UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996]
For the fiscal year ended January 29, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______________ to ___________________
Commission file number 1-7288
THE BOMBAY COMPANY, INC.
(Exact name of registrant as specified in its charter)
A Delaware Corporation 75-1475223
(State or other jurisdiction of incorporation (I.R.S. Employer Identification
or organization) Number)
550 Bailey Avenue
Fort Worth, Texas 76107
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code)
(817) 347-8200
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
Registered
Common Stock, Par Value, $1 Per Share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
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 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.
The aggregate market value of the voting stock held by nonaffiliates of the
registrant based on the closing price of the stock on March 31, 2000 was
approximately $57,601,377.
Shares outstanding at March 31, 2000: Common Stock, $1 Par Value: 34,596,630
DOCUMENTS INCORPORATED BY REFERENCE:
(a) Portions of the Annual Report to Shareholders for the Fiscal Year Ended
January 29, 2000 (as expressly incorporated by reference in Parts I, II, and
IV).
(b) Portions of the Definitive Proxy Statement for the Annual Meeting to be
held May 18, 2000 (as expressly incorporated by reference in Part III).
FORM 10-K
PART I
ITEM 1. BUSINESS.
(a) General Development of Business
The Bombay Company, Inc. and its wholly-owned subsidiaries (the "Company"
or "Bombay") is a specialty retailer marketing timeless and classic furniture,
prints and accessories through a network of retail locations throughout the
United States and Canada, through mail order and over the internet at
www.bombayco.com. During Fiscal 1999, the Company expanded its operations
through the addition of 19 new stores and relocated or enlarged 11 additional
stores while closing 16 locations.
(b) Financial Information About Segments
The Company operates in one business segment consisting of the retail sale
of decorative home furnishings and related items.
(c) Narrative Description of Business
Merchandise Sales, Purchasing and Distribution
Bombay operates a chain of stores, located primarily in regional shopping
malls, certain secondary malls and selected urban and suburban locations. As of
January 29, 2000, there were 364 Bombay stores in 42 states in the United States
and 51 stores in nine Canadian provinces. Bombay also markets its products
through its mail order operations in the United States and Canada and through e-
commerce over the internet at www.bombayco.com.
The Company offers a diverse selection of products consisting of
approximately 5,000 SKUs of which over 95% of the product has been designed or
styled to Bombay's specifications. Bombay's proprietary product offers unique
design, quality and exceptional value to a wide audience of consumers. While
furniture is the Company's core competency and will remain as such, more focus
has recently and will continue to be given to the smaller "take with" items such
as wood and decorative accessories, crystal, candles and a wide assortment of
gift items.
The Company regularly updates its merchandise assortment by introducing new
products and discontinuing others as they approach the end of their life cycles.
During Fiscal 1999, approximately 2,700 SKUs were introduced as compared to
2,200 SKUs in Fiscal 1998. Typically, new product introductions are
concentrated during the Company's spring, fall and Christmas marketing periods.
The principal categories of merchandise include the following:
Furniture - This category includes both wood and metal ready-to-assemble
furniture focusing on the bedroom, living room, dining room and home office as
well as occasional pieces. Furniture represented 45%, 50% and 49% of total
sales in Fiscal 1999, 1998 and 1997, respectively. Bombay's furniture is
manufactured by contract manufacturers located principally in China, Taiwan,
Malaysia, Mexico, the Philippines, Indonesia, India and the United States.
Accessories - This is the broadest category and represented 32%, 28% and
26% of total sales in Fiscal 1999, 1998 and 1997, respectively. This category
includes both functional and decorative accessories including jewelry and
memorabilia boxes, baskets, candles and scents, crystal, ceramics, frames and
desktop, textiles, floral and holiday. The items are imported from over 15
countries in Asia, North America and Europe.
Wall Decor - This category includes prints, mirrors and sconces which
represented 15%, 15% and 17% of total sales in Fiscal 1999, 1998 and 1997,
respectively. This merchandise is sourced primarily from the United States,
various countries in Asia, Canada, Italy and Korea.
Lamps and Other - This category includes lamps and seasonal offerings which
are sourced primarily from China, Taiwan and the United States. These items
accounted for approximately 8%, 7% and 8% of total sales in Fiscal 1999, 1998
and 1997, respectively.
In October 1999, the Company went live with its new generation website
running on IBM's net.commerce software. The new software runs on an AS400 and
is intended to be scaleable in order to respond to the growing e-commerce
demand. The Phase I implementation provided a more stable platform which
accommodated increased traffic and product offering during the Fiscal 1999
holiday season. The Company plans to implement Phase II during Fiscal 2000,
increasing functionality to allow customers to obtain and redeem coupons, have
products engraved or gift wrapped, and utilize multiple shipping options
including multiple delivery addresses. Typically, the Company offers up to 800
SKUs for sale on its website each season. Sales over the internet are expected
to grow to approximately $2 million in Fiscal 2000.
Merchandise is manufactured to Company specifications through a network of
contract manufacturers located principally in Asia and North America.
Approximately 70% of production needs are provided from overseas sources.
Branch offices located in Taiwan, Malaysia, Indonesia and China and agents in
various countries locate prospective vendors, coordinate production requirements
with manufacturers and provide technical expertise and quality control.
Bombay is not dependent on any particular supplier and has had long
standing relationships with many of its vendors. Approximately 65% of the
Company's merchandise requirements are supplied by 35 contract manufacturers in
seven countries. No long-term production agreements are in place; however,
agreements are in place with major manufacturers that prohibit the production of
proprietary product for other parties. Additional manufacturing capacity and
alternative sources, both domestic and international, continue to be added
through new vendors and plant expansions by existing vendors. The Company does
business with its vendors principally in United States currency and has not
historically experienced any material difficulties as a result of any foreign
political, economic or social instabilities.
Usually it takes several months from the time a merchandise order is placed
with a manufacturer until the goods are received at centralized distribution
centers in the United States and Canada. Depending on the category, the source
country and whether an item is new or a reordered product, lead times can vary
from as little as two months to as much as twelve months from order placement
until arrival at the stores. Order times are slightly less for North American
manufacturers principally due to shorter shipping times. Lead times may also be
impacted by seasonality factors especially in months when manufacturers are
producing at or near peak capacity to meet seasonal demands. As a result,
Bombay maintains a substantial inventory position in its distribution centers to
ensure a sufficient supply of products to its customers.
Store inventories are replenished from regional distribution centers
located in Fort Worth, Texas; Atlanta, Georgia; Gilbertsville, Pennsylvania and
Mississaugua, Ontario. The distribution centers are strategically located and
provide the capability to replenish the majority of store inventories within 48
hours of when the order is processed. The Company uses dedicated trucks and
less-than-truckload carriers to transport its product from its distribution
centers to the stores. The Company also leases two vehicles used to transport
product locally in the major metropolitan Toronto area.
The Company has also recently announced the creation of its new wholesale
division, Bailey Street Trading Company. The brand will be separate from Bombay
and will allow the Company to capitalize on its strengths in product design and
sourcing. The initial product offerings are focused on furniture but may be
expanded to include wall decor and accessories in the future. Bailey Street
Trading Company will use a commission based national sales force to market its
product to retailers, hotels, offices and similar businesses. Sales of Bailey
Street Trading Company are expected to be approximately $500,000 in Fiscal 2000
but are expected to add incremental business in the future as the Company
focuses on a new channel of distribution.
Stores and Real Estate
The Company bases its stores primarily in regional shopping malls, certain
secondary malls and selected urban and suburban locations that satisfy its
demographic and financial return criteria. Significant attention is given to
visual merchandising opportunities to maximize the ability to display product in
the most attractive setting.
In selecting store locations, the Company's real estate department conducts
extensive analyses of potential store sites and bases its selection on the
performance of other specialty retail tenants, the size of the market and the
demographics of the surrounding area. In evaluating a store location, placement
of the store relative to retail traffic patterns and customer base of other
retailers in the nearby vicinity are important considerations. Toward that end,
the Company has recently engaged Thompson Associates, the largest, independent
full-service retail-consulting firm in the United States, specializing in store
location and market research, to help evaluate all aspects of the Company's
store expansion strategies. Although 90% of the current stores are mall based,
the Company has opened stores in alternative locations including street and
upscale, open air strip locations. The Company will continue to seek out the
most potentially profitable locations for the opening of new stores regardless
of the venue.
Prior to 1992, the Company operated stores that were typically 1,500 to
1,800 square feet in size. In 1992, to accommodate the increasing number of
products, the Company introduced a large format store which was approximately
4,000 square feet in total size. Between 1992 and 1995, the Company underwent a
dramatic period of growth expanding the total retail square footage relating to
Bombay stores from 504,000 square feet to 1,206,000 square feet and increasing
its Bombay store count from 309 to 428. Beginning in 1995, the Company adopted
a more conservative approach to expansion, reducing both the number and size of
stores opened or converted to the large format. The Company is currently
targeting store sizes in the 3,000 to 3,500 square foot or 4,000 to 4,500 square
foot ranges. As of January 29, 2000, 270 large format stores were in operation
including 166 stores that have been converted from regular stores since Fiscal
1992.
During Fiscal 1997, the Company undertook a program to update its store
design and introduced the new design in three locations. In Fiscal 1998, the
Company opened 15 new stores and converted 16 others from the regular format to
the large format, all of which were constructed in the new design. In addition,
21 stores underwent major remodeling, including new paint, flooring and
lighting, while an additional 11 stores underwent minor updates in keeping with
the new design. Continuing its efforts to update the appearance of its stores,
the Company opened 19 new stores and converted 11 regular stores to the larger
format in Fiscal 1999. All of the openings and conversions were done in the new
format, while another 30 stores were remodeled and/or remerchandised in a style
similar to the new design. As of January 29, 2000, a total of 125 stores, or
30% of the chain, reflect the updated look. The store expansion plan includes
approximately 16 store openings and 25 conversions in Fiscal 2000.
During Fiscal 1999 and 1998, the Company's store openings included eight
and five outlet stores, respectively, which were typically located in
traditional outlet malls. At January 29, 2000, the store chain included a total
of 20 outlet stores. The Company views the use of outlets as an opportunity to
increase sales to a different customer base, to assist in the orderly clearance
of merchandise and to further capitalize on its strength in designing and
sourcing proprietary product. Bombay's store opening plans for Fiscal 2000
include approximately 3 outlet locations.
The Company's average cost of leasehold improvements, furniture, fixtures
and machinery for stores (excluding outlets) opened or converted in Fiscal 1999,
net of landlord allowances, was approximately $220,000 per store or $65 per
square foot. In addition, other investments which consist primarily of
inventory in the store location, averaged approximately $97,000 per large format
store. The average cost of leasehold improvements, furniture, fixtures and
machinery for outlet stores opened in Fiscal 1999, net of landlord allowances,
was approximately $86,000 per store while the inventory investment averaged
approximately $68,000 per store. Bombay stores typically achieve store
operating level profitability during their first year of operations.
As of January 29, 2000, 364 stores were operating in 42 states in the
United States and 51 stores were operating in nine provinces in Canada as
illustrated in the map below.
{The paper version of the Annual Report on Form 10-K contains herein a map
of the United States and Canada with states and provinces outlined, labeled
with the appropriate number of Bombay stores located in each, as follows:
UNITED STATES:
AL - 5 KY - 2 NY - 23
AR - 1 LA - 7 OH - 15
AZ - 5 MA - 9 OK - 4
CA - 47 MD - 12 OR - 3
CO - 5 MI - 9 PA - 18
CT - 7 MN - 5 RI - 1
DC - 1 MO - 5 SC - 4
DE - 3 MS - 2 TN - 10
FL - 32 NC - 11 TX - 27
GA - 15 NE - 1 UT - 3
IA - 1 NH - 3 VA - 16
IL - 15 NJ - 16 WA - 6
IN - 5 NM - 1 WI - 1
KS - 4 NV - 3 WV - 1
CANADA:
AB - 4 NB - 2 ON - 25
BC - 7 NF - 1 PQ - 8
MB - 1 NS - 2 SK - 1}
Intangibles
The Company owns a number of the trademarks and service marks used in its
business, including federal registrations for the marks "The Bombay Company" and
"Bombay", and the palm tree logo. The Company's trademarks are also registered
or are the subject of pending applications in a number of foreign countries.
Each registration is renewable indefinitely if the mark is still in use at the
time of renewal. Appropriate applications are on file for the new wholesale
business.
The Company believes that its trademarks have significant value and that
these marks enhance the Bombay brand and are instrumental in the Company's
ability to create, sustain demand for and market its product. From time to
time, the Company discovers products in the marketplace that are counterfeit
reproductions of the Company's product or that otherwise infringe upon trademark
or tradedress rights held by the Company. The Company has and will continue to
vigorously defend it rights under the marks as necessary
Seasonality
Operating results are subject to seasonal variation. Historically, the
largest proportion of sales and substantially all of the income occurs in the
fiscal quarter that includes the Christmas season. Cash balances increase
significantly in December due to the Christmas business.
Competition
The home furnishings and decorative accessories market is highly fragmented.
The Company faces competition from furniture stores, department stores and other
specialty retailers. The Company believes that it competes primarily on the
basis of selection, quality and value of merchandise.
Employees
The Company has approximately 5,000 employees, which include approximately
3,000 part-time employees, and is not a party to any union contract. Employee
relations are considered to be good.
Risks and Uncertainties
All statements in this Annual Report on Form 10-K, including those
incorporated herein by reference, that do not reflect historical information are
forward-looking statements made in reliance upon the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
but are not limited to, the following: competition; seasonality; success of
operating initiatives; new product development and introduction schedules;
acceptance of new product offerings; advertising and promotional efforts;
adverse publicity; expansion of the store chain; availability, locations and
terms of sites for store development; changes in business strategy or
development plans; availability and terms of capital; labor and employee benefit
costs; changes in government regulations; risks associated with international
business and regional weather conditions.
Executive Officers
The executive officers of the Company, their respective ages, positions held
and tenure as officers are as follows:
<TABLE>
<CAPTION>
Position(s) Held with Officer of the
Name Age the Company Company Since
<S> <C> <C> <C>
Carmie Mehrlander 48 President and Chief Executive 1998
Officer
Brian N. Priddy 43 Senior Vice President, Store 1998
Operations
Steven C. Woodward 43 Senior Vice President, 1998
Merchandising
Elaine D. Crowley 41 Vice President, Finance and 1996
Treasurer
James D. Johnson 53 Vice President, Human Resources 1998
Cathy S. Pringle 48 Vice President, Marketing 1998
Michael J. 43 Vice President, Secretary and 1985
Veitenheimer General Counsel
</TABLE>
Carmie Mehrlander was named Chief Executive Officer of the Company on
February 7, 2000 and re-assumed the duties of President on March 7, 2000. She
served as President and Chief Operating Officer of the Company since February
12, 1998, and joined the Board of Directors on March 26, 1998. Prior to joining
the Company, Ms. Mehrlander served as Executive Vice President-Merchandising for
Home Shopping Network from June 1996 to June 1997, and as Divisional Vice
President of Sears Merchandise Group from August 1993 to June 1996. Prior to
joining Sears, she was Group Vice President of Macy's South from July 1990 to
August 1993 following 13 years of fashion retailing at Abraham & Strauss and
Macy's (Bamberger's).
