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1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 29, 1994
Commission file number 1-8897
CONSOLIDATED STORES CORPORATION
A Delaware Corporation
IRS No. 06-1119097
1105 North Market Street, Suite 1300
P.O. Box 8985
Wilmington, Delaware 19899
(302) 478-4896
Securities registered pursuant to Section 12(b) of the Act:
Name of each Exchange
Title of each class on which registered
------------------- -------------------
Common Stock $.01 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Indicate 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, and (2) has been subject to such filing requirements for
the past 90 days. Yes [ X ] No [ ]
Indicate if the 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 a definitive proxy or information statement
incorporated by reference in Part III of this FORM 10-K or any amendment to
this FORM 10-K [ ]
The aggregate market value (based on the closing price on the New York Stock
Exchange) of the Common Stock of the Registrant held by nonaffiliates of the
Registrant was $798,793,870 on March 31, 1994. For purposes of this response,
executive officers and directors are deemed to be the affiliates of the
Registrant and the holdings by nonaffiliates was computed as 46,306,891 shares.
The number of shares of Common Stock $.01 par value per share, outstanding as
of March 31, 1994, was 46,583,193 and there were no shares of Non-Voting
Common Stock, $.01 par value per share outstanding at that date.
Documents Incorporated By Reference
Portions of the Registrant's Proxy Statement are incorporated into Part III.
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FORM 10-K
ANNUAL REPORT
FOR THE FISCAL YEAR ENDED JANUARY 29, 1994
TABLE OF CONTENTS
PART I
Page
Item 1. Business 2
Item 2. Properties 4
Item 3. Legal Proceedings 5
Item 4. Submission of Matters to Vote of Security Holders 5
PART II
Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters 6
Item 6. Selected Financial Data 6
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 8. Financial Statements and Supplementary Data 12
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures 26
PART III
Item 10. Directors and Executive Officers of the Registrant 26
Item 11. Executive Compensation 26
Item 12. Security Ownership of Certain Beneficial Owners and
Management 26
Item 13. Certain Relationships and Related Transactions 26
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K 26
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PART I
ITEM 1 BUSINESS
GENERAL
At January 29, 1994, Consolidated Stores Corporation (Company) conducted retail
operations in 22 states and is the largest close-out retail company in the
world. Through its principal operating subsidiary the Company operates 432
close-out retail stores under the name "Odd Lots" and "Big Lots" in 18
midwestern, southeastern and eastern states, and 177 single price point stores
under the name "All for One" (AFO) in 15 states. The Company considers the
general economic conditions of all markets in which it has retail operations to
be good. Consumer goods are also sold on a wholesale basis throughout the
continental United States.
The Company purchases and sells large quantities of close-out merchandise. Such
merchandise consists of new, primarily brand name products, generally
manufacturers' excess inventories, discontinued merchandise or goods that have
not been sold successfully by traditional retailers and is obtained at a
fraction of initial wholesale prices.
As a result of the holiday selling season the fourth quarter generally reflects
higher net income and net sales than the other quarters. The first quarter of
the fiscal year is usually the least profitable representing a traditional
softness in retail sales following the holiday season.
Substantially all operations are conducted through subsidiaries, and references
to the "Company" in this Item 1 include the Company and its subsidiaries.
PURCHASING
Purchasing for the retail operations, Odd Lots, Big Lots and AFO, is conducted
by a single group of buyers. This buying group purchases merchandise from
sources throughout the world and continually seeks opportunities created by
manufacturers' overproduction and close-out circumstances, the overstocked
inventories of wholesalers and retailers, receiverships, bankruptcies and
financially distressed businesses, as well as other supply channels. The
primary sources of merchandise are manufacturers, distributors, and importers.
Many manufacturers and wholesalers offer some or all of their close-out
merchandise to the Company prior to attempting to dispose of it through other
channels. Historically, there have been various sources of supply available
for each category of merchandise sold.
In many cases, the Company has developed valuable sources from which it obtains
certain lines of merchandise on a continuing basis. The Company has purchase
commitments to acquire certain lines of paper products over the next five years
or as later may be extended. Utilization of purchase commitments in the future
will be evaluated based on the general availability of the line of merchandise
offered and other economic and operational factors. Long term purchase
commitments are not foreseen to be a major source of merchandise in the future.
RETAIL OPERATIONS - ODD LOTS AND BIG LOTS
Certain general categories of merchandise are offered on a continual basis,
although specific lines, products and manufacturers change frequently.
Inventories depend primarily on the types of merchandise available for
acquisition at any given time.
Historically, Odd Lots and Big Lots stores have offered substantial savings on
housewares, electronics, hardware, automotive supplies, food items, health and
beauty aids, sporting goods, toys, jewelry and softgoods. The stores also carry
on a regular basis consumer items such as paint, batteries, electrical wire and
accessories, trash bags, pet food, hand tools, greeting cards, and seasonal
goods, including Christmas items, which are purchased directly from
manufacturers, suppliers and importers on a recurring basis.
The stores advertise primarily in circulars. Odd Lots and Big Lots have also
engaged in a limited amount of advertising on television and radio. During the
fiscal year ended January 29, 1994, advertising expenditures were approximately
3.1 percent of net sales.
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All Odd Lots and Big Lots stores are located in leased facilities and range in
total size from 10,080 to 81,193 square feet. The average store is
approximately 27,700 square feet in size. Generally, locations of 20,000 to
40,000 square feet are solicited with emphasis on locations of 22,000 to 30,000
square feet. Approximately 71.4% of the area of each store represents selling
space.
Primary in selecting suitable store locations are existing structures which can
be refurbished in a manner consistent with the intended merchandising concept.
All of the stores are located in strip shopping centers or are free standing.
During the fiscal year ended January 29, 1994, 71 Odd Lots and Big Lots stores
were opened, 20 closed, and it is estimated that by the end of the current
fiscal year approximately 70 (55-60 net of store closings) new stores will be
opened. Generally, a new store is profitable in its first full year of
operation. Stores considered for closing are selectively evaluated by a Real
Estate Committee, comprised of management, to established profitability
standards. The cost of opening a new store in a leased facility is
approximately $550,000 to $650,000, including inventory.
AFO
During fiscal 1993, 21 AFO stores were opened and 4 were closed. The AFO stores
combine the value of quality merchandise, in a lively exciting environment, at
a single price point of one dollar. The stores are located in fully enclosed
malls or high traffic strip centers with major anchor stores. The AFO concept
draws on pedestrian traffic in these locations to attract the value shopper who
buys on impulse.
Each store carries a varied line of value-oriented general consumer
merchandise, similar to the categories available in Odd Lots and Big Lots
stores, which can be offered at the one dollar price point. During 1994, a
limited amount of floor space in selected AFO stores will be dedicated to
offering merchandise at a price point above one dollar. The area dedicated to
over one dollar merchandise in any particular store will be dependent on
available space, lease restrictions, if any, and the demographics of a
particular location.
In general the AFO operations do not independently advertise merchandise
available for sale. Advertising by participation in mall or strip center
sponsored programs are the only regularly scheduled advertising promotions.
All AFO stores are located in leased facilities and range in total size from
1,833 to 7,667 square feet and average approximately 3,652 square feet in size.
Approximately 74.5% of the area of each store represents selling space.
Generally, locations of 3,000 to 5,000 square feet are considered desirable for
lease.
The cost of opening a store in a leased facility averages approximately
$150,000 to $200,000, including inventory.
DISTRIBUTION
All merchandise distribution activities are conducted from central distribution
facilities located in Columbus, Ohio. A majority of the merchandise purchased
for the stores is shipped by common carrier directly to the distribution
facilities and from there is shipped by truck to the various stores utilizing
an outside transportation company.
OTHER OPERATIONS
The Company also sells goods wholesale from its corporate office in Columbus,
Ohio. The inventory consists almost entirely of merchandise obtained through
the same or shared opportunistic purchases of the retail operation.
Advertising of wholesale merchandise is conducted primarily at trade shows and
by mailings to past and potential customers. Wholesale customers include a wide
and varied range of major national and regional retailers, as well as smaller
retailers, manufacturers, distributors, and wholesalers.
ASSOCIATES
At January 29, 1994, the Company had 16,399 active associates. At any time
throughout fiscal 1993, approximately two-thirds of the associates were
employed on a part-time basis. Temporary associates hired during the Christmas
selling season increased the number of associates to a peak of 19,487 in fiscal
1993. The relationship with associates is considered to be good and the Company
is not a party to any labor agreements.
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COMPETITIVE CONDITIONS
The retail operations compete with discount department stores, deep discount
drugstore chains, and other value oriented specialty retailers. The Company
also competes with numerous distributors, jobbers, exporters, dealers, and
others which sell many of the items sold wholesale by the registrant.
