x
|
QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
||
Delaware
|
20-4663833
|
|
(State
or Other Jurisdiction of
Incorporation
or Organization)
|
(I.R.S.
Employer
Identification
No.)
|
|
1830
Route 130 North
Burlington,
New Jersey
|
08016
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Part
I - Financial Information
|
Page
|
Item
1. Financial Statements (unaudited).
|
|
Condensed
Consolidated Balance Sheets as of August 30, 2008 and May 31,
2008
|
3
|
Condensed
Consolidated Statements of Operations - Three Months Ended August 30, 2008
and September 1, 2007
|
4
|
Condensed
Consolidated Statements of Cash Flows - Three Months Ended August 30, 2008
and September 1, 2007
|
5
|
Notes
to Condensed Consolidated Financial Statements
|
6
|
Item
2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
|
22
|
Item
3. Quantitative and Qualitative Disclosures About Market
Risk.
|
30
|
Item
4. Controls and Procedures.
|
31
|
Part
II - Other Information
|
32
|
Item 1. Legal Proceedings.
|
32
|
Item
1A. Risk Factors.
|
32
|
Item 2. Unregistered
Sales of Equity Securities and Use of Proceeds.
|
32
|
Item
3. Defaults Upon Senior Securities.
|
32
|
Item
4. Submission of Matters to a Vote of Security Holders.
|
32
|
Item
5. Other Information.
|
32
|
Item
6. Exhibits.
|
33
|
SIGNATURES
|
34
|
*****************
|
August
30, 2008
|
May
31, 2008
|
|||||||
ASSETS
|
||||||||
Current
Assets:
|
||||||||
Cash
and Cash Equivalents
|
$
|
99,430
|
$
|
40,101
|
||||
Restricted
Cash and Cash Equivalents
|
2,693
|
2,692
|
||||||
Accounts
Receivable, Net
|
29,510
|
27,137
|
||||||
Merchandise
Inventories
|
825,509
|
719,529
|
||||||
Deferred
Tax Assets
|
53,042
|
51,376
|
||||||
Prepaid
and Other Current Assets
|
26,168
|
24,978
|
||||||
Income
Tax Receivable
|
22,631
|
3,864
|
||||||
Assets
Held for Disposal
|
2,816
|
2,816
|
||||||
Total
Current Assets
|
1,061,799
|
872,493
|
||||||
Property
and Equipment, Net of Accumulated Depreciation
|
929,054
|
919,535
|
||||||
Tradenames
|
526,300
|
526,300
|
||||||
Favorable
Leases, Net of Accumulated Amortization
|
525,852
|
534,070
|
||||||
Goodwill
|
45,613
|
42,775
|
||||||
Other
Assets
|
74,524
|
69,319
|
||||||
Total
Assets
|
$
|
3,163,142
|
$
|
2,964,492
|
||||
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
||||||||
Current
Liabilities:
|
||||||||
Accounts
Payable
|
$
|
451,043
|
$
|
337,040
|
||||
Income
Taxes Payable
|
--
|
5,804
|
||||||
Other
Current Liabilities
|
251,151
|
238,866
|
||||||
Current
Maturities of Long Term Debt
|
5,912
|
3,653
|
||||||
Total
Current Liabilities
|
708,106
|
585,363
|
||||||
Long
Term Debt
|
1,581,370
|
1,480,231
|
||||||
Other
Liabilities
|
121,067
|
110,776
|
||||||
Deferred
Tax Liability
|
460,288
|
464,598
|
||||||
Commitments
and Contingencies (Note 17)
|
Stockholders'
Equity:
|
||||||||
Common
Stock
|
--
|
--
|
||||||
Capital
in Excess of Par Value
|
458,626
|
457,371
|
||||||
Accumulated
Deficit
|
(166,315
|
)
|
(133,847
|
)
|
||||
Total
Stockholders' Equity
|
292,311
|
323,524
|
||||||
Total
Liabilities and Stockholders' Equity
|
$
|
3,163,142
|
$
|
2,964,492
|
Three
Months Ended
|
||||||||
August
30,
2008
|
September
1, 2007
|
|||||||
REVENUES:
|
||||||||
Net
Sales
|
$
|
707,036
|
$
|
678,769
|
||||
Other
Revenue
|
6,389
|
6,778
|
||||||
Total
Revenue
|
713,425
|
685,547
|
||||||
COSTS
AND EXPENSES:
|
||||||||
Cost
of Sales
|
439,227
