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FORM 10-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 3, 2000,
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No.: 1-8739
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BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
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(Exact Name of Registrant as specified in its charter)
State or other jurisdiction: Delaware
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I.R.S. Employer incorporation or
organization Identification No.: 22-1970303
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1830 Route 130, Burlington, New Jersey 08016
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (609) 387-7800
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Common Stock, $1.00 par value per share
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Name of each exchange
on which registered: New York Stock Exchange
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Securities Registered pursuant to Section 12(g) of the Act:
Title of Class: None
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Page 1 of 125
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. [X]
The aggregate market value of the Common Stock, $1.00 par value ("Common
- ------------------------------------------------------------------------
Stock"), of the registrant held by non-affiliates of the registrant, as
- -----------------------------------------------------------------------
determined by reference to the closing price of the Common Stock on the New
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York Stock Exchange as of July 31, 2000, was $181,812,215.
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As of July 31, 2000, the number of shares of Common Stock, $1.00 par value,
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outstanding was 44,333,058.
- ---------------------------
The documents incorporated by reference into this Form 10K:
Registrant's Proxy Statement to be filed pursuant to
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Regulation 14A.
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The Part of the Form 10-K into which the document is incorporated
Part III
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Page 2 of 125
PART I
Item 1. Business
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Burlington Coat Factory Warehouse Corporation and its subsidiaries (the
"Company" or "Burlington Coat") operate a chain of value-oriented department
stores which offer a broad range of moderate to higher priced, current brand
name merchandise for men, women and children at prices substantially below
traditional full retail prices generally charged by other department and
specialty stores. Burlington Coat offers customers a complete line of men's,
women's and children's wear and accessories (such as handbags, belts, perfume,
watches, etc.) as well as a linens (linens, bath shop items, gifts and luggage)
department in two hundred thirty-one of its stores, a children's furniture
department in two hundred nineteen of its stores, and a shoe department in two
hundred thirty-four of its stores. The Company's policy of buying significant
quantities of merchandise throughout the year, maintaining inventory control
and using a "no-frills" merchandising approach, allows it to offer merchandise
at prices below traditional full retail prices. Merchandise is displayed on
easy access racks, and sales assistance generally is available. Clothing
alteration services are available on a limited basis in many stores for an
additional charge.
Burlington Coat's practice of purchasing outerwear early in each fashion
season and of reordering in rapid response to sales has enabled it to maintain a
large, current and varied selection of outerwear throughout each year. Although
the Company believes that this practice helps attract customers to its stores,
to the extent the Company maintains a relatively large volume of merchandise,
particularly outerwear, the risks related to style changes, weather and other
seasonal factors, and economic conditions are necessarily greater than if the
Company maintained smaller inventories.
An important factor in Burlington Coat's operations has been its continued
ability to purchase desirable, first-quality current brand labeled merchandise
directly from manufacturers on terms at least as favorable as those offered by
large retail department and specialty stores. The Company estimates that over
1,000 manufacturers of apparel, including over 300 manufacturers of outerwear,
are represented at the Company's stores, and that no manufacturer accounted for
more than 5% of the Company's purchases during the last full fiscal year. The
Company does not maintain any long term or exclusive commitments or arrangements
to purchase from any manufacturer. No assurance can be given that the Company
will be able to continue to purchase such merchandise directly from
Page 3 of 125
manufacturers or to continue its current selling price structure. See
"Competition."
The Company sells its merchandise to retail customers for cash and accepts
checks and most major credit cards. The Company's "Cohoes" division also offers
its own credit card. In addition, the Company maintains a layaway plan and
offers special orders on selected merchandise. It does not offer refunds,
except on furs, defective merchandise and certain sales from specialty retail
operations, but will exchange merchandise or give store merchandise exchange
slips for merchandise returned within a prescribed period of time.
The Company advertises primarily on television and, to a lesser extent, in
regional and local newspapers and radio. During the past three fiscal years,
advertising expenditures have averaged approximately 2.5% of total revenues.
The Company has two major product categories, apparel and home products.
Apparel includes all clothing items for men, women and children and apparel
accessories such as jewelry, perfumes and watches. Home products includes
linens, home furnishings, gifts, baby furniture and baby furnishings. Net
revenues from the sale of apparel products for fiscal years 2000, 1999 and 1998
were $1.7 billion, $1.5 billion and $1.4 billion, respectively. Net revenues
from the sale of home products for fiscal years 2000, 1999 and 1998 were $0.5
billion, $0.4 billion and $0.4 billion, respectively.
The Stores
- ----------
As of July 31, 2000, the Company operated two hundred eighty-two stores,
all but twenty-three of which are located in leased facilities ranging in size
(including storage space) from approximately 16,000 to approximately 163,000
square feet, with an average area of approximately 72,000 square feet. Total
store gross square footage increased to 20,279,000 square feet, an increase of
10.7% over a year ago. Selling space accounts for over four-fifths of the total
area in most stores.
All of the Company's stores are either free-standing or are located in
shopping malls or strip shopping centers. The Company believes that its
customers are attracted to its stores principally by the availability of a large
assortment of first-quality current brand name merchandise at attractive prices.
The Company also operates stores under the names "Cohoes Fashions,"
"Decelle," and "Luxury Linens." Cohoes Fashions offers merchandise in the
middle to higher price range. Decelle offers
Page 4 of 125
merchandise in the moderate price range for the entire family with an emphasis
on children's and youth wear. Luxury Linens is a specialty store for linens,
bath shop items, gifts and accessories and offers merchandise in the middle to
higher range. The Company also operates one stand-alone store under the name
"Totally 4 Kids" and one stand-alone store under the name "Baby Depot".
In general, Burlington Coat has selected sites for its stores where there
are suitable existing structures which can be refurbished, and, if necessary,
enlarged, in a manner consistent with the Company's merchandising concepts. In
some cases, space has been substantially renovated or built to specifications
given by Burlington Coat to the lessor. Such properties have been available to
the Company on lease terms which it believes have been favorable. See "Growth
and Expansion."
The stores generally are located in close proximity to population centers,
other department stores and other retail operations and are usually established
near a major highway or thoroughfare, making them easily accessible by
automobile. It is likely that the Company would be adversely affected by any
conditions which were to result in the reduction of automobile use.
The Company owns substantially all the equipment used in its stores and
believes that its selling space is well utilized and that its equipment is well
maintained and suitable for its requirements.
Some stores contain departments licensed by unaffiliated parties for the
sale of items such as lingerie, fragrances and jewelry. During the fiscal year
ended June 3, 2000, the Company's rental income from all of its licensed
departments aggregated less than 1% of the Company's total revenues.
Central Distribution
- --------------------
Central distribution, warehousing, ticketing and marking services are
extended to approximately fifty-five percent of the dollar volume of the
Company's merchandise through its office and warehouse/distribution facility in
Burlington, New Jersey. This facility services the Company's present stores.
The Company is leasing three additional warehouse facilities of approximately
40,000 square feet, 85,000 square feet and 160,000 square feet, respectively,
nearby to its existing warehouse distribution center for the purpose of
warehousing and distributing its juvenile furniture and furnishings inventory
and other items.
Page 5 of 125
Safe Harbor Statement
- ---------------------
Statements made in this report that are forward-looking (within the meaning
of the Private Securities Litigation Reform Act of 1995) are not historical
facts and involve a number of risks and uncertainties. Such statements include
but are not limited to, proposed store openings and closings, proposed capital
expenditures, projected financing requirements, proposed developmental projects,
projected sales and earnings, and the Company's ability to maintain selling
margins. Among the factors that could cause actual results to differ materially
are the following: general economic conditions; consumer demand; consumer
preferences; weather patterns; competitive factors, including pricing and
promotional activities of major competitors; the availability of desirable store
locations on suitable terms; the availability, selection and purchasing of
attractive merchandise on favorable terms; import risks; the Company's ability
to control costs and expenses; unforeseen computer related problems; any
unforeseen material loss or casualty; the effect of inflation; and other factors
that may be described in the Company's filings with the Securities and Exchange
Commission. The Company does not undertake to publicly update or revise its
forward-looking statements even if experience or future changes make it clear
that any projected results expressed or implied will not be realized.
Growth and Expansion
- --------------------
Since 1972 when its first store was opened in Burlington, New Jersey, the
Company has expanded to two hundred sixty-two Burlington Coat stores, five
Cohoes Fashions stores, eight Decelle stores and five stand-alone Luxury Linens
stores as of July 31, 2000. The Company also operates one stand-alone Totally
4 Kids store and one stand-alone Baby Depot.
At July 31, 2000 the Company operated stores in 42 states and is exploring
expansion opportunities both within its current market areas and in other
regions. For fiscal 2001, the Company plans to open approximately fifteen to
twenty additional Burlington Coat Factory stores.* The Company also has planned
store expansions and remodelings for approximately twenty stores.* In addition,
the Company has plans to relocate approximately four of its stores to new
locations within the same trading market.* The Company continues to monitor
store profitability and should economic factors change, some store closings
could be possible.
The Company believes that its ability to find satisfactory locations for
its stores is essential for the continued growth of
* Forward Looking Statement. See Safe Harbor Statement on page 6.
Page 6 of 125
its business. The opening of stores generally is contingent upon a number of
factors, including the availability of desirable locations with suitable
structures and the negotiation of acceptable lease terms. There can be no
assurance, however, that the Company will be able to find suitable locations for
new stores or that even if such locations are found and acceptable lease terms
are obtained, the Company will be able to open the number of new stores
presently planned. During the Fall of 1999, the Company introduced an improved
store design for its new stores. The new design creates a more intimate,
customer-friendly environment by implementing changes in store layout, ceiling
plan, lighting, fixturing and overall color direction.
The Company operates its own jewelry department in nine stores as of July
31, 2000. The jewelry program consists of karat gold and precious and semi-
precious stone jewelry, and in some stores may include brand-name watches.
In fiscal 1997 the Company began to operate its own shoe department. At
July 31, 2000 the Company operated this department in approximately two hundred
thirty-four Burlington Coat Factory stores. The shoe department offers a full
line of mens, womens and childrens shoes in many brands and styles.
On March 1, 2000, the Company launched its national baby registry. This
electronic registry links all two hundred nineteen of the Company's Baby Depot
departments. Expecting parents can register for the items they need at a nearby
Baby Depot department, and friends and relatives can then review and purchase
items on the registry at any Baby Depot department. The Company offers
registered parents the opportunity to receive a gift certificate equal to five
percent of qualified registered purchases.
The Company has entered into an agreement with Christopher Lowell, the Emmy
Award winning host of a home decorating and design show aired on the Discovery
Channel, for the creation of an exclusive line of home furnishings and
accessories. The Christopher Lowell Collection will be presented in a concept
shop within the Company's existing linens and gift area commencing November
2000. The shop will feature Christopher Lowell's line of home furnishings
including bedding, window treatments, bath accessories, picture frames and a
paint line.
The Company offers merchandise for sale through its internet subsidiary,
Burlington Coat Factory Direct Corporation, on the worldwide web. During the
Spring of 2000, the Company relaunched its on-line shopping web site
(www.coat.com) using Commerce Intelligence Software licensed by InterWorld
Corporation. The site features over 5,000 items, shopping cart functionality,
item search capability and a secure on-line payment processing system. An order
management system allows for vendor direct, warehouse and store-based
fulfillment of orders. Web site product data is tied
Page 7 of 125
to the Company's inventory systems for maintenance of prices and item
availability. The Company plans to expand the merchandise mix offered through
its web site, to upgrade its internet marketing and promotional capabilities, to
further develop and automate its fulfillment and customer service systems, to
add new features to its on-line store locator and to integrate its store-based
gift registry with its web site; however, no assurance can be given that this
venture will be successful.*
The Company seeks to maintain its competitive position and improve its
prospects by periodically reevaluating its methods of operation, including its
pricing and inventory policies, the format of its stores and its ownership or
leasing of stores.