Competition is often intense; however, by reason of the ability to make
purchase of close-out, bulk, and surplus items, the Company believes its prices
compare favorably with those of its competitors.
There is increasing competition for the purchase of such merchandise. The
Company believes that it has, and will continue to have, sufficient sources to
enable it to continue purchasing such merchandise in the future. Furthermore,
the wholesale capabilities and, as the number and sales volume of its stores
grow, the ability to take advantage of opportunistic purchases of large
quantities of merchandise at favorable prices will increase accordingly.
ITEM 2 PROPERTIES
CORPORATE, WAREHOUSE AND DISTRIBUTION
The Company owns a 2,500,000-square-foot office, warehouse and distribution
facility. Approximately 150,000 square feet of this facility represent office
space utilized for corporate offices. The balance represents warehouse and
distribution space. Warehousing and distribution is also conducted from a
leased 390,000-square-foot facility. Both facilities are located in Columbus,
Ohio.
The owned warehouse and distribution facility is fully mechanized for the
warehousing and distribution of retail merchandise. Approximately 1,850,000
square feet is utilized for retail operations and 500,000 square feet for
wholesale inventories. The leased facility is dedicated for AFO merchandise
distribution. All stores are serviced from these warehouse and distribution
facilities.
Early in 1994, completion of a 387,000-square-foot expansion of the owned
warehouse and distribution facility is planned. The additional space will be
utilized for the distribution and warehouse requirements of the retail
operations.
STORES
All stores are in leased facilities. Store leases generally provide for fixed
monthly rental payments plus the payment, in most cases, of real estate taxes,
utilities, liability insurance and maintenance. In some locations, the leases
provide formulas requiring the payment of a percentage of sales as additional
rent. Such payments are generally only required when sales reach a specified
level. The typical store lease is for an initial term of three to five years
with a five-year renewal option. The following tables set forth store lease
expiration information for existing and committed leases and a state location
summary at January 29, 1994.
Number of Store Leases Expiring
Number of Store Leases Expiring Without Renewal Options
------------------------------------------- ------------------------------------
Odd Lots Odd Lots
and and
Fiscal Year Big Lots AFO Big Lots AFO
------------------------ -------------- ----------------- --------------- -------------------
1994 54 3 16 1
1995 113 16 21 2
1996 88 21 20 9
1997 88 67 25 7
1998 23 12 7 -
1999 and thereafter 69 58 19 2
-------------- ----------------- --------------- -------------------
Total 435 177 108 21
Of the 177 AFO leases 109 are in enclosed malls and 68 are in strip centers.
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Number of Stores Open
-----------------------------------
Odd Lots
and
Big Lots AFO
----------------- --------------
Alabama 13 -
Colorado - 7
Florida 31 13
Georgia 27 -
Iowa - 7
Illinois 17 22
Indiana 36 12
Kentucky 28 8
Maryland 3 2
Michigan 30 23
Minnesota - 6
Missouri 9 -
North Carolina 18 -
Nebraska - 2
New York 4 -
Ohio 106 56
Pennsylvania 17 9
South Carolina 13 -
Tennessee 27 1
Virginia 22 3
Wisconsin 9 -
West Virginia 22 6
----------------- --------------
432 177
Number of states 18 15
ITEM 3 LEGAL PROCEEDINGS
The Company is party to various legal proceedings arising from its ordinary
course of operations and believes that the outcome of these proceedings,
individually and in aggregate, will be immaterial.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
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EXECUTIVE OFFICERS OF THE COMPANY
(Included pursuant to Instruction 3 to paragraph (b) of Item 401 of Regulation S-K.)
Officer
Name Age Offices Held Since
--------------------- ---------------- ----------------------------------------------------- ------------------
William G. Kelley 48 Chairman of the Board and Chief Executive Officer 1990
Brady J. Churches 35 President 1981
William B. Snow 62 Executive Vice President and Chief Financial 1985
Officer
Jerry D. Sommers 43 Executive Vice President, Merchandising 1987
Albert J. Bell 34 Sr. Vice President, Legal, Real Estate, Secretary 1988
and General Counsel
M. Steven Bromet 52 Sr. Vice President, Information Services and Human 1988
Resources
Donald A. Mierzwa 44 Sr. Vice President, Store Operations 1991
James A. McGrady 43 Vice President and Treasurer 1991
Michael J. Potter 32 Vice President and Controller 1991
James E. Eggenschwiler 35 Director - Legal, Assistant General Counsel and 1992
Assistant Secretary
Executive officers are appointed by the Board of Directors and serve at the pleasure of the Board.
PART II
ITEM 5 MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Company's common stock is listed on the New York Stock Exchange (NYSE)
under the symbol "CNS." The following table reflects the high and low sales
price per share of common stock as quoted from the NYSE composite transactions
for the fiscal periods indicated.
1993 1992
High Low High Low
------------- ------------- ------------- ------------
First Quarter 20 1/8 14 1/8 16 5/8 12 3/8
Second Quarter 19 1/2 14 3/4 15 3/4 10 3/4
Third Quarter 22 1/8 16 1/2 17 10
Fourth Quarter 22 1/4 17 1/4 18 3/4 15 3/4
The Company has followed a policy of reinvesting earnings in the business and
consequently has not paid any cash dividends. At the present time, no change in
this policy is under consideration by the Board of Directors. The payment of
cash dividends in the future will be determined by the Board of Directors in
consideration of business conditions then existing, including the Company's
earnings, financial requirements and condition, opportunities for reinvesting
earnings, and other factors.
ITEM 6 SELECTED FINANCIAL DATA
The statement of earnings data and the balance sheet data has been derived from
the Company's consolidated financial statements and should be read in
conjunction with Management's Discussion and Analysis of Financial Condition
and Results of Operations and the Consolidated Financial Statements and Notes
thereto included elsewhere herein.
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Five Year Fiscal Year Ended
Compound ---------------------------------------------------------------------------------------
Annual JANUARY 29, January 30, February 1, February 2, February 3, January 28,
Growth Rate 1994 1993 1992 1991 1990* 1989
====================================================================================================================================
($ In thousands, except per share and sales per sq. ft. amounts)
STATEMENT OF OPERATIONS DATA:
Net sales:
Odd Lots and Big Lots 9.4 % $ 941,471 $837,805 $744,896 $662,050 $593,519 $601,008
All for One ** 92,283 72,986 7,685 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total Retail 11.5 1,033,754 910,791 752,581 662,050 593,519 601,008
Other (3.4) 21,537 18,489 18,916 17,253 15,162 25,549
- ------------------------------------------------------------------------------------------------------------------------------------
11.0 1,055,291 929,280 771,497 679,303 608,681 626,557
- ------------------------------------------------------------------------------------------------------------------------------------
Cost of sales:
Odd Lots and Big Lots 8.4 531,605 479,536 441,351 405,919 352,783 355,190
All for One ** 45,275 36,973 4,084 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total Retail 10.2 576,880 516,509 445,435 405,919 352,783 355,190
Other (2.3) 16,358 13,895 14,047 14,267 10,999 18,362
- ------------------------------------------------------------------------------------------------------------------------------------
9.7 593,238 530,404 459,482 420,186 363,782 373,552
- ------------------------------------------------------------------------------------------------------------------------------------
Gross profit 12.8 462,053 398,876 312,015 259,117 244,899 253,005
Selling and administrative 12.8 386,116 334,494 273,704 243,878 233,442 211,407
expenses
Unusual items ** - - - - 16,692 -
- ------------------------------------------------------------------------------------------------------------------------------------
Operating profit (loss) 12.8 75,937 64,382 38,311 15,239 (5,235) 41,598
Other expense (1.4) (4,221) (4,116) (5,896) (8,608) (9,280) (4,536)
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes 14.1 71,716 60,266 32,415 6,631 (14,515) 37,062
Income taxes (credit) 14.7 28,689 23,156 12,317 2,086 (7,561) 14,434
- ------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) 13.7% $ 43,027 $ 37,110 $ 20,098 $ 4,545 $ (6,954) $ 22,628
====================================================================================================================================
Earnings (loss) per common and
common equivalent share of stock 12.5% $ 0.90 $ 0.78 $ .44 $ 0.10 $ (0.15) $ 0.50
====================================================================================================================================
Weighted average common and
common equivalent shares
outstanding (In thousands) 1.2% 47,976 47,676 45,797 45,615 45,456 45,238
====================================================================================================================================
BALANCE SHEET DATA:
Working capital $ 174,529 $142,305 $120,275 $100,033 $126,542 $108,757
Current ratio 2.3 2.2 2.2 2.3 3.0 2.4
Total assets $ 468,220 $390,942 $329,321 $288,119 $308,231 $286,156
Long-term obligations $ 50,000 $ 50,000 $ 50,000 $ 50,125 $ 91,087 $ 53,292
Stockholders' equity $ 258,535 $209,459 $170,520 $149,940 $144,776 $150,998
STORE OPERATING DATA:
Average sales per square foot*** $ 119.86 $ 115.64 $ 108.57 $ 100.68 $ 93.26 $ 103.14
New stores opened
Odd Lots and Big Lots 71 47 37 24 46 28
All for One 21 120 41 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
92 167 78 24 46 28
- ------------------------------------------------------------------------------------------------------------------------------------
Stores closed
Odd Lots and Big Lots 20 24 16 23 18 15
All for One 4 - 1 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
24 24 17 23 18 15
- ------------------------------------------------------------------------------------------------------------------------------------
Stores open at end of year
Odd Lots and Big Lots 432 381 358 337 336 308
All for One 177 160 40 - - -
- ------------------------------------------------------------------------------------------------------------------------------------
609 541 398 337 336 308
- ------------------------------------------------------------------------------------------------------------------------------------
* Consists of 53 weeks.
