SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
F O R M 10 - Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 1, 2004
Commission file no. 1-10299
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FOOT LOCKER, INC. |
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(Exact name of registrant as specified in its charter) |
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New York |
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13-3513936 |
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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112 W. 34th Street, New York, New York |
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10120 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number: (212) 720-3700
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 o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES x NO o
Number of shares of Common Stock outstanding at May 28, 2004: 145,418,788
FOOT LOCKER, INC.
TABLE OF CONTENTS
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Page No. |
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Part I. |
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Item 1. |
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1 |
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2 |
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3 |
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4 |
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5-13 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
13-17 |
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Item 4. |
18 |
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Part II. |
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Item 1. |
18 |
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Item 2. |
Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
19 |
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Item 6. |
19 |
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20 |
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21 |
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PART I - FINANCIAL INFORMATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except shares)
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May 1, |
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May 3, |
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January 31, |
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(Unaudited) |
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(Unaudited) |
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* |
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ASSETS |
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Current assets |
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Cash and cash equivalents |
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$ |
392 |
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$ |
306 |
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$ |
448 |
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Merchandise inventories |
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1,051 |
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941 |
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920 |
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Assets of discontinued operations |
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2 |
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2 |
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2 |
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Other current assets |
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151 |
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90 |
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149 |
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1,596 |
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1,339 |
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1,519 |
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Property and equipment, net |
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640 |
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626 |
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644 |
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Deferred taxes |
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191 |
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233 |
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194 |
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Goodwill and intangible assets |
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232 |
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222 |
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232 |
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Other assets |
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101 |
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111 |
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100 |
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$ |
2,760 |
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$ |
2,531 |
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$ |
2,689 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current liabilities |
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Accounts payable |
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$ |
370 |
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$ |
344 |
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$ |
234 |
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Accrued liabilities |
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279 |
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254 |
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300 |
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Current portion of repositioning and restructuring reserves |
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1 |
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3 |
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1 |
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Current portion of reserve for discontinued operations |
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7 |
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15 |
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8 |
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Liabilities of discontinued operations |
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1 |
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3 |
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2 |
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Current portion of long-term debt and obligations under capital leases |
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150 |
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— |
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— |
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808 |
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619 |
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545 |
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Long-term debt and obligations under capital leases |
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182 |
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358 |
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335 |
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Other liabilities |
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355 |
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401 |
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434 |
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1,345 |
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1,378 |
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1,314 |
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Shareholders’ equity |
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Common stock and paid-in capital: 145,602,460, |
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431 |
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381 |
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411 |
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Retained earnings |
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1,171 |
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980 |
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1,132 |
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Accumulated other comprehensive loss |
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(183 |
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(206 |
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(167 |
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Less: Treasury stock at cost: 178,922, 185,220 and 56,587 shares, respectively |
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(4 |
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(2 |
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(1 |
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Total shareholders’ equity |
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1,415 |
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1,153 |
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1,375 |
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$ |
2,760 |
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$ |
2,531 |
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$ |
2,689 |
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See Accompanying Notes to Condensed Consolidated Financial Statements.
* The balance sheet at January 31, 2004 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2004.
-1-
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in millions, except per share amounts)
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Thirteen weeks ended |
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May 1, |
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May 3, |
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Sales |
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$ |
1,186 |
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$ |
1,128 |
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Costs and Expenses |
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Cost of sales |
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826 |
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783 |
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Selling, general and administrative expenses |
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248 |
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241 |
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Depreciation and amortization |
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34 |
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37 |
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Interest expense, net |
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4 |
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5 |
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1,112 |
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1,066 |
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Income from continuing operations before income taxes |
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74 |
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62 |
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Income tax expense |
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27 |
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23 |
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Income from continuing operations |
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47 |
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39 |
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Income from disposal of discontinued operations |
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1 |
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— |
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Cumulative effect of accounting change, net of income tax benefit of $- |
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— |
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(1 |
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Net income |
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$ |
48 |
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$ |
38 |
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Basic earnings per share: |
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Income from continuing operations |
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$ |
0.33 |
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$ |
0.28 |
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Income from discontinued operations |
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— |
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— |
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Cumulative effect of accounting change |
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— |
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(0.01 |
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Net income |
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$ |
0.33 |
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$ |
0.27 |
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Weighted-average common shares outstanding |
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143.6 |
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141.1 |
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Diluted earnings per share: |
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Income from continuing operations |
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$ |
0.31 |
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$ |
0.27 |
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Income from discontinued operations |
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— |
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— |
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Cumulative effect of accounting change |
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— |
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(0.01 |
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Net income |
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$ |
0.31 |
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$ |
0.26 |
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Weighted-average common shares assuming dilution |
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156.2 |
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151.3 |
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See Accompanying Notes to Condensed Consolidated Financial Statements.
-2-
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(in millions)
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Thirteen weeks ended |
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May 1, |
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May 3, |
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Net income |
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$ |
48 |
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$ |
38 |
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Other comprehensive (expense) income |
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Foreign currency translation adjustments arising during the period |
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(16 |
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5 |
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Change in fair value of derivatives / reclassification adjustments, net of tax of $- |
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— |
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2 |
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Comprehensive income |
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$ |
32 |
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$ |
45 |
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See Accompanying Notes to Condensed Consolidated Financial Statements.
-3-
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in millions)
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Thirteen weeks ended |
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May 1, |
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May 3, |
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From Operating Activities: |
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Net income |
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$ |
48 |
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$ |
38 |
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Adjustments to reconcile net income to net cash used in operating activities of continuing operations: |
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Income from disposal of discontinued operations, net of tax |
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(1 |
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— |
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Cumulative effect of accounting change, net of tax |
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— |
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1 |
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Depreciation and amortization |
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34 |
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37 |
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Deferred income taxes |
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6 |
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10 |
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Change in assets and liabilities: |
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Merchandise inventories |
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(140 |
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(101 |
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Accounts payable and other accruals |
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124 |
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58 |
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Pension contribution |
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(50 |
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(50 |
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Other, net |
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(29 |
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(4 |
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Net cash used in operating activities of continuing operations |
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(8 |
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(11 |
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From Investing Activities: |
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