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As Of Filer Filing For·On·As Docs:Size 9/07/10 Brown Shoe Co Inc 10-Q 7/31/10 12:7.8M |
Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 1.01M 2: EX-4.1 Instrument Defining the Rights of Security Holders HTML 27K 3: EX-10.1 Material Contract HTML 2.64M 4: EX-10.2 Material Contract HTML 31K 5: EX-10.3 Material Contract HTML 43K 6: EX-10.4 Material Contract HTML 104K 7: EX-10.5 Material Contract HTML 104K 8: EX-10.6 Material Contract HTML 43K 9: EX-10.7 Material Contract HTML 35K 10: EX-31.1 Certification per Sarbanes-Oxley Act (Section 302) HTML 18K 11: EX-31.2 Certification per Sarbanes-Oxley Act (Section 302) HTML 18K 12: EX-32.1 Certification per Sarbanes-Oxley Act (Section 906) HTML 13K
[X]
|
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended July 31, 2010
|
[ ]
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _____________ to _____________
|
BROWN SHOE COMPANY, INC.
(Exact name of registrant as specified in its charter)
|
|
New York
(State or other jurisdiction
of incorporation or organization)
|
43-0197190
(IRS Employer Identification Number)
|
8300 Maryland Avenue
St. Louis, Missouri
(Address of principal executive offices)
|
63105
(Zip Code)
|
(314) 854-4000
(Registrant's telephone number, including area code)
|
|
Large accelerated filer £ | Accelerated filer R | |
Non-accelerated filer £ | Smaller reporting company £ | |
(Do not check if a smaller reporting company) |
PART I
|
FINANCIAL INFORMATION
|
ITEM 1
|
FINANCIAL STATEMENTS
|
BROWN SHOE COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|||||||||
($ thousands)
|
|||||||||
Assets
|
|||||||||
Current assets
|
|||||||||
Cash and cash equivalents
|
$
|
30,724
|
$
|
37,274
|
$
|
125,833
|
|||
Receivables
|
106,149
|
72,156
|
84,297
|
||||||
Inventories
|
578,085
|
526,808
|
456,682
|
||||||
Prepaid expenses and other current assets
|
33,206
|
41,877
|
41,437
|
||||||
Total current assets
|
748,164
|
678,115
|
708,249
|
||||||
Other assets
|
118,884
|
110,540
|
113,114
|
||||||
Intangible assets, net
|
73,876
|
80,613
|
77,226
|
||||||
Property and equipment
|
418,190
|
423,704
|
418,765
|
||||||
Allowance for depreciation
|
(281,983
|
)
|
(268,154
|
)
|
(277,204
|
)
|
|||
Net property and equipment
|
136,207
|
155,550
|
141,561
|
||||||
Total assets
|
$
|
1,077,131
|
$
|
1,024,818
|
$
|
1,040,150
|
|||
Liabilities and Equity
|
|||||||||
Current liabilities
|
|||||||||
Borrowings under revolving credit agreement
|
$
|
35,500
|
$
|
47,500
|
$
|
94,500
|
|||
Trade accounts payable
|
294,845
|
233,791
|
177,700
|
||||||
Other accrued expenses
|
139,675
|
133,652
|
141,863
|
||||||
Total current liabilities
|
470,020
|
414,943
|
414,063
|
||||||
Other liabilities
|
|||||||||
Long-term debt
|
150,000
|
150,000
|
150,000
|
||||||
Deferred rent
|
38,011
|
42,049
|
38,869
|
||||||
Other liabilities
|
27,555
|
29,570
|
25,991
|
||||||
Total other liabilities
|
215,566
|
221,619
|
214,860
|
||||||
Equity
|
|||||||||
Common stock
|
439
|
428
|
429
|
||||||
Additional paid-in capital
|
130,621
|
149,530
|
152,314
|
||||||
Accumulated other comprehensive income (loss)
|
1,567
|
(4,279
|
)
|
177
|
|||||
Retained earnings
|
258,444
|
233,904
|
249,251
|
||||||
Total Brown Shoe Company, Inc. shareholders’ equity
|
391,071
|
379,583
|
402,171
|
||||||
Noncontrolling interests
|
474
|
8,673
|
9,056
|
||||||
Total equity
|
391,545
|
388,256
|
411,227
|
||||||
Total liabilities and equity
|
$
|
1,077,131
|
$
|
1,024,818
|
$
|
1,040,150
|
BROWN SHOE COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
|
(Unaudited)
|
(Unaudited)
|
|||||||||||
Thirteen Weeks Ended
|
Twenty-six Weeks Ended
|
|||||||||||
($ thousands, except per share amounts)
|
||||||||||||
Net sales
|
$
|
585,756
|
$
|
511,621
|
$
|
1,183,474
|
$
|
1,050,361
|
||||
Cost of goods sold
|
347,286
|
307,981
|
697,444
|
638,557
|
||||||||
Gross profit
|
238,470
|
203,640
|
486,030
|
411,804
|
||||||||
Selling and administrative expenses
|
224,448
|
206,620
|
448,963
|
419,337
|
||||||||
Restructuring and other special charges, net
|
1,891
|
1,998
|
3,608
|
4,612
|
||||||||
Operating earnings (loss)
|
12,131
|
(4,978
|
)
|
33,459
|
(12,145
|
)
|
||||||
Interest expense
|
(4,810
|
)
|
(4,914
|
)
|
(9,322
|
)
|
(10,163
|
)
|
||||
Interest income
|
49
|
145
|
67
|
288
|
||||||||
Earnings (loss) before income taxes
|
7,370
|
(9,747
|
)
|
24,204
|
(22,020
|
)
|
||||||
Income tax (provision) benefit
|
(2,582
|
)
|
5,531
|
(8,881
|
)
|
10,733
|
||||||
Net earnings (loss)
|
$
|
4,788
|
$
|
(4,216
|
)
|
$
|
15,323
|
$
|
(11,287
|
)
|
||
Less: Net (loss) earnings attributable to noncontrolling interests
|
(473
|
)
|
29
|
16
|
561
|
|||||||
Net earnings (loss) attributable to Brown Shoe Company, Inc.
|
$
|
5,261
|
$
|
(4,245
|
)
|
$
|
15,307
|
$
|
(11,848
|
)
|
||
Basic earnings (loss) per common share attributable to Brown Shoe Company, Inc. shareholders
|
$
|
0.12
|
$
|
(0.10
|
)
|
$
|
0.35
|
$
|
(0.28
|
)
|
||
Diluted earnings (loss) per common share attributable to Brown Shoe Company, Inc. shareholders
|
$
|
0.12
|
$
|
(0.10
|
)
|
$
|
0.35
|
$
|
(0.28
|
)
|
||
Dividends per common share
|
$
|
0.07
|
$
|
0.07
|
$
|
0.14
|
$
|
0.14
|
BROWN SHOE COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
||||||
Twenty-six Weeks Ended
|
||||||
($ thousands)
|
||||||
Operating Activities
|
||||||
Net earnings (loss)
|
$
|
15,323
|
$
|
(11,287
|
)
|
|
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
|
||||||
Depreciation
|
16,028
|
18,204
|
||||
Amortization of capitalized software
|
5,010
|
3,993
|
||||
Amortization of intangibles
|
3,350
|
3,387
|
||||
Amortization of debt issuance costs
|
1,098
|
1,098
|
||||
Share-based compensation expense
|
2,781
|
1,944
|
||||
Tax deficiency related to share-based plans
|
142
|
89
|
||||
Loss on disposal of facilities and equipment
|
617
|
293
|
||||
Impairment charges for facilities and equipment
|
1,684
|
2,094
|
||||
Deferred rent
|
(858
|
)
|
335
|
|||
Provision for doubtful accounts
|
80
|
477
|
||||
Foreign currency transaction gains
|
(11
|
)
|
(61
|
)
|
||
Changes in operating assets and liabilities:
|
||||||
Receivables
|
(21,923
|
)
|
11,643
|
|||
Inventories
|
(121,298
|
)
|
(59,120
|
)
|
||
Prepaid expenses and other current and noncurrent assets
|
8,923
|
2,507
|
||||
Trade accounts payable
|
117,041
|
81,073
|
||||
Accrued expenses and other liabilities
|
(714
|
)
|
(4,391
|
)
|
||
Other, net
|
(284
|
)
|
(2,567
|
)
|
||
Net cash provided by operating activities
|
26,989
|
49,711
|
||||
Investing Activities
|
||||||
Purchases of property and equipment
|
(12,844
|
)
|
(17,911
|
)
|
||
Capitalized software
|
(11,871
|
)
|
(10,916
|
)
|
||
Net cash used for investing activities
|
(24,715
|
)
|
(28,827
|
)
|
||
Financing Activities
|
||||||
Borrowings under revolving credit agreement
|
435,500
|
394,900
|
||||
Repayments under revolving credit agreement
|
(494,500
|
)
|
(459,900
|
)
|
||
Acquisition of noncontrolling interests (Edelman Shoe, Inc.)
|
(32,692
|
)
|
–
|
|||
Dividends paid
|
(6,114
|
)
|
(6,006
|
)
|
||
Proceeds from stock options exercised
|
561
|
–
|
||||
Tax deficiency related to share-based plans
|
(142
|
)
|
(89
|
)
|
||
Net cash used for financing activities
|
(97,387
|
)
|
(71,095
|
)
|
||
Effect of exchange rate changes on cash
|
4
|
585
|
||||
Decrease in cash and cash equivalents
|
(95,109
|
)
|
(49,626
|
)
|
||
Cash and cash equivalents at beginning of period
|
125,833
|
86,900
|
||||
Cash and cash equivalents at end of period
|
$
|
30,724
|
$
|
37,274
|
BROWN SHOE COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
Note 1
|
Basis of Presentation
|
Note 2
|
Impact of New and Prospective Accounting Pronouncements
|
Note 3
|
Edelman Shoe, Inc.