** Not applicable.
*** Based on stores open the full period.
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ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW AND TRENDS
The Company's business operations are comprised of one primary segment - the
retail sales of "close-out" merchandise. At January 29, 1994, retail sales were
conducted through 432 Odd Lots and Big Lots specialty retail stores offering
merchandise at substantial discounts and 177 All for One single price point
retail stores. Operations of Odd Lots and Big Lots have annually comprised in
excess of 88% of the total sales and gross profit in each of the past three
fiscal years. The number of stores in operation has significantly expanded over
the past three years increasing from 337 at the start of fiscal 1991 to 609 in
fiscal 1993. Funding for this store expansion, in addition to other capital
requirements, have been provided by internally generated funds from operations
supplemented on an interim basis by utilization of available credit facilities.
The retail operation is somewhat seasonal due to the fourth quarter holiday
selling season. As such the fourth quarter generally reflects higher net sales
and income. In contrast the first quarter of the fiscal year is generally the
least profitable displaying the customary softness in retail sales following
the holiday season. Quarterly fluctuations of inventory balances reflect the
opportunistic purchases available at any given time and the increase in the
number of stores. On a per store basis, inventories have traditionally been
lower at the end of the fiscal year and build throughout the next three
quarters to a peak level in anticipation of the holiday season.
RESULTS OF OPERATIONS
A $1 billion sales volume milestone was reached in fiscal 1993 as record sales
of $1.055 billion, a 13.6% increase, were achieved. Resulting net income of
$43.0 million, a 15.9% increase, was also a record.
The following table compares components of the statements of earnings as a
percent to net sales and presents the percentage change to the prior year.
Percent of Net Sales Percent Change
------------------------------------------ -------------------------
1993 1992 1991 1993-92 1992-91
================================================================================= =========================
Increase(decrease)
Net sales 100.0% 100.0% 100.0% 13.6% 20.5%
--------------------------------------------------------------------------------- -------------------------
Costs and expenses:
Cost of sales 56.2 57.1 59.6 11.8 15.4
Selling and administrative 36.6 36.0 35.5 15.4 22.2
expenses
Interest expense 0.6 0.6 0.7 2.0 (9.1)
Other income -- net (0.2) (0.2) - 0.6 328.5
-------------------------------------------------------------------------------- -------------------------
93.2 93.5 95.8 13.2 17.6
-------------------------------------------------------------------------------- -------------------------
Income before income taxes 6.8 6.5 4.2 19.0 85.9
Provision for income taxes 2.7 2.5 1.6 23.9 88.0
-------------------------------------------------------------------------------- -------------------------
Net income 4.1% 4.0% 2.6% 15.9% 84.6%
===============================================================================================================
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NET SALES
Significant increases in net sales have been realized over the past three
fiscal years. These increases have resulted primarily from the expanded number
of retail stores in operation and increases in comparable store sales (stores
open more than two years at the beginning of the year).
Net sales increased 13.6% to a record $1.055 billion in 1993 compared to $929.3
million in 1992, which increased 20.5% above 1991. The sales from 92 new store
openings contributed $106.7 million, 84.6%, of the 1993 increase. The $114.8
million in sales from 167 new stores opened in 1992 accounted for 72.8% of that
year's sales gain. Comparable store sales increases of 1.8%, $11.2 million, in
1993 and 4.3%, $24.9 million, in 1992 contributed approximately 8.9% and 15.8%
of those respective years' overall sales increases. Sales in the first quarter
and fourth quarter of fiscal 1993 were negatively impacted by the unusual
winter weather patterns that occurred in many of the markets stores operated.
Components of net sales are presented below:
Fiscal Year
---------------------------------------------------------------------------------------
1993 1992 1991
-------------------------------- ------------------------- ------------------------
Pct. to No. of Pct. to No. of Pct. to No. of
($ in thousands) Sales Total Stores Sales Total Stores Sales Total Stores*
================================================================= ========================= ========================
Stores open two or more years at
the beginning of the fiscal year $ 635,423 60.2% 277 $604,681 65.1% 273 $535,018 69.3% 252
Stores open less than two years at
the beginning of the fiscal year 270,624 25.7 240 163,767 17.6 101 140,179 18.2 69
Stores opened in the fiscal period 106,661 10.1 92 114,825 12.3 167 61,682 8.0 77
---------------------------------------------------------------- ------------------------ ------------------------
Total retail sales for stores open at
end of fiscal year 1,012,708 96.0 609 883,273 95.0 541 736,879 95.5 398
Stores closed in the fiscal period 21,046 2.0 24 27,518 3.0 24 15,702 2.0 17
---------------------------------------------------------------- ------------------------ ------------------------
Total retail sales 1,033,754 98.0 633 910,791 98.0 565 752,581 97.5 415
====== ====== ======
Other 21,537 2.0 18,489 2.0 18,916 2.5
------------------------------------------------------- --------------- ---------------
Total sales $1,055,291 100.0% $929,280 100.0% $771,497 100.0%
================================================================ =============== ===============
* Stores opened and closed in the same period are reflected as closed stores.
Comparable store sales
percent increase 1.8% 4.3% 5.6%
Net sales of ODD LOTS and BIG LOTS increased 12.4%, $103.7 million, compared to
a 12.5%, $92.9 million, increase in 1992. AFO sales increased 26.4%, $19.3
million, in 1993. The increase in 1992 AFO sales of $65.3 million is
principally the result of the 120 new store openings and the full year sales
effect of stores opened in 1991.
GROSS PROFIT
Gross profit for 1993 was $462.1 million, 43.8% of sales, compared to $398.9
million, or 42.9% of sales 1992. The gross profit as a percent of sales has
increased over the past three years primarily from planned improvements in
initial markups and an improved merchandise mix placing an emphasis to
eliminate or demphasize low margin or high markdown items. Improved inventory
shrink results have also enhanced gross margins over the past three years.
Inventory valuation allowances, primarily for inventory aging and similar
items, are adjusted throughout the year. Increases and decreases in these
valuations are subject to evaluation of supporting data and other factors
management believes to be relevant in the circumstances.
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An analysis by division of the contribution to total gross profit follows:
Fiscal Year
--------------------------------------------------------------------------------
1993 1992 1991
---------------------- ----------------------- ---------------------
Gross Pct. to Gross Pct. to Gross Pct. to
($ in thousands) Profit Total Profit Total Profit Total
====================================================== ======================= =====================
ODD LOTS and BIG LOTS $409,866 88.7% $358,269 89.8% $303,545 97.3%
AFO 47,008 10.2 36,013 9.0 3,601 1.1
------------------------------------------------------ ----------------------- ---------------------
Total retail 456,874 98.9 394,282 98.8 307,146 98.4
Other 5,179 1.1 4,594 1.2 4,869 1.6
------------------------------------------------------ ----------------------- ---------------------
Total gross profit $462,053 100.0% $398,876 100.0% $312,015 100.0%
====================================================== ======================= =====================
Gross profit as a percent of each division's sales are summarized below:
Pct. by Pct. by Pct. by
Division Division Division
=================================================== ======================= ===================
ODD LOTS and BIG LOTS 43.5% 42.8% 40.7%
AFO 50.9 49.3 46.9
--------------------------------------------------- ----------------------- -------------------
Total retail 44.2 43.3 40.8
Other 24.0 24.8 25.7
--------------------------------------------------- ----------------------- -------------------
Total gross profit 43.8% 42.9% 40.4%
=================================================== ======================= ===================
SELLING AND ADMINISTRATIVE EXPENSES
Selling and administrative expenses as a percent to sales increased .6% to
36.6% in 1993 compared with 36.0% in 1992. The volume increase of 15.4% between
1993 and 1992 is slightly higher than the 14.4% comparative increase in net
sales reflecting the effect of fixed store operating expenses on a lower than
planned sales base as a result of the winter storms discussed above. The 1992
increase of .5% to 36.0% from the 1991 level of 35.5% is associated with
expenses incurred to implement the systems and procedures, and hire personnel
to accommodate the planned growth in AFO.
