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FORM 10-K
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 [FEE REQUIRED]
For the fiscal year ended July 1, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from............... to ...........
Commission File No. 1-8739
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
---------------------------------------------
(Exact Name of Registrant as specified in
its charter)
Delaware 22-1970303
- ---------------------------------- ---------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1830 Route 130
Burlington, New Jersey 08016
------------------------ ----------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number,
including area code: (609) 387-7800
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
on which registered
----------------------------- ---------------------------
Common Stock, $1.00 par value New York Stock Exchange, Inc.
per share
Securities Registered pursuant to Section 12(g) of the Act:
Title of Class
--------------
None
Page 1
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 sale price of the
Common Stock on the New York Stock Exchange as of August 31, 1995,
was $188,983,332.
As of August 31, 1995, the number of shares of Common Stock,
$1.00 par value, outstanding was 40,716,554.
Documents incorporated by Part of Form 10-K into which
reference into this report document is incorporated
- -------------------------- -----------------------------
Registrant's Proxy Statement Part III
to be filed pursuant to
Regulation 14A
Page 2
PART I
Item 1. Business
Burlington Coat Factory Warehouse Corporation and its
subsidiaries (the "Company" or "Burlington Coat") operates a chain
of "off-price" apparel 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 department and specialty stores. The
sale of outerwear (coats, jackets and raincoats) accounted for
approximately 29% of the Company' s total sales during fiscal 1995.
In addition, Burlington Coat offers customers a complete line of
men's, women's and children's wear as well as a linens, bath shop
items, gifts and accessories department in 183 of its stores and a
children's furniture department in approximately 141 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. The sale of
irregular or discontinued merchandise represents only a small portion
of the Company's business. 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 large retail
department and specialty stores. The Company estimates that over
900 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
manufacturers or to continue its current selling price structure.
See "Competition."
Page 3
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 sells on a layaway plan and offers special orders on
selected merchandise. It does not offer refunds, except on furs,
defective merchandise and certain specialty retail operations, but
will exchange or give store credit 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 2.7% of total revenues.
The Stores
- ----------
As of August 31, 1995, the Company operated 240 stores,
all but 20 of which are located in leased facilities ranging in
size (including storage space) from approximately 15,000 to
approximately 133,000 square feet, with an average area of
approximately 60,000 square feet. Selling space accounts for
over four-fifths of the total area in most stores.
All except one of the Company's stores are either free-
standing or are located in shopping malls or strip shopping
centers. The remaining store is operated from the Company's former
distribution facility in Secaucus, New Jersey. 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," "Luxury Linens," "Totally 4 Kids," "Baby
Depot," and "Fit For Men." 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 range. Fit For Men offers brand
name mens clothing in special sizes. Baby Depot offers a wide
selection of baby and juvenile furniture, clothing and accesories.
Totally 4 Kids is a new 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 new
concept store specializing in infant to toddler apparel, furnishings
and accessories. Fit For Men is a stand alone mens store catering
to the needs of "hard to fit" men (big, tall, husky, athletic,
portly, short and small).
Page 4
In the past, Burlington Coat generally has selected sites
for its stores where there are suitable existing structures which
can be refurbished, and, if necessary, enlarged, in a manner
onsistent 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, department stores and other retail operations
and are usually established near a major highway or thoroughfare,
making them easily accessible by automobile. Since the Company's
stores are generally located outside of urban centers and the
Company believes that some of its customers drive long distances
to visit store locations, it is likely that the Company
would be adversely affected by any conditions which were to
result in thereduction 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.
At August 31, 1995, a majority of the Company's stores
contained one or more departments leased by unaffiliated parties
for the sale of shoes, jewelry, and accessories. During the fiscal
year ended July 1, 1995, the Company's rental income from all of its
leased 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 percent of the dollar
volume of the Company's merchandise through its office and
warehouse/distribution facility in Burlington, New Jersey. This
facility is capable of servicing the Company's present stores as
well as accommodating anticipated expansion with modifications to
its existing data processing and materials handling systems, except
for juvenile furniture inventory. The Company is leasing
approximately 85,000 square feet of warehouse space nearby to its
existing warehouse distribution center for the purpose of
warehousing and distributing its juvenile furniture inventory.
Growth and Expansion
- --------------------
Since 1972 when its first store was opened in Burlington,
New Jersey, the Company has expanded to two hundred thirteen
Page 5
Burlington Coat stores, five Cohoes Fashions stores, eight Decelle
stores, nine stand-alone Luxury Linens stores, three Totally 4 Kids
store, one stand alone Baby Depot store and one Fit For Men store
as of August 31, 1995.
At August 31, 1995 the Company operated stores in 41
states and is exploring expansion opportunities both within its
current market areas and in other regions. For fiscal 1996, the
Company has opened or plans to open approximately ten to thirteen
additional Burlington Coat Factory stores, one Luxury Linens store
and one Totally 4 Kids store, prior to March, 1996. There are no
planned store closings for fiscal 1996. 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 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.
The Company began operating its own jewelry department in
three stores on a trial basis in the fall of 1993. The jewelry
program consists of karat gold and precious and semi-precious stone
jewelry, and in some stores may include brand-name watches. Based
on the results to date, the Company expanded the program to an
additional fourteen stores during the fall of 1994. Other stores
may be added to the program during fiscal 1996.
In May of 1994, the Company opened its first "Totally
4 Kids" store in Sterling, Virginia. Two additional Totally 4 Kids
stores were opened in Tulsa, Oklahoma and Cherry Hill, New Jersey
respectively, during fiscal 1995. The store caters to the moderate
to upscale market and offers maternity wear, baby furniture,
children's wear up to teens, children's books, educational tapes,
computer software for kids, and toys in a family environment. The
Company plans to open one additional Totally 4 Kids store in fiscal
1996.
In September, 1994, the Company entered into a license
arrangement with a vendor to supply department store brand or
better fragrance and cosmetics to 127 stores on a test basis.
Based on results to date, the program has been expanded to 218
stores including, five Cohoes Fashions stores and five Decelle
stores, and the arrangement has been extended through January 31,
1998.
Page 6
In addition, the Company opened one stand alone "Baby
Depot" store in August, 1994 and one "Fit for Men" store,
specializing in special size menswear in September 1994. The
Company is currently evaluating the results of these stores in
order to determine whether to open additional Baby Depots and/or
specialized menswear stores on a stand alone basis.
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 second fiscal quarter of each year.
Historically, approximately 57% 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 early fall and winter months and warm during the early
spring months. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
Operations
- ----------
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, the Company employs
directors of administration, store operations, loss prevention and
merchandise presentation who are in charge of those functions 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 facility. 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, where necessary, adjusting inventory
levels.
At July 1, 1995, the Company had approximately 15,000
employees, including a large number of part-time and seasonal
Page 7
employees which varies throughout the year. Of the Company's
employees, only those employed at one of its stores and at its
warehousing facility (aggregating up to 500 persons at its peak and
approximately 300 persons at July 1, 1995) are covered by
collective bargaining agreements. 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 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 to 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.
Item 2. Properties
----------
The Company owns the land and building for twenty of its
stores, and is a 50% partner in a partnership which owns the
building in which one store is located. 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
Page 8
escalation clauses. In certain 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 August 31, 1995 expire:
Fiscal Years Number of Leases Expiring with
Ending June 30 Expiring Renewal Options
- -------------- ---------------- ---------------
1996-99 58 52
2000-2001 27 22
2002-2003 16 9
2004-2005 32 18
2006-2007 15 7
Thereafter 75 28
--- ---
Total 223 136
=== ===
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 and leases approximately 85,000 square feet of space
nearby to the warehouse/distribution facility to store its juvenile
furniture inventory. The Company leases approximately 20,000
square feet of office space in New York City with the right of
occupancy that expires in January 2001. The Company also owns an
older warehouse/distribution facility in Secaucus, New Jersey,
portions of which it is leasing to third parties and a portion of
which it uses as a store. The Company is currently considering
selling this facility.
Item 3. Legal Proceedings
-----------------
In late September 1994, three putative class action lawsuits,
P. Gregory Buchanan v. Monroe G. Milstein, et al., No. 94-CV-4663, Jacob
Turner v. Monroe G. Milstein, et al., No. 94-CV-4737, and Ronald Abramoff v.