|
443,775
|
||||||
Selling
and Administrative Expenses
|
265,712
|
250,887
|
||||||
Depreciation
|
30,379
|
30,757
|
||||||
Amortization
|
10,682
|
10,751
|
||||||
Interest
Expense
|
26,374
|
33,225
|
||||||
Impairment
Charges
|
--
|
553
|
||||||
Other
Income, Net
|
(2,542
|
)
|
(652
|
)
|
||||
769,832
|
769,296
|
|||||||
Loss Before Income Tax
Benefit
|
(56,407
|
)
|
(83,749
|
)
|
||||
Income
Tax Benefit
|
(23,939
|
)
|
(33,354
|
)
|
||||
Net
Loss
|
$
|
(32,468
|
)
|
$
|
(50,395
|
)
|
||
BURLINGTON
COAT FACTORY INVESTMENTS HOLDINGS, INC. AND SUBSIDIARIES
|
|||||||
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
(Unaudited)
|
|||||||
(All
amounts in thousands)
|
|||||||
Three
Months Ended
|
|||||||
August
30,
2008
|
September
1, 2007
|
||||||
OPERATING
ACTIVITIES
|
|||||||
Net
Loss
|
$
|
(32,468
|
)
|
$
|
(50,395
|
)
|
|
Adjustments
to Reconcile Net Loss to Net Cash Provided by Operating
Activities:
|
|||||||
Depreciation
|
30,379
|
30,757
|
|||||
Amortization
|
10,682
|
10,751
|
|||||
Impairment
Charges
|
--
|
553
|
|||||
Accretion
of Senior Notes and Senior Discount Notes
|
146
|
3,243
|
|||||
Interest
Rate Cap Agreement - Adjustment to Market
|
149
|
(134
|
)
|
||||
Provision
for Losses on Accounts Receivable
|
552
|
469
|
|||||
Provision
for Deferred Income Taxes
|
(8,738
|
)
|
(33,354
|
)
|
|||
Loss
on Disposition of Fixed Assets and Leasehold
Improvements
|
53
|
212
|
|||||
Stock
Option Expense and Deferred Compensation
Amortization
|
1,255
|
251
|
|||||
Non-Cash
Rent Expense
|
1,875
|
1,898
|
|||||
Changes
in Assets and Liabilities:
|
|||||||
Accounts
Receivable
|
(1,179
|
)
|
(561
|
)
|
|||
Merchandise
Inventories
|
(105,980
|
)
|
(19,166
|
)
|
|||
Prepaid
and Other Current Assets
|
(19,506
|
)
|
(4,622
|
)
|
|||
Accounts
Payable
|
114,003
|
31,449
|
|||||
Accrued
and Other Current Liabilities
|
1,917
|
12,463
|
|||||
Deferred
Rent Incentives
|
6,846
|
319
|
|||||
Other
|
47
|
(11
|
)
|
||||
Net
Cash Used in Operating Activities
|
33
|
(15,878
|
)
|
||||
INVESTING
ACTIVITIES
|
|||||||
Cash
Paid for Property and Equipment
|
(43,800
|
)
|
(24,473
|
)
|
|||
Proceeds
Received from Sale of Fixed Assets and Leasehold
Improvements
|
26
|
16
|
|||||
Change
in Restricted Cash and Cash Equivalents
|
(1
|
)
|
16
|
||||
Acquisition
of Lease Rights
|
(250
|
)
|
--
|
||||
Issuance
of Notes Receivable
|
--
|
(18
|
)
|
||||
Other
|
70
|
35
|
|||||
Net
Cash Used in Investing Activities
|
(43,955
|
)
|
(24,424
|
)
|
|||
FINANCING
ACTIVITIES
|
|||||||
Proceeds
from Long Term Debt - ABL Senior Secured Revolving
Facility
|
283,551
|
160,384
|
|||||
Principal
Payments on Long Term Debt
|
(149
|
)
|
(142
|
)
|
|||
Principal
Payments on Term Loan
|
--
|
--
|
|||||
Principal
Payments on Long Term Debt - ABL Senior Secured Revolving
Facility
|
(180,151
|
)
|
(101,001
|
)
|
|||
Payment
of Dividends
|
--
|
(300
|
)
|
Net
Cash Provided by Financing Activities
|
103,251
|
58,941
|
||||||
Increase
in Cash and Cash Equivalents
|
59,329
|
18,639
|
||||||
Cash
and Cash Equivalents at Beginning of Period
|
40,101
|
33,878
|
||||||
Cash
and Cash Equivalents at End of Period
|
$
|
99,430
|
$
|
52,517
|
||||
Supplemental
Disclosure of Cash Flow Information
|
||||||||
Interest
Paid
|
$
|
14,027
|
$
|
21,483
|
||||
Income
Taxes Paid, Net of Refunds
|
$
|
9,400
|
$
|
(528
|
)
|
|||
Non-Cash
Investing Activities:
|
||||||||
Accrued
