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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended February 2, 2002
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
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Commission File No. 0-20664
BOOKS-A-MILLION, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 63-0798460
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
402 INDUSTRIAL LANE
BIRMINGHAM, ALABAMA 35211
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (205) 942-3737
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class)
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 [ ]
CONTINUED
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 the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [ ].
The aggregate market value of the voting stock held by non-affiliates
of the Registrant (assuming for these purposes, but without conceding, that all
executive officers and directors are "affiliates" of the Registrant) as of April
16, 2002 (based on the closing sale price as reported on the NASDAQ National
Market on such date), was $50,685,491.
The number of shares outstanding of the Registrant's Common Stock as of
April 16, 2002 was 16,188,346.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Stockholders for the fiscal year ended
February 2, 2002 are incorporated by reference into Part II of this report.
Portions of the Proxy Statement for the Annual Meeting of Stockholders
to be held on June 6, 2002 are incorporated by reference into Part III of this
report.
PART I
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
This document contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, that involve a
number of risks and uncertainties. A number of factors could cause actual
results, performance, achievements of the Company, or industry results to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. These factors include,
but are not limited to, the competitive environment in the book retail industry
in general and in the Company's specific market areas; inflation; economic
conditions in general and in the Company's specific market areas; the number of
store openings and closings; the profitability of certain product lines, capital
expenditures and future liquidity; liability and other claims asserted against
the Company; uncertainties related to the Internet and the Company's Internet
initiative ; and other factors referenced herein. In addition, such
forward-looking statements are necessarily dependent upon assumptions, estimates
and dates that may be incorrect or imprecise and involve known and unknown
risks, uncertainties and other factors. Accordingly, any forward-looking
statements included herein do not purport to be predictions of future events or
circumstances and may not be realized. Given these uncertainties, shareholders
and prospective investors are cautioned not to place undue reliance on such
forward-looking statements. The Company disclaims any obligations to update any
such factors or to publicly announce the results of any revisions to any of the
forward-looking statements contained herein to reflect future events or
developments.
ITEM 1. BUSINESS
GENERAL
Books-A-Million, Inc. (the "Company" or the "Registrant") is a leading
book retailer and is one of the dominant book retailers in the southeastern
United States. The Company, which was founded in 1917, has developed several
store formats to address the various market areas it serves. Superstores, the
first of which was opened in 1988, average approximately 20,000 square feet and
operate under the name "Books-A-Million" and "Books and Co." Smaller bookstores,
which are operated under the name "Bookland," have approximately 4,000 square
feet and are located primarily in malls. The Company also operates newsstands
under the name "Joe Muggs Newsstands." Newsstands average approximately 2,300
square feet and are located in mostly larger markets. All store formats,
excluding newsstands, offer an extensive selection of best sellers and other
hardcover and paperback books, magazines, and newspapers. In addition to the
retail store formats, the Company offers its products over the Internet at
Booksamillion.com and Joemuggs.com. The Company is also a wholesaler of books
to, among others, bookstores, wholesale clubs, supermarkets, department stores
and mass merchandisers. Additionally, the Company has a subsidiary which
provides website development and maintenance services.
The Company was originally incorporated under the laws of the State of
Alabama in 1964 and was reincorporated in Delaware in September 1992. The
principal executive offices of the Company are located at 402 Industrial Lane,
Birmingham, Alabama 35211, and its telephone number is (205) 942-3737. Unless
the context otherwise requires, references to the Company include its wholly
owned subsidiaries, American Wholesale Book Company, Inc. ("American Wholesale")
and American Internet Services, Inc. ("AIS").
ACQUISITION
During fiscal 2002, the Company acquired lease rights and inventory of
18 stores from Crown Books Corporation for $6.5 million. The stores are located
in the Chicago, Illinois and Washington, D.C. metropolitan areas. The results of
operations for these stores were reflected in the consolidated financial
statements beginning in the first quarter of fiscal 2002.
SUPERSTORES
The Company opened its first Books-A-Million superstore in April 1988.
The Company developed its superstores to capitalize on the growing consumer
demand for the convenience, selection and value associated with the superstore
retailing format. Each superstore is designed to be a receptive and open
environment conducive to browsing and reading and includes ample space for
promotional events open to the public, including book autograph sessions and
children's storytelling. The Company operates 157 superstores as of February 2,
2002.
Superstores emphasize selection, value and customer service.
Superstores offer an extensive selection of best sellers and other hardcover and
paperback books, magazines, local newspapers, greeting cards and gifts.
Superstores also dedicate space to bargain books that are sold at a discount
from publishers' originally suggested retail prices. Each superstore has a
service center staffed with associates who are knowledgeable about the store's
merchandise and who are trained to answer customers' questions, assist customers
in locating books within the store and place special orders. The majority of the
superstores also include an
espresso and coffee bar called Joe Muggs. The Company's superstores are
conveniently located on major, high-traffic roads and in enclosed malls or strip
shopping centers with adequate parking. Superstores are generally open Mondays
through Saturdays from 9:00 a.m. to 11:00 p.m. and Sundays 9:00 am through 9:00
p.m.