Monroe G. Milstein, et al., No. 94-CV-4751 (collectively, the "Class Actions"),
were filed against the Company, Monroe G. Milstein, Stephen E. Milstein and
Robert L. LaPenta, Jr. in the United States District Court for the District
of New Jersey. By Order entered November 15, 1994, the Court
Page 9
consolidated the Class Actions under the caption In re Burlington
Coat Factory Securities Litigation. On January 17, 1995,
plaintiffs filed their Consolidated Amended and Supplemental Class
Action Complaint (the "Amended Complaint"), naming as defendants,
in addition to those originally named in September 1994, Andrew R.
Milstein and Mark A. Nesci. The Amended Complaint seeks
unspecified damages in connection with alleged violations of
Sections 10(b) (and Rule 10b-5 promulgated thereunder) and 20(a) of
the Securities Exchange Act of 1934, as amended. The Amended
Complaint alleges material misstatements and omissions by the
Company and certain of its officers and directors that plaintiffs
allege caused the Company's common stock to be artificially
inflated during the proposed Class Period, which is defined in
the Amended Complaint as the period from October 4, 1993 through
September 23, 1994. On March 3, 1995, the Company and the
individual defendants served a motion to dismiss plaintiffs'
Amended Complaint. That motion was fully briefed and filed with
the Court on May 17, 1995; oral argument on that motion was held
on July 20, 1995. Although the Company is unable at this time to
assess the probable outcome of the Class Actions or the materiality
of the risk of loss in connection therewith (given that the Amended
Complaint does not allege damages with any particularity), the
Company believes that the Class Actions are without merit and
intends to continue to vigorously defend them.
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.
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 1995.
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, Inc. and its trading symbol is "BCF."
Page 10
The following table provides the high and low closing
prices on the New York Stock Exchange for each fiscal quarter
for the period from July 4, 1993 to July 1, 1995 and for the two months
ended August 31, 1995, as adjusted to give retroactive effect to
three-for-two stock split effected on September 24, 1993:
Period Low Price High Price
------ --------- ----------
July 4, 1993 to
October 2, 1993 13 1/8 19 3/8
October 3, 1993 to
January 1, 1994 19 24 1/2
January 2, 1994 to
April 2, 1994 18 28 1/4
April 3, 1994 to
July 2, 1994 16 3/4 27 1/2
July 3, 1994 to
October 1, 1994 12 2/3 24 3/4
October 2, 1994 to
December 31, 1994 10 1/4 14 1/8
January 1, 1995 to
April 1, 1995 8 1/2 11 7/8
April 2, 1995 to
July 1, 1995 9 7/8 11 1/4
July 2, 1995 to
August 31, 1995 10 13 3/4
As of August 31, 1995 there were 639 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.
Dividend Policy
- ---------------
The Company has not paid cash dividends in the past and does not
currently plan to do so. It is the present policy of the Company's Board of
Directors to retain future earnings to finance the growth and development of
the Company's business. Any payment of cash dividends in the future will be
at the discretion of the Company's Board of Directors and will depend upon
the financial
Page 11
condition, capital requirements and earnings of the Company as well
as other factors which the Board of Directors may deem relevant.
Item 6. Selected Financial Data
-----------------------
The following table sets forth certain selected financial data:
6/29/91 6/27/92 7/3/93 7/2/94 7/1/95
(In thousands of dollars, except per share data)
Statement of
Operations:
- --------------
Revenues $916,217 $1,013,470 $1,214,783 $1,480,676 $1,597,028
Net Income 24,742 31,368 42,903(1) 45,383 14,866
Net Income per Share .62(2) .78(2) 1.06(1)(2) 1.12 .37
Balance Sheet Data:
- -------------------
Total Assets $438,751 $491,940 $585,481 $725,439 $ 735,269
Working Capital 229,403 252,364 275,113 278,590 245,468
Long-Term Debt 96,040 94,234 91,428 91,369 83,298
Stockholder's Equity 242,071 278,712 323,111 369,857 385,019
__________________
[FN]
(1) Effective June 28, 1992, the Company adopted Statement of
Financial Accounting Standards No. 109, "Accounting for
Income Taxes." The Company reflected the cumulative
effect of change in accounting for income taxes by
recording a benefit of $.6 million ($.02 per share)
during fiscal 1993.
(2) Adjusted to give retroactive effect to three-for-two stock
splits effective in July, 1992 and September, 1993.
[/FN]
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
--------------------------------------------------
The Company maintains its records on the basis of a 52-53
week fiscal year ending on the Saturday closest to June 30. Fiscal
1995 ended on July 1, 1995 and fiscal 1994 ended on July 2, 1994
and comprised 52 weeks each, whereas fiscal 1993 ended July 3, 1993
and comprised 53 weeks.
Page 12
Results of Operations
Fiscal Years Ended July 3, 1993,
July 2, 1994 and July 1, 1995
--------------------------------
The following table sets forth certain items in the
consolidated statements of operations as a percentage of net sales
for the fiscal years ended July 3, 1993, July 2, 1994 and July 1, 1995.
Percentage of Net Sales
-----------------------
Twelve-Month Period Ended
-------------------------
7/3/93 7/2/94 7/1/95
Net Sales 100.0% 100.0% 100.0%
------ ------ ------
Costs and expenses:
Cost of sales 65.0 65.2 66.9
Selling and administrative 28.6 28.6 29.7
expenses
Depreciation and 1.4 1.4 1.7
amortization
Interest expense 0.8 0.7 0.9
--- --- ---
95.8 95.9 99.2
---- ---- ----
Other income 1.4 0.8 0.7
--- --- ---
Income before income taxes
and cumulative effect of
change in accounting for
income taxes 5.6 4.9 1.5
Provision for income taxes 2.1 1.8 0.6
--- --- ---
Income before cumulative
effect of change in
accounting for income taxes 3.5 3.1 0.9
Cumulative effect of change
in accounting for income
taxes .1 -- --
--- --- ---
Net income 3.6% 3.1% 0.9%
==== ==== ====
Page 13
Results of Operations
Performance in 1995 compared with 1994
Net sales increased $116.5 million (7.9%) for fiscal 1995
compared to fiscal 1994. The increase in fiscal 1995 over fiscal
1994 was due to $101.1 million in sales from new Burlington Coat
stores, $8.2 million from Luxury Linens stores, $4.1 million from
Totally 4 Kids stores and $1.7 million each from Fit For Men and
Baby Depot stores opened during the year. Cohoes Fashions stores,
Decelle stores and the Mexican operations (sometimes collectively
referred to as the "Specialty Operations") contributed additional
sales over the prior year of $14.7 million. Offsetting these sales
was a decrease in Burlington Coat comparative store sales of $75.4
million (5.4%). Sales from leased departments this year were $27.4
million compared with $18.8 milion last year. Lack of consumer
interest in apparel throughout the second half of fiscal 1995, the
highly promotional retail environment and unseasonably warm weather
in the fall and winter months were all factors affecting sales
results for fiscal 1995.
Other income in fiscal 1995 decreased $.2 million from
fiscal 1994. The primary reason for the slight decrease was a
decline in investment income. Investment income was reduced by $.9
million due to the higher inventory levels and capital expenditures
during fiscal 1995 absorbing excess investable funds. This
decrease was offset by an increase in rent income.
Cost of sales increased by $103.4 million (10.8%) from
the fiscal 1994 period to the fiscal 1995 period. The dollar in-
crease in cost of sales was attributable to the increases in unit
sales from new stores opened during the period. The decrease in
comparative stores sales volume of 5.4% in the 1995 period offset
in part the additional cost of sales from new units. Cost of sales
as a percentage of net sales increased to 66.9% in the 1995 period.
The percentage increase in 1995 over 1994 was primarily due to
additional markdowns taken as a result of the weaker apparel sales
performance during the year. To the extent apparel sales continue
to perform below planned sales, the Company will continue to take
markdowns above historical levels and will continue to experience
a decline in gross margin percentage compared with 1994 and prior
years.
Selling and administrative expenses increased by
$51.9 million (12.4%) from fiscal 1994 to fiscal 1995 primarily as
a result of increased expenses in connection with the increase in
the number of stores. As a percentage of net sales, selling and
administrative expenses were 29.7% in the 1995 period compared with
28.6% for the prior fiscal year. In fiscal 1995, the percentage
increase over 1994 was primarily due to a decrease in comparative
store sales of 5.4%.