Purchases of Property and Equipment
|
$
|
4,566
|
$
|
1,553
|
(in
thousands)
|
||||||||
August
30, 2008
|
May
31, 2008
|
|||||||
Industrial
Revenue Bonds, 6.13% due in semi-annual payments of various amounts from
September 1, 2008 to September 1, 2010
|
$
|
3,295
|
$
|
3,295
|
||||
Promissory
Note, 4.43% due in monthly payments of $8 through December
23, 2011
|
281
|
300
|
||||||
Promissory
Note, non-interest bearing, due in monthly payments of $17
through January 1, 2012
|
683
|
733
|
||||||
Senior
Notes, 11.13% due at maturity on April 15, 2014, semi-annual
interest payments from October 15, 2008 to April 15,
2014
|
300,352
|
300,207
|
||||||
Senior
Discount Notes, 14.50% due at maturity on October 15, 2014, semi-annual
interest payments from October 15, 2008 to October 15,
2014
|
99,309
|
99,309
|
||||||
$900,000
Senior Secured Term Loan Facility, LIBOR plus 2.25% due in
quarterly payments of $2,250 from November 30, 2008 to May 28,
2013
|
872,807
|
872,807
|
||||||
$800,000
ABL Senior Secured Revolving Facility, LIBOR plus spread based on average
outstanding balance
|
285,000
|
181,600
|
||||||
Capital
Lease Obligations
|
25,555
|
25,633
|
||||||
Total
debt
|
1,587,282
|
1,483,884
|
||||||
Less: current
maturities
|
(5,912
|
)
|
(3,653
|
)
|
||||
Long-term
debt, net of current maturities
|
$
|
1,581,370
|
$
|
1,480,231
|
||||
(in thousands
)
|
||||
Goodwill
as of May 31, 2008
|
$ | 42,775 | ||
Increase
in net deferred tax liabilities (a)
|
2,838 | |||
Goodwill
as of August 30, 2008
|
$ | 45,613 | ||
(a) The
change in deferred income taxes recorded during the three month period
ended August 30, 2008 reflects a change in the Company’s estimate
of the effective state tax rate used to calculate deferred
taxes in accordance with FASB Emerging Issues Task Force Issue 93-7,
“Uncertainties Related to Income Taxes in a Purchase
Combination.” This adjustment has increased goodwill related to the
Merger Transaction.
|
(in
thousands)
|
||||||||
August
30, 2008
|
May
31, 2008
|
|||||||
Fixed
Assets
|
$
|
63
|
$
|
63
|
||||
Favorable
Leases
|
2,753
|
2,753
|
||||||
$
|
2,816
|
$
|
2,816
|
Level 1:
|
Quoted
prices for identical assets or liabilities in active
markets.
|
Level 2:
|
Quoted
market prices for similar assets or liabilities in active markets; quoted
prices for identical or similar assets or liabilities in markets that are
not active;
and
model-derived valuations whose inputs are observable or whose significant
value drivers are observable.
|
Level 3:
|
Pricing
inputs are unobservable for the assets and liabilities and include
situations where there is little, if any, market activity for the assets
and liabilities.
The
inputs into the determination of fair value require significant management
judgment or estimation.
|
|
(in
thousands)
|
|||
Fair
Value
Measurements
at August 30, 2008
|
||||
Assets:
|
||||
Level
1
|
||||
Cash equivalents (including restricted cash)
|
$
|
2,776
|
||
Level
2
|
||||
Interest rate cap agreements (a)
|
$
|
643
|
||
Cash
equivalents
|
58,994
|
(a)
|
Included
in “Other Assets” and “Prepaids and Other Current Assets” within the
Company’s Condensed Consolidated Balance Sheets (Refer to Footnote 6 of
the Company’s Condensed Consolidated Financial Statements, entitled
“Derivative Instruments and Hedging Activities” for further discussion
regarding the Company's interest rate cap
agreements).