INTEREST EXPENSE
Interest expense as a percent to net sales was .6% for 1993 and 1992, and .7%
in 1991. The volume of interest expense increased 2.0% in 1993 compared to 1992
and declined 9.1% in the 1992-1991 period comparison. For 1993 the volume
increase is associated with greater weighted average seasonal borrowings
throughout the year. This increase primarily reflects the full year impact of
the inventory levels associated with the 1992 AFO expansion and other capital
expenditures. In 1992 the weighted average borrowing related to credit
agreements was reduced compared to 1991 levels. Both 1993 and 1992 realized
benefits from lower effective interest rates on short-term borrowings.
INCOME TAXES
Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes," was adopted at the beginning of fiscal 1993. Adoption of the
accounting standard was not material to the financial position or results of
operations.
The effective tax rate increased to 40.0% in fiscal 1993 compared to 38.4% and
38.0% in the prior two fiscal periods. In 1993 the Omnibus Budget
Reconciliation Act of 1993 (Act) was signed into law. Major provisions of the
Act affecting the Company increased the Federal income tax rate from 34.0% to
35.0% and provided for the retroactive extension of the Targeted Jobs Tax
Credit (TJTC). Benefits recognized from TJTC as a reduction of the effective
tax rate in the prior three fiscal years have been .7%, 1.0%, and 2.9%,
respectively. Realization of any future TJTC benefits may be subject to Federal
legislation. Also, certain states in which operations are conducted have passed
legislation enacting future increased tax rates.
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CAPITAL RESOURCES AND LIQUIDITY
Sources of liquidity over the past three years have been derived from two
primary sources: operations and borrowings from available credit facilities.
Net cash provided from operating activities over the last three fiscal years,
as detailed in the consolidated statements of cash flows, have been $29.4
million, $34.9 million, and $53.8 million, respectively. As necessary the
Company utilized its available credit facilities to supplement cash provided
from operations, principally for store expansion, seasonal inventory purchases,
and capital expenditure programs. In 1993 long-term purchase commitments
provided a source of capital not previously utilized. Future use of such
long-term commitments are not anticipated to provide any significant capital
resources. The cash provided from operations over the past three fiscal years
has been sufficient whereby the Company has fully liquidated the balance of its
outstanding credit agreements prior to the fiscal year end. Total debt as a
percent of total capitalization, i.e., total debt and stockholders' equity, was
16.2% at January 29, 1994, compared with 19.3% and 22.7% at each of the
respective prior fiscal year ends. Working capital for each of the past three
fiscal years has increased to $174.5 million in 1993 from $142.3 million and
$120.3 million in 1992 and 1991, respectively. This data reflects the strength
of the Company's balance sheet and the capacity to absorb debt financing if
required.
Capital expenditures for 1993 were $46.0 million compared with $40.4 million
and $18.1 million in the previous two years. The capital expenditure program in
fiscal 1994 is anticipated to be approximately $50.0 million. Approximately
$8.5 million will be for completion of a 387,000-square-foot expansion of the
central distribution facility in the first quarter of 1994. New store expansion
of net 90-100 locations will utilize most of the balance of the 1994 capital
program.
At January 29, 1994, available credit facilities were $104.8 million under a
committed credit facility of $130.0 million plus an additional $45.0 million
under uncommitted facilities. The Company believes that capital resources from
currently available cash, cash generated from future operations, and the
availability of existing credit facilities will be sufficient to meet its
foreseeable capital and seasonal operating requirements.
NEW ACCOUNTING STANDARDS
In fiscal 1993 the Company adopted SFAS No. 106, "Employer's Accounting for
Postretirement Benefits Other Than Pensions," and SFAS No. 112 "Employer's
Accounting for Postemployment Benefits." SFAS No. 106 prescribes the
accounting for certain nonpension benefits provided to retired employees and
requires accrual of such benefits over the working life of the employee rather
than on a cash payment basis. SFAS No. 112 addresses the accounting for the
estimated cost of benefits provided to former or inactive employees prior to
retirement. Under the Company's present benefit structure, the effect of these
pronouncements was not material.
11
13
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of Consolidated Stores Corporation:
We have audited the accompanying consolidated balance sheets of
CONSOLIDATED STORES CORPORATION and subsidiaries as of January 29, 1994,
and January 30, 1993, and the related consolidated statements of earnings,
stockholders' equity and cash flows for each of the three fiscal years in
the period ended January 29, 1994. Our audits also included the financial
statement schedules listed in the Index at Item 14(a)2. These consolidated
financial statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements and
financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the consolidated financial position of CONSOLIDATED
STORES CORPORATION and subsidiaries as of January 29, 1994, and January
30, 1993, and the consolidated results of their operations and their cash
flows for each of the three fiscal years in the period ended January 29,
1994, in conformity with generally accepted accounting principles. Also,
in our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
Deloitte & Touche
Dayton, Ohio
February 19, 1994
12
14
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
Fiscal Year
1993 1992 1991
===========================================================================================================
Net sales $1,055,291 $929,280 $771,497
-----------------------------------------------------------------------------------------------------------
Costs and expenses:
Cost of sales 593,238 530,404 459,482
Selling and administrative expenses 386,116 334,494 273,704
Interest expense 5,812 5,697 6,265
Other income - net (1,591) (1,581) (369)
-----------------------------------------------------------------------------------------------------------
983,575 869,014 739,082
-----------------------------------------------------------------------------------------------------------
Income before income taxes 71,716 60,266 32,415
Provision for income taxes 28,689 23,156 12,317
-----------------------------------------------------------------------------------------------------------
Net income $ 43,027 $ 7,110 $ 20,098
===========================================================================================================
Earnings per common and common
equivalent share of stock $ 0.90 $ 0.78 $ 0.44
===========================================================================================================
The accompanying notes are an integral part of these financial statements.
13
15
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
JANUARY 29, January 30,
1994 1993
=============================================================================================================
ASSETS
Current Assets:
Cash and cash equivalents $ 24,873 $ 35,254
Accounts receivable 4,865 1,614
Inventories 252,880 202,843
Prepaid expenses 11,670 9,892
Deferred income taxes 16,541 12,017
-------------------------------------------------------------------------------------------------------------
Total current assets 310,829 261,620
-------------------------------------------------------------------------------------------------------------
Property and equipment - net 147,848 126,831
Other assets 9,543 2,491
-------------------------------------------------------------------------------------------------------------
$468,220 $390,942
=============================================================================================================
LIABILITIES' AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 81,545 $ 77,644
Accrued liabilities 31,632 29,708
Income taxes 23,123 11,963
-------------------------------------------------------------------------------------------------------------
Total current liabilities 136,300 119,315
-------------------------------------------------------------------------------------------------------------
Long-term obligations 50,000 50,000
Deferred income taxes 16,305 12,168
Other noncurrent liabilities 7,080 -
Commitments and contingencies - -
Stockholders' equity:
Preferred stock - authorized 2,000,000 shares,
$.01 par value; none issued - -
Common stock - authorized 90,000,000 shares, $.01 par
value; issued 46,485,428 shares and 46,164,546 shares,
respectively 465 462
Non-voting common stock - authorized 8,000,000 shares,
$.01 par value; none issued - -
Additional paid-in capital 89,817 86,545
Retained earnings 165,479 122,452
Other adjustments 2,774 -
-------------------------------------------------------------------------------------------------------------
Total stockholders' equity 258,535 209,459
-------------------------------------------------------------------------------------------------------------
$468,220 $390,942
=============================================================================================================
The accompanying notes are an integral part of these financial statements.
14
16
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)
Fiscal Year
1993 1992 1991
====================================================================================================
Common stock
Balance at beginning of year $ 462 $ 459 $ 436
Conversion of non-voting stock to voting - - 21
Exercise of stock options 3 3 2
----------------------------------------------------------------------------------------------------
Balance at end of year $ 465 $ 462 $ 459
====================================================================================================
Non-voting common stock
Balance at beginning of year $ - $ - $ 21
Conversion of non-voting stock to voting - - (21)
----------------------------------------------------------------------------------------------------
Balance at end of year $ - $ - $ -
====================================================================================================
Additional paid-in capital
Balance at beginning of year $ 86,545 $ 84,719 $ 84,239
Exercise of stock options 2,608 1,468 518
Cancellation of restricted stock - - (38)
Contribution to savings plan 664 358 -
----------------------------------------------------------------------------------------------------
Balance at end of year $ 89,817 $ 86,545 $ 84,719
====================================================================================================
Retained earnings
Balance at beginning of year $122,452 $ 85,342 $ 65,244
Net income for the year 43,027 37,110 20,098
----------------------------------------------------------------------------------------------------
Balance at end of year $165,479 $122,452 $ 85,342
====================================================================================================
Other adjustments
Balance at beginning of year $ - $ - $ -
Unrealized investment gain 4,188 - -
Minimum pension liability adjustment (1,414) - -
----------------------------------------------------------------------------------------------------
Balance at end of year $ 2,774 $ - $ -
====================================================================================================
The accompanying notes are an integral part of these financial statements.
