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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 [FEE REQUIRED]
For the fiscal year ended February 3, 1996
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 (I.R.S. Employer
incorporation or organization) Identification Number)
550 Bailey Avenue, Suite 700
Fort Worth, Texas 76107
(Address of principal executive (Zip Code)
offices)
(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, New York Stock Exchange
$1 Per Share
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 April 15, 1996 was approximately $406,981,346.
Shares outstanding at April 15,1996: Common Stock, $1 Par
Value: 37,423,572
DOCUMENTS INCORPORATED BY REFERENCE:
(a) Portions of the Annual Report to Shareholders for the
Fiscal Year Ended February 3, 1996 (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 16, 1996 (as expressly incorporated by
reference in Part III).
Form 10-K
PART I
ITEM 1. Business.
General
-------
The Bombay Company, Inc. (the "Company") is a specialty
retailer which markets lifestyle furniture, prints and
accessories through a network of 434 retail stores in the United
States and Canada. For financial information by geographic
areas, see Note 7 of Notes to Consolidated Financial Statements,
located on page 21 of the 1995 Annual Report to Shareholders,
filed as Exhibit 13 to this Form 10-K Annual Report. Such
Exhibit is incorporated herein by reference.
Merchandise Sales, Purchasing and Distribution
----------------------------------------------
Bombay products internally designed or styled represent
approximately 95% of total sales. New products are introduced
each year, with over 1,500 new items introduced in fiscal year
1995. The fiscal 1995 sales mix consisted of: 47% furniture, 27%
accessories, 17% wall decor (principally prints, mirrors and
sconces) and 9% lamps and other categories.
Merchandise is manufactured to Company specifications through
a network of manufacturers located principally in Asia, the
United States, Canada, Mexico and South America. Approximately
60% of production needs are provided from overseas sources.
Branch offices located in Taiwan and Malaysia, and agents in
various countries coordinate production requirements with
manufacturers, provide technical expertise and ensure quality
standards are met.
Approximately 75% of the Company's merchandise requirements
are supplied by 35 contract manufacturers in seven countries.
Although no long-term production agreements exist with
manufacturers, there are long standing relationships with the
major vendors. Formal agreements with major manufacturers are in
place which prohibit production of proprietary products for any
other party. Additional manufacturing capacity and alternative
sources, both domestic and international, continue to be added
through new vendors and plant expansions by existing vendors.
Usually, it takes several months from the time a merchandise
order is placed with an overseas manufacturer until the goods are
received at centralized distribution centers. Order lead times
are slightly less for domestic manufacturers principally due to
shorter shipping time. Lead times can vary depending on
seasonality factors especially in months when factories are
producing at or near peak capacity to meet seasonal demands.
While overseas purchases are principally denominated in U.S.
dollars, significant foreign currency fluctuations could affect
landed cost.
Store inventories are replenished from four distribution
centers, three of which are located in the United States and one
in Canada. The Company replenishes the majority of store
inventories within 48 hours of receipt of a store order and
replenishes over 90% of stores within 72 hours.
Stores and Real Estate
----------------------
The stores offer a wide variety of attractively styled, ready-
to-assemble furniture, prints and accessories, with a strong
emphasis on value and quality. Significant attention is given to
visual merchandising in order to display products in the most
attractive setting. Stores are completely remerchandised several
times a year coincident with the mailing of each catalogue. To
accommodate the increasing number of products, the Company
introduced a large format Bombay store in late fiscal 1992. The
large format Bombay stores are approximately 4,000 square feet,
while the regular stores average 1,700 square feet. At February
3, 1996, 218 large format Bombay stores were in operation,
including 131 stores that have been converted from regular stores
since fiscal 1992. Over 90% of all stores are located in major
shopping malls. At February 3, 1996, stores were operating in 42
states in the United States and nine of ten 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:
WA - 8 OR - 3 CA - 50
NV - 3 UT - 3 AZ - 5
NM - 1 CO - 3 NE - 1
KS - 3 OK - 4 TX - 21
MN - 7 IA - 1 MO - 8
AR - 1 LA - 7 WI - 3
IL - 18 MS - 1 MI - 10
IN - 4 KY - 2 TN - 12
AL - 5 OH - 20 NH - 3
MA - 11 RI - 2 CT - 6
NY - 28 PA - 20 NJ - 15
DE - 3 MD - 11 DC - 2
WV - 1 VA - 15 NC - 9
SC - 4 GA - 13 FL - 31
Canada:
BC - 8 AB - 4 SK - 1
MB - 2 ON - 26 PQ - 9
NB - 3 NF - 1 NS - 2}
Bombay store locations by geographic
region are as follows: South 102
Northeast 94
Midwest 94
West 88
Canada 56
---
Total 434
COMPETITION
The home furnishings and decorative accessories market is
highly fragmented. The Company faces competition from furniture
stores, department stores and other specialty retailers.
However, direct competition with these stores is limited to some
extent because such stores are not principally focused on
lifestyle furnishings and household accessories at moderate
prices and do not offer the same broad selection. 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.
SEASONALITY
Operating results are subject to seasonal variation.