Brian N. Priddy was named Senior Vice President, Store Operations on April
21, 1998. Prior to joining Bombay, Mr. Priddy served as District General
Manager and a member of the Senior Strategic Leadership Team for Sears, Roebuck
and Company from July 1993 to April 1998 and as Regional Merchandise Manager
(Furniture/Hardlines) for Montgomery Wards from September 1992 to July 1993.
From May 1991 until September 1992, Mr. Priddy served as Director of Stores for
the Lillie Rubin chain of specialty stores and from November 1984 to April 1991
as Regional Vice President of Store Operations for Maison Blanche department
stores.
Steven C. Woodward was named Senior Vice President, Merchandising on August
3, 1998. His responsibilities include buying, concept and product development,
planning, allocation, multinational sourcing and quality assurance. Mr.
Woodward came to Bombay from Service Merchandise where he was the Vice President
of the Home Store Merchandise group from November 1997 to July 1998. Prior
thereto, Mr. Woodward held various positions at Pier 1 Imports from August 1992
to October 1997, including Vice President of Furniture, Textiles and Decorative
Accessories.
Elaine D. Crowley was named Vice President, Finance and Treasurer effective
January 25, 1996, after having served as Corporate Controller since January
1995. Prior thereto, Ms. Crowley acted as Executive Vice President, Operations
of The Bombay Company division from January 1994 to January 1995, Vice President
and Controller from January 1991 to December 1994, and Controller from August
1990 to December 1990. Ms. Crowley was with Price Waterhouse from 1981 to 1990.
James D. Johnson joined Bombay on August 17, 1998 as Vice President, Human
Resources. Prior thereto, Mr. Johnson served as Regional Human Resources
Manager for Sears Product Service for the Dallas and Memphis Region, and as
District Human Resources Manager for Sears Retail Organization from December
1994 to August 1998. Mr. Johnson was employed by Federated Department Stores in
the Abraham & Strauss division from August 1982 to December 1994 as Area
Director of Human Resources, Director of Human Resources/Operations and
Merchandising Group Manager. Mr. Johnson began his retail human resources
career at Macy's Department Stores when he was employed from 1974 to 1982.
Cathy S. Pringle joined the Bombay management team on September 9, 1998 from
Paging Network, Inc. in Dallas, Texas where she served as Vice President
Marketing, Paging Products and Services from 1996 to 1998. Prior to Paging
Network, Inc., Ms. Pringle was Director of Marketing for the Printing and
Publishing Division of Jostens during 1995 and 1996. Ms. Pringle began her
marketing career at Rubbermaid Incorporated, where she served as Group Product
Manager during 1994-1995, Senior Product Manager during 1993-1994, Product
Manager from 1989 to 1993 and as Marketing Coordinator from 1986 to 1989.
Michael J. Veitenheimer was named Vice President effective August 4, 1994,
and has served as Secretary of the Company since July l, 1985, and General
Counsel since December 1983. From 1983 to 1985 he was Assistant Secretary of
the Company. Prior thereto, Mr. Veitenheimer was in private practice of law in
Fort Worth, Texas.
(d) Financial Information About Geographic Areas
The Company operates in the United States and Canada. For financial
information by geographic area, see Note 9 to the Company's Consolidated
Financial Statements, located on page 26 of the 1999 Annual Report to
Shareholders, filed as Exhibit 13 to this Form 10-K Annual Report. Such Exhibit
is incorporated herein by reference.
<F8>
ITEM 2. PROPERTIES.
The Company owns its United States headquarters office complex of which it
occupies approximately 77,000 square feet. The Company leases stores,
distribution centers, regional and Canadian offices under numerous operating
leases. Owned and leased facilities are summarized following:
<TABLE>
<CAPTION>
Square Feet
--------------------
Description Owned Leased
<S> <C> <C>
Stores:
Outlet -- 72,000
Regular -- 216,000
Large format -- 1,049,000
Distribution centers:
McDonnaugh, GA -- 300,000
Gilbertsville, PA -- 235,000
Fort Worth, TX -- 250,000
Mississauga, ON, CAN -- 115,000
Offices and storage:
Mississauga, ON, CAN -- 9,000
Regional sites -- 4,000
Fort Worth, TX 121,000 35,000
121,000 2,285,000
</TABLE>
Leases generally have 10 year terms, expiring between 2000 and 2013.
Adequate insurance coverage is maintained on all properties.
For additional lease information, see Note 4 of Notes to Consolidated
Financial Statements, located on page 24 of the 1999 Annual Report to
Shareholders, filed as Exhibit 13 to this Form 10-K Annual Report. Such Exhibit
is incorporated herein by reference.
<F4>
ITEM 3. LEGAL PROCEEDINGS.
The information in response to Item 3 is contained in Note 4 of Notes to
Consolidated Financial Statements, located on page 24 of the 1999 Annual Report
to Shareholders, filed as Exhibit 13 to this Form 10-K Annual Report. Such
Exhibit is incorporated herein by reference.
<F4>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of security holders during the
fourth quarter of the 1999 fiscal year.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
(a) The principal market for the registrant's common stock is the New York
Stock Exchange. The high and low trading prices are contained in the section
entitled "Price Range of Common Stock", located on page 12 of the 1999 Annual
Report to Shareholders, filed as Exhibit 13 to this Form 10-K Annual Report.
Such Exhibit is incorporated herein by reference.
<F2>
(b) The approximate number of record holders of common stock on March 31,
2000 was 2,500.
(c) The Company has bank credit agreements with restrictions related to
payment of dividends. The Company has not paid dividends the past two years and
will continue to utilize available funds primarily for the expansion of its
retail stores and operating purposes.
ITEM 6. SELECTED FINANCIAL DATA.
The selected financial and operating data in response to Item 6 is contained
in the section entitled "Selected Financial Data", located on page 12 of the
1999 Annual Report to Shareholders, filed as Exhibit 13 to this Form 10-K
Annual Report. Such Exhibit is incorporated herein by reference.
<F3>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information in response to Item 7 is contained in the section entitled
"Management's Discussion and Analysis", located on pages 13 to 16 of the 1999
Annual Report to Shareholders, filed as Exhibit 13 to this Form 10-K Annual
Report. Such Exhibit is incorporated herein by reference.
<F5>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As of January 29, 2000, the Company had no market risk sensitive instruments.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information in response to Item 8 is contained in the 1999 Annual Report
to Shareholders, filed as Exhibit 13 to this Form 10-K Annual Report. Such
Exhibit is incorporated herein by reference. A cross-reference for location of
the requested information is below.
<TABLE>
<CAPTION>
Page Number(s) in
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Annual Report*
<S> <C>
Consolidated Statements of Income for the Years Ended
January 29, 2000, January 30, 1999 and January 31, 1998 18
Consolidated Balance Sheets at January 29, 2000
and January 30, 1999 19
Consolidated Statements of Cash Flows for the Years Ended
January 29, 2000, January 30, 1999 and January 31, 1998 20
Consolidated Statements of Stockholders' Equity for the
Years Ended January 29, 2000, January 30, 1999,
and January 31, 1998 21
Notes to Consolidated Financial Statements 22-26
Report of Independent Accountants 17
Unaudited Quarterly Financial Data 26
<FN>
*The indicated pages of The Bombay Company, Inc. 1999 Annual Report to
Shareholders are filed as Exhibit 13 to this Annual Report on Form 10-K. Such
Exhibit is incorporated herein by reference.
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES.
There have been no changes in or disagreements with accountants on accounting or
financial disclosures.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required by this item appears under the captions "Election
of Directors", "Executive Officers of the Company" and "Section 16(a)
Beneficial Ownership Reporting Compliance" in the Definitive Proxy Statement of
The Bombay Company, Inc. relating to the Company's Annual Meeting of
Shareholders, which information is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this item appears under the captions "Executive
Compensation" and "Compensation of Directors" in the Definitive Proxy Statement
of The Bombay Company, Inc. relating to the Company's Annual Meeting of
Shareholders, which is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this item appears under the caption "Security
Ownership" and in the Definitive Proxy Statement of The Bombay Company, Inc.
relating to the Company's Annual Meeting of Shareholders, which information is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item appears under the caption "Certain
Transactions" in the Definitive Proxy Statement of The Bombay Company, Inc.
relating to the Company's Annual Meeting of Shareholders, which information is
incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this Annual Report for The
Bombay Company, Inc. and its subsidiaries:
(1) The financial statements as cross-referenced in Item 8 of this Form
10-K Annual Report, together with the report thereon of
PricewaterhouseCoopers LLP dated March 8, 2000, appearing in the
accompanying 1999 Annual Report to Shareholders are incorporated by
reference in this Form 10-K Annual Report. With the exception of the
aforementioned information and information incorporated in Items 1, 2,
3, 5, 6 and 7, the 1999 Annual Report to Shareholders is not deemed
filed as part of this Report.
(2) Financial statement schedules not included in this Form 10-K Annual
Report have been omitted because they are not applicable or the
required information is shown in the financial statements or notes
thereto.
(3) Exhibits:
A list of exhibits required to be filed as part of this report is set
forth in the Index to Exhibits, which immediately precedes such
exhibits, and is incorporated herein by reference.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended January 29,
2000.
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.
THE BOMBAY COMPANY, INC.
(Registrant)
Date: April 12, 2000 /s/ CARMIE MEHRLANDER
Carmie Mehrlander
President and Chief Executive Officer
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
Name Position Date
/s/ ROBERT S. JACKSON April 11, 2000
Robert S. Jackson Chairman of the Board
Barbara Bass Director
George B. Cobbe Director
Edmund H. Damon Director
/s/ GLENN E. HEMMERLE April 12, 2000
Glenn E. Hemmerle Director
/s/ JAMES A. MARCUM April 11, 2000
James A. Marcum Director
/s/ CARMIE MEHRLANDER April 12, 2000
Carmie Mehrlander President, Chief Executive
Officer and Director
/s/ ROBERT E. RUNICE April 7, 2000
Robert E. Runice Director
Bruce R. Smith Director
/s/ ELAINE D. CROWLEY April 12, 2000
Elaine D. Crowley Vice President, Finance and
Treasurer
THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
Filed with the Annual Report on Form 10-K for the fiscal year ended January 29,
2000.
Number Description
3(a) - Restated Certificate of Incorporation dated January 1, 1993 and
Certificate of Amendment of the Restated Certificate of
Incorporation dated March 31, 1993. (1)
3(b) - Bylaws, as amended and restated effective May 21, 1997. (9)
4 - Preferred Stock Purchase Rights Plan. (2)
10(a) - Form of Indemnification Agreement. (3)
10(b) - The Bombay Company, Inc. Supplemental Stock Program. (4)
10(c) - The Bombay Company, Inc. 1993 Stock Deferral Plan for Non-Employee
Directors. (5)
10(d) - Executive Long Term Disability Plan. (6)
10(e) - The Bombay Company, Inc. 1996 Long-Term Incentive Stock Plan. (7)
10(f) - Form of Award Agreement under the 1996 Long-Term Incentive Stock
Plan. (9)
10(g) - Executive Officers Incentive Compensation Plan. (8)
10(h) - Employment Contract with Executive Officer. (9)
10(i) - The Bombay Company, Inc. Amended and Restated 1991 Director Stock
Option Plan. (10)
10(j) - Form of Agreement used to evidence stock option grants under The
Bombay Company, Inc.
1991 Director Stock Option Plan. (5)
10(k) - Employment Contracts with Executive Officers.
10(l) - The Bombay Company, Inc. 2000 Non-Employee Director Equity Plan.
10(m) - Form of Agreement used to evidence stock option grants under
The Bombay Company, Inc. 2000 Non-Employee Director Equity Plan.
13 - The Bombay Company, Inc. 1999 Annual Report to Shareholders is filed
as exhibit hereto solely to the extent portions thereof are
expressly incorporated herein by reference.
22 - Subsidiaries of the Registrant.
23 - Definitive Proxy Statement of the Company relating to Annual Meeting
of Shareholders (certain portions of such Proxy Statement are
incorporated herein by reference and are identified by reference to
caption in the text of this report). (11)
24 - Consent of Independent Accountants.
[FN]
(1) Filed with the Commission as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended July 4, 1993. Such Exhibit is incorporated
herein by reference.
(2) Filed with the Commission as an Exhibit to the Company's Registration
Statement on Form 8A filed June 12, 1995. Such Exhibit is incorporated
herein by reference.
(3) Filed with the Commission as an Exhibit to the Company's Definitive
Proxy Statement dated October 10, 1986, which Proxy Statement was filed
with the Commission as an Exhibit to the Company's Annual Report on Form
10-K for the year ended June 30, 1986. Such Exhibit is incorporated
herein by reference.
(4) Filed with the Commission as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended June 28, 1992. Such Exhibit is incorporated
herein by reference.
(5) Filed with the Commission as an Exhibit to the Company's Definitive
Proxy Statement dated September 7, 1993, which Proxy Statement
was filed with the Commission as an Exhibit to the Company's Annual Report
on Form 10-K for the year ended July 4, 1993. Such Exhibit is
incorporated herein by reference.
(6) Filed with the Commission as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended July 3, 1994. Such Exhibit is incorporated
herein by reference.
(7) Filed with the Commission as an Exhibit to the Company's Definitive Proxy
Statement dated April 3, 1996, which Proxy Statement was filed with the
Commission as an Exhibit to the Company's Annual Report on Form 10-K for
the year ended February 3, 1996. Such Exhibit is incorporated herein by
reference.
(8) Filed with the Commission as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended January 31, 1998. Such Exhibit is
incorporated herein by reference.
(9) Filed with the Commission as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended January 30, 1999. Such Exhibit is
incorporated herein by reference.
(10) Filed with the Commission as an Exhibit to the Company's Registration
Statement on Form S-8 filed February 8, 2000. Such Exhibit is
incorporated herein by reference.
(11) To be filed with the Commission on April 13, 2000.
April 13, 1998
PERSONAL AND CONFIDENTIAL
Mr. Brian Priddy
1314 Lakewood Drive
McKinney, TX 75070
Dear Brian:
It is a pleasure to confirm our discussion offering you the position of
Senior Vice President, Stores of The Bombay Company, Inc. ("Company" or
"Bombay"), effective on or before May 4, 1998 (your first day of active
employment hereinafter referred to as the "Hire Date"). In this capacity you
will report directly to me.