Page 14
The increase in depreciation expense of $4.8 million in
the 1995 period is attributable to 29 new stores opened during the
period, remodeling and fixturing of existing stores, as well as the
acquisition of one additional store.
Interest expense increased $3.7 million (37.8%) from the
1994 period to the 1995 period. The increase in interest expense
in the fiscal 1995 period was the result of the Company's increased
usage on its lines of credit during the year as well as an increase
in the average interest rate from last year of 3.8% to the current
year's average borrowing rate of 5.7% on short-term debt.
The effective income tax rates were 37.3% and 40.4% for
the 1994 and 1995 periods, respectively. The increase in the tax
rate in fiscal 1995 is due to the elimination of the Targeted Jobs
Tax credit after December 31, 1994 and increases in state income
taxes as a percentage of pre-tax income.
Income before cumulative effect of change in accounting
for income taxes decreased $30.5 million for fiscal year ended July
1, 1995 compared with the 1994 fiscal year. Income per share
before cumulative effect of change in accounting for income taxes
decreased to $0.37 per share for fiscal 1995 from $1.12 per share
for fiscal 1994, which reflects a decline in operating income of
the Company. The fiscal 1995 performance reflects a weak U.S.
apparel environment and an unusually warm fall and winter. As a
result of the weak sales performance in a highly promotional U.S.
retail environment, higher markdowns have reduced the Company's
gross profit margin percentage in the current year. In addition,
declining comparative store sales have negatively impacted
operating expense leverage.
The Company's business is seasonal with its highest sales
occurring in the months of October, November, and December of each
year. The Company's net income generally reflects the same
seasonal pattern as its net sales. In the past, substantially all
of the Company's profits have been derived from operations during
the months of October, November and December.
Performance in 1994 compared with 1993
- --------------------------------------
Net sales increased $270.1 million (22.5%) for the fiscal
year ended July 2, 1994 over the fiscal year ended July 3, 1993.
The increase was derived from the increase in comparative store
sales of $75.4 million (6.8%), net sales of new stores opened
during the fiscal year, increases in net sales of the Cohoes
Fashions stores, and net sales from the Decelle stores and the
Mexican operations (hereafter Cohoes Fashions, Decelle and the
Mexican operation are collectively referred to as the "Specialty
Operations"). Fiscal 1994 was a 52-week fiscal year compared with
Page 15
a 53-week fiscal year in 1993. Net sales for the 53rd week
impacted fiscal 1993 by approximately $9.5 million compared with
fiscal 1994. The 18 Burlington Coat Factory stores opened in
fiscal 1993 contributed $61.1 million to net sales in fiscal 1993
compared with $107.5 million in fiscal 1994. The 24 Burlington
Coat Factory stores opened in fiscal 1994 contributed $147.0
million to net sales. The two Cohoes Fashions stores opened during
fiscal 1994 contributed $8.7 million to net sales and the Decelle
stores acquired during the period contributed $19.4 million to net
sales.
Other income decreased $4.2 million from the 1993 period
to the 1994 period. The decrease in other income was primarily due
to the decreases in leased department rental income, the result of
the closing of approximately 30 leased departments which the
Company has converted to Company department selling space, and to
a decrease in investment income. New store openings and existing
store capital improvement expenditures as well as planned inventory
growth throughout the Company absorbed excess investable funds
during fiscal 1994 resulting in a decrease in interest income of
$2.2 million realized during the fiscal year. In addition, the
Company lost $.3 million from the sale of investments during the
year.
Cost of sales increased by $178.5 million (22.9%) from
the 1993 period to the 1994 period. The dollar increase in cost of
sales is attributable to the increases in unit sales from new
stores opened during the period, and increases in comparative store
sales volume of 6.8% in the 1994 period. Cost of sales as a
percentage of net sales increased to 65.2% in the 1994 period from
65.0% in the 1993 period. The 0.2% increase was due primarily to
lower margins from the Specialty Operations and increases in
shrinkage and freight costs as a percentage of purchases.
Selling and administrative expenses increased by $77.2
million (22.5%) from the 1993 period to the 1994 period, primarily
as a result of increased expenses in connection with the increase
in the number of stores. As a percentage of net sales, selling and
administrative expenses were 28.6% in both the 1993 period and the
1994 period. In the 1994 fiscal period, the positive effect on
selling and administrative costs, as a percentage of sales, created
by comparative store sales growth, was partially offset by growth
in non-store payroll related expenses and costs incurred to operate
the Specialty Operations.
The increase in depreciation expense of $4.4 million in
the 1994 period is mainly attributable to the fixturing and
improvements made for the 26 new stores opened during the period.
In addition, the Company acquired the real property associated with
five stores during the 1994 fiscal year.
Page 16
Interest expense increased slightly from the 1993 period
due to the Company's increased use of its lines of credit during
the year.
The effective income tax rates were 36.7% and 37.3% for
the 1993 and 1994 periods, respectively. The increase in the
effective tax rate in fiscal 1994 is due primarily to an increase
in the statutory federal tax rate to 35% in fiscal 1994.
Income before cumulative effect of change in accounting
for income taxes increased $3.1 million (7.3%) to $45.4 million for
the fiscal year ended July 2, 1994 compared with the 1993 fiscal
year. Income per share before cumulative effect of change in
accounting for income taxes increased to $1.12 per share for fiscal
1994 due to comparative stores sales increases and new stores
opened during the year. Income before cumulative effect of change
in accounting for income taxes, in part, was negatively impacted in
fiscal 1994 by an increase in the losses from the Specialty
Operations from $.5 million to $3.5 million.
During the fiscal year ended July 3, 1993, the Company
recorded a cumulative effect benefit resulting from the adoption of
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes" (See Notes to the Consolidated Financial
Statements No. A.6) in the amount of $.6 million ($.02 per share
after giving effect to the three-for-two stock split). Net income
as a percentage of net sales was 3.6% and 3.1% for the 1993 and
1994 periods, respectively.
The results of operations for the fourth fiscal quarter
of 1994 were negatively impacted in comparison with the prior
year's fourth fiscal quarter primarily by a shift in comparable
calendar weeks and an earlier Easter selling season to the third
quarter of fiscal 1994, shifting approximately $37.0 million in net
sales and $9.6 million in pre-tax profit into the third fiscal
quarter of 1994. In addition, losses from the newly acquired
operations, start up operations and increased store opening costs
were approximately $1.6 million.
Liquidity and Capital Resources
- -------------------------------
During the year ended July 1, 1995, the Company opened
twenty-nine stores including twenty Burlington Coat Factory
Warehouse stores, one specialty men's store, "Fit For Men", five
new "Luxury Linens" stores, two "Totally 4 Kids" stores and one
"Baby Depot" store. Expenditures incurred to acquire, set up and
fixture the twenty-nine new stores opened during fiscal 1995 were
approximately $34.7 million. The Company also expended
approximately $5.5 million to purchase a building and a ground
lease for two of these stores and $5.7 million to renovate one
store located in a historic district of New York City to be opened
Page 17
in the first quarter of fiscal 1996. In addition, the Company
expended approximately $8.7 million for capital improvements and
refurbishing of existing stores. The Company estimates that it
will spend approximately $12 million for capital expenditures
(i.e., fixtures, equipment and leasehold improvements) in
connection with the opening of 12 new stores during fiscal 1996.
Working capital increased from $275.1 million at July 3,
1993 to $278.6 million at July 2, 1994 and decreased to $245.5
million at July 1, 1995.
Total funds provided from operations for the fiscal years
ended July 3, 1993, July 2, 1994 and July 1, 1995 were $64.7
million, $72.6 million and $45.5 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 $43.0
million for the fiscal year ended July 1, 1995, increased from
$28.3 million in net cash used from operating activities for the
comparable period of fiscal 1994. This increase in net cash from
operations was due to a reduction in merchandise inventory in the
current year of $16.9 million while the prior fiscal year had a
$116.0 million inventory increase. The increase in part was offset
by a decline in operating profits for the current fiscal year.
The Company's long-term borrowings at July 1, 1995
include $80 million of long term subordinated notes issued by the
Company to institutional investors in June 1990 ("the Notes") and
an industrial development bond of $10 million issued by the New
Jersey Economic Development Authority.
