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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 

 
FORM 10-Q
 
(Mark One)
x
 
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
  
 
SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended August 3, 2002
 
Commission File No. 0-11682
 

 
S & K FAMOUS BRANDS, INC.
(Exact name of registrant as specified in its charter)
 
Virginia
 
54-0845694
(State or other jurisdiction of
Incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
11100 West Broad Street, P. O. Box 31800, Richmond, Virginia 23294-1800
(Address of principal executive offices)
 
Registrant’s telephone number, including area code: (804) 346-2500
 

 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  ¨  Yes  x  No
 
Indicate the number of shares outstanding of each of the Registrant’s classes of common stock as of August 3, 2002.
 
2,523,682 shares of Common Stock, $0.50 par value
 


 
PART I.    FINANCIAL INFORMATION
 
ITEM 1.    FINANCIAL STATEMENTS
 
S & K FAMOUS BRANDS, INC.
 
STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
 
    
Three Months Ended

  
Six Months Ended

 
    
August 3, 2002

    
August 4, 2001

  
August 3, 2002

    
August 4, 2001

 
Net sales
  
$
36,094
 
  
$
35,499
  
$
77,885
 
  
$
77,319
 
Cost of sales
  
 
19,196
 
  
 
18,720
  
 
40,400
 
  
 
39,915
 
    


  

  


  


Gross profit
  
 
16,898
 
  
 
16,779
  
 
37,485
 
  
 
37,404
 
Other costs and expenses:
                                 
Selling, general and administrative
  
 
16,005
 
  
 
15,845
  
 
33,448
 
  
 
33,282
 
Interest
  
 
153
 
  
 
108
  
 
166
 
  
 
219
 
Depreciation and amortization
  
 
790
 
  
 
795
  
 
1,587
 
  
 
1,612
 
Other, net
  
 
(138
)
  
 
23
  
 
(181
)
  
 
(25
)
    


  

  


  


Income before income taxes
  
 
88
 
  
 
8
  
 
2,465
 
  
 
2,316
 
Provision for income taxes
  
 
33
 
  
 
3
  
 
937
 
  
 
880
 
    


  

  


  


Net income
  
$
55
 
  
$
5
  
$
1,528
 
  
$
1,436
 
    


  

  


  


Net income per common share:
                                 
Basic
  
$
0.02
 
  
$
—  
  
$
0.48
 
  
$
0.35
 
    


  

  


  


Diluted
  
$
0.02
 
  
$
—  
  
$
0.47
 
  
$
0.35
 
    


  

  


  


Weighted average common shares outstanding—basic
  
 
2,522
 
  
 
4,546
  
 
3,212
 
  
 
4,065
 
    


  

  


  


Weighted average common shares outstanding including dilutive potential common shares
  
 
2,561
 
  
 
4,549
  
 
3,244
 
  
 
4,079
 
    


  

  


  


 
 
See Notes to Financial Statements.

2


S & K FAMOUS BRANDS, INC.
 
BALANCE SHEETS
(In thousands, except per share amounts)
 
    
August 3,
2002

    
August 4,
2001

    
February 2,
2002

 
    
(unaudited)
    
(unaudited)
        
ASSETS
                          
Current assets:
                          
Cash and cash equivalents
  
$
542
 
  
$
525
 
  
$
4,257
 
Accounts receivable
  
 
572
 
  
 
304
 
  
 
271
 
Merchandise inventories
  
 
45,563
 
  
 
51,118
 
  
 
44,869
 
Prepaid income taxes
  
 
722
 
  
 
1,152
 
  
 
—  
 
Other current assets
  
 
3,215
 
  
 
2,991
 
  
 
3,213
 
    


  


  


Total current assets
  
 
50,614
 
  
 
56,090
 
  
 
52,610
 
Property and equipment, at cost:
                          
Land and buildings
  
 
6,608
 
  
 
6,603
 
  
 
6,607
 
Furniture, fixtures and equipment
  
 
16,878
 
  
 
16,095
 
  
 
