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Previous: BABY SUPERSTORE INC, 10-K405/A, 1996-09-11 |
Next: EQUITY CORP INTERNATIONAL, 8-A12G/A, 1996-09-11 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 1, 1996
____ 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: 0-24614
BABY SUPERSTORE, INC.
(Exact Name of Registrant as Specified in Charter)
<TABLE>
<CAPTION>
<S> <C>
South Carolina 57-0527831
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification Number)
</TABLE>
1201 Woods Chapel Road 29334
Duncan, South Carolina (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (864)968-9292
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
At June 7, 1996, there were 19,232,833 shares of Common Stock, no par value,
outstanding.
Page 1 of 15
Exhibits Begin on Page 15
1
<PAGE>
BABY SUPERSTORE, INC.
FORM 10-Q FOR THE QUARTER ENDED MAY 1, 1996
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
Part I. Financial Information
Item 1. Financial Statements (Unaudited):
a. Condensed consolidated balance sheets as of May 1, 1996 and 3-4
January 31, 1996
b. Condensed consolidated statements of income for the thirteen
weeks ended May 1, 1996 and April 26, 1995 5
c. Condensed consolidated statements of cash flows for the
thirteen weeks ended May 1, 1996 and April 26, 1995 6
d. Notes to unaudited condensed consolidated financial statements - 7-8
May 1, 1996
e. Independent accountants' report on review of interim
financial information 12
Item 2. Management's Discussion and Analysis of Financial 9-11
Condition and Results of Operations
Part II. Other Information
Item 1. Legal Proceedings 13
Item 2. Change in Securities 13
Item 3. Defaults in Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
</TABLE>
2
<PAGE>
This Form 10-Q/A is being filed to attach a Financial Data Schedule and
to amend note no. 4 of the Financial Statements appearing within "Part I -
Financial Information, Item 1 - Financial Statements" appearing in the current
report on Form 10-Q for the quarter ended May 1, 1996 filed on June 14, 1996.
Part 1 - Financial Information
Item 1. Financial Statements
BABY SUPERSTORE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
May 1, January 31,
1996 1996
(Unaudited) (1)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 64,715 $ 72,353
Marketable securities 28,322 35,292
Receivables 4,909 5,441
Merchandise inventories 109,697 101,402
Prepaid income taxes --- 695
Other current assets 342 396
------------ ------------
Total current assets 207,985 215,579
--------- ----------
PROPERTY AND EQUIPMENT, NET 56,699 52,046
---------- ----------
OTHER ASSETS:
Deferred debt issuance costs 3,193 3,350
Deferred income taxes 695 444
Utility deposits 252 226
-------------- ------------
TOTAL ASSETS $ 268,824 $ 271,645
========== ==========
</TABLE>
(1) Derived from audited financial statements.
See notes to unaudited condensed consolidated financial statements.
3
<PAGE>
BABY SUPERSTORE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(In thousands, except share data)
<TABLE>
<CAPTION>
May 1, January 31,
1996 1996
(Unaudited) (1)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 41,135 $ 47,400
Accrued expenses 6,026 5,979
Accrued interest 389 1,760
Income taxes payable 1,431 272
----------- -------------
Total current liabilities 48,981 55,411
OTHER DEFERRED CREDITS 2,511 2,381
4 7/8% CONVERTIBLE SUBORDINATED
NOTES DUE 2000 115,000 115,000
----------- -----------
TOTAL LIABILITIES 166,492 172,792
----------- -----------
SHAREHOLDERS' EQUITY:
Common Stock; no par value, 50,000,000 shares
authorized, 19,232,833 (May 1,
1996) and 19,223,184 (January 31, 1996)
shares issued and outstanding 71,304 71,108
Retained earnings 31,028 27,745
----------- -----------
Total shareholders' equity 102,332 98,853
---------- -----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 268,824 $ 271,645
========== ==========
</TABLE>
(1) Derived from audited financial statements.
See notes to unaudited condensed consolidated financial statements.
4
<PAGE>
BABY SUPERSTORE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
May 1, April 26,
1996 1995
<S> <C> <C>
Net sales $ 106,780 $ 67,293
Cost of sales 77,089 47,817
-------- --------
Gross profit 29,691 19,476
Selling, general and administrative expenses 23,706 14,381
-------- ---------
Income from operations 5,985 5,095
Interest income (1,136) (234)
Interest expense 1,559 ---
Other expense 6 159
------------ -----------
Income before income taxes and cumulative
effect of change in accounting principle 5,556 5,170
Income tax provision 2,030 1,975
---------- ----------
Income before cumulative effect of change in
accounting principle 3,526 3,195
Cumulative effect of change in accounting principle (adoption
of SFAS 121) net of income taxes of $141,000 245 ---
---------- ------------
Net income $ 3,281 $ 3,195
========== ==========
Net income per common share before cumulative
effect of change in accounting principle $ 0.18 $ 0.17
Cumulative effect of change in accounting principle 0.01 ---
------------ --------------
Net income per common share $ 0.17 $ 0.17
=========== ===========
Weighted average common shares outstanding 19,621 19,182
========== ==========
</TABLE>
See notes to unaudited condensed consolidated financial statements.