Your annualized base salary in this position will be $180,000. In
addition, you will participate in the Company's Executive Bonus Program under
which, if Bombay (USA and Canada) achieves its business plan for fiscal 1998,
you will be eligible to receive a bonus of up to 48% of base salary. The earned
bonus amount will be determined based upon Company results and your personal
performance as judged by me, the CEO and the Board of Directors. For fiscal
1998 only, your bonus will be not less than $43,200. Bonuses are paid in a lump
sum following the end of each fiscal year.
You will receive a restricted stock grant of 15,000 shares under the
Company's 1996 Long-Term Incentive Stock Plan, which will vest and be delivered
to you according to the following schedule: 1,500 shares on the first
anniversary of your Hire Date; 4,500 shares on the second anniversary of your
Hire Date; and 9,000 shares on the third anniversary of your Hire Date. You
must be actively employed at the end of each respective anniversary period in
order to become vested in the shares.
You will receive an initial grant of nonqualified options covering 30,000
shares of Bombay stock plus incentive stock options equal to $100,000 in face
value based upon Bombay's closing stock price on your Hire Date. All options
will have an exercise price equal to the closing price of Bombay stock on your
Hire Date. These options shall vest and may be exercised in whole or in part at
the rate of 33 1/3% per year, commencing with the first anniversary of your Hire
Date. The options have a term of ten years from the date of grant.
Your employment is at-will and may be terminated by the Board at any time,
with or without cause. Nevertheless, during the first year of employment, if
you are terminated not for cause, there will be a twelve (12) month continuation
of base salary. After one year of employment, if you are terminated not for
cause, you will receive twelve (12) months of salary continuation, six (6)
months guaranteed and six (6) months subject to offset by earnings from
subsequent employment.
You are eligible to participate in The Bombay Company 401(k) Savings and
Stock Ownership Plan after one year of employment. Under this plan, Bombay
currently contributes 75% of up to 5% of your compensation, which may be
invested in the various options available in the plan.
After 60 days of employment you will receive company paid life insurance
equal to 11/2 times your compensation at plan. Also, after 60 days of
employment you will be covered under the Executive Short Term Disability Income
Protection Plan, which pays 100% of your salary for a maximum of 13 weeks, and
the Executive Long Term Income Protection Plan which pays 60% of your salary up
to $8,500 per month for as long as you remain totally disabled up to age 65. If
disability begins after age 62, payments would commence on a sliding scale based
on your age at time of disability. Your net cost will be limited to the amount
of personal income taxes you pay on the Company reimbursement of the premium.
The Company also offers supplemental life and personal accident insurance
programs available to you at low group rates. The Company will provide gap
benefits for life and disability coverage during the first 60 days of your
employment.
You will be eligible to join our Medical and Dental Plan after 60 days of
employment. The cost of the plan is shared by the Company and the employee.
The premiums are currently tax exempt under a section of the IRS tax code. The
Company will reimburse you for COBRA expense actually incurred by you for
coverage during the first 60 days of your employment.
In the event of a Change of Control, as defined in Exhibit "A," attached
hereto, the restricted stock and stock options granted to you shall immediately
vest and be deliverable to you or exercisable by you commencing on such date of
the Change of Control event. The severance provisions of this letter will
likewise become operational at your election in such a Change of Control event.
You agree and represent that your acceptance of employment with Bombay as
set forth in this letter does not conflict with any prior contract or agreement
of employment to which you are a party.
I look forward to your joining The Bombay Company, Inc. We are pleased
that you have indicated your acceptance of this offer. Please call me if you
have any questions.
For our records, I would appreciate your signing and returning one copy of
this letter to me at your earliest convenience.
Sincerely yours,
/s/ CARMIE MEHRLANDER
Carmie Mehrlander
President and Chief Operating Officer
CM/gg
Attachment
/s/ BRIAN PRIDDY April 17, 1998
_______________________________________ ___________________
Brian Priddy Date
July 14, 1998
PERSONAL AND CONFIDENTIAL
Mr. Steve Woodward
823 Woodburn Drive
Brentwood, Tennessee 37027
Dear Steve:
It is a pleasure to confirm our discussion offering you the position of
Senior Vice President, General Merchandising Manager of The Bombay Company, Inc.
("Company" or "Bombay"), effective no later than August 3 (your first day of
active employment hereinafter referred to as the "Hire Date"). In this capacity
you will report directly to me.
Your annualized base salary (which includes car allowance) in this position
will be $210,000. In addition, you will participate in the Company's Executive
Bonus Program under which, if Bombay (USA and Canada) achieves its business plan
for fiscal 1998, you will be eligible to receive a bonus of up to 40% of base
salary. The earned bonus amount will be determined based upon Company results
and your personal performance as judged by me, the CEO and the Board of
Directors. For fiscal 1998 only, your bonus will be guaranteed at $42,000.
Bonuses are paid in a lump sum following the end of each fiscal year.
You will receive a restricted stock grant of 15,000 shares of Bombay common
stock under the Company's 1996 Long-Term Incentive Stock Plan, which will vest
and be delivered to you according to the following schedule: 1,500 shares on
the first anniversary of your Hire Date; 3,000 shares on the second anniversary
of your Hire Date; and 10,500 shares on the third anniversary of your Hire Date.
You must be actively employed at the end of each respective anniversary period
in order to become vested in the shares.
You will receive a two year equivalent initial grant of stock options
covering 85,000 shares of Bombay stock, which will include incentive stock
options equal to $100,000 in face value based upon Bombay's closing stock price
on your Hire Date. Options covering 42,500 shares (including the incentive
options) will have an exercise price equal to the average of the high and low
quoted price of Bombay stock on your Hire Date. The remaining 42,500 options
will have an exercise price which shall be the average of the high and low
quoted price on your Hire Date plus the lesser of $.60 per share or 10% of such
average price. These options shall vest and may be exercised in whole or in
part at the rate of 33 1/3% per year, commencing with the
first anniversary of your Hire Date. The options have a term of ten years from
the date of grant. You will be eligible for additional option grants in the
year 2000.
Your employment is at-will and may be terminated by the Board at any time,
with or without cause. Separation pay for this level position, if you are
terminated not for cause, is generally not less than six (6) months continuation
of base salary.
You are eligible to participate in The Bombay Company 401(k) Savings and
Stock Ownership Plan after one year of employment. Under this plan, Bombay
currently contributes 75% of up to 5% of your compensation, which may be
invested in the various options available in the plan.
After 90 days of employment you will receive company paid life insurance
equal to 11/2 times your compensation at plan. Also, after 60 days of
employment you will be covered under the Executive Short Term Disability Income
Protection Plan, which pays 100% of your salary for a maximum of 13 weeks, and
the Executive Long Term Income Protection Plan which pays 60% of your salary up
to $8,500 per month for as long as you remain totally disabled up to age 65.
Your net cost will be limited to the amount of personal income taxes you pay on
the Company reimbursement of the premium. The Company also offers supplemental
life and personal accident insurance programs available to you at low group
rates. The Company will provide gap benefits for life and disability coverage
during the initial non-eligible periods of your employment.
You will be eligible to join our Medical and Dental Plan after 90 days of
employment. The cost of the plan is shared by the Company and the employee.
The premiums are currently tax exempt under a section of the IRS tax code. The
Company will reimburse you for COBRA expense actually incurred by you for
coverage during the first 90 days of your employment.
You are entitled to three (3) weeks vacation per year following one year of
employment under the current Company policy. For the balance of fiscal year
1998, you will have seven (7) days of vacation time.
In the event of a Change of Control, as defined in Exhibit "A," attached
hereto, the restricted stock and stock options granted to you shall immediately
vest and be deliverable to you or exercisable by you commencing on such date of
the Change of Control event.
With respect to relocation, Bombay will pay all reasonable costs of packing
and moving your furniture and household effects including your personal vehicles
from Brentwood to the Fort Worth area. In addition, the Company will pay a
maximum of $10,000 for commuting and other relocation related incidental
expenses. The Company will assist in the arrangements with one of the moving
companies with whom it has a corporate contract. Additionally, the Company
will, for a period of up to 90 days (extendable for an additional period not to
exceed 90 days by approval of the CEO or COO), pay for an apartment or similar
interim accommodation in the Fort Worth area. All taxable moving expenses will
be grossed-up for federal income taxes.
Regarding the sale of your home in Brentwood, the Company will pay selling
related expenses not to exceed 6% of the sale price of your home, which shall
include real estate commissions, attorney fees, title fees, etc. Bombay will
also pay expenses you incur in the purchase of a new home in the Fort Worth area
not to exceed 2% of the purchase price.
Should you voluntarily elect to terminate your employment with the Company
within one year of the Hire Date, you agree to repay to The Bombay Company, Inc.
all relocation dollars advanced, reimbursed or incurred on your behalf during
the relocation process.
You have advised the Company that you are a party to one or more agreements
or understandings with your current employer, Service Merchandise, under which
demand may be made for you to reimburse certain relocation expenses and bonus
payments relative to your employment with Service Merchandise and earlier
departure from Pier 1. Bombay hereby agrees to assist in the resolution of and
to indemnify you from any liability or expenses actually incurred by you from
claims arising out of the relocation or bonus payments, including attorneys
fees, if any, in disputing or negotiating such claims.
You agree and represent that your acceptance of employment with Bombay as
set forth in this letter does not conflict with any prior contract or agreement
of employment to which you are a party.
I look forward to your joining The Bombay Company, Inc. We are pleased
that you have indicated your acceptance of this offer. Please call me if you
have any questions.
For our records, I would appreciate your signing and returning one copy of
this letter to me at your earliest convenience.
Sincerely yours,
/s/ CARMIE MEHRLANDER
Carmie Mehrlander
President and Chief Operating Officer
CM/brm
/s/ STEVE WOODWARD July 20, 1998
_______________________________________ ___________________
Steve Woodward Date
September 3, 1998
PERSONAL AND CONFIDENTIAL
Ms. Cathy S. Pringle
5733 Clarendon Drive
Plano, TX 75093
Dear Cathy:
It is a pleasure to confirm our discussion offering you the position of
Vice President, Marketing of The Bombay Company, Inc. ("Company" or "Bombay"),
effective no later than September 18, 1998 (your first day of active employment
hereinafter referred to as the "Hire Date"). In this capacity you will report
directly to me.
Your annualized base salary in this position will be $132,000. In
addition, you will participate in the Company's Executive Bonus Program under
which, if Bombay (USA and Canada) achieves its business plan for fiscal 1998,
you will be eligible to receive a bonus of up to 25% of base salary. The earned
bonus amount will be determined based upon Company results and your personal
performance as judged by me, the CEO and the Board of Directors. For fiscal
1998 only, your bonus will be guaranteed at $12,000. Bonuses are paid in a lump
sum following the end of each fiscal year.
You will receive a grant of stock options covering 24,000 shares of Bombay
stock, which will include incentive stock options equal to $100,000 in face
value based upon Bombay's closing stock price on your Hire Date. The options
(including the incentive options) will have an exercise price equal to the
average of the high and low quoted price of Bombay stock on your Hire Date, and
shall vest and may be exercised in whole or in part at the rate of 33 1/3% per
year, commencing with the first anniversary of your Hire Date. The options have
a term of ten years from the date of grant.
Your employment is at-will and may be terminated by the Board at any time,
with or without cause.
You are eligible to participate in The Bombay Company 401(k) Savings and
Stock Ownership Plan after one year of employment. Under this plan, Bombay
currently contributes 75% of up to 5% of your compensation, which may be
invested in the various options available in the plan. You will be eligible to
participate in the Company's Stock Purchase Program, with the Company matching
contribution as approved by the Board of Directors upon completion of six (6)
months service.
After 90 days of employment you will receive company paid life insurance
equal to 11/2 times your compensation at plan. Also, after 60 days of
employment you will be covered under the Executive Short Term Disability Income
Protection Plan, which pays 100% of your salary for a maximum of 13 weeks, and
the Executive Long Term Income Protection Plan which pays 60% of your salary up
to $8,500 per month for as long as you remain totally disabled up to age 65.
Your net cost will be limited to the amount of personal income taxes you pay on
the Company reimbursement of the premium. The Company also offers supplemental
life and personal accident insurance programs available to you at low group
rates.
You will be eligible to join our Medical and Dental Plan after 90 days of
employment. The cost of the plan is shared by the Company and the employee.
The premiums are currently tax exempt under a section of the IRS tax code. The
Company will reimburse you for COBRA expense of $490 per month for coverage
during the first 90 days of your employment.
You are entitled to three (3) weeks vacation per year. For the balance of
calendar year 1998, you will have seven (7) days of vacation time.
In the event of a Change of Control, as defined in Exhibit "A," attached
hereto, the stock options granted to you shall immediately vest and be
exercisable by you commencing on such date of the Change of Control event.
Further, if you are terminated as a result of the Change of Control, you shall
be paid salary continuation (base salary only) plus COBRA reimbursement for a
period of six (6) months.
With respect to relocation, Bombay will pay all reasonable costs of packing
and moving your furniture and household effects from Plano to the Fort Worth
area to an amount not to exceed $20,000 without prior approval, provided such
relocation occurs within 18 months of your Hire Date. The Company will assist
in the arrangements with one of the moving companies with whom it has a
corporate contract. All taxable moving expenses will be grossed-up for federal
income taxes.
Regarding the sale of your home in Plano, the Company will pay selling
related expenses not to exceed 6% of the sale price of your home, which shall
include real estate commissions, attorney fees, title fees, etc. Bombay will
also pay expenses you incur in the purchase of a new home in the Fort Worth area
not to exceed 2% of the purchase price.
You agree and represent that your acceptance of employment with Bombay as
set forth in this letter does not conflict with any prior contract or agreement
of employment to which you are a party.
I look forward to your joining The Bombay Company, Inc. We are pleased
that you have indicated your acceptance of this offer. Please call me if you
have any questions.
For our records, I would appreciate your signing and returning one copy of
this letter to me at your earliest convenience.
Sincerely yours,
/s/ CARMIE MEHRLANDER
Carmie Mehrlander
President and Chief Operating Officer
CM/gg
/s/ CATHY S. PRINGLE September 4, 1998
_______________________________________ ___________________
Cathy S. Pringle Date
EXHIBIT "A"
A "Change of Control" of the Company, unless otherwise determined by the
Board, shall be deemed to have occurred upon the happening of any of the
following events:
(i) the acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) of beneficial ownership of 20% or more of either the
then outstanding shares of Common Stock of the Company or the combined
voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors; provided,
however, that any acquisition by the Company or any of its
subsidiaries, or any employee benefit plan (or related trust) of the
Company or its subsidiaries, or any corporation with respect to which
following such acquisition, more than 50% of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all
or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Common Stock and voting
securities of the Company immediately prior to such acquisition in
substantially the same proportion as their ownership, immediately
prior to such acquisition, of the then outstanding shares of Common
Stock of the Company or the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors, as the case may be, shall not
constitute a Change of Control;
(ii) individuals who, as of January 1, 1996, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a
director subsequent to such date whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors
of the Company (as such terms are used in rule 14a-11 of Regulation
14A promulgated under the Exchange Act); or
(iii) approval by the shareholders of the Company of a reorganization,
merger or consolidation of the Company, in each case, with respect to
which the individuals and entities who were the respective beneficial
owners of the Common Stock and voting securities of the Company
immediately prior to such reorganization, merger or consolidation do
not, following such reorganization, merger or consolidation,
beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of Common Stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such reorganization, merger
or consolidation, or a complete liquidation or dissolution of the
Company or of the sale or other disposition of all or substantially
all of the assets of the Company.
