
TOTAL CURRENT LIABILITIES 314,063 284,286
Long-term debt 60,000 60,000
Capitalized lease obligations 2,428 1,358
Accrued restructuring costs 42,359 43,220
Capitalized lease obligations 23,542 24,798
Long-term debt 420,883 423,335
Accounts payable 196,302 195,898
Accrued expenses 68,102 67,343
----------- -----------
Total Liabilities Subject To Compromise 751,189 754,593
TOTAL LIABILITIES 1,127,680 1,100,237
----------- -----------
Common stock 49,964 49,969
Additional paid-in-capital 6,094 6,133
Deferred compensation (379) (412)
Accumulated other comprehensive loss -- --
Retained (deficit) earnings (244,068) (216,703)
----------- -----------
TOTAL SHAREHOLDERS' (DEFICIT) EQUITY (188,389) (161,014)
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY $ 939,291 $ 939,224
=========== ===========
</TABLE>
Page 8
<PAGE> 9
CHAPTER 11
MONTHLY OPERATING REPORT
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD:JULY 31, 2000 THROUGH AUGUST 27, 2000
SUMMARY OF ACCOUNTS RECEIVABLE
Month Ended: 08/27/00
FORM OPR-3 NOT APPLICABLE
Page 9
<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 31, 2000 THROUGH August 27, 2000
SCHEDULE OF POST PETITION LIABILITIES-ACCOUNTS PAYABLE
Month Ended: 08/27/2000
FORM OPR-4
(Dollars in Thousands)
<TABLE>
<CAPTION>
Total
--------
<S> <C>
Trade Accounts Payable (Merchandise) $ 66,305
Total
--------
Expense & other payables $149,637
</TABLE>
Page 10
<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 31, 2000 THROUGH AUGUST 27, 2000
SCHEDULE OF POST PETITION LIABILITIES
FORM OPR-4
<TABLE>
<CAPTION>
Date Date Total
TAXES PAYABLE Incurred Due Due
------------------------------------------
<S> <C> <C> <C>
Federal income tax ** Various Various 7,843,442
State income tax Various Various (45,452)
----------
SUBTOTAL 7,797,990
----------
Sales/use tax SUBTOTAL Various Various 12,098,172
----------
Personal property tax * Various Various 3,450,744
Real estate taxes * Various Various 11,793,346
Inventory taxes * Various Various -
Gross receipts/bus. licenses * Various Various 45,268
Franchise taxes * Various Various 517,822
----------
SUBTOTAL 15,807,180
----------
----------
TOTAL TAXES PAYABLE 35,703,342
==========
</TABLE>
* liability included in accrued expenses on OPR-2
** tax reserve
Page 11
<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 31, 2000 THROUGH AUGUST 27, 2000
SCHEDULE OF POST PETITION LIABILITIES
FORM OPR-4
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DATE TOTAL DUE
INCURRED DATE DUE (08/27/00 BALANCE)
-----------------------------------------------
<S> <C> <C> <C>
POST PETITION SECURED DEBT
Revolver borrowings 04/14/00 04/14/04 $ 85,923
Facility standby letters of credit 04/14/00 04/14/04 25,901
Facility trade letters of credit 04/14/00 04/14/04 42,168
Term loans 04/14/00 04/14/04 60,000
--------
TOTAL EXTENSIONS OF CREDIT $213,992
========
ACCRUED INTEREST PAYABLE $ 694
========
</TABLE>
Page 12
<PAGE> 13
SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DEBTOR-IN-POSSESSION)
(IN THOUSANDS)
<TABLE>
<CAPTION>
ACTIVITY
JULY 31, 2000
THROUGH
AUGUST 27, 2000
---------------
<S> <C>
Net Sales $ 90,609
Costs of merchandise sold and buying and occupancy expense 79,044
--------
Gross margin after cost of merchandise sold and buying and occupancy expenses 11,565
Selling, General and Administrative Expenses:
Net Employment Expense 20,595
Net Advertising 2,372
Banking and Other Fees 1,274
Real Estate and Other Taxes 1,869
Supplies 788
Communication and Equipment 348
Travel 612
UCC and Other Services (224)
Legal and Professional 340
Sales and Shipping 89
Insurance 491
Miscellaneous 256
Credit Card Services (55)
--------
Total Selling, General and Administrative Expenses 28,754
Other expense/(income), net (840)
Restructuring charge (credit) (694)
Depreciation and amortization 2,975
--------
Earnings (loss) before interest, reorganization items, and income tax (18,630)
Interest expense - debt 2,470
Interest expense - capitalized leases 367
--------
Earnings (loss) before reorganization items, and income tax (21,468)
Reorganization Items:
Legal and Professional 5,810
Miscellaneous fees 198
Close Store Charges (111)
--------
Total Reorganization Items 5,897
Earnings (loss) before income tax (27,365)
Income tax benefit --
Cumulative Effect of Change in Accounting Principles --
--------
Net earnings (loss) $(27,365)
========
</TABLE>
Page 13
