Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 28, 2017 | Dec. 01, 2017 | |
Entity Registrant Name | FREDS INC | |
Entity Central Index Key | 724,571 | |
Document Type | 10-Q | |
Trading Symbol | FRED | |
Document Period End Date | Oct. 28, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-03 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 | |
Common Class A [Member] | ||
Entity Common Stock, Shares Outstanding | 38,228,480 | |
Nonvoting Common Class B [Member] | ||
Entity Common Stock, Shares Outstanding | 0 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 5,113 | $ 5,830 |
Inventories | 317,220 | 331,809 |
Receivables, less allowance for doubtful accounts of $2,639 and $1,952, respectively | 56,922 | 51,668 |
Other non-trade receivables | 30,597 | 33,954 |
Prepaid expenses and other current assets | 10,898 | 11,945 |
Total current assets | 420,750 | 435,206 |
Property and equipment, at depreciated cost | 121,324 | 130,922 |
Goodwill | 41,490 | 41,490 |
Other intangibles, net | 69,972 | 85,685 |
Other noncurrent assets, net | 999 | 6,104 |
Total assets | 654,535 | 699,407 |
Current liabilities: | ||
Accounts payable | 152,943 | 147,340 |
Current portion of indebtedness | 63 | 60 |
Accrued expenses and other | 83,897 | 64,648 |
Total current liabilities | 236,903 | 212,048 |
Long-term portion of indebtedness | 168,196 | 128,388 |
Deferred income taxes | 3,261 | 1,974 |
Other noncurrent liabilities | 27,873 | 19,801 |
Total liabilities | 436,233 | 362,211 |
Commitments and contingencies (see Note 9-Legal Contingencies) | ||
Shareholders' equity: | ||
Retained earnings | 94,000 | 218,640 |
Accumulated other comprehensive income | 466 | 466 |
Total shareholders' equity | 218,302 | 337,196 |
Total liabilities and shareholders' equity | 654,535 | 699,407 |
Nonvoting Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock | ||
Nonvoting Series A Junior Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock | ||
Voting Series B Junior Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock | ||
Voting Series C Junior Preferred Stock [Member] | ||
Shareholders' equity: | ||
Preferred stock | ||
Common Class A [Member] | ||
Shareholders' equity: | ||
Common stock | 123,836 | 118,090 |
Nonvoting Common Class B [Member] | ||
Shareholders' equity: | ||
Common stock |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 |
Allowance for doubtful accounts | $ 2,639 | $ 1,952 |
Nonvoting Preferred Stock [Member] | ||
Preferred stock, no par value (in dollars per share) | ||
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, outstanding | ||
Nonvoting Series A Junior Preferred Stock [Member] | ||
Preferred stock, no par value (in dollars per share) | ||
Preferred stock, authorized | 224,594 | 224,594 |
Preferred stock, outstanding | ||
Voting Series B Junior Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 100 | $ 100 |
Preferred stock, authorized | 50,000 | 50,000 |
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Voting Series C Junior Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 60 | $ 60 |
Preferred stock, authorized | 50,000 | 50,000 |
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Common Class A [Member] | ||
Common stock, no par value (in dollars per share) | ||
Common stock, authorized | 60,000,000 | 60,000,000 |
Common stock, issued | 38,228,255 | 37,940,040 |
Common stock, outstanding | 38,228,255 | 37,940,040 |
Nonvoting Common Class B [Member] | ||
Common stock, no par value (in dollars per share) | ||
Common stock, authorized | 11,500,000 | 11,500,000 |
Common stock, outstanding |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 493,585 | $ 516,645 | $ 1,533,742 | $ 1,595,696 |
Cost of goods sold | 398,967 | 405,439 | 1,180,213 | 1,215,030 |
Gross profit | 94,618 | 111,206 | 353,529 | 380,666 |
Depreciation and amortization | 10,970 | 12,002 | 33,892 | 35,326 |
Selling, general and administrative expenses | 133,401 | 143,266 | 431,665 | 397,882 |
Operating loss | (49,753) | (44,062) | (112,028) | (52,542) |
Interest expense | 1,647 | 560 | 4,371 | 1,685 |
Loss before income taxes | (51,400) | (44,622) | (116,399) | (54,227) |
Provision (benefit) for income taxes | 415 | (6,229) | 1,394 | (10,162) |
Net Loss | $ (51,815) | $ (38,393) | $ (117,793) | $ (44,065) |
Net loss per share | ||||
Basic (in dollars per share) | $ (1.38) | $ (1.05) | $ (3.14) | $ (1.20) |
Diluted (in dollars per share) | $ (1.38) | $ (1.05) | $ (3.14) | $ (1.20) |
Weighted average shares outstanding | ||||
Basic (in shares) | 37,626 | 36,810 | 37,481 | 36,768 |
Effect of dilutive stock options (in shares) | ||||
