hhgregg, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - September 18, 2017

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Exhibit 99.1
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
 
 
 
 
 
 
 
 
 
 
In re
Gregg Appliances, Inc.
Case No.
17-01303-11
 
Debtors
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
"MONTHLY OPERATING REPORT
Gregg Appliances, Inc."
 
 
 
 
 
 
 
 
 
 
INDEX TO CONDENSED FINANCIAL STATEMENTS AND SCHEDULES
 
 
 
 
 
 
 
 
 
 
CONDENSED FINANCIAL STATEMENTS
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
Condensed Statement of Income
 
 
 
2
 
Condensed Balance Sheet
 
 
 
 
3
 
Condensed Statement of Cash Flows
 
 
 
4
 
 
 
 
 
 
 
 
 
 
SCHEDULES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Schedule 1 -
Total Disbursements
 
 
 
5
 
Schedule 2 -
Bank Reconciliations
 
 
 
 
6
 
Schedule 3 -
Total Disbursements to Retained Professionals
 
 
7
 
Schedule 4 -
Summary of Unpaid Post-Petition Debts
 
 
8
 
Schedule 5 -
Schedule of Federal, State, and Local Taxes Collected, Received, Due or Withheld
 
 
 
9
 
Schedule 6 -
Accounts Receivable Aging
 
 
 
10
 
Schedule 7 -
 Questionnaire
11
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the documents attached are true and correct to the best of my knowledge and belief.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Signature of Debtor
 
 
 
 
Date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Signature of Joint Debtor
 
 
 
Date
 
 
 
 
 
 
/s/ Kevin Kovacs
 
 
 
9/12/2017
 
Signature of Authorized Individual*
 
 
 
Date
 
 
 
 
 
 
Kevin Kovacs
 
 
 
CFO
 
 
 
Printed Name of Authorized Individual
 
 
Title of Authorized Individual
 
 
 
 
 
 
 
 
 
* Authorized individual must be an officer, director, or shareholder if debtor is a corporation; a partner if debtor is a partnership; a manager or member if debtor is a limited liability company.
 




Gregg Appliances, Inc.
 
DEBTORS AND DEBTORS IN POSSESSION
 
Condensed Consolidated Statement of Income (unaudited)
 
 
 
 
 For the Period of
 
 August 1, 2017 to
(In Thousands)
August 31, 2017
 
 
Net Sales
 $ -

Cost of Goods Sold
5,106

Gross Profit
(5,106
)
 
 
Operating Expenses:
 
Advertising Expense, Net
  -

Occupancy Costs
(1,966
)
Data Communications
63

Repair and Maintenance
(2
)
Company Insurance (Non-Medical)
25

Employee Benefits
(41
)
Wage Expense
469

Employee Services
26

Travel and Entertainment
  -

Bank Transaction Fees
  -

Professional Fees
2,981

Stock Compensation Expense (Benefit), Net
  -

Gain/Loss on Early Extinguishment of Debt
  -

Depreciation and Amortization
  -

Administrative and Sales Expense
(3
)
Product Services Expense
300

Bad Debts
28

 
 
Total Operating Expenses
1,881

 
 
Operating Income
(6,987
)
 
 
Interest Expense, net
614

Other Income/(Expense)
355

 
 
Income Before Taxes
$
(7,246
)
 
 
Income Tax Expense/(Benefit)
  -
 
 
Net Income
$
(7,246
)




Gregg Appliances, Inc.
 
DEBTORS AND DEBTORS IN POSSESSION
 
Condensed Consolidated Balance Sheet (unaudited)
 
 
 
 
 
 
 As of
(In Thousands)
8/31/2017
 
 
Assets
 
Cash
$
563

Credit Card and Trade Accounts Receivable, Net
5,484

Accounts Receivable - Other
10,718

Merchandise Inventories
  -

Prepaid Expenses and Other Assets
14,573

Income Taxes Receivable
70

Total Current Assets
31,408

 
 
Property and Equipment, Net
  -

Capitalized Financing Fees, Net
2,221

Goodwill
  -

Trademarks, Net
  -

Other Assets, Net
2,322

 
 
Total Assets
35,950

 
 
