x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Delaware
|
|
20-4663833
|
(State
or Other Jurisdiction of
Incorporation
or Organization)
|
|
(I.R.S.
Employer
Identification
No.)
|
1830
Route 130 North
Burlington,
New Jersey
|
|
08016
|
(Address
of Principal Executive Offices)
|
|
(Zip
Code)
|
Part
I - Financial Information:
|
Page
|
Item
1. Financial Statements (unaudited):
|
|
|
|
Condensed
Consolidated Balance Sheets as of December 2, 2006 and June 3, 2006
|
3
|
|
|
Condensed
Consolidated Statements of Operations - Six and Three Months Ended
December 2, 2006 (Successor)
(Successor)
and November 26, 2005 (Predecessor)
|
4
|
|
|
Condensed
Consolidated Statements of Cash Flows - Six Months Ended December
2, 2006
(Successor) and
November
26, 2005 (Predecessor)
|
5
|
|
|
Notes
to Condensed Consolidated Financial Statements
|
7
|
|
|
Item
2. Management's Discussion and Analysis of Results of
Operations and Financial Condition
|
32
|
|
|
Item
3. Quantitative and Qualitative Disclosures About Market
Risk
|
44
|
|
|
Item
4. Controls and Procedures
|
45
|
|
|
Part
II - Other Information:
|
46
|
|
|
Item 1. Legal Proceedings
|
46
|
|
|
Item
1A. Risk Factors
|
46
|
|
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
46
|
|
|
Item
3. Defaults Upon Senior Securities
|
46
|
|
|
Item
4. Submission of Matters to Vote of Security
Holders
|
46
|
|
|
Item
5. Other Information
|
46
|
|
|
Item
6. Exhibits
|
47
|
|
|
SIGNATURES
|
48
|
|
|
*****************
|
|
Successor
|
|||||||
|
|
|
|||||
|
December
2, 2006
|
June
3, 2006
|
|||||
ASSETS
|
|||||||
Current
Assets:
|
|||||||
Cash
and Cash Equivalents
|
$
|
38,326
|
$
|
58,376
|
|||
Restricted
Cash and Cash Equivalents
|
13,808
|
13,816
|
|||||
Investments
|
783
|
591
|
|||||
Accounts
Receivable - Net
|
42,936
|
42,083
|
|||||
Merchandise
Inventories
|
913,259
|
708,185
|
|||||
Deferred
Tax Assets
|
32,349
|
27,916
|
|||||
Prepaid
and Other Current Assets
|
20,009
|
17,835
|
|||||
Assets
Held for Disposal
|
3,070
|
7,661
|
|||||
|
|||||||
Total
Current Assets
|
1,064,540
|
876,463
|
|||||
|
|||||||
|
|||||||
Property
and Equipment (Net of Accumulated Depreciation)
|
1,010,023
|
1,042,398
|
|||||
Tradenames
|
526,300
|
526,300
|
|||||
Favorable
Leases (Net of Accumulated Amortization)
|
608,881
|
626,676
|
|||||
Goodwill
|
58,985
|
58,985
|
|||||
Other
Assets
|
62,672
|
69,727
|
|||||
|
|||||||
Total
Assets
|
$
|
3,331,401
|
$
|
3,200,549
|
|||
|
|||||||
|
|||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
|||||||
|
|||||||
Current
Liabilities:
|
|||||||
Accounts
Payable
|
$
|
636,335
|
$
|
444,904
|
|||
Income
Taxes Payable
|
6,861
|
6,274
|
|||||
Other
Current Liabilities
|
226,476
|
181,760
|
|||||
Current
Maturities of Long Term Debt
|
10,461
|
10,360
|
|||||
|
|||||||
Total
Current Liabilities
|
880,133
|
643,298
|
|||||
|
|||||||
Long
Term Debt
|
1,451,933
|
1,508,119
|
|||||
Other
Liabilities
|
28,694
|
21,974
|
|||||
Deferred
Tax Liability
|
586,477
|
607,646
|
|||||
|
|||||||
Commitments
and Contingencies
|
-
|
Stockholders'
Equity:
|
|||||||
|
|||||||
Preferred
Stock
|
-
|
-
|
|||||
Common
Stock
|
-
|
-
|
|||||
Capital
in Excess of Par Value
|
451,391
|
446,678
|
|||||
Accumulated
Deficit
|
(67,227
|
)
|
(27,166
|
)
|
|||
Total
Stockholders' Equity
|
384,164
|
419,512
|
|||||
Total
Liabilities and Stockholders' Equity
|
$
|
3,331,401
|
$
|
3,200,549
|
BURLINGTON
COAT FACTORY INVESTMENTS HOLDINGS, INC. AND
SUBSIDIARIES
|
|||||||||||||
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||||
(unaudited)
|
|||||||||||||
(All
amounts in thousands)
|
|||||||||||||
|
|
||||||||||||
|
Six
Months Ended
|
Three
Months Ended
|
|||||||||||
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
|||||||||
|
December
2, 2006
|
November
26, 2005
|
December
2, 2006
|
November
26, 2005
|
|||||||||
|
|
|
|
|
|||||||||
REVENUES:
|
|||||||||||||
Net
Sales
|
$
|
1,641,613
|
$
|
1,596,257
|
$
|
984,767
|
$
|
945,409
|
|||||
Other
Revenue
|
19,554
|
15,841
|
12,134
|
8,517
|
|||||||||
|
1,661,167
|
1,612,098
|
996,901
|
953,926
|
|||||||||
|
|||||||||||||
|
|||||||||||||
COSTS
AND EXPENSES:
|
|||||||||||||
Cost
of Sales (Exclusive of Depreciation and Amortization)
|
1,027,383
|
1,014,056
|
600,469
|
588,721
|
|||||||||
Selling
and Administrative Expenses
|
534,641
|
498,593
|
287,581
|
264,153
|
|||||||||
Depreciation
|
72,176
|