Historically, the largest proportion of sales and income occurs
in the fiscal quarter that includes December (the Christmas
season). Cash increases significantly in December due to the
Christmas business.
INTANGIBLES
The Company owns a number of copyright, trademark and
tradename registrations. Management considers these intangibles
to be valuable assets and defends them as necessary.
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. Important factors that
could cause actual results to differ materially from those
discussed in such forward looking statements include, but are not
limited to, competition, economic downturns, dependence upon
product development, international business risks and seasonality
of business.
ITEM 2. Properties.
The Company owns its headquarters office complex, but all
stores and distribution centers are leased under numerous
operating leases, generally with 10 year terms. At February 3,
1996, owned and occupied office space was approximately 72,000
square feet, and leased distribution/office and retail space was
approximately 821,000 and 1,256,000 square feet, respectively.
Leased property consists of stores, distribution centers,
administrative offices, and various equipment, with leases
expiring between 1996 and 2006. Distribution facilities are
located in the Atlanta, Fort Worth, Philadelphia and Toronto
areas. Office facilities are located in the Fort Worth and
Toronto areas. Adequate insurance coverage is carried on all
leased properties.
For additional lease information, see Note 4 of Notes to
Consolidated Financial Statements, located on page 19 of the 1995
Annual Report to Shareholders, filed as Exhibit 13 to this Form
10-K Annual Report. Such Exhibit is incorporated herein by
reference.
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 19
of the 1995 Annual Report to Shareholders, filed as Exhibit 13 to
this Form 10-K Annual Report. Such Exhibit is incorporated
herein by reference.
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 1995 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 entitle "Price Range of Common
Stock," located on page 24 of the 1995 Annual Report to
Shareholders, filed as Exhibit 13 to this Form 10-K Annual
Report. Such Exhibit is incorporated herein by reference.
(b) The approximate number of record holders of common stock
on April 15, 1996 was 3,300.
(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 10 of the 1995 Annual Report to
Shareholders, filed as Exhibit 13 to this Form 10-K Annual
Report. Such Exhibit is incorporated herein by reference.
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 11 to 13 of the 1995 Annual Report to
Shareholders, filed as Exhibit 13 to this Form 10-K Annual
Report. Such Exhibit is incorporated herein by reference.
ITEM 8. Financial Statements and Supplementary Data.
The information in response to Item 8 is contained in the 1995
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.
Page Number(s) in
Annual Report*
-----------------
Financial Statements and Supplementary Data
-------------------------------------------
Consolidated Statements of Operations for the Years Ended
February 3, 1996, July 3, 1994 and July 4, 1993 and the Seven
Months Ended January 28, 1995............................................14
Consolidated Balance Sheets at February 3, 1996, January 28,
1995 and July 3, 1994....................................................15
Consolidated Statements of Cash Flows for the Years Ended
February 3, 1996, July 3, 1994 and July 4, 1993 and the Seven
Months Ended January 28, 1995............................................16
Consolidated Statements of Stockholders' Equity for the Years
Ended February 3, 1996, July 3, 1994, July 4, 1993 and
and the Seven Months Ended January 28, 1995 .............................17
Notes to Consolidated Financial Statements .............................18-22
Report of Independent Accountants .........................................23
Unaudited Quarterly Financial Data ........................................24
*The indicated pages of The Bombay Company, Inc. 1995 Annual
Report to Shareholders are filed as Exhibit 13 to this Annual
Report on Form 10-K. Such Exhibit is incorporated herein by
reference.
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 "Compliance with Section 16(a) of the Securities
Exchange Act of 1934" 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
captions "Security Ownership" and "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.
ITEM 13. Certain Relationships and Related Transactions.
The information required by this item appears under the
captions "Terms of Office; Relationships" and "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 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 Price Waterhouse LLP dated March 6, 1996,
appearing in the accompanying 1995 Annual Report to
Shareholders are incorporated by reference in this Form
10-K Report. With the exception of the aforementioned
information and information incorporated in Items 1, 2, 3,
5, 6 and 7, the 1995 Annual Report to Shareholders is not
deemed filed as part of this Report. The following
financial statement schedule should be read in conjunction
with the financial statements in such 1995 Annual Report to
Shareholders. 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.
(2)Financial Statement Schedule:
Report of Independent Accountants on Financial Statement
Schedule..................................................9
Schedule II-Valuation and Qualifying Accounts and Reserves
for the Years Ended February 3,1996, July 3, 1994 and
July 4,1993 and the Seven Months Ended January 28, 1995..11
(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
February 3, 1996.
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors
of The Bombay Company, Inc.
Our audits of the consolidated financial statements referred
to in our report dated March 6, 1996, appearing on page 23 of
the 1995 Annual Report to Shareholders of The Bombay Company,
Inc. (which report and consolidated financial statements are
incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the Financial Statement Schedule listed
in Item 14(a) of this Form 10-K. In our opinion, this Financial
Statement Schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the
related consolidated financial statements.
