<PAGE> 1
Total number of sequentially numbered pages: 15
----
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
----
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
---- EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED AUGUST 3, 1996
OR
----
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
---- EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______________ TO ________________
Commission file number: 1-12552
THE TALBOTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 41-1111318
---------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
175 Beal Street, Hingham, Massachusetts 02043
------------------------------------------ ------------------------
(Address of principal executive offices) (Zip Code)
(617) 749-7600
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding as of
Class September 13, 1996
----- ------------------
Common Stock, $0.01 par value 33,079,165
1
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INDEX TO FORM 10-Q
Page
----
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
Condensed Consolidated Statements of Earnings for the Thirteen
and Twenty-six Weeks Ended August 3, 1996 and July 29,
1995......................................................... 3
Condensed Consolidated Balance Sheets as of August 3, 1996,
February 3, 1996 and July 29, 1995........................... 4
Condensed Consolidated Statements of Cash Flows for the Twenty-
six Weeks Ended August 3, 1996 and July 29, 1995............. 5
Notes to Condensed Consolidated Financial Statements............. 6-7
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................ 8-12
PART II. OTHER INFORMATION
Item 4: Submission of Matters to a Vote of Security Holders.............. 13
Item 6: Exhibits and Reports on Form 8-K................................. 13
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
THE TALBOTS, INC. AND SUBSIDIARIES
<TABLE>
----------------------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
FOR THE THIRTEEN AND TWENTY-SIX WEEKS ENDED AUGUST 3, 1996 AND JULY 29, 1995
(Amounts in thousands except per share data)
----------------------------------------------------------------------------------------------
<CAPTION>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
--------------------- ----------------------
AUGUST 3, JULY 29, AUGUST 3, JULY 29,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET SALES $232,109 $226,907 $468,296 $457,485
COSTS AND EXPENSES
Cost of sales, buying and occupancy 162,016 154,720 295,371 281,174
Selling, general and administrative 57,931 57,657 125,043 124,972
-------- -------- -------- --------
OPERATING INCOME 12,162 14,530 47,882 51,339
INTEREST EXPENSE, net 1,154 762 2,242 1,542
-------- -------- -------- --------
INCOME BEFORE TAXES 11,008 13,768 45,640 49,797
INCOME TAXES 4,403 5,507 18,256 19,919
-------- -------- -------- --------
NET INCOME $ 6,605 $ 8,261 $ 27,384 $ 29,878
======== ======== ======== ========
NET INCOME PER SHARE $ 0.20 $ 0.24 $ 0.82 $ 0.86
======== ======== ======== ========
CASH DIVIDENDS PER SHARE $ 0.09 $ 0.07 $ 0.16 $ 0.12
======== ======== ======== ========
WEIGHTED AVERAGE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING 33,191 34,558 33,339 34,724
======== ======== ======== ========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
THE TALBOTS, INC. AND SUBSIDIARIES
<TABLE>
-----------------------------------------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
AUGUST 3, 1996, FEBRUARY 3, 1996 AND JULY 29, 1995
(Dollar amounts in thousands except per share data)
-----------------------------------------------------------------------------------------------------------------
<CAPTION>
AUGUST 3, FEBRUARY 3, JULY 29,
1996 1996 1995
-------- -------- --------
<S> <C> <C> <C>
ASSETS
------
CURRENT ASSETS:
---------------
Cash and cash equivalents $ 10,799 $ 14,865 $ 9,568
Customer accounts receivable, net 80,553 73,758 64,111
Merchandise inventories 149,828 143,526 138,017
Deferred catalog costs 11,273 12,757 10,663
Due from affiliates 5,824 4,008 2,308
Deferred income taxes 2,955 3,121 3,586
Prepaid and other current assets 24,026 20,791 21,691
Prepaid income taxes 9,972 2,459 6,495
-------- -------- --------
TOTAL CURRENT ASSETS 295,230 275,285 256,439
PROPERTY AND EQUIPMENT - net 165,222 154,160 146,412