BOOKLAND STORES
The Company's Bookland stores operate as traditional bookstores or
combination book and greeting card stores, both of which are tailored to the
size, demographics and competitive conditions of the particular market area.
Bookland stores average between 3,500 and 4,500 square feet and carry a broad
selection of best sellers and other hardcover and paperback books, bargain
books, magazines, gifts and greeting cards. The Company has 40 Bookland stores
as of February 2, 2002.
JOE MUGGS NEWSSTANDS
The Company's newsstands are concentrated in business and entertainment
districts and are tailored to the demographics of the particular market area.
Newsstands average approximately 2,300 square feet and carry a broad selection
of newspapers and magazines, along with hardcover and paperback books. The
newsstands also offer an espresso and coffee bar. The Company operated 7
newsstands as of February 2, 2002.
MERCHANDISING
The Company employs several value-oriented merchandising strategies.
Books on the Company's best-seller list, which is developed exclusively by the
Company based on its sales and customer demand in its stores, are generally sold
in the Company's superstores below publishers' suggested retail prices. In
addition, superstore customers can join the Millionaire's Club and save 10% on
all purchases in Books-A-Million superstores, including already discounted
best-sellers. Bookland store customers can join the Read & Save Club and enjoy
similar discounts. The Company's point-of-sale computer system provides the data
necessary to enable the Company to anticipate consumer demand and customize
store inventory selection to reflect local customer interest and demand.
MARKETING
The Company promotes its bookstores principally through the use of
geographically concentrated newspaper advertising and direct mail circulars, as
well as point-of-sale materials posted and distributed in the stores. In certain
markets, television advertising is also used on a selective basis. The Company
also arranges for special appearances and book autograph sessions with
recognized authors to attract customers and to build and reinforce customer
awareness of its stores. A substantial portion of the Company's advertising
expenses are reimbursed from publishers through their cooperative advertising
programs.
STORE OPERATIONS AND SITE SELECTION
In choosing specific store sites within a market area, the Company
applies standardized site selection criteria that take into account numerous
factors, including the local demographics, desirability of available leasing
arrangements, proximity to existing Company operations and overall level of
retail activity. In general, stores are located on major high-traffic roads
convenient to customers and have adequate parking. The Company generally
negotiates short-term leases with renewal options. The Company periodically
reviews the profitability trends and prospects of each of its stores and
evaluates whether or not any underperforming stores should be closed, converted
to a different format or relocated to more desirable locations.
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INTERNET OPERATIONS
The Company, through its wholly owned subsidiary, AIS, sells a broad
range of products over the Internet under the name Booksamillion.com. Products
sold by Booksamillion.com are similar to those sold in the Company's
Books-A-Million superstores and include a wide selection of books, magazines and
gift items. Booksamillion.com also operates an online cafe on its web site under
the name Joemuggs.com. Joemuggs.com offers a wide selection of whole bean
coffee, confections and related gift items for purchase over the Internet.
The Company is assisted in its Internet development efforts through a
wholly owned subsidiary of AIS, NetCentral, Inc., which is based in Nashville,
Tennessee. In addition to providing web development and maintenance for all of
the Company's Internet sites and networking initiatives, NetCentral also serves
several outside customers by offering site development, web hosting and
technical services.
PURCHASING
The Company's purchasing decisions are centralized and are made by the
Company's merchandising department. The Company's buyers negotiate terms,
discounts and cooperative advertising allowances for all the Company's
bookstores and decide which books to purchase, in what quantity and for which
stores. The buyers use current inventory and sales information provided by the
Company's in-store point-of-sale computer system to make reorder decisions.
The Company purchases merchandise from over 500 vendors. The Company
purchases the majority of its collectors' supplies from one supplier and
substantially all of its magazines from another supplier, each of which is a
related party. No one vendor accounted for more than 10.0% of the Company's
overall merchandise purchases in the fiscal year ended February 2, 2002. In
general, approximately 80% of the Company's inventory may be returned by the
Company for full credit, which substantially reduces the Company's risk of
inventory obsolescence.
DISTRIBUTION CAPABILITIES
American Wholesale receives a substantial portion of its inventory
shipments, including substantially all of its books, at its two facilities
located in Florence and Tuscumbia, Alabama. Orders from the Company's bookstores
are processed by computer and assembled for delivery to the stores on
pre-determined weekly schedules. Substantially all deliveries of inventory from
American Wholesale's facilities are made by their dedicated transportation
fleet. At the time deliveries are made to each of the Company's stores, returns
of slow moving or obsolete books are picked up and returned to the American
Wholesale returns processing center. American Wholesale then returns these books
to publishers for credit.
