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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-KA
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED February 1, 1997
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE NUMBER 1-12552
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THE TALBOTS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 41-1111318
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
175 Beal Street, Hingham, Massachusetts 02043
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (617)749-7600
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
Common Stock New York Stock Exchange
$0.01 Par Value
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None.
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS TO BE
FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE
PRECEDING 12 MONTHS AND (2) HAS BEEN SUBJECT TO THE FILING REQUIREMENTS FOR THE
PAST 90 DAYS. YES X NO
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INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. [X]
THE APPROXIMATE AGGREGATE MARKET VALUE OF THE REGISTRANT'S COMMON STOCK HELD BY
NON-AFFILIATES (FOR THIS PURPOSE, DEEMED TO REFER TO ALL PERSONS AND ENTITIES
OTHER THAN EXECUTIVE OFFICERS, DIRECTORS AND 10% OR MORE SHAREHOLDERS) BASED ON
THE CLOSING SALE PRICE ON THE NEW YORK STOCK EXCHANGE COMPOSITE TAPE ON APRIL 3,
1997 WAS APPROXIMATELY $348 MILLION.
NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S COMMON STOCK AS OF APRIL 3,
1997: 32,917,757
DOCUMENTS INCORPORATED BY REFERENCE:
PORTIONS OF THE REGISTRANT'S ANNUAL REPORT TO SHAREHOLDERS FOR THE FISCAL YEAR
ENDED FEBRUARY 1, 1997 ARE INCORPORATED BY REFERENCE INTO PART II, AND PORTIONS
OF THE REGISTRANT'S PROXY STATEMENT FOR THE 1997 ANNUAL MEETING OF SHAREHOLDERS
ARE INCORPORATED BY REFERENCE INTO PART III.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Dated: May 13, 1997
THE TALBOTS, INC.
(Registrant)
By /s/ Edward Larsen
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Edward L. Larsen
Senior Vice President, Finance, and Chief
Financial Officer and Treasurer (Principal
Financial and Accounting Officer)
<PAGE> 3
10.42 Employment Agreement, dated as of October 22, 1993, between Arnold
B. Zetcher and Talbots.(1) (as amended by Amendment No. 1 dated May
11, 1994).(4)
10.43 Amendment No. 1 to The Talbots, Inc. Supplemental Retirement Plan,
dated as of November 18, 1993.(2)
10.44 Amendment No. 1 to The Talbots, Inc. Supplemental Savings Plan,
dated as of November 18, 1993.(2)
10.45 Amendment No. 1 to The Talbots, Inc. Deferred Compensation Plan,
dated as of November 18, 1993.(2)
10.46 Employment Agreement, dated as of October 22, 1993, between Clark
Hinkley and The Talbots, Inc.(2) (as amended by Amendment No. 1
dated May 11, 1994).(4)
10.47 Change in Control Agreements, dated as of November 11, 1993,
between Talbots and each of J. Bruce Ash, Edward Larsen, Michele
Mandell, Ronald Ramseyer, Richard T. O'Connell, Bruce Soderholm,
Stuart Stolper, Jacqueline Corso, Paul Kastner, Sandy Katz, Steven
Siegler and Lucy Main Tweet.(2)
10.48 Change in Control Agreements, dated August 22, 1994, between
Talbots and each of Judith O'Keefe and Bruce Prescott.(4)
(11) Statement re Computation of Per Share Earnings
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11.1 Computation of weighted average number of shares outstanding used
in determining primary and fully diluted earnings per share.
(13) Annual Report to Security Holders
---------------------------------
13.1 Excerpts from the 1996 Annual Report of Talbots incorporated by
reference.
(21) Subsidiaries.
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21.1 List of subsidiaries of Talbots.(1)
(23) Consents of Experts and Counsel.
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23.1 Independent Auditors' Consent of Deloitte & Touche LLP.
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[TALBOTS LOGO]
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<TABLE>
CONSOLIDATED BALANCE SHEETS
Dollar amounts in thousands except per share data
<CAPTION>
February 1, February 3,
1997 1996
-------------------------
<S> <C> <C>
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 12,348 $ 14,865
Customer accounts receivable - net 97,274 73,758
Merchandise inventories 161,230 143,526
Deferred catalog costs 9,566 12,757
Due from affiliates 4,978 4,008
Deferred income taxes 3,319 3,121
Prepaid and other current assets 23,088 23,250
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TOTAL CURRENT ASSETS 311,803 275,285
PROPERTY AND EQUIPMENT - net 170,805 154,160
GOODWILL - net 42,233 43,577
INTANGIBLES - net 1,789 4,189
TRADEMARKS - net 87,805 90,189
DEFERRED INCOME TAXES 7,354 4,711
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TOTAL ASSETS $621,789 $572,111
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
Notes payable to banks $ 24,000 $ 24,000
Accounts payable 54,658 44,331
Accrued liabilities 48,703 45,593
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TOTAL CURRENT LIABILITIES 127,361 113,924
LONG-TERM DEBT 50,000 50,000
DEFERRED RENT UNDER LEASE COMMITMENTS 12,969 10,148
COMMITMENTS
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value; 40,000,000 authorized;
34,928,092 shares and 34,910,826 shares issued,
respectively, and 32,916,257 shares and
33,637,826 shares outstanding, respectively 349 349
Additional paid-in capital 286,874 286,472
Retained earnings 207,433 155,092
Cumulative foreign currency translation adjustment (1,154) (1,337)
Deferred pension cost (470)
Restricted stock award (1,164) (1,801)
Treasury stock, at cost (60,879) (40,266)
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TOTAL STOCKHOLDERS' EQUITY 431,459 398,039
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $621,789 $572,111
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</TABLE>
See notes to consolidated financial statements.