Seasonality
- -----------
The Company's business is seasonal, with its highest sales occurring in the
months of September, October, November, December and January of each year. For
the past five fiscal years, approximately 55% of the Company's net sales have
occurred during the period from September through January. Weather, however,
continues to be an important contributing factor to the sale of clothing in the
fall, winter and spring seasons. Generally, the Company's sales are higher if
the weather is cold during the fall and warm during the early spring. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
Operations
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Each store has a manager and one or more assistant managers, as well as
department managers. The Company also employs regional and district managers to
supervise overall store operating and merchandising policies. Major
merchandising decisions are made, overall policies are set, and accounting and
general financial functions for the Company's stores are conducted, at corporate
headquarters. In addition, other operations such as real estate, store
operations, loss prevention, merchandise presentation, customer service, and
human resources, are managed on a Company-wide basis.
Merchandise purchased by the Company is either shipped directly from
manufacturers to store locations or distributed through the Company's
warehousing and distribution facilities. See "Central Distribution." A
computerized merchandise information system provides regular detailed reports of
sales and inventory levels for each store and assists the merchandise managers
and buyers in monitoring and adjusting inventory levels.
* Forward Looking Statement. See Safe Harbor Statement on page 6.
Page 8 of 125
At July 31, 2000, the Company had approximately 21,000 employees, including
a large number of part-time and seasonal employees which varies throughout the
year. Of the Company's employees, only those employed at one of its stores are
covered by a collective bargaining agreement. The Company cannot predict
whether any future attempts to unionize its employees will be successful. The
Company believes that its relationship with its employees has been and remains
satisfactory.
Competition
- -----------
General. The retail apparel business is highly competitive. Competitors
include other individual, regional, and national "off-price" retailers offering
similar merchandise at comparable prices as well as individual and chain stores,
some of which are regional and national department and discount store chains.
At various times throughout the year traditional full-price department store
chains and specialty shops offer brand name merchandise at substantial
markdowns, which can result in prices approximating those offered by the
Company. Some of the Company's competitors are considerably larger than the
Company and have substantially greater financial and other resources.
Resale Price Maintenance. Since it is the general policy of the Company
to sell at lower than the traditional full retail price, its business may be
adversely affected by manufacturers who attempt to maintain the resale price of
their merchandise by refusing to sell or grant advertising allowances to
purchasers who do not adhere to their suggested retail prices. Federal
legislation and regulations have been proposed from time to time which, if
enacted, would be helpful to manufacturers attempting to establish minimum
prices or withhold allowances. In addition, the rules against resale price
maintenance have been subject to challenge in the courts from time to time.
The Company has, on several occasions in the past, brought lawsuits against
certain manufacturers and department store chains and complained to the Federal
Trade Commission seeking more vigorous enforcement of existing Federal laws, as
well as testified before Congress in connection with proposed legislation
concerning the Federal antitrust laws.
Page 9 of 125
Item 2. Properties
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The Company owns the land and building for twenty-three of its stores. In
addition, the Company purchased the building for one of its stores to be opened
in the Fall of calendar year 2000. Generally, however, the Company's policy has
been to lease its stores. Store leases generally provide for fixed monthly
rental payments, plus the payment, in most cases, of real estate taxes and other
charges with escalation clauses. In many locations, the Company's store leases
contain formulas providing for the payment of additional rent based on sales.
The following table shows the years in which store leases existing at
July 31, 2000 expire:
Fiscal Years Number of Leases Expiring with
Ending May 30 Expiring Renewal Options
- ------------- ---------------- ---------------
2001-2002 8 18
2003-2004 5 42
2005-2006 13 46
2007-2008 10 30
2009-2010 7 36
Thereafter 25 27
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Total 68 199
====== ======
The Company owns five buildings in Burlington, New Jersey. Of these
buildings, two are used by the Company as retail space. In addition, the
Company owns approximately 97 acres of land in the Townships of Burlington
and Florence, New Jersey on which the Company has constructed its office and
warehouse/distribution facility. The Company leases three warehouse facilities
of approximately 40,000 square feet, 85,000 square feet and 160,000 square feet,
respectively, at locations nearby to the warehouse/distribution facility. The
Company leases approximately 20,000 square feet of office space in New York
City.
Item 3. Legal Proceedings
-----------------
In the past, the Company has initiated several lawsuits in its effort to
stop what it believes to be unlawful practices on the part of certain
manufacturers and large retailers to control the prices at which certain items
of merchandise may be sold at the Company's stores.
Page 10 of 125
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
The Company did not submit any matter to a vote of its security holders
during the fourth quarter of fiscal 2000.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
---------------------------------------------------------------------
The Company's Common Stock is traded on the New York Stock Exchange and
its trading symbol is "BCF."
The following table provides the high and low closing prices on the New
York Stock Exchange for each fiscal quarter for the period from May 31, 1998 to
June 3, 2000 and for the two months ended July 31, 2000.
Period Low Price High Price
------ --------- ----------
May 31, 1998 to
August 29, 1998 18 3/8 27 3/8
August 30, 1998 to
November 28, 1998 13 15/16 22 11/16
November 29, 1998 to
February 27, 1999 12 13/16 16 5/8
February 28, 1999 to
May 29, 1999 11 1/16 17 5/16
May 30, 1999 to
August 28, 1999 16 1/4 19 1/2
August 29, 1999 to
November 27, 1999 12 3/16 20 1/2
November 28, 1999 to
February 26, 2000 10 1/16 13 7/8
February 27, 2000 to
June 3, 2000 10 11/16 17 3/16
June 4, 2000 to
July 31, 2000 10 13/16 12 1/2
At July 31, 2000 there were three hundred seventeen record holders of the
Company's Common Stock. The number of record holders does not reflect the
number of beneficial owners of the Company's Common Stock for whom shares are
held by Cede & Co., certain brokerage firms and others.
Page 11 of 125
Dividend Policy
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The Board of Directors of the Company declared an annual cash dividend of
two cents ($.02) per share in each of the last three fiscal years. The cash
dividend for fiscal 2000 was declared on September 17, 1999, and was paid on
November 2, 1999, to stockholders of record on October 7, 1999. The paid
dividend amounted to $0.9 million. Maintenance of the cash dividend policy or
any change thereto in the future will be at the discretion of the Company's
Board of Directors and will depend upon the financial condition, capital
requirements and earnings of the Company as well as other factors which the
Board of Directors may deem relevant. At present, the policy of the Board of
Directors of the Company is to retain the majority of earnings to finance the
growth and development of the Company's business.
Item 6. Selected Financial Data
-----------------------
The following tables set forth certain selected financial data:
Twelve Twelve Eleven (2) Twelve Twelve(3)
Months Ended Months Ended Months Ended Months Ended Months Ended
6/29/96 6/28/97 5/30/98 5/29/99 6/3/00
------------ ------------ ------------ ------------ ------------
(In thousands of dollars, except per share data)
Statement of Operations Data:
- -----------------------------
Revenues $1,583,197 $1,749,049 $1,782,292 $1,968,784 $2,226,183
Net Income Before
Cumulative Effect of
Accounting Change 29,013 56,515 63,639 47,783 62,476
Basic and Diluted Net
Income per Share Before
Cumulative Effect of
Accounting Change .59(1) 1.17(1) 1.34 1.02 1.37
Net Income 29,013 56,515 63,639 47,783 61,120
Basic and Diluted Net
Income Per Share .59(1) 1.17(1) 1.34 1.02 1.34
Dividends Per Share - - .02 .02 .02
Balance Sheet Data:
- ------------------
Total Assets $ 704,731 $ 775,077 $ 909,807 $ 941,635 $1,046,047
Working Capital 288,107 319,736 368,459 332,759 260,399
Long-Term Debt 74,907 62,274 60,890 52,970 8,105
Stockholders' Equity 413,745 460,215 516,069 548,156 586,441
_________________
(1) Adjusted to give retroactive effect to six for five stock split effected
in October, 1997.
(2) During fiscal 1998, the Company changed its fiscal year from a 52-53 week
fiscal year ending on the Saturday closest to June 30 to a fiscal year
ending on the Saturday closest to May 31.
(3) During fiscal 2000, the Company changed its method of accounting for
layaway and lease department revenues and related costs. See Management's
Discussion and Analysis of Financial Condition and Results of Operations
for the twelve months ended June 3, 2000 and May 29, 1999.
Page 12 of 125
Item 7. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations
---------------------
During fiscal 1998 the Company changed its fiscal year from a 52-53 week
fiscal year ending on the Saturday closest to June 30 to a fiscal year ending on
the Saturday closest to May 31. The following discussion compares the twelve
months (53 weeks) ended June 3, 2000 with the twelve months (52 weeks) ended May
29, 1999 and the twelve months (52 weeks) ended May 29, 1999 with the twelve
months (52 weeks) ended May 30, 1998 (unaudited).
Results of Operations
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Twelve Months Ended
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June 3, 2000 and May 29, 1999
-----------------------------
The following table sets forth certain items in the consolidated statements
of operations as a percentage of net sales for the twelve months ended June 3,
2000 and May 29, 1999.
Percentage of Net Sales
-----------------------
Twelve Months Ended
-------------------
June 3, 2000 May 29, 1999
------------ ------------
Net Sales 100.0% 100.0%
Costs and Expenses:
Cost of Sales 64.0 63.9
Selling and Administrative Expenses 30.6 31.3
Depreciation and Amortization 1.9 1.8
Interest Expense 0.2 0.3
------- -------
96.7 97.3
Other Income 1.3 1.2
------- -------
Income Before Provision for
Income Taxes 4.6 3.9
Provision for Income Taxes 1.7 1.4
Income Before Cumulative Effect
of Accounting Change 2.9 2.5
Cumulative Effect of Accounting Change (0.1) -
------- -------
Net Income 2.8% 2.5%
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Page 13 of 125
Performance for the Twelve Months (53 weeks) Ended June 3, 2000 Compared With
- -----------------------------------------------------------------------------
the Twelve Months (52 weeks) Ended May 29, 1999
- -----------------------------------------------
Consolidated net sales increased $254.6 million (13.1%) for fiscal 2000
compared with the similar period of a year ago. Comparative stores sales
increased 2.2% for the period. Twenty-two new Burlington Coat Factory stores,
opened during fiscal 2000, contributed $118.6 million to this year's net sales.
Stores opened a year ago contributed $64.5 million to this year's net sales from
the beginning of fiscal 2000 to the anniversary of their opening date. Stores
which were in operation a year ago, but which were closed prior to this year,
contributed $7.0 million to last year's sales. Week 53 of the current fiscal
year contributed $31.3 million to this year's net sales for Burlington Coat
Factory stores.
The Cohoes stores contributed $39.9 million to consolidated sales for the
twelve months ended June 3, 2000 compared with $36.8 million for the twelve
months ended May 29, 1999. Cohoes comparative store sales decreased 3.7% for
the twelve month period. One new Cohoes store opened during the current fiscal
year contributed $3.7 million to this year's sales. Week 53 of the current
fiscal year contributed $0.6 million to this year's net sales.
Sales in fiscal 2000 for the Decelle stores were $33.8 million compared
with $33.5 million for the twelve months ended May 29, 1999. Decelle
comparative store sales increased 0.7% for the twelve months ended June 3, 2000
compared with the similar twelve month period of a year ago. One Decelle store
was closed during fiscal 1999 which contributed $0.4 million to last year's
sales. Week 53 of the current fiscal year contributed $0.6 million to this
year's net sales.
Other income (consisting of rental income from leased departments,
investment income and miscellaneous items) increased to $27.5 million for fiscal
2000 compared with $24.7 million for the similar period of a year ago. This
increase is primarily the result of additional rental income from leased
departments of approximately $1.0 million. In addition, other income increased
due to an increase in interest income, resulting from higher interest rates,
during the comparative twelve month periods ended June 3, 2000 and May 29, 1999
and to the receipt of payment of $0.5 million for certain non-recurring
contractual obligations during fiscal 2000.