|
Note 4
|
Earnings Per Share
|
Thirteen Weeks Ended
|
Twenty-six Weeks Ended
|
||||||||||||||
(in thousands, except per share amounts)
|
|||||||||||||||
NUMERATOR
|
|||||||||||||||
Net earnings (loss) attributable to Brown Shoe Company, Inc. before allocation of earnings to participating securities
|
$
|
5,261
|
$
|
(4,245
|
)
|
$
|
15,307
|
$
|
(11,848
|
)
|
|||||
Less: Earnings allocated to participating securities
|
188
|
–
|
535
|
–
|
|||||||||||
Net earnings (loss) attributable to Brown Shoe Company, Inc. after allocation of earnings to participating securities
|
$
|
5,073
|
$
|
(4,245
|
)
|
$
|
14,772
|
$
|
(11,848
|
)
|
|||||
DENOMINATOR
|
|||||||||||||||
Denominator for basic earnings (loss) per common share attributable to Brown Shoe Company, Inc. shareholders
|
42,147
|
41,583
|
41,951
|
41,574
|
|||||||||||
Dilutive effect of share-based awards
|
316
|
–
|
316
|
–
|
|||||||||||
Denominator for diluted earnings (loss) per common share attributable to Brown Shoe Company, Inc. shareholders
|
42,463
|
41,583
|
42,267
|
41,574
|
|||||||||||
Basic earnings (loss) per common share attributable to Brown Shoe Company, Inc. shareholders
|
$
|
0.12
|
$
|
(0.10
|
)
|
$
|
0.35
|
$
|
(0.28
|
)
|
|||||
Diluted earnings (loss) per common share attributable to Brown Shoe Company, Inc. shareholders
|
$
|
0.12
|
$
|
(0.10
|
)
|
$
|
0.35
|
$
|
(0.28
|
)
|
Note 5
|
Comprehensive Income (Loss) and Changes in Equity
|
Thirteen Weeks Ended
|
Twenty-six Weeks Ended
|
|||||||||||||
($ thousands)
|
||||||||||||||
Net earnings (loss)
|
$
|
4,788
|
$
|
(4,216
|
)
|
$
|
15,323
|
$
|
(11,287
|
)
|
||||
Other comprehensive income (loss) (“OCI”), net of tax:
|
||||||||||||||
Foreign currency translation adjustment
|
(80
|
)
|
2,767
|
1,040
|
2,661
|
|||||||||
Unrealized gains (losses) on derivative instruments, net of tax of $185 and $484 in the thirteen weeks and $44 and $515 in the twenty-six weeks ended July 31, 2010 and August 1, 2009, respectively
|
482
|
(1,112
|
)
|
187
|
(1,277
|
)
|
||||||||
Net loss from derivatives reclassified into earnings, net of tax of $35 and $71 in the thirteen weeks and $89 and $68 in the twenty-six weeks ended July 31, 2010 and August 1, 2009, respectively
|
64
|
142
|
169
|
120
|
||||||||||
466
|
1,797
|
1,396
|
1,504
|
|||||||||||
Comprehensive income (loss)
|
$
|
5,254
|
$
|
(2,419
|
)
|
$
|
16,719
|
$
|
(9,783
|
)
|
||||
Less: Comprehensive (loss) income attributable to noncontrolling interests
|
(467
|
)
|
31
|
22
|
563
|
|||||||||
Comprehensive income (loss) attributable to Brown Shoe Company, Inc.
|
$
|
5,721
|
$
|
(2,450
|
)
|
$
|
16,697
|
$
|
(10,346
|
)
|
($ thousands)
|
|||||||||
Foreign currency translation gains
|
$
|
5,188
|
$
|
3,379
|
$
|
4,154
|
|||
Unrealized losses on derivative instruments, net of tax
|
(361
|
)
|
(889
|
)
|
(717
|
)
|
|||
Pension and other postretirement benefits, net of tax
|
(3,260
|
)
|
(6,769
|
)
|
(3,260
|
)
|
|||
Accumulated other comprehensive income (loss)
|
$
|
1,567
|
$
|
(4,279
|
)
|
$
|
177
|
($ thousands)
|
Brown Shoe Company, Inc.
Shareholders’ Equity
|
Noncontrolling
Interests
|
Total Equity
|
||||||
Equity at January 30, 2010
|
$
|
402,171
|
$
|
9,056
|
$
|
411,227
|
|||
Comprehensive income
|
16,697
|
22
|
16,719
|
||||||
Dividends paid
|
(6,114
|
)
|
–
|
(6,114
|
)
|
||||
Acquisition of noncontrolling interest (Edelman Shoe, Inc.)
|
|||||||||
Stock issued in connection with the acquisition of the noncontrolling interest
|
7,309
|
–
|
7,309
|
||||||
Distribution to noncontrolling interest
|
(31,397
|
)
|
(8,604
|
)
|
(40,001
|
)
|
|||
Stock issued under share-based plans
|
(234
|
)
|
–
|
(234
|
)
|
||||
Tax deficiency related to share-based plans
|
(142
|
)
|
–
|
(142
|
)
|
||||
Share-based compensation expense
|
2,781
|
–
|
2,781
|
||||||
Equity at July 31, 2010
|
$
|
391,071
|
$
|
474
|
$
|
391,545
|
($ thousands)
|
Brown Shoe Company, Inc.
Shareholders’ Equity
|
Noncontrolling
Interests
|
Total Equity
|
||||||
Equity at January 31, 2009
|
$
|
394,104
|
$
|
8,110
|
$
|
402,214
|
|||
Comprehensive (loss) income
|
(10,346
|
)
|
563
|
(9,783
|
)
|
||||
Dividends paid
|
(6,006
|
)
|
–
|
(6,006
|
)
|
||||
Stock issued under share-based plans
|
(24
|
)
|
–
|
(24
|
)
|
||||
Tax deficiency related to share-based plans
|
(89
|
)
|
–
|
(89
|
)
|
||||
Share-based compensation expense
|
1,944
|
–
|
1,944
|
||||||
Equity at August 1, 2009
|
$
|
379,583
|
$
|
8,673
|
$
|
388,256
|
Note 6
|
Restructuring and Other Special Charges, Net
|
($ millions)
|
Employee
Severance
|
Facility
|
Other
|
Total
|
|||||||||||
Original charges and reserve balance
|
$
|
24.7
|
$
|
6.0
|
$
|
0.2
|
$
|
30.9
|
|||||||
Amounts settled in 2008
|
(5.3
|
)
|
(2.7
|
)
|
–
|
(8.0
|
)
|
||||||||
Reserve balance at January 31, 2009
|
$
|
19.4
|
$
|
3.3
|
$
|
0.2
|
$
|
22.9
|
|||||||
Amounts settled in 2009
|
(15.3
|
)
|
(2.1
|
)
|
(0.2
|
)
|
(17.6
|
)
|
|||||||
Reserve balance at January 30, 2010
|
$
|
4.1
|
$
|
1.2
|
$
|
–
|
$
|
5.3
|
|||||||
Amounts settled in first quarter 2010
|
(2.3
|
)
|
(0.2
|
)
|
–
|
(2.5
|
)
|
||||||||
Reserve balance at May 1, 2010
|
$
|
1.8
|
$
|
1.0
|
$
|
–
|
$
|
2.8
|
|||||||
Amounts settled in second quarter 2010
|
(0.1
|
)
|
(1.0
|
)
|
–
|
(1.1
|
)
|
||||||||
Reserve balance at July 31, 2010
|
$
|
1.7
|
$
|
–
|
$
|
–
|
$
|
1.7
|
|||||||
($ millions)
|
Employee
Severance
|
Employee
Relocation
|
Employee
Recruiting
|
Facility
|
Other
|
Total
|
|||||||||||||
Original charges and reserve balance
|
$
|
6.6
|
$
|
8.3
|
$
|
4.6
|
$
|
9.2
|
$
|
1.1
|
$
|
29.8
|
|||||||
Amounts settled in 2008
|
(4.7
|
)
|
(6.2
|
)
|
(4.3
|
)
|
(3.6
|
)
|
(1.0
|
)
|
(19.8
|
)
|
|||||||
Reserve balance at January 31, 2009
|
$
|
1.9
|
$
|
2.1
|
$
|
0.3
|
$
|
5.6
|
$
|
0.1
|
$
|
10.0
|
|||||||
Reserve reduction in 2009
|
–
|
–
|
–
|
(1.9
|
)
|
–
|
(1.9
|
)
|
|||||||||||
Amounts settled in 2009
|
(1.9
|
)
|
(1.7
|
)
|
(0.2
|
)
|
(1.9
|
)
|
(0.1
|
)
|
(5.8
|
)
|
|||||||
Reserve balance at January 30, 2010
|
$
|
–
|
$
|
0.4
|
$
|
0.1
|
$
|
1.8
|
$
|
–
|
$
|
2.3
|
|||||||
Amounts settled in first quarter 2010
|
–
|
–
|
–
|
(0.3
|
)
|
–
|
(0.3
|
)
|
|||||||||||
Reserve balance at May 1, 2010
|
$
|
–
|
$
|
0.4
|
$
|
0.1
|
$
|
1.5
|
$
|
–
|
$
|
2.0
|
|||||||
Amounts settled in second quarter 2010
|
–
|
(0.4
|
)
|
(0.1
|
)
|
(0.4
|
)
|
–
|
(0.9
|
)
|
|||||||||
Reserve balance at July 31, 2010
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
1.1
|
$
|
–
|
$
|
1.1
|
Note 7
|
Business Segment Information
|
($ thousands)
|
Famous
Footwear
|
Wholesale
Operations
|
Specialty
Retail
|
Other
|
Total
|
|||||||||||
Thirteen Weeks Ended July 31, 2010
|
||||||||||||||||
External sales
|
$
|
347,316
|
$
|
178,643
|
$
|
59,797
|
$
|
–
|
$
|
585,756
|
||||||
Intersegment sales
|
438
|
47,215
|
–
|
–
|
47,653
|
|||||||||||
Operating earnings (loss)
|
15,751
|
9,027
|
(2,746
|
)
|
(9,901
|
)
|
12,131
|
|||||||||
Operating segment assets
|
548,683
|
348,148
|
54,629
|
125,671
|
1,077,131
|
|||||||||||
Thirteen Weeks Ended August 1, 2009
|
||||||||||||||||
External sales
|
$
|
314,144
|
$
|
142,027
|
$
|
55,450
|
$
|
–
|
$
|