Liabilities and Stockholders' Deficit
 
Accounts Payable
11,287

Outstanding Customer Deposits, Credits, Refunds
1,560

Unredeemed Gift Card Liability
15

Other Accrued Expenses
2,716

Deferred Tax Liability
—

DIP Loans
6,807

 
 
 
 
Total Current Liabilities
22,384

 
 
Deferred Rent
—

LT Deferred Compensation
234

Other Long-term Liabilities
1,026

Liabilities Subject to Compromise
$
194,189

 
 
Total Liabilities
217,833

 
 
    Preferred Stock
—

Common Stock
4

Retained Earnings / (Accumulated Deficit)
(336,434
)
Treasury Stock
(150,228
)
Additional Paid-in Capital
304,775

Total Stockholders' Deficit
(181,883
)
 
 
 
 
Total Liabilities and Stockholders' Deficit
$
35,950





Gregg Appliances, Inc.
 
DEBTORS AND DEBTORS IN POSSESSION
 
Condensed Consolidated Statement of Cash Flows (unaudited)
 
 
 
 
 
For the Period of
 
 
August 1, 2017 to
 
(In Thousands)
August 31, 2017
 
Cash flows from operating activities:
 
 
     Net cash provided by (used in) operating activities
$
12,657

 
 
 
 
Cash flows from investing activities:
 
 
     Purchases of property and equipment
—

 
     Proceeds from sale of property and equipment
—

 
     Other
—

 
     Net cash used in investing activities
—

 
 
 
 
Cash flows from financing activities:
 
 
     Net Borrowings (Repayments) on Line of Credit
(12,595
)
 
 
(12,595
)
 
 
 
 
Increase/(decrease) in cash and cash equivalents
62

 
 
 
 
Cash and cash equivalents at beginning of period
501

 
 
 
 
Cash and cash equivalents at end of period
$
563

 




Gregg Appliances, Inc.
 
 
 
 
 
DEBTORS AND DEBTORS IN POSSESSION
 
 
 
Total Disbursements by Filed Legal Entity (unaudited)
 
 
 
 
 
 
 
 
(In Thousands)
 
 
 
 
 
For the Period of August 1, 2017 to August 31, 2017
 
 
 
Legal Entity
 
Case Number
 
 Disbursements
 
Gregg Appliances, Inc.
 
17-01303-11
 
$
2,450

 







Gregg Appliances, Inc.
 
 
 
 
DEBTORS AND DEBTORS IN POSSESSION
 
 
 
 
Bank Reconciliations (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
(In Thousands)
 
 
 
 
 
 
G/L Acct
Account Name
Bank Acct #
Debtor
Description
Bank Balance
Ledger Balance
As of Date
Reconciled
1000
Master Operating Account
938169174
Gregg Appliances, Inc.
Operating Account
—

—

8/31/2017
No
1001
Corporate Account
multiple accounts
Gregg Appliances, Inc.
Corporate AR deposit account, All retail locations depository account
 $ -

 $ -

8/31/2017
No
1003
Flex Benefits
938168515
Gregg Appliances, Inc.
Flex Benefits Payments
 $ -

 $ -

8/31/2017
No
1010
RCC Returned Checks
938168127
Gregg Appliances, Inc.
Returned check concentration
 $ -

 $ -

8/31/2017
No
1013
Ohio Workers Compensation
938168341
Gregg Appliances, Inc.
Ohio Workers Comp Claims
 $ -

 $ -

8/31/2017
No
1016
Cash Concentration
938169455
Gregg Appliances, Inc.
Cash Dominion
320

320

8/31/2017
No
1042
PayPal
938183472
Gregg Appliances, Inc.
HR Insurance Collections - Leave Associates
 $ -

 $ -

8/31/2017
No
1050
Payroll
938169802
Gregg Appliances, Inc.
Off Cycle Payroll
 $ -

(13.00
)
8/31/2017
Yes
1051
Disbursements
938169729
Gregg Appliances, Inc.
Checking
 $ -

(115.00
)
8/31/2017
No
1055
Restricted - Utilities Escrow
938157500
Gregg Appliances, Inc.
Utility Escrow
372

372

8/31/2017
Yes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




Gregg Appliances, Inc.
 