Diluted (in shares) | 37,626 | 36,810 | 37,481 | 36,768 |
Dividends per common share (in dollars per share) | $ 0.06 | $ 0.06 | $ 0.18 | $ 0.18 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (51,815) | $ (38,393) | $ (117,793) | $ (44,065) |
Other comprehensive income (expense), net of tax postretirement plan adjustment | ||||
Comprehensive loss | $ (51,815) | $ (38,393) | $ (117,793) | $ (44,065) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 28, 2017 | Oct. 29, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (117,793) | $ (44,065) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||
Depreciation and amortization | 33,892 | 35,326 |
Net (gain) loss on asset disposition | 30 | (391) |
Provision for store closures and asset impairment | 21,878 | 24,114 |
Stock-based compensation | 4,843 | 2,209 |
Provision (recovery) for uncollectible receivables | 687 | (1,041) |
LIFO (credit) charge | 270 | 3,178 |
Deferred income tax benefit (charge) | 1,286 | (10,038) |
Amortization of debt issuance costs | 182 | 79 |
(Increase) decrease in operating assets: | ||
Trade and non-trade receivables | (2,951) | 4,481 |
Insurance receivables | 395 | (147) |
Inventories | (2,762) | (45,282) |
Other assets | 6,153 | (675) |
Increase (decrease) in operating liabilities: | ||
Accounts payable and accrued expenses | 25,867 | 45,158 |
Income taxes payable | (28) | 183 |
Other noncurrent liabilities | 8,073 | (901) |
Net cash provided by (used in) operating activities | (19,978) | 12,188 |
Cash flows provided by (used in) investing activities: | ||
Capital expenditures | (12,832) | (20,315) |
Proceeds from asset dispositions | 1,276 | 1,868 |
Insurance recoveries for replacement assets | 316 | |
Asset acquisition, net (primarily intangibles) | (1,853) | (11,934) |
Net cash used in investing activities | (13,409) | (30,065) |
Cash flows provided by (used in) financing activities: | ||
Payments of indebtedness and capital lease obligations | (45) | (606) |
Proceeds from revolving line of credit | 715,228 | 689,853 |
Payments on revolving line of credit | (675,065) | (665,180) |
Debt issuance costs | (489) | |
Proceeds (payments) from exercise of stock options and employee stock purchase plan | (112) | 305 |
Cash dividends paid | (6,847) | (6,720) |
Net cash provided by financing activities | 32,670 | 17,652 |
Decrease in cash and cash equivalents - total net change | (717) | (225) |
Cash and cash equivalents: | ||
Beginning of year | 5,830 | 5,917 |
End of period | 5,113 | 5,692 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 4,371 | 1,685 |
Income taxes refunded | $ (2,002) | $ (1,693) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Oct. 28, 2017 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | NOTE 1: BASIS OF PRESENTATION Fred’s, Inc. and its subsidiaries (“Fred’s”, “Fred’s Pharmacy”, “We”, “Our”, “Us” or “Company”) operate, as of October 28, 2017, 597 discount general merchandise stores and three specialty pharmacy-only locations, in fifteen states in the Southeastern United States. Included in the count of discount general merchandise stores are 13 franchised locations. There are 349 full service pharmacy departments located within our discount general merchandise stores, including one within franchised locations. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and are presented in accordance with the requirements of Form 10-Q and Article 10 of Regulation S-X and therefore do not include all information and notes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with GAAP. The accompanying financial statements reflect all adjustments (consisting of only normal recurring accruals) which are, in the opinion of management, necessary for a fair presentation of financial position in conformity with GAAP. The accompanying financial statements should be read in conjunction with the Notes to the Consolidated Financial Statements for the fiscal year ended January 28, 2017 included in our Annual Report on Form 10-K, which we filed with the Securities and Exchange Commission on April 13, 2017. Certain prior year amounts have been reclassified to conform to the 2017 presentation. Such reclassifications had no effect on previously reported net loss. The results of operations for the thirteen week and thirty-nine week periods ended October 28, 2017 are not necessarily indicative of the results to be expected for the full fiscal year. All references in this Quarterly Report on Form 10-Q to 2016 and 2017 refer to the fiscal years ended January 28, 2017 and ending February 3, 2018, respectively. Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash The Company does not anticipate the adoption of this standard will have a material impact on our consolidated statement of cash flows. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments The Company does not anticipate the adoption of this standard will have a material impact on our consolidated statement of cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606) In March 2016, the FASB issued ASU 2016-04, Liabilities – Extinguishments of Liabilities (Subtopic 405-20): Recognition of Breakage for Certain Prepaid Stored-Value Products Termination of Asset Purchase Agreement On December 19, 2016, Fred’s and its wholly-owned subsidiary, AFAE, LLC (“Buyer”), entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Rite Aid Corporation (“Rite Aid”) and Walgreens Boots Alliance, Inc. (“Walgreens”), pursuant to which Buyer agreed to purchase 865 stores, certain intellectual property and other tangible assets (collectively, the “Assets”) and to assume certain liabilities for a cash purchase price of $950 million (the “Rite Aid Transaction”). Pursuant to Section 8.01(g) of the Asset Purchase Agreement, each of Buyer, Walgreens or Rite Aid is permitted to terminate the Asset Purchase Agreement upon the termination of that certain Agreement and Plan of Merger, dated as of October 27, 2015, among Walgreens, Rite Aid and the other parties thereto (as amended, the “Merger Agreement”). On June 29, 2017, the Merger Agreement was terminated and, accordingly, the Asset Purchase Agreement was also terminated, effective immediately. In connection with the termination of the Asset Purchase Agreement, the Company received a termination fee payment of $25 million on June 30, 2017. See Note 10: Indebtedness for additional information relating to the termination of the Asset Purchase Agreement. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Oct. 28, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 2: INVENTORIES Merchandise inventories are valued at the lower of cost or market using the retail first-in, first-out (FIFO) inventory method for goods in our stores and the cost FIFO inventory method for goods in our distribution centers. The retail inventory method is a reverse mark-up, averaging method which has been widely used in the retail industry for many years. This method calculates a cost-to-retail ratio that is applied to the retail value of inventory to determine the cost value of inventory and the resulting cost of goods sold and gross margin. The assumptions that the retail inventory method provides for valuation at lower of cost or market and the inherent uncertainties therein are discussed in the following paragraphs. In order to assure valuation at the lower of cost or market, the retail value of our inventory is adjusted on a consistent basis to reflect current market conditions. These adjustments include increases to the retail value of inventory for initial markups to set the selling price of goods or additional markups to adjust pricing for inflation and decreases to the retail value of inventory for markdowns associated with promotional, seasonal or other declines in the market value. Because these adjustments are made on a consistent basis and are based on current prevailing market conditions, they approximate the carrying value of the inventory at net realizable value (market value). Therefore, after applying the cost to retail ratio, the cost value of our inventory is stated at the lower of cost or market as is prescribed by GAAP. Because the approximation of net realizable value (market value) under the retail inventory method is based on estimates such as markups, markdowns and inventory losses (shrink), there exists an inherent uncertainty in the final determination of inventory cost and gross margin. In order to mitigate that uncertainty, the Company has a formal review process, conducted by product class which considers such variables as current market trends, seasonality, weather patterns and age of merchandise to ensure that markdowns are taken currently, or a markdown reserve is established to cover future anticipated markdowns on a particular product class. This review also considers current pricing trends and inflation to ensure that markups are taken if necessary. The estimation of inventory losses (shrink) is a significant element in approximating the carrying value of inventory at net realizable value, and as such the following paragraph describes our estimation method as well as the steps we take to mitigate the risk of this estimate in the determination of the cost value of inventory. The