Cost of sales increased $163.4 million (13.1%) for the twelve months ended
June 3, 2000 compared with the twelve months ended May 29, 1999. The dollar
increase in cost of sales was due to the increase in net sales during the
current fiscal year compared with the prior year as well as an increase in cost
of sales as a
Page 14 of 125
percentage of net sales, which increased from 63.9% to 64.0%. Improvements in
initial margins were offset by increases in freight costs and slight increases
in markdowns as a percentage of sales this year over last year.
Selling and administrative expenses increased $64.4 million (10.6%) from
the 1999 period to the 2000 period. This increase was due mainly to an increase
in the number of stores in operation and increases in payroll and payroll
related expenses. As a percentage of net sales, selling and administrative
expenses were 30.6% for the twelve months ended June 3, 2000 compared with 31.3%
for the twelve months ended May 29, 1999.
Depreciation and amortization expense amounted to $41.0 million in the
twelve months ended June 3, 2000 compared with $35.0 million in the twelve
months ended May 29, 1999. This increase of $6.0 million in the fiscal 2000
period compared with the comparative 1999 period is attributable primarily to
new stores opened during the year as well as remodeling and refixturing of
existing stores.
Interest expense decreased $0.4 million for the twelve months ended June 3,
2000 compared with the similar period of a year ago. The decrease in interest
expense is the result of a decrease in long term debt due to the normal
recurring repayments of the subordinated notes and the industrial development
bonds.
The provision for income taxes increased to $37.7 million for the twelve
months ended June 3, 2000 from $28.4 million for the similar fiscal period a
year ago. This increase in the tax provision was due to higher earnings as well
as an increase in the effective tax rate. The effective tax rate for fiscal
2000 was 37.6% compared with 37.2% in the prior fiscal year. This rate increase
is due primarily to a slight increase in the effective state tax rate and a
decrease in federal jobs tax credits available to the Company.
Income before cumulative effect of accounting change increased $14.7
million to $62.5 million for the fiscal 2000 period from $47.8 million for the
comparative 1999 period. Net income per share before cumulative effect of
accounting change was $1.37 per share for fiscal 2000 compared with $1.02 per
share for the comparative 1999 period.
During the fiscal year ended June 3, 2000, the Company recorded a
cumulative effect loss resulting from the adoption of SEC Staff Accounting
Bulletin No. 101, Revenue Recognition in Financial Statements. The Company
changed its method of accounting for layaway sales in compliance with SAB No.
101. Under the new accounting method, the Company will defer recognition of a
layaway sale and its related profit to the accounting period when the
Page 15 of 125
customer picks up layaway merchandise. The cumulative effect of this change for
periods prior to fiscal 2000 is shown as a cumulative effect of accounting
change in the Consolidated Statements of Operations and amounted to a $1.4
million decrease in income (net of income taxes) or $0.03 per share. The
accounting change has only a slight impact on annual sales and earnings.
However, due to the seasonality of the Company's business, this change may
result in shifts of sales and earnings among the Company's fiscal quarters.
Results of Operations
- ---------------------
Twelve Months Ended
-------------------
May 29, 1999 and May 30, 1998
-----------------------------
The following table sets forth certain items in the consolidated statements
of operations as a percentage of net sales for the twelve months ended May 29,
1999 and May 30, 1998 (unaudited).
Percentage of Net Sales
-----------------------
Twelve Months Ended
-------------------
May 29, 1999 May 30, 1998
------------ ------------
Net Sales 100.0% 100.0%
Costs and Expenses:
Cost of Sales 63.9 63.2
Selling and Administrative Expenses 31.3 30.5
Depreciation and Amortization 1.8 1.8
Interest Expense 0.3 0.4
------- -------
97.3 95.9
Other Income 1.2 1.5
------- -------
Income Before Income Taxes 3.9 5.6
Provision for Income Taxes 1.4 2.2
------- -------
Net Income 2.5% 3.4%
======= =======
Page 16 of 125
Performance for the Twelve Months (52 weeks) Ended May 29, 1999 Compared With
- -----------------------------------------------------------------------------
the Twelve Months (52 weeks) Ended May 30, 1998 (unaudited)
- -----------------------------------------------------------
Consolidated net sales increased $97.0 million (5.3%) for fiscal 1999
compared with the similar period of the prior year. Comparative stores sales
increased 2.7% for the period. Fifteen new Burlington Coat Factory stores,
opened during fiscal 1999, contributed $48.6 million to the year's sales.
Stores opened in fiscal 1998 contributed $31.2 million to net sales from the
beginning of fiscal 1999 to the anniversary of their opening date. Stores which
were in operation during fiscal 1998, but which were closed prior to fiscal
1999, contributed $20.8 million to fiscal 1998 sales.
The Cohoes stores contributed $36.8 million to consolidated sales for the
twelve months ended May 29, 1999 compared with $37.3 million for the twelve
months ended May 30, 1998. Cohoes comparative store sales decreased 2.7% for
the twelve month period.
Sales in fiscal 1999 for the Decelle stores were $33.5 million compared
with $39.7 million for the twelve months ended May 30, 1998. Decelle
comparative store sales decreased 8.9% for the twelve months ended May 29, 1999
compared with the similar twelve month period of the prior year. One Decelle
store was closed during fiscal 1999 which contributed $2.3 million to sales of
the prior fiscal year.
Other income (consisting of rental income from leased departments,
investment income and miscellaneous items) decreased to $26.1 million for fiscal
1999 compared with $28.6 million for the similar period of the prior year. This
decrease is primarily the result of investment income decreases of approximately
$2.9 million, resulting from a decrease in investable funds during the
comparative fiscal periods and a decrease in interest rates during most of the
comparative period. Offsetting the decrease in investment income was an
increase in rental income from lease departments of $0.7 million.
Cost of sales increased $76.0 million (6.5%) for the twelve months ended
May 29, 1999 compared with the twelve months ended May 30, 1998. The dollar
increase in cost of sales was due to the increase in net sales during the 1999
fiscal year compared with the prior year as well as an increase in cost of sales
as a percentage of net sales, which increased from 63.2% to 63.9%. This
increase was due mainly to higher markdowns as a percentage of sales in fiscal
1999 over fiscal 1998, and a slight increase in shrinkage loss.
Selling and administrative expenses increased $45.5 million (8.1%) from the
1998 period to the 1999 period. This increase was
Page 17 of 125
due mainly to an increase in the number of stores in operation and to increases
in payroll and payroll related expenses. As a percentage of net sales, selling
and administrative expenses were 31.3% for the twelve months ended May 29, 1999
compared with 30.5% for the twelve months ended May 30, 1998.
Depreciation and amortization expense amounted to $35.0 million in the
twelve months ended May 29, 1999 compared with $32.8 million in the twelve
months ended May 30, 1998. This increase of $2.2 million in the fiscal 1999
period compared with the comparative 1998 period is attributable primarily to
new stores opened during the year as well as remodeling and refixturing of
existing stores.
Interest expense decreased $1.8 million for the twelve months ended May 29,
1999 compared with the similar period of the prior year. The decrease in
interest expense is the result of a decrease in long term debt due to the normal
recurring repayments of the subordinated notes and the industrial development
bonds.
The provision for income taxes decreased to $28.4 million for the twelve
months ended May 29, 1999 from $41.2 million for the similar fiscal period ended
May 30, 1998. This decrease in the tax provision was due to lower earnings as
well as a decrease in the effective tax rate. The effective tax rate for fiscal
1999 was 37.2% compared with 39.8% in the prior fiscal year. This rate decrease
is due primarily to a decrease in the effective state tax rate and an increase
in federal jobs tax credits available to the Company.
Net income decreased $14.6 million to $47.8 million for the 1999 period
from $62.4 million for the comparative 1998 period. Net income per share was
$1.02 per share for fiscal 1999 compared with $1.31 per share for the
comparative 1998 period.
Liquidity and Capital Resources
- -------------------------------
During fiscal 2000, the Company opened twenty-two Burlington Coat Factory
Warehouse stores and one Cohoes store. The Company closed four stores and
relocated four others to new locations within their trading areas. Expenditures
incurred to acquire, set up and fixture new stores opened during fiscal 2000
were approximately $38.6 million. Expenditures for store relocations, store
expansions and store refurbishings were approximately $28.6 million during
fiscal 2000. During fiscal 2000, the Company purchased the land and building
associated with two of its new stores for $10.8 million and acquired the leases
of two stores for $1.5 million. In addition, expenditures for store locations
to be opened during fiscal 2001, including the purchase of one building,
amounted to $9.0 million. Other capital expenditures, consisting
Page 18 of 125
primarily of computer system enhancements and distribution center improvements
amounted to $20.6 million for fiscal 2000. For fiscal 2001, the Company
estimates that it will spend approximately $93.0 million for capital
expenditures (i.e., building acquisitions, fixtures, equipment and leasehold
improvements) in connection with the opening of approximately nineteen to
twenty-five new stores (including store relocations), remodeling and expansion
of existing stores, expansion of the Company's home office and warehouse
facilities, and computer enhancement projects.*
The Company repurchased 1,922,949 shares of its stock, costing
approximately $22.4 million, in the current fiscal period. These purchases are
reflected as treasury stock in the equity section of the balance sheet. As of
June 3, 2000, the Company had authority to purchase an additional $7.0 million
of its stock. Subsequent to June 3, 2000, the Company repurchased 229,100
shares of its stock, costing approximately $2.8 million.
Working capital decreased to $260.4 million at June 3, 2000 from $332.8
million at May 29, 1999. At May 30, 1998, working capital was $368.5 million.
Total funds provided from operations for the fiscal years ended June 3,
2000, May 29, 1999 and May 30, 1998 were $112.1 million, $94.7 million, and
$97.6 million, respectively. Total funds from operations are calculated by
adding back to net income non-cash expenditures such as depreciation and
deferred taxes.
Net cash provided by operating activities of $162.9 million for fiscal 2000
increased by $89.9 million from $73.1 million in net cash provided from
operating activities for fiscal 1999. This increase in net cash from operations
was due in part to an increase in net income before depreciation expense of
$19.3 million, a smaller increase in inventory ($12.0 million) in comparison
with the increase in the prior fiscal year ($26.2 million), and a larger
increase in accounts payable in the latest fiscal year ($51.6 million) in
comparison with an increase in accounts payable of $24.2 million in the prior
fiscal year.
On September 17, 1999, the Board of Directors of the Company declared the
annual cash dividend in the amount of two cents ($0.02) per share. The cash
dividend was paid on November 2, 1999, to stockholders of record on October 7,
1999. The paid dividend amounted to $0.9 million.
The Company's long-term borrowings at June 3, 2000 include $44.4 million of
long term subordinated notes issued by the Company to institutional investors in
June, 1990 ("the Notes") and an
* Forward Looking Statement. See Safe Harbor Statement on page 6.
Page 19 of 125
industrial development refunding bond of $8.5 million issued by the New Jersey
Economic Development Authority (the "Refunding Bonds").
The Notes were scheduled to mature on June 27, 2005 and bore interest at
the rate of 10.6% per annum. As of June 3, 2000, the Notes had a remaining
average scheduled maturity of approximately 3 years and were subject to
mandatory payment in installments of $7.4 million each without premium on June
27 of each year. The Notes were subordinated to senior debt, including, among
others, bank debt and indebtedness for borrowed money. On June 27, 2000, the
Company paid its mandatory $7.4 million installment payment. In addition, the
Company prepaid the remaining $37.0 million balance of the Notes. The prepayment
penalty was approximately $1.0 million.
The Refunding Bonds consist of serial and term bonds. The serial bonds
aggregate $2.1 million and mature in series annually on September 1, through the
year 2003. The term bonds consist of two portions, $1.4 million maturing on
September 1, 2005 and $5.0 million maturing on September 1, 2010. The serial
bonds bear interest ranging from 3.75% to 5.4% per annum, and the term bonds
bear interest at the rates of 5.60% for the portion maturing on September 1,
2005 and 6.125% per annum for the portion maturing on September 1, 2010. The
average interest rate and average scheduled maturity of the Refunding Bonds are
5.8% and 6.5 years, respectively. During fiscal 2000, the Company expended
approximately $0.4 million for the repayment of the Refunding Bonds.
