Ames reports fourth-quarter, year-end results.ROCKY HILL Rocky Hill, town (1990 pop. 16,554), Hartford co., central Conn., a suburb of Hartford, on the Connecticut River; settled c.1650, inc. 1843. Chemical coatings and synthetic textiles are made there. Rocky Hill was an important river port from 1700 to 1820. , Conn.--(BUSINESS WIRE)--March 14, 1996--Ames Department Stores This is a list of department stores. In the case of department store groups the location of the flagship store is given. This list does not include large specialist stores, which sometimes resemble department stores. Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :AMES) today reported income before other charges and gains of $10.1 million for the fiscal year ended Jan. 27, 1996 (fiscal 1995), compared with income before other charges and gains of $7.8 million for the prior fiscal year (fiscal 1994). The company reported a net loss of $1.6 million, or a loss of 8 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , for fiscal 1995, compared with net income of $17.0 million, or 79 cents per share, in fiscal 1994. Fiscal 1995's net loss included a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. $20.9 million restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. taken in the fourth quarter to cover the previously announced closing of 17 underperforming stores and reduction in corporate office staff levels and property gains of $9.1 million. Fiscal 1994's results included a nonrecurring gain of $12.0 million for a litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. settlement and property gains of $8.3 million. Ames reported income before other charges and gains of $34.6 million for the fourth quarter ended Jan. 27, 1996, compared with income before other charges and gains of $38.8 million for the same period in the prior year. Net income for the fourth quarter, including the $20.9 million restructuring charge discussed above, was $11.2 million, or 54 cents per share, compared with net income of $30.7 million, or $1.44 per share, for the same period in the prior year. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for fiscal 1995 were $2.121 billion, compared with $2.143 billion in the previous fiscal year, a decrease of 1.0 percent. Comparable-store sales for the period also decreased 1.0 percent. Net sales for the fourth quarter were $669.0 million, compared with $704.5 million in the year-earlier period, a decrease of 5.0 percent. Comparable store sales for the period also decreased 5.0 percent. Joseph R. Ettore, Ames President and Chief Executive Officer, said, "We were pleased to be able to report a modest increase in income before other charges and gains for fiscal 1995, particularly in view of generally poor Northeast economic conditions and the extremely competitive retailing environment. As part of the company's continuing efforts to improve efficiencies and reduce expense, fiscal 1995 total selling, general and administrative expenses were reduced by $16.9 million, compared with fiscal 1994, while fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. merchandise inventories were $28.0 million below the prior year-end. "We continue to position the company so that it may actively pursue growth opportunities arising in the regional discount industry. This year we plan to open 12 new stores, including 11 formerly operated by Jamesway. Acquiring these higher-volume stores better positions Ames by building on our dominant presence in the Northeast, increasing market share in areas of three key states and adding an estimated $120 million in annual net sales. Nine of these locations will reopen re·o·pen tr. & intr.v. re·o·pened, re·o·pen·ing, re·o·pens 1. To open or be opened again: Officials reopened the airport after the snow was cleared. Schools reopen in September. as Ames stores in late April. Additionally, on February 29 we held the grand opening of our newest store in Lowell, Mass., to positive and enthusiastic customer reaction," he said. "In 1996 our efforts remain focused on providing customers with compelling reasons to buy at Ames by stressing our wide assortment assortment /as·sort·ment/ (ah-sort´ment) the random distribution of nonhomologous chromosomes to daughter cells in metaphase of the first meiotic division. as·sort·ment n. of quality, value-priced merchandise in a convenient, friendly shopping environment. We also intend to continue to generate customer excitement and traffic through the further expansion of the successful Special Buy and 55 Gold Savings Card programs; targeted advertising; micromarketing and special promotional events," Ettore said. Ames, which operates 308 stores in 14 Northeastern states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , is the nation's fifth-largest discount retailer with annual net sales of $2.1 billion. For fax copies of Ames' most-recent news releases, dial 1-800-758-5804 ext. 036787. Ames on-line information - http://www.AmesStores.com
AMES DEPARTMENT STORES INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
For the Thirteen For the Fifty-two
Weeks Ended Weeks Ended
Jan. 27, Jan. 28, Jan. 27, Jan. 28,
1996 1995 1996 1995