45,063
|
37,192
|
22,435
|
|||||||||
Amortization
|
22,897
|
482
|
11,964
|
458
|
|||||||||
Interest
Expense
|
70,630
|
3,344
|
35,216
|
1,531
|
|||||||||
Other
(Income) Loss, Net
|
(1,663
|
)
|
2,492
|
(682
|
)
|
2,611
|
|||||||
|
1,726,064
|
1,564,030
|
971,740
|
879,909
|
|||||||||
|
|
|
|
||||||||||
(Loss)
Income Before Income Tax (Benefit)
Expense
|
(64,897
|
)
|
48,068
|
25,161
|
74,017
|
||||||||
|
|||||||||||||
Provision
for Income Tax (Benefit)Expense
|
(24,836
|
)
|
18,602
|
13,414
|
28,644
|
||||||||
|
|
|
|
||||||||||
Net
(Loss) Income
|
(40,061
|
)
|
29,466
|
11,747
|
45,373
|
||||||||
|
|||||||||||||
Net
Unrealized (Loss) on Non-Marketable
Securities,
Net of Tax
|
-
|
(2
|
)
|
-
|
(2
|
)
|
|||||||
Total
Comprehensive (Loss) Income
|
$
|
(40,061
|
)
|
$
|
29,464
|
$
|
11,747
|
$
|
45,371
|
BURLINGTON
COAT FACTORY INVESTMENTS HOLDINGS, INC. AND
SUBSIDIARIES
|
|||||||
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
(Unaudited)
|
|||||||
(All
amounts in thousands)
|
|||||||
|
|||||||
|
Six
Months Ended
|
||||||
|
Successor
|
Predecessor
|
|||||
|
December
2, 2006
|
November
26, 2005
|
|||||
|
|
|
|||||
OPERATING
ACTIVITIES
|
|||||||
Net
Income (Loss)
|
$
|
(40,061
|
)
|
$
|
29,466
|
||
Adjustments
to Reconcile Net Income (Loss) to Net Cash Provided
by
Operating Activities:
|
|||||||
|
|||||||
Depreciation
|
72,176
|
45,063
|
|||||
Amortization
|
22,897
|
-
|
|||||
Accretion
|
5,759
|
-
|
|||||
Interest
Rate Cap Contract - Adjustment to Market
|
1,675
|
-
|
|||||
Provision
for Losses on Accounts Receivable
|
1,460
|
1,905
|
|||||
Provision
for Deferred Income Taxes
|
(25,602
|
)
|
(1,726
|
)
|
|||
Loss
on Disposition of Fixed Assets and Leaseholds
|
91
|
2,130
|
|||||
Non-Cash
Stock Compensation Expense
|
4,513
|
-
|
|||||
Non-Cash
Rent Expense and Other
|
7,196
|
3,210
|
|||||
Changes
in Assets and Liabilities
|
|||||||
Investments
|
(192
|
)
|
53,589
|
||||
Accounts
Receivable
|
(2,313
|
)
|
(22,766
|
)
|
|||
Merchandise
Inventories
|
(205,074
|
)
|
(179,490
|
)
|
|||
Prepaid
and Other Current Assets
|
(2,174
|
)
|
(1,328
|
)
|
|||
Accounts
Payable
|
191,431
|
254,583
|
|||||
Accrued
and Other Current Liabilities
|
44,318
|
37,898
|
|||||
Net
Cash Provided by Operating Activities
|
76,100
|
222,534
|
|||||
|
|||||||
INVESTING
ACTIVITIES
|
|||||||
Cash
Paid for Property and Equipment
|
(39,176
|
)
|
(45,993
|
)
|
|||
Change
in Restricted Cash and Cash Equivalents
|
8
|
105
|
|||||
Proceeds
From Sale of Fixed Assets
|
4,648
|
656
|
|||||
Issuance
of Notes Receivable
|
(33
|
)
|
(31
|
)
|
|||
Other
|
47
|
15
|
|||||
|
|||||||
Net
Cash Used in Investing Activities
|
(34,506
|
)
|
(45,248
|
)
|
|||
|
|||||||
FINANCING
ACTIVITIES
|
|||||||
Proceeds
from Long Term Debt - ABL Line of Credit
|
244,900
|
-
|
|||||
Principal
Payments on Long Term Debt
|
(1,105
|
)
|
(100,960
|
)
|
|||
Principal
Payments on Term Loan
|
(13,500
|
)
|
-
|
||||
Principal
Payments on ABL Line of Credit
|
(292,139
|
)
|
-
|
||||
Equity
Investment
|
200
|
44
|
|||||
|
|||||||
Net
Cash Used in Financing Activities
|
(61,644
|
)
|
(100,916
|
)
|
|||
Increase
(Decrease) in Cash and Cash Equivalents
|
(20,050
|
)
|
76,370
|
||||
Cash
and Cash Equivalents at Beginning of Period
|
58,376
|
47,953
|
Cash
and Cash Equivalents at End of Period
|
$
|
38,326
|
$
|
124,323
|
|||
|
|||||||
Supplemental
Disclosure of Cash Flow Information;
|
|||||||
Interest
Paid
|
$
|
68,673
|
$
|
3,921
|
|||
Income
Taxes Paid
|
$
|
2,825
|
$
|
16,064
|
|||
|
|||||||
Non-Cash
Investing Activities: Accrued Purchases of Property and
Equipment
|
$
|
(773
|
)
|
$
|
3,784
|
||
|
|
•
|
|
Aggregate
cash equity contributions of approximately $445 million were
made by the
Equity Sponsors and $0.8 million in cash from members of management;
and
|
|
•
|
|
BCFWC
(1) entered into an $800 million secured ABL Credit Facility, of
which $225 million was drawn at closing, (2) entered into a $900
million secured term loan agreement, all of which was drawn at
closing,
(3) issued $305 million face amount 11 1/8% Senior Notes due
2014 at a
discount of which all the $299 million proceeds were used to
finance the
Merger Transaction and (4) received a cash contribution
from Holdings of $75 million from an issuance of $99.3 million
14 ½ %
Senior Discount Notes due 2014, all of which was also used to
finance the
Merger Transaction.