THE BOMBAY COMPANY, INC.
2000 NON-EMPLOYEE DIRECTORS' EQUITY PLAN
Adopted by the Board of Directors on March 8, 2000
INTRODUCTION
The Bombay Company, Inc. 2000 Non-Employee Directors' Equity Plan (the
"Plan") is hereby adopted on March 8, 2000 to continue the purposes of the
expiring 1991 Directors' Stock Option Plan, which was originally adopted on
August 14, 1991, and approved by shareholders on November 12, 1991, and which
was subsequently amended by shareholder approval on October 13, 1994, and was
further amended by the Board on March 1, 1998 and on April 17, 1998 and again by
shareholders on May 21, 1998. The Plan also incorporates and supersedes the
1993 Stock Deferral Plan for Non-Employee Directors which was originally adopted
by the Board on August 5, 1993, was approved by shareholders on October 13,
1993, and was amended by the Board on March 12, 1997.
1. PURPOSE.
(a) The purpose of the Plan is to provide a means by which each director
of The Bombay Company, Inc., a Delaware corporation (the "Company"), who is not
otherwise an employee of the Company or of any Affiliate of the Company (each
such person being hereafter referred to as a "Non-Employee Director") will be
given an opportunity to purchase common stock of the Company. The Plan also
permits Non-Employee Directors to elect to receive their annual and Committee
Chair retainer fees and meeting attendance fees in the form of common stock of
the Company or to defer such payments. The word "Affiliate" as used in the Plan
means any parent corporation or subsidiary corporation of the Company as those
terms are defined in Sections 424(e) and (f), respectively, of the Internal
Revenue Code of 1986, as amended (the "Code").
(b) The Company, by means of the Plan, seeks to retain the services of
persons now serving as Non-Employee Directors of the Company, to secure and
retain the services of persons capable of serving in such capacity, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors of the
Company (the "Board") unless and until the Board delegates administration to a
committee, as provided in paragraph 2(c).
(b) The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:
(i) To construe and interpret the Plan and options granted under it,
and to establish, amend and revoke rules and regulations for its administration.
The Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any option agreement, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective;
(ii) To amend, suspend or terminate the Plan as provided in paragraph
12; and
(iii) Generally, to exercise such powers and to perform such acts
as the Board deems necessary or expedient to promote the best interests of the
Company.
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members of the Board (the "Committee"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 11 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to options granted under
the Plan, used to pay fees or used to fund deferral distributions shall not
exceed in the aggregate Five Hundred Thousand (500,000) shares of the Company's
common stock plus any shares available for delivery under the 1991 Director
Stock Option Plan and 1993 Stock Deferral Plan for Non-Employee Directors which
have not been committed for delivery by grants made or stock units credited
under the prior plans, including any shares subject to options granted under the
prior plan which are settled, forfeited, expired or canceled without the
delivery of shares. If any option granted under the Plan shall for any reason
expire or otherwise terminate without having been exercised in full, the stock
not purchased under such option shall again become available for the Plan.
(b) All stock sold or otherwise delivered pursuant to the Plan shall be
treasury shares.
4. ELIGIBILITY. Only Non-Employee Directors of the Company may participate in
the Plan.
5. NON-DISCRETIONARY OPTION GRANTS.
(a) Each person who is elected for the first time to be a Non-Employee
Director of the Company shall, upon the date of his initial election to be a
Non-Employee Director by the Board or stockholders of the Company, be granted an
option (the "Initial Option") to purchase the lesser of (i) Five Thousand
(5,000) shares of common stock of the Company or (ii) a number of shares of
common stock of the Company having an aggregate Fair Market Value on the date of
grant of $75,000 (rounded to the nearest whole number of shares), on the terms
and conditions set forth herein. "Fair Market Value" shall mean the last
reported sale price of the shares of the Company's common stock as reported on
the applicable stock exchange on the relevant date of valuation or, if there is
no such sale, the last reported sale price of such shares so reported on the
nearest preceding date upon which such sale took place.
(b) On the third business day following issuance of the Company's annual
earnings release of each year each person who is then a Non-Employee Director of
the Company shall be granted an option (the "Annual Option") to purchase the
lesser of (i) Five Thousand (5,000) shares of common stock of the Company or
(ii) a number of shares of common stock of the Company having an aggregate Fair
Market Value on the date of grant of $75,000 (rounded to the nearest whole
number of shares) on the terms and conditions set forth herein.
(c) The Company intends that the options issued under the Plan not be
incentive stock options as that term is used in Section 422 of the Code.
6. OPTION PROVISIONS. Each option shall contain the following terms and
conditions:
(a) No option shall be exercisable after the expiration of ten (10) years
from the date it was granted.
(b) The per share exercise price of each option shall be one hundred
percent (100%) of the Fair Market Value of the common stock of the Company on
the date such option is granted.
(c) The purchase price of stock acquired pursuant to the exercise of an
option shall be paid, to the extent permitted by applicable statutes and
regulations, either (i) in cash at the time the option is exercised, or (ii) by
delivery to the Company of shares of common stock of the Company that have been
held for the requisite period necessary to avoid a charge to the Company's
reported earnings and valued at the Fair Market Value on the date of exercise,
or (iii) by a combination of such methods of payment.
(d) An option shall not be transferable except by will or by the laws of
descent and distribution, and shall be exercisable during the lifetime of the
person to whom the option is granted only by such person or by his guardian or
legal representative.
(e) An option shall vest with respect to each optionee as follows: (i)
the Initial Option shall vest and become exercisable at the rate of 20% per year
over a five (5) year period after the date of grant of such Initial Option; and
(ii) the Annual Option shall vest in full and become exercisable six (6) months
after the grant date of the Annual Option, provided that, subject to paragraph
6(m), the optionee has, during the entire period prior to such vesting date,
continuously served as a Non-Employee Director or as an employee of or
consultant to the Company or any Affiliate of the Company, whereupon such option
shall become fully exercisable in accordance with its terms with respect to that
portion of the shares represented by that installment.
(f) The Company may require any optionee, or any person to whom an option
is transferred under paragraph 6(d), as a condition of exercising any such
option: (1) to give written assurances satisfactory to the Company as to the
optionee's knowledge and experience in financial and business matters; and (2)
to give written assurances satisfactory to the Company stating that such person
is acquiring the stock subject to the option for such person's own account and
not with any present intention of selling or otherwise distributing the stock.
These requirements, and any assurances given pursuant to such requirements,
shall be inoperative if (i) the issuance of the shares upon the exercise of the
option has been registered under a then-currently-effective registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
or (ii) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the
then-applicable securities laws.
(g) Notwithstanding anything to the contrary contained herein, an option
may not be exercised unless the shares issuable upon exercise of such option are
then registered under the Securities Act or, if such shares are not then so
registered, the Company has determined that such exercise and issuance would be
exempt from the registration requirements of the Securities Act.
(h) Neither an optionee nor any person to whom an option is transferred
under paragraph 6(d) shall be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares subject to such option unless and
until such person has satisfied all requirements for exercise of the option
pursuant to its terms.
(i) Nothing in the Plan or in any instrument executed pursuant thereto
shall confer upon any Non-Employee Director any right to continue in the service
of the Company or any Affiliate or shall affect any right of the Company, its
Board or stockholders or any Affiliate to terminate the service of any Non-
Employee Director with or without cause.
(j) No Non-Employee Director, individually or as a member of a group, and
no beneficiary or other person claiming under or through him, shall have any
right, title or interest in or to any option reserved for the purposes of the
Plan except as to such shares of common stock, if any, as shall have been
reserved for him pursuant to an option granted to him.
(k) In connection with each option granted pursuant to the Plan, it shall
be a condition precedent to the Company's obligation to issue or transfer shares
to a Non-Employee Director that such Non-Employee Director acknowledge full
responsibility for any federal or other tax with respect to such sale or
transfer.
(l) If a Non-Employee Director shall terminate performance of services for
the Company because of death or disability, all options outstanding as to such
Non-Employee Director shall be fully exercisable, at any time, or from time to
time, within the greater of one (1) year after the date of death or termination
of performance of services because of disability or the exercise period
presented in the second sentence of paragraph 6(m), but in no event later than
the expiration date specified pursuant to paragraph 6(a). In the case of death,
exercise may be made by the person or persons to whom the Non-Employee
Director's rights under the option pass by will or applicable law, or if no such
person has such rights, by the Non-Employee Director's executors or
administrators; provided that such person(s) consent in writing to abide by and
be subject to the terms of the Plan and the option.
(m) If a Non-Employee Director's performance of services for the Company
shall terminate for any reason other than death or disability, all options
outstanding as to such Non-Employee Director shall, to the extent not otherwise
exercisable, become fully exercisable provided said Non-Employee Director has
completed at least five (5) years service on the Board. A departing Non-
Employee Director shall have twelve (12) months to exercise vested options for
each full three (3) year term and any partial term served on the Board of
Directors, to a maximum exercise period of thirty-six (36) months.
Notwithstanding the above, in no event shall an option be exercisable later than
the expiration date specified in paragraph 6(a). For the purposes of the Plan
and any other agreement, the Non-Employee Director's performance of services
shall be deemed to have terminated on the earlier of (i) the date when the Non-
Employee Director's performance of services in fact terminated or (ii) the date
when the Non-Employee Director gave or received written notice that his
performance of services was to terminate.
7. COVENANTS OF THE COMPANY.
(a) During the terms of the options granted under the Plan, the Company
shall keep available at all times the number of shares of common stock required
to satisfy such options.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the options granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any option granted under the
Plan, or any stock issued or issuable pursuant to any such option. If the
Company is unable to obtain from any such regulatory commission or agency the
authority which counsel for the Company deems necessary for the lawful issuance
and sale of stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell stock upon exercise of such options.
8. USE OF PROCEEDS FROM STOCK.
Proceeds from the exercise of options granted under the Plan shall
constitute general funds of the Company.
9. PAYMENT OF FEES IN COMMON STOCK.
(a) A Non-Employee Director may elect to receive payment of all or any
portion of his or her annual retainer and Committee Chair retainer ("Retainer
Fees") and meeting attendance fees ("Meeting Fees") from the Company in the form
of common stock of the Company. Such an election shall be effective with
respect to fees payable commencing with the next fiscal quarter following the
date of the election. An election to receive payment of fees in the form of the
Company's common stock may be revoked only by a subsequent election to receive
payment of fees in cash or to defer such fees pursuant to paragraph 10. Such
election shall be effective with respect to fees payable commencing with the
next fiscal quarter. Notwithstanding the above, no election permitted in this
paragraph 9 shall be effective if such election would cause the payment of fees
in common stock to be a non-exempt purchase under Rule 16b-3 of the Securities
Exchange Act of 1934 (the "Exchange Act") or terminate the Non-Employee
Director's status as a disinterested person under Rule 16b-3, unless approved by
the Board of Directors. The number of shares of the Company's common stock to
be paid to a Non-Employee Director shall be determined by dividing the amount of
each fee payable by the Fair Market Value of the Company's common stock on the
last day of each fiscal quarter during which such fees were earned. The amount
of any fractional share shall be paid in cash.
(b) If a Non-Employee Director has elected to receive his or her fees in
the form of common stock, a certificate for the number of shares of common stock
to which the Non-Employee Director is entitled shall be issued as soon as
reasonably practicable following the date the director is to receive the fee.
10. DEFERRAL OF RETAINERS AND MEETING FEES.
(a) Commencing on the effective date of the Plan, payment of all or a
portion of the Retainer Fees and Meeting Fees may be deferred by election of the
Non-Employee Director (a "Deferral Election"). Any deferral election under the
prior plan shall be valid under this Plan for continuing deferrals. Each new
Deferral Election shall be effective as of the beginning of the next fiscal
quarter after receipt, provided however that such election shall satisfy the
requirements of Rule 16b-3(d) promulgated under the Exchange Act, as the same
may be hereafter amended. Deferrals shall continue until changed or ceased by a
subsequent Deferral Election becoming effective.
(b) Amounts deferred pursuant to paragraph 10(a) shall be credited at the
end of each fiscal quarter to a bookkeeping reserve account ("Account")
maintained by the Company in stock units ("Stock Units"). The number of Stock
Units credited to an Account with respect to any Non-Employee Director shall
equal any deferred cash amount divided by the average Fair Market Price of the
common stock on the New York Stock Exchange for each day of the quarter during
which such fees would have been paid but for the Deferral Election pursuant to
paragraph 10(a).
(c) All Stock Units credited to a Non-Employee Director's Account pursuant
to this Plan shall be at all times fully vested and nonforfeitable.
(d) Stock Units credited to a Non-Employee Director's Account shall be
payable in an equal number of shares of common stock of the Company in a single
distribution made at such time specified by the Non-Employee Director in the
applicable Deferral Election, provided that the designated payment date with
respect to any election must be no earlier than twelve (12) months following the
establishment of the affected Stock Unit. Fractional shares shall be paid in
cash.
(e) The Company shall issue and deliver to the Non-Employee Director a
certificate for the number of shares of common stock due such director as
payment for Stock Units as soon as practicable following the date on which Stock
Units are payable.
(f) The Plan shall be unfunded with respect to the Company's obligation to
pay any amounts due pursuant to Stock Units, and a Non-Employee Director's
rights to receive any payment of any Stock Unit shall be not greater than the
rights of an unsecured general creditor of the Company.
(g) Except as otherwise provided herein or approved by the Board of
Directors, the right to receive payment with respect to a Stock Unit under this
Plan is not assignable or transferable and shall not be subject to any
encumbrances, liens, pledges or charges of the Non-Employee Director or his or
her creditors. Any such attempt to assign, transfer or hypothecate any Stock
Unit or any right to receive a Stock Unit shall be void and of no force and
effect whatsoever.
(h) A Non-Employee Director may designate a beneficiary or beneficiaries
to receive any distributions under the Plan upon his or her death.
(i) In the event a cash dividend is declared with respect to the common
stock, the Account of each participating Non-Employee Director shall be credited
with Stock Units equal to the product of (i) the per-share cash dividend payable
with respect to each share of common stock on such date, and (ii) the total
number of Stock Units credited to the Account as of the record date
corresponding to such dividend payment date, divided by the closing price of the
common stock on the New York Stock Exchange on the record date corresponding to
such dividend.
