<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 July 30, 2000
-------------
COMES NOW, SERVICE MERCHANDISE COMPANY, INC.
---------------------------------
Debtor-In-Possession, and hereby submits its Monthly Operating Report for the
period commencing July 3, 2000 and ending July 30, 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: August 21, 2000
---------------------
DEBTOR-IN-POSSESSION
By: /s/ THOMAS L. GARRETT, JR.
-----------------------------------------------------
Name and Title: THOMAS L. GARRETT, JR., SENIOR VICE PRESIDENT & CFO
-----------------------------------------------------
Address: 7100 SERVICE MERCHANDISE DRIVE
-----------------------------------------------------
BRENTWOOD, TENNESSEE 37027
-----------------------------------------------------
Telephone No: (615) 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: JULY 3, 2000 THROUGH JULY 30, 2000
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 32,037.33 4,423.32 13,347.19
C. STEVEN MOORE SENIOR VICE PRESIDENT, CHIEF ADMINISTRATIVE OFFICER,
GENERAL COUNSEL AND SECRETARY 27,752.86 18,603.87 2,161.67 6,736.21
THOMAS L. GARRETT, JR. SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER 25,089.38 17,306.12 1,800.08 5,663.27
CHARLES K. SEPTER PRESIDENT AND CHIEF OPERATING OFFICER 38,604.81 24,827.37 3,345.80 10,096.23
ROBERT J. PINDRED VICE PRESIDENT AND TREASURER 11,558.88 8,593.53 609.31 1,681.43
JOE M. ELLIOTT VICE PRESIDENT, PROPERTY ADMINISTRATION 11,597.13 7,797.24 605.73 1,836.23
KARREN PRASIFKA ASSISTANT GENERAL COUNSEL VICE PRESIDENT 13,120.61 8,959.32 1,007.35 3,038.41
BILLY STEWART ASSISTANT TAX VICE PRESIDENT, TAX 7,706.27 5,811.76 306.60 923.92
KENNETH A. CONWAY VICE PRESIDENT AND CONTROLLER 12,335.22 8,781.47 497.17 1,786.60
</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 3, 2000 THROUGH July 30, 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
Liability Chubb Insurance Co $10 Million 81278901A 03/01/01 $130,845 03/01/01
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> 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 3, 2000 THROUGH JULY 30, 2000
3. BANK ACCOUNTS
TOTAL CASH AND CASH EQUIVALENTS
<TABLE>
<S> <C>
CASH IN STORES AND HOME OFFICE
------------------------------
HOME OFFICE $ 8,200
RETAIL SAFE FUNDS 1,978,636
CORPORATE ACCOUNTS 2,185,437
------------------
STORE DEPOSITORY ACCOUNTS
-------------------------
FIRST TENNESSEE 686,147
SOCIETY NATIONAL BANK 460,131
BANK OF BOSTON 437,083
BANK OF BOSTON CONNECTICUT 185,794
FIRST UNION 2,347,092
HARRIS TRUST 383,262
BANK ONE LOUISIANA 548,322
ABN - AMRO BANK 197,354
COMERICA BANK 215,271
AM SOUTH 220,034
BANK OF AMERICA CALIFORNIA 84,238
FIRST AMERICAN NATIONAL BANK 176,427
HERITAGE BANK OF NEVADA --
BANK OF OKLAHOMA 167,467
CHASE BANK OF TEXAS 817,893
SINGLE STORE DEPOSITORY ACCOUNTS 501,244
WELLS FARGO BANK 77,932
BANK OF AMERICA 413,966
BANK ONE, IN 239,124
PNC BANK 741,220
CREDIT CARD CASH ACCOUNTS (SALES PROCESSED BY CREDIT CARD COMPANY) 11,458,099
------------------------------------------------------------------
OTHER DEPOSITORY ACCOUNTS
-------------------------
SERVICE MERCHANDISE - MUSCULAR DYSTROPHY ASSOC. 74,875
OTHER CASH ACCOUNTS 1,687,695
-----------
TOTAL CASH PER GENERAL LEDGER $26,292,942
===========
</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: JULY 3, 2000 THROUGH JULY 30, 2000
RECEIPTS AND DISBURSEMENTS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ACTUAL ACTUAL ACTUAL ACTUAL TOTAL
Monday 07/03/00 07/10/00 07/17/00 07/24/00 07/03/00
Sunday 07/09/00 07/16/00 07/23/00 07/30/00 07/30/00
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Receipts:
Sales receipts $26,850 $28,919 $ 28,030 $ 25,397 $109,196
Miscellaneous receipts -- 959 -- -- 959
--------------------------------------------------------------
Total available collections 26,850 29,878 28,030 25,397 110,155
Disbursements:
Merchandise disbursements 8,131 11,215 11,360 12,154 42,860
Non-merchandise disbursements 14,601 14,843 20,246 13,663 63,353