|
Fiscal
Year Reserve Established
|
(in
thousands)
|
|||||||||||||||
Balance
at
May
31, 2008
|
Provisions
|
Payments
|
Balance
at
August
30, 2008
|
|||||||||||||
2005
|
$
|
67
|
$
|
-
|
$
|
(40
|
)
|
$
|
27
|
|||||||
2008
|
95
|
6
|
(90
|
)
|
11
|
|||||||||||
2009
|
-
|
167
|
-
|
167
|
||||||||||||
$
|
162
|
$
|
173
|
$
|
(130
|
)
|
$
|
205
|
Number
of
Units
|
Weighted
Average
Exercise
Price
Per Unit
|
|||||||
Options
Outstanding May 31, 2008
|
412,000
|
$
|
181.25
|
|||||
Options
Issued
|
25,000
|
183.33
|
||||||
Options
Forfeited
|
--
|
--
|
||||||
Options
Cancelled
|
(12,500
|
)
|
180.00
|
|||||
Options
Exercised
|
--
|
--
|
||||||
Options
Outstanding August 30, 2008
|
424,500
|
$
|
181.33
|
|||||
Option
Units Outstanding
|
Option
Units Exercisable
|
|||||||||||||
Range
of
Exercise
Prices
|
Number
Outstanding
at
August 30, 2008
|
Weighted
Average
Remaining
Contractual
Life
(Years)
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
at
August 30, 2008
|
||||||||||
Tranche
1
|
$
|
90.00
- 100.00
|
141,500
|
8.3
|
$
|
94.00
|
32,000
|
|||||||
Tranche
2
|
$
|
180.00
|
141,500
|
8.3
|
$
|
180.00
|
32,000
|
|||||||
Tranche
3
|
$
|
270.00
|
141,500
|
8.3
|
$
|
270.00
|
32,000
|
|||||||
424,500
|
96,000
|
Three
Months Ended
August
30, 2008
|
Three Months
Ended
September
1, 2007
|
|||||||
Risk-free
interest rate
|
3.61-3.83
|
%
|
4.11
|
%
|
||||
Expected
volatility
|
35
|
%
|
67
|
%
|
||||
Expected
life
|
6.6
– 8.3 years
|
4.5
years
|
||||||
Contractual
life
|
10
years
|
10
years
|
||||||
Expected
dividend yield
|
0.0
|
%
|
0.0
|
%
|
||||
Fair
value of option units granted
|
||||||||
Tranche
1
Tranche
2
Tranche
3
|
$ |
63.76
39.77
32.44
|
$ |
56.65
42.60
33.13
|
Burlington
Coat Factory Investments Holdings, Inc. and Subsidiaries
|
||||||||||||||||||||
Condensed
Consolidating Balance Sheets
|
||||||||||||||||||||
(All
amounts in thousands)
|
||||||||||||||||||||
As of August 30, 2008
|
||||||||||||||||||||
ASSETS
|
Holdings
|
BCFW
|
Guarantors
|
Eliminations
|
Total
|
|||||||||||||||
Current
Assets:
|
||||||||||||||||||||
Cash
and Cash Equivalents
|
$ | - | $ | 13,413 | $ | 86,017 | $ | - | $ | 99,430 | ||||||||||
Restricted
Cash and Cash Equivalents
|
- | - | 2,693 | - | 2,693 | |||||||||||||||
Accounts
Receivable
|
- | 21,837 | 7,673 | - | 29,510 | |||||||||||||||
Merchandise
Inventories
|
- | 776 | 824,733 | - | 825,509 | |||||||||||||||
Deferred
Tax Asset
|
- | 14,023 | 39,019 | - | 53,042 | |||||||||||||||
Prepaid
and Other Current Assets
|
- | 9,264 | 16,904 | - | 26,168 | |||||||||||||||
Prepaid
Income Tax
|
- | 21,353 | 1,278 | - | 22,631 | |||||||||||||||
Assets
Held for Sale
|
- | - | 2,816 | - | 2,816 | |||||||||||||||
Total Current Assets
|
- | 80,666 | 981,133 | - | 1,061,799 | |||||||||||||||
Property
and Equipment - Net of Accumulated Depreciation
|
- | 61,091 | 867,963 | - | 929,054 | |||||||||||||||
Tradename
|
- | 526,300 | - | 526,300 | ||||||||||||||||
Favorable
Leases, Net of Accumulation Amortization
|
- | - | 525,852 | 525,852 | ||||||||||||||||
Goodwill
|
- | 45,613 | - | 45,613 | ||||||||||||||||
Other
Assets
|
292,311 | 1,818,922 | 29,515 | (2,066,224 | ) | 74,524 | ||||||||||||||
Total
Assets
|
$ | 292,311 | $ | 2,532,592 | $ | 2,404,463 | $ | (2,066,224 | ) | $ | 3,163,142 | |||||||||
|
|
|
|
|
||||||||||||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||||||||||||||
Current
Liabilities:
|
||||||||||||||||||||
Accounts
Payable
|
$ | - | $ | 451,043 | $ | - | $ | - | $ | 451,043 | ||||||||||
Income
Taxes Payable
|
- | - | - | - | - | |||||||||||||||
Other
Current Liabilities
|
- | 92,177 | 158,974 | - | 251,151 | |||||||||||||||
Current
Maturities of Long Term Debt
|
- | 4,307 | 1,605 | - | 5,912 | |||||||||||||||
Total Current Liabilities
|
- | 547,527 | 160,579 | - | 708,106 | |||||||||||||||