11. ADJUSTMENTS UPON CHANGES IN STOCK.
If any change is made in the stock of the Company through merger,
consolidation, reorganization, recapitalization, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or otherwise, the Plan
(including the total number of shares and kind of shares issuable under the Plan
and the number of shares issuable pursuant to grants of Initial Options and
Annual Options), outstanding options (including the exercise prices thereof) and
Stock Units will be appropriately adjusted by the Board to account for the
change. The options granted under the Plan and the Stock Units created pursuant
to the Plan shall not affect in any way the right or power of the Company to
issue additional common stock or other securities, make adjustments,
reclassifications, reorganizations or other changes in its corporate, capital or
business structure, to participate in a merger, consolidation or share exchange
or to transfer its assets or dissolve or liquidate.
12. AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.
(a) The Board at any time, and from time to time, may amend, suspend or
terminate the Plan. However, except as provided in paragraph 11 relating to
adjustments upon changes in stock, no amendment shall be effective unless
approved by the stockholders of the Company to the extent the Board determines
stockholder approval of such amendment is necessary or desirable.
(b) Rights and obligations under any option granted or Stock Unit credited
or to be audited before any amendment, suspension or termination of the Plan
shall not be altered or impaired by such amendment, suspension or termination of
the Plan except with the consent of the person to whom the option was granted or
Stock Unit credited.
13. CHANGES OF CONTROL, ACCELERATION OF RIGHT TO EXERCISE AND DISTRIBUTION OF
STOCK UNITS.
(a) Notwithstanding anything in the Plan or in a stock option agreement
evidencing any option to the contrary, in the event a Change of Control (as
defined below) occurs, then each option shall become immediately exercisable,
upon the date of the occurrence of such Change of Control, for the purchase of
the full number of shares subject to such option for a period not to exceed
thirty-six (36) months or the remaining life of the option. In addition, and
notwithstanding the provisions of paragraph 10(d), all Stock Units credited to
an Account for a Non-Employee Director shall be immediately payable to such
director in the form of shares of common stock equal in number to the Stock
Units held as of the date of the Change of Control.
(b) "Change of Control" shall mean the occurrence of any of the following
events:
(i) the acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) of beneficial ownership of 20% or more of either the then
outstanding shares of Common Stock of the Company or the combined voting power
of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors; provided, however, that any acquisition
by the Company or any of its subsidiaries, or any employee benefit plan (or
related trust) of the Company or its subsidiaries, or any corporation with
respect to which following such acquisition, more than 50% of, respectively, the
then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Common Stock
and voting securities of the Company immediately prior to such acquisition in
substantially the same proportion as their ownership, immediately prior to such
acquisition, of the then outstanding shares of Common Stock of the Company or
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors, as the case may
be, shall not constitute a Change of Control;
(ii) individuals who, as of January 1, 1996, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board, provided that any individual becoming a director subsequent to such date
whose election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the Company (as
such terms are used in rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or
(iii) approval by the shareholders of the Company of a
reorganization, merger or consolidation of the Company, in each case, with
respect to which the individuals and entities who were the respective beneficial
owners of the Common Stock and voting securities of the Company immediately
prior to such reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of
Common Stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such reorganization, merger or
consolidation, or a complete liquidation or dissolution of the Company or of the
sale or other disposition of all or substantially all of the assets of the
Company.
14. EFFECTIVE DATE OF PLAN.
The Plan shall become effective upon approval by the Board of Directors.
DIRECTOR STOCK OPTION AGREEMENT
PURSUANT TO
THE BOMBAY COMPANY, INC.
2000 NON-EMPLOYEE DIRECTOR EQUITY PLAN
This Option Agreement (The "Agreement") is made this ___ day of ________,
2000, between THE BOMBAY COMPANY, INC., a Delaware Corporation (the "Company"),
and _____________________, a director of the Company (the "Director).
WHEREAS, the Company desires to carry out the purposes of The Bombay
Company, Inc. 2000 Non-Employee Director Equity Plan (the "Plan") by affording
Director the opportunity to purchase shares of the Company's $1.00 par value
common stock.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the parties hereto agree as
follows:
1. Grant of Option. The Company hereby grants to Director the right and
option (the "Option") to purchase an aggregate of _______ shares of the
Company's $1.00 par value common stock (the "Shares"), such Shares being subject
to adjustment as provided in paragraph 8 hereof, and on the terms and conditions
herein set forth. The _______ Shares are granted as a nonqualified option not
entitled to special tax treatment under Internal Revenue Code Section 422A.
2. Purchase Price. The purchase price of the Shares covered by the
Option shall be $_______ per Share, such purchase price being 100% of the fair
market value of such Shares on ___________, 2000 (the "Date of Grant").
3. Exercise of Option. Unless expired as provided in paragraph 5 below,
and subject to the special provisions of paragraph 6 below, the Option may be
exercised from time to time in whole or in part at any time after the completion
of six (6) months following the Date of Grant.
4. Manner of Exercise; Payment of Purchase Price.
A. Subject to the terms and conditions of this Agreement, the Option
shall be exercised by written notice to the Company at its principal office.
Such notice shall state the election to exercise the Option and shall specify
the number of Shares sought to be exercised pursuant to the notice. Such notice
of exercise shall be signed by Director and shall be irrevocable when given.
B. The Notice of exercise shall be accompanied by the full payment,
in cash, of the purchase price for the Shares or by tendering Shares owned by
Director to the Company with a fair market value equal to the purchase price for
the Shares or by a combination of such methods of payment.
C. Upon receipt of the purchase price, and subject to the terms of
paragraph 11, the certificate or certificates representing the Shares exercised
shall be registered in the name of the person or persons so exercising the
Option. If the Option shall be exercised by Director and, if Director shall so
request in the notice exercising the Option, the Shares shall be registered in
the name of Director and another person, as joint tenants with right of
survivorship, and shall be delivered as provided above to or upon the written
order of the person or persons exercising the Option. In the event the Option
shall be exercised pursuant to paragraph 7 hereof, by any person or persons
other than Director, such notice shall be accompanied by appropriate proof
satisfactory to the Company of the right of such person or persons to exercise
the Option. All Shares that shall be purchased upon the exercise of the Option
as provided therein shall be fully paid and non-assessable.
5. Expiration of Option. A departing Director shall have twelve (12)
months to exercise vested options for each full three year term and any partial
term served on the Board, to a maximum exercise period of thirty-six (36)
months. In no event, however, shall the period to exercise this option extend
beyond the date which is ten (10) years after the Date of Grant. Except as
provided in paragraph 6 below, only those portions of this option exercisable as
of the date Director ceases to serve as a Director of the Company may be
exercised, whether such termination is by retirement or otherwise. Any option
not exercised within the permitted exercise period shall expire and become null
and void.
6. Acceleration of Exercisable Dates. Notwithstanding the provisions of
paragraph 3 above relating to the exercise of this Option: (a) upon Director's
death or Disability this Option shall be fully vested and immediately
exercisable, until the expiration date provided in paragraph 5 above, for the
entire number of Shares covered hereby; (b) upon Director's retirement, or other
termination or service, this Option shall be fully vested and immediately
exercisable, until the expiration date provided in paragraph 5 above, for the
entire number of Shares covered hereby provided Director has completed at least
five (5) years service on the Board; and (c) upon any Change in Control of the
Company (as defined in the Plan) this Option shall be fully vested and
immediately exercisable for a period of the lesser of thirty-six (36) months
following the date of the Change of Control or the remaining life of the option
(which shall not exceed 10 years from the Date of Grant), for the entire number
of Shares covered hereby.
7. Option Nontransferable. The Option and any right related thereto
shall not be transferable by Director otherwise than by will or by the laws of
descent and distribution and may be exercised, during Director's lifetime, only
by Director. Upon the death of Director, the Option may be exercised by
Director's executor, administrator, legatee or distributee, as the case may be,
in accordance with paragraphs 4.C and 6.
8. Adjustments of Shares Subject to Option. If the Shares shall at any
time prior to exercise be changed or exchanged by reason of reorganization,
merger, consolidation, recapitalization, reclassification, stock split,
combination of Shares or a dividend payable in stock, then the aggregate number
of Shares subject to this Agreement and the purchase price of such Shares shall
be automatically adjusted such that Director's proportionate interest shall be
maintained as before the occurrence of such event. The determination of any
such adjustment by the Administrative Committee shall be final, binding and
conclusive.
9. No Right to Continue as a Director. This Agreement does not
constitute or be evidence of any agreement or understanding, express or implied,
that the Company will retain Director for any period of time or at any
particular rate of compensation.
10. Rights as Shareholder. This Option shall not entitle Director or any
permitted transferee to any rights of a shareholder of the Company or to any
notice of proceedings of the Company with respect to any Shares issuable upon
exercise of this Option unless and until the Option has been exercised for such
Shares.
11. Restriction on Issuance of Shares. The Company shall not be required
to issue or deliver any certificates for Shares purchased upon the exercise of
an Option prior to the obtaining of any approval from any governmental agency
which the Company shall, in its sole discretion, determine to be necessary or
advisable, and the completion of any registration or other qualification of such
Shares under any state of federal law or ruling or regulations of any
governmental body which the Company shall, in its sole discretion, determine to
be necessary or advisable. In addition, if shares reserved for issuance upon
exercise of Options shall not then be registered under the Securities Act of
1933 the Company may, upon Director's exercise of the Option, require Director
or his permitted transferee to represent in writing that the Shares being
acquired are for investment and not with a view to distribution, and may mark
the certificate for the Shares with a legend restricting transfer and may issue
stop transfer orders relating to such certificate to the transfer agent.
12. Binding Effect. This Agreement shall be binding upon the heirs,
executors, administrators, and successors of the parties hereto.
13. Governing Instrument and Law. This Option and any shares issued
hereunder shall in all respects be governed by the terms and provisions of the
Plan, and by the laws of the State of Texas, and in the event of a conflict
between the terms of this Agreement and the terms of the Plan, the terms of the
Plan shall control.
THE BOMBAY COMPANY, INC.
By:_______________________________
Carmie Mehrlander
President & Chief Executive Officer
Accepted and Agreed:
___________________________
(insert name)
<F3>
<TABLE>
Selected Financial Data
The Bombay Company, Inc. and Subsidiaries
<CAPTION>
Year Ended
--------------------------------------------------------------
January 29 January 30 January 31 February 1 February 3
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
Financial Data:
Net sales(1) $390,881 $356,715 $332,577 $336,303 $345,399
Net sales increase
(decrease) 10% 7% (1)% 2%(2) 0%(2)
Same store sales increase
(decrease) 5% 6% 0 % 2%(2) (9)%(2)
Income (loss) from
continuing operations:(1)
Before accounting
change $7,342 $ 4,010 $ 4,450 $(2,840) $12,393(3)
Cumulative effect of
accounting change 0 0 0 835 0
Net income (loss) 7,342 4,010 4,450 (2,005) 12,393(3)
Basic earnings per share:
Income (loss) before
accounting change .20 .11 .12 (.07) .33(3)
Cumulative effect of
accounting change 0 0 0 .02 0
Net income (loss) .20 .11 .12 (.05) . 33(3)
Diluted earnings per share:
Income (loss) before
accounting change .20 .11 .12 (.07) .33(3)
Cumulative effect of
accounting change 0 0 0 .02 0
Net income (loss) .20 .11 .12 (.05) .33(3)
Total assets(1) 201,872 193,519 195,462 195,363 190,696
Stockholders equity(1) 156,248 156,143 158,238 153,933 152,468
Return on average assets 3.7% 2.1% 2.3% (1.0)% 6.5%
Return on average equity 4.7% 2.6% 2.9% (1.3)% 8.6%
Operating Data:
Average sales per store
open for full fiscal
period(1) $942 $873 $796 $784 $765(2)
Average sales per square foot $288 $278 $263 $262 $263(2)
Number of stores:
Beginning of year 412 415 427 434 486
Opened 19 15 2 9 11
Closed 16 18 14 16 63
End of year 415 412 415 427 434
Store composition:
Regular 145 161 187 203 216
Large format 270 251 228 224 218
Retail square footage:(1)
Regular 288 303 333 358 371
Large format 1,049 989 910 902 885
Total 1,337 1,292 1,243 1,260 1,256
<FN>
The Company has paid no cash dividends during the periods presented.
(1) In thousands.
(2) Excludes the closed Alex & Ivy division; comparatives are based on twelve
month periods.
(3) Includes pre-tax credit of $6,000,000, equivalent to $.10 per share,
reversal of previous operations realignment costs.
</TABLE>
<F2>
<TABLE>
Price Range of Common Stock
Quoted by quarter for the fiscal periods ended:
<CAPTION>
January 29, 2000 High Low January 30, 1999 High Low
<S> <C> <C> <C> <C> <C>
First $6.94 $3.56 First $5.94 $4.19
Second 8.13 5.56 Second 5.94 3.75
Third 6.81 3.50 Third 6.75 4.13
Fourth 5.88 3.75 Fourth 5.88 4.31
</TABLE>
<F5>
Management's Discussion and Analysis
General
The Bombay Company, Inc. ("Company") is a specialty retailer which markets
timeless and classic furniture, prints and accessories through over 400
locations of The Bombay Company ("Bombay") retail stores in 42 states in the
United States and nine Canadian provinces, through mail order and over the
Internet at www.bombayco.com.
The largest percentage of the Company's sales and operating income is
realized in the fiscal quarter that includes December (Christmas season).
Merchandise is manufactured to Company specification through a network of
contract manufacturers located principally in Asia and North America. Because
the majority of the Company's products are proprietary, the impact of inflation
on operating results is typically not significant. The Company attempts to
alleviate inflationary pressures by increasing selling prices (subject to
competitive conditions), improving designs and finding alternative production
sources in lower cost countries.
See Note 1 of Notes to Consolidated Financial Statements for fiscal
reporting periods.
<F1>
Special Note Regarding Forward-Looking Statements
Certain statements in this Annual Report to Shareholders under
"Management's Discussion and Analysis" constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: competition; seasonality; success
of operating initiatives; new product development and introduction schedules;
acceptance of new product offerings; advertising and promotional efforts;
adverse publicity; expansion of the store chain; availability, locations and
terms of sites for store development; changes in business strategy or
development plans; availability and terms of capital; labor and employee benefit
costs; changes in government regulations; risks associated with international
business and regional weather conditions.
Net Sales
Fiscal 1999
During Fiscal 1999, the Company recorded net sales of $390.9 million, an
increase of $34.2 million or 10% over net sales of $356.7 million in Fiscal
1998. The increase is due to a 5% increase in same store sales (stores in
existence for one year or more) as well as a slight increase in the number of
stores opened. During the year, the Company opened 19 new stores and converted
another 11 regular stores to the larger format store. These increases were
partially offset by the closure of 16 underperforming stores, most of which were
at the end of their lease lives. As a result, the number of stores increased
from 412 stores as of the end of Fiscal 1998 to 415 stores as of the end of
Fiscal 1999 including 270 large stores, 125 regular stores and 20 outlet stores.