The Company has in place a committed line of credit agreement in the amount
of $50.0 million and an additional $50.0 million in uncommitted lines of credit.
The Company had no borrowings under these credit lines during the fiscal 2000
and fiscal 1999 periods. The Company had letter of credit commitments
outstanding against these lines of credit of $30.8 million at the end of fiscal
2000 and $20.9 million at the end of fiscal 1999. Subsequent to June 3, 2000,
as a result of the early payoff of the Notes, borrowings under the lines of
credit were necessary. Through July 31, 2000, the Company had maximum
borrowings against these credit lines of $51.8 million.
The Company believes that its current capital expenditures and operating
requirements can be satisfied from internally generated funds, from short term
borrowings under its revolving credit and term loan agreement as well as
uncommitted lines of credit.* Furthermore, to the extent that the Company
decides to purchase additional store locations, or to undertake unusual
transactions such as an acquisition, it may be necessary to finance such
transactions with additional long term borrowings.*
* Forward Looking Statement. See Safe Harbor Statement on page 6.
Page 20 of 125
Inflation
- ---------
Historically, the Company has been able to increase its selling prices as
the costs of merchandising and related operating expenses have increased, and
therefore, inflation has not had a significant effect on operations.*
Item 7A. Quantitative and Qualitative Disclosures About Market Risks
-----------------------------------------------------------
The Company does not utilize financial instruments for trading purposes and
holds no derivative financial instruments which could expose the Company to
significant market risk. The Company's primary market risk exposure with regard
to financial instruments is to changes in interest rates. Pursuant to the terms
of certain revolving credit arrangements, changes in the lenders' prime rate,
LIBOR or other stated interest rates could affect the rates at which the Company
could borrow funds thereunder. At June 3, 2000, the Company had no outstanding
borrowings against the credit facilities. The table below summarizes the fair
value and contract terms of the Company's fixed rate debt and long-term
investments at June 3, 2000:
Scheduled Maturity Date of Long-Term Debt (Including Current Portion) and
Long Term Investments at June 3, 2000 (in thousands)
Average Average
Fixed Rate Interest Long-Term Interest
Debt Rate Investments Rate
--------------------------------------------------------
2001 $ 7,905 10.3% - 6.3%
2002 7,905 10.3% $ 4,200 6.3%
2003 7,955 10.2% - 6.5%
2004 8,005 10.2% 20,000 6.5%
Thereafter 21,200 9.2% - -
------- -------
Total $52,970 $24,200
======= =======
Fair Value
at June 3,
2000 $55,946 $23,659
======= =======
Item 8. Financial Statements and Supplementary Data
-------------------------------------------
See Index to Financial Statements and following pages.
* Forward Looking Statement. See Safe Harbor Statement on page 6.
Page 21 of 125
Item 9. Changes in and Disagreements with Accountants on Accounting and
---------------------------------------------------------------
Financial Disclosure
--------------------
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
--------------------------------------------------
Item 11. Executive Compensation
----------------------
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
In accordance with General Instruction G(3) of the General Instructions to
Form 10-K, the information called for by Items 10, 11, 12 and 13 is omitted from
this Report and is incorporated by reference to the definitive Proxy Statement
to be filed by the Company pursuant to Regulation l4A of the General Rules and
Regulations under the Securities Exchange Act of 1934, which the Company will
file not later than 120 days after June 3, 2000.
Page 22 of 125
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
----------------------------------------------------------------
(a) The following documents are filed as part of this Report.
Page No.
--------
1. Financial Statements
Index to Consolidated Financial Statements 29
Independent Auditors' Report 30
Consolidated Balance Sheets 31
June 3, 2000 and May 29, 1999
Consolidated Statements of Operations 32
for the Twelve Months Ended
June 3, 2000, the Twelve Months
Ended May 29, 1999 and the Eleven Months
Ended May 30, 1998
Consolidated Statements of Stockholders' 33
Equity for the Eleven Months Ended
May 30, 1998, the Twelve Months Ended
May 29, 1999 and the Twelve Months Ended
June 3, 2000
Consolidated Statements of Cash 34
Flows for the Twelve Months Ended
June 3, 2000, the Twelve
Months Ended May 29, 1999, and the
Eleven Months ended May 30, 1998
Notes to Consolidated Financial Statements 35
2. Financial Statement Schedules
Schedule II - Valuation and Qualifying Accounts 54
Schedules I, III, IV and V are omitted because
they are not applicable or not required or
because the required information is included
in the consolidated financial statements or
notes thereto.
Page 23 of 125
Page No.
--------
3. Exhibits
3.1 Articles of Incorporation, as amended 1/
--
3.2 By-laws 1/
--
10.1 Cohoes Fashions, Inc. Employees' 401(k) 2/
Savings Plan (as amended and restated --
effective January 1, 1999)
10.2 1993 Stock Incentive Plan* 1/
--
10.3 1998 Stock Incentive Plan* 1/
--
10.4 Revolving Credit Agreement dated August 30, 3/
1985 between the Company and BancOhio --
National Bank, as amended through
Amendment No. 6
10.5 Amendment No. 7 to Revolving Credit Agreement 1/
dated June 1, 1998 between the Company and --
National City Bank
10.6 Burlington Coat Factory Warehouse Corporation 60
401(k) Profit-Sharing Plan (as amended and
restated effective January 1, 2000)
____________________
(1) Incorporated by reference to Exhibits filed with the Company's Annual
Report on Form 10-K for the year ended May 30, 1998. File No. 1-8739.
(2) Incorporated by reference to Exhibits filed with the Company's Registration
Statement on Form S-8 with the Commission on May 20, 1999. File No.
333-78941.
(3) Incorporated by reference to the Exhibits filed with the Company's Annual
Report on Form 10-K for the year ended June 29, 1996. File No. 1-8739.
* Executive Compensation Plan
Page 24 of 125
Page No.
--------
10.7 Loan Agreement dated as of August 1, 1995 by 4/
and between New Jersey Economic Development --
Authority and Burlington Coat Factory Ware-
house of New Jersey, Inc.
10.8 Assignment of Leases dated as of August 1, 4/
1995 from Burlington Coat Factory Warehouse --
of New Jersey, Inc. to First Fidelity
Bank, National Association
10.9 Mortgage and Security Agreement dated as of 4/
August 1, 1995 between Burlington Coat --
Factory Warehouse of New Jersey, Inc. and
First Fidelity Bank, National Association
10.10 Indenture of Trust dated as of August 1, 1995 4/
by and between New Jersey Economic Development --
Authority and Shawmut Bank Connecticut,
National Association
10.11 Guaranty and Suretyship dated as of August 1, 4/
1995 from the Company to First Fidelity Bank, --
National Association
10.12 Letter of Credit Reimbursement Agreement dated 4/
as of August 1, 1995 between Burlington Coat --
Factory Warehouse of New Jersey, Inc. and
First Fidelity Bank, National Association
10.13 Environmental Indemnity Agreement dated as of 4/
August 1, 1995 between Burlington Coat Factory --
Warehouse of New Jersey, Inc. and First
Fidelity Bank, National Association
____________________
(4) Incorporated by reference to the Exhibits filed with the Company's Annual
Report on Form 10-K for the year ended July 1, 1995. File No. 1-8739.
Page 25 of 125
Page No.
--------
10.14 Burlington Coat Factory Warehouse Corporation 109
Deferred Compensation Plan effective
May 1, 2000*
21 Subsidiaries of Registrant 120
23 Consent of Deloitte & Touche LLP, independent 122
certified public accountants, to the use of
their report on the financial statements of
the Company for the year ended June 3, 2000
in the Registration Statements of the Company
on Form S-8, Registration No. 2-96332,
No. 33-21569, No. 33-51965, No. 333-41077,
No. 333-65995, and No. 333-78941
27 Financial Data Schedule 124
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
---------------------------------------------
Description Location
----------- --------
1) 1993 Stock Incentive Plan Filed as Exhibit 10.3
2) 1998 Stock Incentive Plan Filed as Exhibit 10.4
3) Deferred Compensation Plan Filed as Exhibit 10.18
(b) Reports on Form 8-K
During the quarter ended June 3, 2000 the Company did not file any report
on Form 8-K.
* Executive Compensation Plan
Page 26 of 125
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.
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
---------------------------------------------
(Registrant)
By: /s/ Monroe G. Milstein
-----------------------------
Monroe G. Milstein, President
Dated: September 1, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/Monroe G. Milstein Chief Executive Officer September 1, 2000
- --------------------------- and President (Principal
Monroe G. Milstein Executive Officer);
Director
/s/Robert L. LaPenta, Jr. Controller (Principal September 1, 2000
- --------------------------- Financial and
Robert L. LaPenta, Jr. Accounting Officer)
/s/Bernard Brodsky Treasurer September 1, 2000
- ---------------------------
Bernard Brodsky
/s/ Henrietta Milstein Director September 1, 2000
- ---------------------------
Henrietta Milstein
/s/Harvey Morgan Director September 1, 2000
- ---------------------------
Harvey Morgan
/s/Andrew R. Milstein Director September 1, 2000
- ---------------------------
Andrew R. Milstein
/s/Stephen E. Milstein Director September 1, 2000
- ---------------------------
Stephen E. Milstein
/s/Mark A. Nesci Director September 1, 2000
- ---------------------------
Mark A. Nesci
/s/Irving Drillings Director September 1, 2000
- ---------------------------
Irving Drillings
Page 27 of 125
[THIS PAGE INTENTIONALLY LEFT BLANK]
Page 28 of 125
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
---------------------------------------------
AND SUBSIDIARIES
----------------
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
Page No.
--------
Independent Auditors' Report 30
Consolidated Balance Sheets 31
June 3, 2000 and May 29, 1999
Consolidated Statements of Operations for the 32
Twelve Months Ended June 3, 2000, the Twelve Months
Ended May 29, 1999 and the Eleven Months
Ended May 30, 1998
Consolidated Statements of Stockholders' 33
Equity for the Eleven Months Ended
May 30, 1998, the Twelve Months Ended
May 29, 1999 and the Twelve Months Ended
June 3, 2000
Consolidated Statements of Cash Flows for the 34
Twelve Months Ended June 3, 2000, the Twelve Months
Ended May 29, 1999 and the Eleven Months Ended
May 30, 1998
Notes to Consolidated Financial Statements 35
Financial Statement Schedules
Schedule II -- Valuation and Qualifying Accounts 54
Schedules I, III, IV and V are omitted because
they are not applicable or not required
because the required information is included
in the consolidated financial statements or
notes thereto.
Page 29 of 125
INDEPENDENT AUDITORS' REPORT
- ----------------------------
Board of Directors and Stockholders
Burlington Coat Factory Warehouse Corporation
Burlington, New Jersey
We have audited the accompanying consolidated balance sheets of
Burlington Coat Factory Warehouse Corporation and its subsidiaries as of June 3,
2000 and May 29, 1999, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the years ended June 3, 2000 and May
29, 1999 and for the eleven months in the period ended May 30, 1998. Our audits
also included the financial statement schedule listed in the Index at Item
14(a)(2). These financial statements and the financial statement schedule are
the responsibility of the Company's management. Our responsibility is to
express an opinion on the financial statements and the financial statement
schedule based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards 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. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe our audits provide a reasonable
basis for our opinion.
In our opinion, such consolidated financial statements present fairly,
in all material respects, the financial position of Burlington Coat Factory
Warehouse Corporation and subsidiaries at June 3, 2000 and May 29, 1999, and the
results of their operations and their cash flows for the years ended June 3,
2000 and May 29, 1999 and for the eleven months in the period ended May 30, 1998
in conformity with accounting principles generally accepted in the United States
of America. Also, in our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as
a whole, presents fairly in all material respects, the information set forth
therein.
As discussed in Note A to the consolidated financial statements, during
the year ended June 3, 2000, the Company changed its method of accounting for
layaway sales.