The Notes mature on June 27, 2005 and bear interest at
the rate of 10.6% per annum. The Notes have an average maturity of
ten years and are subject to mandatory prepayment in installments
of $8 million each without premium on June 27 of each year
beginning in 1996. The Notes are subordinated to senior debt,
including, among others, bank debt and indebtedness for borrowed
money. The interest rate on the industrial development bond
financing was originally fixed at 9.78% over the life of these
serial and term bonds (the "Bonds"). The Company refinanced its
industrial development bonds with the New Jersey Economic
Development Authority on September 1, 1995. The original bonds
were called at 103 and refinanced with credit enhanced bonds (the
"Refunding Bonds"). The Refunding Bonds consist of serial and
term bonds having the same maturity as the original issue. The
serial bonds aggregate $3.6 million and mature in series annually
on September 1, beginning in 1996 and continuing to and including
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
Page 18
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 maturity of the Refunding
Bonds are 5.84% and 9.78 years, respectively.
The Company has in place a committed line of credit
agreement in the amount of $40.0 million and $160.0 million in
uncommitted lines of credit. The maximum borrowings outstanding
under these lines were $147.4 million and $65.0 million during
fiscal 1995 and fiscal 1994, respectively. The average borrowings
outstanding under the lines were $69.1 million and $15.7 million
during fiscal 1995 and 1994 respectively. The weighted average
interest rate on outstanding borrowings during fiscal 1995 and 1994
were 5.7% and 3.8%, respectively. Short term borrowings
outstanding at July 1, 1995 were $85.9 million compared with $65.0
million at July 2, 1994.
The increase in short term borrowings at July 1, 1995
over July 2, 1994 is the direct result of poorer sales performance
during the current fiscal year. As a result, the Company has
reduced its expansion plan to opening approximately 12 additional
stores in fiscal 1996. The Company anticipates having its lines of
credit paid off by the end of the calender year 1995.
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 and from its long term borrowings. The Company may
consider replacing some of its short term borrowings with long term
financing. Furthermore, to the extent that the Company decides to
purchase additional store locations, it may be necessary to finance
such acquisitions with additional long term borrowings. The
Company believes that the current operating results will not have
a material effect on its ability to obtain financing.
On or about September 23, 1994 three separate class
actions were filed against the Company. These three actions were
consolidated and an amended complaint was served on January 17,
1995. The Company filed a motion to dismiss on May 17, 1995 and a
hearing on the motion was held on July 20, 1995. (See part II -
Other Information, Item 1 Legal Proceedings.) The Company is
unable to determine the probability of any potential loss with
respect to these class action suits or the materiality thereof at
this time and accordingly has not established any reserve for this
matter. However, the Company believes the actions are without
merit and intends to vigorously defend them.
Page 19
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 8. Financial Statements and Supplementary Data
-------------------------------------------
See Index to Financial Statements and following pages.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
---------------------------------------------
Not Applicable
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 July 1,
1995.
Page 20
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 30
Statements
Independent Auditors' Report 31
Consolidated Balance Sheets 32
July 2, 1994 and July 1, 1995
Consolidated Statements of Operations 33
Fiscal Years Ended July 3, 1993,
July 2, 1994 and July 1, 1995
Consolidated Statements of 34
Stockholders' Equity for the
Fiscal Years Ended July 3, 1993,
July 2, 1994 and July 1, 1995
Consolidated Statements of Cash 35
Flows for the Fiscal Years
Ended July 3, 1993,
July 2, 1994 and July 1, 1995
Notes to Consolidated Financial 37
Statements
2. Financial Statement Schedules
Schedule II - Valuation and 48
Qualifying Accounts
Schedule IX - Short-term Borrowing
is omitted because the information
required is presented in Management's
Discussion and Analysis of Financial
Condition and Results of Operations
appearing on pages 12 through 20
of this Report and the Notes to the
Consolidated Financial Statements.
Page 21
Page No.
All other schedules are omitted
because they are not applicable or not
required or because the required
information is included in the consol-
idated financial statements or notes
thereto.
3. Exhibits
3.1 Articles of Incorporation,
as amended 1/
3.2 By-laws 1/
*10.1 1993 Stock Incentive Plan 1/
10.2 Revolving Credit Agreement dated 2/
August 30, 1985 between the
Company and BancOhio National
Bank, as amended through Amendment
No. 3.
10.3 Amendment No. 4 to Revolving Credit 1/
Agreement between the Company and
National City Bank, Columbus
(successor to BancOhio National Bank)
10.4 Loan Agreement dated as of August 1, 54
1995 by and between New Jersey
Economic Development Authority and
Burlington Coat Factory Warehouse
of New Jersey, Inc.
10.5 Assignment of Leases dated as of 138
August 1, 1995 from Burlington
Coat Factory Warehouse of New
Jersey, Inc. to First Fidelity
Bank, National Association
_______________
[FN]
(1) Incorporated by reference to the Exhibits filed with the
Company's Annual Report on Form 10-K for the year ended July
3, 1993, File No. 1-8739.
(2) Incorporated by reference to the Exhibits filed with the
Company's Annual Report on Form 10-K for the year ended June
29, 1991, File No. 1-8739.
*Executive Compensation Plan
[/FN]
Page 22
Page No.
10.6 Mortgage and Security Agreement 155
dated as of August 1, 1995
between Burlington Coat Factory
Warehouse of New Jersey, Inc. and
First Fidelity Bank, National
Association
10.7 Indenture of Trust dated as of 184
August 1, 1995 by and between
New Jersey Economic Development
Authority and Shawmut Bank
Connecticut, National Association
10.8 Guaranty and Suretyship dated as of 288
August 1, 1995 from the Company to
First Fidelity Bank, National
Association
10.9 Letter of Credit Reimbursement 305
Agreement dated as of August 1, 1995
between Burlington Coat Factory
Warehouse of New Jersey,
Inc. and First Fidelity Bank,
National Association
10.10 Environmental Indemnity Agreement dated 359
as of August 1, 1995 between Burlington
Coat Factory Warehouse of New Jersey,
Inc. and First Fidelity Bank,
National Association
10.11 Burlington Coat Factory Warehouse 368
Corporation Amended and Restated
Employees Profit Sharing
Plan
10.12 Note Agreement dated June 27, 1990 413
21 Subsidiaries of Registrant 479
23 Consent of Deloitte & Touche LLP, 481
independent certified public
accountants, to the use of
their report on the financial
statements of the Company for
the fiscal year ended July 1,
1995 in the Registration Statements
of the Company on Form S-8,
Registration No. 2-96332,
No. 33-21569, No. 33-51965 and
No. 33-61351
27 Financial Data Schedule 483
Page 23
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
---------------------------------------------
Description Location
----------- --------
1) 1993 Stock Incentive Plan Filed as Exhibit 10.1
to the Company's Annual
Report on Form 10-K for
the year ended July 3,
1993, Pages 103-130
(b) Reports on Form 8-K
During the period ended July 1, 1995 the Company did not
file any report on Form 8-K.
Page 24
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 28, 1995
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 28, 1995
Monroe G. Milstein and President (Principal
Executive Officer);
Director
/s/ Robert L. LaPenta, Jr. Controller (Principal September 28, 1995
Robert L. LaPenta, Jr. Financial and
Accounting Officer)
/s/ Henrietta Milstein Director September 28, 1995
Henrietta Milstein
_____________________ Director September __, 1995
Harvey Morgan
/s/ Andrew R. Milstein Director September 28, 1995
Andrew R. Milstein
/s/ Stephen E. Milstein Director September 28, 1995
Stephen E. Milstein
/s/ Mark A. Nesci Director September 28, 1995
Mark A. Nesci
______________________ Director September __, 1995
Irving Drillings
Page 25
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: _____________________________
Monroe G. Milstein, President
Dated: September , 1995
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
- ---- ----- ----
________________________ Chief Executive Officer September __, 1995
Monroe G. Milstein and President (Principal
Executive Officer);
Director
________________________ Controller (Principal September __, 1995
Robert L. LaPenta, Jr. Financial and
Accounting Officer)
________________________ Director September __, 1995
Henrietta Milstein
________________________ Director September __, 1995
Harvey Morgan
________________________ Director September __, 1995
Andrew R. Milstein
________________________ Director September __, 1995
Stephen E. Milstein
________________________ Director September __, 1995
Mark A. Nesci
/s/Irving Drillings Director September 28, 1995
Irving Drillings
Page 26
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: _____________________________
Monroe G. Milstein, President
Dated: September , 1995
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
________________________ Chief Executive Officer September __, 1995
Monroe G. Milstein and President (Principal
Executive Officer);
Director
________________________ Controller (Principal September __, 1995
Robert L. LaPenta, Jr. Financial and
Accounting Officer)
________________________ Director September __, 1995
Henrietta Milstein
/s/ Harvey Morgan Director September 28, 1995
Harvey Morgan
________________________ Director September __, 1995
Andrew R. Milstein
________________________ Director September __, 1995
Stephen E. Milstein
________________________ Director September __, 1995
Mark A. Nesci
________________________ Director September __, 1995
Irving Drillings
Page 27
[THIS PAGE INTENTIONALLY LEFT BLANK]
Page 28
[THIS PAGE INTENTIONALLY LEFT BLANK]
Page 29
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
Page No.
