SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended November 2, 2002.
OR
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from ____________ to ____________
Commission File No. 0-28410
LOEHMANN'S HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-4129380
- ---------------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2500 Halsey Street, Bronx, New York 10461
(Address of principal executive offices, including zip code)
(718) 409-2000
(Registrant's telephone number, including area code)
Indicate by a 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 as 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 whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes X No _
-
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed under Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No _
-
Below are indicated the number of shares outstanding of each of the registrant's
classes of common stock.
Class Outstanding at December 12, 2002
------ --------------------------------
Common Stock, $.01 par value per share 6,659,236
LOEHMANN'S HOLDINGS, INC.
CONTENTS
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets--November 2, 2002, February 2, 2002
and November 3, 2001................................................... 2
Consolidated Statements of Operations--Quarters and nine months ended
November 2, 2002 and November 3, 2001.................................. 3
Consolidated Statements of Cash Flows--Nine months ended
November 2, 2002 and November 3, 2001.................................. 4
Notes to Financial Statements............................................. 5
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition................................................ 6
Item 3. Quantitative and Qualitative Disclosures About Market Risk........ 9
Item 4. Controls and Procedures........................................... 9
PART II--OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.................................. 10
Signature................................................................. 11
Certifications pursuant to Section 302 of the Sarbanes-Oxley Act.......... 12
1
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Loehmann's Holdings, Inc.
Consolidated Balance Sheets
(In thousands)
NOVEMBER 2, February 2, November 3,
2002 2002 2001
----------------- ---------------- ----------------
(Unaudited) (Audited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 21,575 $ 13,882 $ 1,192
Accounts receivable and other assets 5,412 4,785 4,096
Merchandise inventory 59,409 43,972 56,663
----------------- ---------------- ----------------
Total current assets 86,396 62,639 61,951
Property, equipment and leaseholds, net 42,946 43,362 45,378
Deferred financing fees and other assets, net 1,559 1,493 1,491
Deferred tax asset 2,357 2,357 -
Reorganization value in excess of identifiable assets, net 19,381 19,381 20,526
----------------- ---------------- ----------------
Total assets $ 152,639 $ 129,232 $ 129,346
================= ================ ================
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable $ 25,423 $ 19,427 $ 19,744
Accrued expenses 18,743 16,378 16,333
Accrued interest 16 840 133
Revolving line of credit - - 3,744
Current portion of long-term debt 15,000 - -
Income taxes payable 4,300 888 1,087
----------------- ---------------- ----------------
Total current liabilities 63,482 37,533 41,041
11% Senior notes due December 2005 11,407 26,528 26,528
Other noncurrent liabilities 5,878 5,483 5,268
Common stockholders' equity:
Common stock, $0.01 par value, 20,000,000 shares authorized and
6,659,236 issued and outstanding 67 33 33
Additional paid-in capital 49,933 49,967 49,967
Retained earnings 21,872 9,688 6,509
----------------- ---------------- ----------------
Total common stockholders' equity 71,872 59,688 56,509
----------------- ---------------- ----------------
Total liabilities and common stockholders' equity $ 152,639 $ 129,232 $ 129,346
================= ================ ================
The accompanying notes are an integral part of these financial statements.
2
Loehmann's Holdings, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
QUARTER ENDED NINE MONTHS ENDED
--------------------------------- ---------------------------------
NOVEMBER 2, November 3, NOVEMBER 2, November 3,
2002 2001 2002 2001
--------------- --------------- ---------------- ---------------
Net sales $ 94,731 $ 83,647 $ 263,412 $ 238,298
Cost of sales 55,696 50,307 159,923 148,030
--------------- --------------- ---------------- ---------------
Gross profit 39,035 33,340 103,489 90,268
Revenue from leased departments 303 333 930 1,074
--------------- --------------- ---------------- ---------------
Operating profit 39,338 33,673 104,419 91,342
Selling, general, and administrative expenses 27,543 25,615 79,564 74,553
Depreciation and amortization 2,203 2,389 6,513 7,324
Gain on sale of building - - 3,925 -
--------------- --------------- ---------------- ---------------
Operating income 9,592 5,669 22,267 9,465
Interest expense, net 743 1,026 2,206 3,039
--------------- --------------- ---------------- ---------------
Income before income taxes 8,849 4,643 20,061 6,426
Provision for income taxes, net 3,458 1,813 7,877 2,512
--------------- --------------- ---------------- ---------------
Net income applicable to common stock $ 5,391 $ 2,830 $ 12,184 $ 3,914
=============== =============== ================ ===============
EARNINGS PER SHARE, NET OF TAX:
BASIC
Net income $ 0.81 $ 0.42 $ 1.83 $ 0.59
=============== =============== ================ ===============
Weighted average common shares and common share
equivalents used in earnings per share calculation 6,659 6,666 6,659 6,666
=============== =============== ================ ===============
DILUTED
Net income $ 0.73 $ 0.41 $ 1.67 $ 0.58
=============== =============== ================ ===============
Weighted average common shares and common share
equivalents used in earnings per share calculation 7,424 6,854 7,278 6,792
=============== =============== ================ ===============
The accompanying notes are an integral part of these financial statements.
3
Loehmann's Holdings, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
NINE MONTHS ENDED
--------------------------------
NOVEMBER 2, November 3,
2002 2001
--------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 12,184 $ 3,914
Adjustments to reconcile net income to net cash Provided by operating
activities:
Depreciation and amortization 6,513 7,324
Gain on sale of building (3,925) -
Write off of fixed assets 386 -
Non-cash PIK interest on 11% senior notes - 1,528
Reorganization and fresh start items - (1,640)
Changes in current assets and liabilities:
Accounts receivable and other assets (627) (750)
Merchandise inventory (15,437) (10,932)
Accounts payable 5,996 7,624
Accrued expenses 2,363 (53)
Income taxes payable 3,413 (584)
Accrued interest (824) (798)
-------------- -------------
Net changes in current assets and liabilities (5,116) (5,493)
Net change in other noncurrent assets and liabilities 167 595
-------------- -------------
Total adjustments, net (1,975) 2,314
-------------- -------------
Net cash provided by operating activities 10,209 6,228
-------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (7,205) (3,799)
Net proceeds from sale of building 4,839 -
-------------- -------------
Net cash used in investing activities (2,366) (3,799)
-------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under the credit facility, net - (2,824)
Other financing activities, net (150) -
-------------- -------------
Net cash used in financing activities (150) (2,824)
-------------- -------------
Net increase (decrease) in cash and cash equivalents 7,693 (395)
Cash and cash equivalents at beginning of period 13,882 1,587
-------------- -------------
Cash and cash equivalents at end of period $ 21,575 $ 1,192
============== =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash interest paid during period $ 3,149 $ 2,310
============== =============
Cash taxes paid during period $ 3,351 $ 3,104
============== =============
The accompanying notes are an integral part of these financial statements.
4
Loehmann's Holdings, Inc.
Notes to Financial Statements
1. ORGANIZATION
Loehmann's Holdings, Inc. ("Loehmann's" or the "Company"), a Delaware
corporation, was formed pursuant to the Company's emergence from bankruptcy on
October 10, 2000. Loehmann's Holdings, Inc. is the parent company of Loehmann's,
Inc. and owns 100% of its common stock. In addition to the formation of
Loehmann's Holdings, Inc., two new wholly-owned subsidiaries of Loehmann's, Inc.
were formed and all the assets of Loehmann's, Inc. were transferred to these
subsidiaries, Loehmann's Operating Co. and Loehmann's Real Estate Holdings, Inc.
Loehmann's is a leading upscale off-price specialty retailer of well known
designer and brand name women's fashion apparel, men's furnishings, accessories
and shoes.
2. BASIS OF PRESENTATION
The balance sheet at November 2, 2002 and the statements of operations for
the quarter and nine months ended November 2, 2002 and the statement of cash
flows for the nine months ended November 2, 2002 include, in the opinion of
management, all adjustments (consisting of only normal recurring adjustments)
considered necessary for a fair presentation.
The accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States for interim
financial information. Certain information and footnote disclosure normally
included in financial statements required by generally accepted accounting
principles have been omitted. Operating results for the quarter and nine months
ended November 2, 2002 are not necessarily indicative of the results that may be
expected for the fiscal year ending February 1, 2003. It is suggested that these
unaudited financial statements be read in conjunction with the financial
statements and notes for the fiscal year ended February 2, 2002 included in the
Company's Annual Report on Form 10-K for such year.
3. INCOME TAXES
Income taxes are provided for under the liability method using an effective
tax rate of 39%.
4. USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States for interim financial
information requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes. Actual
amounts could differ from the estimates.