511,621
|
||||||
Intersegment sales
|
471
|
52,462
|
–
|
–
|
52,933
|
|||||||||||
Operating (loss) earnings
|
(846
|
)
|
7,882
|
(4,301
|
)
|
(7,713
|
)
|
(4,978
|
)
|
|||||||
Operating segment assets
|
527,013
|
293,005
|
75,703
|
129,097
|
1,024,818
|
|||||||||||
Twenty-six Weeks Ended July 31, 2010
|
||||||||||||||||
External sales
|
$
|
709,486
|
$
|
353,372
|
$
|
120,616
|
$
|
–
|
$
|
1,183,474
|
||||||
Intersegment sales
|
971
|
88,328
|
–
|
–
|
89,299
|
|||||||||||
Operating earnings (loss)
|
43,934
|
17,706
|
(5,655
|
)
|
(22,526
|
)
|
33,459
|
|||||||||
Twenty-six Weeks Ended August 1, 2009
|
||||||||||||||||
External sales
|
$
|
631,707
|
$
|
310,851
|
$
|
107,803
|
$
|
–
|
$
|
1,050,361
|
||||||
Intersegment sales
|
1,112
|
97,557
|
–
|
–
|
98,669
|
|||||||||||
Operating earnings (loss)
|
2,195
|
13,792
|
(10,527
|
)
|
(17,605
|
)
|
(12,145
|
)
|
Thirteen Weeks Ended
|
Twenty-six Weeks Ended
|
||||||||||||
($ thousands)
|
|||||||||||||
Operating earnings (loss)
|
$
|
12,131
|
$
|
(4,978
|
)
|
$
|
33,459
|
$
|
(12,145
|
)
|
|||
Interest expense
|
(4,810
|
)
|
(4,914
|
)
|
(9,322
|
)
|
(10,163
|
)
|
|||||
Interest income
|
49
|
145
|
67
|
288
|
|||||||||
Earnings (loss) before income taxes
|
$
|
7,370
|
$
|
(9,747
|
)
|
$
|
24,204
|
$
|
(22,020
|
)
|
Note 8
|
Intangible Assets
|
($ thousands)
|
|||||||||
Famous Footwear
|
$
|
2,800
|
$
|
2,800
|
$
|
2,800
|
|||
Wholesale Operations
|
70,876
|
77,613
|
74,226
|
||||||
Specialty Retail
|
200
|
200
|
200
|
||||||
$
|
73,876
|
$
|
80,613
|
$
|
77,226
|
Note 9
|
Share-Based Compensation
|
Note 10
|
Retirement and Other Benefit Plans
|
Pension Benefits
|
Other Postretirement Benefits
|
|||||||||||
Thirteen Weeks Ended
|
Thirteen Weeks Ended
|
|||||||||||
($ thousands)
|
||||||||||||
Service cost
|
$
|
2,000
|
$
|
1,683
|
$
|
–
|
$
|
–
|
||||
Interest cost
|
3,042
|
2,783
|
44
|
50
|
||||||||
Expected return on assets
|
(5,039
|
)
|
(4,878
|
)
|
–
|
–
|
||||||
Settlement cost
|
–
|
52
|
–
|
–
|
||||||||
Amortization of:
|
||||||||||||
Actuarial loss (gain)
|
59
|
29
|
(33
|
)
|
(21
|
)
|
||||||
Prior service income
|
(3
|
)
|
–
|
–
|
–
|
|||||||
Net transition asset
|
(11
|
)
|
(34
|
)
|
–
|
–
|
||||||
Total net periodic benefit cost (income)
|
$
|
48
|
$
|
(365
|
)
|
$
|
11
|
$
|
29
|
Pension Benefits
|
Other Postretirement Benefits
|
|||||||||||
Twenty-six Weeks Ended
|
Twenty-six Weeks Ended
|
|||||||||||
($ thousands)
|
||||||||||||
Service cost
|
$
|
3,826
|
$
|
3,393
|
$
|
–
|
$
|
–
|
||||
Interest cost
|
6,029
|
5,779
|
97
|
109
|
||||||||
Expected return on assets
|
(10,103
|
)
|
(9,757
|
)
|
–
|
–
|
||||||
Settlement cost
|
–
|
127
|
–
|
–
|
||||||||
Amortization of:
|
||||||||||||
Actuarial loss (gain)
|
85
|
56
|
(48
|
)
|
(42
|
)
|
||||||
Prior service income
|
(3
|
)
|
(6
|
)
|
–
|
–
|
||||||
Net transition asset
|
(22
|
)
|
(65
|
)
|
–
|
–
|
||||||
Total net periodic benefit (income) cost
|
$
|
(188
|
)
|
$
|
(473
|
)
|
$
|
49
|
$
|
67
|
Note 11
|
Long-Term and Short-Term Financing Arrangements
|
Year
|
Percentage
|
||||||||||||
2010
|
102.188
|
%
|
|||||||||||
2011 and thereafter
|
100.000
|
%
|
Note 12
|
Risk Management and Derivatives
|
(U.S. $ equivalent in thousands)
|
Contract Amount
|
Contract Amount
|
Contract Amount
|
|||||
Deliverable Financial Instruments
|
||||||||
U.S. dollars (purchased by the Company’s Canadian division with Canadian dollars)
|
$
|
19,040
|
$
|
14,182
|
$
|
14,851
|
||
Euro
|
7,244
|
4,564
|
5,545
|
|||||
Other currencies
|
191
|
–
|
–
|
|||||
Non-deliverable Financial Instruments
|
||||||||
Chinese yuan
|
12,531
|
10,264
|
12,042
|
|||||
Japanese yen
|
1,552
|
1,793
|
1,549
|
|||||
New Taiwanese dollars
|
1,155
|
1,242
|
1,192
|
|||||
Other currencies
|
716
|
628
|
723
|
|||||
$
|
42,429
|
$
|
32,673
|
$
|
35,902
|
Asset Derivatives
|
Liability Derivatives
|
|||||||||||
($ in thousands)
|
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
||||||||
Derivatives designated as hedging instruments:
|
||||||||||||
Foreign exchange forward contracts
|
Prepaid expenses and other current assets
|
$
|
165
|
Other accrued expenses
|
$
|
715
|
||||||
Asset Derivatives
|
Liability Derivatives
|
|||||||||||
($ in thousands)
|
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
||||||||
Derivatives designated as hedging
instruments:
|
||||||||||||
Foreign exchange forward contracts
|
Prepaid expenses and other current assets
|
$
|
276
|
Other accrued expenses
|
$
|
1,318
|
||||||
Asset Derivatives
|
Liability Derivatives
|
|||||||||||
($ in thousands)
|
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
||||||||
Derivatives designated as hedging
instruments:
|
||||||||||||
Foreign exchange forward contracts
|
Prepaid expenses and other current assets
|
$
|
88
|
Other accrued expenses
|
$
|
689
|
||||||
($ in thousands)
|
Location of Loss
|
Amount of Loss
|
||||||||||||||||||||||||
Amount of (Loss)/Gain
|
Reclassified from
|
Reclassified from
|
||||||||||||||||||||||||
Derivatives in Cash Flow
|
Recognized in OCI on
|
Accumulated OCI into
|
Accumulated OCI into
|
|||||||||||||||||||||||
Hedging Relationships:
|
Derivatives
|
Earnings
|
Earnings
|
|||||||||||||||||||||||
Foreign exchange forward
|
$
|
(104
|
)
|
Net sales
|
$
|
30
|
||||||||||||||||||||
Foreign exchange forward
|
859
|
Cost of goods sold
|
20
|
|||||||||||||||||||||||
Foreign exchange forward
|
(94
|
)
|
Selling and administrative
expenses
|
49
|
||||||||||||||||||||||
Foreign exchange forward
|
6
|
Interest expense
|
–
|
($ in thousands)
|
Location of Loss
|
Amount of Loss
|
||||||||||||||||||||||||
Amount of Loss
|
Reclassified from
|
Reclassified from
|
||||||||||||||||||||||||
Derivatives in Cash Flow
|
Recognized in OCI on
|
Accumulated OCI into
|
Accumulated OCI into
|
|||||||||||||||||||||||
Hedging Relationships:
|
Derivatives
|
Earnings
|
Earnings
|
|||||||||||||||||||||||
Foreign exchange forward
|
$
|
(113
|
)
|
Net sales
|
$
|
48
|
||||||||||||||||||||
Foreign exchange forward
|
(1,085
|
)
|
Cost of goods sold
|
12
|
||||||||||||||||||||||
Foreign exchange forward
|
(381
|
)
|
Selling and administrative
expenses
|
153
|
||||||||||||||||||||||
Foreign exchange forward
|
(17
|
)
|
Interest expense
|
–
|
($ in thousands)
|
Location of Loss
|
Amount of Loss
|
||||||||||||||||||||||||
Amount of (Loss)/Gain
|
Reclassified from
|
Reclassified from
|
||||||||||||||||||||||||
Derivatives in Cash Flow
|
Recognized in OCI on
|
Accumulated OCI into
|
Accumulated OCI into
|
|||||||||||||||||||||||
Hedging Relationships:
|
Derivatives
|
Earnings
|
Earnings
|
|||||||||||||||||||||||
Foreign exchange forward
|
$
|
(118
|
)
|
Net sales
|
$
|
108
|
||||||||||||||||||||
Foreign exchange forward
|
580
|
Cost of goods sold
|
48
|
|||||||||||||||||||||||
Foreign exchange forward
|
(230
|
)
|
Selling and administrative
expenses
|
102
|
||||||||||||||||||||||
Foreign exchange forward
|
(1
|
)
|
Interest expense
|
–
|
($ in thousands)
|
Location of Loss
|
Amount of Loss
|
||||||||||||||||||||||||
Amount of Loss
|
Reclassified from
|
Reclassified from
|
||||||||||||||||||||||||
Derivatives in Cash Flow