15
17
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Fiscal Year
1993 1992 1991
=====================================================================================================
Cash flows from operating activities:
Net income $ 43,027 $ 37,110 $ 20,098
Adjustment for noncash items included
in net income:
Depreciation and amortization 23,685 19,542 16,149
Deferred income taxes (2,236) (319) (3,494)
Other 3,031 1,868 1,645
Change in assets and liabilities (38,081) (23,280) 19,435
-----------------------------------------------------------------------------------------------------
Net cash provided by operating activities 29,426 34,921 53,833
-----------------------------------------------------------------------------------------------------
Cash provided (used) by investment activities:
Capital expenditures (45,994) (40,401) (18,121)
Other 478 1,036 241
-----------------------------------------------------------------------------------------------------
Net cash used by investment activities (45,516) (39,365) (17,880)
-----------------------------------------------------------------------------------------------------
Cash provided (used) by financing activities:
Increase in deferred credits 4,723 - -
Principal payments of capital lease obligations - - (1,276)
Proceeds from exercise of stock options 986 566 520
-----------------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities 5,709 566 (756)
-----------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents $(10,381) $(3,878) $ 35,197
=====================================================================================================
The accompanying notes are an integral part of these financial statements.
16
18
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FISCAL YEAR
The Company follows the concept of a 52/53 week fiscal year which ends on the
Saturday nearest to January 31.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries. All significant intercompany transactions have
been eliminated.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of highly liquid investments which are
unrestricted as to withdrawal or use, and which have an original maturity of
three months or less. Cash equivalents are stated at cost which approximates
market value.
INVENTORIES
Retail inventories are stated at the lower of cost or market on the retail
method. Other inventories are stated at the lower of cost (first-in, first-out
method) or market.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization are provided on the straight line method for
financial reporting purposes. Service lives are principally forty years for
buildings and from four to ten years for other property and equipment.
INVESTMENTS
At January 29, 1994, the non-current investment in equity securities is
classified as Other Assets in the consolidated balance sheets and is stated at
fair value. Unrealized gains on equity securities classified as
available-for-sale are recorded as a separate component of stockholders' equity
net of applicable income taxes.
DEFERRED CREDITS
Deferred credits associated with purchase commitments are classified as other
noncurrent liabilities and are recognized when earned as a reduction of the
related inventory purchase cost.
PRE-OPENING COSTS
Non-capital expenditures associated with opening new stores are charged to
expense over the first twelve months of store operations.
INVENTORIES
Inventories are comprised of the following:
January 29, January 30,
(In thousands) 1994 1993
===================================================================================================
Retail $241,125 $192,244
Other 11,755 10,599
---------------------------------------------------------------------------------------------------
$252,880 $202,843
===================================================================================================
17
19
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
INCOME TAXES
Effective January 31, 1993, the Company adopted SFAS No. 109 "Accounting for
Income Taxes." The statement requires the use of the asset and liability
approach for financial reporting for income taxes. Financial statements for
prior years have not been restated and the cumulative effect of the accounting
change was not material. The provision for income taxes is comprised of the
following:
Fiscal Year
(In thousands) 1993 1992 1991
====================================================================================================
LIABILITY Deferred Deferred
METHOD Method Method
Federal - Currently payable $22,733 $18,775 $12,375
Deferred 387 (319) (3,494)
State and Local 5,569 4,700 3,436
----------------------------------------------------------------------------------------------------
$28,689 $23,156 $12,317
====================================================================================================
A reconciliation between the statutory federal income tax rate and the
effective tax rate follows:
Fiscal Year
1993 1992 1991
====================================================================================================
LIABILITY Deferred Deferred
METHOD Method Method
Statutory Federal income tax rate 35.0% 34.0% 34.0%
Effect of:
State and local income taxes 5.1 5.1 7.0
Targeted jobs tax credit (0.7) (1.0) (2.9)
Other 0.6 0.3 (0.1)
----------------------------------------------------------------------------------------------------
Effective tax rate 40.0% 38.4% 38.0%
====================================================================================================
Deferred taxes reflect the effects of temporary differences between carrying
amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes. For financial reporting purposes deferred
taxes are reflected without reduction for a valuation allowance. Components of
the Company's deferred tax assets and liabilities at January 29, 1994, are as
follows:
(In thousands)
===============================================================================
Deferred tax assets:
Uniform inventory capitalization $ 6,877
Inventory valuation allowance 2,831
Deferred credits 2,602
Other (each less than 5% of total assets) 4,231
-------------------------------------------------------------------------------
Total deferred tax assets 16,541
-------------------------------------------------------------------------------
Deferred tax liabilities:
Depreciation 13,464
Unrealized gain 2,792
Other 49
-------------------------------------------------------------------------------
Total deferred tax liabilities 16,305
-------------------------------------------------------------------------------
Net deferred tax assets $ 236
===============================================================================
18
20
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
INCOME TAXES - CONTINUED
The fiscal 1992 and 1991 provision for deferred income taxes is comprised of
the following:
Fiscal Year
(In thousands) 1992 1991
============================================================================================================
Deferred Deferred
Method Method
Depreciation $(2,625) $ (137)
Inventory valuation allowance (39) 2,748
Financial reporting expenses in excess of those allowable for tax 2,318 1,855
Alternative minimum tax - (1,468)
Other (each less than 5% of the computed "Expected" Federal tax amount) 665 496
------------------------------------------------------------------------------------------------------------
$ 319 $3,494
============================================================================================================
Net income taxes paid were $19,288,000, $19,170,000, and $8,082,000 in 1993,
1992, and 1991, respectively.
LONG-TERM OBLIGATIONS
SENIOR NOTES
The 10.5% senior notes are due in semi-annual principal payments commencing in
February 1995, until maturity in August 2002. Subject to the provisions of the
Note Purchase Agreement (Agreement) the Company may prepay all or part of the
outstanding principal balance subsequent to July 1993. The Agreement contains
provisions specifying certain limitations on the Company's operations including
the amount of future long-term obligations, investments, dividends and the
maintenance of specific operating ratios. At January 29, 1994, $91,551,000 of
retained earnings were available for dividends under provisions of the
Agreement.
The fair value of the senior notes is estimated based on the current rates
offered to the Company for debt with similar terms and remaining maturities.
The estimated fair value of the senior notes at January 29, 1994, was
$57,584,000 and the related carrying amount was $50,000,000. Maturities of
senior notes during the next five fiscal years are as follows:
(In thousands)
=======================================================================
1994 $ -
1995 15,000
1996 10,000
1997 5,000
1998 5,000
19
21
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
LONG-TERM OBLIGATIONS - CONTINUED
CREDIT AGREEMENTS
The Company has a $130,000,000 unsecured revolving credit agreement through
June 1, 1995, and a term loan for outstanding borrowings for one year
thereafter. The funds available under this agreement may be used for working
capital requirements and other general corporate purposes. The Company has the
option to borrow at various interest rates and is required to pay a 1/8 of 1%
commitment fee on the average daily undrawn funds. Provisions of the agreement
include the maintenance of certain standard financial ratios similar to those
described for senior notes. Additionally, $45,000,000 of uncommitted
short-term credit facilities were available at January 29, 1994. No borrowings
were outstanding under any such credit agreements.
The Company was contingently liable for outstanding letters of credit totaling
$25,171,000 at January 29, 1994.
Interest paid, including capitalized interest of $486,000 in 1993, totaled
$6,314,000, $5,775,000, and $6,017,000, for fiscal years 1993, 1992, and 1991,
respectively.
DEFERRED CREDITS
The Company received payments during fiscal 1993 related to commitments to
certain vendors for future inventory purchases. Open commitments at January 29,
1994 were approximately $103,000,000 to be purchased through fiscal 1998 or
later as may be extended. There are no annual minimum purchase requirements.
EMPLOYEE BENEFIT PLANS
PENSION PLAN
The Company has a defined benefit pension plan covering substantially all of
its employees. Benefits are based on credited years of service and the
employee's compensation during the last five years of employment. The
Company's funding policy is to contribute annually the amount required to
meet ERISA funding standards. Contributions are intended to provide not only
for benefits attributed to service to date but also for those anticipated to
be earned in the future. Subsequent to January 29, 1994, the Company amended
its pension plan to provide benefits only to employees hired on or before
March 31, 1994.