--------------------------------------------------------------
Total disbursements: 22,732 26,058 31,606 25,817 106,213
--------------------------------------------------------------
Net receipts/(disbursements) $ 4,118 $ 3,820 $ (3,576) $ (420) $ 3,942
==============================================================
</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: JULY 3, 2000 THROUGH JULY 30, 2000
ROLLING REVISED CASH FLOW FORECAST
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Actual Forecast Forecast Forecast
08/06/00 08/27/00 10/01/00 10/29/00
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Ending total revolver balance $ 80,347 $112,105 $175,372 $217,574
Term loan 60,000 60,000 60,000 60,000
Standby letters of credit 27,323 25,892 25,851 25,810
Trade letters of credit 36,135 31,118 28,386 18,153
-------- -------- -------- --------
Total extensions of credit 203,805 229,115 289,609 321,537
Borrowing base 410,347 423,711 461,061 487,814
-------- -------- -------- --------
Availability $206,542 $194,596 $171,452 $166,277
======== ======== ======== ========
</TABLE>
<PAGE> 7
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 3, 2000 THROUGH July 30, 2000
4. Payments to Professionals July 3, 2000 through July 30, 2000
<TABLE>
<CAPTION>
Vendor # Vendor Name Check Amt. Check Date Check #
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
100906 Peter J. Solomon $75,000.00 07/05/00 B0022205
101232 E & Y Restructuring, LLC $98,948.00 07/05/00 B0022206
71217 Bass, Berry & Sims $59,411.93 07/05/00 B0022208
79108 Ernst & Young, LLP $12,027.00 07/05/00 B0022209
98378 Skadden, Arps, Slate, Meagher & Flom $421,665.00 07/05/00 B0022211
99104 Jay Alix & Associates $109,657.24 07/05/00 B0022212
99391 Otterbourg, Steindler, Houston & Rosen, PC $95,073.53 07/05/00 B0022213
99454 Harwell, Howard, Hyne, Gabbert & Manner, PC $23,106.21 07/05/00 B0022214
86237 Brusniak, Clement, Harrison & McCool, PC $185.00 07/14/00 50009316
101625 D. G. Hart Associates, Inc. $78,500.20 07/17/00 B0022275
98378 Skadden, Arps, Slate, Meagher & Flom $674,128.00 07/17/00 B0022277
99104 Jay Alix & Associates $176,608.86 07/17/00 B0022278
94414 Keen Realty Consultants, Inc. $5,545.56 07/18/00 50009590
96684 Jeffrey S. Sherbow, PC $5,000.00 07/18/00 50009593
99459 Robert L. Berger $38,679.07 07/25/00 B0022383
101730 CBIZ Property Tax Solutions, Inc. $4,743.75 07/28/00 50010955
101730 CBIZ Property Tax Solutions, Inc. $12,887.50 07/28/00 50010956
101232 E & Y Restructuring, LLC $95,128.00 07/28/00 B0022396
101993 Rothschild, Inc. $109,312.20 07/28/00 B0022397
71217 Bass, Berry & Sims $92,368.39 07/28/00 B0022398
99391 Otterbourg, Steindler, Houston & Rosen, PC $110,446.44 07/28/00 B0022400
99444 Sitrick & Company $68,959.95 07/28/00 B0022401
99454 Harwell, Howard, Hyne, Gabbert & Manner, PC $54,482.97 07/28/00 B0022402
</TABLE>
<PAGE> 8
SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DEBTOR-IN-POSSESSION)
(IN THOUSANDS)
<TABLE>
<CAPTION>
JULY 30, JULY 2,
2000 2000
----------- -----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 26,293 $ 29,719
Accounts receivable 7,664 8,268
Inventories 476,090 513,592
Prepaid expenses and other assets 12,829 16,968
----------- -----------
TOTAL CURRENT ASSETS 522,875 568,547
----------- -----------
PROPERTY AND EQUIPMENT
Owned assets, net of accumulated depreciation 352,438 348,190
Capitalized leases, net of accumulated amortization 13,359 13,410
----------- -----------
TOTAL PROPERTY AND EQUIPMENT 365,797 361,599
----------- -----------
Other assets and deferred charges 50,552 51,836
----------- -----------
TOTAL ASSETS $ 939,224 $ 981,982
=========== ===========
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Liabilities Not Subject To Compromise
Current Liabilities:
Notes payable to banks $ 72,167 $ 76,192
Accounts payable 43,745 54,753
Accrued expenses 155,423 153,338
State & local sales tax 12,671 14,985
Current maturities of long-term debt -- --
Current maturities capitalized leases 280 305
----------- -----------