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[TALBOTS LOGO]
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<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Dollar amounts in thousands except share data
<CAPTION>
Cumulative
Foreign
Common Stock Additional Currency Deferred Total
------------------ Paid-in Retained Translation Pension Restricted Treasury Stockholders'
Shares Amount Capital Earnings Adjustment Cost Stock Award Stock Equity
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 29, 1994 34,907,494 $349 $286,387 $53,264 $167 ($372) ($3,076) $336,719
Net income 54,457 54,457
Cash dividends paid (6,283) (6,283)
Amortization of restricted
stock award 638 638
Stock options exercised,
including tax benefit 1,000 22 22
Other equity transactions 168 (127) 41
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BALANCE AT JANUARY 28, 1995 34,908,494 349 286,409 101,438 335 (499) (2,438) 385,594
Net income 62,600 62,600
Cash dividends paid (8,946) (8,946)
Amortization of restricted
stock award 637 637
Stock options exercised,
including tax benefit 2,332 63 63
Purchase of 1,273,000 shares of
common stock ($40,266) (40,266)
Other equity transactions (1,672) 29 (1,643)
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BALANCE AT FEBRUARY 3, 1996 34,910,826 349 286,472 155,092 (1,337) (470) (1,801) (40,266) 398,039
Net income 63,621 63,621
Cash dividends paid (11,280) (11,280)
Amortization of restricted
stock award 637 637
Stock options exercised,
including tax benefit 17,266 402 402
Purchase of 738,835 shares of
common stock (20,613) (20,613)
Other equity transactions 183 470 653
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BALANCE AT FEBRUARY 1, 1997 34,928,092 $349 $286,874 $207,433 ($1,154) $0 ($1,164) ($60,879) $431,459
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</TABLE>
See notes to consolidated financial statements.
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[TALBOTS LOGO]
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8. INCOME TAXES
<TABLE>
The provision for income taxes for the years ended February 1, 1997, February 3,
1996, and January 28, 1995, consists of the following:
<CAPTION>
Year Ended
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February 1, February 3, January 28,
1997 1996 1995
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<S> <C> <C> <C>
Currently Payable:
Federal $37,089 $33,448 $29,726
State 5,579 7,768 7,194
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Total currently payable 42,668 41,216 36,920
Deferred:
Federal (1,508) 354 88
State (174) 163 (232)
Foreign (1,159)
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Total deferred (2,841) 517 (144)
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Total income tax expense $39,827 $41,733 $36,776
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</TABLE>
<TABLE>
The effect of temporary differences which give rise to deferred income tax
balances at February 1, 1997 and February 3, 1996, respectively, are as follows:
<CAPTION>
February 1, 1997 February 3, 1996
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Assets Liabilities Total Assets Liabilities Total
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<S> <C> <C> <C> <C>
UNITED STATES:
Current:
Merchandise inventories $ 813 $ 813 $ 1,405 $ 1,405
Deferred catalog costs ($ 2,021) (2,021) ($ 2,385) (2,385)
Accrued vacation pay 1,645 1,645 1,430 1,430
Deferred compensation 2,621 2,621 2,293 2,293
Other 1,968 (1,707) 261 1,997 (1,619) 378
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Total current 7,047 (3,728) 3,319 7,125 (4,004) 3,121
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Noncurrent:
Depreciation & amortization 1,322 1,322 77 77
Lease commitments 3,986 3,986 3,219 3,219
Other 1,977 (1,090) 887 2,204 (789) 1,415
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Total noncurrent 7,285 (1,090) 6,195 5,500 (789) 4,711
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FOREIGN:
Noncurrent:
Subsidiary tax loss carryforwards 3,424 3,424 2,723 2,723
Less: valuation allowance (2,265) (2,265) (2,723) (2,723)
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Total noncurrent 1,159 0 1,159 0 0 0
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TOTAL DEFERRED INCOME TAXES $ 15,491 ($ 4,818) $10,673 $12,625 ($ 4,793) $ 7,832
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</TABLE>
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