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
July 26, 2000
Page 30 of 125
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(All amounts in thousands except share data)
June 3, May 29,
2000 1999
-------- --------
Current Assets:
Cash and Cash Equivalents $127,818 $106,952
Accounts Receivable (Net of Allowance for Doubtful
Accounts of $604 in 2000 and $723 in 1999) 20,119 14,227
Merchandise Inventories 513,018 501,040
Deferred Tax Asset 8,813 10,231
Prepaid and Other Current Assets 23,766 18,247
Prepaid Income Tax - 973
-------- --------
Total Current Assets 693,534 651,670
Property and Equipment Net of Accumulated
Depreciation and Amortization 318,316 252,221
Long Term Investments 23,659 24,175
Intangible and Other Assets (Net of Accumulated
Amortization of $6,911 in 2000 and $5,952 in 1999) 10,538 13,569
-------- --------
Total Assets $1,046,047 $941,635
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Accounts Payable $274,337 $222,766
Income Taxes Payable 16,472 -
Accrued Insurance Costs 8,109 10,814
Other Current Liabilities 89,352 77,412
Current Maturities of Long-Term Debt 44,865 7,919
-------- --------
Total Current Liabilities 433,135 318,911
Long-Term Debt 8,105 52,970
Other Liabilities 15,064 15,689
Deferred Tax Liability 3,302 5,909
Commitments and Contingencies
Stockholders' Equity:
Preferred Stock, Par Value $1; Authorized
5,000,000 shares; none issued and outstanding - -
Common Stock, Par Value $1; Authorized
100,000,000 shares; 49,702,538 shares issued at
June 3, 2000; 49,611,988 shares issued
at May 29, 1999 49,703 49,612
Capital in Excess of Par Value 19,937 19,157
Retained Earnings 575,994 515,814
Unearned Compensation - (2)
Accumulated Other Comprehensive Income (Loss) (359) (29)
Treasury Stock at Cost; 2000-5,135,239 shares;
1999-3,212,290 shares (58,834) (36,396)
-------- --------
Total Stockholders' Equity 586,441 548,156
-------- --------
Total Liabilities and Stockholders' Equity $1,046,047 $941,635
========== ========
See notes to consolidated financial statements
Page 31 of 125
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands except share data)
Twelve Months Twelve Months Eleven Months
Ended Ended Ended
June 3, May 29, May 30,
2000 1999 1998
------------- ------------- -------------
REVENUES:
Net Sales $2,198,696 $1,944,106 $1,756,232
Other Income 27,487 24,678 26,060
---------- ---------- ----------
2,226,183 1,968,784 1,782,292
---------- ---------- ----------
COSTS AND EXPENSES:
Cost of Sales (Exclusive of
Depreciation and Amortization) 1,406,625 1,243,198 1,111,722
Selling and Administrative Expenses 673,027 608,629 528,354
Depreciation and Amortization 41,028 35,046 29,634
Interest Expense 5,377 5,771 6,829
---------- ---------- ----------
2,126,057 1,892,644 1,676,539
---------- ---------- ----------
Income Before Provision for
Income Taxes 100,126 76,140 105,753
Provision for Income Taxes 37,650 28,357 42,114
Income Before Cumulative Effect
of Accounting Change $ 62,476 $ 47,783 $ 63,639
Cumulative Effect of Accounting Change,
Net of Income Taxes (1,356) - -
---------- ---------- ----------
Net Income $ 61,120 $ 47,783 $ 63,639
========== ========== ==========
Basic and Diluted Net Income Per Share:
Income Before Cumulative Effect of
Accounting Change $ 1.37 $ 1.02 $ 1.34
Cumulative Effect of Accounting Change,
Net of Income Taxes (.03) - -
---------- ---------- ----------
Net Income $ 1.34 $ 1.02 $ 1.34
========== ========== ==========
Weighted Average Shares Outstanding 45,707,520 46,876,564 47,420,726
========== ========== ==========
Dividends Per Share $ .02 $ .02 $ .02
========== ========== ==========
See notes to consolidated financial statements
Page 32 of 125
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
ELEVEN MONTHS ENDED MAY 30, 1998,
TWELVE MONTHS ENDED MAY 29, 1999
and TWELVE MONTHS ENDED JUNE 3, 2000
(All amounts in thousands)
Accumulated
Capital in Other
Common Excess of Retained Unearned Comprehensive Treasury
Stock Par Value Earnings Compensation Income (Loss) Stock Total
- ----------------------------------------------------------------------------------------------------------------------------
Balance at June 28, 1997 $41,259 $25,997 $406,123 ($54) - ($13,110) $460,215
Net Income 63,639 63,639
Stock Options Exercised 78 444 522
Tax Benefit From Exercise
of Stock Options 526 526
Unearned Compensation 25 25
Treasury Stock Transactions (8,054) (8,054)
Stock Dividend 8,257 (8,257) -
Dividends (804) (804)
____________________________________________________________________________________________________________________________
Balance at May 30, 1998 49,594 18,710 468,958 (29) - (21,164) 516,069
Comprehensive Income:
Net Income 47,783 47,783
Net Unrealized Loss on
Noncurrent Marketable
Securities, Net of
Income Taxes ($29) (29)
---------
Total Comprehensive Income 47,754
Stock Options Exercised 18 198 216
Tax Benefit From Exercise
of Stock Options 249 249
Unearned Compensation 27 27
Treasury Stock Transactions (15,232) (15,232)
Dividends (927) (927)
____________________________________________________________________________________________________________________________
Balance at May 29, 1999 49,612 19,157 515,814 (2) (29) (36,396) 548,156
Comprehensive Income:
Net Income 61,120 61,120
Net Unrealized Loss on
Noncurrent Marketable
Securities, Net of
Income Taxes (330) (330)
--------
Total Comprehensive Income 60,790
Stock Options Exercised 91 310 401
Tax Benefit From Exercise
of Stock Options 470 470
Unearned Compensation 2 2
Treasury Stock Transactions (22,438) (22,438)
Dividends (940) (940)
____________________________________________________________________________________________________________________________
Balance at June 3, 2000 $49,703 $19,937 $575,994 - ($359) ($58,834) $586,441
============================================================================================================================
See notes to consolidated financial statements
Page 33 of 125
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All amounts in thousands)
Twelve Months Twelve Months Eleven Months
Ended Ended Ended
June 3, 2000 May 29, 1999 May 30, 1998
-------------------------------------------------------
OPERATING ACTIVITIES
Net Income $ 61,120 $ 47,783 $ 63,639
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 41,028 35,046 29,634
Provision for Losses on Accounts Receivable 8,482 7,978 7,187
Provision for Deferred Income Taxes (1,189) 3,114 (4,658)
Loss on Disposition of Fixed Assets 314 836 794
Non-Cash Rent Expense and Other 3,414 1,061 1,047
Changes in Assets and Liabilities:
Accounts Receivable (9,970) (7,443) (7,931)
Merchandise Inventories (11,978) (26,223) (108,584)
Prepaids and Other Current Assets (4,546) 4,746 (15,843)
Accounts Payable 51,571 24,169 54,757
Accrued and Other Current Liabilities 25,708 (16,873) 19,506
Deferred Rent Incentives (1,085) (1,085) 7,887
--------- --------- ---------
Net Cash Provided by Operating Activities 162,869 73,109 47,435
--------- --------- ---------
INVESTING ACTIVITIES
Acquisition of Property and Equipment (107,578) (69,244) (43,320)
Proceeds From Sale of Fixed Assets 1,186 3,682 13
Lease Acquisition Costs (1,523) (8,825) -
Issuance of Notes Receivable (3,601) - -
Receipts Against Long-Term Notes Receivable 119 3,197 1,118
Acquisition of Long Term Securities - (24,280) -
Minority Interest and Other (182) 58 58
--------- --------- ---------
Net Cash Used in Investing Activities (111,579) (95,412) (42,131)
--------- --------- ---------
FINANCING ACTIVITIES
Principal Payments on Long-Term Debt (7,919) (8,793) (423)
Issuance of Common Stock Upon Exercise of
Stock Options 873 243 547
Purchase of Treasury Stock (22,438) (15,232) (8,054)
Payment of Dividends (940) (927) (804)
--------- --------- ---------
Net Cash Used in Financing Activities (30,424) (24,709) (8,734)
--------- --------- ---------
Increase (Decrease) in Cash and Cash Equivalents 20,866 (47,012) (3,430)
Cash and Cash Equivalents at Beginning of Period 106,952 153,964 157,394
--------- --------- ---------
Cash and Cash Equivalents at End of Period $127,818 $106,952 $153,964
========= ========= =========
Supplemental Disclosure of Cash Flow Information:
Interest Paid $ 5,616 $ 6,431 $ 4,000
========= ========= =========
Income Taxes Paid $ 19,921 $ 36,588 $ 42,240
========= ========= =========
See notes to consolidated financial statements
Page 34 of 125
Notes to Consolidated Financial Statements
- ------------------------------------------
A. Summary of Significant Accounting Policies
1. Business
Burlington Coat Factory Warehouse Corporation operates 282 stores, in
42 states, which sell apparel, shoes and accessories for men, women and
children. A majority of those stores offer a home furnishings and linens
department and a juvenile furniture department. The Company operates
stores under the names "Burlington Coat Factory Warehouse" (two hundred
sixty-two stores), "Cohoes Fashions" (five stores), "Decelle" (eight
stores), "Luxury Linens" (five stores), "Totally 4 Kids" (one store), and
"Baby Depot" (one store). Cohoes Fashions offers merchandise in the middle
to higher price range. Decelle offers merchandise in the moderate price
range for the entire family with an emphasis on children's and youth wear.
Luxury Linens is a specialty store for linens, bath shop items, gifts and
accessories and offers merchandise in the middle to higher price range.
Totally 4 Kids is a moderate to upscale concept store offering maternity
wear, baby furniture, children's wear from toddlers up to teens, children's
books, toys, computer software for kids and educational tapes in a family
environment. Baby Depot is a stand alone infant and toddler store
specializing in infant and toddler apparel, furnishings and accessories.
2. Principles of Consolidation
The consolidated financial statements include the accounts of
Burlington Coat Factory Warehouse Corporation and its subsidiaries (the
"Company"). All intercompany transactions and balances have been
eliminated in consolidation.
3. Use of Estimates
The Company's consolidated financial statements have been prepared in
conformity with generally accepted accounting principles. Certain amounts
included in the consolidated financial statements are estimated based on
currently available information and management's judgment as to the outcome
of future conditions and circumstances. While every effort is made to
ensure the integrity of such estimates, including the use of third party
specialists where appropriate, actual results could differ from these
estimates.
Page 35 of 125
4. Cash and Cash Equivalents
Cash and cash equivalents represent cash and short-term, highly liquid
investments with maturities of three months or less at time of purchase.
Cash equivalent investments amounted to $120.8 million at June 3, 2000 and
$89.6 million at May 29, 1999.
5. Inventories
Merchandise inventories are valued at the lower of cost, on a First In
First Out (FIFO) basis, or market, as determined by the retail inventory
method.
6. Property and Equipment
Property and equipment are stated at cost and depreciation is computed
on the straight line method over the estimated useful lives of the assets.
The estimated useful lives are between 20 and 40 years for buildings,
depending upon the expected useful life of the facility, and three to ten
years for store fixtures and equipment. Leasehold improvements are
amortized over a ten year period or lease term, whichever is less. Repairs
and maintenance expenditures are charged to expense as incurred. Renewals
and betterments which significantly extend the useful lives of existing
property and equipment are capitalized.
7. Long Term Investments
The Company classifies its investments in debt-securities into held-
to-maturity, available-for-sale or trading categories in accordance with
the provisions of SFAS No. 115, Accounting For Certain Investments in Debt
and Equity Securities. Debt securities are classified as held-to-maturity
when the Company has the positive intent and ability to hold the securities
to maturity. Held-to-maturity securities are stated at amortized cost.
The Company's debt securities not classified as held-to-maturity are
classified as available-for-sale and are carried at fair market value, with
unrealized gains and losses, net of tax, reported as a separate component
in stockholders' equity.
