SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
Quarter Ended May 4, 1996 Commission File Number 0-15898
DESIGNS, INC.
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(Exact name of registrant as
specified in its charter)
Delaware 04-2623104
- ------------------------------- ------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
66 B Street, Needham, MA 02194
- ----------------------------------- ---------------
(Address of principal executive offices) (Zip Code)
(617) 444-7222
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(Registrant's telephone
number, including area code)
Indicate by "X" whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of May 4, 1996
----- -----------------------------
Common 15,812,443 shares
DESIGNS, INC.
CONSOLIDATED BALANCE SHEETS
May 4, 1996, April 29, 1995 and February 3, 1996
(In thousands, except share data)
(Unaudited)
May 4, April 29, February 3,
1996 1995 1996
------------------------------
ASSETS
Current Assets:
Cash and cash equivalents $ 21,435 $15,172 $13,941
Short-term investments --- --- 5,978
Accounts receivable 576 823 473
Inventories 64,752 60,033 58,008
Deferred income taxes 922 1,579 922
Prepaid income taxes 1,154 --- 126
Pre-opening costs, net 492 1,067 884
Prepaid expenses 4,021 1,223 3,842
______ ______ ______
Total current assets 93,352 79,897 84,174
Property and equipment, net of accumulated
depreciation and amortization 39,281 28,863 36,083
Other assets:
Long-term investments 5,665 16,161 6,050
Deferred income taxes 2,763 1,620 2,698
Intangible assets 2,783 --- 2,901
Other assets 850 693 743
_____ _____ _____
Total assets $144,694 $127,234 $132,649
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $20,170 $13,869 $8,185
Accrued expenses and other current
liabilities 9,886 7,531 8,346
Accrued rent 2,414 2,853 2,586
Income taxes payable --- 643 ---
Current portion of long-term note 1,000 --- 500
______ ______ ______
Total current liabilities 33,470 24,896 19,617
Long-term note payable --- --- 500
Commitments and contingencies
Minority interest (Note 2) 6,371 4,799 6,447
Stockholders' equity:
Preferred Stock, $0.01 par value, 1,000,000 shares
authorized, none issued
Common Stock, $0.01 par value, 50,000,000 shares
authorized, 15,812,000, 15,759,000 and 15,818,000
shares issued at May 4, 1996, April 29, 1995 and
February 3, 1996 respectively 158 157 158
Additional paid-in capital 52,769 52,629 52,767
Retained earnings 51,926 44,753 53,160
_______ ______ _______
Total stockholders' equity 104,853 97,539 106,085
_______ _______ _______
Total liabilities and stockholders'equity $144,694 $127,234 $132,649
======= ======= =======
The accompanying notes are an integral part of the consolidated
financial statements.
DESIGNS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
------------------ -------------------
May 4, April 29, May 4, April 29,
1996 1995 1996 1995
______ ________ ______ ________
Sales $ 59,336 $ 57,337 $ 302,932 $ 274,287
Cost of goods sold including
occupancy 43,179 41,140 213,895 187,173
------ ------ ------- -------
Gross profit 16,157 16,197 89,037 87,114
Expenses:
Selling, general and
administrative 16,060 14,176 70,991 55,802
Restructuring (income) --- (2,200) --- (5,400)
Depreciation and amortization 2,484 1,864 7,253 7,112
------ ------ ------ ------
Total expenses 18,544 13,840 78,244 57,514
------ ------ ------ ------
Operating income (loss) (2,387) 2,357 10,793 29,600
Interest expense 44 22 218 110
Interest income 318 471 1,438 1,546
------ ----- ----- ------
Income (loss) before minority
interest and income taxes (2,113) 2,806 12,013 31,036
Less minority interest (145) 91 140 91
------ ----- ------ ------
Income (loss) before
income taxes (1,968) 2,715 11,873 30,945
Provision (benefit) for
income taxes (823) 1,118 4,819 12,545
------ ----- ------ ------
Net income (loss) $ (1,145) $ 1,597 $ 7,054 $ 18,400
====== ===== ===== ======
Net income (loss) per common
and common equivalent share $ (0.07) $ 0.10 $ 0.45 $ 1.16
Weighted average common and
common equivalent shares
outstanding 15,812 15,756 15,778 15,867
The accompanying notes are an integral part of the consolidated financial
statements.
DESIGNS, INC.