TOTAL SALES $696,157 $731,339 $2,216,009 $2,242,270 Less: Leased department sales 27,114 26,835 95,178 99,443 NET SALES 669,043 704,504 2,120,831 2,142,827 COSTS, EXPENSES AND (INCOME): Cost of merchandise sold 491,039 522,283 1,557,345 1,571,181 Selling, general and administrative expenses 141,967 145,706 552,729 569,645 Leased department and other operating income (8,533) (8,099) (29,677) (30,296) Depreciation and amortization expense 5,933 1,677 12,360 5,288 Amortization of the excess of revalued net assets over equity under fresh-start reporting (1,538) (1,539) (6,153) (6,153) Interest and debt expense, net 5,566 5,721 24,116 25,367 INCOME BEFORE OTHER (CHARGES) AND GAINS 34,609 38,755 10,111 7,795 Gain on disposition of properties 3,046 4,720 9,136 8,255 Restructuring charge (20,865) --- (20,865) --- Distribution center closing costs --- 1,200 --- (1,300) Nonrecurring gain -- litigation settlement --- --- --- 12,001 INCOME (LOSS) BEFORE INCOME TAXES AND EXTRAORDINARY ITEM 16,790 44,675 (1,618) 26,751 Income tax benefit (provision) (5,571) (14,015) --- (8,208) INCOME (LOSS) BEFORE EXTRAORDINARY ITEM 11,219 30,660 (1,618) 18,543 Extraordinary item -- gain (loss) on early extinguishment of debt (net of tax benefit of $727) --- --- --- (1,517) NET INCOME (LOSS) $11,219 $30,660 ($1,618) $17,026 WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES USED IN THE CALCULATION OF EARNINGS PER SHARE 20,788 21,316 20,127 21,499 INCOME (LOSS) PER SHARE BEFORE EXTRAORDINARY ITEM $0.54 $1.44 ($0.08) $0.86 EXTRAORDINARY GAIN (LOSS) PER SHARE --- --- --- (0.07) NET INCOME (LOSS) PER SHARE $0.54 $1.44 ($0.08) $0.79 Results of Operations as a Percent of Net Sales: Net sales 100.0% 100.0% 100.0% 100.0% Cost of merchandise sold 73.4 74.1 73.4 73.3 Gross margin 26.6 25.9 26.6 26.7 Selling, general and administrative expenses 21.2 20.7 26.1 26.6 Leased department and other operating income (1.3) (1.1) (1.4) (1.4) Depreciation and amortization expense 0.9 0.2 0.6 0.2 Amortization of the excess of revalued net assets over equity under fresh-start reporting (0.2) (0.2) (0.3) (0.3) Interest and debt expense, net 0.8 0.8 1.1 1.2 Income before other (charges) and gains 5.2 5.5 0.5 0.4 Gain on disposition of properties 0.5 0.7 0.4 0.4 Restructuring charge (3.1) --- (1.0) --- Distribution center closing costs --- 0.2 --- (0.1) Nonrecurring gain -- litigation settlement --- --- --- 0.6 Income (loss) before income taxes and extraordinary item 2.5 6.3 (0.1) 1.3 Income tax benefit (provision) (0.8) (2.0) --- (0.4) Income (loss) before extraordinary item 1.7 4.3 (0.1) 0.9 Extraordinary gain (loss) --- --- --- (0.1) Net income (loss) 1.7% 4.3% (0.1)% 0.8% (Please see the accompanying condensed notes to these consolidated financial statements.)
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AMES DEPARTMENT STORES INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands, except share amounts)
January 27, January 28,
1996 1995
ASSETS
Current assets:
Unrestricted cash and short-term investments $14,185 $28,402
Restricted cash and short-term investments --- 2,047
Total cash and short-term investments 14,185 30,449
Receivables:
Trade 6,900 8,834
Other 7,578 7,973
Total receivables 14,478 16,807
Merchandise inventories 402,177 430,152
Prepaid expense and other current assets 12,793 8,999
Total current assets 443,633 486,407
Fixed assets:
Land and buildings 1,074 845
Property under capital leases 3,809 687
Fixtures and equipment 53,259 35,130
Leasehold improvements 20,345 11,991
78,487 48,653
Less -- Accumulated depreciation and
amortization (20,259) (7,620)
Net fixed assets 58,228 41,033
Other assets and deferred charges 3,965 5,948
$505,826 $533,388
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Accounts payable: Trade $112,682 $130,737 Other 43,636 33,794 Total accounts payable 156,318 164,531 Note payable -- revolver 4,284 --- Current portion of long-term debt 13,682 15,168 Current portion of capital lease obligations 3,665 3,988 Self-insurance reserves 39,003 46,413 Accrued compensation 20,424 20,129 Accrued expenses 34,519 40,491 Restructuring reserve 30,623 2,878 Total current liabilities 302,518 293,598 Long-term debt 23,159 39,030 Capital lease obligations 29,372 38,065 Other long-term liabilities 6,322 6,242 Unfavorable lease liability 18,672 22,903 Excess of revalued net assets over equity under fresh-start reporting 42,480 48,633 Commitments and contingencies
Stockholders' equity:
Priority common stock --- ---
Common stock (40,000,000 shares authorized;
20,472,269 and 20,127,269 outstanding at
Jan. 27, 1996 and Jan. 28, 1995, respectively;
par value $.01) 205 201
Additional paid-in capital 80,759 80,759
Retained earnings (accumulated deficit) 2,339 3,957
Total stockholders' equity 83,303 84,917
$505,826 $533,388
(Please see the accompanying condensed notes to these consolidated financial statements) Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Notes to News Release Financial Statements Basis of Presentation: In the opinion of management, the accompanying consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge of Ames Department Stores Inc., and subsidiaries (collectively the "Company") contain all adjustments necessary for a fair presentation of such financial statements for the periods presented. Certain prior year items have been reclassified to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the current year presentation. The accompanying financial statements should be read in conjunction with the financial statements and notes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. included