TOTAL CURRENT LIABILITIES 284,286 299,573
Long-Term Liabilities:
Long-term debt 60,000 60,000
Capitalized lease obligations 1,358 1,639
Liabilities Subject To Compromise:
Accrued restructuring costs 43,220 43,337
Capitalized lease obligations 24,798 24,798
Long-term debt 423,335 424,003
Accounts payable 195,898 195,538
Accrued expenses 67,343 66,609
----------- -----------
Total Liabilities Subject To Compromise 754,593 754,285
TOTAL LIABILITIES 1,100,237 1,115,497
----------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' (DEFICIT) EQUITY
Common stock 49,969 49,979
Additional paid-in-capital 6,133 6,211
Deferred compensation (412) (467)
Accumulated other comprehensive loss -- --
Retained (deficit) earnings (216,703) (189,238)
----------- -----------
TOTAL SHAREHOLDERS' (DEFICIT) EQUITY (161,013) (133,515)
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY $ 939,224 $ 981,982
=========== ===========
</TABLE>
<PAGE> 9
CHAPTER 11
MONTHLY OPERATING REPORT
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD:JULY 3, 2000 THROUGH JULY 30, 2000
SUMMARY OF ACCOUNTS RECEIVABLE
Month Ended: 07/30/00
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: July 2, 2000 THROUGH July 30, 2000
SCHEDULE OF POST PETITION LIABILITIES-ACCOUNTS PAYABLE
Month Ended: 07/30/2000
FORM OPR-4
<TABLE>
<CAPTION>
Total
--------
<S> <C>
Trade Accounts Payable (Merchandise) $ 43,745
Total
--------
Expense & other payables $155,423
</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: JULY 3, 2000 THROUGH JULY 30, 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 12,670,868
------------
Personal property tax * Various Various 3,188,917
Real estate taxes * Various Various 11,571,729
Inventory taxes * Various Various -
Gross receipts/bus. licenses * Various Various 142,470
Franchise taxes * Various Various 459,836
------------
SUBTOTAL 15,362,952
------------
------------
TOTAL TAXES PAYABLE 35,831,810
============
</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: JULY 3, 2000 THROUGH JULY 30, 2000
SCHEDULE OF POST PETITION LIABILITIES
FORM OPR-4
<TABLE>
<CAPTION>
(DOLLARS IN THOUSANDS)
DATE TOTAL DUE
INCURRED DATE DUE (7/30/00 BALANCE)
---------------------------------------------
<S> <C> <C> <C>
POST PETITION SECURED DEBT
Revolver borrowings 04/14/00 04/14/04 $ 72,168
Facility standby letters of credit 04/14/00 04/14/04 27,323
Facility trade letters of credit 04/14/00 04/14/04 30,639
Term loans 04/14/00 04/14/04 60,000
--------
TOTAL EXTENSIONS OF CREDIT $190,130
========
ACCRUED INTEREST PAYABLE $ 1,022
========
</TABLE>
<PAGE> 13
SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DEBTOR-IN-POSSESSION)
(IN THOUSANDS)
<TABLE>
<CAPTION>
ACTIVITY
JULY 2, 2000
THROUGH
JULY 30, 2000
-------------
<S> <C>
Net Sales $ 100,587
Costs of merchandise sold and buying and occupancy expense 86,950
---------
Gross margin after cost of merchandise sold and buying and occupancy expenses 13,637
Selling, General and Administrative Expenses:
Net Employment Expense 23,004
Net Advertising 2,441
Banking and Other Fees 1,339
Real Estate and Other Taxes 1,847
Supplies 702
Communication and Equipment 391
Travel 508
UCC and Other Services (547)
Legal and Professional 158
Sales and Shipping 232
Insurance 286
Miscellaneous 137
Credit Card Services (51)
---------
Total Selling, General and Administrative Expenses 30,450
Other expense/(income), net (669)
Restructuring charge (credit) (83)
Depreciation and amortization 3,009
---------
Earnings (loss) before interest, reorganization items, and income tax (19,070)
Interest expense - debt 2,415
Interest expense - capitalized leases 278
---------
Earnings (loss) before reorganization items, and income tax (21,762)
Reorganization Items:
Legal and Professional 5,645
Miscellaneous fees 198
Close Store Charges (140)
---------
Total Reorganization Items 5,703
Earnings (loss) before income tax (27,465)
Income tax benefit --
Cumulative Effect of Change in Accounting Principles --
---------
Net earnings (loss) $ (27,465)
=========
</TABLE>