The components of net periodic pension cost are comprised of the following:
(In thousands) 1993 1992 1991
=======================================================================================================
Service cost - benefits earned in the period $ 944 $1,248 $1,182
Interest cost on projected benefit obligation 592 492 377
Investment return on plan assets (557) (373) (230)
Net amortization and deferral 96 175 206
-------------------------------------------------------------------------------------------------------
Net periodic pension cost $1,075 $1,542 $1,535
=======================================================================================================
Assumptions used in each year of the actuarial computations were:
Discount rate 7.2% 8.5% 8.5%
Rate of increase in compensation levels 5.0% 5.5% 5.0%
Expected long-term rate of return 9.0% 9.0% 9.0%
20
22
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
EMPLOYEE BENEFIT PLANS - CONTINUED
PENSION PLAN - CONTINUED
The following table sets forth the funded status of the Company's defined
benefit plan.
(In thousands) 1993 1992
====================================================================================================
Actuarial present value of:
Vested benefit obligation $ 6,097 $ 5,338
Non-vested benefits 1,943 1,214
----------------------------------------------------------------------------------------------------
Accumulated benefit obligation $ 8,040 $ 6,552
====================================================================================================
Actuarial present value of projected benefit obligation $10,325 $ 8,206
Plan assets at fair value, primarily cash equivalents, U.S. Government
securities and obligations, and publicly traded stocks and mutual funds 6,451 5,581
----------------------------------------------------------------------------------------------------
Projected benefit obligation in excess of plan assets (3,874) (2,625)
Unrecognized prior service cost (1,218) (1,354)
Unrecognized net obligation at transition 265 278
Unrecognized net loss 5,595 2,729
Recognition of minimum pension liability (2,357) -
----------------------------------------------------------------------------------------------------
Accrued pension cost $(1,589) $ (972)
====================================================================================================
Provisions of SFAS No. 87, "Employers' Accounting for Pensions," require
recognition of a minimum pension liability relating to certain unfunded pension
obligations. Principally as a result of the decrease in discount rate and
change in plan benefits in 1993, the Company recorded a minimum pension
liability of $2,357,000 with a corresponding reduction of stockholders' equity,
net of tax benefits.
SAVINGS PLAN
The Company has a savings plan with a 401(k) deferral feature for all eligible
employees. Provisions of $1,390,000, $920,000, and $733,000 have been charged
to operations in fiscal 1993, 1992, and 1991, respectively.
LEASES
Leased property consists of the Company's retail stores. Store leases generally
provide for fixed monthly rental payments plus the payments, in most cases, of
real estate taxes, utilities, liability insurance and maintenance. Certain
leases provide for contingent rents, in addition to the fixed monthly rent,
based on a percentage of store sales above a specified level. Additionally,
leases generally provide options to extend the original terms for an additional
two to twenty years.
21
23
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
LEASES - CONTINUED
Minimum operating lease commitments as of January 29, 1994, are as follows:
(In thousands)
=============================================================================
1994 $ 44,299
1995 39,488
1996 30,159
1997 20,464
1998 11,949
Subsequent to 1998 17,922
-----------------------------------------------------------------------------
Total minimum operating lease payments $164,281
=============================================================================
Total rental expense consisted of the following:
Fiscal Year
(In thousands) 1993 1992 1991
===============================================================================================
Buildings $51,105 $42,339 $32,720
Equipment 2,807 2,017 1,447
-----------------------------------------------------------------------------------------------
$53,912 $44,356 $34,167
===============================================================================================
STOCKHOLDERS' EQUITY
EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
Earnings per common and common equivalent share are based on the weighted
average number of shares outstanding during each period and, in 1993 and 1992,
on the additional number of shares which would have been issuable upon
exercise of stock options, assuming that the Company used the proceeds received
to purchase additional shares at market value. The average number of common and
common equivalent shares outstanding during fiscal 1993, 1992 and 1991 were
47,976,396, 47,676,377, and 45,797,325, respectively.
STOCKHOLDER RIGHTS PLAN
Each share of the Company's common stock has one Right attached. The Rights
trade with the common stock and only become exercisable, or transferable apart
from the common stock, ten business days after a person or group (Acquiring
Person) acquires beneficial ownership of, or commences a tender or exchange
offer for, 20% or more of the Company's common stock. Each Right, under certain
circumstances, entitles its holder to acquire one one-hundredth of a share of
Series A Junior Participating Preferred Stock at a price of $35, subject to
adjustment. If 20% of the Company's common stock is acquired, or a tender offer
to acquire 20% of the Company's common stock is made, each Right not owned by
an Acquiring Person will entitle the holder to purchase Company common stock
having a market value of twice the exercise price of the Rights. In addition,
if the Company is involved in a merger or other business combination at any
time there is a 20% or more stockholder of the Company, the Rights will entitle
a holder to buy a number of shares of common stock of the acquiring company
having a market value of twice the exercise price of each Right. The Rights may
be redeemed by the Company at $.01 per Right at any time until the tenth day
following public announcement that a 20% position has been acquired. The Rights
expire on April 18, 1999, and at no time have voting power.
22
24
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
STOCKHOLDERS' EQUITY - CONTINUED
PREFERRED STOCK
In conjunction with the Stockholder Rights Plan the Company has reserved
600,000 shares of preferred stock for issuance thereunder.
STOCK PLANS
STOCK OPTION PLANS
The Company has a Stock Option Plan (Plan) which provides
for the grant of options to executives for the purchase of up to 6,800,000
shares of the Company's common stock. The Plan requires that all options be
granted at an exercise price at least equal to the fair market value of the
common stock at the date of grant. The options generally become exercisable one
year following the original date of grant in five equal annual installments.
However, upon an effective change in control of the Company all options granted
become exercisable.
The Company has a Director Stock Option Plan (DSOP), for non-employee
directors, pursuant to which up to 200,000 shares of the Company's common stock
may be issued upon exercise of options granted thereunder. The DSOP is
administered by the Compensation Committee of the Board of Directors pursuant
to an established formula. Neither the Board of Directors, nor the Compensation
Committee, exercise any discretion in administration of the DSOP. Grants are
made annually, 90 days following the annual meeting of stockholders, at an
exercise price equal to 100% of the fair market value on the date of grant. The
present formula provides for an annual grant of 5,000 options to each
non-employee director which becomes fully exercisable over a three year period,
beginning one year subsequent to grant.
The following table reflects transactions for all plans:
Shares Price Range
=============================================================================================
Outstanding February 2, 1991 3,000,550 $ 2.12 - 4.88
Granted 1,151,452 $ 3.50 - 13.13
Canceled 158,780 $ 2.12 - 11.25
Exercised 234,060 $ 2.12 - 4.88
---------------------------------------------------------------------------------------------
Outstanding February 1, 1992 3,759,162 $ 2.12 - 13.13
Granted 653,180 $ 10.13 - 15.38
Canceled 176,840 $ 2.12 - 13.38
Exercised 207,790 $ 2.12 - 9.38
---------------------------------------------------------------------------------------------
Outstanding January 30, 1993 4,027,712 $ 2.12 - 15.38
Granted 708,600 $ 15.00 - 20.00
Canceled 107,160 $ 2.12 - 16.13
Exercised 283,945 $ 2.12 - 13.38
=============================================================================================
Outstanding January 29, 1994 4,345,207 $ 2.12 - 20.00
=============================================================================================
Exercisable January 29, 1994 2,008,176 $ 2.12 - 15.38
=============================================================================================
Available For Grant At January 29, 1994 1,522,738
==================================================================
23
25
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
STOCK PLANS - CONTINUED
RESTRICTED STOCK
The Company's Restricted Stock Plan (Plan) permits the granting of 500,000
shares of restricted stock awards to key employees, officers and directors. The
shares are restricted as to the right of sale and other disposition until
vested as determined by the Board of Directors. The Plan provides that on any
event that results in a change in effective control of the Company, all awards
of restricted stock would become vested as of the date of such change in
effective control. The Plan terminates in 1997 or when sooner terminated by the
Company's Board of Directors.
The cost of the awards, determined at the date of grant, is charged to income
over the period the restriction lapses. As of January 29, 1994, no restricted
shares were outstanding with respect to which restrictions had not lapsed and
shares available for grant totaled 391,822.
ADDITIONAL DATA
The following is a summary of certain additional financial data:
JANUARY 29, January 30,
(In thousands) 1994 1993
=========================================================================================================
Other assets:
Investment in equity securities* $ 7,428 $ 318
Net cash surrender value of life insurance policies 1,392 1,423
Other 723 750
---------------------------------------------------------------------------------------------------------
$ 9,543 $ 2,491
=========================================================================================================
* Stated at fair value in 1994 and at cost in 1993.