Long
Term Debt
|
- | 1,453,852 | 127,518 | - | 1,581,370 | |||||||||||||||
Other
Liabilities
|
- | 18,493 | 112,574 | (10,000 | ) | 121,067 | ||||||||||||||
Deferred
Tax Liability
|
- | 220,409 | 239,879 | - | 460,288 | |||||||||||||||
Stockholders'
Equity:
|
||||||||||||||||||||
|
||||||||||||||||||||
Common
Stock
|
- | - | - | - | - | |||||||||||||||
Capital
in Excess of Par Value
|
458,626 | 458,626 | 1,461,901 | (1,920,527 | ) | 458,626 | ||||||||||||||
(Accumulated
Deficit)/ Retained Earnings
|
(166,315 | ) | (166,315 | ) | 302,012 | (135,697 | ) | (166,315 | ) | |||||||||||
Total Stockholders'
Equity
|
292,311 | 292,311 | 1,763,913 | (2,056,224 | ) | 292,311 | ||||||||||||||
Total
Liabilities and Stockholders' Equity
|
$ | 292,311 | $ | 2,532,592 | $ | 2,404,463 | $ | (2,066,224 | ) | $ | 3,163,142 | |||||||||
|
|
|
|
|
As
of May 31, 2008
|
||||||||||||||||||||
Holdings
|
BCFW
|
Guarantors
|
Eliminations
|
Consolidated
|
||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current
Assets:
|
||||||||||||||||||||
Cash
and Cash Equivalents
|
$
|
-
|
$
|
4,114
|
$
|
35,987
|
$
|
-
|
$
|
40,101
|
||||||||||
Restricted
Cash and Cash Equivalents
|
-
|
-
|
2,692
|
-
|
2,692
|
|||||||||||||||
Accounts
Receivable, Net
|
-
|
20,930
|
6,207
|
-
|
27,137
|
|||||||||||||||
Merchandise
Inventories
|
-
|
1,354
|
718,175
|
-
|
719,529
|
|||||||||||||||
Deferred
Tax Assets
|
-
|
14,222
|
37,154
|
-
|
51,376
|
|||||||||||||||
Prepaid
and Other Current Assets
|
-
|
11,581
|
13,397
|
-
|
24,978
|
|||||||||||||||
Prepaid
Income Taxes
|
-
|
935
|
2,929
|
-
|
3,864
|
|||||||||||||||
Assets
Held for Disposal
|
-
|
-
|
2,816
|
-
|
2,816
|
|||||||||||||||
Total
Current Assets
|
-
|
53,136
|
819,357
|
-
|
872,493
|
|||||||||||||||
Property
and Equipment, Net of Accumulated Depreciation
|
-
|
58,906
|
860,629
|
-
|
919,535
|
|||||||||||||||
Tradename
|
-
|
526,300
|
-
|
-
|
526,300
|
|||||||||||||||
Favorable
Leases, Net of Accumulated Amortization
|
-
|
-
|
534,070
|
-
|
534,070
|
|||||||||||||||
Goodwill
|
-
|
42,775
|
-
|
-
|
42,775
|
|||||||||||||||
Other
Assets
|
323,524
|
1,705,185
|
21,025
|
(1,980,415
|
)
|
69,319
|
||||||||||||||
Total
Assets
|
$
|
323,524
|
$
|
2,386,302
|
$
|
2,235,081
|
$
|
(1,980,415
|
)
|
$
|
2,964,492
|
|||||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||||||||||||||
Current
Liabilities:
|
||||||||||||||||||||
Accounts
Payable
|
$
|
-
|
$
|
337,040
|
$
|
-
|
$
|
-
|
$
|
337,040
|
||||||||||
Income
Taxes Payable
|
-
|
4,256
|
1,548
|
-
|
5,804
|
|||||||||||||||
Other
Current Liabilities
|
-
|
128,597
|
110,269
|
-
|
238,866
|
|||||||||||||||
Current
Maturities of Long Term Debt
|
-
|
2,057
|
1,596
|
-
|
3,653
|
|||||||||||||||
Total
Current Liabilities
|
-
|
471,950
|
113,413
|
-
|
585,363
|
|||||||||||||||
Long
Term Debt
|
-
|
1,352,557
|
127,674
|
-
|
1,480,231
|
|||||||||||||||
Other
Liabilities
|
-
|
17,550
|
103,226
|
(10,000
|
)
|
110,776
|
||||||||||||||
Deferred
Tax Liability
|
-
|
220,721
|
243,877
|
-
|
464,598
|
|||||||||||||||
Stockholders’
Equity:
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Common
Stock
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Capital
in Excess of Par Value
|
457,371
|
457,371
|
1,352,271
|
(1,809,642
|
)
|
457,371
|
||||||||||||||
(Accumulated
Deficit)/ Retained Earnings
|
(133,847
|
)
|
(133,847
|
)
|
294,620
|
(160,773
|
)
|
(133,847
|
)
|
|||||||||||
Total
Stockholders’ Equity
|
323,524
|
323,524
|
1,646,891
|
(1,970,415
|
)
|
323,524
|
||||||||||||||
Total
Liabilities and Stockholders’ Equity
|
$
|
323,524
|
$
|
2,386,302
|
$
|
2,235,081
|
$
|
(1,980,415
|
)
|
$
|
2,964,492
|
Burlington
Coat Factory Investments Holdings, Inc. and
Subsidiaries
|
||||||||||||||||||||
Condensed
Consolidating Statement of Operations