PRICE WATERHOUSE LLP
Fort Worth, Texas
March 6, 1996
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 17, 1996 /s/ ROBERT E. M. NOURSE
----------------------------
Robert E. M. Nourse
President, Chief Executive
Officer and Director
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/ CARSON R. THOMPSON Chairman of the Board April 19 , 1996
-----------------------
Carson R. Thompson
Director
-----------------------
Barbara Bass
Director
-----------------------
Edmund H. Damon
/s/ ROBERT S. JACKSON Director April 18, 1996
----------------------
Robert S. Jackson
Director
----------------------
A. Roy Megarry
/s/ CLAYTON E. NILES Director April 22, 1996
----------------------
Clayton E. Niles
/s/ ROBERT E. RUNICE Director April 25, 1996
----------------------
Robert E. Runice
Director
----------------------
Shirley Young
Executive Vice
President and
Chief Financial
/s/ JAMES E. HERLIHY Officer April 26, 1996
----------------------
James E. Herlihy
/s/ ELAINE D. CROWLEY Treasurer April 26, 1996
----------------------
Elaine D. Crowley
THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(Dollars in Thousands)
Additions
------------------------
Charged to Charged to
Balance at Costs Other Balance at
Beginning and Accounts- Deductions- End of
Description of Period Expenses Describe Describe Period
----------- --------- ---------- --------- ----------- ----------
Twelve Months Ended
July 3, 1994
-------------------
Store Conversion Reserve -
Asset Writedown $12,095 -- -- $3,669 (1) $8,426
Seven Months Ended
January 28, 1995
------------------
Store Conversion Reserve - $8,426 -- -- $1,473 (1) $6,953
Asset Writedown
Store Closing Reserve:
Asset Writedown $ -- $20,075 -- $928 (2) $19,147
Reserve:
Lease Obligations $ -- $19,475 -- -- $19,475
Employee Separations $ -- $1,450 -- $101 (3) $1,349
Twelve Months Ended
February 3, 1996
-------------------
Store Conversion Reserve -
Asset Writedown $6,953 -- -- $1,630 (1) $5,323
Store Closing Reserve:
Asset Writedown $19,147 -- -- $19,147 (2,5) $ --
Reserve:
Lease Obligations $19,475 -- -- $19,475 (4,5) $ --
Employee Separations $1,349 -- -- $1,349 (3,5) $ --
(1)Primarily remaining book value of leasehold improvements of Bombay stores, written off
as they were converted to the large store format.
(2)Write-off of sold or disposed assets.
(3)Severance payments related to the closure of the Alex & Ivy division.
(4)Lease termination payments related to the closure of the Alex & Ivy division.
(5)Includes reversals of $952,000, $4,626,000 and $422,000 related to Asset Writedown, Lease
Obligations and Employee Separations, respectively, reflecting lower costs than originally
projected.
THE BOMBAY COMPANY, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
Filed with the Annual Report on Form 10-K for the fiscal year
ended February 3, 1996.
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 and
Bylaws, as amended and restated effective June 24,
1993. (1)
10(a) - The Bombay Company, Inc. 1986 Stock Option Plan. (2)
10(b) - Form of Stock Option Agreement used to evidence stock
options granted under The Bombay Company, Inc. 1986
Stock Option Plan. (3)
10(c) - Executive Officers Incentive Compensation Plan. (7)
10(d) - Form of Indemnification Agreement. (2)
10(e) - The Bombay Company, Inc. 1991 Director Stock Option
Plan. (4)
10(f) - Form of Director Stock Option Agreement used to
evidence stock option grants under The Bombay Company,
Inc. 1991 Director Stock Option Plan. (5)
10(g) - The Bombay Company, Inc. Supplemental Stock Program.
(5)
10(h) - Consulting Agreement dated April 1, 1991 between Carson
R. Thompson and the Registrant. (5)
10(i) - The Bombay Company, Inc. 1993 Stock Deferral Plan for
Non-Employee Directors. (6)
10(j) - Form of Executive Severance and Non-Competition
Agreement dated December 8, 1992 between Robert E. M.
Nourse, Aagje M. T. Nourse, and James E. Herlihy and
the Registrant. (1)
10(k) - Executive Long Term Disability Plan. (8)
10(l) - The Bombay Company, Inc. 1996 Long-Term Incentive Stock
Plan. (9)
13 - The Bombay Company, Inc. 1995 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. (8)
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). (10)
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
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.
(3) Filed with the Co mmission as an Exhibit to the Company's
Registration Statement on Form S-2, No. 33-26807, filed
February 3, 1989. Such Exhibit is incorporated herein by
reference.
(4) Filed with the Commission as an Exhibit to the Company's
Definitive Proxy Statement dated October 8, 1991, 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, 1991. Such Exhibit is incorporated herein by reference.
(5) 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.
(6) 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.
(7) Filed with the Commission as an Exhibit to the Company's
Definitive Proxy Statement dated September 2, 1994, 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 3, 1994. 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 July 3, 1994.
Such Exhibit is incorporated herein by reference.
(9) Filed with the Commission as an Exhibit to the Company's
Definitive Proxy Statement dated May 16, 1996, which Proxy
Statement was filed with the Commission on April 3, 1996.
Such Exhibit is incorporated herein by reference.
(10)Filed with the Commission on April 3, 1996.