|
|
•
|
|
Purchase
of common stock outstanding of approximately $2.1 billion;
|
|
•
|
|
Settlement
of all stock options of BCFWC under the terms of the Merger Agreement
of
approximately $13.8 million; and
|
|
•
|
|
Fees
and expenses related to the Merger Transaction and the related
financing
transactions of approximately $90.8
million.
|
|
December
2, 2006
|
|||||||||
|
Cost
|
Unrealized
Gains
|
Fair
Market
Value
|
|||||||
Trading
Securities (Current):
|
||||||||||
Short
Term Municipal Bond Investments
|
$
|
150
|
$
|
0
|
$
|
150
|
||||
Equity
Investments
|
431
|
202
|
633
|
|||||||
|
$
|
581
|
$
|
202
|
$
|
783
|
|
June
3, 2006
|
|||||||||
|
Cost
|
Unrealized
Gains
|
Fair
Market
Value
|
|||||||
Trading
Securities (Current):
|
||||||||||
Equity
Investments
|
$
|
431
|
$
|
160
|
$
|
591
|
|
December
2, 2006
|
June
3, 2006
|
||||||||||||||||||||||||
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Amount
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Amount
|
||||||||||||||||||||
Tradename
|
$
|
526,300
|
$
|
-
|
$
|
526,300
|
$
|
526,300
|
$
|
-
|
$
|
526,300
|
||||||||||||||
Net
Favorable Leases
|
$
|
631,149
|
$
|
(22,268
|
)
|
$
|
608,881
|
$
|
631,149
|
$
|
(4,473
|
)
|
$
|
626,676
|
Fiscal
Year Reserve Established
|
Balance
at
June
3, 2006
|
Additions
|
Payments
|
Balance
at
December
2, 2006
|
|||||||||
|
|
|
|
|
|||||||||
2004
|
$
|
377
|
-
|
$
|
(
80
|
)
|
$
|
297
|
|||||
2006
|
494
|
-
|
(494
|
)
|
-
|
||||||||
|
$
|
871
|
-
|
$
|
(574
|
)
|
$
|
297
|
|
December
2, 2006
|
June
3, 2006
|
|||||
Industrial
Revenue Bonds, 6.0% due in semi-annual payments of various amounts
from
September 1, 2004 to September 1, 2010
|
$
|
4,190
|
$
|
5,000
|
|||
Promissory
Note, 4.43% due in monthly payments of $8 through December
23, 2011
|
412
|
447
|
|||||
Promissory
Note, non-interest bearing, due in monthly payments of $17
through January 1, 2012
|
1,033
|
1,133
|
|||||
Senior
Notes, 11⅛% due at maturity on April 15, 2014, semi-annual
interest payments from October 15, 2006 to April 15,
2014
|
299,415
|
299,179
|
|||||
Senior
Discount Notes, 14.5% due at maturity on October 15, 2014.
Semi-annual discount accretion to maturity amount from October 15,
2006 to April 15, 2008
and semi-annual interest payments from October 15, 2008 to October
15,
2014.
|
82,040
|
76,517
|
|||||
$900
million senior secured term loan facility, Libor plus 2.25% due
in
quarterly payments of $2,250 from May 30, 2006 to May 28, 2012 with
remaining balance payable quarterly in equal amounts through
May 28,
2013.
|
884,250
|
897,750
|
|||||
$800
million ABL senior secured revolving facility, Libor plus spread
based
on average outstanding balance.
|
165,000
|
212,239
|
|||||
|
|||||||
Capital
Lease Obligations
|
26,054
|
26,214
|
|||||
Subtotal
|
1,462,394
|
1,518,479
|
|||||
Less
Current Portion
|
(10,461
|
)
|
(10,360
|
)
|
|||
Long-Term
Debt and Obligations Under Capital Leases
|
$
|
1,451,933
|
$
|
1,508,119
|
|
Six
Months Ended
|
Three
Months Ended
|
|||||||||||
|
|
|
|
|
|||||||||
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
|||||||||
|
December
2, 2006
|
November
26, 2005
|
December
2, 2006
|
November
26, 2005
|
|||||||||
Apparel
|
$
|
1,308,687
|
$
|
1,266,721
|
$
|
801,267
|
$
|
765,257
|
|||||
Home
Products
|
332,926
|
329,536
|
183,500
|
180,152
|
|||||||||
|
$
|
1,641,613
|
$
|
1,596,257
|
$
|
984,767
|
$
|
945,409
|
Option
Units Outstanding
|
Option
Units Exercisable
|
|||||||||||||||
|
Range
of
Exercise
Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
|
|||||||||||
Tranche
1
|
$
|
90.00
|
135,833
|
9.4
years
|
$
|
90.00
|
0
|
|||||||||
Tranche
2
|
$
|
180.00
|
135,833
|
9.4
years
|
$
|
180.00
|
0
|
|||||||||
Tranche
3
|
$
|
270.00
|
135,834
|
9.4
years
|
$
|
270.00
|
0
|
|||||||||
|
407,500
|
0
|
|
|
|||
Risk-Free
Interest Rate
|
4.75
|
%
|
||
Expected
Volatility
|
70
|
%
|
||
Expected
Life
|
4.5
years
|
|||
Contractual
Life
|
10
years
|
|||
Expected
Dividend Yield
|
0.0
|
%
|
||
Fair
Value of Option Units Granted