|
Recognized in OCI on
|
Accumulated OCI into
|
Accumulated OCI into
|
|||||||||||||||||||||||
Hedging Relationships:
|
Derivatives
|
Earnings
|
Earnings
|
|||||||||||||||||||||||
Foreign exchange forward
|
$
|
(8
|
)
|
Net sales
|
$
|
45
|
||||||||||||||||||||
Foreign exchange forward
|
(1,430
|
)
|
Cost of goods sold
|
12
|
||||||||||||||||||||||
Foreign exchange forward
|
(322
|
)
|
Selling and administrative
expenses
|
131
|
||||||||||||||||||||||
Foreign exchange forward
|
(32
|
)
|
Interest expense
|
–
|
($ in thousands)
|
Location of Loss
|
Amount of Loss
|
||||||||||||||||||||||||
Amount of Loss
|
Reclassified from
|
Reclassified from
|
||||||||||||||||||||||||
Derivatives in Cash Flow
|
Recognized in OCI on
|
Accumulated OCI into
|
Accumulated OCI into
|
|||||||||||||||||||||||
Hedging Relationships:
|
Derivatives
|
Earnings
|
Earnings
|
|||||||||||||||||||||||
Foreign exchange forward
|
$
|
(113
|
)
|
Net sales
|
$
|
100
|
||||||||||||||||||||
Foreign exchange forward
|
(1,330
|
)
|
Cost of goods sold
|
118
|
||||||||||||||||||||||
Foreign exchange forward
|
(175
|
)
|
Selling and administrative
expenses
|
23
|
||||||||||||||||||||||
Foreign exchange forward
|
(9
|
)
|
Interest expense
|
2
|
Note 13
|
Fair Value Measurements
|
·
|
Level 1 – Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;
|
·
|
Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly;
|
·
|
Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
|
Fair Value Measurements
|
||||||||||||
($ thousands)
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||
Asset (Liability)
|
||||||||||||
As of July 31, 2010:
|
||||||||||||
Non-qualified deferred compensation plan assets
|
$
|
1,226
|
$
|
1,226
|
$
|
–
|
$
|
–
|
||||
Non-qualified deferred compensation plan liabilities
|
(1,226
|
)
|
(1,226
|
)
|
–
|
–
|
||||||
Deferred compensation plan liabilities for non-employee directors
|
(899
|
)
|
(899
|
)
|
–
|
–
|
||||||
Derivative financial instruments, net
|
(550
|
)
|
–
|
(550
|
)
|
–
|
||||||
As of August 1, 2009:
Cash equivalents – money market funds
|
$
|
14,500
|
$
|
14,500
|
$
|
–
|
$
|
–
|
||||
Non-qualified deferred compensation plan assets
|
788
|
788
|
–
|
–
|
||||||||
Non-qualified deferred compensation plan liabilities
|
(788
|
)
|
(788
|
)
|
–
|
–
|
||||||
Deferred compensation plan liabilities for non-employee directors
|
(467
|
)
|
(467
|
)
|
–
|
–
|
||||||
Derivative financial instruments, net
|
(1,042
|
)
|
–
|
(1,042
|
)
|
–
|
||||||
As of January 30, 2010:
Cash equivalents – money market funds
|
$
|
25,000
|
$
|
25,000
|
$
|
–
|
$
|
–
|
||||
Non-qualified deferred compensation plan assets
|
1,033
|
1,033
|
–
|
–
|
||||||||
Non-qualified deferred compensation plan liabilities
|
(1,033
|
)
|
(1,033
|
)
|
–
|
–
|
||||||
Deferred compensation plan liabilities for non-employee directors
|
(747
|
)
|
(747
|
)
|
–
|
–
|
||||||
Derivative financial instruments, net
|
(601
|
)
|
–
|
(601
|
)
|
–
|
||||||
($ thousands)
|
Carrying
Amount
|
Fair
Value
|
Carrying Amount
|
Fair
Value
|
Carrying
Amount
|
Fair
Value
|
||||||||||
Borrowings under revolving credit agreement
|
$
|
35,500
|
$
|
35,500
|
$
|
47,500
|
$
|
47,500
|
$
|
94,500
|
$
|
94,500
|
||||
Senior Notes
|
150,000
|
151,688
|
150,000
|
143,813
|
150,000
|
152,250
|
Note 14
|
Related Party Transactions
|
Note 15
|
Commitments and Contingencies
|
Note 16
|
Financial Information for the Company and its Subsidiaries
|
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF JULY 31, 2010
|
($ thousands)
|
Parent
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Total
|
||||||||||
Assets
|
|||||||||||||||
Current assets
|
|||||||||||||||
Cash and cash equivalents
|
$
|
(2,745
|
)
|
$
|
14,714
|
$
|
18,755
|
$
|
–
|
$
|
30,724
|
||||
Receivables
|
78,242
|
3,183
|
24,724
|
–
|
106,149
|
||||||||||
Inventories
|
105,623
|
470,020
|
2,442
|
–
|
578,085
|
||||||||||
Prepaid expenses and other current assets
|
26,221
|
6,891
|
94
|
–
|
33,206
|
||||||||||
Total current assets
|
207,341
|
494,808
|
46,015
|
–
|
748,164
|
||||||||||
Other assets
|
96,235
|
21,973
|
676
|
–
|
118,884
|
||||||||||
Intangible assets, net
|
56,036
|
17,840
|
–
|
–
|
73,876
|
||||||||||
Property and equipment, net
|
25,242
|
107,683
|
3,282
|
–
|
136,207
|
||||||||||
Investment in subsidiaries
|
675,269
|
81,980
|
–
|
(757,249
|
)
|
–
|
|||||||||
Total assets
|
$
|
1,060,123
|
$
|
724,284
|
$
|
49,973
|
$
|
(757,249
|
)
|
$
|
1,077,131
|
||||
Liabilities and Equity
|
|||||||||||||||
Current liabilities
|
|||||||||||||||
Borrowings under revolving credit agreement
|
$
|
35,500
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
35,500
|
|||||
Trade accounts payable
|
73,720
|
192,380
|
28,745
|
–
|
294,845
|
||||||||||
Other accrued expenses
|
74,225
|
59,768
|
5,682
|
–
|
139,675
|
||||||||||
Total current liabilities
|
183,445
|
252,148
|
34,427
|
–
|
470,020
|
||||||||||
Other liabilities
|
|||||||||||||||
Long-term debt
|
150,000
|
–
|
–
|
–
|
150,000
|
||||||||||
Other liabilities
|
26,660
|
38,632
|
274
|
–
|
65,566
|
||||||||||
Intercompany payable (receivable)
|
308,947
|
(241,765
|
)
|
(67,182
|
)
|
–
|
–
|
||||||||
Total other liabilities
|
485,607
|
(203,133
|
)
|
(66,908
|
)
|
–
|
215,566
|
||||||||
Equity
|
–
|
||||||||||||||
Brown Shoe Company, Inc. shareholders’ equity
|
391,071
|
675,269
|
81,980
|
(757,249
|
)
|
391,071
|
|||||||||
Noncontrolling interests
|
–
|
–
|
474
|
–
|
474
|
||||||||||
Total equity
|
391,071
|
675,269
|
82,454
|
(757,249
|
)
|
391,545
|
|||||||||
Total liabilities and equity
|
$
|
1,060,123
|
$
|
724,284
|
$
|
49,973
|
$
|
(757,249
|
)
|
$
|
1,077,131
|
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS
FOR THE THIRTEEN WEEKS ENDED JULY 31, 2010
|
($ thousands)
|
Parent
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Total
|
||||||||||
Net sales
|
$
|
169,710
|
$
|
411,080
|
$
|
55,733
|
$
|
(50,767
|
)
|
$
|
585,756
|
||||
Cost of goods sold
|
129,810
|
221,340
|
46,903
|
(50,767
|
)
|
347,286
|
|||||||||
Gross profit
|
39,900
|
189,740
|
8,830
|
–
|
238,470
|
||||||||||
Selling and administrative expenses
|
45,227
|
177,946
|
1,275
|
–
|
224,448
|
||||||||||
Restructuring and other special charges, net
|
1,730
|
–
|
161
|
–
|
1,891
|
||||||||||
Equity in (earnings) loss of subsidiaries
|
(12,251
|
)
|
(2,480
|
)
|
–
|
14,731
|
–
|
||||||||
Operating earnings (loss)
|
5,194
|
14,274
|
7,394
|
(14,731
|
)
|
12,131
|
|||||||||
Interest expense
|
(4,809
|
)
|
(1
|
)
|
–
|
–
|
(4,810
|
)
|
|||||||
Interest income
|
–
|
28
|
21
|
–
|
49
|
||||||||||
Intercompany interest income (expense)
|
3,459
|
581
|
(4,040
|
)
|
–
|
–
|
|||||||||
Earnings (loss) before income taxes
|
3,844
|
14,882
|
3,375
|
(14,731
|
)
|
7,370
|
|||||||||
Income tax benefit (provision)
|
1,417
|
(3,028
|
)
|
(971
|
)
|
–
|
(2,582
|
)
|
|||||||
Net earnings (loss)
|
$
|
5,261
|
$
|
11,854
|
$
|
2,404
|
$
|
(14,731
|
)
|
$
|
4,788
|
||||
Less: Net loss attributable to noncontrolling interests
|
–
|
(397
|
)
|
(76
|
)
|
–
|
(473
|
)
|
|||||||
Net earnings (loss) attributable to Brown Shoe Company, Inc.