GOODWILL - net 42,905 43,577 44,249
INTANGIBLES - net 2,989 4,189 6,020
TRADEMARKS - net 88,997 90,189 91,381
DEFERRED INCOME TAXES 11,839 4,711 6,206
-------- -------- --------
TOTAL ASSETS $607,182 $572,111 $550,707
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
--------------------
Notes payable to banks $ 50,000 $ 24,000 $ 16,000
Accounts payable 48,510 44,331 51,447
Accrued liabilities 42,704 45,593 40,551
-------- -------- --------
TOTAL CURRENT LIABILITIES 141,214 113,924 107,998
LONG-TERM DEBT 50,000 50,000 35,000
DEFERRED RENT UNDER LEASE COMMITMENTS 11,140 10,148 9,812
STOCKHOLDERS' EQUITY:
---------------------
Common stock, $0.01 par value; 40,000,000 authorized; 34,926,592 shares,
34,910,826 shares and 34,909,494 shares issued, respectively, and
33,077,665 shares, 33,637,826 shares and 34,486,344
shares outstanding, respectively 349 349 349
Additional paid-in capital 286,837 286,472 286,438
Retained earnings 177,144 155,092 127,151
Cumulative foreign currency translation adjustment (1,138) (1,337) 163
Deferred pension cost (470) (470) (499)
Restricted stock award (1,483) (1,801) (2,120)
Treasury stock, at cost; 1,848,927 shares, 1,273,000 shares and (56,411) (40,266) (13,585)
423,150 shares respectively
-------- -------- --------
TOTAL STOCKHOLDERS' EQUITY 404,828 398,039 397,897
-------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $607,182 $572,111 $550,707
======== ======== ========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
THE TALBOTS, INC. AND SUBSIDIARIES
<TABLE>
--------------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE TWENTY-SIX WEEKS ENDED AUGUST 3, 1996 AND JULY 29, 1995
(Dollar amounts in thousands)
--------------------------------------------------------------------------------------
<CAPTION>
TWENTY-SIX WEEKS ENDED
------------------------
AUGUST 3, JULY 29,
1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
-------------------------------------
Net income $ 27,384 $ 29,878
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 16,362 16,233
Deferred rent 992 791
Amortization of restricted stock award 319 318
Loss on disposal of property and equipment 491 355
Deferred income taxes (6,961) (1,443)
Changes in current assets and liabilities:
Customer accounts receivable (6,789) 1,193
Merchandise inventories (6,284) (14,336)
Deferred catalog costs 1,484 (1,894)
Due from affiliates (1,816) 263
Prepaid income taxes (7,513) (5,808)
Prepaid and other current assets (2,613) (4,287)
Accounts payable 4,173 (6,380)
Accrued liabilities (3,300) (4,161)
Income taxes payable (448)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 15,929 10,274
CASH FLOWS FROM INVESTING ACTIVITIES:
-------------------------------------
Additions to property and equipment (24,824) (18,028)
Proceeds from disposal of property and equipment 8
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (24,816) (18,028)
CASH FLOWS FROM FINANCING ACTIVITIES:
-------------------------------------
Borrowings under notes payable to banks 26,000 16,000
Proceeds from options exercised, including tax benefit 307 29
Cash dividend (5,331) (4,165)
Purchase of treasury stock (16,145) (13,585)
-------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 4,831 (1,721)
EFFECT OF EXCHANGE RATE CHANGES ON CASH (10) 50
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS (4,066) (9,425)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 14,865 18,993
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 10,799 $ 9,568
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE> 6
THE TALBOTS, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
1. OPINION OF MANAGEMENT
With respect to the unaudited condensed consolidated financial
statements set forth herein, it is the opinion of management of The
Talbots, Inc. and its subsidiaries (hereinafter referred to as the
"Company") that all adjustments, which consist only of normal recurring
adjustments, necessary to present a fair statement of the results for such
interim periods have been included. These financial statements should be
read in conjunction with the Company's audited Consolidated Financial
Statements for the year ended February 3, 1996, included in the Company's
Annual Report on Form 10-K filed with the Securities and Exchange
Commission. All significant intercompany accounts and transactions have
been eliminated.