Property and equipment - at cost:
Land $ 5,260 $ 5,249
Buildings 52,062 50,400
Fixtures and equipment 165,764 144,839
Transportation equipment 7,203 3,391
---------------------------------------------------------------------------------------------------------
230,289 203,879
Construction--in-progress 14,393 _
---------------------------------------------------------------------------------------------------------
244,682 203,879
Less accumulated depreciation 96,834 77,048
---------------------------------------------------------------------------------------------------------
$147,848 $126,831
=========================================================================================================
Accrued liabilities:
Salaries and wages $ 8,771 $ 7,448
Property, payroll and other taxes 20,014 19,397
Other 2,847 2,863
---------------------------------------------------------------------------------------------------------
$ 31,632 $ 29,708
=========================================================================================================
24
26
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
ADDITIONAL DATA - CONTINUED
The following analysis supplements changes in assets and liabilities presented
in the consolidated statements of cash flows.
Fiscal Year
(In thousands) 1993 1992 1991
=========================================================================================
Accounts receivable $ (3,251) $ 151 $ 526
Inventories (50,037) (40,899) (1,389)
Prepaid expenses (1,778) (2,905) (1,765)
Accounts payable 3,901 14,414 6,782
Accrued liabilities 1,924 2,390 8,228
Income taxes 11,160 3,569 7,053
-----------------------------------------------------------------------------------------
$(38,081) $(23,280) $19,435
=========================================================================================
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
Summarized quarterly financial data for fiscal 1993 and 1992 is presented
below:
Quarter
------------------------------------------------------------
First Second Third Fourth Year
========================================================================================================
(In thousands except per share data)
Net sales
1993 $210,190 $234,430 $261,058 $349,613 $1,055,291
1992 192,032 203,169 228,677 305,402 929,280
Gross profit
1993 89,353 103,259 115,059 154,382 462,053
1992 80,870 86,561 99,736 131,709 398,876
Net income
1993 1,326 6,595 6,802 28,304 43,027
1992 3,368 5,135 5,156 23,451 37,110
Earnings per common
and common equivalent share
1993 0.03 0.14 0.14 0.59 0.90
1992 0.07 0.11 0.11 0.49 0.78
25
27
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None.
PART III
ITEMS 10 - 13
Pursuant to Instruction G(3) to Form 10-K, the information required in Items
10 - 13 is incorporated by reference from the Company's definitive proxy
statement which will be filed with the Commission pursuant to Regulation 14A on
or about May 8, 1994.
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) INDEX TO CONSOLIDATED FINANCIAL STATEMENTS, FINANCIAL STATEMENT SCHEDULES
-------------------------------------------------------------------------
AND EXHIBITS
------------
1. Financial Statements
-------------------- Page
Independent Auditors' Report 12
Consolidated Statements of Earnings 13
Consolidated Balance Sheets 14
Consolidated Statements of Stockholders' Equity 15
Consolidated Statements of Cash Flows 16
Notes to Consolidated Financial Statements 17
2. Financial Statement Schedules
-----------------------------
Schedule Description
-------- -----------
II Amounts Receivable from Employees 30
V Property, Plant and Equipment 31
VI Accumulated Depreciation, Depletion, and
Amortization of Property, Plant and Equipment 32
VIII Valuation and Qualifying Accounts 33
X Supplementary Operations Statement Information 34
All other financial statements and schedules not listed in the preceding
indexes are omitted as the information is not applicable or the information is
presented in the consolidated financial statements or notes thereto.
(b) REPORTS ON FORM 8-K
-------------------
There were no reports on Form 8-K filed during the last quarter of the fiscal
year ended January 29, 1994.
26
28
(c) EXHIBITS
Exhibits marked with an asterisk (*) are filed herewith.
EXHIBIT NO. DOCUMENT
----------- ---------------------------------
3(a) Form of Restated Certificate of
Incorporation of the Company
(Exhibit 4(a) to the Company's
Registration Statement (No.
33-6086) on Form S-8 and
incorporated herein by reference)
3(b) Amended and Restated By-laws of
the Company (Exhibit 3(c) to the
Company's Annual Report on Form
10-K for the year ended February
3, 1990 and incorporated herein
by reference)
3(c) Amendment to By-laws dated April
14, 1992 (Exhibit 3(c) to the
Company's Annual Report on Form
10-K for the year ended February
1, 1992 and incorporated herein
by reference)
4(a) Specimen Stock Certificate
(Exhibit 4(a) to the Company's
Annual Report on Form 10-K for
the year ended February 1, 1992
and incorporated herein by
reference)
4(b) Summary of Rights to Purchase
Preferred Stock (Exhibit 4(b) to
the Company's Annual Report on
Form 10-K for the year ended
February 3, 1990 and incorporated
herein by reference)
4(c) Rights Agreement between the
Company and National City Bank
(Exhibit 4(c) to the Company's
Annual Report on Form 10-K for
the year ended February 3, 1990
and incorporated herein by
reference)
4(d) Form of Certificate of
Designation, Preferences and
Rights of Series A Junior
Participating Preferred Stock of
the Company (Exhibit 4(d) to the
Company's Annual Report on Form
10-K for the year ended February
3, 1990 and incorporated herein
by reference)
10(a) Executive Stock Option and Stock
Appreciation Rights Plan as
amended and restated October 9,
1990 (Exhibit 10(c) to the
Company's Annual Report on Form
10-K for the year ended February
1, 1992 and incorporated herein
by reference)
10(a)(i) Consolidated Stores Corporation
Directors Stock Option Plan
(Exhibit 10(q) to the Company's
Registration Statement (No.
33-42502) on Form S-8 and
incorporated herein by reference)
10(a)(ii) Consolidated Stores Corporation
Amended and Restated Directors
Stock Option Plan (Exhibit
10(c)(ii) to the Company's Annual
Report on Form 10-K for the year
ended February 1, 1992 and
incorporated herein by reference)
10(b) Consolidated Stores Corporation
Supplemental Savings Plan
(Exhibit 10(r) to the Company's
Registration Statement (No.
33-42692) on Form S-8 and
incorporated herein by reference)
10(c) CSIC Pension Plan and Trust dated
March 1, 1976 (Exhibit 10(h)(i)
to the Company's Registration
Statement (No. 2-97642) on Form
S-1 and incorporated herein by
reference)
10(c)(i) Amendment to CSIC Pension Plan
and Trust (Exhibit 10(h)(ii) to
the Company's Registration
Statement (No. 2-97642) on Form
S-1 and incorporated herein by
reference)
10(c)(ii) Amendment No. 2 to CSIC Pension
Plan and Trust (Filed as an
Exhibit to the Company's
Registration Statement (No.
33-6086) on Form S-8 and
incorporated herein by reference)
27
29
EXHIBIT NO. DOCUMENT
----------- ---------------------------------
10(c)(iii) Amendment No. 3 to CSIC Pension
Plan and Trust (Exhibit 10(h)(iv)
to the Company's Annual Report on
Form 10-K for the year ended
February 3, 1990 and incorporated
herein by reference)
10(d) Supplemental Pension Agreement
with William B. Snow (Exhibit
10(e) to the Company's Annual
Report on Form 10-K for the year
ended February 2, 1991 and
incorporated by reference)
10(e) Credit Agreement dated as of June
10, 1993, among Consolidated
Stores Corporation and C.S. Ross
Company, in favor of National
City Bank, Columbus, NBD Bank,
N.A., Bank One, Columbus, N.A.,
and The Bank of Tokyo Trust
Company (Exhibit 10 to the
Company's Quarterly Report on
Form 10-Q for the quarter ended
May 1, 1993 and incorporated
herein by reference)
10(f) Credit Guarantee dated as of June
10, 1993, among Consolidated
Stores Corporation and TRO, Inc.
in favor of National City Bank,
Columbus, NBD Bank, N.A., Bank
One, Columbus, N.A., and The Bank
of Tokyo Trust Company (Exhibit
10(a) to the Company's Quarterly
Report on Form 10-Q for the
quarter ended May 1, 1993 and
incorporated herein by reference)
10(f)(i) Credit Guarantee dated as of June
10, 1993, made by subsidiaries of
Consolidated Stores Corporation
in favor of National City Bank,
Columbus, NBD Bank, N.A., Bank
One, Columbus, N.A., and The Bank
of Tokyo Trust Company (Exhibit
10(b) to the Company's Quarterly
Report on Form 10-Q for the
quarter ended May 1, 1993 and
incorporated herein by reference)
10(g) Form of Note Purchase Agreement
dated as of August 1, 1987
relating to CSIC 10.50% Senior
Notes due August 1, 2002 (Exhibit
10(m) to the Company's Annual
Report on Form 10-K for the year
ended January 30, 1988 and
incorporated herein by reference)
10(h) Employment Agreement with William
G. Kelley (Exhibit 10(r) to the
Company's Annual Report on Form
10-K for the year ended February
3, 1990 and incorporated herein
by reference)
10(i)* Employment Agreement as of
February 21, 1994, with Brady J.