|
$
|
5,261
|
$
|
12,251
|
$
|
2,480
|
$
|
(14,731
|
)
|
$
|
5,261
|
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS
FOR THE TWENTY-SIX WEEKS ENDED JULY 31, 2010
|
($ thousands)
|
Parent
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Total
|
||||||||||
Net sales
|
$
|
333,064
|
$
|
837,956
|
$
|
100,774
|
$
|
(88,320
|
)
|
$
|
1,183,474
|
||||
Cost of goods sold
|
247,492
|
453,473
|
84,799
|
(88,320
|
)
|
697,444
|
|||||||||
Gross profit
|
85,572
|
384,483
|
15,975
|
–
|
486,030
|
||||||||||
Selling and administrative expenses
|
96,031
|
346,409
|
6,523
|
–
|
448,963
|
||||||||||
Restructuring and other special charges, net
|
3,273
|
–
|
335
|
–
|
3,608
|
||||||||||
Equity in (earnings) loss of subsidiaries
|
(26,253
|
)
|
(4,196
|
)
|
–
|
30,449
|
–
|
||||||||
Operating earnings (loss)
|
12,521
|
42,270
|
9,117
|
(30,449
|
)
|
33,459
|
|||||||||
Interest expense
|
(9,318
|
)
|
(4
|
)
|
–
|
–
|
(9,322
|
)
|
|||||||
Interest income
|
1
|
29
|
37
|
–
|
67
|
||||||||||
Intercompany interest income (expense)
|
7,076
|
(3,416
|
)
|
(3,660
|
)
|
–
|
–
|
||||||||
Earnings (loss) before income taxes
|
10,280
|
38,879
|
5,494
|
(30,449
|
)
|
24,204
|
|||||||||
Income tax benefit (provision)
|
5,027
|
(12,316
|
)
|
(1,592
|
)
|
–
|
(8,881
|
)
|
|||||||
Net earnings (loss)
|
$
|
15,307
|
$
|
26,563
|
$
|
3,902
|
$
|
(30,449
|
)
|
$
|
15,323
|
||||
Less: Net earnings (loss) attributable to noncontrolling interests
|
–
|
310
|
(294
|
)
|
–
|
16
|
|||||||||
Net earnings (loss) attributable to Brown Shoe Company, Inc.
|
$
|
15,307
|
$
|
26,253
|
$
|
4,196
|
$
|
(30,449
|
)
|
$
|
15,307
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE TWENTY-SIX WEEKS ENDED JULY 31, 2010
|
($ thousands)
|
Parent
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Total
|
||||||||||
Net cash (used for) provided by operating activities
|
$
|
(26,863
|
)
|
$
|
44,036
|
$
|
9,816
|
$
|
–
|
$
|
26,989
|
||||
Investing activities
|
|||||||||||||||
Purchases of property and equipment
|
(1,978
|
)
|
(10,664
|
)
|
(202
|
)
|
–
|
(12,844
|
)
|
||||||
Capitalized software
|
(11,734
|
)
|
(137
|
)
|
–
|
–
|
(11,871
|
)
|
|||||||
Net cash used for investing activities
|
(13,712
|
)
|
(10,801
|
)
|
(202
|
)
|
–
|
(24,715
|
)
|
||||||
Financing activities
|
|||||||||||||||
Borrowings under revolving credit agreement
|
435,500
|
–
|
–
|
–
|
435,500
|
||||||||||
Repayments under revolving credit agreement
|
(494,500
|
)
|
–
|
–
|
–
|
(494,500
|
)
|
||||||||
Intercompany financing
|
95,216
|
12,205
|
(107,421
|
)
|
–
|
–
|
|||||||||
Acquisition of noncontrolling interests (Edelman Shoe, Inc.)
|
7,309
|
(40,001
|
)
|
–
|
–
|
(32,692
|
)
|
||||||||
Dividends paid
|
(6,114
|
)
|
–
|
–
|
–
|
(6,114
|
)
|
||||||||
Proceeds from stock options exercised
|
561
|
–
|
–
|
–
|
561
|
||||||||||
Tax deficiency related to share-based plans
|
(142
|
)
|
–
|
–
|
–
|
(142
|
)
|
||||||||
Net cash provided by (used for) financing activities
|
37,830
|
(27,796
|
)
|
(107,421
|
)
|
–
|
(97,387
|
)
|
|||||||
Effect of exchange rate changes on cash
|
–
|
4
|
–
|
–
|
4
|
||||||||||
|
|||||||||||||||
(Decrease) increase in cash and cash equivalents
|
(2,745
|
)
|
5,443
|
(97,807
|
)
|
–
|
(95,109
|
)
|
|||||||
Cash and cash equivalents at beginning of period
|
–
|
9,271
|
116,562
|
–
|
125,833
|
||||||||||
Cash and cash equivalents at end of period
|
$
|
(2,745
|
)
|
$
|
14,714
|
$
|
18,755
|
$
|
–
|
$
|
30,724
|
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF JANUARY 30, 2010
|
($ thousands)
|
Parent
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Total
|
||||||||||
Assets
|
|||||||||||||||
Current assets
|
|||||||||||||||
Cash and cash equivalents
|
$
|
–
|
$
|
2,809
|
$
|
123,024
|
$
|
–
|
$
|
125,833
|
|||||
Receivables
|
51,417
|
3,002
|
29,878
|
–
|
84,297
|
||||||||||
Inventories
|
77,730
|
376,110
|
2,842
|
–
|
456,682
|
||||||||||
Prepaid expenses and other current assets
|
26,751
|
12,327
|
2,359
|
–
|
41,437
|
||||||||||
Total current assets
|
155,898
|
394,248
|
158,103
|
–
|
708,249
|
||||||||||
Other assets
|
92,413
|
(1,189
|
)
|
21,890
|
–
|
113,114
|
|||||||||
Intangible assets, net
|
58,826
|
3,000
|
15,400
|
–
|
77,226
|
||||||||||
Property and equipment, net
|
25,140
|
112,580
|
3,841
|
–
|
141,561
|
||||||||||
Investment in subsidiaries
|
641,409
|
199,234
|
–
|
(840,643
|
)
|
–
|
|||||||||
Total assets
|
$
|
973,686
|
$
|
707,873
|
$
|
199,234
|
$
|
(840,643
|
)
|
$
|
1,040,150
|
||||
Liabilities and Equity
|
|||||||||||||||
Current liabilities
|
|||||||||||||||
Borrowings under revolving credit agreement
|
$
|
94,500
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
94,500
|
|||||
Trade accounts payable
|
53,410
|
93,937
|
30,353
|
–
|
177,700
|
||||||||||
Other accrued expenses
|
78,504
|
55,685
|
7,674
|
–
|
141,863
|
||||||||||
Total current liabilities
|
226,414
|
149,622
|
38,027
|
–
|
414,063
|
||||||||||
Other liabilities
|
|||||||||||||||
Long-term debt
|
150,000
|
–
|
–
|
–
|
150,000
|
||||||||||
Other liabilities
|
19,455
|
39,386
|
6,019
|
–
|
64,860
|
||||||||||
Intercompany payable (receivable)
|
210,439
|
(261,042
|
)
|
50,603
|
–
|
–
|
|||||||||
Total other liabilities
|
379,894
|
(221,656
|
)
|
56,622
|
–
|
214,860
|
|||||||||
Equity
|
|||||||||||||||
Brown Shoe Company, Inc. shareholders’ equity
|
367,378
|
779,907
|
95,529
|
(840,643
|
)
|
402,171
|
|||||||||
Noncontrolling interests
|
–
|
–
|
9,056
|
–
|
9,056
|
||||||||||
Total equity
|
367,378
|
779,907
|
104,585
|
(840,643
|
)
|
411,227
|
|||||||||
Total liabilities and equity
|
$
|
973,686
|
$
|
707,873
|
$
|
199,234
|
$
|
(840,643
|
)
|
$
|
1,040,150
|
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF AUGUST 1, 2009
|
($ thousands)
|
Parent
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Total
|
||||||||||
Assets
|
|||||||||||||||
Current assets
|
|||||||||||||||
Cash and cash equivalents
|
$
|
–
|
$
|
7,428
|
$
|
29,846
|
$
|
–
|
$
|
37,274
|
|||||
Receivables
|
46,328
|
3,584
|
22,244
|
–
|
72,156
|
||||||||||
Inventories
|
79,319
|
443,301
|
4,188
|
–
|
526,808
|
||||||||||
Prepaid expenses and other current assets
|
26,705
|
12,725
|
2,447
|
–
|
41,877
|
||||||||||
Total current assets
|
152,352
|
467,038
|
58,725
|
–
|
678,115
|
||||||||||
Other assets
|
80,504
|
15,394
|
14,642
|
–
|
110,540
|
||||||||||
Intangible assets, net
|
61,653
|
3,000
|
15,960
|
–
|
80,613
|
||||||||||
Property and equipment, net
|
26,474
|
125,333
|
3,743
|
–
|
155,550
|
||||||||||
Investment in subsidiaries
|
651,310
|
79,239
|
–
|
(730,549
|
)
|
–
|
|||||||||
Total assets
|
$
|
972,293
|
$
|
690,004
|
$
|
93,070
|
$
|
(730,549
|
)
|
$
|
1,024,818
|
||||
Liabilities and Equity
|
|||||||||||||||
Current liabilities
|
|||||||||||||||
Borrowings under revolving credit agreement
|
$
|
47,500
|
$
|
–
|
$
|
–
|
$
|
–
|
$
|
47,500
|
|||||
Trade accounts payable
|
36,021
|
176,029
|
21,741
|
–
|
233,791
|
||||||||||
Other accrued expenses
|
65,897
|
61,338
|
6,417
|
–
|
133,652
|
||||||||||
Total current liabilities
|
149,418
|
237,367
|
28,158
|
–
|
414,943
|
||||||||||
Other liabilities
|
|||||||||||||||
Long-term debt
|
150,000
|
–
|
–
|
–
|
150,000
|
||||||||||
Other liabilities
|
23,156
|
42,223
|
6,240
|
–
|
71,619
|
||||||||||
Intercompany payable (receivable)
|
270,136
|
(240,896
|
)
|
(29,240
|
)
|
–
|
–
|
||||||||
Total other liabilities
|
443,292
|
(198,673
|
)
|
(23,000
|
)
|
–
|
221,619
|
||||||||
Equity
|
|||||||||||||||
Brown Shoe Company, Inc. shareholders’ equity
|
379,583
|
651,310
|
79,239
|
(730,549
|
)
|
379,583
|
|||||||||
Noncontrolling interests
|
–
|
–
|
8,673
|
–
|
8,673
|
||||||||||
Total equity
|
379,583
|
651,310
|
87,912
|
(730,549
|
)
|
388,256
|
|||||||||
Total liabilities and equity
|
$
|
972,293
|
$
|
690,004
|
$
|
93,070
|
$
|
(730,549
|
)
|
$
|
1,024,818
|
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS
FOR THE THIRTEEN WEEKS ENDED AUGUST 1, 2009
|
($ thousands)
|
Parent
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Total
|
||||||||||
Net sales
|
$
|
124,904
|
$
|
373,829
|
$
|
68,472
|
$
|
(55,584
|
)
|
$
|
511,621
|
||||
Cost of goods sold
|
99,215
|
211,318
|
53,032
|
(55,584
|
)
|
307,981
|
|||||||||
Gross profit
|
25,689
|
162,511
|
15,440
|
–
|
203,640
|
||||||||||
Selling and administrative expenses
|
33,264
|
167,084
|
6,272
|
–
|
206,620
|
||||||||||
Restructuring and other special charges, net
|
1,998
|
–
|
–
|
–
|
1,998
|
||||||||||
Equity in (earnings) loss of subsidiaries
|
(4,414
|
)
|
(8,296
|
)
|
–
|
12,710
|
–
|
||||||||
Operating (loss) earnings
|
(5,159
|
)
|
3,723
|
9,168
|
(12,710
|
)
|
(4,978
|
)
|
|||||||
Interest expense
|
(4,758
|
)
|
–
|
(156
|
)
|
–
|
(4,914
|
)
|
|||||||
Interest income
|
–
|
4
|
141
|
–
|
145
|
||||||||||
Intercompany interest income (expense)
|
1,384
|
(1,689
|
)
|
305
|
–
|
–
|
|||||||||
(Loss) earnings before income taxes
|
(8,533
|
)
|
2,038
|
9,458
|
(12,710
|
)
|
(9,747
|
)
|
|||||||
Income tax benefit (provision)
|
4,288
|
2,376
|
(1,133
|
)
|
–
|
5,531
|
|||||||||
Net (loss) earnings
|
$
|
(4,245
|
)
|
$
|
4,414
|
$
|
8,325
|
$
|
(12,710
|
)
|
$
|
(4,216
|
)
|
||
Less: Net earnings attributable to noncontrolling interests
|
–
|
–
|
29
|
–
|
29
|
||||||||||
Net (loss) earnings attributable to Brown Shoe Company, Inc.