STATEMENTS OF CASH FLOWS
(In thousands- Unaudited)
Three Months Ended
------------------
May 4, April 29,
1996 1995
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Net (loss) income $ (1,145) $ 1,597
Adjustments to reconcile to net cash
provided by operating activities:
Depreciation and amortization 2,484 1,864
Deferred income taxes (65) ---
Minority interest (145) 91
Loss on sale of investments 17 ---
(Gain) loss from disposal of property and equipment (6) 74
Changes in operating assets and
liabilities:
Accounts receivable 97 3,400
Inventories (6,744) (7,384)
Prepaid expenses (53) (10)
Income taxes payable (1,154) 643
Accounts payable 11,985 659
Accrued expenses and other current 2,002 1,547
liabilities
Accrued rent (172) (4,689)
----- -----
Net cash provided by (used for) 7,101 (2,208)
operating activities ===== =====
Cash flows from investing activities:
Additions to property and equipment (5,872) (4,423)
Incurrence of pre-opening costs 8 (777)
Proceeds from disposal of property & equipment 8 170
Sale and maturity of investments 6,190 53
Reduction (Increase) in other assets 57 (77)
----- -----
Net cash provided by (used in) investing activities 391 (5,054)
==== =====
Cash flows from financing activities:
Issuance of common stock under option program (1) 2 10
----- -----
Net cash provided by financing activities 2 10
===== =====
Net increase (decrease) in cash and cash equivalents 7,494 (7,252)
Beginning of the year 13,941 22,424
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End of the quarter $ 21,435 $15,172
====== ======
Supplementary Cash Flow Disclosure
Cash paid, net
Interest $ 43 $ 16
Taxes 199 564
The accompanying notes are an integral part of the consolidated financial
statements.
DESIGNS, INC.
Notes to Consolidated Financial Statements
1. Basis of Presentation
In the opinion of management of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments (consisting only
of normal recurring adjustments) necessary for a fair presentation of the
interim financial statements. These financial statements do not include
all disclosures associated with annual financial statements and,
accordingly, should be read in conjunction with the notes contained in the
Company's audited consolidated financial statements for the year ended
February 3, 1996. The Company's business has historically been seasonal
in nature and the results of the interim periods presented are not
necessarily indicative of the results to be expected for the full year.
2. Minority Interest
On January 28, 1995, Designs JV Corp., a wholly-owned subsidiary of the
Company, entered into a partnership agreement with LDJV Inc. (the
"Partnership Agreement") establishing a joint venture to sell Levi's(R)
brand products and jeans-related products in Original Levi's(R) Stores and
Levi's(R) Outlet stores. LDJV Inc. is a wholly-owned subsidiary of Levi's
Only Stores, Inc., which is a wholly-owned subsidiary of Levi Strauss &
Co. The partnership established pursuant to the Partnership Agreement is
known as The Designs/OLS Partnership (the "OLS Partnership").
The operating results of the OLS Partnership are consolidated with the
financial statements of the Company for the three and twelve months ended
May 4, 1996. Minority interest at May 4, 1996 represents LDJV Inc.'s 30%
interest in the OLS Partnership.
In accordance with the Partnership Agreement, the OLS Partnership
distributed $133,000 to its partners at the end of the first quarter of
fiscal 1995. This capital distribution represented funds sufficient to
pay taxes associated with the earnings of the OLS Partnership for the
three month period ended April 29, 1995. There have been no cash
distributions made during the first quarter of fiscal 1996.
3. Restructuring
In fiscal 1993, the Company recorded a non-recurring pre-tax charge of
$15.0 million which covered the costs associated with the closing of 15 of
its poorest performing Designs stores. The costs to close these 15 stores
totaled $9.6 million, comprised of $6.1 million of cash and $3.5 million
of noncash costs. Total costs of $9.6 million to close the 15 stores were
less than the original pre-tax estimate, primarily due to favorable
negotiations with landlords. The remaining reserve of $5.4 million was
recognized in part in the first quarter of fiscal 1995 and in part in the
fourth quarter of fiscal 1994 as non-recurring pre-tax income.
4. Boston Trading Ltd., Inc. Acquisition
On May 2, 1995, the Company acquired certain assets of Boston Trading
Ltd., Inc. In accordance with the terms of the Asset Purchase Agreement
dated April 21, 1995, the Company paid $5.4 million in cash, financed by
operations, and delivered a non-negotiable promissory note in the
principal amount of $1 million payable in two equal annual installments
through May 1997.
During the first quarter of fiscal 1996, the Company asserted rights of
indemnification under the Asset Purchase Agreement. In accordance with
the Asset Purchase Agreement and the promissory note issued thereunder,
the Company has the right to satisfy its indemnification rights by
offsetting against the payment of principal and interest payable under
the promissory note. Accordingly, the Company did not make the $500,000
payment of principal due on May 2, 1996. The Company has paid all
interest due through May 2, 1996.
5. Amendment to Credit Agreement
On May 8, 1996, subsequent to the quarter ended May 4, 1996, the Company
signed an amendment to the $20 million revolving credit agreement dated as
of November 17, 1995 among the Company, BayBank Boston, N.A. and State
Street Bank and Trust Company. This amendment increased the letter of
credit portion of this facility, which is used for the purchase of
inventory, from $5 million to $8 million.
At May 4, 1996, the Company had outstanding letters of credit totaling $3.2
million.
Part I. Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
Sales for the first quarter of fiscal 1996 were $59.3 million as compared
to sales of $57.3 million in the first quarter of fiscal 1995. Comparable
store sales decreased 8% for the first quarter as compared to the same
period in the prior year. Comparable stores are retail locations that have
been in operation for at least one full fiscal year. Of the 155 stores the
Company operated as of May 4, 1996, 112 were comparable stores. This
decrease in sales was due to the lack of a strong spring product focus and
reduced customer traffic caused by the extra long winter season in the
Northeast.
Gross margin rate (including the costs of occupancy) for the first quarter
equaled 27.2 percent of sales as compared with 28.2 percent in the prior
year. The decrease reflects higher occupancy costs due to the deleveraging
of sales offset slightly by an increase in the percentage of business
generated in the higher margin joint venture stores.
Selling, general and administrative expenses increased to 27.1% of sales,
as compared to 24.7% in the prior year principally due to additional
infrastructure expenses associated with the development of the vertically
integrated Boston Traders(R) brand. This increase is partially offset by
store payroll expense as a percentage of sales decreasing to 11.3% as
compared to 11.6% in the prior year.
In fiscal 1993, the Company recorded a non-recurring pre-tax charge of
$15.0 million which covered the costs associated with the closing of 15
of its poorest performing Designs stores. Total costs of $9.6 million,
comprised of $6.1 million of cash and $3.5 million of noncash costs, to
close the 15 stores were less than the original pre-tax estimate,
primarily due to favorable negotiations with landlords. The remaining
reserve of $5.4 million was recognized in part in the first quarter of
fiscal 1995 and in part in the fourth quarter of fiscal 1994 as
non-recurring pre-tax income.
Depreciation and amortization expense of $2.5 million for the first
quarter of fiscal 1996 represents an increase of 33% as compared with
the same period in fiscal 1995 due to the cost of new store openings and
remodeled stores. For the rolling 12 month period, depreciation and
amortization increased 2%, primarily due to the timing of store openings.
Interest expense was $44,000 and $22,000 in fiscal 1996 and fiscal 1995,
respectively. On a rolling 12 month basis, interest expense increased
to $218,000 as compared to $110,000 in the prior period. The increase is
attributable to interest payments made in connection with the non-
negotiable promissory note issued in conjunction with the acquisition of
certain assets of Boston Trading, Ltd., Inc. in May 1995.
Interest income for the first quarter was $318,000 compared to $471,000
in fiscal year 1995. The decrease in income is attributable to a lower
average investment balance and average yield compared to the same period
last year. For the rolling 12 month period, interest income decreased by
7% from $1.5 million in the prior period. This decrease is similarly
attributable to the decrease in the average investment balance during the
rolling 12 month period.
Net income for the first quarter of fiscal year 1996 represents a loss of
($1.1) million or ($0.07) per share, as compared with net income of $1.6
million, or $.10 per share in the first quarter of fiscal 1995. In the
first quarter of fiscal 1995, the Company recognized $2.2 million or $.08
per share of non-recurring pre-tax income related to the fiscal 1993
restructuring program.
Net income, on a rolling 12 month basis, was $7.1 million or $0.45 per
share in the 12 month period, as compared with $18.4 million, or $1.16 per
share in the prior comparable period. Net income for the twelve month
period ended April 29, 1995 included the impact of restructuring income of
$5.4 million or $0.20 per share.