5. ADOPTION OF NEW ACCOUNTING STANDARD
In 2002, the Company adopted FASB Statement No. 142, "Goodwill and Other
Intangible Assets". This standard requires that reorganization value, goodwill
and other indefinitely lived intangible assets not be amortized, but instead be
tested for impairment. After the initial impairment review required by SFAS 142,
the Company has determined that the adoption of SFAS 142 did not result in the
impairment of the carrying value of its reorganization value.
5
If reorganization value in excess of identifiable assets had not been
amortized in the quarter and nine months ended November 3, 2001, the Company's
adjusted net income and earnings per share would have been as follows:
Quarter ended Nine months ended
November 3, 2001 November 3, 2001
------------------------------------------ ------------------------------------
Net Basic Diluted Net Basic Diluted
Income EPS EPS Income EPS EPS
As reported $ 2,830 $ 0.42 $ 0.41 $ 3,914 $ 0.59 $ 0.58
Amortization of reorganization value
in excess of identifiable assets, net
of tax 120 0.02 0.02 362 0.05 0.05
-------------- ------------ -------------- ------------ --------- ----------
As adjusted $ 2,950 $ 0.44 $ 0.43 $ 4,276 $ 0.64 $ 0.63
============== ============ ============== ============ ========= ==========
6. STOCK SPLIT
In September 2002, the Company's Board of Directors declared a dividend in
the nature of a 2-for-1 stock split of the Company's common stock. Shareholders
of record on September 30, 2002 received one share of the Company's common stock
for each share owned. The distribution of the shares occurred after the close of
business on October 15, 2002. All share and per share amounts have been
retroactively restated for all periods to reflect the impact of the stock split.
7. SUBSEQUENT EVENT
On November 4, 2002, the Company redeemed $15,000,000 of its 11% Senior
Notes due December 2005. These notes have been reclassed as current portion of
long-term liabilities on the Company's balance sheet at November 2, 2002.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS - COMPARISON OF THE QUARTERS ENDED NOVEMBER 2, 2002 AND
NOVEMBER 3, 2001
Comparable store sales (stores that were in operation for both periods)
increased by 12.1% compared to the same period in fiscal 2001. This was
primarily due to an increase in customer traffic. Net sales for the quarter
ended November 2, 2002 were $94.7 million as compared to $83.6 million for the
comparable period in the prior year.
Gross profit for the quarter ended November 2, 2002 was $39.0 million as
compared to $33.3 million for the same period in the prior year. Gross profit
percentage increased to 41.2% from 39.9% in the prior year period. The increase
in gross profit percentage was due primarily to an increase in the initial
markup of merchandise resulting from a favorable change in the merchandise mix
and lower markdowns, as a percentage of net sales, in the comparable period.
Selling, general and administrative expenses, as a percentage of net sales,
for the quarter ended November 2, 2002 decreased to 29.1% from 30.6% in the
prior period. Selling, general and administrative expenses increased to $27.5
million from $25.6 million in the prior period. The increase is due primarily to
variable expenses related to the $11.1 million increase in net sales for the
quarter.
6
Depreciation and amortization expense for the quarter ended November 2,
2002 was $2.2 million as compared to $2.4 million for the same period in the
prior year. The Company no longer amortizes reorganization value in excess of
identifiable assets, which last year was $197,000 for the third quarter. See
Notes to the Financial Statements - 5. Adoption of New Accounting Standard.
As a result of the items explained above, operating income increased by
$3.9 million to $9.6 million, or 10.1% of sales, for the quarter ended November
2, 2002 as compared to $5.7 million, or 6.8% of sales, for the quarter ended
November 3, 2001.
Net interest expense for the quarter ended November 2, 2002 was $0.7
million as compared to $1.0 million for the same period in the prior year. There
were no borrowings under the Company's credit facility during the period and, as
a result, interest expense was comprised primarily of $0.7 million in interest
on the Company's 11% Senior Notes due 2005.
RESULTS OF OPERATIONS - COMPARISON OF THE NINE MONTHS ENDED NOVEMBER 2, 2002 AND
NOVEMBER 3, 2001
Comparable store sales (stores that were in operation for both periods)
increased by 10.1% for the nine-month period ended November 2, 2002 compared to
the same period in fiscal 2001. This was primarily due to an increase in
customer traffic. Net sales for the nine-month period ended November 2, 2002
were $263.4 million as compared to $238.3 million for the comparable period in
the prior year.