COMPETITION
The retail bookstore industry is highly competitive and includes
competitors that have substantially greater financial and other resources than
the Company. The Company competes directly with national bookstore chains,
independent bookstores, booksellers on the Internet, certain mass merchandisers
and greeting card stores. The Company is one of the top three retail bookstore
chains in the nation. In recent years, competing bookstore chains have been
expanding their businesses and certain leading regional and national chains have
developed and opened superstores and Internet web sites. The Company also
experiences indirect competition from retail specialty stores that offer books
in a particular area of specialty. Management believes that the key competitive
factors in the retail book industry are convenience of location, selection,
customer service and price.
SEASONALITY
Similar to many retailers, the Company's business is seasonal, with its
highest retail sales, gross profit and net income historically occurring in its
fourth fiscal quarter. This seasonal pattern reflects the increased demand for
books and gifts experienced during the year-end holiday selling season. Working
capital requirements are generally at their highest during the third fiscal
quarter and the early part of the fourth fiscal quarter due to the seasonality
of the Company's business. The Company's results of operations depend
significantly upon net sales generated during the fourth fiscal
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quarter, and any significant adverse trend in the net sales of such period would
have a material adverse effect on the Company's results of operations for the
full year. In addition to seasonality, the Company's results of operations may
fluctuate from quarter to quarter as a result of the amount and timing of sales
and profits contributed by new stores as well as other factors. Accordingly, the
addition of a large number of new stores in a particular fiscal quarter could
adversely affect the Company's results of operations for that quarter.
TRADEMARKS
"Books-A-Million," "BAM!," "Bookland," "Books & Co.," "Millionaire's
Club," "Sweet Water Press," "Thanks-A-Million," "Big Fat Coloring Book," "Up All
Night Reader," "Read & Save Rebate", "Readables Accessories for Reader",
"Kids-A-Million," "Teachers First," "The Write-Price," "Bambeanos," "Book$mart",
"BAMM", "BAMM.com", "BOOKSAMILLION.com", "Chillatte", "Joe Muggs Newsstand" and
"NetCentral" are the primary registered trademarks of the Company. Management
does not believe that these trademarks are crucial to the continuation of the
Company's operations.
EMPLOYEES
As of fiscal year end, the Company employed approximately 2,800
full-time associates and 2,300 part-time associates. The number of part-time
associates employed by the Company fluctuates based upon seasonal needs. None of
the Company's associates are covered by a collective bargaining agreement, and
management believes that the Company's relations with its associates are
excellent.
ITEM 2. PROPERTIES
The Company's bookstores are located either in enclosed malls or strip
shopping centers. All of the Company's stores are leased. Generally, these
leases have terms ranging from five to ten years and require the Company to pay
a fixed minimum rental fee and/or a rental fee based on a percentage of net
sales together with certain customary costs (such as property taxes, common area
maintenance and insurance).
The Company's principal executive offices are located in a 20,550
square foot leased building located in Birmingham, Alabama. The Company's has an
additional 20,000 square foot leased building located in Irondale, Alabama. Both
leases involve related parties. The Birmingham, Alabama office space lease
extends to January 31, 2006, and the Irondale, Alabama office space lease
extends to December 31,2002. In addition, the Company leases approximately 4,025
square feet of office space in Nashville, Tennessee which extends to January 31,
2003.
American Wholesale owns its wholesale distribution center that is
located in an approximately 290,000 square foot facility located in Florence,
Alabama. During fiscal 1995 and 1996, the Company financed the acquisition and
construction of the wholesale distribution facility through loans obtained from
the proceeds of an industrial revenue bond, which are secured by a mortgage
interest in this facility. The Company also leases, from a related party, a
second warehouse facility, which is located in an approximately 177,450 square
foot facility in Tuscumbia, Alabama. In addition, the Company leases all of the
tractors that pull the company owned trailers, which comprise its transportation
fleet.
ITEM 3. LEGAL PROCEEDINGS
The Company is a party to various legal proceedings incidental to its
business. In the opinion of management, after consultation with legal counsel,
the ultimate liability, if any, with respect to those proceedings is not
presently expected to materially affect the financial position or results of
operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information under the heading "Market and Dividend Information" on
page 21 (inside back cover) of the Annual Report to Stockholders for the year
ended February 2, 2002 is incorporated herein by reference.
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ITEM 6. SELECTED FINANCIAL DATA
The information under the heading "Selected Consolidated Financial
Data" for the years ended January 31, 1998, through February 2, 2002 on page 4
of the Annual Report to Stockholders for the year ended February 2, 2002, is
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information under the heading "Management's Discussion & Analysis
of Financial Condition & Results of Operations" on pages 5 through 7 of the
Annual Report to Stockholders for the year ended February 2, 2002 is
incorporated herein by reference.
ITEM 7.A. MARKET RISK
The information in note 3 "Debt and Lines of Credit" in the Notes to
Consolidated Financial Statements on page 15 of the Annual Report to
Stockholders for the year ended February 2, 2002 is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following financial statements of the Registrant and its
subsidiaries included in the Annual Report to Stockholders for the year ended
February 2, 2002 are incorporated herein by reference:
Consolidated Balance Sheets as of February 2, 2002 and February 3,
2001.
Consolidated Statements of Operations for the Fiscal Years Ended
February 2, 2002, February 3, 2001 and January 29, 2000.
Consolidated Statements of Stockholders' Investment for the Fiscal
Years Ended February 2, 2002, February 3, 2001, and January
29, 2000.
Consolidated Statements of Cash Flows for the Fiscal Years Ended
February 2, 2002, February 3, 2001, and January 29, 2000.
Notes to Consolidated Financial Statements.
Report of Independent Public Accountants.
The information under the heading "Summary of Quarterly Results
(Unaudited)" on page 19 of the Annual Report to Stockholders
for the Fiscal Years Ended February 2, 2002 and February 3,
2001 is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
Arthur Andersen, LLP was the Company's independent accountants for
fiscal 2002 and has been its independent accountants since its initial public
offering in 1992. The Company dismissed Arthur Andersen, LLP as its independent
accountants on April 26, 2002. The decision to dismiss Arthur Andersen as the
Company's independent accountants was recommended and approved by the Audit
Committee of the Board of Directors. Arthur Andersen's report on the Company's
financial statements for the past two years did not contain an adverse opinion
or a disclaimer of opinion, and was not qualified or modified as to uncertainty,
audit scope or accounting principles. In addition, during the two most recent
fiscal years and since the end of fiscal year 2002, there were no disagreements
with Arthur Andersen, LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Arthur Andersen would have
caused Arthur Andersen to make reference to the subject matter of the
disagreement in connection with its report.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
The sections under the heading "Proposal I-Election of Directors"
entitled "Nominee for Election - Term Expiring 2005", "Incumbent Directors -
Term Expiring 2004" and "Incumbent Directors - Term Expiring 2003" on pages 2
through 4 of the Proxy Statement for the Annual Meeting of Stockholders to be
held June 6, 2002, are incorporated herein by reference for information on the
directors of the Registrant.
EXECUTIVE OFFICERS
All executive officers of the Company are elected annually by and serve
at the discretion of the Board of Directors. The executive officers of the
Company are listed below:
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
Clyde B. Anderson 41 Chairman of the Board and Chief Executive Officer
Sandra B. Cochran 43 President and Secretary
Terrance G. Finley 48 Executive Vice President of Books-A-Million, Inc. and
President of American Internet Services, Inc.
Richard S. Wallington 43 Chief Financial Officer
Clyde B. Anderson has served as a director of the Company since August
1987. Mr. Anderson has served as the Chairman of the Board of the Company since
January 2000 and the Chief Executive Officer of the Company since July 1992. Mr.
Anderson served as the President of the Company from November 1987 to August
1999. From November 1987 to March 1994, Mr. Anderson also served as the
Company's Chief Operating Officer. Mr. Anderson serves on the Board of Directors
and the Compensation Committee of Hibbett Sporting Goods, Inc., a sporting goods
retailer. Mr. Anderson is the son of Charles C. Anderson and the brother of
Terry C. Anderson, both members of the Company's Board of Directors.
Sandra B. Cochran has served as President of the Company since August
1999 and Secretary since June 1998. Ms. Cochran served as the Executive Vice
President from February 1996 to August 1999 and as Chief Financial Officer from
September 1993 to August 1999. Ms. Cochran previously served as Vice President
and Assistant Secretary of the Company from August 1992 to September 1993. Prior
to joining the Company, Ms. Cochran served as a Vice President (as well as in
other capacities) of SunTrust Securities, Inc., a subsidiary of SunTrust Banks,
Inc. for more than five years.
Terrance G. Finley has served as Executive Vice President of the
Company since October 2001 and as the President of American Internet Services,
Inc. since December 1998. Mr. Finley served as Senior Vice President -
Merchandising from January 1998 to December 1998. Mr. Finley served as Vice
President - Merchandising from April 1994 to January 1998 and was named an
executive officer of the Company in March 1995. Mr. Finley served as the General
Manager of Book$mart from February 1992 to April 1994. Prior to joining the
Company, Mr. Finley served as the Vice President - Sales for Smithmark
Publishers.
Richard S. Wallington has served as the Chief Financial Officer of the
Company since August 1999. Mr. Wallington served as Vice President and
Controller from September 1993 to August 1999. Prior to joining the Company, Mr.
Wallington served as the Director of Financial Reporting for Woodward & Lothrop,
a retail department store company.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's directors, executive officers and persons who own
beneficially more than 10% of the Company's Common Stock to file reports of
ownership and changes in ownership of such stock with the Securities and
Exchange Commission (the "SEC") and the NASDAQ Stock Market, Inc. Directors,
executive officers and greater than 10% stockholders are required by SEC
6
regulations to furnish the Company with copies of all such forms they file. To
the Company's knowledge, based solely on a review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, its directors, executive officers and greater than 10% stockholders
complied with all applicable Section 16(a) filing requirements during fiscal
2002.
ITEM 11. EXECUTIVE COMPENSATION
The sections under the heading "Executive Compensation," other than
those entitled "Report on Executive Compensation", "Compensation Committee
Interlocks and Insider Participation", "Certain Relationships and Related
Transactions" and "Performance Graph", on pages 9 through 16 of the Proxy
Statement for the Annual Meeting of Stockholders to be held June 6, 2002 are
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The section under the heading "Proposal I-Election of Directors"
entitled "Beneficial Ownership of Common Stock" on pages 7 and 8 of the Proxy
Statement for the Annual Meeting of Stockholders to be held June 6, 2002 is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The sections under the heading "Executive Compensation" entitled
"Compensation Committee Interlocks and Insider Participation" and "Certain
Relationships and Related Transactions" on pages 11 and 12 of the Proxy
Statement for the Annual Meeting of Stockholders to be held June 6, 2002 are
incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements
The following Consolidated Financial Statements of Books-A-Million,
Inc. and its subsidiaries, included in the Registrant's Annual Report
to Stockholders for the fiscal year ended February 2, 2002 are
incorporated by reference in Part II, Item 8:
Consolidated Balance Sheets as of February 2, 2002 and February 3,
2001.
Consolidated Statements of Operations for the Fiscal Years Ended
February 2, 2002, February 3, 2001, and January 29, 2000.
Consolidated Statements of Stockholders' Investment for the Fiscal
Years Ended February 2, 2002, February 3, 2001, and January
29, 2000.
Consolidated Statements of Cash Flows for the Fiscal Years Ended
February 2, 2002, February 3, 2001, and January 29, 2000.
Notes to Consolidated Financial Statements.
Report of Independent Public Accountants.
2. Financial Statement Schedule:
The following consolidated financial statement schedule of
Books-A-Million, Inc. is attached hereto:
Schedule 2 Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are not applicable, and therefore
have been omitted.
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3. Exhibits
Exhibit Number
- --------------
3.1 -- Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to Registration
Statement on Form S-1, File No. 33-52256, originally filed September 21, 1992).
3.2 -- Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to Registration Statement on
Form S-1, File No. 33-52256, originally filed September 21, 1992).
4.1 -- See Exhibits 3.1 and 3.2 hereto incorporated herein by reference to the Exhibits of the same number
to Registration Statement on Form S-1, File No. 33-52256, originally filed September 21,
1992.
10.1 -- Lease Agreement between First National Bank of Florence, Alabama, as Trustee, and Bookland Stores, Inc.
(which is a predecessor of the Registrant), an Alabama corporation, dated January 30, 1991
(incorporated by reference to Exhibit 10.1 to Registration Statement on Form S-1, File No.
33-52256, originally filed September 21, 1992).
10.2 -- Amended and Restated Stock Option Plan (incorporated by reference to Exhibit 10.2 to Annual Report on
Form 10-K for the fiscal year ended January 30, 1999, File No. 0-20664, filed on April 30,
1999).
10.3 -- Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.7 to Registration Statement on
Form S-1, File No. 33-52256, originally filed September 21, 1992).
10.4 -- Amendment to Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.6 to Annual Report
on Form 10-K for the fiscal year ended January 29, 1994, File No. 0-20664, filed on April 29,
1994).
10.5 -- 1999 Amended and Restated Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.5 to
Annual Report on Form 10-K for the fiscal year ended January 29, 2000, File No. 0-20664,
filed on April 28, 2000).
10.6 -- 401(k) Plan (together with related documents) (incorporated by reference to Exhibit 10.9 to
Registration Statement on Form S-1, File No. 33-52256, originally filed September 21, 1992).
10.7 -- Shareholders Agreement dated as of September 1, 1992 (incorporated by reference to Exhibit 10.9 to
Annual Report on Form 10-K for the fiscal year ended January 31, 1993, File No. 0-20664,
filed May 3, 1993).
10.8 -- Executive Incentive Plan (incorporated by reference to Exhibit 10.8 to Annual Report on Form 10-K for
the fiscal year ended January 28, 1995, File No. 0-20664, filed April 28, 1995).
10.9 -- Short-Term Credit Agreement dated as of October 27, 1995, between the Company and AmSouth Bank, N.A.
(incorporated by reference to Exhibit 10.6 to Annual Report on Form 10-K for the fiscal year
ended February 3, 1996, File No. 0-20664, filed May 3, 1996).
10.10 -- Revolving Loan Agreement dated as of October 27, 1995 between the Company and AmSouth Bank, N.A.
(incorporated by reference to Exhibit 10.10 to Annual Report on Form 10-K for the fiscal year
ended February 3, 1996, File 0-20664, filed May 3, 1996).
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10.11 -- First amendment to Short-Term Credit Agreement, dated as of November 1, 1996 between the Company and
AmSouth Bank, N.A. (incorporated by reference to Exhibit 10.11 to Annual Report on Form 10-K
for the fiscal year ended February 1, 1997, File 0-20664, filed May 2, 1997).
10.12 -- First amendment to Revolving Loan Agreement dated June 4, 1997 between the Company and AmSouth Bank of
Alabama, SunTrust Bank, Atlanta and NationsBank, N.A. and Master Assignment and Acceptance
Agreement dated November 7, 1997 between AmSouth Bank, NationsBank, N.A., SunTrust Bank,
Atlanta and SouthTrust Bank, N.A. (incorporated by reference to Exhibit 10.11 to Annual
Report on Form 10-K for the fiscal year ended January 31, 1998, File 0-20664, filed May 1,
1998).
10.13 -- Second amendment to Short-Term Credit Agreement, dated June 4, 1997 between the Company and AmSouth
Bank of Alabama (incorporated by reference to Exhibit 10.12 to Annual Report on Form 10-K for
the fiscal year ended January 31, 1998, File 0-20664, filed May 1, 1998).
10.14 -- Second amendment to Revolving Loan Agreement dated June 19, 1998 between the Company and AmSouth Bank
of Alabama, SunTrust Bank, Atlanta, NationsBank, N.A. and SouthTrust Bank, National
Association and Master Assignment and Acceptance Agreement dated November 7, 1997 between
AmSouth Bank, NationsBank, N.A., SunTrust Bank, Atlanta and SouthTrust Bank, N. A.
(incorporated by reference to Exhibit 10.14 to Annual Report on Form 10-K for the fiscal year
ended January 30, 1999, File No. 0-20664, filed on April 30, 1999).
10.15 -- Third amendment to Short-Term Credit Agreement, dated June 3, 1998 between the Company and AmSouth
Bank of Alabama (incorporated by reference to Exhibit 10.15 to Annual Report on Form 10-K for
the fiscal year ended January 30, 1999, File No. 0-20664, filed on April 30, 1999).
10.16 -- Third amendment to Revolving Loan Agreement dated June 18, 1999 between the Company and AmSouth Bank
of Alabama, SunTrust Bank, Atlanta, NationsBank, N.A. and SouthTrust Bank, National
Association and Master Assignment and Acceptance Agreement dated November 7, 1997 between
AmSouth Bank, NationsBank, N.A., SunTrust Bank, Atlanta and SouthTrust Bank, N. A.
(incorporated by reference to Exhibit 10.16 to Annual Report on Form 10-K for the fiscal year
ended January 29, 2000, File No. 0-20664, filed on April 28, 2000).
10.17 -- Fourth amendment to Short-Term Credit Agreement, dated September 25, 2000 between the Company and
AmSouth Bank (incorporated by reference to Exhibit 10.17 to Annual Report on Form 10-K for
the fiscal year ended February 3, 2001, File No. 0-20664, filed on May 4, 2001).
10.18 -- Fourth amendment to Revolving Loan Agreement dated September 25, 2000 between the Company and AmSouth
Bank, SunTrust Bank, Atlanta, NationsBank, N.A. and SouthTrust Bank, N.A. (incorporated by
reference to Exhibit 10.18 to Annual Report on Form 10-K for the fiscal year ended February
3, 2001, File No. 0-20664, filed on May 4, 2001).
10.19 -- Stock Option Plans for Booksamillion.com, American Internet Service, Inc., Netcentral, Inc. and
Faithpoint, Inc. (incorporated by reference to Exhibit 10.19 to Annual Report on Form 10-K
for the fiscal year ended February 3, 2001, File No. 0-20664, filed on May 4, 2001).
13 -- Portions of the Annual Report to Stockholders for the year ended February 2, 2002 that are expressly
incorporated by reference into Part II of this Report.
16 -- Letter from Arthur Andersen LLP to the Securities and Exchange Commission dated May 3, 2002.
21 -- Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to Annual Report on
Form 10-K for the fiscal year ended February 3, 2001, File No. 0-20664, filed on May 4, 2001).
23 -- Consent of Independent Public Accountants to the incorporation of their report on the Company's
consolidated financial statements for the fiscal year ended February 2, 2002, into the
Registration Statements on Form S-8. (File Nos. 33-72812 and 33-86980).
99 -- Letter from Books-A-Million, Inc. to the Securities and Exchange Commission dated April 19, 2002.
9
(b) Reports on Form 8-K
Incorporated herein by reference.
(c) See Item 14(a)(3), the Exhibit Index and the Exhibits attached hereto.
(d) See Item 14(a)(2).
10
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.
BOOKS-A-MILLION, INC.
by: /s/ Clyde B. Anderson
---------------------------------------------------
Clyde B. Anderson
Chairman of the Board and Chief Executive Officer
Date: April 29, 2002
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:
PRINCIPAL EXECUTIVE OFFICER:
/s/ Clyde B. Anderson
- --------------------------------------------------
Clyde B. Anderson
Chairman of the Board and Chief Executive Officer
Date: April 29, 2002
PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:
/s/ Richard S. Wallington
- --------------------------------------------------
Richard S. Wallington
Chief Financial Officer
Date: April 29, 2002
DIRECTORS:
/s/ Clyde B. Anderson
- --------------------------------------------------
Clyde B. Anderson
Date: April 29, 2002
/s/ Charles C. Anderson
- --------------------------------------------------
Charles C. Anderson
Date: April 29, 2002
DIRECTORS:
/s/ Ronald G. Bruno
- --------------------------------------------------
Ronald G. Bruno
Date: April 29, 2002
/s/ J. Barry Mason
- --------------------------------------------------
J. Barry Mason
Date: April 29, 2002
/s/ Terry C. Anderson
- --------------------------------------------------
Terry C. Anderson
Date: April 29, 2002
/s/ William H. Rogers, Jr.
- --------------------------------------------------
William H. Rogers, Jr.
Date: April 29, 2002
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Books-A-Million, Inc.:
We have audited in accordance with auditing standards generally accepted in the
United States, the consolidated financial statements of BOOKS-A-MILLION, INC. (A
Delaware corporation) AND ITS SUBSIDIARIES incorporated by reference in this
Form 10-K and have issued our report thereon dated March 19, 2002. Our audit was
made for the purpose of forming an opinion on the basic financial statements
taken as a whole. The schedule listed in the accompanying index is the
responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Birmingham, Alabama
March 19, 2002
S-1
SCHEDULE 2.
BOOKS-A-MILLION, INC.
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JANUARY 29, 2000, FEBRUARY 3, 2001 AND FEBRUARY 2, 2002
CHARGED/
BALANCE AT (CREDITED) (DEDUCTIONS)/
BEGINNING TO COSTS RECOVERIES BALANCE AT
OF YEAR AND EXPENSES NET END OF YEAR
---------- ------------ ------------- -----------
FOR THE YEAR ENDED JANUARY 29, 2000:
Allowance for doubtful accounts $ 938,623 $898,830 $(348,556) $1,488,897
FOR THE YEAR ENDED FEBRUARY 3, 2001:
Allowance for doubtful accounts $1,488,897 $218,044 $(920,060) $ 786,881
FOR THE YEAR ENDED FEBRUARY 2, 2002:
Allowance for doubtful accounts $ 786,881 $567,913 $(569,902) $ 784,892
S-2
INDEX TO EXHIBITS
Exhibit Number
- --------------
3.1 -- Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to Registration
Statement on Form S-1, File No. 33-52256, originally filed September 21, 1992).
3.2 -- Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to Registration Statement on
Form S-1, File No. 33-52256, originally filed September 21, 1992).
4.1 -- See Exhibits 3.1 and 3.2 hereto incorporated herein by reference to the Exhibits of the same number
to Registration Statement on Form S-1, File No. 33-52256, originally filed September 21,
1992.
10.1 -- Lease Agreement between First National Bank of Florence, Alabama, as Trustee, and Bookland Stores, Inc.
(which is a predecessor of the Registrant), an Alabama corporation, dated January 30, 1991
(incorporated by reference to Exhibit 10.1 to Registration Statement on Form S-1, File No.
33-52256, originally filed September 21, 1992).
10.2 -- Amended and Restated Stock Option Plan (incorporated by reference to Exhibit 10.2 to Annual Report on
Form 10-K for the fiscal year ended January 30, 1999, File No. 0-20664, filed on April 30,
1999).
10.3 -- Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.7 to Registration Statement on
Form S-1, File No. 33-52256, originally filed September 21, 1992).
10.4 -- Amendment to Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.6 to Annual Report
on Form 10-K for the fiscal year ended January 29, 1994, File No. 0-20664, filed on April 29,
1994).
10.5 -- 1999 Amended and Restated Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.5 to
Annual Report on Form 10-K for the fiscal year ended January 29, 2000, File No. 0-20664,
filed on April 28, 2000).
10.6 -- 401(k) Plan (together with related documents) (incorporated by reference to Exhibit 10.9 to
Registration Statement on Form S-1, File No. 33-52256, originally filed September 21, 1992).
10.7 -- Shareholders Agreement dated as of September 1, 1992 (incorporated by reference to Exhibit 10.9 to
Annual Report on Form 10-K for the fiscal year ended January 31, 1993, File No. 0-20664,
filed May 3, 1993).
10.8 -- Executive Incentive Plan (incorporated by reference to Exhibit 10.8 to Annual Report on Form 10-K for
the fiscal year ended January 28, 1995, File No. 0-20664, filed April 28, 1995).
10.9 -- Short-Term Credit Agreement dated as of October 27, 1995, between the Company and AmSouth Bank, N.A.
(incorporated by reference to Exhibit 10.6 to Annual Report on Form 10-K for the fiscal year
ended February 3, 1996, File No. 0-20664, filed May 3, 1996).