|
||||||||||||||||||||
(All
amounts in thousands)
|
||||||||||||||||||||
For
the Three Months Ended August 30, 2008
|
||||||||||||||||||||
Holdings
|
BCFW
|
Guarantors
|
Eliminations
|
Consolidated
|
||||||||||||||||
REVENUES:
|
||||||||||||||||||||
Net
Sales
|
$ | - | $ | 1,422 | $ | 705,614 | $ | - | $ | 707,036 | ||||||||||
Other
Revenue
|
- | 100 | 6,289 | - | 6,389 | |||||||||||||||
Total Revenue | - | 1,522 | 711,903 | - | 713,425 | |||||||||||||||
COSTS
AND EXPENSES:
|
||||||||||||||||||||
Cost
of Sales
|
- | 884 | 438,343 | - | 439,227 | |||||||||||||||
Selling
and Administrative Expenses
|
- | 36,766 | 228,946 | - | 265,712 | |||||||||||||||
Depreciation
|
- | 6,500 | 23,879 | - | 30,379 | |||||||||||||||
Amortization
|
- | 2,457 | 8,225 | - | 10,682 | |||||||||||||||
Impairment
Charges
|
- | - | - | |||||||||||||||||
Interest
Expense
|
- | 22,196 | 4,178 | - | 26,374 | |||||||||||||||
Other
Income, Net
|
- | (349 | ) | (2,193 | ) | - | (2,542 | ) | ||||||||||||
Loss
(Earnings) from Equity Investment
|
32,468 | (7,392 | ) | - | (25,076 | ) | - | |||||||||||||
32,468 | 61,062 | 701,378 | (25,076 | ) | 769,832 | |||||||||||||||
(Loss) Income Before (Benefit)
Provision for Income Taxes
|
(32,468 | ) | (59,540 | ) | 10,525 | 25,076 | (56,407 | ) | ||||||||||||
(Benefit)
Provision for Income Taxes
|
- | (27,072 | ) | 3,133 | - | (23,939 | ) | |||||||||||||
Net (Loss) Income
|
$ | (32,468 | ) | $ | (32,468 | ) | $ | 7,392 | $ | 25,076 | $ | (32,468 | ) | |||||||
Burlington
Coat Factory Investments Holdings, Inc. and Subsidiaries
|
||||||||||||||||||||
Condensed
Consolidating Statement of Operations
(All
amounts in thousands)
|
||||||||||||||||||||
For
the Three Months Ended September 1, 2007
|
||||||||||||||||||||
Holdings
|
BCFW
|
Guarantors
|
Eliminations
|
Consolidated
|
||||||||||||||||
|
||||||||||||||||||||
REVENUES:
|
||||||||||||||||||||
Net
Sales
|
$ | — | $ | 757 | $ | 678,012 | $ | — | $ | 678,769 | ||||||||||
Other
Revenue
|
— | 642 | 6,136 | — | 6,778 | |||||||||||||||
Total Revenue | — | 1,399 | 684,148 | — | 685,547 | |||||||||||||||
COSTS
AND EXPENSES:
|
||||||||||||||||||||
Cost
of Sales
|
— | 462 | 443,313 | — | 443,775 | |||||||||||||||
Selling
and Administrative Expenses
|
— | 31,933 | 218,954 | — | 250,887 | |||||||||||||||
Depreciation
|
— | 5,859 | 24,898 | — | 30,757 | |||||||||||||||
Amortization
|
— | 2,485 | 8,266 | — | 10,751 | |||||||||||||||
Impairment
Charges
|
— | — | 553 | — | 553 | |||||||||||||||
Interest
Expense
|
— | 29,494 | 3,731 | — | 33,225 | |||||||||||||||
Other
Income, Net
|
— | (385 | ) | (267 | ) | — | (652 | ) | ||||||||||||
Loss
(Earnings) From Equity Investment
|
50,395 | 9,657 | — | (60,052 | ) | — | ||||||||||||||
50,395 | 79,505 | 699,448 | (60,052 | ) | 769,296 | |||||||||||||||
(Loss)
Income Before (Benefit) Provision for Income Taxes
|
(50,395 | ) | (78,106 | ) | (15,300 | ) | 60,052 | (83,749 | ) | |||||||||||
(Benefit)
for Income Taxes
|
— | (27,711 | ) | (5,643 | ) | — | (33,354 | ) | ||||||||||||
Net (Loss) Income
|
$ | (50,395 | ) | $ | (50,395 | ) | $ | (9,657 | ) | $ | 60,052 | $ | (50,395 | ) |
Condensed
Consolidating Statements of Cash Flows
|
||||||||||||||||||||
(All
amounts in thousands)
|
||||||||||||||||||||
|
||||||||||||||||||||
For the Three Months Ended August 30,
2008
|
||||||||||||||||||||
Holdings
|
BCFW
|
Guarantors
|
Elimination
|
Consolidated
|
||||||||||||||||
OPERATING
ACTIVITIES
|
||||||||||||||||||||
Net
Cash (Used In) Provided by Operating Activities
|
$ | - | $ | (86,576 | ) | $ | 86,609 | $ | - | $ | 33 | |||||||||
INVESTING
ACTIVITIES
|
||||||||||||||||||||
Cash
Paid For Property and Equipment
|
- | (7,595 | ) | (36,205 | ) | - | (43,800 | ) | ||||||||||||
Investing
Activity-Other
|
- | 70 | (225 | ) | - | (155 |
)