SEASONALITY
The Company's business is seasonal, reflecting increased consumer buying
in the "Fall" and "Holiday" seasons. Historically, the second half of
each fiscal year provides a greater portion of the Company's annual sales
and operating income.
LIQUIDITY AND CAPITAL RESOURCES
The following discussion of the Company's liquidity, capital resources and
capital expansion plans includes certain forward-looking information. Such
forward-looking information requires management to make certain estimates
and assumptions regarding the Company's expected strategic direction and
the related effect of such plans on the financial results of the Company.
Actual results and strategic directions may differ from those estimates
and assumptions. The Company encourages readers of this information to
refer to the Company's Current Report on Form 8-K, previously filed with
the United States Securities and Exchange Commission on April 30, 1996,
which identifies certain risks and uncertainties that may impact the
future earnings and direction of the Company.
The Company's primary cash needs are for operating expenses, including
cash outlays associated with the development of the Boston Traders(R)
branded product line, seasonal inventory purchases and capital expenses
for information technology and new and remodeled stores and acquisitions.
WORKING CAPITAL AND CASH FLOWS
To date, the Company has financed its working capital requirements and
expansion program with cash flow from operations, borrowings and proceeds
from Common Stock offerings. Cash provided by operations for the first
three months of fiscal 1996 was $7.1 million as compared to cash used for
operations of $2.2 million for the same period in the prior year.
The Company's working capital at May 4, 1996 was approximately $59.8
million compared to $55.0 million on April 29, 1995. This increase was
attributable to an increase in inventory in connection with the Boston
Trading acquisition and the maturity of certain long term investments.
At May 4, 1996 total inventories were up $4.7 million or 7.8% from April
29, 1995. This increase is primarily due to an increase in the number of
OLS Partnership (as defined below) stores and inventory purchased as part
of the Boston Trading acquisition, offset partially by a reduction in
inventory due to closed stores and continued efforts by the Company to
manage inventory levels.
The Company's trade payables to Levi Strauss & Co., its principal vendor,
generally are due 30 days after the date of invoice. The Company has been
current with its payments to Levi Strauss & Co. from fiscal 1987 to date.
Variations in the amount of trade payables outstanding at the end of
different periods relate to the timing of purchases. In the second
quarter of fiscal 1995, the Company began sourcing its own merchandise
with various off-shore vendors. To date, payment to these vendors have
been through the issuance of letters of credit, which require payment upon
shipment of merchandise. The Company anticipates that the use of this
payment method will be proportionate to its Boston Traders(R) product
purchases.
On May 8, 1996, subsequent to the quarter ended May 4, 1996, the Company
signed an amendment to the $20 million revolving credit agreement dated as
of November 17, 1995 among the Company, BayBank Boston, N.A. and State
Street Bank and Trust Company. This amendment increased the letter of
credit portion of this facility, which is used for the purchase of
inventory, from $5 million to $8 million.
On January 28, 1995, Designs JV Corp., a wholly-owned subsidiary of the
Company, and a subsidiary of Levi's Only Stores, Inc., a wholly-owned
subsidiary of Levi Strauss & Co., entered into a partnership agreement
(the "Partnership Agreement") to sell Levi's(R) brand products and
jeans-related products. The joint venture that was established by the
Partnership Agreement is known as The Designs/OLS Partnership (the "OLS
Partnership"). The term of the joint venture is ten years; however, the
Partnership Agreement contains certain exit rights that enable either
partner to buy or sell interest its in the joint venture after five years.
The Company previously announced that the OLS Partnership may open up to
thirty-five to fifty Original Levi's(R) Stores and Levi's(R) Outlet stores
throughout eleven Northeast states and the District of Columbia through
the end of fiscal 1999. At the end of the first quarter of fiscal 1996
there were eleven Original Levi's(R) Stores and four Levi's(R) Outlet
stores.
In June 1994, Levi Strauss & Co. advised the Company that it did not see
any additional growth in the Levi's(R) Outlet by Designs store format,
other than additional outlet stores that might be opened by the OLS
Partnership. As such, the Company does not currently plan to open any
Levi's(R) Outlet by Designs stores during fiscal 1996. In addition, the
OLS Partnership is opening its own outlet stores, which may impact the
availability of goods to the Levi's(R) Outlet by Designs stores.