 
 
 
 
 
DEBTORS AND DEBTORS IN POSSESSION
 
 
 
 
 
Total Disbursements to Retained Professionals (unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
(In Thousands)
 
 
 
 
 
 
For the Period of August 1, 2017 to August 31, 2017
 
Retained Professionals
 
Approved Amounts (1)
 
Disbursements
 
MORGAN, LEWIS & BOCKIUS LLP
Legal Services
 
1,019

 
(316
)
 
STIFEL, NICOLAUS & COMPANY INC
Bankruptcy Services
 
  -

 
  -

 
BERKELEY RESEARCH GROUP LLC
Bankruptcy Services
 
2,088

 
(550
)
 
DONLIN, RECANO & COMPANY INC
Bankruptcy Services
 
  -

 
(22
)
 
ICE MILLER LLP
Legal Services
 
763

 
(226
)
 
BINGHAM GREENBAUM DOLL LLP
Bankruptcy Services
 
67

 
(21
)
 
MALFITANO PARTNERS
Bankruptcy Services
 
66

 
(9
)
 
COOLEY LLP
Bankruptcy Services
 
1,045

 
(312
)
 
PROVINCE, INC.
Bankruptcy Services
 
390

 
(107
)
 
 
 
 
 
 
Total
 
 
$
5,438

 
$
(1,563
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Approved amounts represent the aggregate amount of fees and expenses that were approved by court order for payment by the Debtors to each professional through August 2017.
 
 
 





Gregg Appliances, Inc.
 
 
 
 
 
 
DEBTORS AND DEBTORS IN POSSESSION
 
 
 
 
 
Summary of Unpaid Post-Petition Debts (unaudited)
 
 
As of 8/31/2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In Thousands)
 
 
 
 
 
 
Gregg Appliances, Inc. (17-01303-11)
 
 
 Number of Days Past Due
 
Current
 0-30
31-60
61-90
Over 90
Total
Accounts Payable
$
406

$
48

$
229

$
409

$
(159
)
$
933

Wages Payable
373

  -

  -

  -

  -

373

Taxes Payable (1)
691

1

4

43

204

944

Rent/Leases-Building
  -

(38
)
11

  -

4,613

4,586

Utilities Payable (2)
127

86

105

396

228

943

Insurance Reserves
1,928

  -

  -

  -

  -

1,928

Secured Debt/Adequate Protection Payments
  -

  -

  -

  -

  -

  -

Professional Fees
310

1,071

715

1,913

269

4,277

Amounts Due to Insiders
  -

  -

  -

  -

  -

  -

Outstanding Customer Deposits, Credits, Refunds (1)
1,560

  -

  -

  -

  -

1,560

Unredeemed Gift Card Liability (1)
15

  -

  -

  -

  -

15

Deferred Rent
  -

  -

  -

  -

  -

  -

LT Deferred Compensation
234

  -

  -

  -

  -

234

Other (1)
1,007

  -

  -

1

36

1,043

Total Post-Petition Debts
$
6,651

$
1,169

$
1,063

$
2,761

$
5,192

$
16,836

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Any past due taxes payable relate to unpaid business license fees for 2017, as well as unpaid gross receipts taxes payable beginning in June 2017.
(2) Aging information for payables other than trade payables is not readily available. As such, all other post-petition payables have been categorized in the Current bucket.




Gregg Appliances, Inc.
 
 
 
 
DEBTORS AND DEBTORS IN POSSESSION
 
 
Schedule of Federal, State, & Local Taxes Collected, Received, Due or Witheld (unaudited)
 
 
 
 
 
 
 
 
(In Thousands)
 
 
 
 
 
 
For the Period of August 1, 2017 to August 31, 2017
 
 
 
 
Beginning Tax Liability
Amount Withheld or Accrued
Amount Paid
Date Paid
Check No. or EFT
Ending Tax Liability
Federal
 
 
 
 
 
 
Withholding
 $ -

76.00

(76
)
8/11; 8/25
EFT
 $ -

FICA - Employee
 $ -

19

(19
)
8/11; 8/25
EFT
 $ -

FICA - Employer
16.00

4

(19
)
8/11; 8/25
EFT
1.00

Unemployment
 $ -

 $ -

 $ -

8/11; 8/25
EFT
 $ -

Income
 $ -

 
 