The February 3, 1996, Condensed Consolidated Balance Sheet amounts
have been derived from the Company's audited consolidated balance sheet
accounts.
Certain reclassifications have been made to the February 3, 1996 and
the July 29, 1995 financial statements to conform with the August 3, 1996
presentation.
2. NEW ACCOUNTING STANDARDS
In March 1995 the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of." The Company adopted SFAS No. 121 during the first fiscal
quarter of 1996. The implementation of SFAS No. 121 had no impact on the
financial statements for the fiscal period ended August 3, 1996.
In October 1995, the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation," which was effective for the Company beginning
February 4, 1996. SFAS No. 123 requires expanded disclosures of stock-based
compensation arrangements with employees and encourages but does not
require compensation costs to be measured based upon the fair value of the
equity instrument awarded. Companies are permitted, however, to continue to
apply Accounting Principles Board ("APB") Opinion No. 25, which recognizes
compensation cost based on the intrinsic value of the equity instrument
awarded. The Company will continue to apply APB Opinion No. 25 to its stock
based compensation awards to employees and will disclose the required pro
forma effect on net income and earnings per share in the Company's year
ended February 1, 1997 financial statements.
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<PAGE> 7
3. SEASONAL VARIATIONS IN BUSINESS
Due to the seasonal variations in the retail industry, the results of
operations for any interim period are not necessarily indicative of the
results expected for the full fiscal year.
4. FEDERAL AND STATE INCOME TAXES
The Company has provided for income taxes based on the estimated
annual effective rate method.
7
<PAGE> 8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the condensed consolidated financial statements of the Company and the notes
thereto appearing elsewhere in this document.
RESULTS OF OPERATIONS
<TABLE>
The following table sets forth, for the periods indicated, the percentage
relationship to net sales of certain items in the Company's condensed
consolidated statements of earnings for the fiscal periods shown below:
=========================================================================================
<CAPTION>
Thirteen Twenty-six
Weeks Ended Weeks Ended
- -----------------------------------------------------------------------------------------
August 3, July 29, August 3, July 29,
1996 1995 1996 1995
(unaudited) (unaudited) (unaudited) (unaudited)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
- -----------------------------------------------------------------------------------------
Cost of sales, buying and 69.8% 68.2% 63.1% 61.5%
occupancy expenses
- -----------------------------------------------------------------------------------------
Selling, general and 25.0% 25.4% 26.7% 27.3%
administrative expenses
- -----------------------------------------------------------------------------------------
Operating income 5.2% 6.4% 10.2% 11.2%
- -----------------------------------------------------------------------------------------
Interest expense, net 0.5% 0.3% 0.5% 0.3%
- -----------------------------------------------------------------------------------------
Income before income taxes 4.7% 6.1% 9.7% 10.9%
- -----------------------------------------------------------------------------------------
Income taxes 1.9% 2.4% 3.9% 4.4%
- -----------------------------------------------------------------------------------------
Net income 2.8% 3.6% 5.8% 6.5%
=========================================================================================
</TABLE>
THE 13 WEEKS ENDED AUGUST 3, 1996 COMPARED TO THE 13 WEEKS ENDED JULY 29, 1995
(SECOND QUARTER)
Net sales in the second quarter of 1996 increased by $5.2 million to $232.1
million, or 2.3% over the second quarter of 1995. Operating income was $12.2
million in the second quarter of 1996 compared to $14.5 million in the second
quarter of 1995, a decrease of 15.9%.
Retail store sales in the second quarter of 1996 increased by $6.2 million,
to $199.3
8
<PAGE> 9
million, or 3.2%, over the second quarter of 1995. The percentage of the
Company's net sales derived from its retail stores increased to 85.9% in the
second quarter of 1996 from 85.1% in the second quarter of 1995. The increase in
retail store sales as a percentage of the Company's total net sales was due to
the growth in retail store sales and the decline in catalog sales. The increase
in retail store sales was attributable to the 15 new stores opened in the second
quarter of 1996, the 21 new stores opened in the first quarter of 1996 and the
42 non-comparable stores that opened in the last 27 weeks of 1995, and partially
offset by a decline of $7.3 million in comparable stores sales, or 4.9%, over
the previous year for the same period. Comparable stores are those which were
open for at least one full fiscal year. When a new Talbots Petites store or a
new Talbots Accessories & Shoes store is opened adjacent to or in close
proximity to an existing Misses store which would qualify as a comparable store,
such Misses store is excluded from the computation of comparable store sales for
a period of 13 months so that the performance of the full Misses assortment may
be properly compared.
Catalog sales in the second quarter of 1996 decreased by $1.0 million, to
$32.8 million, or 3.0% compared to the second quarter of 1995. The percentage of
the Company's net sales derived from its catalogs decreased to 14.1% in the
second quarter of 1996 from 14.9% in the second quarter of 1995 due to the
growth in retail store sales. The decrease in second quarter sales was largely
due to a planned reduction in catalog circulation intended to offset the
increased cost of paper used to print the catalogs. The number of catalogs
circulated during the quarter decreased 22% compared to the same period a year
ago and this reduction capped catalog production costs at a level comparable to
the same period in 1995.
Because the Company sells a wide range of products which by their nature
are subject to constantly changing business strategies and competitive
positioning, it is not possible to attribute increases or decreases in retail
sales or catalog sales to specific changes in prices, changes in volume or
changes in product mix.
Cost of sales, buying and occupancy expenses increased as a percentage of
net sales to 69.8% in the second quarter of 1996 from 68.2% in the second
quarter of 1995 due primarily to occupancy costs rising at greater rate than
sales. Selling, general and administrative expenses decreased as a percentage of
net sales to 25.0% in the second quarter of 1996 from 25.4% in the second
quarter of 1995. This improvement was a result of the Company's continued
efforts to reduce certain corporate overhead costs as a percent to sales.
The Company expected increases in the cost of paper to affect its catalog
business in 1995 and implemented a strategy which continues to help offset the
effect of such cost increases. The plan included a reduction in the number of
catalogs mailed to less likely to buy customers, which reduced expenses. Also,
the plan included adding pages to individual catalogs, which increased the
number of pages that reach our best customers.
Interest expense, net, increased by $0.4 million, to $1.2 million, in the
second quarter of 1996 from the second quarter of 1995 due to higher average
debt levels, partially offset by lower
9
<PAGE> 10
interest rates. The average total debt level, including short-term and long-term
bank borrowings, was $104.9 million in the second quarter of 1996 compared to
$56.1 million in the second quarter of 1995. The increase in average total debt
is due largely to the funding of the stock repurchase program. The average
interest rate, including interest on short-term and long-term bank borrowings,
was 6.0% in the second quarter of 1996 compared to 7.2% in the second quarter of
1995.
THE 26 WEEKS ENDED AUGUST 3, 1996 COMPARED TO THE 26 WEEKS ENDED JULY 29, 1995
Net sales in the first 26 weeks of 1996 increased by $10.8 million to
$468.3 million, or 2.4%, over the first 26 weeks of 1995. Operating income was
$47.9 million in the first 26 weeks of 1996 compared to $51.3 million in the
first 26 weeks of 1995, a decrease of 6.6%.
Retail store sales in the first 26 weeks of 1996 increased by $15.1
million, to $387.4 million, or 4.1%, over the first 26 weeks of 1995. The
percentage of the Company's net sales derived from its retail stores increased
to 82.7% in the first 26 weeks of 1996 from 81.4% in the first 26 weeks of 1995.