10.10 -- Revolving Loan Agreement dated as of October 27, 1995 between the Company and AmSouth Bank, N.A.
(incorporated by reference to Exhibit 10.10 to Annual Report on Form 10-K for the fiscal year
ended February 3, 1996, File 0-20664, filed May 3, 1996).
10.11 -- First amendment to Short-Term Credit Agreement, dated as of November 1, 1996 between the Company and
AmSouth Bank, N.A. (incorporated by reference to Exhibit 10.11 to Annual Report on Form 10-K
for the fiscal year ended February 1, 1997, File 0-20664, filed May 2, 1997).
10.12 -- First amendment to Revolving Loan Agreement dated June 4, 1997 between the Company and AmSouth Bank of
Alabama, SunTrust Bank, Atlanta and NationsBank, N.A. and Master Assignment and Acceptance
Agreement dated November 7, 1997 between AmSouth Bank, NationsBank, N.A., SunTrust Bank,
Atlanta and SouthTrust Bank, N.A. (incorporated by reference to Exhibit 10.11 to Annual
Report on Form 10-K for the fiscal year ended January 31, 1998, File 0-20664, filed May 1,
1998).
10.13 -- Second amendment to Short-Term Credit Agreement, dated June 4, 1997 between the Company and AmSouth
Bank of Alabama (incorporated by reference to Exhibit 10.12 to Annual Report on Form 10-K for
the fiscal year ended January 31, 1998, File 0-20664, filed May 1, 1998).
10.14 -- Second amendment to Revolving Loan Agreement dated June 19, 1998 between the Company and AmSouth Bank
of Alabama, SunTrust Bank, Atlanta, NationsBank, N.A. and SouthTrust Bank, National
Association and Master Assignment and Acceptance Agreement dated November 7, 1997 between
AmSouth Bank, NationsBank, N.A., SunTrust Bank, Atlanta and SouthTrust Bank, N.A.
(incorporated by reference to Exhibit 10.14 to Annual Report on Form 10-K for the fiscal year
ended January 30, 1999, File No. 0-20664, filed on April 30, 1999).
10.15 -- Third amendment to Short-Term Credit Agreement, dated June 3, 1998 between the Company and AmSouth
Bank of Alabama (incorporated by reference to Exhibit 10.15 to Annual Report on Form 10-K for
the fiscal year ended January 30, 1999, File No. 0-20664, filed on April 30, 1999).
10.16 -- Third amendment to Revolving Loan Agreement dated June 18, 1999 between the Company and AmSouth Bank
of Alabama, SunTrust Bank, Atlanta, NationsBank, N.A. and SouthTrust Bank, National
Association and Master Assignment and Acceptance Agreement dated November 7, 1997 between
AmSouth Bank, NationsBank, N.A., SunTrust Bank, Atlanta and SouthTrust Bank, N.A.
(incorporated by reference to Exhibit 10.16 to Annual Report on Form 10-K for the fiscal year
ended January 29, 2000, File No. 0-20664, filed on April 28, 2000).
10.17 -- Fourth amendment to Short-Term Credit Agreement, dated September 25, 2000 between the Company and
AmSouth Bank (incorporated by reference to Exhibit 10.17 to Annual Report on Form 10-K for
the fiscal year ended February 3, 2001, File No. 0-20664, filed on May 4, 2001).
10.18 -- Fourth amendment to Revolving Loan Agreement dated September 25, 2000 between the Company and AmSouth
Bank, SunTrust Bank, Atlanta, NationsBank, N.A. and SouthTrust Bank,N.A. (incorporated by
reference to Exhibit 10.18 to Annual Report on Form 10-K for the fiscal year ended February
3, 2001, File No. 0-20664, filed on May 4, 2001).
10.19 -- Stock Option Plans for Booksamillion.com, American Internet Service, Inc., Netcentral, Inc. and
Faithpoint, Inc. (incorporated by reference to Exhibit 10.19 to Annual Report on Form 10-K
for the fiscal year ended February 3, 2001, File No. 0-20664, filed on May 4, 2001).
13 -- Portions of the Annual Report to Stockholders for the year ended February 2, 2002 that are expressly
incorporated by reference into Part II of this Report.
16 -- Letter from Arthur Andersen LLP to the Securities and Exchange Commission dated May 3, 2002.
21 -- Subsidiaries of the Registrant (incorporated by reference to Exhibit 21 to Annual Report on
Form 10-K for the fiscal year ended February 3, 2001, File No 0-20664, filed on May 4, 2001).
23 -- Consent of Independent Public Accountants to the incorporation of their report on the Company's
consolidated financial statements for the fiscal year ended February 2, 2002, into the
Registration Statements on Form S-8. (File Nos. 33-72812 and 33-86980).
99 -- Letter from Books-A-Million, Inc. to the Securities and Exchange Commission dated April 19, 2002.