|
$
|
(4,245
|
)
|
$
|
4,414
|
$
|
8,296
|
$
|
(12,710
|
)
|
$
|
(4,245
|
)
|
CONDENSED CONSOLIDATING STATEMENT OF EARNINGS
FOR THE TWENTY-SIX WEEKS ENDED AUGUST 1, 2009
|
($ thousands)
|
Parent
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Total
|
||||||||||
Net sales
|
$
|
272,040
|
$
|
747,230
|
$
|
129,494
|
$
|
(98,403
|
)
|
$
|
1,050,361
|
||||
Cost of goods sold
|
212,788
|
422,583
|
101,589
|
(98,403
|
)
|
638,557
|
|||||||||
Gross profit
|
59,252
|
324,647
|
27,905
|
–
|
411,804
|
||||||||||
Selling and administrative expenses
|
70,465
|
333,236
|
15,636
|
–
|
419,337
|
||||||||||
Restructuring and other special charges, net
|
4,612
|
–
|
–
|
–
|
4,612
|
||||||||||
Equity in (earnings) loss of subsidiaries
|
(3,505
|
)
|
(11,095
|
)
|
–
|
14,600
|
–
|
||||||||
Operating (loss) earnings
|
(12,320
|
)
|
2,506
|
12,269
|
(14,600
|
)
|
(12,145
|
)
|
|||||||
Interest expense
|
(10,003
|
)
|
(1
|
)
|
(159
|
)
|
–
|
(10,163
|
)
|
||||||
Interest income
|
1
|
31
|
256
|
–
|
288
|
||||||||||
Intercompany interest income (expense)
|
2,893
|
(3,433
|
)
|
540
|
–
|
–
|
|||||||||
(Loss) earnings before income taxes
|
(19,429
|
)
|
(897
|
)
|
12,906
|
(14,600
|
)
|
(22,020
|
)
|
||||||
Income tax benefit (provision)
|
7,581
|
4,402
|
(1,250
|
)
|
–
|
10,733
|
|||||||||
Net (loss) earnings
|
$
|
(11,848
|
)
|
$
|
3,505
|
$
|
11,656
|
$
|
(14,600
|
)
|
$
|
(11,287
|
)
|
||
Less: Net earnings attributable to noncontrolling interests
|
–
|
–
|
561
|
–
|
561
|
||||||||||
Net (loss) earnings attributable to Brown Shoe Company, Inc.
|
$
|
(11,848
|
)
|
$
|
3,505
|
$
|
11,095
|
$
|
(14,600
|
)
|
$
|
(11,848
|
)
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE TWENTY-SIX WEEKS ENDED AUGUST 1, 2009
|
($ thousands)
|
Parent
|
Guarantors
|
Non-Guarantors
|
Eliminations
|
Total
|
||||||||||
Net cash provided by operating activities
|
$
|
12,231
|
$
|
14,475
|
$
|
23,005
|
$
|
–
|
$
|
49,711
|
|||||
Investing activities
|
|||||||||||||||
Purchases of property and equipment
|
(1,133
|
)
|
(16,286
|
)
|
(492
|
)
|
–
|
(17,911
|
)
|
||||||
Capitalized software
|
(10,307
|
)
|
(582
|
)
|
(27
|
)
|
–
|
(10,916
|
)
|
||||||
Net cash used for investing activities
|
(11,440
|
)
|
(16,868
|
)
|
(519
|
)
|
–
|
(28,827
|
)
|
||||||
Financing activities
|
|||||||||||||||
Borrowings under revolving credit agreement
|
394,900
|
–
|
–
|
–
|
394,900
|
||||||||||
Repayments under revolving credit agreement
|
(459,900
|
)
|
–
|
–
|
–
|
(459,900
|
)
|
||||||||
Tax deficiency related to share-based plans
|
(89
|
)
|
–
|
–
|
–
|
(89
|
)
|
||||||||
Dividends paid
|
(6,006
|
)
|
–
|
–
|
–
|
(6,006
|
)
|
||||||||
Intercompany financing
|
70,304
|
(13,598
|
)
|
(56,706
|
)
|
–
|
–
|
||||||||
Net cash used for financing activities
|
(791
|
)
|
(13,598
|
)
|
(56,706
|
)
|
–
|
(71,095
|
)
|
||||||
Effect of exchange rate changes on cash
|
–
|
585
|
–
|
–
|
585
|
||||||||||
Decrease in cash and cash equivalents
|
–
|
(15,406
|
)
|
(34,220
|
)
|
–
|
(49,626
|
)
|
|||||||
Cash and cash equivalents at beginning of period
|
–
|
22,834
|
64,066
|
–
|
86,900
|
||||||||||
Cash and cash equivalents at end of period
|
$
|
–
|
$
|
7,428
|
$
|
29,846
|
$
|
–
|
$
|
37,274
|
ITEM 2
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
OVERVIEW
|
·
|
Consolidated net sales increased $74.2 million, or 14.5%, to $585.8 million for the second quarter of 2010, compared to $511.6 million for the second quarter of last year. Net sales of our Wholesale Operations, Famous Footwear and Specialty Retail segments increased by $36.6 million, $33.2 million and $4.3 million, respectively.
|
·
|
Consolidated operating earnings were $12.1 million in the second quarter of 2010, compared to a consolidated operating loss of $5.0 million for the second quarter of last year.
|
·
|
Consolidated net earnings attributable to Brown Shoe Company, Inc. were $5.3 million, or $0.12 per diluted share, in the second quarter of 2010, compared to our consolidated net loss attributable to Brown Shoe Company, Inc. of $4.2 million, or $0.10 per diluted share, in the second quarter of last year.
|
·
|
Marketing initiatives – Marketing expenses were $5.8 million ($3.6 million on an after-tax basis, or $0.08 per diluted share) higher in the second quarter of 2010, compared to the second quarter of last year, due to our continued focus on driving brand awareness across our retail and wholesale businesses and deepening our connection with customers.
|
·
|
Incentive plans – Due to our stronger financial performance in the second quarter of 2010 relative to the second quarter of last year, as well as expectations for the full year of 2010, expenses related to our cash- and share-based incentive plans were $4.3 million ($2.6 million on an after-tax basis, or $0.06 per diluted share) higher in the second quarter of 2010.
|
·
|
Information technology initiatives – We incurred expenses of $1.9 million ($1.3 million on an after-tax basis, or $0.03 per diluted share) during the second quarter of 2010, related to our integrated enterprise resource planning (“ERP”) information technology system that is replacing select existing internally developed and certain other third-party applications, with $2.0 million ($1.3 million on an after-tax basis, or $0.03 per diluted share) in corresponding expenses during the second quarter of last year. See the Recent Developments section that follows and Note 6 to the condensed consolidated financial statements for additional information related to these expenses.
|
·
|
Our Famous Footwear segment’s net sales increased 10.6% to $347.3 million for the second quarter of 2010, compared to $314.1 million for the second quarter of last year. Same-store sales increased 11.8% during the second quarter of 2010, reflecting a higher conversion rate in our stores, higher average retail prices and increases in customer traffic levels. The improvement in operating results was broad-based with all major categories, channels and geographic regions contributing to Famous Footwear’s second quarter operating results. A lower store count, as a result of store closings, partially offset the same-store sales increase. Operating earnings increased $16.6 million to $15.8 million for the second quarter of 2010, as compared to an operating loss of $0.8 million for the second quarter of last year, driven primarily by higher net sales and gross profit rate, partially offset by higher selling and merchandising expenses.
