<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 4, 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 1-13814
-------
INTIMATE BRANDS, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 31-1436998
- --------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Three Limited Parkway, P.O. Box 16000, Columbus, OH 43216
---------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (614) 479-6900
-----------------------------
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.
Class A Common Stock Outstanding at May 31, 1996
- ----------------------- ---------------------------
$.01 Par Value 42,700,000 Shares
Class B Common Stock Outstanding at May 31, 1996
- ----------------------- ---------------------------
$.01 Par Value 210,000,000 Shares
<PAGE>
INTIMATE BRANDS, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Income
Thirteen Weeks Ended
May 4, 1996 and April 29, 1995............................. 3
Consolidated Balance Sheets
May 4, 1996 and February 3, 1996........................... 4
Consolidated Statements of Cash Flows
Thirteen Weeks Ended
May 4, 1996 and April 29, 1995............................. 5
Notes to Consolidated Financial Statements...................... 6
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition.......... 10
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders....... 16
Item 6. Exhibits and Reports on Form 8-K.......................... 17
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
INTIMATE BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
---------------------------
May 4, April 29,
1996 1995
------ ---------
<S> <C> <C>
NET SALES $ 586,208 $479,835
Cost of Goods Sold, Occupancy and
Buying Costs 411,431 342,042
--------- --------
GROSS INCOME 174,777 137,793
General, Administrative and Store
Operating Expenses (125,894) (97,391)
--------- --------
OPERATING INCOME 48,883 40,402
Interest Expense ( 7,563) -
Other Income, net 715 -
--------- --------
INCOME BEFORE INCOME TAXES 42,035 40,402
Provision for Income Taxes 16,800 16,000
--------- --------
NET INCOME $ 25,235 $ 24,402
========= ========
NET INCOME PER SHARE $ .10 $.12
========= ========
DIVIDENDS PER SHARE $ .12 -
========= ========
WEIGHTED AVERAGE SHARES
OUTSTANDING 252,757 210,000
========= ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
INTIMATE BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Thousands)
<TABLE>
<CAPTION>
May 4, February 3,
1996 1996
------ -----------
(Unaudited)
ASSETS
------
<S> <C> <C>
CURRENT ASSETS:
Cash and Equivalents $ 13,860 $ 12,095
Accounts Receivable 15,849 16,928
Inventories 339,908 358,846
Other 38,592 32,151
--------- ---------
TOTAL CURRENT ASSETS 408,209 420,020
INTERCOMPANY RECEIVABLE - 34,136
PROPERTY AND EQUIPMENT, NET 358,549 358,032
OTHER ASSETS 127,415 131,165
--------- ---------
TOTAL ASSETS $ 894,173 $ 943,353
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
- -------------------------------------
CURRENT LIABILITIES:
Accounts Payable $ 61,449 $ 64,452
Accrued Expenses 82,711 104,023
Income Taxes 42,530 78,783
--------- ---------
TOTAL CURRENT LIABILITIES 186,690 247,258
INTERCOMPANY PAYABLE 39,462 -
LONG-TERM DEBT 350,000 350,000
DEFERRED INCOME TAXES 47,941 71,475
OTHER LONG-TERM LIABILITIES 6,232 5,683
SHAREHOLDERS' EQUITY:
Common Stock 2,527 2,527
Paid-in Capital 675,421 675,421
Retained Deficit (414,100) (409,011)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 263,848 268,937
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 894,173 $ 943,353
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
INTIMATE BRANDS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
-----------------------------
May 4, April 29,
1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 25,235 $ 24,402
Impact of Other Operating Activities on Cash Flows:
Depreciation and Amortization 19,250 18,304
Changes in Assets and Liabilities:
Accounts Receivable 1,079 1,975
Inventories 18,938 (35,988)
Accounts Payable and Accrued Expenses (24,315) (11,700)
Income Taxes (36,253) -
Other Assets and Liabilities (26,375) 7,870
-------- --------
NET CASH PROVIDED FROM (USED FOR) OPERATING ACTIVITIES (22,441) 4,863
-------- --------
CASH USED FOR INVESTING ACTIVITIES
Capital Expenditures (19,068) (20,064)
-------- --------
FINANCING ACTIVITIES:
Dividends Paid (30,324) -
Increase in Intercompany Payable 73,598 -
Other Changes in Shareholders' Equity - 15,510
-------- --------
NET CASH PROVIDED FROM FINANCING ACTIVITIES 43,274 15,510
-------- --------
NET INCREASE IN CASH AND EQUIVALENTS 1,765 309
Cash and Equivalents, Beginning of Year 12,095 8,869
-------- --------
CASH AND EQUIVALENTS, END OF PERIOD $ 13,860 $ 9,178
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