in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. to be filed in April, 1996. Earnings Per Common Share: Earnings per share was determined using the weighted average number of common and common equivalent shares outstanding. Primary and fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were the same in each period. Inventories: Substantially all inventories are valued at the lower of cost or market lower of cost or market A method for determining an asset's value such that either the original cost or the current replacement cost, whichever is lowest, is used for financial reporting purposes. . Cost is determined by the retail last-in, first-out last-in, first-out n. A method of inventory accounting in which the most recently acquired items are assumed to have been the first sold. In a period of rising prices, this method yields a lower ending inventory, a higher cost of goods sold, a lower (LIFO (Last In-First Out) A queueing method in which the next item to be retrieved is the item most recently placed in the queue. Contrast with FIFO. LIFO - stack ) cost method for all merchandise inventories. No LIFO reserve was necessary at Jan. 27, 1996 and Jan. 28, 1995. Debt: The Company has an agreement with BankAmerica Business Credit Inc., as agent, and a syndicate Syndicate organized crime unit throughout major cities of the United States. [Am. Hist.: NCE, 2018] See : Gangsterism consisting of seven other banks and financial institutions, for a secured revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility of up to $300 million, with a sublimit sub·lim·it n. A limit or ceiling placed on a subdivision of a larger category, especially of nuclear weapons: negotiating sublimits on the number of land-based, intermediate-range missiles. of $100 million for letters of credit (the "Credit Agreement"). The Credit Agreement is in effect until June 22, 1997, is secured by substantially all of the assets of the Company, and requires the Company to meet certain quarterly financial covenants. The Company is in compliance with these financial covenants, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , through the quarter ended Jan. 27, 1996. Income Taxes: The Company did not record an income tax provision for the fiscal year ended Jan. 27, 1996 and recorded a non-cash income tax provision of $8.2 million for the fiscal year ended Jan. 28, 1995. Tax benefits realized for tax purposes for cumulative temporary differences incurred prior to the consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the company's plan of reorganization, as well as for pre-consummation net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. carryovers, are reported as additions to paid-in capital Paid-in capital Capital received from investors in exchange for stock, but not stock from capital generated from earnings or donated. This account includes capital stock and contributions of stockholders credited to accounts other than capital stock. rather than as reductions in the tax provisions in the statements of operations. The income tax provision has no impact on the company's taxes payable or cash flows. Restructuring Charge: The Company announced in January, 1996 that it would close 17 stores in March, 1996 and that it eliminated 71 positions in the corporate headquarters. In connection with the 17-store closing and related headquarter head·quar·ter v. head·quar·tered, head·quar·ter·ing, head·quar·ters Usage Problem v.tr. To provide with headquarters: reductions, the Company recorded a restructuring charge of $20.9 million in January, 1996. The restructuring charge represented estimated leases liabilities, employee payroll and severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs, losses on disposition of assets and other incremental costs Costs which are additional costs to the Service appropriations that would not have been incurred absent support of the contingency operation. See also financial management. related to the 17-store closing. Accounting Change: Effective Jan. 27, 1996 the Company adopted Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of Long-Lived Assets and for Long-Lived Assets to be Disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. Of." As a result, the Company recorded an impairment loss of $3.4 million in the quarter ended Jan. 27, 1996. The impairment loss, classified as part of "Depreciation and Amortization Expense," was equivalent to the current carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of fixtures and equipment and leasehold improvements Leasehold Improvement Improvements on a leased asset that increase the value of the asset. Notes: A leasehold improvement is classified as an asset that must be depreciated over time. for specific stores where historical and projected operating performance indicated an impairment. The Company will continue to operate these stores until such time that the estimated closing costs Closing Costs The numerous expenses (over and above the price of the property) that buyers and sellers normally incur to complete a real estate transaction. Costs incurred include loan origination fee, discount points, appraisal fee, title search, title insurance, survey, taxes, are less than any current cash losses. CONTACT: Marge Wyrwas, 203/257-2659 Bill Roberts, 203/257-2666 Lynn Riemer, 203/257-2655 |
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