Independent auditors' report 31
Consolidated balance sheets 32
July 2, 1994 and July 1, 1995
Consolidated statements of operations for the 33
fiscal years ended July 3, 1993, July 2,
1994 and July 1, 1995
Consolidated statements of stockholders' 34
equity for the fiscal years ended July 3,
1993, July 2, 1994 and July 1, 1995
Consolidated statements of cash flows for 35
the fiscal years ended July 3, 1993, July
2, 1994 and July 1, 1995
Notes to consolidated financial statements 37
Financial Statement Schedules
- Schedule II -- Valuation and Qualifying 48
Accounts
- Schedule IX -- (Omitted since information
required appears in Management's
Discussion and Analysis of
Financial Condition and Results
of Operations appearing on pages
12 through 20 of this Report)
- Schedule X -- (Omitted since information
required is included in Note K to the
consolidated financial statements)
Page 30
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 July 1, 1995 and
July 2, 1994, and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the three fiscal years in the
period ended July 1, 1995. Our audits also included the financial statement
schedule listed in the Index at Item 14(a)(2). These financial statements and
financial statement schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on the financial
statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 July 1, 1995 and July 2, 1994, and the results
of their operations and their cash flows for each of the three fiscal years in
the period ended July 1, 1995 in conformity with generally accepted accounting
principles. 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 P to the consolidated financial statements, the Company
is a defendant in a consolidated class action lawsuit. The ultimate outcome
of the litigation cannot presently be determined. Accordingly, no provision
for any loss that may result upon resolution of these matters has been made in
the accompanying consolidated financial statements.
As discussed in Note A.6 to the consolidated financial statements, the Company
changed its method of accounting for income taxes effective June 28, 1992 to
conform with Statement of Financial Accounting Standards No. 109.
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
September 21, 1995
Page 31
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(All amounts in thousands except share data)
July 01, July 02,
1995 1994
ASSETS
- ------
Current Assets:
Cash and Cash Equivalents $ 14,520 $ 21,236
Accounts Receivable Net of Allowance for Doubtful
Accounts of 1995--$3,711 and 1994--$4,995 15,326 13,915
Merchandise Inventories 452,026 468,921
Deferred Tax Asset 8,843 6,782
Prepaid and Other Current Assets 6,006 17,968
------------------
Total Current Assets 496,721 528,822
Property and Equipment Net of Accumulated
Depreciation and Amortization 224,493 184,590
Other Assets 14,055 12,027
-----------------
Total Assets $735,269 $725,439
=================
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Accounts Payable $101,046 133,706
Notes Payable 85,900 65,020
Income Taxes Payable 2,064 454
Other Current Liabilities 54,177 50,998
Current Maturities of Long-Term Debt 8,066 54
------------------
Total Current Liabilities 251,253 250,232
Long-Term Debt 83,298 91,369
Other Liabilities 9,728 7,151
Deferred Tax Liability 5,971 6,830
Stockholders' Equity:
Unrealized Loss-Marketable Securities (8) (20)
Foreign Currency Translation Adjustment -- 284
Preferred Stock, Par Value $1; Authorized
5,000,000 shares; none issued and outstanding -- --
Common Stock, Par Value $1; Authorized 100,000,000 shares;
41,139,012 shares issued and outstanding at July 1, 1995
41,122,459 shares issued and outstanding at July 2, 1994 41,139 41,122
Capital in Excess of Par Value 25,143 24,592
Retained Earnings 320,595 305,729
Treasury Stock at Cost; 1995 and 1994--427,387 Shares (1,850) (1,850)
Total Stockholders Equity 385,019 369,857
Total Liabilities and Stockholders' Equity $735,269 $725,439
See notes to consolidated financial statements
Page 32
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands except share data)
YEAR YEAR YEAR
ENDED ENDED ENDED
July 01, July 02, July 03,
1995 1994 1993
------------------------------------
REVENUES:
Net Sales $1,584,942 $1,468,440 $1,198,305
Other Income 12,086 12,236 16,478
------------------------------------
1,597,028 1,480,676 1,214,783
------------------------------------
COSTS AND EXPENSES:
Cost of Sales (Exclusive of
Depreciation and Amortization) 1,060,212 956,818 778,306
Selling and Administrative Expenses 471,947 420,046 342,799
Depreciation and Amortization 26,327 21,528 17,090
Interest Expense 13,602 9,873 9,774
-----------------------------------
1,572,088 1,408,265 1,147,969
-----------------------------------
Income Before Provision for
Income Taxes and Cumulative Effect
of Change in Accounting Principle 24,940 72,411 66,814
Provision for Income Taxes 10,074 27,028 24,512
-----------------------------------
Income Before Cumulative Effect
of Change in Accounting Principle 14,866 45,383 42,302
Cumulative Effect of Change in
Accounting Principle (See note 6) -- -- 601
-----------------------------------
Net Income $14,866 $ 45,383 $ 42,903
===================================
Earnings Per Share:
Income Per Share Before Cumulative
Effect of Change in Accounting
Principle $ 0.37 $ 1.12 $ 1.04
Income Per Share From Cumulative
Effect of Change in Accounting
Principle -- -- 0.02
--------------------------------------
Net Income Per Share $ 0.37 $ 1.12 $ 1.06
=======================================
Weighted Average Shares Outstanding 40,710,683 40,632,201 40,503,350
=======================================
Dividends Per Share -- -- --
=======================================
See notes to consolidated financial statements
Page 33
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED JULY 03, 1993, JULY 02, 1994 AND JULY 01, 1995
(All amounts in thousands)
Capital in Valuation
Common Excess of Retained Treasury Allowance
Stock Par Value Earnings Stock Total
- -----------------------------------------------------------------------------
Balance at June 27, 1992 $27,247 $35,872 $217,443 ($1,850) $278,712
Net Income 42,903 42,903
Stock Options Exercised 101 1,406 1,507
Net Unrealized Loss on
Noncurrent Marketable
Securities ($11) (11)
Stock Split 13,680 (13,680) 0
------------------------------------------------------------
Balance at July 03, 1993 41,028 23,598 260,346 (1,850) (11) 323,111
Net Income 45,383 45,383
Stock Options Exercised 81 1,007 1,088
Net Unrealized Loss on
Noncurrent Marketable
Securities (9) (9)
Equity Adjustment for
Translation 284 284
Stock Split Adjustment 13 (13) 0
------------------------------------------------------------
Balance at July 02, 1994 41,122 24,592 305,729 (1,850) 264 369,857
Net Income 14,866 14,866
Stock Options Exercized 17 551 568
Net Unrealized Gain on
Non-Current Marketable
Securities 12 12
Equity Adjustment for
Translation (284) (284)
_____________________________________________________________
Balance at July 01, 1995 $41,139 $25,143 $320,595 ($1,850) ($8) $385,019
=============================================================
See notes to consolidated financial statements
Page 34
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(All amounts in thousands)
Year Ended
July 01, July 02, July 03,
1995 1994 1993
-------------------------------
OPERATING ACTIVITIES
Net Income $ 14,866 $ 45,383 $42,903
Adjustments to Reconcile Net Income to Net Cash
Provided by (Used in) Operating Activities:
Depreciation and Amortization 26,327 21,528 17,090
Provision for Losses on Accounts Receivable 5,162 4,821 3,690
Provision for Deferred Income Taxes (2,920) (826) 193
Loss on Disposition of Fixed Assets 536 203 378
Rent Expense and Other 1,521 1,527 1,041
Cumulative Effect of Change in Accounting for
Income Taxes - - (601)
Changes in Operating Assets and Liabilities:
Accounts Receivable (3,032) (8,674) (4,741)
Merchandise Inventories 16,895 (116,002) (88,780)
Prepaids and Other Current Assets 11,962 (1,327) (7,551)
Accounts Payable (32,660) 17,499 44,703
Other Current Liabilities 4,389 7,525 2,766
-------------------------------
Net Cash Provided by (Used in)
Operating Activities 43,046 (28,343) 11,091
-------------------------------
INVESTING ACTIVITIES
Acquisition of Property and Equipment (66,900) (63,686) (39,836)
Short-Term Investments-Net - 16,421 41,623
Proceeds From Sale of Fixed Assets 27 17 14
Issuance of Long-Term Notes Receivable (5,202) (3,668) (2,241)
Receipts Against Long-Term Notes Receivable 1,611 609 442
Acquisition of Investments - - (155)
Proceeds From Sale of Investments - - 113
Acquisition of Leasehold (2,652) (2,050) -
Minority Interest (66) 497 -
Other 2,031 568 43
-------------------------------
Net Cash (Used in) Provided by
Investing Activities (71,151) (51,292) 3
-------------------------------
FINANCING ACTIVITIES
Principal Payments on Long-Term Debt (59) (118) (3,069)
Issuance of Common Stock Upon Exercise of
Stock Options 568 1,088 1,507
Net Borrowings Under Line of Credit 20,880 65,020 -
------------------------------
Net Cash Provided by (Used in)
Financing Activities 21,389 65,990 (1,562)
------------------------------
(Decrease) Increase in Cash and
Cash Equivalents (6,716) (13,645) 9,532
Cash and Cash Equivalents at
Beginning of Period 21,236 34,881 25,349
------------------------------
Cash and Cash Equivalents at
End of Period $ 14,520 $ 21,236 $34,881
==============================
Interest Paid $ 13,490 $ 9,873 $13,925
==============================
Income Taxes Paid $ 10,900 $ 32,414 $21,955
==============================
See notes to consolidated financial statements
Page 35
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Supplemental Schedule of Non-Cash Financing and Investing Activities:
The Company wrote off certain fixed assets with a book value of $.4
million, $.2 million and $.5 million for the fiscal years 1993, 1994 and
1995 respectively.