INTIMATE BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
Intimate Brands, Inc. (the "Company") was incorporated on May 16, 1995, and
on May 19, 1995 acquired the assets and liabilities of the Intimate Brands
Businesses in exchange for 210 million shares of Class B common stock issued
to The Limited, Inc. The Intimate Brands Businesses include specialty retail
and catalogue operations which offer women's intimate and other apparel,
personal care products and accessories, and, prior to their transfer to the
Company, were direct or indirect subsidiaries of The Limited, Inc. They
consist of Victoria's Secret Stores, Victoria's Secret Catalogue, Bath &
Body Works, Cacique, Penhaligon's and Gryphon Development. An initial public
offering of 40 million shares of the Company's Class A common stock was
consummated on October 24, 1995, and on November 21, 1995, the Company sold
an additional 2.7 million shares as a result of underwriters exercising
options to purchase additional shares at the initial public offering price
per share to cover over-allotments. After these transactions, approximately
83% of the outstanding common stock of the Company is owned by The Limited,
Inc.
The consolidated financial statements include the accounts of the Company
and all significant subsidiaries which are more than 50 percent owned and
controlled. The common stock issued to The Limited, Inc. (210 million Class
B shares) in connection with the incorporation of the Company has been
reflected as outstanding for all periods presented.
The consolidated financial statements as of and for the periods ended May 4,
1996 and April 29, 1995 are unaudited and are presented pursuant to the
rules and regulations of the Securities and Exchange Commission.
Accordingly, these consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
contained in the Company's 1995 Annual Report. In the opinion of management,
the accompanying consolidated financial statements reflect all adjustments
(which are of a normal recurring nature) necessary to present fairly the
financial position and results of operations and cash flows for the interim
periods, but are not necessarily indicative of the results of operations for
a full fiscal year.
The consolidated financial statements as of May 4, 1996 and for the thirteen
week periods ended May 4, 1996 and April 29, 1995 included herein have been
reviewed by the independent public accounting firm of Coopers & Lybrand
L.L.P. and the report of such firm follows the notes to consolidated
financial statements.
2. ADOPTION OF ACCOUNTING STANDARD
In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, "Accounting for Stock-Based Compensation." The Company will make the
required disclosures in the 1996 annual report.
6
<PAGE>
3. INVENTORIES
The fiscal year of the Company and its subsidiaries is comprised of two
principal selling seasons: Spring (the first and second quarters) and Fall
(the third and fourth quarters). Valuation of finished goods inventories is
based principally upon the lower of average cost or market determined on a
first-in, first-out basis utilizing the retail method. Inventory valuation
at the end of the first and third quarters reflects adjustments for
inventory markdowns and shrinkage estimates for the total selling season.
4. PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consisted of (thousands):
<TABLE>
<CAPTION>
May 4, February 3,
1996 1996
--------- -----------
<S> <C> <C>
Property and equipment, at cost $ 623,651 $ 605,365
Accumulated depreciation and
amortization (265,102) (247,333)
--------- ---------
Property and equipment, net $ 358,549 $ 358,032
========= =========
</TABLE>
5. INCOME TAXES
The Company is included in The Limited Inc.'s consolidated federal income
tax group for income tax purposes and is responsible for its proportionate
share of income taxes calculated upon its federal taxable income at a
current estimate of the annual consolidated effective tax rate.
6. LONG-TERM DEBT
Long-term intercompany debt consists of notes which represent the Company's
proportionate share of certain long-term debt of The Limited, Inc. The
interest rates and maturities of the notes parallel those of the
corresponding debt of The Limited, Inc. Unsecured long-term debt consisted
of (thousands):
<TABLE>
<CAPTION>
May 4, February 3,
1996 1996
-------- -----------
<S> <C> <C>
7 1/2% Debentures due March 2023 $100,000 $100,000
9 1/8% Notes due February 2001 150,000 150,000
8 7/8% Notes due August 1999 100,000 100,000
-------- --------
$350,000 $350,000
======== ========
</TABLE>
Interest paid during the thirteen weeks ended May 4, 1996, including
interest on the intercompany cash management account (see note 7),
approximated $19.5 million.