8. Intangible and Other Assets
Intangible and Other Assets primarily consisted of leasehold
purchases, which are amortized over the minimum life of the related lease
term.
Page 36 of 125
9. Other Current Liabilities
Other current liabilities primarily consisted of sales tax payable,
accrued operating expenses, payroll taxes payable and other miscellaneous
items.
10. Store Opening Expenses
Expenses related to new store openings are charged to operations in
the period incurred.
11. Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, Accounting for Income
Taxes. Deferred income taxes have been recorded to recognize temporary
differences which result from revenues and expenses being recognized in
different periods for financial reporting purposes than for income tax
purposes.
12. Basic and Diluted Net Income Per Share
SFAS No. 128, Earnings Per Share, requires dual presentation of basic
and diluted earnings per share and requires reconciliation of the
numerators and denominators of the basic and diluted earnings per share
calculation.
Basic and diluted net income per share before cumulative effect of
accounting change is based on the weighted average number of shares
outstanding during each period. The amounts used in calculation of basic
and dilutive net income per share before cumulative effect of accounting
change are as follows:
Twelve Months Twelve Months Eleven Months
Ended Ended Ended
June 3, 2000 May 29, 1999 May 30, 1998
-------------------------------------------------------
(all amounts in thousands except per share data)
Income Before Cumulative
Effect of Accounting Change $62,476 $47,783 $63,639
======= ======= =======
Weighted Average Shares
Outstanding 45,708 46,877 47,421
Effect of Dilutive Stock Options 42 87 99
------- ------- -------
Weighted Average Shares Out-
standing, Assuming Dilution 45,750 46,964 47,520
======= ======= =======
Basic and Diluted Net
Income Per Share Before
Cumulative Effect of
Accounting Change $ 1.37 $ 1.02 $ 1.34
======= ======= =======
Options to purchase 198,120 shares of common stock were outstanding
during fiscal 2000, but were not included in the computation of weighted
average shares outstanding, assuming
Page 37 of 125
dilution, because the options' exercise price is greater than the average
market price of common shares and therefore would be antidilutive.
13. Fiscal Year End Date
Fiscal 2000 ended June 3, 2000 and consisted of 53 weeks. Fiscal 1999
ended on May 29, 1999 and consisted of 52 weeks. Fiscal 1998 ended May 30,
1998 and consisted of 48 weeks. For comparative purposes, financial data
for the twelve months ended June 3, 2000 (53 weeks), the twelve months
ended May 29, 1999 (52 weeks) and the twelve months ended May 30, 1998 (52
weeks-unaudited) is set forth below.
Twelve Months Ended
June 3, 2000 May 29, 1999 May 30, 1998
(53 weeks) (52 weeks) (52 weeks)
(unaudited)
------------------------------------------------------------
(in thousands except per share data)
Revenues $2,226,183 $1,968,784 $1,875,639
Gross Margin 792,071 700,908 679,871
Selling and Administration
Expenses 673,027 608,629 564,524
Provision for Income Taxes 37,650 28,357 41,195
Income Before Cumulative
Effect of Accounting Change 62,476 47,783 62,358
Basic and Diluted Net Income
Per Share Before Cumulative
Effect of Accounting Change $1.37 $1.02 $1.31
14. Other Income
Other income is primarily rental income received from leased
departments, interest income and miscellaneous items.
15. Advertising Costs
The Company's net advertising costs consist primarily of newspaper and
television costs. The production costs of net advertising are charged to
expense as incurred. Net advertising expenses for the twelve months ended
June 3, 2000, twelve months ended May 29, 1999 and eleven months ended May
30, 1998 were $50.6 million, $51.3 million, and $44.5 million,
respectively.
16. Impairment of Long Lived Assets
The Company accounts for impaired long-lived assets in accordance with
SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed of. This statement requires that long-
lived assets and certain identifiable intangibles to be held and used by
an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Also, in general, long-lived assets
Page 38 of 125
and certain intangibles to be disposed of should be reported at the lower
of carrying amount or fair value less cost to sell. The Company considers
historical performance and future estimated results in its evaluation of
potential impairment and then compares the carrying amount of the asset to
the estimated future cash flows expected to result from the use of the
asset. If the carrying amount of the asset exceeds estimated expected
undiscounted future cash flows, the Company measures the amount of the
impairment by comparing the carrying amount of the asset to its fair value.
The estimation of fair value is generally measured by discounting expected
future cash flows at the rate the Company utilizes to evaluate potential
investments.
17. Stock-Based Compensation
SFAS No. 123, Accounting for Stock Based Compensation, encourages, but
does not require companies to record compensation cost for stock-based
employee compensation plans at fair value. The Company has chosen to
continue to account for stock-based compensation using the intrinsic method
prescribed in Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, and related Interpretations. Accordingly,
compensation cost for stock options is measured as the excess, if any, of
the quoted market price of the Company's stock at the date of the grant
over the amount an employee must pay to acquire the stock (See Note K).
18. Comprehensive Income
The Company presents comprehensive income as a component of
stockholders' equity in accordance with SFAS No. 130, Reporting
Comprehensive Income.
19. Revenue Recognition
The Company records revenue at the time of sale and delivery of
merchandise.
20. Recent Accounting Pronouncements
a. Effective for the year ended June 3, 2000, the Company changed
its method of accounting for layaway sales in compliance with Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements.
Layaway sales for fiscal 2000 have been recognized upon delivery of
merchandise to the customer. Layaway sales in prior fiscal years were
recognized when the initial layaway deposit was received. The amount of
cash received upon initiation of the layaway is recorded as a deposit
liability within Other Current Liabilities. The
Page 39 of 125
accounting change has only a slight impact on annual sales and earnings.
However, due to the seasonal influences of the business, the accounting
change results in a shift of sales and earnings among the Company's
quarterly periods. The cumulative effect of the change for periods prior
to fiscal 2000 is a net decrease in income of $1.4 million or $.03 per
share (See Note L). In addition, upon adoption of SAB No. 101, the Company
changed its classification of leased department revenues and related
expenses. Previously, the Company included these lease department revenues
in Net Sales and their related costs in Cost of Sales. The Company
presently records the net of lease revenues and related costs to Other
Income. Prior years' Statement of Operations have been reclassified to
conform to the current year's presentation.
b. In June 1998, the FASB issued Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities. This statement, as amended by SFAS No. 137, Accounting for
Derivative Instruments and Hedging Activities - Deferral of the Effective
Date of FASB Statement No. 133 and SFAS No. 138, Accounting for Certain
Derivative Instruments and Certain Hedging Activities, an Amendment of FASB
Statement No. 133, establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded
in other contracts (collectively referred to as derivatives), and for
hedging activities. It requires that an entity recognize all derivatives
as either assets or liabilities in the statement of financial position and
measure those instruments at fair value. This statement is effective for
all fiscal quarters of fiscal years beginning after June 15, 2000. The
Company has not yet assessed what the impact of SFAS No. 133 will be on the
Company's future earnings or financial position.
c. In March 1998, the AICPA issued Statement of Position ("SOP")
98-1, Accounting For the Costs of Computer Software Developed For or
Obtained for Internal-Use. The Company adopted SOP 98-1 for fiscal year
ended June 3, 2000. The SOP requires the capitalization of certain costs
incurred after the date of adoption in connection with developing or
obtaining software for internal use. The Company capitalized $1.9 million
relating to these costs during fiscal 2000.
21. Reclassifications
Certain reclassifications have been made to the prior years' financial
statements to conform to the classifications used in the current year.
Page 40 of 125
B. Property and Equipment
Property and equipment consists of:
----------------------------------------------------------------------
June 3, May 29,
2000 1999
(in thousands)
----------------------------------------------------------------------
Land $ 25,990 $ 20,087
Buildings 100,628 83,211
Store Fixtures and
Equipment 289,250 244,813
Leasehold Improvements 138,844 97,188
Construction in Progress 1,302 4,857
-------- --------
556,014 450,156
Less Accumulated Depreciation
and Amortization (237,698) (197,935)
-------- --------
$318,316 $252,221
======== ========
C. Investments
Long term investment consists of the following (in thousands):
Held-to-Maturity Investments: Unrealized Estimated
Cost Losses Fair Value
------- ---------- ----------
June 3, 2000
Federal Home Loan Mortgage
Corporation Note $ 1,500 ($39) $ 1,461
Federal National Mortgage
Association Note 4,200 (83) 4,117
------- -------- -------
$ 5,700 ($122) $ 5,578
======= ======== =======
May 29, 1999
Federal National Mortgage
Association Note $ 4,200 - $ 4,200
======= ======== =======
Available-for-Sale Investments:
June 3, 2000
Federal Home Loan Mortgage
Corporation Note $18,500 ($541) $17,959
======= ======== =======
May 29, 1999
Federal Home Loan Mortgage
Corporation note $20,021 ($46) $19,975
======= ======== =======
Page 41 of 125
Held-to-maturity investments are pledged as collateral under certain insurance
contracts which previously had been collateralized through the use of letter of
credit agreements. The Federal National Mortgage Association Note matures on
February 25, 2002. The Federal Home Loan Mortgage Corporation Note matures on
March 3, 2004.
D. Accounts Payable
Accounts payable consists of:
--------------------------------------------------------------------
June 3, May 29,
2000 1999
(in thousands)
--------------------------------------------------------------------
Accounts Payable-Trade $243,933 $195,231
Accounts Payable-Due Banks 10,291 13,245
Other 20,113 14,290
-------- --------
$274,337 $222,766
======== ========
E. Lines of Credit
The Company had a committed line of credit of $50.0 million at both June 3,
2000 and May 29, 1999. The Company's committed line of credit renews every
three years and is available through December 2002. The Company also had an
uncommitted line of credit of $50.0 million at June 3, 2000 and May 29,
1999, respectively. The uncommitted lines of credit are cancelable by the bank
at any time. Letters of credit outstanding against these lines were $30.8
million and $20.9 million at June 3, 2000 and May 29, 1999, respectively.
The Company had no borrowings under these credit lines during fiscal 2000
or 1999. Short-term borrowings against these lines of credit bear interest at
or below the lending bank's prime rate (9.5% at June 3, 2000).
Page 42 of 125
F. Long-Term Debt
Long-term debt consists of:
June 3, May 29,
2000 1999
(in thousands)
---------------------
Subordinated Notes, 10.6%, due in
annual principal payments of $7.4
million from June 2000 to June 2005
with interest due semiannually $44,400 $51,800
Industrial Revenue Bonds, 5.8%,
due in semi-annual payments of
various amounts from September 1,
2000 to September 1, 2010 8,525 8,945
Promissory note, due at various dates
through 2000 (interest rate
imputed at 10.6%) 45 144
------- -------
Subtotal 52,970 60,889
Less current portion (44,865) (7,919)
------- -------
Long-Term Debt $ 8,105 $52,970
======= =======
The Industrial Revenue Bonds were issued in connection with the
construction of the Company's distribution center. The Bonds are secured by a
first mortgage on the Company's distribution center. Indebtedness totaling
$8.5 million is secured by land and buildings with a net book value of $18.5
million at June 3, 2000.
Long-term debt scheduled maturities in each of the next five fiscal years
is as follows: 2001-$7.9 million; 2002-$7.9 million; 2003-$8.0 million; 2004-
$8.0 million; and 2005-$8.1 million. $44.4 million of such maturities related
to the Subordinated Notes were repaid subsequent to June 3, 2000 ($7.4 million
for each of the fiscal years 2001 through 2006). In anticipation of this
prepayment of the Notes, the Company has reclassified the remaining balance of
the Notes to Current Maturities of Long Term Debt on the Company's Consolidated
Balance Sheet (See Note P).
As of June 3, 2000, the Company was in compliance with all covenants
related to its loan agreements. Several loan agreements of the Company contain
restrictions which, among other things, require maintenance of certain financial
ratios, restrict encumbrance of assets and creation of indebtedness, and limit
the payment of dividends. At June 3, 2000, $384.1 million of the Company's
retained earnings of $576.0 milliom were unrestricted and available for the
payment of dividends under the most restrictive terms of the agreements.