 
 
 $ -

Total Federal Taxes
16

99

(114
)
 
 
1

 
 
 
 
 
 
 
State and Local
 
 
 
 
 
 
Withholding
 $ -

4

(4
)
8/11; 8/25
EFT
 $ -

Sales and Use
(27
)
 $ -

 $ -

 
 
(27
)
Excise
 $ -

 $ -

 $ -
 
 
 $ -

Unemployment
 $ -

 $ -

 $ -

8/11; 8/25
EFT
 $ -

Real Property
3,502

 $ -

 $ -

 
 
3,502

Personal Property
1,646

 $ -

(10
)
 
Applied against business license refunds by State Taxing Authorities
1,635

Other
52

 $ -

 $ -

 
 
52

Total State and Local
5,173

4

(14
)
 
 
5,163

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




Gregg Appliances, Inc.
 
 
 
 
 
DEBTORS AND DEBTORS IN POSSESSION
 
 
 
 
 
Accounts Receivable Aging (unaudited)
 
 
 
 
 
 
 
 
 
 
 
(In Thousands)
 
 
 
 
 
As of August 31, 2017
 
 
 
 
 
Accounts Receivable Reconciliation
 
Credit Card Receivables
Trade Accounts Receivable
 
Total Credit Card and Trade Accounts Receivable
Total Accounts Receivable at the beginning of the reporting period
 
$
(301
)
$
5,911

 
$
5,611.00

+ Amounts billed during the period
 
  -

  -

 
  -

- Amounts collected during the period
 
  -

(99
)
 
$
(99
)
- Other Adjustments (Writeoffs/Credit Memos/Adjustments/Chargebacks/Signifyd Funding)
 
  -

(28
)
 
$
(28
)
Total Accounts Receivable at the end of the reporting period
 
$
(301
)
$
5,784

 
$
5,484

 
 
 
 
 
 
As of August 31, 2017
 
 
 
 
Accounts Receivable Aging
 
 
 
 
 
 
 
 
 
 
 
< 90
 
 $ -

(1
)
 
$
(1
)
91+
 
(301
)
5,785.00

 
$
5,485

Total Accounts Receivable
 
(301
)
5,784

 
$
5,484

Amount Considered Uncollectible
 
  -

  -

 
  -

Accounts Receivable, Net
 
$
(301
)
$
5,784

 
$
5,484

 
 
 
 
 
 
NOTES
 
 
 
 
 
(1) Credit Card Receivable Aging has been estimated, as all credit card settlement was turned off in June 2017. Therefore, all balances are at least 60 days old as of 8/31/17.
 
 
(2) No reserves have been recorded against credit card receivables.
 
 
(3) $10.7M of Accounts Receivable - Other exists at 8/31/2017 for which aging information is not readily available.
 
 
(4) The Credit Card Receivables are in a payable position at 8/31/2017 as a result of turning off settlement with credit card companies in June, thereby, owing the credit card companies, specifically Synchrony, for various ongoing adjustments and chargebacks.

 
 
 
 
 
 
 
 
 
 
 
 
 
 




Gregg Appliances, Inc.
 
 
 
 
 
 
DEBTORS AND DEBTORS IN POSSESSION
 
 
 
 
Questionnaire
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Yes
No
1. Have any assets been sold or transferred outside the normal course of business this reporting period? If yes, provide an explanation below.
 
X
2. Have any funds been disbursed from any account other than a debtor in possession account this reporting period? If yes, provide an explanation below.
 
X
3. Have all post-petition tax returns been filed timely? If no, provide an explanation below.
X
 
4. Are workers compensation, general liability, and other necessary insurance coverages in effect? If no, provide an explanation below.
X
 
5. Has any bank account been opened during the reporting period? If yes, provide documentation identifying the opened account(s). If an investment has been opened provide the required documentation pursuant to the Delaware Local Rule 4001-3.
 
X
Account Name
Purpose
Business
Acct Number
Bank Name
Date
 
 
 
 
 
 
 
 
 
 
 
 





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