|
|||||||||||||
Net
Cash Used in Investing Activities
|
- | (7,525 | ) | (36,430 | ) | - | (43,955 | ) | ||||||||||||
FINANCING
ACTIVITIES
|
||||||||||||||||||||
Proceeds
from Long Term Debt - ABL Line of Credit
|
- | 283,551 | - | - | 283,551 | |||||||||||||||
Principal
Payments on Long Term Debt
|
- | - | (149 | ) | - | (149 | ) | |||||||||||||
Principal
Payments on Long Term Debt - ABL Line of Credit
|
- | (180,151 | ) | - | - | (180,151 | ) | |||||||||||||
Net
Cash Provided By (Used In) Financing Activities
|
- | 103,400 | (149 | ) | - | 103,251 | ||||||||||||||
Increase
in Cash and Cash Equivalents
|
- | 9,299 | 50,030 | - | 59,329 | |||||||||||||||
Cash
and Cash Equivalents at Beginning of Period
|
- | 4,114 | 35,987 | - | 40,101 | |||||||||||||||
Cash
and Cash Equivalents at End of Period
|
$ | - | $ | 13,413 | $ | 86,017 | $ | - | $ | 99,430 | ||||||||||
|
|
|
|
|
Burlington
Coat Factory Investments Holdings, Inc. and Subsidiaries
|
||||||||||||||||||||
Condensed
Consolidating Statement of Cash Flows
(All
amounts in thousands)
|
||||||||||||||||||||
For
the three months ended September 1, 2007
|
||||||||||||||||||||
Holdings
|
BCFW
|
Guarantors
|
Elimination
|
Consolidated
|
||||||||||||||||
|
||||||||||||||||||||
OPERATING
ACTIVITIES
|
||||||||||||||||||||
Net
Cash (Used In) Provided by Operating Activities
|
$ | — | $ | (53,837 | ) | $ | 37,959 | $ | — | $ | (15,878 | ) | ||||||||
INVESTING
ACTIVITIES
|
||||||||||||||||||||
Cash
Paid for Property and Equipment
|
— | (4,492 | ) | (19,981 | ) | — | (24,473 | ) | ||||||||||||
Investing
Activity—Other
|
— | (18 | ) | 67 | — | 49 | ||||||||||||||
Net
Cash Used in Investing Activities
|
— | (4,510 | ) | (19,914 | ) | — | (24,424 | ) | ||||||||||||
FINANCING
ACTIVITIES
|
||||||||||||||||||||
Proceeds
from Long Term Debt – ABL Line of Credit
|
— | 160,384 | — | — | 160,384 | |||||||||||||||
Principal
Payments on Long Term Debt
|
— | — | (142 | ) | — | (142 | ) | |||||||||||||
Principal
Payments on Long Term Debt – ABL Line of Credit
|
— | (101,001 | ) | — | — | (101,001 | ) | |||||||||||||
Payment
of Dividends
|
(300 | ) | (300 | ) | — | 300 | (300 | ) | ||||||||||||
Receipt
of Dividends
|
300 | — | — | (300 | ) | — | ||||||||||||||
Net
Cash Provided By (Used In) Financing Activities
|
— | 59,083 | (142 | ) | — | 58,941 | ||||||||||||||
Increase
in Cash and Cash Equivalents
|
— | 736 | 17,903 | — | 18,639 | |||||||||||||||
Cash
and Cash Equivalents at Beginning of Period
|
— | 20,035 | 13,843 | — | 33,878 | |||||||||||||||
Cash
and Cash Equivalents at End of Period
|
$ | — | $ | 20,771 | $ | 31,746 | $ | — | $ | 52,517 | ||||||||||
·
|
Developing
and enhancing our strategies related to improving our merchandise flow and
improving our inventory allocation process to place trend right
merchandise in the right stores at the right
time
|
·
|
Implementation
of findings associated with the Network Design Study that was completed in
Fiscal 2008, including, but not limited to, a new warehouse management
system. We believe that the implementation of these findings
will enable us to reduce costs and improve service levels in both the
short term as well as over the long
term
|
·
|
Implementation
of a performance management program that is designed to drive productivity
improvements within our distribution
centers
|
·
|
Working
to derive insights into our customers' purchasing behavior from our
recently implemented customer relationship
database
|
·
|
Launching
of a new marketing campaign focused on re-connecting with our
customers
|
(in
thousands)
|
||||||||
Three
Months Ended
|
||||||||
August
30, 2008
|
September
1, 2007
|
|||||||
Net
Loss
|
$
|
(32,468
|
)
|
$
|
(50,395
|
)
|
||
Interest
Expense
|
26,374
|
33,225
|
||||||
Income
Tax Benefit
|
(23,939
|
)
|
(33,354
|
)
|
||||
Depreciation
|
30,379
|
30,757
|
||||||
Impairment
Charges
|
--
|
553
|
||||||
Amortization
|
10,682
|
10,751
|
||||||
EBITDA
|
$
|
11,028
|
$
|
(8,463
|
)
|
Percentage
of Net Sales
|
||||||||
Three
Months Ended
|
||||||||
August
30,
|
September
1,
|
|||||||
2008
|
2007
|
|||||||
Net
Sales
|
100 | % | 100 | % | ||||
Other
Revenue
|
0.9 | 1.0 | ||||||
Cost
of Sales
|
62.1 | 65.4 | ||||||
Selling
and Administrative Expenses
|
37.6 | 37.0 | ||||||
Depreciation
|
4.3 | 4.5 |
Amortization
|
1.5 | 1.5 | ||||||
Interest
Expense
|
3.7 | 4.9 | ||||||
Impairment
Charges
|
0.0 | 0.1 | ||||||
Other
Income, Net
|
(0.3 | ) | (0.1 | ) | ||||
Loss before
Income Tax Benefit
|
(8.0 | ) | (12.3 | ) | ||||
Income
Tax Benefit
|
(3.4 | ) | (4.9 | ) | ||||
Net
Loss
|
(4.6 | %) | (7.4 | %) |
·
|
Operating
results for the three months ended August 30, 2008 improved by $17.9
million compared to the operating results for the three months ended
September 1, 2007.
|
·
|
Net
cash provided by operating activities was positively affected by $24.6
million related to the provision for deferred income
taxes.
|
·
|
Cash
flow from the change in accounts payable for the three months ended August
30, 2008 increased $82.6 million compared with the three months ended
September 1, 2007. The increase in accounts payable for the
three months ended August 30, 2008 compared with the three months ended
September 1, 2007 is primarily related to the increase in merchandise
inventory during the similar
periods.
|
·
|
Merchandise
inventory had a larger increase during the three month period ended August
30, 2008 compared with the three month period ended September 1,
2007. This increase resulted in $86.8 million less cash flow
related to the change in inventory during the three month period ended
August 30, 2008 compared with the three month period ended September 1,
2007. The larger increase in our merchandise inventories is
primarily due to the opening of 33 new stores between September 1, 2007
and August 30, 2008.
|
·
|
Prepaid
and other current assets had a larger increase during the three month
period ended August 30, 2008 compared with the three month period ended
September 1, 2007 which resulted in $14.9 million less cash flow during
the respective periods.
|
·
|
Accrued
and other current liabilities had a smaller increase during the three
months ended August 30, 2008 compared with the three months ended
September 1, 2007 resulting in $10.5 million less cash flow during
the three month period ended August 30, 2008 compared to the three month
period ended September 1, 2007.
|
Floating
Rate Debt
|
(in
thousands)
|
|||||||||||||||||||
Principal
Outstanding at August 30, 2008
|
Additional
Interest Expense
Q2
2009
|
Additional
Interest Expense
Q3
2009
|
Additional
Interest Expense
Q4
2009
|
Additional
Interest Expense
Q1
2010
|
||||||||||||||||
ABL
Line of Credit
|
$
|
285,000
|
$
|
713
|
$
|
713
|
$
|
713
|
$
|
713
|
||||||||||
Term
Loan
|
872,807
|
2,182
|
2,182
|
2,177
|
2,171
|
|||||||||||||||
Total
|
$
|
1,157,807
|
$
|
2,895
|
$
|
2,895
|
$
|
2,890
|
$
|
2,884
|
31.1
|
Certification
of Principal Executive Officer pursuant to Rule 13a - 14(a) or Rule 15d -
14(a) of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification
of Principal Financial Officer pursuant to Rule 13a - 14(a) or Rule 15d -
14(a) of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of
2002.
|
32.1
|
Certification
of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
32.2
|
Certification
of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
/s/
Mark A. Nesci
|
|||
Mark
A. Nesci
|
|||
President
& Chief Executive Officer
|
|||
/s/
Todd Weyhrich
|
|||
Todd
Weyhrich
|
|||
Executive
Vice President & Chief Financial Officer (Principal Financial
Officer)
|
|||