It is the intention of the partners in the joint venture that the OLS
Partnership's working capital and funds for its future expansion will come
from its operations, capital contributions, loans from the
partners and borrowings from third parties.
CAPITAL EXPENDITURES
During the first quarter of fiscal 1996, the Company remodeled three
Levi's(R) Outlet by Designs stores. Total cash outlays of $5.7 million and
$4.4 million during the first quarter of fiscal years 1996 and 1995
respectively, represent the costs of new and remodeled stores, relocation
of corporate facilities, as well as, other corporate capital spending during
the periods.
In the second quarter of fiscal 1995, the Company acquired certain assets
of Boston Trading Ltd., Inc. This acquisition was completed so that the
Company would own the Boston Traders(R) brand name and certain Boston
Traders(R) outlet store assets. The Company currently plans to use the
Boston Traders(R) brand to transition from being a single vendor retailer
to a vertically integrated retailer featuring the Boston Traders(R) brand
and select Levi Strauss & Co. brands. In the spring of fiscal 1997, the
Company plans to open up to six new specialty stores which will
predominantly feature Boston Traders(R) brand product.
The Company continually evaluates discretionary investments in new
projects that may complement its existing business. Further, as leases
expire, the Company continues to evaluate the performance of its existing
stores. As a result of this process, certain store locations could be
closed or relocated within a center in the future.
The Company expects that cash flow from operations, short-term borrowings
and available cash will enable it to finance its current working capital,
remodeling and expansion requirements during the remainder of the fiscal
year.
Part II. Other Information
ITEM 1. Legal proceedings
The Company is a party to litigation and claims arising in the normal
course of its business. Barring unforeseen circumstances, management
does not expect the results of these actions to have a material adverse
effect on the Company's business or financial condition.
ITEM 6. Exhibits and Reports on Form 8-K
A. Reports on Form 8-K:
The Company reported under item 5 on Form 8-K, dated April 30, 1996,
certain cautionary statements of the Company to be taken account in
conjunction with the consideration and review of the Company's
publicly disseminated documents (including oral statements made by
others on behalf of the Company) that include forward looking
information.
B. Exhibits:
3.1 Restated Certificate of Incorporation of the Company, as
amended (included as Exhibit 3.1 to Amendment No. 3
to the Company's Registration Statement on Form S-1
(No. 33-13402), and incorporated herein by reference). *
3.2 Certificate of Amendment to Restated Certificate of
Incorporation, as amended, dated June 22, 1993.