16,711
 
Leasehold improvements
  
 
17,110
 
  
 
16,705
 
  
 
17,142
 
    


  


  


    
 
40,596
 
  
 
39,403
 
  
 
40,460
 
Less: Accumulated depreciation and amortization
  
 
24,072
 
  
 
21,443
 
  
 
22,889
 
    


  


  


    
 
16,524
 
  
 
17,960
 
  
 
17,571
 
Other assets
  
 
6,978
 
  
 
6,144
 
  
 
6,550
 
    


  


  


    
$
74,116
 
  
$
80,194
 
  
$
76,731
 
    


  


  


LIABILITIES AND SHAREHOLDERS’ EQUITY
                          
Current liabilities:
                          
Current maturities of long-term debt
  
$
889
 
  
$
180
 
  
$
180
 
Accounts payable
  
 
8,635
 
  
 
7,970
 
  
 
9,408
 
Accrued compensation and related items
  
 
1,262
 
  
 
1,206
 
  
 
1,566
 
Current and deferred income taxes
  
 
103
 
  
 
141
 
  
 
190
 
Other current liabilities
  
 
1,813
 
  
 
1,771
 
  
 
1,949
 
    


  


  


Total current liabilities
  
 
12,702
 
  
 
11,268
 
  
 
13,293
 
Long-term debt
  
 
14,208
 
  
 
8,545
 
  
 
1,260
 
Other long-term liabilities
  
 
1,636
 
  
 
1,534
 
  
 
1,583
 
Deferred income taxes
  
 
1,463
 
  
 
1,698
 
  
 
1,437
 
Commitments
                          
Shareholders’ equity:
                          
Preferred stock, $1 par value; authorized shares, 500; issued and outstanding shares, none
                          
Common stock, $.50 par value, authorized shares, 10,000; issued and outstanding shares, 2,524, 4,042 and 4,044, respectively
  
 
1,262
 
  
 
2,021
 
  
 
2,022
 
Capital in excess of par value
  
 
38
 
  
 
—  
 
  
 
12
 
Notes receivable—Stock Purchase Loan Plan
  
 
(1,122
)
  
 
(2,059
)
  
 
(2,013
)
Retained earnings
  
 
43,929
 
  
 
57,187
 
  
 
59,137
 
    


  


  


    
 
44,107
 
  
 
57,149
 
  
 
59,158
 
    


  


  


    
$
74,116
 
  
$
80,194
 
  
$
76,731
 
    


  


  


 
See Notes to Financial Statements.

3


 
S & K FAMOUS BRANDS, INC.
 
STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash
(In thousands)
(unaudited)
 
    
Six Months Ended

 
    
8/3/02

    
8/4/01

 
Cash flows from operating activities:
                 
Net income
  
$
1,528
 
  
$
1,436
 
Adjustments to reconcile net income to net cash
                 
Depreciation and amortization
  
 
1,856
 
  
 
1,832
 
Proceeds received on insurance claim
  
 
225
 
  
 
—  
 
Gain on insurance claim
  
 
(132
)
  
 
—  
 
Loss on property dispositions, net
  
 
51
 
  
 
73
 
Other
  
 
53
 
  
 
49
 
Changes in assets and liabilities:
                 
Accounts receivable
  
 
5
 
  
 
(49
)
Merchandise inventories
  
 
(1,008
)
  
 
913
 
Other current assets
  
 
(2
)
  
 
(95
)
Other assets
  
 
100
 
  
 
(339
)
Accounts payable and accrued expenses
  
 
(1,163
)
  
 
90
 
Current and deferred income taxes
  
 
(564
)
  
 
(1,683
)
    


  


Net cash provided by operating activities
  
 
949
 
  
 
2,227
 
    


  


Cash flows from investing activities:
                 
Capital expenditures
  
 
(865
)
  
 
(1,400
)
Proceeds from property disposition
  
 
7
 
  
 
58
 
    


  


Net cash used for investing activities
  
 
(858
)
  
 
(1,342
)
    


  


Cash flows from financing activities: