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 May 3, 2003
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 by check mark whether the registrant is an accelerated filer as defined in Rule 12-b-2 of the Act. Yes ¨ No x
Indicate the number of shares outstanding of each of the Registrant’s classes of common stock as of May 3, 2003.
2,452,584 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 |
||||||||
| May 3, 2003 |
May 4, 2002 |
|||||||
| Net sales |
$ |
42,183 |
|
$ |
41,791 |
| ||
| Cost of sales |
|
21,341 |
|
|
21,204 |
| ||
| Gross profit |
|
20,842 |
|
|
20,587 |
| ||
| Other costs and expenses: |
||||||||
| Selling, general and administrative |
|
17,469 |
|
|
17,443 |
| ||
| Interest |
|
94 |
|
|
13 |
| ||
| Depreciation and amortization |
|
787 |
|
|
797 |
| ||
| Other income, net |
|
(25 |
) |
|
(43 |
) | ||
| Income before income taxes |
|
2,517 |
|
|
2,377 |
| ||
| Provision for income taxes |
|
956 |
|
|
903 |
| ||
| Net income |
$ |
1,561 |
|
$ |
1,474 |
| ||
| Earnings per common share: |
||||||||
| Basic |
$ |
0.63 |
|
$ |
0.38 |
| ||
| Diluted |
$ |
0.63 |
|
$ |
0.38 |
| ||
| Weighted average common shares outstanding – basic |
|
2,473 |
|
|
3,902 |
| ||
| Weighted average common shares outstanding including dilutive potential common shares |
|
2,487 |
|
|
3,927 |
| ||
See Notes to Financial Statements.
2
S & K FAMOUS BRANDS, INC.
Balance Sheets
(In thousands, except per share amounts)
| May 3, 2003 |
May 4, 2002 |
February 1, 2003 |
||||||||||
| (unaudited) |
(unaudited) |
|||||||||||
| ASSETS |
||||||||||||
| Current assets: |
||||||||||||
| Cash and cash equivalents |
$ |
519 |
|
$ |
5,491 |
|
$ |
3,002 |
| |||
| Accounts receivable |
|
258 |
|
|
252 |
|
|
314 |
| |||
| Merchandise inventories |
|
55,017 |
|
|
50,339 |
|
|
46,073 |
| |||
| Prepaid income taxes |
|
— |
|
|
— |
|
|
242 |
| |||
| Other current assets |
|
3,081 |
|
|
3,405 |
|
|
3,283 |
| |||
| Total current assets |
|
58,875 |
|
|
59,487 |
|
|
52,914 |
| |||
| Property and equipment, at cost: |
||||||||||||
| Land and buildings |
|
6,608 |
|
|
6,608 |
|
|
6,607 |
| |||
| Furniture, fixtures and equipment |
|
17,353 |
|
|
16,919 |
|
|
17,327 |
| |||
| Leasehold improvements |
|
17,321 |
|
|
17,205 |
|
|
17,220 |
| |||
|
|
41,282 |
|
|
40,732 |
|
|
41,154 |
| ||||
| Less: Accumulated depreciation and amortization |
|
25,727 |
|
|
23,721 |
|
|
25,033 |
| |||
|
|
15,555 |
|
|
17,011 |
|
|
16,121 |
| ||||
| Other assets |
|
7,184 |
|
|
6,792 |
|
|
7,174 |
| |||
| $ |
81,614 |
|
$ |
83,290 |
|
$ |
76,209 |
| ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||
| Current liabilities: |
||||||||||||
| Current maturities of long-term debt |
$ |
2,346 |
|
$ |
403 |
|
$ |
1,860 |
| |||
| Accounts payable |
|
17,068 |
|
|
14,691 |
|
|
12,037 |
| |||
| Accrued compensation and related items |
|
893 |
|
|
893 |
|
|
2,379 |
| |||
| Current and deferred income taxes |
|
821 |
|
|
438 |
|
|
94 |
| |||
| Other current liabilities |
|
2,215 |
|
|
1,975 |
|
|
2,034 |
| |||
| Total current liabilities |
|
23,343 |
|
|
18,400 |
|
|
18,404 |
| |||
| Long-term debt |
|
8,832 |
|
|
18,079 |
|
|
9,419 |
| |||
| Other long-term liabilities |
|
1,704 |
|
|
1,609 |
|
|
1,690 |
| |||
| Deferred income taxes |
|
1,503 |
|
|
1,450 |
|
|
1,512 |
| |||
| 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, 2,452, 2,519 and 2,504, respectively |
|
1,226 |
|
|
1,260 |
|
|
1,252 |
| |||
| Capital in excess of par value |
|
— |
|
|
— |
|
|
— |
| |||
| Notes receivable—Stock Purchase Loan Plan |
|
(985 |
) |
|
(1,508 |
) |
|
(996 |
) | |||
| Retained earnings |
|
45,991 |
|
|
44,000 |
|
|
44,928 |
| |||
|
|
46,232 |
|
|
43,752 |
|
|
45,184 |
| ||||
| $ |
81,614 |
|
$ |
83,290 |
|
$ |
76,209 |
| ||||
See Notes to Financial Statements.
3
S & K FAMOUS BRANDS, INC.
Statements of Cash Flows
Increase (Decrease) in Cash
(in thousands) (unaudited)
| Three Months Ended |
||||||||
| May 3, 2003 |
May 4, 2002 |
|||||||
| Cash flows from operating activities: |
$ |
1,561 |
|
$ |
1,474 |
| ||
| Net income |
||||||||
| Adjustments to reconcile net income to net cash provided by (used for) operating activities: |
||||||||
| Depreciation and amortization |
|
907 |
|
|
916 |
| ||
| Loss on property dispositions, net |
|
10 |
|
|
16 |
| ||
| Other |
|
14 |
|
|
25 |
| ||
| Changes in assets and liabilities: |
||||||||
| Accounts receivable |
|
56 |
|
|
19 |
| ||
| Merchandise inventories |
|
(8,944 |
) |
|
(5,470 |
) | ||
| Other current assets |
|
202 |
|
|
(192 |
) | ||
| Other assets |
|
17 |
|
|
(114 |
) | ||
| Accounts payable and accrued expenses |
|
3,886 |
|
|
4,408 |
| ||
| Current and deferred income taxes |
|
964 |
|
|
585 |
| ||
| Net cash (used for) provided by operating activities |
|
(1,327 |
) |
|
1,667 |
| ||
| Cash flows from investing activities: |
||||||||
| Capital expenditures |
|
(341 |
) |
|
(372 |
) | ||
| Cash flows from financing activities: |
||||||||
| Borrowings under line of credit debt |
||||||||