See notes to consolidated financial statements
Page 36
Notes to Consolidated Financial Statements
- ----------------------------------------------------------------------------
A. Summary of Significant Accounting Policies
1. Business
Burlington Coat Factory Warehouse operates 211 stores which sell off-
price apparel for men, women and children. A majority of those stores
offer a home linens department and baby room furniture department.
The Company also operates stores under the names "Cohoes Fashions"
(five stores), "Decelle" (eight stores), "Luxury Linens" (nine
stores), "Totally 4 Kids" (three stores), "Fit For Men" (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 item, gifts and accessories and offers merchandise
in the middle to higher range. Totally 4 Kids is a new moderate to
upscale concept store offering maternity wear, baby furniture,
children's wear from toddlers up to teens, childrens's books, toys
computer software for kids and educational tapes in a family
environment. "Fit For Men" is a stand alone mens store specializing
in special size mens wear. "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. Inventories
Inventories are stated at the lower of the First In First Out (FIFO)
cost or market, as determined by the retail inventory method.
4. 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. 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.
5. Store opening expenses
Expenses related to new store openings are charged to operations in
the period incurred.
6. Income taxes
Effective June 28, 1992, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." Deferred
income taxes have been recorded to recognize temporary differences
Page 37
which result from revenues and expenses being recognized in different
periods for financial reporting purposes than for income tax purposes.
The adoption of SFAS 109 created a $.6 million benefit ($.02 per
share) and was accounted for in fiscal 1993 as a cumulative change in
accounting principle.
7. Income per share
Income per share is based on the weighted average number of shares
outstanding during each period. The dilutive effect of stock options
is not material.
8. Cash and Cash Equivalents
Cash and cash equivalents represent cash and short-term, highly liquid
investments with maturities of three months or less at the time of
purchase. Cash equivalent investments amounted to $.8 million at July
1, 1995 and $.9 million at July 2, 1994.
9. Fiscal year end date
The Company's fiscal year is a 52-53 week year with its year ending on
the Saturday closest to June 30th of each year. Fiscal 1993 ended
July 3, 1993 and comprised 53 weeks, whereas fiscal 1995 and fiscal
1994 ended July 1, 1995 and July 2, 1994, respectively, and comprised
52 weeks each.
10. Other income
Other income is primarily rental income received from leased
departments and interest income.
11. Reclassifications
Certain reclassifications have been made to the prior years' financial
statements to conform to the classifications used in the current
year.
B. Stock Splits
On September 13, 1993, the Board of Directors declared a three-for-two
split of the Company's common stock effective October 4, 1993, to
stockholders of record on September 24, 1993. This stock split was
effected in the form of a 50% stock dividend by the distribution of one
additional share for every two shares of stock already issued. The par
value of the common stock remained at $1.00 per share. As a result,
$13.68 million, representing the total par value of the new shares issued,
were transferred from the capital in excess of par value account to common
stock. Common stock and paid in capital in excess of par value accounts
as of July 3, 1993 were adjusted to give effect to the stock split. All
amounts per share were adjusted to give retroactive effect to the stock
split.
Page 38
C. Investments
Investments (which are incuded in Other Assets) consist of the following:
__________________________________________________________________________
Fair Value
_____________________________________
July 1, July 2,
1995 1994
(in thousands)
- -----------------------------------------------------------------------------
Long-Term:
Common Stock (cost: 1995,
$34; 1994, $34) $ 16 $ 9
Preferred Stock (cost: 1995,
$69; 1994, $69) 79 74
- -----------------------------------------------------------------------------
$ 95 $ 83
_____________________________________________________________________________
D. Property and Equipment
Property and equipment consists of:
- -----------------------------------------------------------------------------
July 1, July 2,
1995 1994
(in thousands)
- -----------------------------------------------------------------------------
Land $ 21,181 $ 14,989
Buildings 81,191 78,626
Store Fixtures and Equipment 188,072 155,359
Leasehold Improvements 60,546 35,581
Construction in Progress --- 1,100
- -----------------------------------------------------------------------------
350,990 285,655
- -----------------------------------------------------------------------------
Less Accumulated Depreciation
and Amortization (126,497) (101,065)
- -----------------------------------------------------------------------------
$224,493 $184,590
- -----------------------------------------------------------------------------
Page 39
E. Accounts Payable
Accounts payable consists of the following:
- ------------------------------------------------------------------------------
July 1, July 2,
1995 1994
(in thousands)
- ------------------------------------------------------------------------------
Accounts Payable-Trade $ 76,571 $114,549
Accounts Payable-Due Banks 7,641 3,258
Other 16,834 15,899
- ------------------------------------------------------------------------------
$101,046 $133,706
- ------------------------------------------------------------------------------
F. Lines of Credit
The Company had a committed line of credit of $40.0 million at July 1,
1995 and July 2, 1994. The Company also had uncommitted lines of credit
of $160.0 million and $130.0 million at July 1, 1995 and July 2, 1994,
respectively. Short-term borrowings outstanding under these committed and
uncommitted lines were $85.9 million and $65.0 at July 1, 1995 and July 2,
1994, respectively. Letters of credit outstanding against these lines
were $36.9 million and $50.4 million at July 1, 1995 and July 2, 1994,
respectively.
The maximum borrowings outstanding under these lines were $147.4 million
and $65.0 million during fiscal 1995 and fiscal 1994 respectively. The
average borrowings outstanding under these lines were $69.1 million during
fiscal 1995 and $15.7 million during fiscal 1994.
The weighted average interest rate on outstanding borrowings during fiscal
1995 was 5.7%. The weighted average interest rate on outstanding
borrowings during fiscal 1994 was 3.8%.
Short-term borrowings against these lines of credit bear interest at or
below the lending bank's prime rate. The $40 million committed line of
credit requires a commitment fee on the unused portion of 1/5 of 1
percent.
The Company's committed line of credit renews annually and is available
through 1998. The uncommitted lines of credit are cancellable at any
time.