5
<PAGE>
BABY SUPERSTORE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
May 1, April 26,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,281 $ 3,195
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Cumulative effect of change in accounting principle, net 245 --
Depreciation and amortization 1,999 1,036
Amortization of debt issuance costs 157 --
Writedown and loss on disposition of property 13 171
Deferred income taxes (34) 60
Decrease (increase) in assets and increase (decrease) in liabilities:
Receivable 532 106
Merchandise inventories (8,295) (12,010)
Prepaid and other assets (59) (9)
Prepaid income taxes 695 --
Accounts payable (6,265) 4,634
Accrued expenses 47 994
Accrued interest (1,371) --
Income taxes payable 1,159 1,825
Other deferred credits 130 76
-------- --------
Net cash provided by (used in) operating activities (7,766) 78
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (7,040) (7,326)
Maturities of marketable securities 6,970 --
Net cash used in investing activities (70) (7,326)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from public offering of Common Stock, net of offering expenses -- 28,566
Proceeds from issuance of Common Stock under stock purchase and option plans 198 512
Payments to redeem Common Stock -- (2)
-------- --------
Net cash provided by financing activities 198 29,076
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (7,638) 21,828
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 72,353 13,682
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 64,715 $ 35,510
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid $ 322 $ 90
Interest paid $ 2,772 $ --
</TABLE>
See notes to unaudited condensed consolidated financial statements.
6
<PAGE>
BABY SUPERSTORE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
May 1, 1996
1. Basis of presentation:
The accompanying condensed financial statements are unaudited. These
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and the instructions of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements, and should be read in conjunction with the annual report.
In the opinion of management, all adjustments necessary for a fair presentation
of such financial statements have been included and were normal and recurring in
nature. Interim results are not necessarily indicative of results that may be
expected for a full year.
2. Effect of New Accounting Pronouncement
The Company was required to adopt Statement of Financial Accounting
Standards (SFAS No. 121) "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of" as of February 1, 1996. This statement
essentially requires that when the Company commits to closing specific stores,
the fixed assets for such stores (primarily leasehold improvements) be written
down to fair market value. The cumulative effect of the adoption of SFAS No. 121
resulted in a charge of approximately $245,000 (net of an income tax benefit of
$141,000) in the May 1, 1996 income statement.
3. Inventories:
Inventories are valued at the lower of cost, as determined using the
retail method applied on the average cost basis, or market.
4. Long Term Debt and Credit Facility:
On September 27, 1995, the Company sold $115 million of 4 7/8%
convertible subordinated notes due 2000. The notes are convertible at the
security holders' option into Common Stock at any time on or before October 1,
2000, unless previously redeemed by the Company, at a conversion price of
$53.875 per share. Interest is payable semi-annually on April 1st and
October 1st.
The Company has a commitment from NationsBank, National Association
(Carolinas) for a $25 million credit facility with a one-year revolving line of
credit, there were no outstanding borrowings under this facility at May 1, 1996.
7
<PAGE>
5. Income taxes:
Income taxes are provided based upon management's estimate of the
annual effective tax rate.
6. Stock split:
The Company effected a three-for-two stock split in the form of a stock
dividend in February 1995. All common share and per share data reflect these
stocks splits.
7. Stock options and stock purchase plan:
During the quarter ended May 1, 1996, stock options for the purchase of
38,000 shares of Common Stock were granted at fair market value under the Stock
Incentive Plan and 4,725 shares were purchased under the Employee Stock Purchase
Plan.
8. Net income per common share:
Net income per common share is computed based upon the weighted average
number of common and common equivalent shares outstanding. Common equivalent
shares are represented by shares under option or warrant.
The 4 7/8% convertible subordinated notes were determined not to be
Common Stock equivalents at the issuance date based on the yield to maturity and
are anti-dilutive under the "if converted" method. Therefore, the common
equivalent shares represented by the 4 7/8% convertible subordinated notes are
excluded from both the primary net income per share and fully diluted net income
per share calculations.
8
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Form 10-Q for quarterly period ended May 1, 1996 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-29-1997
<PERIOD-END> MAY-01-1996
<CASH> 64,715
<SECURITIES> 28,322
<RECEIVABLES> 4,909
<ALLOWANCES> 0
<INVENTORY> 109,697
<CURRENT-ASSETS> 207,985
<PP&E> 70,665
<DEPRECIATION> 13,966
<TOTAL-ASSETS> 268,824
<CURRENT-LIABILITIES> 48,981
<BONDS> 115,000
0
0
<COMMON> 71,304
<OTHER-SE> 31,028
<TOTAL-LIABILITY-AND-EQUITY> 268,824
<SALES> 106,780
<TOTAL-REVENUES> 106,780
<CGS> 77,089
<TOTAL-COSTS> 23,706
<OTHER-EXPENSES> 6
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,559
<INCOME-PRETAX> 5,556
<INCOME-TAX> 2,030
<INCOME-CONTINUING> 3,526
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 245
<NET-INCOME> 3,281
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
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