The increase in retail store sales as a percentage of the Company's total net
sales was due to the growth in retail store sales and the decline in catalog
sales. The increase in retail store sales was attributable to the 36 new stores
opened in the first 26 weeks of 1996 and the 42 non-comparable stores that
opened in the last 27 weeks of 1995, and partially offset by a decrease of $14.2
million in comparable stores sales, or 4.7%, over the comparable 26 week period
in the previous year.
Catalog sales in the first 26 weeks of 1996 decreased by $4.3 million, to
$80.9 million, or 5.0% compared to the first 26 weeks of 1995. This decrease was
largely due to a planned reduction in catalog circulation intended to offset the
increased cost of paper used to print the catalogs. The number of catalogs
circulated during the period decreased 18% compared to the same period a year
ago and this reduction capped catalog production costs at a level comparable to
the same period in 1995.
Cost of sales, buying and occupancy expenses increased as a percentage of
net sales to 63.1% in the first 26 weeks of 1996 from 61.5% in the first 26
weeks of 1995. The increase in cost of sales, buying and occupancy as a
percentage of sales is due primarily to higher occupancy costs as a percent of
sales. Selling, general and administrative expenses decreased as a percentage of
net sales to 26.7% in the first 26 weeks of 1996 from 27.3% in the first 26
weeks of 1995. Nearly half of this improvement was in catalog direct expenses,
principally catalog production costs. The balance of the improvement was in
central expenses, which was a result of the Company's continued efforts to
reduce certain corporate overhead costs as a percent to sales.
Interest expense, net, increased by $0.7 million, to $2.2 million for the
first 26 weeks of 1996 from the first 26 weeks of 1995 due to higher average
debt levels, partially offset by lower interest rates. The average total debt
level, including short-term and long-term bank borrowings,
10
<PAGE> 11
was $99.2 million in the first 26 weeks of 1996 compared to $57.0 million in the
first 26 weeks of 1995. The average interest rate, including interest on
short-term and long-term bank borrowings, was 6.0% in the first 26 weeks of 1996
compared to 7.2% in the first 26 weeks of 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of working capital are cash flows from
operating activities and a line-of-credit facility from five banks, with maximum
available short-term borrowings of $125.0 million. At August 3, 1996 and July
29, 1995, the Company had $50.0 million and $16.0 million of outstanding
borrowings under this line-of-credit facility, respectively. Additionally, the
Company has a revolving credit facility with maximum available borrowings of
$50.0 million. At August 3, 1996 and July 29, 1995, and throughout the
respective 26 weeks then ended, the Company's borrowings under the revolving
credit facility were $50.0 and $35.0 million, respectively. The Company's
working capital needs are typically at their lowest in the spring and peak
during the fall selling season.
During the first 26 weeks of 1996 cash decreased $4.1 million compared to a
decrease of $9.4 million during the first 26 weeks of 1995. The major changes
were lower net income, an increase in customer accounts receivable following a
reduction in the minimum payment terms on the Company's charge card, an increase
in capital spending, an increase in borrowings and an increase in the purchase
of treasury stock pursuant to the Company's stock repurchase plan. The extended
stock repurchase plan authorizes the Company to purchase up to $40 million of
its common stock from time to time over a two year period. During the first 26
weeks of 1996, the Company repurchased 575,927 shares of its common stock at an
average price of approximately $28 per share.
Capital expenditures for the first 26 weeks of 1996 were $24.8 million. The
Company used approximately $23.2 million for opening 36 new stores and expanding
and renovating existing stores. For the remainder of the fiscal year, the
Company currently anticipates approximately $25.2 million of additional capital
spending, primarily for the opening of new stores and expanding and renovating
existing stores. The actual amount of such capital expenditures will depend on
the number and type of stores being opened, expanded and renovated, and the
schedule of such activity during the remainder of fiscal 1996.
The Company's primary ongoing cash requirements will be to finance working
capital buildups during peak selling seasons, to fund new stores and expansions
and renovations of existing stores, to fund debt service payments for debt that
has not been refinanced, to fund the stock repurchase plan and to pay dividends
that may be declared from time to time. The Company anticipates that cash from
operating activities and from its borrowing facilities will be sufficient to
meet these current requirements.