Page 40
G. Long-Term Debt:
Long-term debt consists of:
- -------------------------------------------------------------------------------
July 1, July 2,
1995 1994
(in thousands)
- -------------------------------------------------------------------------------
Subordinated Notes, 10.6%, due in
annual $8 million payments from
June 1996 to June 2005 $ 80,000 $ 80,000
Industrial Revenue Bonds, 9.78%,
due in semi-annual payments of
various amounts from September 1,
1996 to September 1, 2010 10,000 10,000
Urban Development Action Grant, non-
interest bearing, due April 1999 917 917
Promissory note, due at various dates
through 2000 (interest rate
imputed at 10.6%) 447 506
- -------------------------------------------------------------------------------
Subtotal 91,364 91,423
Less current portion (8,066) (54)
- -------------------------------------------------------------------------------
Long-Term Debt $ 83,298 $91,369
- -------------------------------------------------------------------------------
The Industrial Revenue Bonds and Urban Development Action Grant 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. The Urban Development Action Grant was secured by a
second mortgage on the facility.
Indebtedness totaling $10.9 million are secured by land and buildings with
a net book value of $20.2 million at July 1, 1995.
On September 1, 1995 the Company called the Industrial Revenue Bonds at
103 and simultaneously refinanced these bonds with fixed rate bonds with
an average interest rate of 5.84%. The new Industrial Revenue Bonds have
the same maturity schedule as the original bonds and are also secured by a
first mortgage on the Company's home office and distribution center.
Long-term debt maturing in each of the next five fiscal years is as
follows: 1996 - $8.1 million; 1997 - $8.4 million; 1998 - $8.4 million;
1999 - $9.4 million and 2000 - $8.5 million.
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 July 1, 1995, $176.6 million of the Company's retained
earnings of $320.6 million were unrestricted and available for the payment
of dividends under the most restrictive terms of the agreements.
Page 41
H. Sales from Leased Departments
Retail sales from certain leased departments, included in net sales,
amounted to $27.4 million, $18.8 million, and $15.8 million in fiscal
1995, fiscal 1994 and fiscal 1993, respectively.
I. Lease Commitments
The Company leases 218 stores and office spaces under operating leases
that will expire principally during the next twenty years. The leases
typically include renewal options and 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:
- ------------------------------------------------------------------
(in thousands)
Fiscal Year
__________________________________________________________________
1996 $ 55,831
1997 54,376
1998 52,395
1999 49,225
2000 43,511
Thereafter 324,485
- ------------------------------------------------------------------
Total minimum lease payments $ 579,823
- ------------------------------------------------------------------
The above schedule of future minimum lease payments has not been reduced
by future minimum sublease rental income of $16.0 million under non-
cancelable subleases and other contingent rental agreements.
Total rental expenses under operating leases for the periods ended July 1,
1995, July 2, 1994 and July 3, 1993 were $57.1 million, $47.3 million, and
$39.3 million, respectively, including contingent rentals of $2.5 million,
$1.5 million and $1.0 million. Rent expense for the above periods has not
been reduced by sublease rental income of $6.1 million, $4.9 million and
$6.9 million which has been included in other income for the periods ended
July 1, 1995, July 2, 1994 and July 3, 1993, respectively.
The Company has irrevocable letters of credit in the amount of $14.5
million to guarantee payment and performance under certain leases and
insurance contracts.
J. Employee Retirement Benefit Plans
The Company has a noncontributory profit-sharing plan covering full-time
employees who meet age and service requirements. Under the plan, the
Company's contribution is determined annually by the Board of Directors.
Profit sharing contributions were $.9 million, $4.2 million and $3.7
million respectively, for the periods ended July 1, 1995, July 2, 1994 and
July 3, 1993.
Page 42
K. Income Taxes
The provision for income taxes is summarized as follows:
- ----------------------------------------------------------------------
Year ended 1995 1994 1993
(in thousands)
- ----------------------------------------------------------------------
Current:
Federal $10,737 $24,779 $20,795
State and Local 2,257 3,075 3,309
- ----------------------------------------------------------------------
Subtotal 12,994 27,854 24,104
Deferred (2,920) (826) 408
- ----------------------------------------------------------------------
Total $10,074 $27,028 $24,512
- ----------------------------------------------------------------------
A reconciliation of the Company's effective tax rate with the statutory
federal tax rate is as follows:
______________________________________________________________________
Year ended 1995 1994 1993
______________________________________________________________________
Tax at statutory rate 35.0% 35.0% 34.0%
State income taxes, net
of federal benefit 4.7 2.8 3.2
Job tax credit (.3) (.9) (.8)
Other charges 1.0 .4 .3
- ----------------------------------------------------------------------
Effective tax rate 40.4% 37.3% 36.7%
______________________________________________________________________
As discussed in Note A.6, the Company adopted SFAS No. 109 for the fiscal
year beginning June 28, 1992, and the cumulative effect of this change is
reported in the 1993 consolidated statement of operations. Deferred
income taxes for 1995 and 1994 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 and
are more inclusive in nature than "timing differences" as determined under
previously applicable accounting principles.
On August 10, 1993 the Omnibus Budget Reconciliation Act was enacted which
increases federal tax rates from 34% to 35%. The effect on current and
deferred taxes of this change in tax rates was not significant and was
recognized in income during fiscal 1994.
Page 43
Temporary differences which give rise to deferred tax assets and
liabilities at July 1, 1995 and July 2, 1994 are as follows:
- --------------------------------------------------------------------------------
Year Ended 1995 1994
Deferred Deferred Deferred Deferred
Tax Tax Tax Tax
Assets Liabilities Assets Liabilities
(in thousands)
- --------------------------------------------------------------------------------
Current:
Allowance for doubtful
accounts $1,494 $1,954
Compensated absences 657 676
Inventory costs
capitalized for tax
purposes 3,544 2,845
Insurance Reserves 4,836 2,746
Prepaid Items deductible
for tax purposes $2,117 --- $1,439
Other 429 ---
- -------------------------------------------------------------------------------
10,960 2,117 8,221 1,439
- -------------------------------------------------------------------------------
Non-Current:
Depreciation 9,706 --- 8,281
Accounting for rent
expense 1,131 --- 1,261 ---
Pre-opening cost 2,414 --- ---
Other 190 190 ---
- -------------------------------------------------------------------------------
$3,735 $9,706 $1,451 $8,281
- -------------------------------------------------------------------------------
No valuation account is deemed necessary.
L. Supplementary Income Statement Information
- -------------------------------------------------------------------------------
Year ended 1995 1994 1993
(in thousands)
- -------------------------------------------------------------------------------
Advertising $42,345 $38,793 $35,384
Repairs and Maintenance $15,533 $13,330 $10,696
- -------------------------------------------------------------------------------
All other required items are omitted since they are less than 1% of total
revenues.
M. 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 450,000 shares of common stock have been
reserved for issuance under the 1993 Plan. A summary of stock options
transactions in fiscal 1993, 1994 and 1995 is as follows (all data have
been restated to reflect the three-for-two stock split):
Page 44
- ------------------------------------------------------------------
Number Option Price
of Shares Per Share
- ------------------------------------------------------------------
Options outstanding
June 27, 1992 . . . . . 541,923 $ 4.48 to $ 8.30
Options issued . . . . 9,000 $11.08
Options cancelled . . . . . (20,236) $ 4.48 to $ 8.22
Options exercised . . . . . (151,286) $ 4.75 to $ 8.22
- ------------------------------------------------------------------
Options outstanding
July 3, 1993 . . . . . 379,401 $ 4.48 to $ 8.30
Options issued . . . . . 25,100 $24.69
Options cancelled . . . . . (5,445) $ 4.74 to $ 7.37
Options exercised . . . . . (81,011) $ 4.74 to $ 7.37
- ------------------------------------------------------------------
Options outstanding
July 2, 1994 . . . . . 318,045 $ 4.74 to $24.69
Options issued . . . . . 38,200 $11.50
Options cancelled . . . . . (5,290) $ 4.74 to $ 7.37
Options exercised . . . . . (16,404) $ 4.74 to $ 7.37
- ------------------------------------------------------------------
Options outstanding
July 1, 1995 . . . . . 334,551 $ 4.74 to $24.69
Options exercisable. . . . . 296,351 $ 4.74 to $24.69
- ------------------------------------------------------------------
Included in the above are options to purchase 2,250 shares of stock issued
to a member of the Board of Directors at $8.22 per share which were
exercised during the year ended July 2, 1994. To date, only stock options
have been granted under both the 1983 Plan and the 1993 Plan.
N. Interim Financial Information (Unaudited)
(All amounts in thousands except per share data.)
- --------------------------------------------------------------------------------
Income
Provision (Loss)
(Benefit) Net per
Net Gross for Income Income Share
Sales Profit Taxes (Loss) (1)
- -------------------------------------------------------------------------------
1995:
First $299,242 $105,875 $(4,675) $(7,526) $(.18)
Second 656,492 218,309 26,442 43,115 1.06
Third 324,457 107,901 (5,144) (9,029) (.22)
Fourth 304,751 92,645 (6,549) (11,694) (.29)
_______________________________________________________________________________
1994:
First $241,215 $85,445 $(1,352) $(2,916) $(.07)
Second 625,420 218,924 33,914 56,082 1.38
Third 327,413 114,453 1,727 2,828 .07
Fourth 274,392 92,800 (7,261) (10,611) (.26)
(1) Income 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.
Page 45
On an interim basis the Company values inventory using the gross profit
method and at year-end values inventory at the lower of FIFO cost or
market as determined by the retail inventory method. The annual
adjustment for the difference between actual gross profit and interim
estimated gross profit is recorded in the fourth quarter of the fiscal
year. 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.
O. Fair Value of Financial Instruments
The carrying values of cash and cash equivalents, short-term investments,
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 value of notes payable and long-term debt
(including current maturities) are as follows:
_____________________________________________________________________________
July 1, July 2,
1995 1994
(in thousands)
Carrying Fair Carrying Fair
Amount Value Amount Value
- -----------------------------------------------------------------------------
Notes Payable $85,900 $85,900 $65,020 $ 65,020
Long-Term Debt
(including current maturities) $91,364 $92,930 $91,423 $102,800
- -----------------------------------------------------------------------------
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.
P. Legal Matters
In late September, 1994, the Company received summons and complaint in
three separate purported class action lawsuits. Each of the complaints
was consolidated into a single amended complaint which seeks unspecified
damages and alleges a cause of action arising under certain federal
securities laws for alleged material misstatements and omissions in public
statements by the Company and five executive officers purportedly causing
the market price of the Company's common stock to be artificially inflated
during the period October 4, 1993 through September 23, 1994, inclusive.
The Company is unable to fully assess the impact of such actions at this
time but believes they are without merit. Accordingly, no provision for
Page 46
any loss that may result upon resolution of these matters has been made in
the accompanying consolidated financial statements.
Dividend Policy
The Company has not paid cash dividends in the past and does not currently
plan to do so. It is the present policy of the Company's Board of
Directors to retain future earnings to finance the growth and development
of the Company's business. Any payment of cash dividends 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.
Market for the Registrant's Common Equity and Related Stockholder Matters
The Company's Common Stock is traded on the New York Stock Exchange, Inc.
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 July 4, 1993 to July 1, 1995 and for the two
months ended August 31, 1995 (all data has been restated to reflect the
three-for-two stock split effected on September 24, 1993):
- -----------------------------------------------------------------
Period Low Price High Price
- ----------------------------------------------------------------
July 4, 1993 to 13 1/8 19 3/8
October 2, 1993
- -----------------------------------------------------------------
October 3, 1993 to 19 24 1/2
January 1, 1994
- -----------------------------------------------------------------
January 2, 1994 to 18 28 1/4
April 2, 1994
- -----------------------------------------------------------------
April 3, 1994 to 16 3/4 27 1/2
July 2, 1994
- -----------------------------------------------------------------
July 3, 1994 to 12 2/3 24 3/4
October 1, 1994
- -----------------------------------------------------------------
October 2, 1994 to 10 1/4 14 1/8
December 31, 1994
- -----------------------------------------------------------------
January 1, 1995 to 8 1/2 11 7/8
April 1, 1995
- -----------------------------------------------------------------
April 2, 1995 to 9 7/8 11 1/4
July 1, 1995
- -----------------------------------------------------------------
July 2, 1995 to 10 13 3/4
August 31, 1995
- -----------------------------------------------------------------
As of August 31, 1995, there were 639 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.
Page 47
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
- -------------------------------------------------------------------------------
DESCRIPTION BALANCE AT CHARGED TO DEDUCTIONS- BALANCE AT
BEGINNING CHARGED TO OTHER ACCOUNTS END OF
OF PERIOD EXPENSE ACCOUNTS WRITTEN OFF PERIOD
- -------------------------------------------------------------------------------
Period ended 7/01/95
ALLOWANCE FOR DOUBTFUL
ACCOUNTS-
ACCOUNTS RECEIVABLE $4,995 $5,162 $0 $(6,446) $3,711
---------------------------------------------------------
Period ended 7/02/94
ALLOWANCE FOR DOUBTFUL
ACCOUNTS-
ACCOUNTS RECEIVABLE $4,237 $4,821 $0 $(4,063) $4,995
---------------------------------------------------------
Period ended 7/03/93
ALLOWANCE FOR DOUBTFUL
ACCOUNTS-
ACCOUNTS RECEIVABLE $3,723 $3,690 $0 $(3,176) $4,237
--------------------------------------------------------
Page 48
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Page 49
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Page 50
File No. 1-8739
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
EXHIBITS FILED WITH
FORM 10-K
FOR FISCAL YEAR ENDED
July 1, 1995
under
The Securities Exchange Act of 1934
BURLINGTON COAT FACTORY WAREHOUSE CORPORATION
(Exact Name of Registrant as specified in its Charter)
- ------------------------------------------------------------------------------
Page 51
INDEX TO EXHIBITS
Exhibits Page No.
3.1 Articles of Incorporation, as Amended 1/
3.2 By-laws 1/
10.1 1993 Stock Incentive Plan 1/
10.2 Revolving Credit Agreement dated 2/
August 30, 1985 between the Company
and BancOhio National Bank as amended
through Amendment No. 3
10.3 Amendment No. 4 to Revolving Credit 1/
Agreement between the Company and
National City Bank, Columbus (successor
to BancOhio National Bank)
10.4 Loan Agreement dated as of 54
August 1, 1995 by and between
New Jersey Economic Development
Authority and Burlington Coat Factory
Warehouse of New Jersey, Inc.
10.5 Assignment of Leases dated as of 138
August 1, 1995 from Burlington
Coat Factory Warehouse of New
Jersey, Inc. to First Fidelity Bank,
National Association
10.6 Mortgage and Security Agreement dated 155
as of August 1, 1995 between Burlington
Coat Factory Warehouse of New Jersey,
Inc. and First Fidelity Bank, National
Association
[FN]
_______________
(1) Incorporated by reference to Exhibits filed with the Company's Annual
Report on Form 10-K for the year ended July 3, 1993, File No. 1-8739.
(2) Incorporated by reference to Exhibits filed with the Company's Annual
Report on Form 10-K for the year ended June 29, 1991, File No. 1-8739.
Page 52
Exhibits Page No.
- -------- --------
10.7 Indenture of Trust dated as of 184
August 1, 1995 by and between
New Jersey Economic Development
Authority and Shawmut Bank
Connecticut, National Association
10.8 Guaranty and Suretyship Agreement dated 288
as of August 1, 1995 from the Company
to First Fidelity Bank, National
Association
10.9 Letter of Credit Reimbursement Agreement 305
dated as of August 1, 1995 between
Burlington Coat Factory Warehouse of
New Jersey, Inc. and First Fidelity
Bank, National Association
10.10 Environmental Indemnity Agreement dated 359
as of August 1, 1995 between Burlington
Coat Factory Warehouse of New Jersey,
Inc. and First Fidelity Bank, National
Association
10.11 Burlington Coat Factory Warehouse 368
Corporation Amended and Restated
Employees Profit Sharing Plan
10.12 Note Agreement dated June 27, 1990 413
21 Subsidiaries of Registrant 479
23 Consent of Deloitte & Touche LLP 481
independent certified public accountants,
to the use of their report on the financial
statements of the Company for the fiscal
year ended July 1 1995 in the Registration
Statements of the Company on Form S-8,
Registration No. 2-96332, No. 33-21569,
No. 33-51965 and No. 33-61351
27 Financial Data Schedule 483
Page 53