7
<PAGE>
7. INTERCOMPANY RELATIONSHIP WITH PARENT
The Limited, Inc. provides various services to the Company including, but
not limited to, store design and construction supervision, real estate
management, travel and flight support and merchandise sourcing. To the
extent expenditures are specifically identifiable they are charged to the
Company. All other related support expenses are charged to the Company and
other Limited divisions pro rata based upon various allocation methods.
The Company participates in The Limited's centralized cash management system
whereby cash received from operations is transferred to The Limited's
centralized cash accounts and cash disbursements are funded from the
centralized cash accounts on a daily basis. After the initial capitalization
of the Company, the intercompany cash management account became an interest
earning asset or interest bearing liability of the Company depending upon
the level of cash receipts and disbursements. Interest on the intercompany
cash management account is calculated based on the commercial paper rates
for "AA" rated companies as reported in the Federal Reserve's H.15
statistical release. The amount of the intercompany payable under these
agreements to The Limited at May 4, 1996 approximated $39.5 million.
8
<PAGE>
[LETTERHEAD OF COOPERS & LYBRAND]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Audit Committee of
The Board of Directors of
Intimate Brands, Inc.
We have reviewed the condensed consolidated balance sheet of Intimate Brands,
Inc. and Subsidiaries at May 4, 1996 and the related condensed consolidated
statements of income and cash flows for the thirteen-week periods ended May 4,
1996 and April 29, 1995. These financial statements are the responsibility of
the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of February 3, 1996 and the related
statements of income, shareholders' equity, and cash flows for the year then
ended (not presented herein); and in our report dated February 26, 1996 we
expressed an unqualified opinion on those financial statements. In our opinion,
the information set forth in the accompanying condensed balance sheet as of
February 3, 1996, is fairly stated, in all material respects, in relation to the
balance sheet from which it has been derived.
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
June 7, 1996
9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
Net sales for the first quarter of 1996 increased 22% to $586 million from $480
million in the first quarter of 1995. Operating income for the 1996 quarter of
$48.9 million increased 21% from first quarter of 1995's $40.4 million.
Earnings per share were up 25% to $.10 per share, compared to $.08 per share on
a pro-forma basis in 1995.
The following pro-forma results reflect 1) approximately 250 million shares
outstanding post initial public offering ("IPO") and 2) interest expense on the
long term debt which forms part of the Company's past capital structure.
<TABLE>
<CAPTION>
First Quarter
---------------------------------------
Actual Pro-Forma Actual
1996 1995 1995
------- --------- -------
<S> <C> <C> <C>
Operating Income $48,883 $40,402 $40,402
Interest Expense (7,563) (7,516) -
Other Income, net 715 _ _
------- --------- -------
Income Before Taxes 42,035 32,886 40,402
Taxes 16,800 13,200 16,000
Effective Rate 40.0% 40.1% 39.6%
------- --------- -------
Net Income $25,235 $19,686 $24,402
======= ========= =======
Earnings Per Share $0.10 $0.08 $0.12
======= ========= =======
Weighted Average
Shares Outstanding 252,757 250,000 210,000
======= ========= =======
</TABLE>
Divisional highlights include the following:
Victoria's Secret Stores regained sales momentum in the first quarter,
recording an 8% comparable store sales increase, a 19% total sales increase
and a 28% operating profit increase. Fresh merchandise assortments and
product introductions produced strong results.
Victoria's Secret Catalogue strengthened late in the quarter. The Swim and
Summer Catalogues generated excellent customer response in April. Overall,
net sales increased 10% for April and 8% for the quarter.
Bath & Body Works turned in a very solid performance for the quarter.
Comparable store sales increased 14%, while operating profits increased
45%. Thirty of the 250 new store openings planned for 1996 opened in the
first quarter.