Gross profit for the nine-month period ended November 2, 2002 was $103.5
million as compared to $90.3 million for the same period in the prior year.
Gross profit percentage increased to 39.3% from 37.9% in the prior year period.
The increase in gross profit percentage was due primarily to (i) an increase in
the initial markup of merchandise resulting from a favorable change in the
merchandise mix, (ii) improved inventory shrinkage results and (iii) lower
markdowns, as a percentage of sales, in the comparable period.
Selling, general and administrative expenses, as a percentage of net sales,
for the nine-month period ended November 2, 2002 decreased to 30.2% from 31.3%
in the prior period. Selling, general and administrative expenses increased to
$79.6 million from $74.6 million in the prior period. The increase is due
primarily to variable expenses related to the $25.1 million increase in net
sales for the quarter and expenses related to the opening of a new location in
Centennial, CO.
Depreciation and amortization expense for the nine-month period ended
November 2, 2002 was $6.5 million as compared to $7.3 million for the same
period in the prior year. The Company no longer amortizes reorganization value
in excess of identifiable assets, which was $593,000 in the prior year period.
See Notes to the Financial Statements - 5. Adoption of New Accounting Standard.
In July 2002, the Company sold its facility in Bronx, NY and realized a
gain on the sale of $3.9 million. This gain is included in operating income for
the current period. The Company still occupies a portion of the facility, which
is leased and serves as the Company's corporate headquarters.
As a result of the items explained above, operating income increased by
$12.8 million to $22.3 million, or 8.5% of sales, in the nine-month period ended
November 2, 2002 as compared to operating income of $9.5 million, or 4.0% of
sales, in the nine-month period ended November 3, 2001. Excluding the gain on
the sale of the building, operating income for the current period would have
been $18.3 million or 7.0% of sales, an increase of 94%.
7
Net interest expense for the nine-month period ended November 2, 2002 was
$2.2 million as compared to $3.0 million for the same period in the prior year.
Interest expense is comprised primarily of $2.1 million in interest on the
Company's 11% Senior Notes due 2005.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a $75.0 million revolving line of credit with Bankers Trust
Company (the "Credit Facility"). The Credit Facility is secured by substantially
all of the Company's assets and expires on September 30, 2005. The availability
of the revolving line of credit under the Credit Facility is subject to certain
inventory-related borrowing base requirements.
The indebtedness under the Credit Facility bears interest at variable rates
based on LIBOR plus 3.0% or the prime rate plus 2.0% on borrowings less than or
equal to the fixed asset sublimit. For borrowings in excess of the fixed asset
sublimit, the interest rates are LIBOR plus 2.5% or the prime rate plus 1.5%.
There is an unused line fee of 0.50% per annum on the unused portion of the
facility.
The Credit Facility contains certain customary covenants, including
limitations on indebtedness, liens and restricted payments. In addition, the
Company is required to satisfy certain financial performance criteria including
minimum EBITDA requirements, fixed charge coverage and inventory turn ratios.
The Credit Facility also contains an annual limitation on capital expenditures.
The Company is in compliance with all of its loan covenants.
During the nine-month period ended November 2, 2002, the Company had no net
borrowings under the Credit Facility. Excess cash is invested in a money market
fund and other cash equivalents with an average maturity of 40 days and an
average quality of AA. As of November 2, 2002 there were documentary letters of
credit of $3.2 million outstanding under the Credit Facility. The Company
believes that cash generated from operations and funds available under the
Credit Facility will be sufficient to satisfy cash requirements through the
remainder of the fiscal year.
Net cash provided by operations before working capital for the nine-month
period ended November 2, 2002 was $15.3 million. The working capital needs for
the nine-month period were $5.1 million, due primarily to an increase in
inventory of $15.4 million offset by an increase in accounts payable and accrued
expenses of $6.0 million and $2.4 million respectively. Cash provided by
operating activities was $10.2 million for the nine-month period. Capital
expenditures for the nine-month period were $7.2 million primarily for (i)
maintenance and repairs, $4.0 million, (ii) systems upgrades, $1.2 million,
(iii) expansion of warehouse facility in Rutherford, NJ, $0.8 million, and (iv)
new stores in Centennial, CO and Oak Brook, IL, $1.2 million.
This Quarterly Report on Form 10-Q and, in particular, Management's
Discussion and Analysis of Financial Condition and Results of Operations contain
forward-looking statements within the meaning of the Securities Exchange Act of
1934. The Company's actual results of operations and future financial condition
may differ materially from those expressed or implied in any such
forward-looking statements as a result of many factors, including factors that
may be beyond the Company's control. Other factors that may cause actual results
of operations and future financial condition to differ from those expressed or
implied in any forward-looking statements contained herein include adverse
changes in relationships with key vendors and factors, changes in consumer
preferences, competition from existing and potential competitors and general
economic conditions.
The Company cautions that the foregoing list of important factors is not
exclusive. The Company does not undertake to update any forward-looking
statements contained herein or that may be made from time to time by or on
behalf of the Company.
8
CRITICAL ACCOUNTING POLICIES
Inventory
Merchandise inventory is valued at the lower of cost or market as
determined by the retail inventory method, which the Company believes
approximates fair value. However, certain warehoused inventory that is not
immediately available for sale is valued on a specific cost basis. The
merchandise inventory valued on a specific cost basis at November 2, 2002 and
November 3, 2001 was $13.4 million and $12.6 million, respectively.
The Company takes permanent markdowns to reduce prices as goods age. The
resulting gross profit reduction is recognized in the period the markdown is
recorded.
Shrinkage is estimated as a percentage of sales for the period from the
last inventory date, July 13, 2002, through November 2, 2002, the end of the
reporting period. This estimate is a conservative estimate based on experience.
Physical inventories are taken twice annually and inventory records are adjusted
accordingly.
Revenue Recognition and Leased Sales
The Company recognizes revenue when goods are sold, at retail, to customers
in its stores. Sales of fragrances, a leased department, are not reflected in
the net sales reported on the Company's statements of operations. Gross profit
from fragrance sales is shown as revenue from leased departments on the
Company's statements of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has assessed its vulnerability to certain market risks,
including interest rate risk associated with financial instruments included in
cash and cash equivalents. Due to the short-term nature of these investments the
Company has determined that the risks associated with interest rate fluctuations
related to these financial instruments do not pose a material risk to the
Company.
ITEM 4. CONTROLS AND PROCEDURES
Within the 90-day period prior to the filing of this report, an evaluation
was carried out under the supervision and with the participation of the
Company's Chief Executive Officer and Chief Financial Officer of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures, as defined in Rule 13a-14(c) under the Securities Exchange Act
of 1934, as amended. Based upon the evaluation, the Chief Executive Officer and
the Chief Financial Officer have concluded that these disclosure controls and
procedures are effective.
There have been no significant changes in the Company's internal controls
or in other factors that could significantly affect the internal controls
subsequent to the date of the Company's most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
9
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS
Exhibits
4.1 Amendment No. 1 to the Credit Agreement dated as of June 10, 2002 among
Loehmann's Operating Co., as borrower, the lenders, and Deutsche Bank Trust
Company Americas, as agent.
99.1 Certificate of Chief Executive Officer required by Section 906 of the
Sarbanes-Oxley Act of 2002.
99.2 Certificate of Chief Financial Officer required by Section 906 of the
Sarbanes-Oxley Act of 2002.
10
Loehmann's Holdings, Inc.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: December 12, 2002
Loehmann's Holdings, Inc.
By /s/ Robert Glass
-----------------------------------
Robert Glass
Chief Operating Officer, Chief Financial
Officer, Secretary and Director
11
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert N. Friedman, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Loehmann's
Holdings, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 12, 2002
/s/ Robert N. Freidman
----------------------------------------------
Name: Robert N. Friedman
Title: President, Chief Executive Officer and
Director
12
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert Glass, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Loehmann's
Holdings, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: December 12, 2002 /s/ Robert Glass
---------------------------------------------
Name: Robert Glass
Title: Chief Operating Officer, Chief
Financial Officer, Secretary and Director
13
Exhibit Index
Exhibit
Number Description
- ------ --------------------------------------------------------------
4.1 Amendment No. 1 to the Credit Agreement dated as of June 10, 2002
among Loehmann's Operating Co., as borrower, the lenders, and
Deutsche Bank Trust Company Americas, as agent.
99.1 Certificate of Chief Executive Officer required by Section 906 of
the Sarbanes-Oxley Act of 2002.
99.2 Certificate of Chief Financial Officer required by Section 906 of
the Sarbanes-Oxley Act of 2002.