The payment of dividends and the amount of any dividends will be determined
by the
11
<PAGE> 12
Board of Directors and will depend on many factors, including earnings,
operations, financial condition, capital requirements and general business
outlook. On August 7, 1996, the Company announced that its Board of Directors
approved a quarterly dividend of $.09 per share payable on September 16, 1996 to
shareholders of record as of September 3, 1996.
12
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 23, 1996, the Company held its Annual Meeting of
Shareholders (the "Annual Meeting"). At the Annual Meeting, the
following persons were elected to serve as directors of the Company:
Takuya Okada, Arnold B. Zetcher, Eiji Akiyama, Clark J. Hinkley,
Masaharu Isogai, Elizabeth T. Kennan, Motoya Okada and Mark H. Willes.
There are no other directors of the Company.
At the Annual Meeting, no fewer than 31,411,628 votes were cast
in favor of, and no more than 74,303 were withheld with respect to,
the proposal to elect the above-listed persons as directors of the
Company. See Schedule of Votes attached hereto and made a part hereof
for a separate tabulation with respect to each nominee for office.
Also at the Annual Meeting, on a proposal to approve the adoption
of the 1995 Directors Stock Option Plan, 30,368,400 votes were cast in
favor of such plan, 1,078,774 votes were cast against and 38,755 votes
abstained. The Directors Stock Option Plan provides for awards of
nonqualified stock options to members of the Company's Board of
Directors who are not employees of the Company.
Also at the Annual Meeting, on a proposal to ratify the
appointment of Deloitte & Touche LLP to serve as independent auditors
of the Company for the 1996 fiscal year, 31,461,314 votes were cast in
favor of such proposal, 14,244 votes were cast against and 10,372
votes abstained.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(B) REPORTS ON FORM 8-K
No Reports on Form 8-K were filed during the quarter for
which this Report on Form 10-Q is filed.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE TALBOTS, INC.
Dated: September 13, 1996 By: /s/ Edward L. Larsen
----------------------------------
Edward L. Larsen
Duly authorized officer and Senior
Vice President of Finance, Chief
Financial Officer, and Treasurer
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-01-1997
<PERIOD-START> MAY-05-1996
<PERIOD-END> AUG-03-1996
<EXCHANGE-RATE> 1
<CASH> 10,799
<SECURITIES> 0
<RECEIVABLES> 80,553
<ALLOWANCES> 0
<INVENTORY> 149,828
<CURRENT-ASSETS> 295,230
<PP&E> 165,222
<DEPRECIATION> 0
<TOTAL-ASSETS> 607,182
<CURRENT-LIABILITIES> 141,214
<BONDS> 0
<COMMON> 349
0
0
<OTHER-SE> 404,479
<TOTAL-LIABILITY-AND-EQUITY> 607,182
<SALES> 468,296
<TOTAL-REVENUES> 468,296
<CGS> 295,371
<TOTAL-COSTS> 420,414
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,242
<INCOME-PRETAX> 45,640
<INCOME-TAX> 18,256
<INCOME-CONTINUING> 27,384
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,384
<EPS-PRIMARY> .82
<EPS-DILUTED> 0
</TABLE>
<PAGE> 1
Exhibit 99
<TABLE>
SCHEDULE OF VOTES
-----------------
<CAPTION>
Total Vote For Total Vote Withheld
Each Director From Each Director
------------- ------------------
<S> <C> <C>
Takuya Okada 31,412,458 73,473
Arnold B. Zetcher 31,411,832 74,099
Eiji Akiyama 31,412,158 73,773
Clark J. Hinkley 31,411,632 74,299
Masaharu Isogai 31,423,778 62,153
Elizabeth T. Kennan 31,424,429 61,502
Motoya Okada 31,411,628 74,303
Mark H. Willes 31,425,999 59,931
</TABLE>
15