10
<PAGE>
Financial Summary
- -----------------
The following summarized financial data compares the thirteen week period ended
May 4, 1996 to the comparable period for 1995:
<TABLE>
<CAPTION>
First Quarter
----------------------------------------------------------
Change
From Prior
1996 1995 Year
----------- ------------ -----------
Net Sales (millions):
<S> <C> <C> <C>
Victoria's Secret Stores $286 $241 19%
Victoria's Secret Catalogue 167 155 8%
Bath & Body Works 111 66 68%
Cacique 19 15 27%
Other 3 3 -
----------- ------------ -----------
Total Net Sales $586 $480 22%
----------- ------------ -----------
Increase (decrease) in comparable store sales:
Victoria's Secret Stores 8% 2%
Bath & Body Works 14% 28%
Cacique 19% (29%)
----------- ------------
Total Intimate Brands, Inc. 9% 3%
----------- ------------
Retail sales increase
attributable to new and
remodeled stores 13% 18%
Retail sales per average
selling square foot $97 $93 4%
Retail sales per average
store (thousands) $316 $305 4%
Average store size at end of
quarter (square feet) 3,257 3,295 (1%)
Retail selling square feet
(thousands) 4,351 3,549 23%
Number of stores:
Beginning of period 1,293 1,037
Opened 44 41
Closed (1) (1)
----------- ------------
End of Period 1,336 1,077
----------- ------------
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Number of Stores Selling Sq. Ft. (thousands)
-------------------------------------------- ------------------------------------------
Change Change
May 4, April 29, From May 4, April 29, From
1996 1995 Prior Year 1996 1995 Prior Year
------- --------- ---------- ------ --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Victoria's Secret Stores 683 609 74 3,074 2,646 428
Bath & Body Works 528 347 181 906 549 357
Cacique 121 117 4 369 352 17
Penhaligon's 4 4 - 2 2 -
------- --------- ---------- ------ --------- ----------
Total stores and selling
square feet 1,336 1,077 259 4,351 3,549 802
======= ========= ========== ====== ========= ==========
</TABLE>
Net Sales
- ---------
Net sales for the first quarter of 1996 increased 22% over the same period in
1995. This increase was primarily attributable to the net addition of 259 new
stores which accounted for 61% of the increase. The remaining increase came
from a 9% increase in comparable store sales (27% of total increase) and an 8%
increase in catalogue net sales.
Victoria's Secret Stores net sales for the first quarter of 1996 increased 19%
to $286 million from $241 million a year ago. The sales increase was due to the
net addition of 74 new stores and 428,000 selling square feet, ( a 16% increase
in selling square feet over 1995) and an 8% increase in comparable store sales.
Victoria's Secret Catalogue net sales for the first quarter of 1996 increased 8%
to $167 million from $155 million a year ago. This increase was primarily
attributable to a 20% increase in catalogue circulation to approximately 79
million catalogues mailed in the first quarter 1996 from approximately 66
million catalogues for the same period in 1995.
Bath & Body Works net sales for the first quarter of 1996 increased 68% to $111
million from $66 million a year ago. This increase was primarily attributable
to a net increase of 181 stores and 357,000 selling square feet, a 65% increase
in selling square feet over 1995. In addition to the new stores, which
accounted for 81% of the increase, the remaining increase was from a 14%
increase in comparable store sales.
Gross Income
- ------------
Gross income increased as a percentage of net sales to 29.8% for the first
quarter 1996 from 28.7% for the same period in 1995. The increase was primarily
due to a 0.4% increase in merchandise margins and a 0.7% reduction in buying and
occupancy costs. The increase in gross income is primarily the result of the
growth of Bath & Body Works net sales in the first quarter from 14% of total
Company sales in 1995 to 19% in 1996. Bath & Body Works has historically
recorded significantly higher merchandise margins and significantly lower buying
and occupancy costs (due to smaller store size and higher sales productivity),
as compared with the rest of the Company. This advantage results from the cost
structure of the personal care products and the high productivity, expressed in
sales per selling square feet, that Bath & Body Works stores enjoy. The Company
believes that continued strong growth of Bath & Body Works will have a positive
impact on gross income as a percentage of total Company sales.
12
<PAGE>
General, Administrative and Store Operating Expenses
- ----------------------------------------------------
General, administrative and store operating expenses increased as a percentage
of net sales to 21.5% in the first quarter of 1996 from 20.3% for the same
period in 1995. This increase occurred even though all individual operating
divisions maintained or reduced their general, administrative and store
operating expenses as a percentage of net sales as compared to the same period
last year. The increase in the Company's expense rate was primarily the result
of the growth of Bath & Body Works net sales in the first quarter from 14% of
total Company sales in 1995 to 19% in 1996. Due to its emphasis on point of sale
marketing and in store staffing, it has higher general, administrative and store
operating expenses as a percentage of net sales. The Company believes that
continued strong growth of Bath & Body Works as a percentage of total Company
business may cause these costs to increase, expressed as a percentage of total
Company sales, without significant expense rate improvement by other Company
divisions.