All stores, either new or converted, were built in the new design introduced
late in Fiscal 1997. In addition, during Fiscal 1999, the Company remodeled
and/or remerchandised another 30 stores in a style similar to the new store
design. As of the end of Fiscal 1999, a total of 125 stores, or 30% of the
chain, reflect the updated look.
Additional fixturing has been introduced to all stores in order to assist
in the presentation of the wider merchandise selection. These new fixtures have
allowed the Company to increase the density of merchandise presented in our
stores which helps drive incremental sales in key accessory growth categories.
From a product mix standpoint, the sales increases are primarily related to
the increased focus on accessories and impulse items, designed to attract more
customers and grow the Company's customer base. While furniture is still the
core of the business, the emphasis on accessories has somewhat shifted the sales
mix in Fiscal 1999 compared to Fiscal 1998. In Fiscal 1999, furniture
represented 45% of the sales, accessories were 32%, wall decor (principally
prints, mirrors and sconces) was 15% while lamps and other categories
represented 8% of the business. In Fiscal 1998, furniture represented 50% of the
sales, and accessories were 28% while other categories were essentially the same
as in Fiscal 1999. Consistent with the emphasis on accessories, the number of
transactions increased 23% over last year and the average ticket decreased 10%
to $79.
On a regional basis, there was little variation in same store sales with
the exception of the northeastern part of the U.S. which experienced a slight
decline. The same store sales increase in outlets was above the Company average
as more outlet specific merchandise purchases have been made. Currently, the mix
of product in the outlets is approximately 60% special purchase and 40%
clearance and overstock from the primary retail chain.
Fiscal 1998
In Fiscal 1998, net sales increased by $24.1 million or 7% to $356.7 million
from $332.6 million in Fiscal 1997. Sales increases were attributable to a 6%
increase in same store sales as well as opening 15 new stores during the year
and converting another 16 regular stores to the larger format. These increases
were partially offset by the closure of 18 underperforming stores. The same
store sales increase was driven by promotional selling of old and discontinued
merchandise as new management purged inventory of items that no longer were
consistent with the Company's direction.
The Fiscal 1998 sales mix consisted of 50% furniture, 28% accessories, 15%
wall decor and 7% lamps and other categories, essentially the same as Fiscal
1997. In order to broaden the customer base and increase the sales per square
foot in the stores, new management focused on developing the non-furniture
portion of the business which resulted in a shift in the mix toward the latter
part of the year. This emphasis resulted in an 11% increase in the number of
transactions over Fiscal 1997 and a 3% decline in the average ticket to $88.
All regions of the United States contributed to the sales gains with
relatively little variation in same store sales performance. Canadian sales
were adversely impacted by the unfavorable changes in the Canadian exchange rate
which resulted in their reporting flat comparable store sales for the year
measured in U.S. dollars.
Cost of Sales, Buying and Store Occupancy Costs
Cost of sales, including buying and store occupancy costs, for Fiscal 1999
was $273.5 million or 70.0% of sales. As a percentage of sales, these costs
decreased from 70.9% of sales in Fiscal 1998. Product margins improved 70 basis
points over the prior year primarily due to higher margins in all categories
except furniture which was down slightly. Improved merchandise selection and
more selective promotions were the key reasons for the improvement. Buying and
occupancy costs declined to 20.2% of sales from 20.4% of sales while increasing
$6.1 million. The higher costs were primarily the results of higher rents and
related costs on a 3% increase in overall store square footage, and higher
depreciation costs associated with the new construction, additional store
fixtures and the new point of sale system. The decline in buying and occupancy
as a percentage of sales is due to the relatively fixed nature of the costs
measured against a higher sales base.
In Fiscal 1998, cost of sales, including buying and store occupancy costs, was
$252.9 million or 70.9% of sales. As a percentage of sales, these costs
increased from 69.1% of sales in Fiscal 1997. Product margins declined 240 basis
points compared to the prior year as the new management team aggressively
cleared old and discontinued merchandise. The decline in product margin was
partially offset by a 60 basis point improvement in buying and occupancy costs
from 21.0% of sales to 20.4% of sales due to the relatively fixed nature of
costs measured against sales increases.
Selling, General and Administrative Expenses
Selling, general and administrative expenses in Fiscal 1999 were $106.3
million, an increase of $7.4 million or 8%, compared to $98.9 million in Fiscal
1998. The dollar increase resulted primarily from higher payroll and payroll
related costs. Store payroll cost increases were driven by higher store pay
rates in the tight labor market while performance based compensation increased
due to the Company's improved operating results. Although expenses increased in
dollars, as a percentage of sales, selling, general and administrative expenses
declined from 27.7% to 27.2% due largely to economies of scale realized in
advertising, leveraging other fixed costs against the higher sales base and
continued controls over expenses.
In Fiscal 1998, selling, general and administrative expenses increased $1.2
million to $98.9 million, compared to $97.7 million in Fiscal 1997. Although
expense amounts increased, as a percentage of sales, selling, general and
administrative expenses declined from 29.4% to 27.7%. Improvements were realized
primarily in advertising (63 basis points), payroll and payroll related costs
(40 basis points) and insurance (31 basis points) as a result of higher sales
levels and continued cost control efforts.
Interest
In Fiscal 1999, interest income was $1.1 million compared to $1.9 million
in Fiscal 1998. The decline in interest income was due primarily to lower
average cash balances resulting primarily from higher average inventory levels
than in Fiscal 1998. In addition, $8.5 million of cash was used to repurchase
Company stock during the year. In Fiscal 1999, the Company had less than $.1
million interest expense incurred on temporary seasonal borrowings used to
support higher inventory levels in preparation for the Christmas sales season.
Interest income in Fiscal 1998 was $1.9 million compared to $2.3 million in
Fiscal 1997. There was no interest expense in either period. The decline in
interest income was due primarily to lower average cash balances as the Company
increased its capital expenditures to $20.5 million during Fiscal 1998 compared
to $4.4 million in Fiscal 1997. Additionally, $6.2 million of cash was utilized
under the Company's stock repurchase program. The decline in the cash balance
was somewhat offset by higher interest rates earned during the year.
Income Taxes
The Company provided income taxes of $4.8 million, $2.8 million and $2.9
million in Fiscal 1999, Fiscal 1998 and Fiscal 1997, respectively. The effective
rates were 39.6%, 41.0% and 39.3% for the respective periods. Fluctuations in
the effective rate are primarily related to state tax expenses which have not
changed proportionately to income before income taxes.
Liquidity and Capital Resources
The primary sources of liquidity and capital resources are cash flows from
operations and bank lines of credit. Bank borrowings are available to fund
seasonal inventory purchases. In addition, the bank credit lines are used for
overseas merchandise purchases. Unsecured bank lines aggregate $45 million, of
which $30 million are committed under revolving credit agreements expiring May
13, 2000. These lines are expected to be renewed under similar terms.
Fiscal 1999
At January 29, 2000, cash and short-term investments were $39.2 million, a
decrease of $13.6 million from January 30, 1999. The primarily uses of cash were
inventory purchases, expansion of the store base and information technology
upgrades as well as purchases of treasury stock. These uses were partially
offset by net income including non-cash depreciation and amortization expense,
and by increases in payables.
At January 29, 2000, inventory levels were $16.2 million higher than at the
same time last year. The Company does not believe that the higher levels
represent a financial risk going forward. During Fiscal 1999, the Company made
the decision to bring in approximately $5 million of inventory early as
insurance against possible supply chain disruptions related to Year 2000 issues.
Much of this product was included in inventory as of the end of the year. The
increase also reflects the higher sales level and the increased focus on
accessories. As of the end of the year, less than 3% of the total inventory was
greater than one year old.
Capital expenditures totaled $18.0 million and included the costs of 19 new
stores and the conversion of 11 regular stores to the larger format. The 1999
capital expenditures also included approximately $6.6 million spent on the
replacement of store point of sale equipment, as well as purchases of additional
store fixtures and routine purchases of machinery and equipment. The capital
expenditure program for Fiscal 2000 is planned at approximately $20 million and
includes approximately 16 store openings and 25 conversions. Generally, a new or
converted store is profitable in its first full year of operations.
The Company also continues a stock repurchase program approved by the Board
of Directors, recently extended to a total of $25.0 million. During Fiscal 1999,
the Company spent $8.5 million under the program to purchase, on the open
market, approximately 1.8 million shares of the Company's common stock. Through
January 29, 2000, $14.7 million has been spent to acquire approximately 3.0
million shares of the Company's common stock. The Company will continue to
purchase shares on the open market under this program during Fiscal 2000.
The Company believes that its current cash position, cash flows from
operations and credit line facilities will be more than sufficient to fund its
current operations, capital expenditure and stock repurchase programs.
Fiscal 1998
At January 30, 1999, cash and short-term investments were $52.8 million, a
decrease of $3.3 million from January 31, 1998. Sources of cash were primarily
net income including non-cash depreciation and amortization expense as well as a
decrease in inventories. The decline in inventories was primarily related to
aggressive moves to clear old and discontinued merchandise. These sources of
cash were offset by an increase in other noncurrent assets related to software
purchases, and by the acquisition of 1.2 million shares of Company stock
acquired under the stock repurchase program begun in June 1998.
Capital expenditures totaled $20.5 million and included the costs of 15 new
stores, 16 store conversions, purchases of additional store fixtures and routine
purchases of machinery, equipment and information technology upgrades.
Year 2000 Conversion
The Company prepared for Year 2000 through a comprehensive effort which
addressed not only information technology but also other functional areas of
the Company. Remediation efforts were in process since 1997 and contingency
plans continued to be developed throughout 1999. The overall objective of the
Company's efforts were to identify and remediate Year 2000 related conditions
that could reasonably be expected to cause a mission critical failure if not
addressed. Efforts related to this objective focused on a review of all
proprietary and third-party systems and software, as well as an analysis of the
risks inherent in significant business partner and vendor relationships. The
Company's Year 2000 program and associated resources were primarily directed
toward ensuring that the Company would be able to effect sales, order and
receive merchandise, and pay its vendors and employees. The Company considers
its preparation and remediation efforts to have been successful, as it has
experienced no significant impact to date related to Year 2000 issues.
During Fiscal 1998, the Company spent approximately $1.0 million on the
installation of its new payroll and human resources systems, each of which was
certified by the respective vendor to be Year 2000 compliant and which replaced
a non-compliant system. During Fiscal 1999, the Company replaced its store
hardware and store operating and communications software, including the point of
sale system. Total costs for the implementation of the new store environment
technology totaled approximately $7.3 million in Fiscal 1998 and 1999. In
addition to the cost of purchasing and implementing compliant replacement
systems, the Company incurred approximately $.4 million in Fiscal 1998 and
approximately $.9 million in Fiscal 1999 for ancillary testing and remediation
of Year 2000 issues, consisting primarily of normal salaries paid to existing
employees through the redirection of internal programming resources. These costs
and expenditures were included in the Company's operating budget and have not
had a material effect on the results of operations, liquidity or financial
position. Purchased hardware, software and the costs of their implementation are
capitalized and amortized over their useful lives while other costs of
remediation associated with the Year 2000 conversion were expensed as incurred.
The Company developed and documented contingency plans to address
situations that might result if the Company was unable to achieve Year 2000
readiness of its critical operations. Although the Company has experienced no
significant impact from Year 2000 issues, there can be no assurance that such
issues will not arise in the future. Furthermore, there can be no assurance that
contingency plans developed by the Company will adequately address issues that
may arise, or that the failure to develop such a plan will not have a material
impact on the operations of the Company.
New Accounting Pronouncement
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities ("FAS 133"). FAS 133 establishes accounting and reporting
standards for derivative financial instruments including, among other things,
forward currency exchange contracts. FAS 133 is effective for the Company's
financial statements beginning in Fiscal 2000, and the Company is currently
investigating the impact of its adoption. However, due to the Company's limited
use of derivative financial instruments, adoption of FAS 133 is not expected to
have a significant impact on the Company's consolidated financial position or
results of operations.
<AUDIT-REPORT>
Independent Accountants' Report
To the Board of Directors and Stockholders of
The Bombay Company, Inc.