|
||||
Tranche
1
|
$
|
53.13
|
||
Tranche
2
|
$
|
38.79
|
||
Tranche
3
|
$
|
30.53
|
|
Six
Months Ended
November
26, 2005
|
Three
Months Ended
November
26, 2005
|
|||||
|
|
|
|||||
Net
Income as Reported
|
$
|
29,466
|
$
|
45,373
|
|||
Expense
Under Fair Value Method, Net of Tax Effect
|
(336
|
)
|
(133
|
)
|
|||
Pro
forma Net Income
|
$
|
29,130
|
$
|
45,240
|
|
Grant
1
|
Grant
2
|
|||||
Number
of Shares
|
87,700
|
73,600
|
|||||
Risk-Free
Interest Rate
|
4.10
|
%
|
4.10
|
%
|
|||
Expected
Volatility
|
37.65
|
%
|
38.00
|
%
|
|||
Expected
Life
|
5.5
years
|
5.5
years
|
|||||
Contractual
Life
|
10
years
|
10
years
|
|||||
Expected
Dividend Yield
|
0.20
|
%
|
0.20
|
%
|
|||
Fair
Value of Options Granted
|
$
|
6.79
|
$
|
9.85
|
BURLINGTON
COAT FACTORY INVESTMENTS HOLDINGS, INC. AND
SUBSIDIARIES
|
||||||||||||||||
CONDENSED
CONSOLIDATING BALANCE SHEETS (SUCCESSOR)
|
||||||||||||||||
|
||||||||||||||||
As
of December 2, 2006
|
||||||||||||||||
ASSETS
|
Investments
|
BCFWC
|
Guarantors
|
Eliminations
|
Consolidated
|
|||||||||||
(All
amounts in thousands)
|
||||||||||||||||
Current
Assets:
|
||||||||||||||||
Cash
and Cash Equivalents
|
$
|
-
|
$
|
27,143
|
$
|
11,183
|
$
|
-
|
$
|
38,326
|
||||||
Restricted
Cash and Cash Equivalents
|
-
|
-
|
13,808
|
-
|
13,808
|
|||||||||||
Investments
|
-
|
-
|
783
|
-
|
783
|
|||||||||||
Accounts
Receivable
|
-
|
41,956
|
980
|
-
|
42,936
|
|||||||||||
Merchandise
Inventories
|
-
|
1,780
|
911,479
|
-
|
913,259
|
|||||||||||
Deferred
Tax Asset
|
-
|
12,090
|
20,259
|
-
|
32,349
|
|||||||||||
Prepaid
and Other Current Assets
|
9,311
|
21,575
|
(7,807
|
)
|
23,079
|
|||||||||||
Total
Current Assets
|
-
|
92,280
|
980,067
|
(7,807
|
)
|
1,064,540
|
||||||||||
Property
and Equipment - Net of Accumulated Depreciation
|
-
|
41,674
|
968,349
|
-
|
1,010,023
|
|||||||||||
Goodwill
|
-
|
58,985
|
-
|
58,985
|
||||||||||||
Trademark
|
-
|
526,300
|
-
|
526,300
|
||||||||||||
Net
Favorable Leases
|
-
|
-
|
608,881
|
608,881
|
||||||||||||
Other
Assets
|
384,164
|
2,096,131
|
504
|
(2,418,127
|
)
|
62,672
|
||||||||||
Total
Assets
|
$
|
384,164
|
$
|
2,815,370
|
$
|
2,557,801
|
$
|
(2,425,934
|
)
|
$
|
3,331,401
|
|||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||||||||||
|
||||||||||||||||
Current
Liabilities:
|
||||||||||||||||
Accounts
Payable
|
$
|
-
|
$
|
634,570
|
$
|
1,765
|
$
|
-
|
$
|
636,335
|
||||||
Income
Taxes Payable
|
-
|
14,668
|
-
|
(7,807
|
)
|
6,861
|
||||||||||
Other
Current Liabilities
|
-
|
196,928
|
29,548
|
-
|
226,476
|
Current
Maturities of Long Term Debt
|
-
|
9,000
|
1,461
|
-
|
10,461
|
|||||||||||
Total
Current Liabilities
|
-
|
855,166
|
32,774
|
(7,807
|
)
|
880,133
|
||||||||||
Long
Term Debt
|
-
|
1,339,665
|
112,268
|
-
|
1,451,933
|
|||||||||||
Other
Liabilities
|
-
|
10,000
|
28,694
|
(10,000
|
)
|
28,694
|
||||||||||
Deferred
Tax Liability
|
-
|
226,375
|
360,102
|
-
|
586,477
|
|||||||||||
Stockholders'
Equity:
|
||||||||||||||||
Preferred
Stock
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Common
Stock
|
-
|
-
|
1,568
|
(1,568
|
)
|
-
|
||||||||||
Capital
in Excess of Par Value
|
451,391
|
451,391
|
1,963,670
|
(2,415,061
|
)
|
451,391
|
||||||||||
Retained
Earnings (Accumulated Deficit)
|
(67,227
|
)
|
(67,227
|
)
|
58,725
|
8,502
|
(67,227
|
)
|
||||||||
Total
Stockholders' Equity
|
384,164
|
384,164
|
2,023,963
|
(2,408,127
|
)
|
384,164
|
||||||||||
Total
Liabilities and Stockholders' Equity
|
$
|
384,164
|
$
|
2,815,370
|
$
|
2,557,801
|
$
|
(2,425,934
|
)
|
$
|
3,331,401
|
|||||
|
|
|
|
|
|
||||||||||||||
|
As
of June 3, 2006
|
||||||||||||||||||
|
Holdings
|
BCFWC
|
Guarantors
|
Eliminations
|
Consolidated
|
||||||||||||||
|
(All
amounts in thousands)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current
Assets:
|
|||||||||||||||||||
Cash
and Cash Equivalents
|
$
|
—
|
$
|
48,865
|
$
|
9,511
|
$
|
—
|
$
|
58,376
|
|||||||||
Restricted
Cash and Cash Equivalents
|
—
|
—
|
13,816
|
—
|
13,816
|
||||||||||||||