Operating Income
- ----------------
First quarter operating income, as a percentage of sales, was 8.3% in 1996 and
8.4% in 1995. The decrease was due to the higher general, administrative and
store operating expenses which offset lower buying and occupancy costs
and higher merchandise margins, expressed as a percentage of net sales.
Interest Expense and Net Income
- -------------------------------
In the first quarter of 1996, the Company incurred $7.6 million in interest
expense which approximates the pro-forma quarterly interest expense associated
with the Company's outstanding $350 million long-term debt. However, no expense
was recognized for the comparable period in 1995.
In the first quarter of 1996, the Company earned $.7 million in other income,
whereas no income was recognized for the comparable period in 1995. The other
income is primarily interest income earned from excess net cash from operations
managed through The Limited, Inc.'s centralized cash management system (see Note
7 of the Company's Consolidated Financial Statements).
13
<PAGE>
FINANCIAL CONDITION
The Company's consolidated balance sheet as of May 4, 1996 provides evidence of
financial strength and flexibility. A discussion of liquidity, capital
resources and capital requirements follows:
Liquidity and Capital Resources
- -------------------------------
Cash provided from operating activities and cash funding from The Limited,
Inc.'s centralized cash management systems provide the resources to support
operations, including projected growth, seasonal requirements and capital
expenditures. A summary of the Company's working capital position and
capitalization follows (thousands):
<TABLE>
<CAPTION>
May 4, February 3,
1996 1996
-------- -----------
<S> <C> <C>
Working Capital $221,519 $172,762
======== ===========
Capitalization:
Long-term debt $350,000 $350,000
Deferred income taxes 47,941 71,475
Shareholders' equity 263,848 268,937
-------- -----------
Total Capitalization $661,789 $690,412
======== ===========
</TABLE>
Net cash used in operating activities totaled $22.4 million for the thirteen
weeks ended May 4, 1996 versus $4.9 million of cash provided for the same period
in 1995. Net cash requirements for tax liabilities were larger in 1996 due
to the timing of the tax payment associated with higher fourth quarter earnings.
Prior to September 1995, the Company transferred all current income tax
liabilities to The Limited, Inc. when the charges were incurred rather than when
they were paid. After September 1995, the tax liabilities will be included on
the Company's balance sheet until the payments are made. The $18.9 million of
cash provided from the inventory reduction was primarily the result of reduced
clearance inventory by both Victoria's Secret Stores and Catalogue. Bath & Body
Works also contributed to the reduction by decreasing the in-house production
time required for gift sets, which shortened the holding period of the related
component inventory.
Investing activities consisted of capital expenditures, which are primarily for
new and remodeled stores.
Financing activities included proceeds of $74 million from The Limited, Inc's.
centralized cash management reflected in intercompany payables during the first
quarter of 1996. This additional cash was required to fund the $60 million net
tax payment and the $30 million first quarter dividend. Other changes in
shareholders' equity in 1995 represent net intercompany activity prior to the
incorporation of the Company.
14
<PAGE>
Capital Expenditures
- --------------------
Capital expenditures, primarily for new and remodeled stores, totaled $19.1
million for the thirteen weeks ended May 4, 1996, compared to $20.1 million for
the comparable period of 1995. The Company anticipates spending $120 - $140
million in 1996 for capital expenditures, of which $115 - $125 million will be
for new stores, the relocation and expansion of existing stores and related
improvements for the retail business. The Company has previously announced its
intention to add approximately 800,000 selling square feet in 1996, which will
represent a 19% increase over year-end 1995. The increase results from the
planned addition of approximately 300 new stores and the remodeling/expansion of
approximately 50 stores. The Company expects that future capital expenditures
will be funded principally by net cash provided by operating activities.
15
<PAGE>
PART II - OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Stockholders on May 20, 1996. The
matters voted upon and the results of the voting were as follows:
(a) Roger D. Blackwell, Grace A. Nichols and Donald B. Shackelford were
elected to the Board of Directors for a term of three years. Of the
28,722,306 Class A shares and 210,000,000 Class B shares (representing
630,000,000 votes) present in person or represented by proxy at the
meeting, the number of votes for and the number of votes as to which
authority to vote in the election was withheld, were as follows with
respect to each of the nominees:
<TABLE>
<CAPTION>
Votes Votes as to Which
For Voting Authority
Name Election Withheld
-------------------- ----------- -----------------
<S> <C> <C>
Roger D. Blackwell 658,571,168 151,138
Grace A. Nichols 658,581,549 140,757
Donald B. Shackelford 658,571,928 150,378
</TABLE>
In addition, directors whose term of office continued after the Annual
Meeting were: Leslie H. Wexner, Kenneth B. Gilman, Cynthia D. Fedus, E.