G. Lease Commitments
The Company leases 259 stores and office spaces under operating leases that
will expire principally during the next twenty years. The leases typically
include renewal options and
Page 43 of 125
escalation clauses and provide for contingent rentals based on a percentage of
gross sales.
The following is a schedule of future minimum lease payments under the
operating leases:
-----------------------------------------------------------------
Fiscal Year (in thousands)
-----------------------------------------------------------------
2001 $87,452
2002 84,219
2003 79,073
2004 72,412
2005 61,191
Thereafter 282,194
-------
Total minimum lease payments $666,541
=======
The above schedule of future minimum lease payments has not been reduced by
future minimum sublease rental income of $12.9 million under non-cancelable
subleases and other contingent rental agreements.
Total rental expenses under operating leases for the periods ended June 3,
2000, May 29, 1999, and May 30, 1998 were $88.3 million, $77.2 million and $66.2
million, respectively, including contingent rentals of $2.7 million, $2.5
million and $2.3 million, respectively. Rent expense for the above periods has
not been reduced by sublease rental income of $11.6 million, $10.1 million and
$10.3 million which has been included in other income for the periods ended June
3, 2000, May 29, 1999 and May 30, 1998, respectively.
The Company has irrevocable letters of credit in the amount of $8.7 million
to guarantee payment and performance under certain leases, insurance contracts
and utility agreements.
H. Employee Retirement Plans
The Company has a noncontributory profit-sharing plan covering employees
who meet age and service requirements. The Company also provides additional
retirement security to participants through a cash or deferred (salary deferral)
feature qualifying under Section 401(k) of the Internal Revenue Code.
Membership in the salary deferment feature is voluntary. Employees may, up to
certain prescribed limits, contribute to the 401(k) plan and a portion of these
contributions are matched by the Company. In addition, under the profit sharing
feature, the Company's contribution to the plan is determined annually by the
Board of Directors. The provision for Company profit sharing and 401(k)
contributions for the twelve months ended June 3, 2000, the twelve months ended
May 29, 1999 and the eleven months ended May 30, 1998 were $6.3 million, $5.0
million and $6.5 million, respectively.
Page 44 of 125
I. Income Taxes
The provision for income taxes is summarized as follows:
------------------------------------------------------------------
Period Ended 2000 1999 1998
(in thousands)
------------------------------------------------------------------
Current:
Federal $34,285 $22,625 $40,214
State and Other 4,367 2,617 6,559
------- ------- -------
Subtotal 38,652 25,242 46,773
Deferred (1,002) 3,115 (4,659)
------- ------- -------
Total $37,650 $28,357 $42,114
======= ======= =======
A reconciliation of the Company's effective tax rate with the statutory
federal tax rate is as follows:
------------------------------------------------------------------
Period Ended 2000 1999 1998
------------------------------------------------------------------
Tax at statutory rate 35.0% 35.0% 35.0%
State income taxes, net
of federal benefit 2.7 2.7 3.9
Other charges (.1) (.5) .9
----- ----- -----
Effective tax rate 37.6% 37.2% 39.8%
===== ===== =====
Deferred income taxes for 2000, 1999, and 1998 reflect the impact of
"temporary differences" between amounts of assets and liabilities for financial
reporting purposes and such amounts as measured by tax laws. These temporary
differences are determined in accordance with SFAS No. 109.
Temporary differences which give rise to deferred tax assets and
liabilities at June 3, 2000 and May 29, 1999 are as follows:
---------------------------------------------------------------------------------------------
Period Ended 2000 1999
Tax Tax Tax Tax
Assets Liabilities Assets Liabilities
(in thousands)
---------------------------------------------------------------------------------------------
Current:
Allowance for doubtful accounts $ 237 $ 291
Compensated absences 979 917
Inventory costs and reserves
capitalized for tax purposes 5,010 5,397
Insurance reserves 3,660 4,481
Prepaid items deductible
for tax purposes $ 1,836 $ 1,383
Other 763 528
------- ------- ------- -------
$10,649 $ 1,836 $11,614 $ 1,383
Non-Current:
Depreciation $12,260 $13,123
Accounting for rent expense $ 3,802 $ 4,182
Pre-opening costs 4,968 3,033
Accounting for non-current
marketable securities and
other 188 1
------- ------- ------- -------
$ 8,958 $12,260 $ 7,215 $13,124
======= ======= ======= =======
No valuation account is deemed necessary.
Page 45 of 125
J. Supplementary Income Statement Information
-----------------------------------------------------------------------
Period Ended 2000 1999 1998
(in thousands)
-----------------------------------------------------------------------
Repairs and Maintenance $24,533 $22,513 $19,977
All other required items are omitted since they are less than 1% of total
revenues.
K. Incentive Plans
In April 1983, the stockholders of the Company adopted a Stock Option and
Stock Appreciation Rights Plan (the "1983 Plan") which authorized the granting
of options for the issuance of 1,125,000 shares of common stock. During 1988,
the stockholders authorized the issuance of an additional 675,000 shares of
common stock for a total of 1,800,000 shares under this Plan. The 1983 Plan
provided for the issuance of incentive stock options, nonqualified stock options
and stock appreciation rights. This plan expired in April, 1993. In November,
1993, the stockholders of the Company approved a stock incentive plan (the "1993
Plan"), authorizing the granting of incentive stock options, non-qualified stock
options, stock appreciation rights, restricted stock, performance stock and
other stock based compensation. A total of 540,000 shares of common stock have
been reserved for issuance under the 1993 Plan. This plan expired in August,
1998. In October, 1998, the stockholders of the Company approved a stock
incentive plan (the "1998 Plan"), authorizing the granting of incentive stock
options, non-qualified stock options, stock appreciation rights, restricted
stock, performance stock and other stock based compensation. A total of 350,000
shares of common stock have been reserved for issuance under the 1998 Plan. A
summary of stock options transactions in fiscal periods 1998, 1999 and 2000 is
as follows:
Page 46 of 125
---------------------------------------------------------------------
Weighted Average
Number Exercise Price
of Shares Per Share
---------------------------------------------------------------------
Options outstanding
June 28, 1997 . . . . 330,124 $ 7.91
Options issued . . . . 75,700 $16.28
Options (cancelled). . (2,813) $ 6.62
Options exercised. . . (85,337) $ 6.12
-------- ------
Options outstanding
May 30, 1998. . . . . 317,674 $10.40
Options issued . . . . 2,900 $22.13
Options(cancelled)reversed 541 $ 4.56
Options exercised. . . (18,372) $ 6.41
-------- ------
Options outstanding
May 29, 1999. . . . . 302,743 $10.74
Options issued . . . . 191,200 $14.29
Options(cancelled) . . (10,753) $ 4.56
Options exercised. . . (90,750) $ 4.56
-------- ------
Options outstanding
June 3, 2000. . . . . 392,440 $14.02
-------- ------
Options exercisable. . 201,240 $13.76
-------- ------
The following table summarizes information about the stock options
outstanding under the Company's option plans as of June 3, 2000:
- ----------------------------------------------------------------------------------------
Options Outstanding Options Exercisable
- ----------------------------------------------------------------------------------------
Weighted
Average Weighted Weighted
Range of Number Remaining Average Number Average
Exercise Outstanding Contractual Exercise Exercisable Exercise
Prices At 6/3/00 Life Price At 6/3/00 Price
- --------------- ----------- ----------- -------- ----------- --------
$ 8.85 - $ 9.58 93,720 5.3 yrs $ 9.37 93,720 $ 9.37
$12.00 100,600 9.7 yrs $12.00 - -
$16.28 - $16.84 166,100 8.6 yrs $16.59 75,500 $16.28
$20.57 - $22.13 32,020 4.1 yrs $20.66 32,020 $20.66
- ----------------------------------------------------------------------------------------
392,440 201,240
- ----------------------------------------------------------------------------------------
Page 47 of 125
The Company adopted the disclosure requirements of SFAS No. 123, Accounting
for Stock Based Compensation, effective with the 1997 financial statements, but
elected to continue to measure compensation expense in accordance with APB
Opinion No. 25, Accounting for Stock Issued to Employees. Accordingly, no
compensation expense for stock options has been recognized. If compensation
expense had been determined based on the estimated fair value of options granted
in 1998, 1999 and 2000, consistent with the methodology in SFAS 123, the pro
forma effects on the Company's net income per share would have been as follows
(in thousands, except per share amounts):
2000 1999 1998
------ ------ ------
Net Income:
As reported $61,120 $47,783 $63,639
Pro forma $60,799 $47,374 $63,540
Net Income per Share:
As reported $1.34 $1.02 $1.34
Pro forma $1.33 $1.01 $1.34
The fair value of each stock option granted is estimated on the date of
grant using the Black-Scholes option pricing model with the following weighted
average assumptions used for grants in 2000, 1999 and 1998.
2000 1999 1998
------ ------ ------
Risk-free interest rate 5.85% 5.40% 5.65%
Expected volatility 48.4% 48.4% 42.9%
Expected life 6 years 8 years 10 years
Contractual life 10 years 10 years 10 years
Expected Dividend Yield 0.1% - -
Fair value of options granted $7.41 $10.46 $10.38
During the fiscal year ended June 29, 1996, a restricted stock award of
10,000 shares of the Company's common stock was made to an officer of the
Company. The fair market value on the date of the award was $108,800. The
shares become vested to the officer over a four year period based on certain
employment criteria. The unearned compensation related to this award is being
amortized over the vesting period.
Page 48 of 125
L. Interim Financial Information (Unaudited)
(All amounts in thousands except per share data)
Fiscal Year Ended June 3, 2000
14 Weeks
13 Weeks Ended Ended
---------------------------------------------------
August 28, November 27, February 26, June 3,
1999 1999 2000 2000
---------- ---------- ---------- ----------
Net Sales adjusted for lease
department reclassification...... $ 382,432 $ 611,971 $ 680,435 $ 526,238
Effect of change in accounting
for layaway sales................ (7,643) (1,029) 6,292 -
--------- --------- --------- ---------
Net Sales as restated............. $ 374,789 $ 610,942 $ 686,727 $ 526,238
========= ========= ========= =========
Gross Margin adjusted for lease
department reclassification...... $ 135,112 $ 234,021 $ 227,742 $ 196,986
Effect of change in accounting
for layaway sales................ (3,740) (828) 2,778 -
--------- --------- --------- ---------
Gross Margin as restated.......... $ 131,372 $ 233,193 $ 230,520 $ 196,986
========= ========= ========= =========
Net Income (Loss) as
originally reported.............. ($6,345) $ 29,944 $ 33,023 $ 6,971
Effect of change in accounting
for layaway sales................ (2,333) (517) 1,733 -
--------- --------- --------- ---------
Net Income (Loss) before
cumulative effect of accounting
principle as restated............ (8,678) 29,427 34,756 6,971
Cumulative effect of change in
accounting for layaway sales..... (1,356) - - -
--------- --------- --------- ---------
Net Income (Loss) as restated..... ($10,034) $ 29,427 $ 34,756 $ 6,971
========= ========= ========= =========
Per common share -- basic and
diluted:
Net Income (Loss) as
originally reported.............. ($0.14) $ 0.65 $ 0.72 $ 0.16
Effect of change in accounting
for layaway sales................ (0.05) (0.01) 0.04 -
--------- --------- --------- ---------
Income (Loss) before
cumulative effect as restated.... (0.19) 0.64 0.76 0.16
Cumulative effect of change in
accounting for layaway sales..... (0.03) - - -
--------- --------- --------- ---------
Net Income (Loss) as restated..... ($0.22) $ 0.64 $ 0.76 $ 0.16
========= ========= ========= =========
Page 49 of 125
Fiscal Year Ended May 29, 1999 13 Weeks Ended
--------------------------------------------------
August 29, November 28, February 27, May 29,
1998 1998 1999 1999
---------- --------- ----------- ----------
As Reported:
Net Sales adjusted for lease
department reclassification.. $ 337,112 $ 587,400 $ 573,508 $ 446,086
Gross Margin adjusted for lease
department reclassification.. $ 118,020 $ 223,062 $ 190,986 $ 168,841
Net Income (Loss).............. ($11,477) $ 30,203 $ 23,171 $ 5,886
Per common share -- basic and
diluted:
Net Income (Loss).............. ($0.24) $ 0.64 $ 0.50 $ 0.13
Pro forma amounts assuming the
new layaway sales recognition
is applied retroactively:
Net Sales...................... $ 329,189 $ 586,146 $ 580,902 $ 447,035
Gross Margin................... $ 114,141 $ 222,131 $ 193,893 $ 168,920
Net Income (Loss).............. ($13,903) $ 29,621 $ 24,989 $ 5,935
Per common share -- basic and
diluted:
Net Income (Loss).............. ($0.29) $ 0.63 $ 0.53 $ 0.13
(1) Net Income (Loss) per share is based on the weighted average number of
shares outstanding during each of the quarters. The sum of the four
quarters may not equal the full year computation due to rounding.