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of The Bombay
Company, Inc. and its subsidiaries at January 29, 2000 and January 30, 1999, and
the results of their operations and their cash flows for the three years ended
January 29, 2000, in conformity with accounting principles generally accepted in
the United States. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management,
and evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
/s/ PRICEWATERHOUSECOOPERS LLP
March 8, 2000
Fort Worth, Texas
</AUDIT-REPORT>
<TABLE>
Consolidated Statements of Income
The Bombay Company, Inc. and Subsidiaries
(In thousands, except per share amounts)
<CAPTION>
Year Ended
--------------------------------------------
January 29 January 30 January 31
2000 1999 1998
<S> <C> <C> <C>
Net sales $ 390,881 $ 356,715 $ 332,577
Costs and expenses:
Cost of sales, buying and
store occupancy costs 273,500 252,891 229,927
Selling, general and
administrative expenses 106,257 98,916 97,663
Interest income, net (1,029) (1,885) (2,349)
378,728 349,922 325,241
Income before income taxes 12,153 6,793 7,336
Provision for income taxes 4,811 2,783 2,886
Net income $ 7,342 $ 4,010 $ 4,450
Basic earnings per share $.20 $.11 $.12
Diluted earnings per share $.20 $.11 $.12
Average common shares
outstanding 36,408 37,728 38,066
Average common shares
outstanding and dilutive
potential common shares 36,672 37,784 38,095
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<TABLE>
Consolidated Balance Sheets
The Bombay Company, Inc. and Subsidiaries
(In thousands, except shares)
<CAPTION>
January 29 January 30
2000 1999
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents (short - term
investments of $32,584 and $47,705,
respectively) $39,174 $ 52,809
Inventories, at lower of cost or market 90,583 74,402
Other current assets 9,365 9,560
Total current assets 139,122 136,771
Property and equipment, at cost:
Land 993 993
Building 5,198 5,198
Leasehold improvements 73,896 71,425
Furniture and equipment 28,674 24,255
108,761 101,871
Accumulated depreciation (61,217) (57,459)
Net property and equipment 47,544 44,412
Deferred taxes and other assets 14,721 11,824
Goodwill, less amortization of
$549 and $522, respectively 485 512
Total assets $ 201,872 $ 193,519
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses $ 24,459 $ 21,910
Income taxes payable 5,192 1,736
Accrued payroll and bonuses 4,519 3,214
Gift certificates redeemable 4,184 3,487
Total current liabilities 38,354 30,347
Accrued rent and other liabilities 7,270 7,029
Stockholders' equity:
Preferred stock, $1 par value,
1,000,000 shares authorized - -
Common stock, $1 par value,
50,000,000 shares authorized,
38,149,646 shares issued 38,150 38,150
Additional paid-in capital 76,082 76,044
Retained earnings 56,775 49,433
Accumulated other comprehensive income (1,013) (1,501)
Common shares in treasury, at cost,
2,677,236 and 1,170,930
shares, respectively (13,129) (5,983)
Stock purchase loans (617) -
Total stockholders' equity 156,248 156,143
Commitments and contingencies (Note 4)
<F4>
Total liabilities and stockholders'
equity $201,872 $193,519
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<TABLE>
Consolidated Statements of Cash Flows
The Bombay Company, Inc. and Subsidiaries
(In thousands)
<CAPTION>
Year Ended
----------------------------------------
January 29 January 30 January 31 2000 1999 1998
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 7,432 $ 4,010 $ 4,450
Adjustments to reconcile net income to
net cash from operations:
Depreciation and amortization 12,661 10,343 9,859
Management severance costs - - 800
Deferred taxes and other (317) 936 (86)
Change in assets and liabilities:
(Increase) decrease in inventories (15,615) 8,769 (16,818)
(Increase) decrease in other
current assets 38 (1,777) 4,412
Increase (decrease) in accounts payable
and accrued expenses 3,081 1,593 (6,451)
Increase (decrease) in income taxes
payable 3,477 (399) 825
Increase (decrease) in accrued payroll
and bonuses 1,291 (1,163) (567)
Increase in noncurrent assets (84) (162) (554)
Increase in noncurrent liabilities 462 398 496
Net cash provided (used) by operations 12,336 22,548 (3,634)
Cash flows from investing activities:
Purchases of property, equipment
and other (18,011) (20,476) (4,392)
Proceeds from sale of property
and equipment 249 403 234
Net cash used by investing activities (17,762) (20,073) (4,158)
Cash flows from financing activities:
Purchases of treasury stock (8,527) (6,170) -
Sale of stock to employee benefit plans 269 161 273
Issuance of stock purchase loans (43) - -
Exercise of stock options 290 38 266
Net cash provided (used) by financing
activities (8,011) (5,971) 539
Effect of exchange rate change on cash (198) 195 233
Net decrease in cash and cash equivalents (13,635) (3,301) (7,020)
Cash and cash equivalents at beginning of year 52,809 56,110 63,130
Cash and cash equivalents at end of year 39,174 52,809 56,110
Supplemental disclosures of cash flow
information:
Interest paid $ 48 $ - $ -
Income taxes paid 1,490 2,217 1,791
Non-cash financing activities:
Distributions of deferred director fees 189 148 -
Issuance of restricted stock 73 - -
Loans issued to purchase Company stock 574 - -
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<TABLE>
Consolidated Statements of Stockholders' Equity
The Bombay Company, Inc. and Subsidiaries
(In thousands)
<CAPTION>
Accumulated
Common Stock Treasury Stock Additional Stock Other
-------------- ---------------- Paid-In Purchase Retained Comprehensive Comprehensive
Shares Amount Shares Amount Capital Loans Earnings Income Income
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, February 1, 1997 37,998 $ 37,998 - $ - $ 75,465 $ - $ 40,973 $ (503)
Shares contributed or sold
to employee benefit plans 62 62 - - 223 - - -
Exercise of stock options 54 54 - - 216 - - -
Net income - - - - - - 4,450 - $ 4,450
Foreign currency
translation adjustments - - - - - - - (700) (700)
Comprehensive income - - - - - - - - $ 3,750
Balance, January 31, 1998 38,114 38,114 - - 75,904 - 45,423 (1,203)
Purchases of treasury shares - - (1,207) (6,170) - - - -
Shares contributed or sold
to employee benefit plans 19 19 15 77 66 - - -
Exercise of stock options 15 15 - - 38 - - -
Distributions of deferred
director fees 2 2 21 110 36 - - -
Net income - - - - - - 4,010 - $ 4,010
Foreign currency
translation adjustments - - - - - - - (298) (298)
Comprehensive income - - - - - - - - $ 3,712
Balance, January 30, 1999 38,150 38,150 (1,171) (5,983) 76,044 - 49,433 (1,501)
Purchases of treasury shares - - (1,777) (8,527) - - - -
Shares contributed or sold to
employee benefit plans - - 80 405 (43) (93) - -
Exercise of stock options - - 66 336 (22) - - -
Distributions of deferred
director fees - - 31 153 36 - - -
Distributions of
restricted stock - - 13 65 8 - - -
Shares sold to officers with
stock purchase loans - - 81 422 59 (481) - -
Loans to officers for purchases
of Company stock - - - - - (43) - -
Net income - - - - - - 7,342 - $ 7,342
Foreign currency
translation adjustments - - - - - - - 488 488
Comprehensive income - - - - - - - - $ 7,830
Balance, January 29, 2000 38,150 $ 38,150 (2,677) $(13,129) $76,082 $(617) $56,775 $(1,013)
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
Notes to Consolidated Financial Statements
<F1>
Note 1 - Statement of Accounting Policies
______________________________________________________________
Basis of Presentation
The consolidated financial statements include the accounts of the Company
and its wholly - owned subsidiaries. All significant intercompany transactions,
balances and profits have been eliminated. The Company has a retail (52 - 53
week) fiscal year which ends on the Saturday nearest January 31. The periods
ended January 29, 2000 ("Fiscal 1999"), January 30, 1999 ("Fiscal 1998") and
January 31,1998 ("Fiscal 1997") represent 52 weeks. Certain prior year amounts
have been reclassified to conform to current year presentation.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates. Actual
results could differ from those estimates.
Foreign Currency Translation
Fiscal year end exchange rates are used to translate assets and liabilities
to U.S. dollars. Monthly average exchange rates are used to translate income and
expenses. The cumulative effect of foreign currency translation adjustments is
reported in accumulated other comprehensive income within stockholders' equity.
Cash and Cash Equivalents
Cash in stores, deposits in banks and short-term investments with original
maturities of three months or less are considered as cash and cash equivalents
for the purposes of the financial statements. Short - term investments are
recorded at the lower of cost or fair market value.
Inventories
Inventories are primarily finished merchandise and are valued at the lower
of average cost or market, cost being determined based upon the weighted average
inventory method.
Property and Equipment
Property and equipment are depreciated over the estimated useful lives of
the assets using the straight-line method over the lives shown:
Building Forty years
Furniture and equipment Two to ten years
Leasehold improvements The lesser of the life
of the lease or asset
Maintenance and repairs are charged to expense as incurred. Renewals and
betterments which materially prolong the useful lives of the assets are
capitalized. The cost and related accumulated depreciation of property retired
or sold are removed from the accounts, and gains or losses are recognized in the
statement of income.
Goodwill
Goodwill recorded in association with acquisitions accounted for using the
purchase method is amortized using the straight-line method over the estimated
useful life of 40 years.
Impairment of Long-lived Assets
Long-lived assets, including goodwill, are reviewed whenever events or changes
in circumstances indicate that the carrying value of the asset may not be
recoverable. This review is performed by comparing the expected future
undiscounted net cash flows to the net book value of the assets. The amount of
the impairment loss is measured as the difference between carrying value and the
estimated fair value of the asset. To date, no impairment has been recognized.
Revenue Recognition
Sales are recorded upon purchase or shipment to customers. Sales are net of
returns and exclude sales tax.
Advertising Costs
Advertising costs are expensed the first time the advertising takes place.
During Fiscal 1999, Fiscal 1998 and Fiscal 1997 advertising expense was
$14,645,000, $16,565,000 and $18,584,000, respectively.
Income Taxes
The Company uses the liability method of computing deferred income taxes on
all material temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax bases. The
Company assesses realizability of deferred tax assets and, if necessary, a
valuation allowance is provided.
Comprehensive Income
Comprehensive income represents the change in equity (net assets) of a
business enterprise during a period from transactions and other events and
circumstances from non-owner sources. It includes all changes in equity during a
period except those resulting from investments by owners and distributions to
owners. Such amounts are included in accumulated other comprehensive income
within stockholders' equity and consist of the cumulative effect of foreign
currency translation adjustments.
New Accounting Pronouncement
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities ("FAS 133"). FAS 133 establishes accounting and reporting
standards for derivative financial instruments including, among other things,
forward currency exchange contracts. FAS 133 is effective for the Company's
financial statements beginning in Fiscal 2000, and the Company is currently
investigating the impact of its adoption. However, due to the Company's limited
use of derivative financial instruments, adoption of FAS 133 is not expected to
have a significant impact on the Company's consolidated financial position or
results of operations.
Earnings per Share
Basic earnings per share are based upon the weighted average number of
shares outstanding. Diluted earnings per share are based upon the weighted
average number of shares outstanding plus the shares that would be outstanding
assuming exercise of dilutive stock options and distribution of restricted stock
and deferred director compensation.
The computations for basic and diluted earnings from continuing operations per
share are as follows (in thousands, except per share amounts):
<TABLE>
<CAPTION>
Year Ended
---------------------------------------
January 29 January 30 January 31
2000 1999 1998
<S> <C> <C> <C>
Numerator:
Net income $7,342 $4,010 $4,450
Denominator for basic
earnings per share:
Average common
shares outstanding 36,408 37,728 38,066
Denominator for diluted
earnings per share:
Average common shares
outstanding 36,408 37,728 38,066
Stock options 217 32 11
Restricted stock 23 8 13
Deferred director compensation 24 16 5
36,672 37,784 38,095
Basic earnings per share $.20 $.11 $.12
Diluted earnings per share $.20 $.11 $.12
</TABLE>
Note 2 - Income Taxes
_______________________________________________________________
The components of the provision for domestic and foreign income taxes are
shown below (in thousands):
<TABLE>
<CAPTION>
Year Ended
----------------------------------------
January 29 January 30 January 31
2000 1999 1998
<S> <C> <C> <C>
Income (loss) before income taxes :
Domestic $ 12,049 $ 7,244 $ 6,706
Foreign 104 (451) 630
$ 12,153 $ 6,793 $ 7,336
Provision (benefit) for income taxes:
Current:
Federal $ 4,895 $ 1,789 $ 2,255
Foreign (20) (75) 306
State and local 527 299 109
5,402 2,013 2,670
Deferred (prepaid):
Federal (692) 767 175
Foreign 149 (50) 59
State and local (48) 53 (18)
(591) 770 216
Total provision for income taxes $ 4,811 $ 2,783 $ 2,886
</TABLE>
The effective tax rate differs from the federal statutory tax rate for the
following reasons:
<TABLE>
<CAPTION>
Year Ended
----------------------------------------
January 29 January 30 January 31
2000 1999 1998
<S> <C> <C> <C>
Federal statutory tax rate 35.0% 35.0% 35.0%
Increase in effective tax rate due to:
Foreign income taxes .8 .5 2.0
State and local taxes,net of
federal income tax benefit 3.0 4.0 1.2
Other, net .8 1.5 1.1
Effective tax rate 39.6% 41.0% 39.3%
</TABLE>
Deferred taxes reflect the net tax impact of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and amounts used for income tax purposes. Deferred tax assets (liabilities) are
comprised of the following (in thousands):
<TABLE>
<CAPTION>
January 29 January 30
2000 1999
<S> <C> <C>
Deferred tax liabilities $(1,185) $(1,043)
Deferred tax assets:
Accrued rent 3,042 3,004
Depreciation 2,697 1,661
Inventory valuation 1,725 1,702
Store conversion costs 482 530
Other 1,686 1,917
9,632 8,814
Net deferred tax assets $ 8,447 $ 7,771
</TABLE>
Note 3 - Debt
______________________________________________________________
The Company has unsecured revolving credit agreements with a group of banks
aggregating $45 million at January 29, 2000 of which $30 million is committed.
The credit facilities are for working capital and letter of credit purposes,
primarily to fund seasonal merchandise purchases, and bear interest at market
rates based on prime. The credit agreements restrict dividend payments, and
require the maintenance of various financial ratios and the payment of
negotiated fees. The revolving credit agreements expire May 13, 2000 and are
expected to be renewed under similar terms. At January 29, 2000, there were
$8,034,000 in letters of credit outstanding under the credit facilities, issued
principally in conjunction with overseas merchandise purchases. Interest expense
and negotiated fees for Fiscal 1999, Fiscal 1998 and Fiscal 1997 totaled
$257,000, $247,000 and $182,000, respectively.
<F4>
Note 4 - Commitments and Contingencies
______________________________________________________________
Store, distribution and field office facilities are leased under operating
leases expiring through 2013. The store leases are generally based upon a
minimum rental plus a percentage of the store sales in excess of specified
levels. Store lease terms generally require additional payments covering taxes,
common area charges and certain other costs. Rental expense for Fiscal 1999,
Fiscal 1998 and Fiscal 1997 totaled $42,991,000, $40,244,000 and $39,051,000,
respectively.
The minimum rental commitments for future fiscal years are as follows (in
thousands):
Fiscal
2000 $ 39,249
2001 37,262
2002 35,107
2003 29,278
2004 17,079
Thereafter 35,999
$193,974
The Company has certain contingent liabilities resulting from litigation and
claims incident to the ordinary course of business. Management believes that the
probable resolution of such contingencies will not materially affect the
financial position or results of operations of the Company.
Note 5 - Employee Benefit Plans
______________________________________________________________
The Bombay Company, Inc. Employee 401(k) Savings and Stock Ownership Plan
("401(k) Plan") is open to substantially all employees who have been employed
for one year and who work at least 1,000 hours per year. Under the 401(k) Plan,
a participant may contribute up to 14% of earnings with the Company matching the
first 5% at a rate of 75%. Effective January 1, 2000, the Company match was
changed to 100% of the initial 3% contribution, and 50% of the next 2%
contributed by the participant. Contributions are paid to a corporate trustee
and invested in various funds. Company matching contributions made to
participants' accounts become fully vested upon completion of two years of
service. Similar benefit plans are in effect for eligible foreign employees.
To the extent employees are unable to contribute up to 5% of their earnings
to the 401(k) Plan because of limitations imposed by IRS regulations, a
Supplemental Stock Program was adopted. Under this program, employee
contributions in excess of IRS limitations, along with Company matching
contributions, are distributed annually in the form of Company common stock.
The Bombay Company, Inc. Stock Purchase Program ("SPP") is open to all
full-time employees who have at least six months of service. Each participant
may contribute 5% or 10% of qualifying compensation. Contributions are used to
purchase shares of Company common stock, which are distributed annually to all
participants. The participants' shares are fully vested upon purchase. During
Fiscal 1999, the SPP was amended to allow participants to purchase Company
common stock at a discount of 15% from current market rates. Under the amended
provisions, participantse shares are held by a third-party administrator until
the respective participant requests a distribution.
Total Company contributions to these plans for Fiscal 1999, Fiscal 1998 and
Fiscal 1997 were $480,000, $544,000 and $681,000 respectively.
During Fiscal 1998, the Company modified its vacation policy in order to be
more competitive with the retail industry. As a result of the change, the
Company recorded a one time pre-tax credit of $700,000, equivalent to $.01 per
share after tax, relating to expenses that had been accrued under the previous
policy but were no longer required under the revised policy.