Gordon Gee, Beth M. Pritchard, and Alex Shumate.
(b) The Company's Incentive Compensation Plan was approved with 658,471,754
votes for election, and 222,774 against and 86,778 abstained.
(c) The Company's 1995 Stock Option and Performance Incentive Plan was
approved with 651,397,164 votes for election, and 7,205,772 against and
119,370 abstained.
16
<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4. Instruments Defining the Rights of Security Holders.
4.1. Specimen Certificate of Class A Common Stock of the
Company incorporated by reference to Exhibit 4.1 to the
Company's Registration Statement on Form S-1 (File No.
33-92568) (the "Form S-1").
4.2. Certificate of Incorporation of The Limited, Inc. incorporated
by reference to Exhibit 4.2 to the Company's Form S-1.
4.3. Bylaws of The Limited, Inc. incorporated by reference to
Exhibit 4.3 to the Company's Form S-1.
10. Material Contracts
10.1 Intimate Brands, Inc. 1995 Stock Option and Performance
Incentive Plan incorporated by reference to Exhibit 4.3 to the
Company's Registration Statement on Form S-8 (File No.
333-04923).
10.2 Intimate Brands, Inc. Incentive Compensation Plan incorporated
by reference to Exhibit 4.3 to the Company's Registration
Statement on Form S-8 (File No. 333-04921).
15. Letter re: Unaudited Interim Financial Information to Securities
and Exchange Commission re: Incorporation of Accountants' Report.
27. Financial Data Schedule
(b) Reports on Form 8-K.
-------------------
None.
17
<PAGE>
SIGNATURE
---------
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.
INTIMATE BRANDS, INC.
(Registrant)
By /s/ Philip E. Mallott
--------------------------
Philip E. Mallott,
Chief Financial Officer*
Date: June 12, 1996
- --------------------------------------------------------------------------------
* Mr. Mallott is the principal financial officer and has been duly authorized to
sign on behalf of the Registrant.
18
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Document
- ----------- -----------------------------------------------
15 Letter re: Unaudited Interim Financial Information
to Securities and Exchange Commission re: Incorporation of
Accountants' Report
27 Financial Data Schedule
19
<PAGE>
[Letterhead of Coopers & Lybrand]
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
We are aware that our report dated June 7, 1996, on our review of the interim
consolidated financial information of Intimate Brands, Inc. and Subsidiaries
for the thirteen-week period ended May 4, 1996 and included in this Form 10-Q is
incorporated by reference in the Company's registration statements on Form S-8,
Registration Nos. 333-1960, 333-04921, and 333-04923. Pursuant to Rule 436(c)
under the Securities Act of 1933, this report should not be considered part of
the Registration Statement prepared or certified by us within the meanings of
Sections 7 and 11 of that Act.
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
June 11, 1996
20
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Financial Statements (unaudited) of Intimate Brands, Inc. and
Subsidiaries for the quarter ended May 4, 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> FEB-01-1997
<PERIOD-START> FEB-04-1996
<PERIOD-END> MAY-04-1996
<CASH> 13,860
<SECURITIES> 0
<RECEIVABLES> 15,849
<ALLOWANCES> 0
<INVENTORY> 339,908
<CURRENT-ASSETS> 408,209
<PP&E> 623,651
<DEPRECIATION> 265,102
<TOTAL-ASSETS> 894,107
<CURRENT-LIABILITIES> 186,690
<BONDS> 350,000
0
0
<COMMON> 2,527
<OTHER-SE> 261,321
<TOTAL-LIABILITY-AND-EQUITY> 894,173
<SALES> 586,208
<TOTAL-REVENUES> 586,208
<CGS> 411,431
<TOTAL-COSTS> 411,431
<OTHER-EXPENSES> 125,894
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,563
<INCOME-PRETAX> 42,035
<INCOME-TAX> 16,800
<INCOME-CONTINUING> 25,235
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,235
<EPS-PRIMARY> $.10
<EPS-DILUTED> $.10
</TABLE>