3.3 Certificate of Designations, Preferences and Rights of a
Series of Preferred Stock of the Company establishing Series
A Junior Participating Cumulative Preferred Stock dated May
1, 1995 (included as Exhibit 3.2 to the Company's Annual
Report on Form 10-K dated May 1, 1996, and incorporated
herein by reference). *
3.4 By-Laws of the Company, as amended (included as Exhibit 3.1
to the Company's Quarterly Report on Form 10-Q dated December
12, 1995 and incorporated herein by reference). *
4.1 Shareholder Rights Agreement dated as of May 1, 1995 between the
Company and its transfer agent (included as Exhibit 4.1 to the
Company's Current Report on Form 8-K dated May 1, 1995, and
incorporated herein by reference). *
10.1 1987 Incentive Stock Option Plan, as amended (included as
Exhibit 10.1 to the Company's Annual Report on Form 10-K dated
April 29, 1993, and incorporated herein by reference). *
10.2 1987 Non-Qualified Stock Option Plan, as amended (included as
Exhibit 10.2 to the Company's Annual Report on Form 10-K dated
April 29, 1993, and incorporated herein by reference). *
10.3 1992 Stock Incentive Plan, as amended (included as Exhibit A
to the Company's definitive proxy statement dated May 10, 1994,
and incorporated herein by reference). *
10.4 Executive Incentive Plan effective through the fiscal year
ended January 28, 1995 (included as Exhibit 10.8 to the Company's
Annual Report on Form 10-K for the year ended January 28, 1994,
and incorporated herein by reference). *
10.5 License Agreement between the Company and Levi Strauss & Co. dated
as of April 14, 1992 (included as Exhibit 10.8 to the Company's
Annual Report on Form 10-K dated April 29, 1993, and incorporated
herein by reference). *
10.6 Credit Agreement among the Company, BayBank Boston, N.A.
("BayBank"), and State Street Bank and Trust Company
("State Street") dated as of November 17, 1994 (included as
Exhibit 1 to the Company's Current Report on Form 8-K dated
November 22, 1994, and incorporated herein by reference). *
10.7 Amendment dated June 2, 1995 to the Credit Agreement among the
Company, BayBank, and State Street dated as of November 17,
1994 (included as Exhibit 10.18 to the Company's Quarterly
Report on Form 10-Q dated September 12, 1995, and incorporated
herein by reference). *
10.8 Amendment dated May 8, 1996 to the Credit Agreement among
the Company, BayBank, and State Street dated as of November 17,
1994 (included as Exhibit 10.1 to the Company's Current Report
on Form 8-K dated June 6, 1996, and incorporated herein by
reference). *
10.9 Consulting Agreement between the Company and Stanley I. Berger
dated December 21, 1994 (included as Exhibit 10.7 to the
Company's Annual Report on Form 10-K, dated April 28, 1995,
and incorporated herein by reference). *
10.10 Participation Agreement among Designs JV Corp. (the "Designs
Partner"), the Company, LDJV Inc. (the "LOS Partner"),
Levi's Only Stores, Inc. ("LOS"), Levi Strauss & Co. ("LS&CO")
and Levi Strauss Associates Inc. ("LSAI") dated January 28,
1995 (included as Exhibit 10.1 to the Company's Current Report
on Form 8-K dated April 24, 1995, and incorporated herein
by reference). *
10.11 Partnership Agreement of The Designs/OLS Partnership (the
"OLS Partnership" between the LOS Partner and the Designs
Partner dated January 28, 1995 (included as Exhibit 10.2 to the
Company's Current Report on Form 8-K dated April 24, 1995, and
incorporated herein by reference). *
10.12 Glossary executed by the Designs Partner, the Company, the
LOS Partner, LOS, LS&CO, LSAI and the OLS Partnership dated
January 28, 1995 (included as Exhibit 10.3 to the Company's
Current Report on Form 8-K dated April 24, 1995, and
incorporated herein by reference). *
10.13 Sublicense Agreement between LOS and the LOS Partner dated
January 28, 1995 (included as Exhibit 10.4 to the Company's
Current Report on Form 8-K dated April 24, 1995, and
incorporated herein by reference). *
10.14 Sublicense Agreement between the LOS Partner and the OLS
Partnership (included as Exhibit 10.5 to the Company's Current
Report on Form 8-K dated April 24, 1995, and incorporated
herein by reference). *
10.15 License Agreement between the Company and the OLS Partnership
(included as Exhibit 10.6 to the Company's Current Report on
Form 8-K dated April 24, 1995, and incorporated herein
by reference). *
10.16 Administrative Services Agreement between the Company and
the OLS Partnership dated January 28, 1995 (included as
Exhibit 10.7 to the Company's Current Report on Form 8-K
dated April 24, 1995, and incorporated herein by reference). *
10.17 Asset Purchase Agreement between LOS and the Company relating
to the stores located in Minneapolis, Minnesota dated January
28, 1995 (included as Exhibit 10.9 to the Company's Current
Report on Form 8-K dated April 24, 1995, and incorporated
herein by reference). *
10.18 Asset Purchase Agreement between LOS and the Company relating
to the store located in Cambridge, Massachusetts dated January
28, 1995 (included as Exhibit 10.10 to the Company's Current
Report on Form 8-K dated April 24, 1995, and incorporated
herein by reference). *
10.19 Asset Purchase Agreement among Boston Trading Ltd., Inc.,
Designs Acquisition Corp., the Company and others dated
April 21, 1995 (included as Exhibit 10.16 to the Company's
Quarterly Report on Form 10-Q dated September 12, 1995, and
incorporated herein by reference). *
10.20 Non-Negotiable Promissory Note between the Company and
Atlantic Harbor, Inc., formerly known as Boston Trading Ltd.,
Inc., dated May 2, 1995 (included as Exhibit 10.17 to the
Company's Quarterly Report on Form 10-Q dated September 12,
1995, and incorporated herein by reference). *
10.21 Employment Agreement dated as of October 16, 1995 between the
Company and Joel H. Reichman (included as Exhibit 10.1 to the
Company's Current Report on Form 8-K dated December 6, 1995,
and incorporated herein by reference). *
10.22 Employment Agreement dated as of October 16, 1995 between the
Company and Scott N. Semel (included as Exhibit 10.2 to the
Company's Current Report on Form 8-K dated December 6, 1995,
and incorporated herein by reference). *
10.23 Employment Agreement dated as of October 16, 1995 between the
Company and Mark S. Lisnow (included as Exhibit 10.3 to the
Company's Current Report on Form 8-K dated December 6, 1995,
and incorporated herein by reference). *
10.24 Employment Agreement dated as of October 16, 1995 between the
Company and William D. Richins (included as Exhibit 10.4 to the
Company's Current Report on Form 8-K dated December 6, 1995,
and incorporated herein by reference). *
11. Schedule re: computation of per share earnings
27 Financial Data Schedule
99 Report of the Company dated April 30, 1996 concerning certain
cautionary statements of the Company to be taken into account
in conjunction with the consideration and review of the
Company's publicly disseminated documents (including oral
statements made by others on behalf of the Company) that
include forward looking information.