As a percent of net sales, operating earnings increased to 4.5% in the second quarter of 2010, compared to an operating loss of 0.3% in the second quarter of last year.
|
·
|
Our Wholesale Operations segment’s net sales increased 25.8% to $178.6 million for the second quarter of 2010, compared to $142.0 million for the second quarter of last year. Sales growth was led by our Dr. Scholl’s, Sam Edelman, Vera Wang Lavender and Via Spiga divisions. The increased mix of our wholesale brands sold to third parties as well as shifts in channel and brand mix and increased air freight costs led to a lower gross profit rate. Operating earnings increased $1.1 million, or 14.5%, to $9.0 million for the second quarter of 2010, compared to $7.9 million for the second quarter of last year, as a result of the increase in net sales, partially offset by the decrease in gross profit rate and increase in selling and administrative expenses. As a percent of net sales, operating earnings declined to 5.1% for the second quarter of 2010, compared to 5.5% for the second quarter of last year.
|
·
|
Our Specialty Retail segment’s net sales increased 7.8% to $59.8 million for the second quarter of 2010, compared to $55.5 million for the second quarter of last year. A same-store sales increase of 6.8% in our retail stores, higher net sales at Shoes.com and an increase in the Canadian dollar exchange rate led to an overall increase in our level of net sales. A lower store count, as a result of store closings, partially offset the net sales increases. We incurred an operating loss of $2.7 million for the second quarter of 2010, compared to an operating loss of $4.3 million for the second quarter of last year.
|
CONSOLIDATED RESULTS
|
Thirteen Weeks Ended
|
Twenty-six Weeks Ended
|
||||||||||||||||||
($ millions)
|
% of
Net
Sales
|
% of
Net
Sales
|
% of
Net
Sales
|
% of
Net
Sales
|
|||||||||||||||
Net sales
|
$
|
585.8
|
100.0%
|
$
|
511.6
|
100.0%
|
$
|
1,183.5
|
100.0%
|
$
|
1,050.4
|
100.0%
|
|||||||
Cost of goods sold
|
347.3
|
59.3%
|
308.0
|
60.2%
|
697.5
|
58.9%
|
638.6
|
60.8%
|
|||||||||||
Gross profit
|
238.5
|
40.7%
|
203.6
|
39.8%
|
486.0
|
41.1%
|
411.8
|
39.2%
|
|||||||||||
Selling and administrative expenses
|
224.5
|
38.3%
|
206.6
|
40.4%
|
448.9
|
38.0%
|
419.3
|
40.0%
|
|||||||||||
Restructuring and other special charges, net
|
1.9
|
0.3%
|
2.0
|
0.4%
|
3.6
|
0.3%
|
4.6
|
0.4%
|
|||||||||||
Operating earnings (loss)
|
12.1
|
2.1%
|
(5.0
|
)
|
(1.0)%
|
33.5
|
2.8%
|
(12.1
|
)
|
(1.2)%
|
|||||||||
Interest expense
|
(4.7
|
)
|
(0.8)%
|
(4.9
|
)
|
(0.9)%
|
(9.4
|
)
|
(0.8)%
|
(10.2
|
)
|
(0.9)%
|
|||||||
Interest income
|
–
|
–
|
0.2
|
0.0%
|
0.1
|
0.0%
|
0.3
|
0.0%
|
|||||||||||
Earnings (loss) before income taxes
|
7.4
|
1.3%
|
(9.7
|
)
|
(1.9)%
|
24.2
|
2.0%
|
(22.0
|
)
|
(2.1)%
|
|||||||||
Income tax (provision) benefit
|
(2.6
|
)
|
(0.5)%
|
5.5
|
1.1%
|
(8.9
|
)
|
(0.7)%
|
10.7
|
1.0%
|
|||||||||
Net earnings (loss)
|
$
|
4.8
|
0.8%
|
$
|
(4.2
|
)
|
(0.8)%
|
$
|
15.3
|
1.3%
|
$
|
(11.3
|
)
|
(1.1)%
|
|||||
Less: Net (loss) earnings attributable to noncontrolling interests
|
(0.5
|
)
|
(0.1)%
|
–
|
–
|
–
|
–
|
0.5
|
0.0%
|
||||||||||
Net earnings (loss) attributable to Brown Shoe Company, Inc.
|
$
|
5.3
|
0.9%
|
$
|
(4.2
|
)
|
(0.8)%
|
$
|
15.3
|
1.3%
|
$
|
(11.8
|
)
|
(1.1)%
|
FAMOUS FOOTWEAR
|
Thirteen Weeks Ended
|
Twenty-six Weeks Ended
|
||||||||||||||||||
($ millions, except sales per square foot)
|
% of
Net
Sales
|
% of
Net
Sales
|
% of
Net
Sales
|
% of
Net
Sales
|
|||||||||||||||
Operating Results
|
|||||||||||||||||||
Net sales
|
$
|
347.3
|
100.0%
|
$
|
314.1
|
100.0%
|
$
|
709.5
|
100.0%
|
$
|
631.7
|
100.0%
|
|||||||
Cost of goods sold
|
187.7
|
54.0%
|
179.8
|
57.2%
|
385.7
|
54.4%
|
360.9
|
57.1%
|
|||||||||||
Gross profit
|
159.6
|
46.0%
|
134.3
|
42.8%
|
323.8
|
45.6%
|
270.8
|
42.9%
|
|||||||||||
Selling and administrative expenses
|
143.8
|
41.5%
|
135.1
|
43.1%
|
279.9
|
39.4%
|
268.6
|
42.6%
|
|||||||||||
Operating earnings (loss)
|
$
|
15.8
|
4.5%
|
$
|
(0.8
|
)
|
(0.3)%
|
$
|
43.9
|
6.2%
|
$
|
2.2
|
0.3%
|
||||||
Key Metrics
|
|||||||||||||||||||
Same-store sales % change
|
11.8%
|
(6.7)%
|
13.6%
|
(5.9)%
|
|||||||||||||||
Same-store sales $ change
|
$
|
35.8
|
$
|
(21.5
|
)
|
$
|
82.4
|
$
|
(36.9
|
)
|
|||||||||
Sales change from new and
closed stores, net
|
$
|
(2.6
|
)
|
$
|
9.4
|
$
|
(4.6
|
)
|
$
|
23.6
|
|||||||||
Sales per square foot, excluding
e-commerce (thirteen and twenty-six
weeks ended)
|
$
|
44
|
$
|
39
|
$
|
89
|
$
|
78
|
|||||||||||
Sales per square foot, excluding
e-commerce (trailing twelve-months)
|
$
|
179
|
$
|
162
|
$
|
179
|
$
|
162
|
|||||||||||
Square footage (thousand sq. ft.)
|
7,845
|
8,091
|
7,845
|
8,091
|
|||||||||||||||
Stores opened
|
7
|
13
|
18
|
52
|
|||||||||||||||
Stores closed
|
13
|
12
|
19
|
23
|
|||||||||||||||
Ending stores
|
1,128
|
1,167
|
1,128
|
1,167
|
WHOLESALE OPERATIONS
|
Thirteen Weeks Ended
|
Twenty-six Weeks Ended
|
||||||||||||||||||
($ millions)
|
% of
Net
Sales
|
% of
Net
Sales
|
% of
Net
Sales
|
% of
Net
Sales
|
|||||||||||||||
Operating Results
|
|||||||||||||||||||
Net sales
|
$
|
178.6
|
100.0%
|
$
|
142.0
|
100.0%
|
$
|
353.4
|
100.0%
|
$
|
310.9
|
100.0%
|
|||||||
Cost of goods sold
|
124.5
|
69.7%
|
95.7
|
67.4%
|
242.7
|
68.7%
|
215.2
|
69.2%
|
|||||||||||
Gross profit
|
54.1
|
30.3%
|
46.3
|
32.6%
|
110.7
|
31.3%
|
95.7
|
30.8%
|
|||||||||||
Selling and administrative expenses
|
44.9
|
25.1%
|
38.3
|
27.0%
|
92.7
|
26.2%
|
81.9
|
26.4%
|
|||||||||||
Restructuring and other special charges, net
|
0.2
|
0.1%
|
0.1
|
0.1%
|
0.3
|
0.1%
|
–
|
–
|
|||||||||||
Operating earnings
|
$
|
9.0
|
5.1%
|
$
|
7.9
|
5.5%
|
$
|
17.7
|
5.0%
|
$
|
13.8
|
4.4%
|
|||||||
Key Metrics
|
|||||||||||||||||||
Unfilled order position at end of period
|
$
|
317.2
|
$
|
198.8
|
SPECIALTY RETAIL
|
Thirteen Weeks Ended
|
Twenty-six Weeks Ended
|
||||||||||||||||||
($ millions, except sales per square foot)
|
% of
Net
Sales
|
% of
Net
Sales
|
% of
Net
Sales
|
% of
Net
Sales
|
|||||||||||||||
Operating Results
|
|||||||||||||||||||
Net sales
|
$
|
59.8
|
100.0%
|
$
|
55.5
|
100.0%
|
$
|
120.6
|
100.0%
|
$
|
107.8
|
100.0%
|
|||||||
Cost of goods sold
|
35.0
|
58.6%
|
32.5
|
58.4%
|
69.1
|
57.3%
|
62.5
|
58.0%
|
|||||||||||
Gross profit
|
24.8
|
41.4%
|
23.0
|
41.6%
|
51.5
|
42.7%
|
45.3
|
42.0%
|
|||||||||||
Selling and administrative expenses
|
27.5
|
46.0%
|
27.3
|
49.4%
|
57.2
|
47.4%
|
55.8
|
51.8%
|
|||||||||||
Operating loss
|
$
|
(2.7
|
)
|
(4.6)%
|
$
|
(4.3
|
)
|
(7.8)%
|
$
|
(5.7
|
)
|
(4.7)%
|
$
|
(10.5
|
)
|
(9.8)%
|
|||
Key Metrics
|
|||||||||||||||||||
Same-store sales % change
|
6.8%
|
(3.8)%
|
11.3%
|
(4.9)%
|
|||||||||||||||
Same-store sales $ change
|
$
|
2.7
|
$
|
(1.6
|
)
|
$
|
8.5
|
$
|
(3.8
|
)
|
|||||||||
Sales change from new and closed
stores, net
|
$
|
(1.7
|
)
|
$
|
(0.2
|
)
|
$
|
(3.9
|
)
|
$
|
0.6
|
||||||||
Impact of changes in Canadian
exchange rate on sales
|
$
|
1.4
|
$
|
(1.9
|
)
|
$
|
4.3
|
$
|
(4.8
|
)
|
|||||||||
Sales change of e-commerce
subsidiary
|
$
|
1.9
|
$
|
(3.8
|
)
|
$
|
3.9
|
$
|
(5.2
|
)
|
|||||||||
Sales per square foot, excluding
e-commerce (thirteen and twenty-
six weeks ended)
|
$
|
94
|
$
|
83
|
$
|
180
|
$
|
152
|
|||||||||||
Sales per square foot, excluding
e-commerce (trailing twelve-
months)
|
$
|
371
|
$
|
326
|
$
|
371
|
$
|
326
|
|||||||||||
Square footage (thousand sq. ft.)