Note 6 - Common Stock and Stock Options
_______________________________________________________________
On June 17,1998, the Company announced that its Board of Directors had
approved a stock repurchase program with initial authorization to purchase up to
$10 million of the Company's stock. On August 18, 1999 and on March 8, 2000,
the Board of Directors announced that it had extended this program by $5 million
and $10 million, respectively. The shares may be purchased from time to time,
through open market purchases and privately negotiated transactions. During
Fiscal 1999 and Fiscal 1998, 1,777,416 and 1,207,200 shares, respectively, were
acquired at an aggregate cost of $8,527,000 and $6,170,000, respectively.
Treasury shares are used for various employee and director stock plans as the
need arises.
Non-employee directors are eligible to participate in the 1993 Stock
Deferral Plan for Non-Employee Directors, which allows such directors the
option to defer receipt of retainer payments and meeting fees which are credited
to an account for such director in units equivalent to Company common stock.
The Bombay Company, Inc. 1986 Stock Option Plan and 1996 Long Term
Incentive Stock Plan ("Employee Plans") provide for the granting of options (and
other types of stock-related awards under the 1996 plan) to officers and key
management employees. At January 29, 2000, the option shares reserved for the
Employee Plans were 4,969,854. The option price is fixed at the market price or
higher on the date of the grant. Options are generally exercisable annually at a
rate of 33% per year beginning one year after the grant date. Shares available
for additional grants were 2,046,273; 2,315,959 and 2,663,618 at January 29,
2000, January 30, 1999 and January 31, 1998, respectively.
During Fiscal 1998, restricted stock aggregating 90,000 shares was granted
under the 1996 Long Term Incentive Stock Plan to three key executives. The
respective shares are issuable in designated increments contingent upon
continued employment of the respective executive after 12 months, 24 months and
36 months. During Fiscal 1999, 13,000 shares became vested and were issued under
these grants. If each of the executives remains employed by the Company under
the terms of the grant, 27,500 and 49,500 shares will be issuable during Fiscal
2000 and Fiscal 2001, respectively. Compensation expense of $174,000 and
$214,000 was recognized during Fiscal 1999 and Fiscal 1998, respectively, in
connection with the restricted stock.
On March 12, 1997, the Board of Directors granted 50,000 shares each of
restricted stock under the 1996 Long Term Incentive Stock Plan to two key
executives. The respective shares were issuable at March 12, 2001 contingent
upon the continued employment of each executive. Compensation expense of
$105,000 was recognized during Fiscal 1997 in connection with the restricted
stock. The expense related to each was reversed during Fiscal 1998 and the
grants were canceled upon the respective departures of the executives from the
Company.
The Bombay Company, Inc. 1991 Director Stock Option Plan ("Director Plan")
provides for the granting of options to members of the Board of Directors who
are neither employees nor officers of the Company. At January 29, 2000, the
option shares reserved for the Director Plan were 261,005. The option price is
fixed at the market price on the date of the grant. The option grant, initial
and annual, is currently the lesser of 5,000 shares or $75,000 in face value.
The initial grant becomes exercisable at a rate of 20% per year beginning one
year after the grant date. Each additional annual grant becomes fully
exercisable six months after the grant date. Shares available for additional
grants were 10,946; 56,946 and 6,946 at January 29, 2000, January 30, 1999 and
January 31,1998, respectively.
The following table includes option information for the Employee Plans and
Director Plan:
<TABLE>
<CAPTION>
Weighted
Number Option Price Average
Stock Option Activity of Shares per Share Option Price
<S> <C> <C> <C>
February 1, 1997 2,212,671 $ 3.01 - 25.75 $ 8.01
Options granted 644,766 3.63 - 8.38 4.75
Options exercised (75,783) 3.16 - 6.75 4.24
Options canceled (1,174,147) 3.63 - 17.94 7.52
January 31, 1998 1,607,507 3.01 - 25.75 7.23
Options granted 1,218,535 3.75 - 8.19 5.20
Options exercised (25,569) 3.01 - 4.75 3.48
Options canceled (691,329) 3.88 - 15.88 6.33
January 30, 1999 2,109,144 3.33 - 25.75 6.28
Options granted 1,151,610 3.81 - 8.00 4.73
Options exercised (44,316) 4.00 - 7.25 4.84
Options canceled (359,053) 3.33 - 17.94 6.36
January 29, 2000 2,857,385 3.60 - 25.75 5.67
Exercisable at:
January 31, 1998 579,233 3.01 - 25.75 8.85
January 30, 1999 640,609 3.33 - 25.75 8.35
January 29, 2000 827,492 3.60 - 25.75 7.15
</TABLE>
The following table summarizes stock options outstanding at
January 29, 2000:
<TABLE>
<CAPTION>
Oustanding Exercisable
- -------------------------------------------------- --------------------
Weighted Weighted Weighted
Exercise Average Average Average
Price Remaining Exercise Exercise
Range Shares Life Price Shares Price
<S> <C> <C> <C> <C> <C>
$ 3.60 - 3.94 680,637 8.6 $ 3.80 36,237 $ 3.61
4.00 - 4.38 425,450 8.1 4.28 167,189 4.25
4.50 - 4.94 401,541 7.5 4.74 129,448 4.71
5.00 - 5.95 402,857 8.3 5.53 131,520 5.44
6.00 - 6.44 409,300 9.5 6.42 13,074 6.31
6.53 - 9.25 400,034 6.4 7.45 212,458 7.53
10.00 -25.75 137,566 4.0 15.02 137,566 15.02
2,857,385 7.9 $ 5.67 827,492 $ 7.15
</TABLE>
The exercise of non-qualified stock options in Fiscal 1999, Fiscal 1998 and
Fiscal 1997 resulted in income tax benefits of $25,000, $17,000 and $47,000,
respectively, which were credited to additional paid-in capital. The income
tax benefits are the tax effect of the difference between the market price on
the date of exercise and the option price.
The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, Accounting for Stock - Based
Compensation ("FAS 123"). Accordingly, no compensation cost has been
recognized for options granted. Had compensation cost for the Company's stock
option plans been
determined based on the fair value at the grant date for awards in Fiscal 1995
through Fiscal 1999 in accordance with the provisions of FAS 123, the Company's
net income and earnings per share would have been reduced to the pro forma
amounts indicated below (in thousands, except per share amounts):
<TABLE>
<CAPTION>
Year Ended
-----------------------------------------
January 29 January 30 January 31
2000 1999 1998
<S> <C> <C> <C>
Net income, as reported $7,342 $4,010 $4,450
Net income, pro forma 5,876 2,868 4,057
Basic earnings per share,
as reported .20 .11 .12
Diluted earnings per share,
as reported .20 .11 .12
Basic earnings per share,
pro forma .16 .08 .11
Diluted earnings per share,
pro forma .16 .08 .11
</TABLE>
The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model based upon the following assumptions:
<TABLE>
<CAPTION>
Year Ended
----------------------------------------
January 29 January 30 January 31
2000 1999 1998
<S> <C> <C> <C>
Expected volatility 59.4% 55.5% 75.0%
Expected life years 5 6 6
Expected dividends - - -
Risk-free interest rate 5.3 - 6.7% 5.0 - 6.1% 5.8 - 7.1%
</TABLE>
The weighted average fair value of options granted during Fiscal 1999,
Fiscal 1998 and Fiscal 1997 was $2.64, $2.92 and $3.37, respectively.
Note 7 - Shareholders' Rights Plan
_________________________________________________
The Company has a shareholders' rights plan under which each share of
Company common stock includes one Preferred Share Purchase Right ("Right")
entitling the holder to buy one one-thousandth of a share of Series A Junior
Participating Preferred Stock of the Company at an exercise price of $50. The
Rights, which have ten year terms expiring in 2005, are exercisable if a person
or group acquires 15% or more of the common stock of the Company or announces a
tender offer for 15% or more of the common stock. If a person or group acquires
15% or more of the outstanding common stock of the Company, each Right will
entitle the holder to purchase, at the Right's exercise price, a number of
shares of Company common stock having a market value of twice the Right's
exercise price. If the Company is acquired in a merger or other business
combination transaction after a person or group acquires 15% or more of the
Company's common stock, each Right will entitle its holder to purchase, at the
Right's exercise price, a number of shares of the acquiring companyis common
stock having a market value of twice the Right's exercise price. The Rights are
redeemable at one cent per Right at any time before they become exercisable.
Note 8 - Stock Purchase Loans
______________________________________________________________
On August 26, 1999, the Board of Directors adopted an executive stock
purchase program as a vehicle to enable executive officers to increase their
ownership in the Company by purchasing Company stock, further aligning the
interests of the officers with those of the shareholders. Under the program,
certain key executive officers may be given the opportunity to purchase shares
of the Company's common stock at market prices from time to time over a
specified period of time, and the Company will finance 100% of the purchase
price of such stock. The unsecured, full recourse loans bear interest at
Applicable Federal Rates and are due August 31, 2002. At January 29, 2000,
$617,000 had been borrowed under these terms, and the notes receivable are
reflected as a reduction in stockholders' equity. Of the total, $574,000 was
used to purchase shares from the Company's treasury at current market prices
while the remainder was purchased through open market transactions. The shares
purchased from the Company are unregistered and, therefore, are restricted when
received by participants.
<F8>
Note 9 - Geographic Areas
______________________________________________________________
The Company operates in one industry segment, specialty retailing.
Substantially all revenues result from the sale of home furnishings and
accessories through retail stores in the United States and Canada. Operating
profit by geographic area is total revenue less operating expenses. Area
operating expenses exclude interest income, net of interest expense, and income
taxes. Identifiable assets by area are those assets used in the area's
operations, including intangibles.
The following table shows net sales, operating profit and other financial
information by geographic area (in thousands):
<TABLE>
<CAPTION>
Year Ended
----------------------------------------
January 29 January 30 January 31
2000 1999 1998
<S> <C> <C> <C>
Net sales:
United States $ 349,632 $ 318,657 $ 294,308
Canada 41,249 38,058 38,269
Total $ 390,881 $ 356,715 $ 332,577
Operating profit:
United States $ 8,998 $ 3,505 $ 2,462
Canada 2,126 1,403 2,525
Interest income, net 1,029 1,885 2,349
Income before
income taxes $ 12,153 $ 6,793 $ 7,336
Identifiable assets:
United States $ 186,325 $ 180,741 $ 180,351
Canada 15,547 12,778 15,111
Total $ 201,872 $ 193,519 $ 195,462
Depreciation and amortization:
United States $ 11,840 $ 9,592 $ 9,078
Canada 821 751 781
Total $ 12,661 $ 10,343 $ 9,859
Capital expenditures:
United States $ 16,307 $ 19,699 $ 4,038
Canada 1,704 777 354
Total $ 18,011 $ 20,476 $ 4,392
</TABLE>
Unaudited Quarterly Financial Data
The Bombay Company, Inc. and Subsidiaries
(In thousands, except per share amounts)
Unaudited quarterly financial data for the quarters ended:
<TABLE>
<CAPTION>
January 29 October 30 July 31 May 1
2000 1999 1999 1999
<S> <C> <C> <C> <C>
Net sales $ 139,577 $ 85,256 $ 90,762 $ 75,286
Gross profit 49,936 22,119 25,720 19,606
Net income (loss) 11,718 (2,358) 413 (2,431)
Basic earnings (loss)
per share .33 (.06) .01 (.07)
Diluted earnings (loss)
per share .32 (.06) .01 (.07)
<CAPTION>
January 30 October 31 August 1 May 2
1999 1998 1998 1998
<S> <C> <C> <C> <C>
Net sales $ 130,483 $ 75,878 $ 82,011 $ 68,343
Gross profit 46,693 19,737 21,685 15,709
Net income (loss) 11,142 (2,775)(1) (476) (3,881)
Basic earnings (loss)
per share .30 (.07)(1) (.01) (.10)
Diluted earnings (loss)
per share .30 (.07)(1) (.01) (.10)
<FN>
(1) Includes a one time pre-tax credit of $700,000, equivalent to $.01 per
share after tax, resulting from a change in vacation policy.
</TABLE>
THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
Exhibit 22 - Subsidiaries of Registrant
NAME The Bombay Furniture Company of Canada Inc.
JURISDICTION OF INCORPORATION Province of Ontario, Canada
DOING BUSINESS AS The Bombay Company
NAME BBA Holdings, Inc.
JURISDICTION OF INCORPORATION Delaware
DOING BUSINESS AS BBA Holdings, Inc.
NAME The Bombay Furniture Company, Inc.
JURISDICTION OF INCORPORATION Delaware
DOING BUSINESS AS The Bombay Furniture Company, Inc.
NAME BMAJ, Inc.
JURISDICTION OF INCORPORATION Delaware
DOING BUSINESS AS BMAJ, Inc.
NAME The Bombay Company de Mexico, S.A. de C.V.
JURISDICTION OF INCORPORATION Mexico, D.F.
DOING BUSINESS AS The Bombay Company de Mexico, S.A. de C.V.
NAME Bombay International Inc.
JURISDICTION OF INCORPORATION Delaware
DOING BUSINESS AS Bombay International Inc.
NAME Bailey Street Trading Company
JURISDICTION OF INCORPORATION Delaware
DOING BUSINESS AS Bailey Street Trading Company
<AUDIT-REPORT>
CONSENT OF INDEPENDENT ACCOUNTANTS
EXHIBIT 24
We hereby consent to the incorporation by reference in these Registration
Statements on Form S-8 (No. 33-02028, 33-32610, 33-40736, 33-40743, 33-51076,
33-55306, 333-39057, 333-39059, 333-96353 and 333-96357) of The Bombay Company,
Inc. of our report dated March 8, 2000 relating to the financial statements,
which appears in the 1999 Annual Report to Shareholders, which is incorporated
by reference in this Annual Report on Form 10-K.
PricewaterhouseCoopers LLP
Fort Worth, Texas
April 12, 2000
</AUDIT-REPORT>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from The
Bombay Company, Inc. annual report on Form 10-K for the year ended
January 29, 2000 and is qualified in its entirety by reference to such
10-K.
</LEGEND>
<CIK> 0000096287
<NAME> THE BOMBAY COMPANY, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-29-2000
<PERIOD-START> JAN-31-1999
<PERIOD-END> JAN-29-2000
<CASH> 39174
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 90583
<CURRENT-ASSETS> 139122
<PP&E> 108761
<DEPRECIATION> 61217
<TOTAL-ASSETS> 201872
<CURRENT-LIABILITIES> 38354
<BONDS> 0
0
0
<COMMON> 38150
<OTHER-SE> 118098
<TOTAL-LIABILITY-AND-EQUITY> 201872
<SALES> 390881
<TOTAL-REVENUES> 390881
<CGS> 273500
<TOTAL-COSTS> 379757
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1029)
<INCOME-PRETAX> 12153
<INCOME-TAX> 4811
<INCOME-CONTINUING> 7342
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7342
<EPS-BASIC> .20
<EPS-DILUTED> .20
</TABLE>