Investments
|
—
|
—
|
591
|
—
|
591
|
||||||||||||||
Accounts
Receivable
|
—
|
41,133
|
950
|
—
|
42,083
|
||||||||||||||
Merchandise
Inventories
|
—
|
1,416
|
706,769
|
—
|
708,185
|
||||||||||||||
Deferred
Tax Asset
|
—
|
12,091
|
15,825
|
—
|
27,916
|
||||||||||||||
Prepaid
and Other Current Assets
|
—
|
9,820
|
20,104
|
(4,428
|
)
|
25,496
|
|||||||||||||
|
|||||||||||||||||||
Total
Current Assets
|
—
|
113,325
|
767,566
|
(4,428
|
)
|
876,463
|
|||||||||||||
|
|||||||||||||||||||
Property
and Equipment—Net of Accumulated Depreciation
|
—
|
46,521
|
995,877
|
—
|
1,042,398
|
||||||||||||||
Goodwill
|
—
|
58,985
|
—
|
—
|
58,985
|
||||||||||||||
Trademark
|
—
|
526,300
|
—
|
—
|
526,300
|
||||||||||||||
Net
Favorable Leases
|
—
|
—
|
626,676
|
—
|
626,676
|
||||||||||||||
Other
Assets
|
419,512
|
1,951,421
|
470
|
(2,301,676
|
)
|
69,727
|
|||||||||||||
|
|||||||||||||||||||
Total
Assets
|
$
|
419,512
|
$
|
2,696,552
|
$
|
2,390,589
|
$
|
(2,306,104
|
)
|
$
|
3,200,549
|
||||||||
|
|||||||||||||||||||
|
|||||||||||||||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||||||||||||||
Current
Liabilities:
|
|||||||||||||||||||
Accounts
Payable
|
$
|
—
|
$
|
441,811
|
$
|
3,093
|
$
|
—
|
$
|
444,904
|
|||||||||
Income
Taxes Payable
|
—
|
10,702
|
—
|
(4,428
|
)
|
6,274
|
|||||||||||||
Other
Current Liabilities
|
—
|
178,057
|
3,703
|
—
|
181,760
|
Current
Maturities of Long Term Debt
|
—
|
9,000
|
1,360
|
—
|
10,360
|
|||||||||||
|
||||||||||||||||
Total
Current Liabilities
|
—
|
639,570
|
8,156
|
(4,428
|
)
|
643,298
|
||||||||||
|
||||||||||||||||
Long
Term Debt
|
—
|
1,398,073
|
110,046
|
—
|
1,508,119
|
|||||||||||
Other
Liabilities
|
—
|
10,000
|
21,974
|
(10,000
|
)
|
21,974
|
||||||||||
Deferred
Tax Liability
|
—
|
229,397
|
378,249
|
—
|
607,646
|
|||||||||||
|
||||||||||||||||
Stockholders’
Equity:
|
||||||||||||||||
Preferred
Stock
|
—
|
—
|
—
|
—
|
—
|
|||||||||||
Common
Stock
|
—
|
1
|
1,568
|
(1,569
|
)
|
—
|
||||||||||
Capital
in Excess of Par Value
|
446,678
|
446,677
|
1,864,120
|
(2,310,797
|
)
|
446,678
|
||||||||||
Retained
Earnings (Accumulated Deficit)
|
(27,166
|
)
|
(27,166
|
)
|
6,476
|
20,690
|
(27,166
|
)
|
||||||||
|
||||||||||||||||
Total
Stockholders’ Equity
|
419,512
|
419,512
|
1,872,164
|
(2,291,676
|
)
|
419,512
|
||||||||||
|
||||||||||||||||
Total
Liabilities and Stockholders’ Equity
|
$
|
419,512
|
$
|
2,696,552
|
$
|
2,390,589
|
$
|
(2,306,104
|
)
|
$
|
3,200,549
|
|||||
|
BURLINGTON
COAT FACTORY INVESTMENTS HOLDINGS, INC. AND
SUBSIDIARIES
|
||||||||||||||||
CONDENSED
CONSOLIDATING STATEMENT OF OPERATIONS (SUCCESSOR)
|
||||||||||||||||
|
|
|||||||||||||||
For
the Six Months Ended December 2, 2006
|
||||||||||||||||
Holdings
|
BCFWC
|
Guarantors
|
Eliminations
|
Consolidated
|
||||||||||||
(All
amounts in thousands)
|
||||||||||||||||
REVENUES:
|
||||||||||||||||
Net
Sales
|
$
|
-
|
$
|
2,107
|
$
|
1,639,506
|
$
|
-
|
$
|
1,641,613
|
||||||
Other
Revenue
|
(40,061
|
)
|
56,484
|
15,320
|
(12,189
|
)
|
19,554
|
|||||||||
(40,061
|
)
|
58,591
|
1,654,826
|
(12,189
|
)
|
1,661,167
|
||||||||||
COSTS
AND EXPENSES:
|
||||||||||||||||
Cost
of Sales (Exclusive of Depreciation and Amortization)
|
-
|
1,315
|
1,026,068
|
-
|
1,027,383
|
|||||||||||
Selling
and Administrative Expenses
|
-
|
76,544
|
458,097
|
-
|
534,641
|
|||||||||||
Depreciation
|
-
|
11,757
|
60,419
|
-
|
72,176
|
|||||||||||
Amortization
|
-
|
4,904
|
17,993
|
-
|
22,897
|
|||||||||||
Interest
Expense
|
-
|
63,668
|
6,962
|
-
|
70,630
|
|||||||||||
Other
Income, Net
|
-
|
(658
|
)
|
(1,005
|
)
|
-
|
(1,663
|
)
|
||||||||
|
- |
157,530
|
1,568,534
|
-
|
1,726,064
|
|||||||||||
Income
(Loss) Before Provision (Benefit) for Income Taxes
|
(40,061
|
)
|
(98,939
|
)
|
86,292
|
(12,189
|
)
|
(64,897
|
)
|
|||||||
Provision
(Benefit) for Income Taxes
|
-
|
(58,878
|
)
|
34,042
|
-
|
(24,836
|
)
|
|||||||||
Net
Income (Loss)
|
(40,061
|
)
|
(40,061
|
)
|
52,250
|
(12,189
|
)
|
(40,061
|
)
|
BURLINGTON
