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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended JUNE 1, 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 NUMBER 1-8546
SYMS CORP
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(Exact Name of Registrant as Specified in Its Charter)
NEW JERSEY 22-2465228
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
SYMS WAY, SECAUCUS, NEW JERSEY 07094
- ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(201) 902-9600
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(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
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(Former Name, Former Address
and Former Fiscal Year, if Changed Since Last Report)
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
--- ---
At July 8, 2002 the latest practicable date, there were 15,782,278 shares
outstanding of Common Stock, par value $0.05 per share.
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SYMS CORP AND SUBSIDIARIES
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INDEX
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PAGE NO.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of
June 1, 2002, March 2, 2002 and June 2, 2001 ................... 1
Condensed Consolidated Statements of Operations for the
13 Weeks Ended June 1, 2002 and June 2, 2001 ................... 2
Condensed Consolidated Statements of Cash Flows for the
13 Weeks Ended June 1, 2002 and June 2, 2001 ................... 3
Notes to Condensed Consolidated Financial Statements ........... 4-5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations ...................................... 6-7
Item 3. Quantitative and Qualitative Disclosure about Market Risk ...... n/a
PART II. OTHER INFORMATION .............................................. 8
Item 1. Legal Proceedings
Item 2. Changes In Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES ............................................................... 8
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SYMS CORP AND SUBSIDIARIES
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CONDENSED CONSOLIDATED BALANCE SHEETS
- ------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS)
JUNE 1, MARCH 2, JUNE 2,
2002 2002 2001
(Unaudited) (NOTE) (Unaudited)
----------- --------- -----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents ............................................. $ 33,264 $ 19,485 $ 23,306
Merchandise inventories ............................................... 94,854 86,810 109,797
Deferred income taxes ................................................. 6,514 6,514 6,472
Prepaid expenses and other current assets ............................. 3,724 6,071 3,599
--------- --------- ---------
TOTAL CURRENT ASSETS ................................................ 138,356 118,880 143,174
PROPERTY AND EQUIPMENT - Net ............................................. 145,490 147,186 147,747
DEFERRED INCOME TAXES .................................................... 4,392 2,309 3,170
OTHER ASSETS ............................................................. 8,659 8,119 7,710
--------- --------- ---------
TOTAL ASSETS ........................................................ $ 296,897 $ 276,494 $ 301,801
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ...................................................... $ 36,188 $ 17,867 $ 41,881
Accrued expenses ...................................................... 10,224 8,845 8,918
Accrued insurance ..................................................... 2,907 3,144 2,977
Obligations to customers .............................................. 3,022 3,063 2,871
--------- --------- ---------
TOTAL CURRENT LIABILITIES ........................................... 52,341 32,919 56,647
OTHER LONG TERM LIABILITIES .............................................. 2,140 2,118 2,156
--------- --------- ---------
SHAREHOLDERS' EQUITY
Preferred stock, par value $100 per share. Authorized 1,000
shares; none outstanding .............................................. -- -- --
Common stock, par value $0.05 per share. Authorized 30,000
shares; 15,782 shares outstanding (net of 2,152 in treasury shares)
on June 1, 2002, 15,737 shares outstanding as of March 2, 2002
(net of 2,152 treasury shares) and 15,737 shares outstanding
(net of 2,152 treasury shares) on June 2, 2001 ........................ 793 787 787
Additional paid-in capital ............................................ 14,007 13,760 13,759
Treasury Stock ........................................................ (18,987) (18,987) (18,987)
Retained earnings ..................................................... 246,603 245,897 247,439
--------- --------- ---------
TOTAL SHAREHOLDERS' EQUITY .......................................... 242,416 241,457 242,998
--------- --------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .......................... $ 296,897 $ 276,494 $ 301,801
========= ========= =========
NOTE: The balance sheet at March 2, 2002 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See Notes to Condensed Consolidated Financial Statements
1
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SYMS CORP AND SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
13 WEEKS ENDED
-------------------------
JUNE 1, JUNE 2,
2002 2001
-------- --------
(Unaudited)
Net sales ...................................... $ 67,950 $ 71,554
Cost of goods sold ............................. 38,853 42,084
-------- --------
Gross profit ................................... 29,097 29,470
Expenses:
Selling, general and administrative ............ 18,765 20,501
Advertising .................................... 2,244 2,647
Occupancy ...................................... 4,501 4,740
Depreciation and amortization .................. 2,810 2,947
Other income ................................... (454) --
-------- --------
Income (loss) from operations .................. 1,231 (1,365)
Interest income ................................ (54) (92)
-------- --------
Income (loss) before income taxes .............. 1,285 (1,273)
Provision (benefit) for income taxes ........... 578 (496)
-------- --------
Net income (loss) .............................. $ 707 $ (777)
======== ========
Net income (loss) per share-basic .............. $ 0.04 $ (0.05)
======== ========
Weighted average shares outstanding-basic ...... 15,754 15,751
======== ========
Net income (loss) per share-diluted ............ $ 0.04 $ (0.05)
======== ========
Weighted average shares outstanding-diluted .... 15,754 15,751
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See Notes to Condensed Consolidated Financial Statements
2
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SYMS CORP AND SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
(IN THOUSANDS)
13 WEEKS ENDED
-------------------
JUNE 1, JUNE 2,
2002 2001
------- -------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ..................................... $ 707 $ (777)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization ......................... 2,810 2,947
Deferred income taxes ................................. -- (466)
(Gain)/loss of disposal of assets ..................... (94) 11
(Increase) decrease in operating assets:
Merchandising inventories ........................... (8,044) (10,611)
Prepaid expenses and other current assets ........... 2,451 639
Other assets ........................................ (540) (1,526)
Increase (decrease) in operating liabilities:
Accounts payable .................................... 18,321 25,428
Accrued expenses .................................... 1,069 696
Other long term liabilities ......................... 22 (253)
------- -------
Net cash provided by operating activities ......... 16,702 16,088
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Stanley Blacker, Inc. acquisition ..................... (1,906) --
Expenditures for property and equipment ............... (1,020) (107)
------- -------
Net cash used in investing activities ............. (2,926) (107)
CASH FLOWS FROM FINANCING ACTIVITIES:
Exercise of options/Issuance of stock ................. 3 7
Stock repurchase ...................................... -- (167)
------- -------
Net cash used in financing activities ............. 3 (160)
------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS ............... 13,779 15,821
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD .......... 19,485 7,485
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD ................ $33,264 $23,306
======= =======
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) ................ $ -- $ 271
======= =======
Income taxes paid (refunds received) ................ $ -- $ 43
======= =======
Stanley Blacker, Inc. acquisition financed
through stock ..................................... $ 250 $ --
======= =======
See Notes to Condensed Consolidated Financial Statements
3
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SYMS CORP AND SUBSIDIARIES
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
13 WEEKS ENDED JUNE 1, 2002 AND JUNE 2, 2001
- --------------------------------------------------------------------------------
(UNAUDITED)
NOTE 1 - THE COMPANY
Syms Corp (the "Company") operates a chain of 42 "off-price" retail stores
located throughout the Northeastern and Middle Atlantic regions and in the
Midwest, Southeast and Southwest. Each Syms store offers a broad range of first
quality, in season merchandise bearing nationally recognized designer or
brand-name labels for men, women and children.
NOTE 2 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the 13-week period ended June 1, 2002 is
not necessarily indicative of the results that may be expected for the entire
fiscal year ending March 1, 2003. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the fiscal year ended March 2, 2002.
NOTE 3 - ACCOUNTING PERIOD
The Company's fiscal year ends the Saturday nearest to the end of February. The
fiscal year ending March 2, 2002 was comprised of 52 weeks. The fiscal year
ended March 1, 2003 will be comprised of 52 weeks.
NOTE 4 - MERCHANDISE INVENTORIES
Merchandise inventories are stated at the lower of cost (first in, first out) or
market, as determined by the retail inventory method.
NOTE 5 - BANK CREDIT FACILITIES
The Company has an unsecured revolving credit agreement with a bank for a line
of credit not to exceed $20,000,000 through May 3, 2003. Interest on individual
advances is payable quarterly at 1/2% per annum below the bank's base rate,
except that at the time of advance, the Company has the option to select an
interest rate based upon one other alternative calculation, with such rate to be
fixed for a period not to exceed 90 days. The average daily unused portion is
subject to a commitment fee of 3/8 of 1% per annum. As of June 1, 2002, March 2,
2002 and June 2, 2001 there were no outstanding borrowings under this agreement.
The agreement contains financial covenants, with respect to consolidated
tangible net worth, as defined, working capital and maximum capital
expenditures, including dividends (defined to include cash repurchases of
capital stock), as well as other financial ratios. The Company was in compliance
with all covenants as of June 1, 2002.
In addition, the Company has a separate $10,000,000 credit facility with another
bank available for the issuance of letters of credit for the purchase of
merchandise. This agreement may be canceled at any time by either party. At June
1, 2002, March 2, 2002 and June 2, 2001 the Company had $4,523,000, $4,564,000
and $5,215,000 respectively, in outstanding letters of credit.
4
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SYMS CORP AND SUBSIDIARIES
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NOTE 6 - NET INCOME PER SHARE
In accordance with SFAS 128, basic net income per share has been computed based
upon the weighted average common shares outstanding. Diluted net income per
share gives effect to outstanding stock options.
Net income per share has been computed as follows:
JUNE 1, JUNE 2,
2002 2001
-------- --------
Basic net income per share
Net income (loss) ................... $ 707 $ (777)
Average shares outstanding .......... 15,754 15,751
Basic net income (loss) per share ... $ 0.04 $ (0.05)
Diluted net income per share:
Net income (loss) ................... $ 707 $ (777)
Average shares outstanding .......... 15,754 15,751
Stock options ....................... -- --
Total average equivalent shares ..... 15,754 15,751
Diluted net income per share ........ $ 0.04 $ (0.05)
In periods with losses, options were excluded from the computation of diluted
net income per share because the effect would be anti-dilutive.
Options to purchase 1,060,000 and 1,077,000 shares of common stock at prices
ranging from $5.63 to $11.50 per share were outstanding as of June 1, 2002 and
June 2, 2001, respectively, but were not included in the computation of diluted
net income per share because the exercise price of the options exceed the
average market price and would have been antidilutive.
NOTE 7 - SPECIAL CHARGES
During the third quarter of fiscal 2000, the Company recorded a store closing
cost of $12,935,000 relating to a plan to close five stores and an additional
lease commitment cost associated with a previously closed store. As of June 1,
2002, the amount remaining in the closed store accrual recorded in the third
quarter of fiscal 2000 is $307,000, primarily relating to severance and lease
obligations, which will be paid out periodically through January, 2004. The
total restructuring accrual at June 1, 2002 of $307,000 is included within
accrued expenses.
NOTE 8 - STANLEY BLACKER, INC. ACQUISITION
On January 10, 2002, an independent committee of the Board of Directors was
established to review the potential acquisition of Stanley Blacker, Inc., a
corporation owned by The Sy Syms Revocable Living Trust. This committee obtained
an independent appraisal as to the fair market value of the business enterprise
of Stanley Blacker, Inc., and on April 18, 2002, the Board of Directors approved
the acquisition based on the independent committee's recommendation to acquire
the assets of Stanley Blacker, Inc. The assets of Stanley Blacker, Inc.
consisted substantially of trademarks and trade names licensed to third party
manufacturers of clothing and accessories. The acquisition of such assets was
consummated on May 1, 2002, for a purchase price consisting of $250,000 paid in
cash, $250,000 paid by the issuance of 44,138 shares of the Company's common
stock and the balance by taking of the assets subject to a note payable to Fleet
National Bank in the principal amount of $1,655,000 together with interest
thereon of approximately $11,355, which note was paid in full by the Company.
The Company's financial statements include the results of operations of Stanley
Blacker, Inc. from the date of acquisition.
5
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SYMS CORP AND SUBSIDIARIES
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Purchase Price:
- ---------------
Cash ........................................... $1,905,000
Stock .......................................... 250,000
Purchase price ................................. 2,155,000
Preliminary Allocation of Purchase Price
- ----------------------------------------
Receivables .................................... $ 104,000
Deferred Tax Assets ............................ 2,083,000
Payables ....................................... 32,000
The following unaudited consolidated pro forma results of operations of the
Stanley Blacker, Inc. for the 13 weeks ended June 1, 2002 and June 2, 2001 give
effect to the Stanley Blacker, Inc. acquisition as if it occurred at the
beginning of the period presented (in thousands, except per share amounts):
Thirteen Weeks Ended
----------------------------
June 1, 2002 June 2, 2001
------------ ------------
Revenues ........................................ $ 176 $ 206
Income (loss) before income taxes ............... 128 (88)
Net Income (loss) ............................... 73 (149)
Net Income (loss) per diluted common share ...... $0.00 (0.01)
NOTE 9 - OTHER INCOME
Other income was recorded by the Company amounting to approximately $450,000
resulting from restitution on an employee theft and partial insurance recovery
related to business interruption at the Trinity store.
NOTE 10 - RECENTLY ISSUED ACCOUNTING STANDARDS
In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS No. 144 addresses the accounting and
reporting for the impairment or disposal of long-lived assets. The statement
provides a single accounting model for long-lived assets to be disposed of. New
criteria must be met to classify the asset as an asset held-for-sale. This
statement also focuses on reporting the effects of a disposal of a segment of a
business. This statement is effective for fiscal years beginning after December
15, 2001. The Company has determined that the adoption of SFAS No. 144 will not
have a material impact on the Company's financial position or results of
operations.
NOTE 11 - NEW ACCOUNTING STANDARDS
In April 2002, SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64,
Amendment of FASB Statement No. 13, and Technical Corrections" ("SFAS 145") was
issued. SFAS 145 rescinds SFAS 4 and 64, which required gains and losses from
extinguishment of debt to be classified as extraordinary items. SFAS also
rescinds SFAS 44 since the provisions of the Motor Carrier Act of 1980 are
complete. SFAS 145 also amends SFAS 13 eliminating inconsistencies in certain
sale-leaseback transactions. The provisions of SFAS 145 are effective for fiscal
years beginning after May 15, 2002. Any gain or loss on extinguishment of debt
that was classified as an extraordinary item in prior periods presented shall be
reclassified. The Company does not expect that the adoption of SFAS 145 will
have a material effect on the Company's financial position or results of
operations.
6
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SYMS CORP AND SUBSIDIARIES
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
The Quarterly Report (including but not limited to factors discussed below, in
the Management's Discussion and Analysis of Financial Condition and Results of
Operations," as well as those discussed elsewhere in this Quarterly Report on
Form 10-Q) includes forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995) and information relating to
the Company that are based on the beliefs of the management of the Company as
well as assumptions made by and information currently available to the
management of the Company. When used in this Quarterly Report, the words
"anticipate," "believe," "estimate," "expect," "intend," "plan," and similar
expressions, as they relate to the Company or the management of the Company,
identify forward-looking statements. Such statements reflect the current views
of the Company with respect to future events, the outcome of which is subject to
certain risks, including among others general economic and market conditions,
decreased consumer demand for the Company's products, possible disruptions in
the Company's computer or telephone systems, possible work stoppages, or
increases in labor costs, effects of competition, possible disruptions or delays
in the opening of new stores or inability to obtain suitable sites for new
stores, higher than anticipated store closings or relocation costs, higher
interest rates, unanticipated increases in merchandise or occupancy costs and
other factors which may be outside the Company's control. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results or outcomes may vary materially from those described
therein as anticipated, believed, estimated, expected, intended or planned.
Subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the cautionary statements in this paragraph and elsewhere described
in this Quarterly Report and other reports filed with the Securities and
Exchange Commission.
CRITICAL ACCOUNTING POLICIES AND ESTIMATE
The preparation of financial statements in conformity with generally
accepted accounting principles requires the appropriate application of certain
accounting policies, many of which require us to make estimates and assumptions
about future events and their impact on amounts reported in the financial
statements and related notes. Since future events and their impact cannot be
determined with certainty, the actual results will inevitably differ from our
estimates. Such differences could be material to the consolidated financial
statements.
The Company believes application of accounting policies, and the estimates
inherently required by the policies, are reasonable. These accounting policies
and estimates are constantly reevaluated, and adjustments are made when facts
and circumstances dictate a change. Historically, the Company has found the
application of accounting policies to be appropriate, and actual results have
not differed materially from those determined using necessary estimates.