* Previously filed with the Securities and Exchange Commission.
Exhibit 11. Statement Re: Computation of Per Share Earnings
Three Months Twelve Months
Ended Ended
5/4/96 4/29/95 5/4/96 4/29/95
------ ------- ------ ------
(In thousands, except per share data)
Net(loss)income $(1,145) $1,597 $7,054 $18,400
Weighted average
shares outstanding
during the period 15,812 15,756 15,778 15,867
Net(loss) income per
common and common
equivalent share $(0.07) $0.10 $0.45 $ 1.16
------- ----- ----- -----
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DESIGNS, INC.
By: /s/ William D. Richins
------------------------
William D. Richins
Chief Financial Officer
Dated: June 17, 1995
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
DESIGNS, INC.
DESIGNS, INC., a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation at a meeting held on
April 8, 1993 duly adopted resolutions proposing and declaring
advisable that the Restated Certificate of Incorporation of the
Corporation, as heretofore amended, be further amended, and that
such amendments be submitted to the stockholders of the Corporation
for their consideration, as follows:
RESOLVED: That the Board of Directors of the Corporation
recommends and deems it advisable that the
Restated Certificate of Incorporation of the
Corporation, as heretofore amended, be further
amended by deleting the first paragraph of
Article FOURTH in its entirety and substituting
therefor the following new paragraph:
"FOURTH: The total number of shares of capital
stock which the Corporation shall have the authority
to issue shall be 50,000,000 shares of Common Stock
having a par value of $.01 per share, amounting to an
aggregate par value of $500,000, and 1,000,000 shares
of Preferred Stock having a par value of $.01 per
share, amounting to an aggregate par value of $10,000."
RESOLVED: That the aforesaid proposed amendment be submitted
to the stockholders of the Corporation for their
consideration; and
RESOLVED: That following the approval by the stockholders of the
aforesaid proposed amendment as required by law, the
officers of the Corporation be, and they hereby are,
and each of them acting singly hereby is, authorized
and directed (i) to prepare, execute and file with
the Secretary of State of the State of Delaware a
Certificate of Amendment setting forth the aforesaid
amendment and (ii) to take any and all other actions
necessary, desirable or convenient to give effect to
the aforesaid amendments or otherwise to carry out
the purposes of the foregoing Resolutions.
SECOND: That holders of a majority of the shares of Common Stock, $.01 par
value, of the Corporation outstanding and entitled to vote on the
aforesaid amendment approved such amendment at the Corporation's
annual meeting of stockholders held on June 8, 1993.
THIRD: That the aforesaid amendment was duly adopted in accordance with the
applicable provisions of Section 242 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, Designs, Inc. has caused this certificate to be
signed by Stanley I. Berger, its Chairman of the Board, and attested by
Scott N. Semel,its Secretary, this 22 day of June, 1993.
ATTEST: DESIGNS, INC.
/s/ Scott N. Semel By: /s/ Stanley I. Berger
- ------------------ -------------------------
Secretary Chairman of the Board
5
1,000
3-MOS
FEB-01-1997
FEB-04-1996
MAY-04-1996
21,435
0
576
0
64,752
93,352
66,271
26,990
144,694
33,470
0
0
0
158
104,695
144,694
59,336
59,336
43,179
43,179
18,544
0
44
(2,113)
(823)
(1,145)
0
0
0
(1,145)
(0.07)
0
