Charming Shoppes Inc – ‘8-K/A’ for 8/16/01 – EX-20

On:  Tuesday, 10/30/01   ·   For:  8/16/01   ·   Accession #:  19353-1-500055   ·   File #:  0-07258

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Amendment to Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K/A       Form 8-K/A for Lane Bryant Acquisition                14     66K 
 2: EX-20       Lane Bryant Financials 2/3/2001                       15     53K 
 3: EX-20       Lane Bryant Financials 8/4/2001                        5     22K 
 4: EX-23       Pricewaterhousecoopers Consent                         1      6K 

EX-20   —   Lane Bryant Financials 8/4/2001

EX-20
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                                                          EXHIBIT 20.2

LANE BRYANT, INC. AND SUBSIDIARIES      

CONSOLIDATED STATEMENTS OF INCOME     

(Thousands)     

(Unaudited)     

                                                                [Download Table]


                                                      Twenty-six Weeks Ended 

                                                      August 4,     July 29, 
                                                         2001         2000   
                                                         ----         ----   
                                                                             
Net sales                                              $467,593     $451,275 

Costs of goods sold, buying and occupancy costs        (322,615)    (327,309)
                                                       --------     -------- 
Gross income                                            144,978      123,966 

General, administrative and store operating                                  
expenses                                               (110,194)    (100,197)
                                                       --------     -------- 
                                                         34,784       23,769 

Corporate overhead allocations from The Limited         (11,529)     (12,085)
                                                       --------     -------- 
Operating income                                         23,255       11,684 

Provision for income taxes                                9,240        4,670 
                                                       --------     -------- 
Net income                                             $ 14,015     $  7,014 
                                                       ========     ======== 

The accompanying Notes are an integral part of these Consolidated Financial     
Statements.     

1     

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LANE BRYANT, INC. AND SUBSIDIARIES      

CONSOLIDATED BALANCE SHEETS     

(Thousands)     

                                                                [Download Table]

                                  August 4,    February 3,      July 29,  
                                    2001           2001           2000    
                                    ----           ----           ----    
                                 (Unaudited)                   (Unaudited)
                                                                          
ASSETS                                                                    
Current assets                                                            
Cash                              $  5,797       $  2,853      $  1,141   
Accounts receivable                  2,001          5,286         4,409   
Inventories                         92,842         85,230        84,499   
Store supplies                       7,530          8,749         8,593   
Deferred income taxes                4,664          5,279         6,615   
Other                                2,335          3,421         1,398   
                                  --------       --------      --------   
Total current assets               115,169        110,818       106,655   

Property and equipment, net         77,239         77,956        67,846   

Deferred income taxes                7,061         11,198         9,580   

Other assets                           425            450           475   
                                  --------       --------      --------   
Total assets                      $199,894       $200,422      $184,556   
                                  ========       ========      ========   

LIABILITIES AND SHAREHOLDER'S                                             
EQUITY                                                                    
Current liabilities                                                       
Accounts payable                  $ 12,721       $  8,934      $ 16,809   
Accrued expenses                    32,615         30,673        23,573   
                                  --------       --------      --------   
Total current liabilities           45,336         39,607        40,382   

Other long-term liabilities         18,448         14,132        14,029   

Net investment by The Limited      136,110        146,683       130,145   
                                  --------       --------      --------   
Total liabilities and                                                     
shareholders' equity              $199,894       $200,422      $184,556   
                                  ========       ========      ========   

The accompanying Notes are an integral part of these Consolidated Financial     
Statements.     

2     

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LANE BRYANT, INC. AND SUBSIDIARIES      

CONSOLIDATED STATEMENTS OF CASH FLOWS     

(Thousands)     

(Unaudited)     

                                                                [Download Table]

                                                    Twenty-six Weeks Ended

                                                    August 4,     July 29,
                                                      2001          2000  
                                                      ----          ----  
                                                                          
Operating activities:                                                     
  Net income                                         $14,015      $ 7,014 
Adjustments to reconcile net income to net                                
cash provided by (used for) operating                                     
activities:                                                               
    Depreciation and amortization                      9,250        8,682 
    Changes in assets and liabilities:                                    
       Accounts receivable                             3,285        4,611 
       Inventories                                    (7,612)      (7,482)
       Accounts payable and accrued expenses           5,729       (2,626)
       Income taxes                                    4,752         (286)
       Other assets and liabilities                    6,629          333 
                                                     -------      ------- 
Net cash provided by operating activities             36,048       10,246 
                                                     -------      ------- 

Investing activities:                                                     
  Capital expenditures                                (8,516)      (8,652)

Financing activities:                                                     
  Net decrease in net investment by                                       
  The Limited, Inc.                                  (24,588)      (3,673)
                                                     -------      ------- 
Net increase (decrease) in cash and equivalents        2,944       (2,079)

Cash, beginning of year                                2,853        3,220 
                                                     -------      ------- 
Cash, end of period                                  $ 5,797      $ 1,141 
                                                     =======      ======= 

The accompanying Notes are an integral part of these Consolidated Financial     
Statements.     