The Company's accounting policies are more fully described in Note 1 to the
Consolidated Financial Statements, located in the Annual Report for the year
ended March 2, 2002. The Company has identified certain critical accounting
policies that are described below.
MERCHANDISE INVENTORY - Inventories are valued at lower of cost or market
using the retail first-in, first-out ("FIFO") inventory method. Under the retail
inventory method ("RIM"), the valuation of inventories at cost and the resulting
gross margins are calculated by applying a calculated cost to retail ratio to
the retail value of inventories. RIM is an averaging method that has been widely
used in the retail industry due to its practicality. Additionally, it is
recognized that the use of RIM will result in valuing inventories at the lower
of cost or market if markdowns are currently taken as a reduction of the retail
value of inventories. Inherent in the RIM calculation are certain significant
management judgments and estimates including, among others, merchandise markon,
markups, and markdowns, which significantly impact the ending inventory
7
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SYMS CORP AND SUBSIDIARIES
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valuation at cost as well as resulting gross margins. Management believes that
the Company's RIM and application of FIFO provides an inventory valuation which
reasonably approximates cost using a first-in, first-out assumption and results
in carrying value at the lower of cost or market. If actual market conditions
are less favorable than those projected by management, additional markdowns may
be required.
LONG-LIVED ASSET - In evaluation of the fair value and future benefits of
long-lived assets, the Company performs analyses of the anticipated undiscounted
future net cash flows of the related long-lived assets. If the carrying value of
the related asset exceeds the undiscounted cash flows, the Company reduces the
carrying value to its fair value, which is generally calculated using discounted
cash flows. Various factors including future sales growth and profit margins are
included in this analysis. To the extent these future projections or our
strategies change, the conclusion regarding impairment may differ from the
Company's current estimates.
DEFERRED TAX VALUATION ALLOWANCE - The Company records a valuation
allowance to reduce its deferred tax assets to the amount that is more likely
than not to be realized. The Company has considered future taxable income and
ongoing prudent and feasible tax planning strategies in assessing the need for
the valuation allowance, if the Company were to determine that it would be able
to realize its deferred tax assets in the future in excess of its net recorded
amount, an adjustment to the deferred tax asset would increase income in the
period such determination was made. Likewise, should the Company determine that
it would not be able to realize all or part of our net deferred tax asset in the
future, an adjustment to the deferred tax asset would be charged to income in
the period such determination was made.
RESULTS OF OPERATIONS
13 Weeks Ended June 1, 2002 Compared to 13 Weeks Ended June 2, 2001
Net sales of $67,950,000 for the 13 weeks ended June 1, 2002 decreased
$3,604,000 (5.0%) as compared to net sales of $71,554,000 for the 13 weeks ended
June 2, 2001. The closing of the Franklin Mills, PA, Potomac, VA and
Sharonville, OH stores amounted to approximately $2,191,000 of the decrease in
the first quarter of 2002. Comparable store sales decreased 2.2% from the
comparable 13 week period in fiscal 2001. The Trinity store, located near the
World Trade Center, closed for a period of 18 days following September 11, 2001
and suffered a sales decline of $666,000 or 19% compared to the 13 week period a
year ago.
Gross profit for the 13 weeks ended June 1, 2002 was $29,097,000 (42.8% as a
percentage of net sales), a decrease of $373,000 as compared to $29,470,000
(41.2% as a percentage of net sales) for the fiscal period ended June 2, 2001.
Although such gross profit percentage improved from 41.2% to 42.8%, the decline
in overall gross profit is largely attributable to the decline in the Company's
net sales. The gross profit percentage improved due to less markdowns on
merchandise sold.
Selling, general and administrative expense decreased $1,736,000 to $18,765,000
(27.6% as a percentage of net sales) for the 13 weeks ended June 1, 2002. The
expenses of the closed stores (Sharonville, OH, Franklin Mills, PA and Potomac,
VA) amounted to approximately $700,000 and the remainder of the decline results
from greater expense efficiencies in the existing stores.