Churches
10(j)* Employment Agreement as of
February 21, 1994, with Jerry D.
Sommers
10(k)* Employment Agreement as of
February 21, 1994, with Mark N.
Hanners
10(l) Promissory Note dated July 12,
1991 between William G. Kelley
and Lois Ellen Kelley and
Consolidated Stores Corporation
(Exhibit 10(k) to the Company's
Annual Report on Form 10-K for
the year ended February 1, 1992
and incorporated herein by
reference)
10(m) Consolidated Stores Corporation
1987 Restricted Stock Plan as
amended and restated (Exhibit
10(p)(i) to the Company's Annual
Report on Form 10-K for the ended
February 3, 1990 and incorporated
by reference herein)
10(n) Consolidated Stores Corporation
Savings Plan and Trust, as
amended and restated (Exhibit
10(q)(i) to the Company's Annual
Report on Form 10-K for the year
ended February 3, 1990 and
incorporated by reference herein)
28
30
EXHIBIT NO. DOCUMENT
----------- ---------------------------------
10(o) Form of Executive Severance
Agreement of the Company (Exhibit
10(s)(i) to the Company's Annual
Report on Form 10-K for the year
ended February 3, 1990 and
incorporated herein by reference)
10(p) Form of Senior Executive
Severance Agreement of the
Company (Exhibit 10(s)(i) to the
Company's Annual Report on Form
10-K for the year ended
February 3, 1990 and
incorporated herein by reference)
10(q) Consolidated Stores Executive
Benefits Plan (Exhibit 10(t) to
the Company's Annual Report on
Form 10-K for the year ended
February 3, 1990 and incorporated
herein by reference)
21* List of subsidiaries of the
Company
23* Consent of Deloitte & Touche
24 Powers of Attorney (Exhibit 25 to
Company's Annual Report on Form
10-K for the year ended January ,
30, 1993 and incorporated herein
by reference)
29
31
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
SCHEDULE II - AMOUNTS RECEIVABLE FROM EMPLOYEES
(In thousands)
Deductions Balance at End
Balance at ------------------------- of Period
Beginning Amounts Amounts -----------------------
Name of Debtor of Period Additions Collected Written Off Current Not Current
======================== =========== =========== =========== =========== ============ ===========
For the fiscal year ended
January 29, 1994:
William G. Kelley (1) $ 450 $ - $ - $ - $ - $ 450
========== ========= ========== ========= ========= ===========
For the fiscal year ended
January 30, 1993:
William G. Kelley (1) $ 450 $ - $ - $ - $ - $ 450
========== ========= ========== ========= ========= ===========
For the fiscal year ended
February 1, 1992:
William G. Kelley (1) $ - $ 450 $ - $ - $ - $ 450
========== ========= ========== ========= ========= ===========
(1) Note was issued on July 12, 1991, and is due July 11, 1996. The note is
interest free and is secured by an Open-End Mortgage and Security Agreement
(Agreement) on Mr. Kelley's personal residence. The Agreement is subordinate to
a prior mortgage on the residence.
30
32
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
(In thousands)
Balance at Balance at
Beginning Additions End
Classification of Period at Cost Retirements Transfers of Period
================================================================================================================
For the fiscal year ended
January 29, 1994:
Land $ 5,249 $ 11 $ - $ - $ 5,260
Buildings 50,400 1,662 - - 52,062
Fixtures and equipment 144,839 25,248 (4,323) - 165,764
Transportation equipment 3,391 4,680 (868) - 7,203
Construction--in-progress - 14,393 - - 14,393
----------------------------------------------------------------------------------------------------------------
Total $203,879 $45,994 $(5,191) $ - $244,682
================================================================================================================
For the fiscal year ended
January 30, 1993:
Land $ 5,232 $ 17 $ - $ - $ 5,249
Buildings 48,624 1,494 - 282 50,400
Fixtures and equipment 112,523 37,381 (4,783) (282) 144,839
Transportation equipment 2,968 1,509 (1,086) - 3,391
----------------------------------------------------------------------------------------------------------------
Total $169,347 $40,401 $(5,869) $ - $203,879
================================================================================================================
For the fiscal year ended
February 1, 1992:
Land $ 5,232 $ - $ - $ - $ 5,232
Buildings 47,760 864 - - 48,624
Fixtures and equipment 93,746 16,626 (3,567) 5,718 112,523
Transportation equipment 2,730 631 (393) - 2,968
Capital leases 7,464 - (1,746) (5,718) -
----------------------------------------------------------------------------------------------------------------
Total $156,932 $18,121 $(5,706) $ - $169,347
================================================================================================================
Note: See Summary of Significant Accounting Policies of Notes to Consolidated
Financial Statements for depreciation methods.
31
33
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
(In thousands)
Additions
Balance at Charged to Balance at
Beginning Cost and End
Classification of Period Expenses Retirements Transfers of Period
=======================================================================================================
For the fiscal year ended
January 29, 1994:
Buildings $ 7,228 $ 1,481 $ - $ - $ 8,709
Fixtures and equipment 68,467 21,652 (3,543) - 86,576
Transportation equipment 1,353 552 (356) - 1,549
------------------------------------------------------------------------------------------------------
Total $77,048 $23,685 $(3,899) $ - $96,834
======================================================================================================
For the fiscal year ended
January 30, 1993:
Buildings $ 5,795 $ 1,288 $ - $ 145 $ 7,228
Fixtures and equipment 54,576 17,586 (3,550) (145) 68,467
Transportation equipment 1,484 668 (799) - 1,353
------------------------------------------------------------------------------------------------------
Total $61,855 $19,542 $(4,349) $ - $77,048
======================================================================================================
For the fiscal year ended
February 1, 1992:
Buildings $ 4,511 $ 1,284 $ - $ - $ 5,795
Fixtures and equipment 39,843 13,563 (2,000) 3,170 54,576
Transportation equipment 1,053 725 (294) - 1,484
Capital leases 4,150 577 (1,557) (3,170) -
------------------------------------------------------------------------------------------------------
Total $49,557 $16,149 $(3,851) $ - $61,855
======================================================================================================
Note: See Summary of Significant Accounting Policies of Notes to Consolidated
Financial Statements for depreciation methods.
32
34
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(In thousands)
Additions
--------------------------
Balance at Charged Charged Balance
Beginning to Cost and to Other at End
Description of Period Expenses Accounts Deductions of Period
=================================== ========== =========== =========== =========== ==========
Fiscal year ended January 29, 1994:
Inventory valuation allowance (1) $ 10,258 $ 3,376 $ - $ 6,990 $ 6,644
========== ========== ========== ========== ==========
Fiscal year ended January 30, 1993:
Inventory valuation allowance (1) $ 10,515 $ 12,479 $ - $ 12,736 $ 10,258
========== ========== ========== ========== ==========
Fiscal year ended February 1, 1992:
Inventory valuation allowance (1) $ 3,831 $ 10,636 $ - $ 3,952 $ 10,515
========== ========== ========== ========== ==========
(1) Consists of reserves for markdowns of aged goods and similar inventory
reserves.
33
35
CONSOLIDATED STORES CORPORATION AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY OPERATIONS
STATEMENT INFORMATION
(In thousands)
Fiscal Year Ended
-------------------------------------------------------------
January 29, January 30, February 1,
1994 1993 1992
=============== =============== ===============
Advertising costs $ 32,337 $ 28,132 $ 22,917
=============== =============== ===============
Repairs and maintenance $ 12,880 $ 10,826 $ 9,345
=============== =============== ===============
Note: All items omitted are less than 1% of total sales.
34
36
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.
By: /s/ William G. Kelley
-----------------------------
William G. Kelley
Chairman of the Board and
Chief Executive Officer
Dated: April 21, 1994
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 date indicated.
Name and Signature Title Date
===============================================================================
__
/s/ William G. Kelley Chairman of the Board |
- ------------------------- and Chief Executive Officer |
William G. Kelley |
|
|
|
/s/ William B. Snow Director, Executive Vice |
- ------------------------- President, Chief Financial |
William B. Snow Officer, and Principal |
Accounting Officer |
|
|
/s/ Brady J. Churches |
- ------------------------- |
Brady J. Churches President and Director | April 21, 1994
|
Michael L. Glazer Director * |
David T. Kollat Director * |
Nathan Morton Director * |
John L. Sisk Director * |
Dennis B. Tishkoff Director * |
William A. Wickham Director * |
|
|
*By: /s/ William G. Kelley |
--------------------- |
(William G. Kelley, as |
Attorney-in-Fact for each of |
the persons indicated) __|
35