3     

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LANE BRYANT, INC. AND SUBSIDIARIES      

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)      

1.   PRINCIPLES OF CONSOLIDATION                                                

Lane Bryant, Inc. ("Lane Bryant" or the "Company"), a division of The 
Limited, Inc. ("The Limited") is the leading specialty store retailer 
of women's apparel, offering knit tops, sweaters, pants, jeans and    
intimate apparel for women size 14-plus and has stores in 46 states.  
The Company was founded in 1904 and was acquired  by The Limited, Inc.
as a wholly-owned subsidiary in 1982.  The Company has one reportable 
segment, which includes all of its products.                          

The accompanying consolidated financial statements include the        
accounts of Lane Bryant and its subsidiaries and reflect the Company's
assets, liabilities, results of operations and cash flows, including  
certain allocations by The Limited, on a historical cost basis.  The  
consolidated financial statements include the accounts of the Company 
and all significant subsidiaries which are more than 50 percent owned 
and controlled. All significant intercompany balances and transactions
have been eliminated in consolidation.                                

The consolidated financial statements as of and for the twenty-six    
week periods ended August 4, 2001 and July 29, 2000 are unaudited and 
should be read in conjunction with the consolidated financial         
statements and notes thereto for fiscal years ended February 3, 2001, 
January 29, 2000 and January 30, 1999. In the opinion of management,  
the accompanying consolidated financial statements reflect all        
adjustments (which are of a normal recurring nature) necessary for a  
fair statement of the results for the interim periods, but are not    
necessarily indicative of the results of operations for a full fiscal 
year.                                                                 

2.   PROPERTY AND EQUIPMENT, NET                                                

Property and equipment, net, consisted of (thousands):                

                                                                [Download Table]

                                    August 4,   February 3,   July 29, 
                                      2001         2001         2000   
                                      ----         ----         ----   
                                                                       
Property and equipment, at cost     $244,514     $237,244     $224,943 
Accumulated depreciation and                                           
amortization                        (167,275)    (159,288)    (157,097)
                                    --------     --------     -------- 
Property and equipment, net         $ 77,239     $ 77,956     $ 67,846 
                                    ========     ========     ======== 

3.   INCOME TAXES                                                               

The provision for income taxes is based on the current estimate of the
annual effective tax rate.  Current income tax obligations are treated
as having been settled through the intercompany accounts as if the    
Company was filing its income tax returns on a separate company basis.
Such amounts were $4.5 million and $5.0 million for the twenty-six    
weeks ended August 4, 2001 and July 29, 2000.                         

4     

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4.   INTERCOMPANY RELATIONSHIP WITH THE PARENT                                  

The Limited provides various services to the Company including, among 
other things, merchandise sourcing, real estate management, store     
design and construction supervision, inbound and outbound             
transportation, and corporate services (including corporate           
administration, brand and business planning, information technology,  
corporate development, finance human resources and benefits).         

The Company is charged by The Limited for corporate costs relating to 
these transactions and other services, using the following            
methodologies:                                                        

- Direct Costs - costs incurred by The Limited specifically on behalf 
of Lane Bryant or a group of Limited subsidiaries that are either     
charged directly to the Company or allocated based on usage. These    
costs are included within individual line items in the consolidated   
income statements, as appropriate.                                    
- Corporate overhead allocations - overhead costs not identified to a 
specific Limited subsidiary are generally allocated to Lane Bryant    
based on the Company's sales and selling square feet in relation to   
totals for The Limited. These costs are included in the consolidated  
income statements as "corporate overhead allocations." These          
allocations were $11.5 million and $12.1 million for the twenty-six   
weeks ended August 4, 2001 and July 29, 2000.                         

Management believes the direct costs and allocations described above  
are fair and reasonable, however, they are not necessarily indicative 
of the amounts that would have been or that will be recorded by Lane  
Bryant on a stand-alone basis.                                        

The Company participates in The Limited's centralized cash management 
system. Cash received from the Company's operations is transferred to 
The Limited's centralized cash accounts and cash disbursements are    
funded from the centralized cash accounts on a daily basis.  No       
interest has been charged or earned on the cash management account.   
Under this system, Lane Bryant has had no external sources of         
financing, such as available lines of credit, as may be necessary to  
operate a separate entity.                                            

5.   SUBSEQUENT EVENT                                                           

On August 16, 2001, The Limited completed the sale of Lane Bryant to  
Charming Shoppes, Inc. for $280 million of cash and 8.7 million shares
of Charming Shoppes common stock valued at $55 million.  The          
consideration received by The Limited is subject to adjustment based  
on Lane Bryant's net tangible assets at closing.                      

The Limited will continue to provide certain corporate services to    
Lane Bryant through a transition period of up to three years.         

5     

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K/A’ Filing		Date		First		Last			Other Filings
Filed on:		10/30/01
For Period End:		8/16/01		5					8-K,  8-K/A
		8/4/01		4		5			10-Q
		2/3/01		4					10-K,  5
		7/29/00		4		5			10-Q
		1/29/00		4					10-K,  5
		1/30/99		4					10-K405
									List all Filings