During the fourth quarter of fiscal 2000, the Company changed its method of
accounting for layaway sales. Quarterly results for fiscal 2000 in the table
above have been restated to reflect the change in accounting. The cumulative
effect of this change for periods prior to May 30, 1999 of $1.4 million (net of
income taxes of $.8 million), is included in net income (loss) of the first
quarter. All quarterly sales and gross margin results reflect the
reclassifications made for lease department transactions.
On an interim basis during fiscal 2000 and fiscal 1999, the Company valued
inventory at the lower of cost, on a first in first out (FIFO) basis, or market,
as determined by the retail inventory method. Results of quarterly operations
are impacted by the highly seasonal nature of the Company's business, timing of
certain holiday selling seasons and the comparability of calendar weeks within a
quarter as a result of the 52/53 week fiscal years.
Page 50 of 125
M. Fair Value of Financial Instruments
The carrying values of cash and cash equivalents, accounts receivable and
accounts payable approximate fair value because of the short maturities of these
items.
Interest rates that are currently available to the Company for issuance of
notes payable and long-term debt (including current maturities) with similar
terms and remaining maturities are used to estimate fair value for debt issues.
The estimated fair values of long term investments are based on market prices of
the securities. The estimated fair values of long-term debt (including current
maturities) and long term investments are as follows:
--------------------------------------------------------------------------------------
June 3, 2000 May 29, 1999
Carrying Fair Carrying Fair
Amount Value Amount Value
(in thousands)
--------------------------------------------------------------------------------------
Long-Term Investments $23,659 $23,537 $24,175 $24,175
Long-Term Debt
(including current maturities) $52,970 $55,946 $60,889 $64,331
The fair values presented herein are based on pertinent information
available to management as of the respective year ends. Although management is
not aware of any factors that could significantly affect the estimated fair
value amounts, such amounts have not been comprehensively revalued for purposes
of these financial statements since that date, and current estimates of fair
value may differ from amounts presented herein.
N. Segment Information
The Company reports segment information in accordance with SFAS No.131,
Disclosure about Segments of an Enterprise and Related Information. The Company
has one reportable segment, operating within the United States. Sales by major
product categories are as follows:
- --------------------------------------------------------------------------
Period Ended June 3, 2000 May 29, 1999 May 30, 1998
(53 weeks) (52 weeks) (48 weeks)
(in thousands)
- --------------------------------------------------------------------------
Apparel $1,707,670 $1,519,768 $1,402,143
Home Products 491,026 424,338 354,089
---------- ---------- ----------
$2,198,696 $1,944,106 $1,756,232
========== ========== ==========
Page 51 of 125
Apparel includes all clothing items for men, women and children and apparel
accessories such as jewelry, perfumes and watches. Home products includes
linens, home furnishings, gifts, baby furniture and baby furnishings.
O. Legal Matters
From time to time in the ordinary course of business, the Company is party
to litigation. The Company has established reserves relating to its legal
claims and believes that potential liabilities in excess of those recorded will
not have a material adverse effect on the Company's Consolidated Financial
Statements; however, there can be no assurances to this effect.
P. Subsequent Events
With respect to the Subordinated Notes, in addition to the $7.4 million
principal payment scheduled for June 27, 2000, the Company prepaid the remaining
$37.0 million balance on June 27, 2000. The Company incurred prepayment
penalties of $1.0 million due to the prepayment. As a result of this
prepayment, the Company has classified the entire $44.4 million balance of the
Subordinated Notes as a component of Current Maturities of Long-Term Debt on the
Company's Consolidated Balance Sheet of June 3, 2000.
Subsequent to June 3, 2000, the Company repurchased 229,100 shares of its
stock, costing approximately $2.8 million.
Page 52 of 125
Dividend Policy
The Board of Directors of the Company declared an annual cash dividend of
two cents ($.02) per share in fiscal 2000, fiscal 1999 and fiscal 1998. The
cash dividend for fiscal 2000 was declared on September 17, 1999, and was paid
on November 2, 1999, to stockholders of record on October 7, 1999. The paid
dividend amounted to $0.9 million. Maintenance of the cash dividend policy or
any change thereto in the future will be at the discretion of the Company's
Board of Directors and will depend upon the financial condition, capital
requirements and earnings of the Company as well as other factors which the
Board of Directors may deem relevant. At present, the policy of the Board of
Directors is to retain the majority of earnings to finance the growth and
development of the Company's business. At June 3, 2000, $384.1 million of the
Company's retained earnings were unrestricted and available for the payment of
dividends under the most restrictive terms of certain loan agreements.
Market for the Registrant's Common Equity and Related Stockholder Matters
The Company's Common Stock is traded on the New York Stock Exchange and
its trading symbol is "BCF." The following table provides the high and low
closing prices on the New York Stock Exchange for each fiscal quarter for the
period from May 31, 1998 to June 3, 2000 and for the two months ended July 31,
2000:
- -----------------------------------------------------------------
Period Low Price High Price
- -----------------------------------------------------------------
May 31, 1998 to
August 29, 1998 18 3/8 27 3/8
- -----------------------------------------------------------------
August 30, 1998 to
November 28, 1998 13 15/16 22 11/16
- -----------------------------------------------------------------
November 29, 1998 to
February 27, 1999 12 13/16 16 5/8
- -----------------------------------------------------------------
February 28, 1999 to
May 29, 1999 11 1/16 17 5/16
- -----------------------------------------------------------------
May 30, 1999 to
August 28, 1999 16 1/4 19 1/2
- -----------------------------------------------------------------
August 29, 1999 to
November 27, 1999 12 3/16 20 1/2
- -----------------------------------------------------------------
November 28, 1999 to
February 26, 2000 10 1/16 13 7/8
- -----------------------------------------------------------------
Page 53 of 125
February 27, 2000 to
June 3, 2000 10 11/16 17 3/16
- -----------------------------------------------------------------
June 4, 2000 to
July 31, 2000 10 13/16 12 1/2
- -----------------------------------------------------------------
As of July 31, 2000, there were 317 record holders of the Company's Common
Stock. The number of record holders does not reflect that number of beneficial
owners of the Company's Common Stock for whom shares are held by Cede & Co.,
certain brokerage firms and others.
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
Schedule II - Valuation and Qualifying Accounts
(All amounts in thousands)
- ----------------------------------------------------------------------------------------------------------
COL.A COL.B COL.C COL.D COL.E
- ----------------------------------------------------------------------------------------------------------
BALANCE AT CHARGED TO BALANCE
BEGINNING OF CHARGED TO OTHER ACCOUNTS AT END OF
DESCRIPTION PERIOD EXPENSE ACCOUNTS WRITTEN OFF PERIOD
- ----------------------------------------------------------------------------------------------------------
Period Ended 6/3/00
- -------------------
ALLOWANCE FOR DOUBTFUL
ACCOUNTS -
ACCOUNTS RECEIVABLE $ 723 $8,482 $0 ($8,601) $ 604
Period Ended 5/29/99
- --------------------
ALLOWANCE FOR DOUBTFUL
ACCOUNTS -
ACCOUNTS RECEIVABLE $1,103 $7,978 $0 ($8,358) $ 723
Period Ended 5/30/98
- --------------------
ALLOWANCE FOR DOUBTFUL
ACCOUNTS -
ACCOUNTS RECEIVABLE $ 953 $7,187 $0 ($7,037) $1,103
Page 54 of 125
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Page 55 of 125
File No. 1-8739
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
EXHIBITS FILED WITH
FORM 10-K
FOR FISCAL YEAR ENDED
June 3, 2000
under
The Securities Exchange Act of 1934
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
(Exact Name of Registrant as specified in its Charter)
Page 56 of 125
INDEX TO EXHIBITS
Exhibits Page No.
- -------- --------
3.1 Articles of Incorporation, as amended 1/
3.2 By-laws 1/
10.1 Cohoes Fashions, Inc. Employees' 401(k) 2/
Savings Plan (as amended and restated
effective January 1, 1999)
10.2 1993 Stock Incentive Plan* 1/
10.3 1998 Stock Incentive Plan* 1/
10.4 Revolving Credit Agreement dated August 30, 3/
1985 between the Company and BancOhio
National Bank, as amended through
Amendment No. 6
10.5 Amendment No. 7 to Revolving Credit Agreement 1/
dated June 1, 1998 between the Company and
National City Bank
10.6 Burlington Coat Factory Warehouse Corporation 60
401(k) Profit-Sharing Plan (as amended and
restated effective January 1, 2000)
____________________
(1) Incorporated by reference to Exhibits filed with the Company's Annual
Report on Form 10-K for the year ended May 30, 1998. File No. 1-8739.
(2) Incorporated by reference to Exhibits filed with the Company's Registration
Statement on Form S-8 with the Commission on May 20, 1999. File
No. 333-78941.
(3) Incorporated by reference to the Exhibits filed with the Company's Annual
Report on Form 10-K for the year ended June 29, 1996, File No. 1-8739.
* Executive Compensation Plan
Page 57 of 125
Page No.
--------
10.7 Loan Agreement dated as of August 1, 1995 by 4/
and between New Jersey Economic Development
Authority and Burlington Coat Factory Ware-
house of New Jersey, Inc.
10.8 Assignment of Leases dated as of August 1, 4/
1995 from Burlington Coat Factory Warehouse
of New Jersey, Inc. to First Fidelity
Bank, National Association
10.9 Mortgage and Security Agreement dated as of 4/
August 1, 1995 between Burlington Coat
Factory Warehouse of New Jersey, Inc. and
First Fidelity Bank, National Association
10.10 Indenture of Trust dated as of August 1, 1995 4/
by and between New Jersey Economic Development
Authority and Shawmut Bank Connecticut,
National Association
10.11 Guaranty and Suretyship dated as of August 1, 4/
1995 from the Company to First Fidelity Bank,
National Association
10.12 Letter of Credit Reimbursement Agreement dated 4/
as of August 1, 1995 between Burlington Coat
Factory Warehouse of New Jersey, Inc. and
First Fidelity Bank, National Association
10.13 Environmental Indemnity Agreement dated as of 4/
August 1, 1995 between Burlington Coat Factory
Warehouse of New Jersey, Inc. and First
Fidelity Bank, National Association
____________________
(4) Incorporated by reference to the Exhibits filed with the Company's Annual
Report on Form 10-K for the year ended July 1, 1995. File No. 1-8739.
Page 58 of 125
Page No.
--------
10.14 Burlington Coat Factory Warehouse Corporation 109
Deferred Compensation Plan effective
May 1, 2000*
21 Subsidiaries of Registrant 120
23 Consent of Deloitte & Touche LLP, independent 122
certified public accountants, to the use of
their report on the financial statements of
the Company for the year ended June 3, 2000
in the Registration Statements of the Company
on Form S-8, Registration No. 2-96332,
No. 33-21569, No. 33-51965, No. 333-41077,
No. 333-65995, and No. 333-78941
27 Financial Data Schedule 124
* Executive Compensation Plan
Page 59 of 125