COAT FACTORY INVESTMENTS HOLDINGS, INC. AND
SUBSIDIARIES
|
||||||||||||||||
CONDENSED
CONSOLIDATING STATEMENT OF OPERATIONS (SUCCESSOR)
|
||||||||||||||||
|
|
|||||||||||||||
For
the Three Months Ended December 2, 2006
|
||||||||||||||||
Holdings
|
BCFWC
|
Guarantors
|
Eliminations
|
Consolidated
|
||||||||||||
(All
amounts in thousands)
|
||||||||||||||||
REVENUES:
|
||||||||||||||||
Net
Sales
|
$
|
-
|
$
|
1,271
|
$
|
983,496
|
$
|
-
|
$
|
984,767
|
||||||
Other
Revenue
|
11,747
|
60,974
|
8,432
|
(69,019
|
)
|
12,134
|
||||||||||
11,747
|
62,245
|
991,928
|
(69,019
|
)
|
996,901
|
|||||||||||
COSTS
AND EXPENSES:
|
||||||||||||||||
Cost
of Sales (Exclusive of Depreciation and Amortization)
|
-
|
773
|
599,696
|
-
|
600,469
|
|||||||||||
Selling
and Administrative Expenses
|
-
|
34,843
|
252,738
|
-
|
287,581
|
|||||||||||
Depreciation
|
-
|
5,880
|
31,312
|
-
|
37,192
|
|||||||||||
Amortization
|
-
|
2,457
|
9,507
|
-
|
11,964
|
|||||||||||
Interest
Expense
|
-
|
31,542
|
3,674
|
-
|
35,216
|
|||||||||||
Other
Income, Net
|
-
|
(658
|
)
|
(24
|
)
|
-
|
(682
|
)
|
||||||||
|
- |
74,837
|
896,903
|
-
|
971,740
|
|||||||||||
Income
(Loss) Before Provision (Benefit) for Income Taxes
|
11,747
|
(12,592
|
)
|
95,025
|
(69,019
|
)
|
25,161
|
|||||||||
Provision
(Benefit) for Income Taxes
|
-
|
(24,339
|
)
|
37,753
|
-
|
13,414
|
||||||||||
Net
Income (Loss)
|
$
|
11,747
|
$
|
11,747
|
$
|
57,272
|
$
|
(69,019
|
)
|
$
|
11,747
|
BURLINGTON
COAT FACTORY INVESTMENTS HOLDINGS, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATING STATEMENT OF OPERATIONS (PREDECESSOR)
|
||||||||||||||||
|
|
|
||||||||||||||
For
the Six Months Ended November 26, 2005
|
||||||||||||||||
Holdings
|
BCFWC
|
Guarantors
|
Eliminations
|
Consolidated
|
||||||||||||
(All
amounts in thousands)
|
||||||||||||||||
|
|
|
|
|||||||||||||
REVENUES:
|
||||||||||||||||
Net
Sales
|
$
|
-
|
$
|
2,216
|
$
|
1,594,041
|
$
|
-
|
$
|
1,596,257
|
||||||
Other
Revenue
|
-
|
74,283
|
15,339
|
(73,781
|
)
|
15,841
|
||||||||||
|
-
|
76,499
|
1,609,380
|
(73,781
|
)
|
1,612,098
|
||||||||||
COSTS
AND EXPENSES:
|
||||||||||||||||
Cost
of Sales (Exclusive of Depreciation and Amortization)
|
-
|
1,404
|
1,012,652
|
-
|
1,014,056
|
|||||||||||
Selling
and Administrative Expenses
|
-
|
62,150
|
436,443
|
-
|
498,593
|
|||||||||||
Depreciation
|
-
|
6,116
|
38,947
|
-
|
45,063
|
|||||||||||
Amortization
|
-
|
467
|
15
|
-
|
482
|
|||||||||||
Interest
Expense
|
-
|
2,057
|
1,287
|
-
|
3,344
|
|||||||||||
Other
Income, Net
|
-
|
2,816
|
(324
|
)
|
-
|
2,492
|
||||||||||
|
-
|
75,010
|
1,489,020
|
-
|
1,564,030
|
|||||||||||
Income
(Loss) Before Provision (Benefit) for Income Taxes
|
-
|
1,489
|
120,360
|
(73,781
|
)
|
48,068
|
||||||||||
Provision
(Benefit) for Income Taxes
|
-
|
(27,977
|
)
|
46,579
|
-
|
18,602
|
||||||||||
Net
Income (Loss)
|
-
|
29,466
|
73,781
|
(73,781
|
)
|
29,466
|
BURLINGTON
COAT FACTORY INVESTMENTS HOLDINGS, INC. AND
SUBSIDIARIES
CONDENSED
CONSOLIDATING STATEMENT OF OPERATIONS (PREDECESSOR)
|
||||||||||||||||
|
|
|
||||||||||||||
For
the Three Months Ended November 26, 2005
|
||||||||||||||||
Holdings
|
BCFWC
|
Guarantors
|
Eliminations
|
Consolidated
|
||||||||||||
(All
amounts in thousands)
|
||||||||||||||||
|
|
|
|
|||||||||||||
REVENUES:
|
||||||||||||||||
Net
Sales
|
$
|
-
|
$
|
1,349
|
$
|
944,060
|
$
|
-
|
$
|
945,409
|
||||||
Other
Revenue
|
-
|
66,652
|
8,636
|
(66,771
|
)
|
8,517
|
||||||||||
|
-
|
68,001
|
952,696
|
(66,771
|
)
|
953,926
|
||||||||||
COSTS
AND EXPENSES:
|
||||||||||||||||
Cost
of Sales (Exclusive of Depreciation and Amortization)
|
-
|
841
|
587,880
|
-
|
588,721
|
|||||||||||
Selling
and Administrative Expenses
|
-
|
31,163
|
232,990
|
-
|
264,153
|
|||||||||||
Depreciation
|
-
|
2,529
|
19,906
|
-
|
22,435
|
|||||||||||
Amortization
|
-
|
450
|
8
|
-
|
458
|
|||||||||||
Interest
Expense
|
-
|
894
|
637
|
-
|
1,531
|
|||||||||||
Other
Income, Net
|
-
|
2,816
|
(205
|
)
|
-
|
2,611
|
||||||||||
|
-
|
38,693
|