Advertising expense for the 13 weeks ended June 1, 2002 decreased to $2,244,000
(3.3% as a percentage of net sales) as compared to $2,647,000 (3.7% as a
percentage of net sales) for the 13 weeks ended June 2, 2001.
Occupancy costs were $4,501,000 (6.6% as a percentage of net sales) for the 13
week period ended June 1, 2002, as compared to $4,740,000 (6.6% as a percentage
of net sales) for the 13 weeks ended June 2, 2001. The occupancy expenses for
the current period reflect the closing of the Sharonville, OH, Franklin Mills,
PA and Potomac, VA stores.
8
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SYMS CORP AND SUBSIDIARIES
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Depreciation and amortization amounted to $2,810,000 (4.1% as a percentage of
net sales), a decrease of $137,000 as compared to $2,947,000 (4.1% as a
percentage of net sales) for the 13 weeks ended June 2, 2001.
Other income was recorded by the Company amounting to approximately $450,000
resulting from restitution on an employee theft and partial insurance recovery
related to business interruption.
Net income before income taxes for the 13 weeks ended June 1, 2002 was
$1,285,000 as compared to net loss before income taxes of $1,273,000 for the 13
weeks ended May 27, 2000.
For the 13 week period ended June 1, 2002 the effective income tax rate was 45%,
compared to 39% for the period ended June 2, 2001.
LIQUIDITY AND CAPITAL RESOURCES
Working capital as of June 1, 2002 was $86,015,000, a decrease of $512,000
compared to $86,527,000 as of June 2, 2001. The ratio of current assets to
current liabilities was 2.64 to 1 as compared to 2.53 to 1 as of May 27, 2000.
Net cash provided by operating activities totaled $16,702,000 for the 13 weeks
ended June 1, 2002, an increase of $614,000 as compared to $16,088,000 for the
13 weeks ended June 2, 2001. Net cash used in investing activities was
$2,926,000 for the 13 weeks ended June 1,2002, and $107,000 for the 13 weeks
ended June 2, 2001. Expenditures for property and equipment totaled $1,020,000
and $107,000 for the 13 weeks ended June 1, 2002 and June 2, 2001, respectively.
Net cash provided by financing activities was $3,000 for the 13 weeks ended June
1, 2002 and $160,000 was used in financing activities for the 13 weeks ended
June 2, 2001.
The Company has a revolving credit agreement with a bank for a line of credit
not to exceed $20,000,000 through May 3, 2003. Except for funds provided from
this credit agreement, the Company has satisfied its operating and capital
expenditure requirements needs. As of June 1, 2002 and June 2, 2001 there were
no outstanding borrowings under the revolving credit agreement.
The Company has planned capital expenditures of approximately $5,000,000 for the
fiscal year ending March 1, 2003. Through the 13 week period ended June 1, 2002
the Company has incurred $1,020,000 of capital expenditures.
On June 7, 2002, the Company's Board of Directors authorized the repurchase of
up to 20% of its outstanding shares of common stock (not to exceed 3,200,000
shares) at prevailing market prices through June 7, 2004. No purchases of stock
were made during the quarter ended June 1, 2002.
Management believes that existing cash, internally generated funds, trade credit
and funds available from the revolving credit agreement will be sufficient for
working capital and capital expenditure requirements for the fiscal year ending
March 1, 2003.
IMPACT OF INFLATION AND CHANGING PRICES
Although the Company cannot accurately determine the precise effect of inflation
on its operations, it does not believe inflation has had a material effect on
sales or results of operations.
9
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SYMS CORP AND SUBSIDIARIES
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PART II. OTHER INFORMATION
- --------------------------------------------------------------------------------
Item 1. LEGAL PROCEEDINGS - None
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS - None
Item 3. DEFAULTS UPON SENIOR SECURITIES - None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None
Item 5. OTHER INFORMATION - None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K - None
SIGNATURES
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.
SYMS CORP
DATE: JULY 9, 2002 BY // MARCY SYMS
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MARCY SYMS
CHIEF EXECUTIVE OFFICER
DATE: JULY 9, 2002 BY // ANTONE F. MOREIRA
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ANTONE F. MOREIRA
VICE PRESIDENT, CHIEF FINANCIAL
OFFICER
(Principal Financial and Accounting Officer)
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