|
435
|
467
|
435
|
467
|
|||||||||||||||
Stores opened
|
–
|
1
|
2
|
2
|
|||||||||||||||
Stores closed
|
5
|
11
|
20
|
19
|
|||||||||||||||
Ending stores
|
264
|
289
|
264
|
289
|
OTHER SEGMENT
|
·
|
Incentive plans – Our selling and administrative expenses were higher by $2.2 million during the second quarter of 2010, as compared to the second quarter of last year, due to higher expected payments under our incentive plans.
|
·
|
Lower expenses related to director compensation expenses, as certain director compensation arrangements are variable based on the Company’s stock price, which decreased during the second quarter of 2010.
|
·
|
Information technology initiatives – We incurred expenses of $1.7 million during the second quarter of 2010 related to our integrated ERP information technology system, $0.2 million lower than the $1.9 million in corresponding expenses incurred during the second quarter of last year.
|
·
|
Incentive plans – Our selling and administrative expenses were higher by $3.6 million during the first half of 2010, as compared to the first half of last year, reflecting higher expected payments under our incentive plans.
|
·
|
Higher expenses related to director compensation expenses, as certain director compensation arrangements are variable based on the Company’s stock price, which increased during the first half of 2010.
|
·
|
Information technology initiatives – We incurred expenses of $3.3 million during the first half of 2010, related to our integrated ERP information technology system, $1.3 million lower than the $4.6 million in corresponding expenses during the first half of last year.
|
LIQUIDITY AND CAPITAL RESOURCES
|
($ millions)
|
|||||||||
Borrowings under revolving credit agreement
|
$
|
35.5
|
$
|
47.5
|
$
|
94.5
|
|||
Senior notes
|
150.0
|
150.0
|
150.0
|
||||||
Total debt
|
$
|
185.5
|
$
|
197.5
|
$
|
244.5
|
Year
|
Percentage
|
||||||||||||
2010
|
102.188
|
%
|
|||||||||||
2011 and thereafter
|
100.000
|
%
|
Twenty-six Weeks Ended
|
||||||||||
($ millions)
|
Increase/
(Decrease)
|
|||||||||
Net cash provided by operating activities
|
$
|
27.0
|
$
|
49.7
|
$
|
(22.7
|
)
|
|||
Net cash used for investing activities
|
(24.7
|
)
|
(28.8
|
)
|
4.1
|
|||||
Net cash used for financing activities
|
(97.4
|
)
|
(71.1
|
)
|
(26.3
|
)
|
||||
Effect of exchange rate changes on cash
|
–
|
0.6
|
(0.6
|
)
|
||||||
Decrease in cash and cash equivalents
|
$
|
(95.1
|
)
|
$
|
(49.6
|
)
|
$
|
(45.5
|
)
|
·
|
A larger increase in inventories in the first half of 2010 compared to the first half of last year due to the timing and amount of sales as well as purchases to support higher sales levels; and
|
·
|
An increase in receivables during the first half of 2010 as compared to a decrease in the first half of last year due to the timing and amount of receipts and sales.
|
·
|
An increase in trade accounts payable during the first half of 2010 as compared to the first half of last year due to the timing and amount of purchases and payments to vendors; and
|
Working capital ($ millions)
|
$ 278.1
|
$ 263.2
|
$ 294.2
|
||
Current ratio
|
1.59:1
|
1.63:1
|
1.71:1
|
||
Total debt as a percentage of total capitalization
|
32.1%
|
33.7%
|
37.3%
|
OFF BALANCE SHEET ARRANGEMENTS
|
CONTRACTUAL OBLIGATIONS
|
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
|
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
|
FORWARD-LOOKING STATEMENTS
|
ITEM 3
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4
|
CONTROLS AND PROCEDURES
|
PART II
|
OTHER INFORMATION
|
ITEM 1
|
LEGAL PROCEEDINGS
|
ITEM 1A
|
RISK FACTORS
|
ITEM 2
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Fiscal Period
|
Total Number
of Shares
Purchased
|
Average
Price Paid
per Share
|
Total Number
of Shares Purchased
as Part of Publicly
Announced Program (1)
|
Maximum Number
of Shares that
May Yet Be
Purchased Under
the Program
(1)
|
||||||||||
–
|
$
|
–
|
–
|
2,500,000
|
||||||||||
–
|
–
|
–
|
2,500,000
|
|||||||||||
–
|
–
|
–
|
2,500,000
|
|||||||||||
Total
|
–
|
$
|
–
|
–
|
2,500,000
|
(1)
|
In January 2008, the Board of Directors approved a stock repurchase program authorizing the repurchase of up to 2.5 million shares of our outstanding common stock. We can utilize the repurchase program to repurchase shares on the open market or in private transactions from time to time, depending on market conditions. The repurchase program does not have an expiration date. Under this plan, no shares were repurchased through the end of the second quarter of 2010; therefore, there were 2.5 million shares authorized to be purchased under the program as of July 31, 2010. Our repurchases of common stock are limited under our debt agreements.
|
ITEM 3
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4
|
(REMOVED AND RESERVED)
|
ITEM 5
|
OTHER INFORMATION
|
ITEM 6
|
EXHIBITS
|
Exhibit
No.
|
||
3.1
|
Restated Certificate of Incorporation of Brown Shoe Company, Inc. (the “Company”), incorporated herein by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended May 5, 2007 and filed June 5, 2007.
|
|
3.2
|
Bylaws of the Company as amended through October 2, 2008, incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K dated October 8, 2008 and filed October 8, 2008.
|
|
4.1
|
†
|
Supplemental Indenture for 8.75% Senior Notes due 2012, dated as of June 18, 2010, between Edelman Shoe, Inc., the Company and U.S. Bank National Association, a national banking association, as successor to SunTrust Bank, as trustee.
|
10.1
10.2
10.3
10.4
10.5
10.6
|
†#
†*
†*
†*
†*
†*
|
Second Amended and Restated Credit Agreement, dated as of January 21, 2009 (the “Credit Agreement”), among the Company, as lead borrower for itself and on behalf of certain of its subsidiaries, and Bank of America, N.A., as lead issuing bank, administrative agent and collateral agent, Wells Fargo Retail Finance, LLC, as syndication agent, Bank of America, N.A. and JPMorgan Chase Bank, N.A., as co-documentation agents, and the other financial institutions party thereto, as lenders.
Summary of compensatory arrangements for the named executive officers of the Company.
Amendment letter dated December 18, 2009, to the Severance Agreement (April 1, 2006), between the Company and Ronald A. Fromm.
Severance Agreement, effective April 1, 2006, between the Company and Richard M. Ausick.
Severance Agreement, effective April 1, 2009, between the Company and Mark D. Lardie.
Form of Amendment letter dated December 18, 2009, to the Severance Agreements between the Company and each of: Richard M. Ausick, Mark E. Hood, Mark D. Lardie, Diane M. Sullivan, and Joseph W. Wood.
|
10.7
|
†
|
Joinder to Credit Agreement, made as of June 18, 2010, by and between Edelman Shoe, Inc. and Bank of America, N.A., as Administrative Agent and Collateral Agent for the lenders party to the Credit Agreement.
|
31.1
|
†
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
†
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
†
|
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
SIGNATURES
|
BROWN SHOE COMPANY, INC.
|
||
Date: September 7, 2010
|
/s/ Mark E. Hood
|
|
Senior Vice President and Chief Financial Officer
on behalf of the Registrant and as the
Principal Financial Officer and Principal Accounting Officer
|
This ‘10-Q’ Filing | Date | Other Filings | ||
---|---|---|---|---|
1/21/14 | 4 | |||
5/1/12 | 4 | |||
1/29/11 | 10-K, 4 | |||
12/15/10 | ||||
10/1/10 | ||||
9/17/10 | ||||
Filed on: | 9/7/10 | |||
8/28/10 | ||||
8/23/10 | ||||
For Period End: | 7/31/10 | 4 | ||
7/4/10 | ||||
7/3/10 | ||||
6/18/10 | ||||
6/4/10 | ||||
5/30/10 | ||||
5/29/10 | ||||
5/2/10 | ||||
5/1/10 | 10-Q, 4 | |||
1/30/10 | 10-K, 4 | |||
12/18/09 | ||||
12/15/09 | 4 | |||
11/15/09 | ||||
8/1/09 | 10-Q | |||
5/1/09 | ||||
4/1/09 | ||||
1/31/09 | 4, 5 | |||
1/21/09 | ||||
11/3/08 | ||||
10/8/08 | 8-K | |||
10/2/08 | ||||
4/25/08 | ||||
6/5/07 | 10-Q, 4, 8-K | |||
5/5/07 | 10-Q, 4 | |||
4/1/06 | ||||
List all Filings |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 4/02/24 Caleres Inc. 10-K 2/03/24 114:18M 3/28/23 Caleres Inc. 10-K 1/28/23 112:19M 3/28/22 Caleres Inc. 10-K 1/29/22 111:19M 3/30/21 Caleres Inc. 10-K 1/30/21 119:20M |