841,216
|
-
|
879,909
|
|||||||||||
Income
(Loss) Before Provision (Benefit) for Income Taxes
|
-
|
29,308
|
111,480
|
(66,771
|
)
|
74,017
|
||||||||||
Provision
(Benefit) for Income Taxes
|
-
|
(16,065
|
)
|
44,709
|
-
|
28,644
|
||||||||||
Net
Income (Loss)
|
-
|
45,373
|
66,771
|
(66,771
|
)
|
45,373
|
BURLINGTON
COAT FACTORY INVESTMENTS HOLDINGS, INC. AND
SUBSIDIARIES
|
||||||||||||||||
CONDENSED
CONSOLIDATING STATEMENT OF CASH FLOWS (SUCCESSOR)
|
||||||||||||||||
|
For
the Six Months Ended December 2, 2006
|
|||||||||||||||
|
Holdings
|
BCFWC
|
Guarantors
|
Elimination
|
Consolidated
|
|||||||||||
(All
amounts in thousands)
|
||||||||||||||||
|
||||||||||||||||
OPERATING
ACTIVITIES
|
||||||||||||||||
Net
Cash Provided by Operating Activities
|
$
|
-
|
$
|
45,679
|
$
|
30,421
|
$
|
-
|
$
|
76,100
|
||||||
INVESTING
ACTIVITIES
|
||||||||||||||||
Acquisition
of Property and Equipment - Continuing Operations
|
-
|
(6,909
|
)
|
(32,267
|
)
|
-
|
(39,176
|
)
|
||||||||
Proceeds
Received from Sales of Assets Held for Sale
|
-
|
-
|
4,591
|
-
|
4,591
|
|||||||||||
Investing
Activity-Other
|
-
|
47
|
32
|
-
|
79
|
|||||||||||
Net
Cash Used in Investing Activities
|
(6,862
|
)
|
(27,644
|
)
|
-
|
(34,506
|
)
|
|||||||||
Proceeds
from Long - Term Debt
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
Proceeds
from ABL
|
-
|
244,900
|
-
|
-
|
244,900
|
|||||||||||
Principal
Payments on Long Term Debt
|
-
|
-
|
(1,105
|
)
|
-
|
(1,105
|
)
|
|||||||||
Principal
Payments on Long Term Loan
|
-
|
(13,500
|
)
|
-
|
-
|
(13,500
|
)
|
|||||||||
Principal
Payments on ABL
|
-
|
(292,139
|
)
|
-
|
-
|
(292,139
|
)
|
|||||||||
Equity
Investment
|
-
|
200
|
-
|
-
|
200
|
|||||||||||
Net
Cash Used in Financing Activities
|
-
|
(60,539
|
)
|
(1,105
|
)
|
-
|
(61,644
|
)
|
||||||||
Increase
in Cash and Cash Equivalents
|
-
|
(21,722
|
)
|
1,672
|
-
|
(20,050
|
)
|
|||||||||
Cash
and Cash Equivalents at Beginning of Period
|
-
|
48,865
|
9,511
|
-
|
58,376
|
|||||||||||
Cash
and Cash Equivalents at End of Period
|
-
|
$
|
27,143
|
$
|
11,183
|
$
|
-
|
$
|
38,326
|
|||||||
BURLINGTON
COAT FACTORY INVESTMENT HOLDINGS, INC. AND
SUBSIDIARIES
|
||||||||||||||||
CONDENSED
CONSOLIDATING STATEMENTS OF CASH FLOWS
(PREDECESSOR)
|
||||||||||||||||
|
For
the Six Month Period Ended November 26, 2005
|
|||||||||||||||
|
Holdings
|
BCFWC
|
Guarantors
|
Elimination
|
Consolidated
|
|||||||||||
(All
amounts in thousands)
|
||||||||||||||||
|
||||||||||||||||
OPERATING
ACTIVITIES
|
||||||||||||||||
Net
Cash Provided by Operating Activities
|
$
|
-
|
$
|
109,602
|
$
|
112,932
|
$
|
-
|
$
|
222,534
|
||||||
INVESTING
ACTIVITIES
|
-
|
|||||||||||||||
Acquisition
of Property and Equipment
|
-
|
(15,360
|
)
|
(30,633
|
)
|
-
|
(45,993
|
)
|
||||||||
Proceeds
Received from Insurance
|
-
|
-
|
656
|
-
|
656
|
|||||||||||
Investing
Activity-Other
|
-
|
120
|
(31
|
)
|
-
|
89
|
||||||||||
Net
Cash Used in Investing Activities
|
-
|
(15,240
|
)
|
(30,008
|
)
|
-
|
(45,248
|
)
|
||||||||
FINANCING
ACTIVITIES
|
||||||||||||||||
Principal
Payments on Long Term Debt
|
-
|
(100,000
|
)
|
(960
|
)
|
-
|
(100,960
|
)
|
||||||||
Equity
Investment
|
-
|
44
|
-
|
-
|
44
|
|||||||||||
Net
Cash Used in Financing Activities
|
-
|
(99,956
|
)
|
(960
|
)
|
-
|
(100,916
|
)
|
||||||||
Increase
in Cash and Cash Equivalents
|
-
|
(5,594
|
)
|
81,964
|
-
|
76,370
|
||||||||||
Cash
and Cash Equivalents at Beginning of Period
|
-
|
43,942
|
4,011
|
-
|
47,953
|
|||||||||||
Cash
and Cash Equivalents at End of Period
|
$
|
-
|
$
|
38,348
|
$
|
85,975
|
$
|
-
|
$
|
124,323
|
||||||
|
|
|||
|
April 13,
2006
|
|||
|
(in thousands)
|
|||
Total
acquisition consideration:
|
||||
Cash
paid upon acquisition
|
$
|
2,050,918
|
||
Liabilities
assumed
|
769,251
|
|||
Acquisition
related costs
|
4,849
|
|||
|
|
2,825,018
|
|||
Less:
Book value of net assets acquired
|
1,785,818
|
|||
|
||||
$
|
1,039,200
|
|||
|
||||
Fair
value adjustment for property, plant and equipment
|
416,118
|
|||
Tradenames
|
526,300
|
|||
Net
favorable lease positions
|
637,112
|
|||
Internally
developed software
|
42,000
|
|||
Deferred
taxes related to valuations
|
(641,315
|
)
|
||
Goodwill
|
58,985
|
|||
|
||||
$
|
1,039,200
|
|||
|
|
|
|||
|
|
|||
|
|
|||
Cash
and other current assets
|
$
|
216,850
|
||
Inventory
|
757,156
|
|||
Property,
plant and equipment
|
1,061,244
|
|||
Goodwill
|
58,985
|
|||
Intangibles
|
1,234,964
|
|||
Other
assets
|
26,311
|
|||
|
||||
Total
assets
|
$
|
3,355,510
|
||
|
||||
Current
portion of long-term debt
|
$
|
10,358
|
||
Accounts
payable
|
507,080
|
|||
Other
current liabilities and taxes payable
|
226,965
|
Long-term
debt
|
1,521,596
|
|||
Other
long-term liabilities
|
643,681
|
|||
Stockholders’
equity
|
445,830
|
|||
|
||||
Total
liabilities and stockholders’ equity
|
$
|
3,355,510
|
||
|
|
|
|
||||||||
|
Six
Months Ended
November
26, 2005
|
Three
Months Ended
November
26, 2005
|
||||||||
Revenue
|
$
|
1,611,972
|
$
|
953,884
|
||||||
Net
Income (Loss)
|
$
|
(50,562
|
)
|
$
|
5,872
|
|
Percentage
of Net Sales
|
Percentage
of Net Sales
|
|||||||||||
|
Six
Months Ended
|
Three
Months Ended
|
|||||||||||
|
(unaudited)
|
(unaudited)
|
|||||||||||
|
Successor
|
Predecessor
|
Successor
|
Predecessor
|
|||||||||
|
December
2,
|
November
26,
|
December
2,
|
November
26,
|
|||||||||
|
2006
|
2005
|
2006
|
2005
|
|||||||||
|
|
|
|
|
|||||||||
|
|
|
|
|
|||||||||
Net
Sales
|
100
|
%
|
100.0
|
%
|
100
|
%
|
100.0
|
%
|
|||||
|
|||||||||||||
Cost
of Sales
|
62.6
|
63.5
|
61.0
|
62.3
|
|||||||||
Selling
& Administrative Expenses
|
32.6
|
31.3
|
29.2
|
28.0
|
|||||||||
|
|||||||||||||
Depreciation
|
4.4
|
2.8
|
3.8
|
2.4
|
|||||||||
|
|||||||||||||
Amortization
|
1.4
|
-
|
1.2
|
-
|
|
|
|
|
|
|||||||||
Interest
Expense
|
4.3
|
0.2
|
3.6
|
0.1
|
|||||||||
|
|||||||||||||
Other
Income (Loss), Net
|
.1
|
(0.2
|
)
|
.1
|
(0.3
|
)
|
|||||||
|
|||||||||||||
Other
Revenue
|
1.2
|
1.0
|
1.2
|
0.9
|
|||||||||
|
|||||||||||||
Income
(Loss) before Income Taxes
|
(4.0
|
)
|
3.0
|
2.5
|
7.8
|
||||||||
|
|||||||||||||
Income
Tax Expense (Benefit)
|
1.6
|
1.2
|
1.2
|
3.0
|
|||||||||
|
|||||||||||||
Net
Income (Loss)
|
(2.4
|
)%
|
1.8
|
%
|
1.3
|
%
|
4.8
|
%
|
|||||
|
Payments
During Fiscal Years
|
||||||||||||||||||||||
Contractual
Obligations
|
Total
|
Fiscal
2007
Less
Than One Year
|
2008
|
2009
|
2010
|
2011
|
Thereafter
|
|||||||||||||||
Long
Term Debt
|
$
|
1,459,194
|
$
|
4,637
|
$
|
10,171
|
$
|
10,269
|
$
|
10,377
|
$
|
10,496
|
$
|
1,413,244
|
||||||||
Interest
on Long Term Debt
|
808,484
|
62,969
|
113,822
|
126,908
|
126,142
|
126,098
|
252,545
|
|||||||||||||||
Capital
Leases
|
54,162
|
1,248
|
2,497
|
2,497
|
2,557
|
2,616
|
42,747
|
|||||||||||||||
Operating
Leases
|
580,979
|
66,265
|
120,842
|
98,787
|
75,403
|
53,219
|
166,463
|
|||||||||||||||
Purchase
Obligations
|
331,127
|
323,863
|
2,751
|
2,008
|
1,081
|
1,025
|
399
|
|||||||||||||||
Total
|
$
|
3,233,946
|
$
|
458,982
|
$
|
250,083
|
$
|
240,469
|
$
|
215,560
|
$
|
193,454
|
$
|
1,875,398
|
||||||||
Principal
Outstanding at December 2, 2006
|
Additional
Interest Expense
Q3
2007
|
Additional
Interest Expense
Q4
2007
|
Additional
Interest Expense
Q1
2008
|
Additional
Interest Expense
Q2
2008
|
||||||||||||
ABL
Credit Facility
|
$
|
165,000
|
$
|
413
|
$
|
413
|
$
|
413
|
$
|
413
|
||||||
Term
Loan
|
884,250
|
2,211
|
2,205
|
2,199
|
2,194
|
|||||||||||
Total
|
$
|
1,049,250
|
$
|
2,624
|
$
|
2,618
|
$
|
2,612
|
$
|
2,607
|
32.1
|
|
Certification
of Principal Executive Officer pursuant to 18 U.S.C. Section
1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
|
|
32.2
|
|
Certification
of Principal Financial Officer pursuant to 18 U.S.C. Section
1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
/s/
Mark A. Nesci
|
|
|
|
Mark
A. Nesci
|
|
|
|
President
& Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Robert L. LaPenta,
Jr.
|
|
|
|
Robert
L. LaPenta, Jr.
|
|
|
|
Vice
President - Chief Accounting Officer
|
|
|
|
|
|
|