Company calculates inventory losses (shrink) based on actual inventory losses occurring as a result of physical inventory counts during each fiscal period and estimated inventory losses occurring between yearly physical inventory counts. The estimate for shrink occurring in the interim period between physical counts is calculated on a store-specific basis and is based on history, as well as performance on the most recent physical count. It is calculated by multiplying each store’s shrink rate, which is based on the previously mentioned factors, by the interim period’s sales for each store. Additionally, the overall estimate for shrink is adjusted at the corporate level to a three-year historical average to ensure that the overall shrink estimate is the most accurate approximation of shrink based on the Company’s overall history of shrink. The three-year historical estimate is calculated by dividing the “book to physical” inventory adjustments for the trailing 36 months by the related sales for the same period. In order to reduce the uncertainty inherent in the shrink calculation, the Company first performs the calculation at the lowest practical level (by store) using the most current performance indicators. This ensures a more reliable number, as opposed to using a higher level aggregation or percentage method. The second portion of the calculation ensures that the extreme negative or positive performance of any particular store or group of stores does not skew the overall estimation of shrink. This portion of the calculation removes additional uncertainty by eliminating short-term peaks and valleys that could otherwise cause the underlying carrying cost of inventory to fluctuate unnecessarily. The methodology that we have applied in estimating shrink has resulted in variability that is not material to our financial statements. Management believes that the Company’s retail inventory method provides an inventory valuation which reasonably approximates cost and results in carrying inventory at the lower of cost or market. For pharmacy inventories, which were approximately $31.6 million and $39.5 million at October 28, 2017 and January 28, 2017, respectively, cost was determined using the retail last-in, first-out (LIFO) inventory method in which inventory cost is maintained using the retail inventory method, then adjusted by application of the Producer Price Index published by the U.S. Department of Labor for cumulative annual periods. The current cost of inventories exceeded LIFO cost by approximately $53.1 million at October 28, 2017 and $52.8 million at January 28, 2017. The Company has historically included an estimate of inbound freight and certain general and administrative costs in merchandise inventory as prescribed by GAAP. These costs include activities surrounding the procurement and storage of merchandise inventory such as merchandise planning and buying, warehousing, accounting, information technology and human resources, as well as inbound freight. The total amount of procurement and storage costs and inbound freight, inclusive of the accelerated recognition of freight capitalization expense, included in merchandise inventory at October 28, 2017 is $19.9 million, with the corresponding amount of $19.1 million at January 28, 2017. During 2016, the Company recorded impairment charges for inventory clearance of product that management identified as low-productive and does not fit our go-forward model. The Company recorded a below-cost inventory adjustment in accordance with FASB Accounting Standards Codification (“ASC”) 330, “ Inventory The Company utilized $0.5 million (including $0.2 million for the accelerated recognition of freight capitalization expense) of impairment charges in the first quarter of 2017 and $1.4 million (including $0.2 million for the accelerated recognition of freight capitalization expense) in the second quarter of 2017. In the third quarter of 2017, the Company recorded additional impairment charges related to the 2016 inventory clearance of product in the amount of $1.5 million. The Company also utilized $2.7 million of existing impairment charges (including $0.3 million for the accelerated recognition of freight capitalization expense). During the third quarter of 2017, the Company recorded impairment charges for inventory clearance of product that management identified as low-productive and does not fit our go-forward model. The Company recorded a below-cost inventory adjustment in accordance with FASB Accounting Standards Codification (“ASC”) 330, “ Inventory The following table illustrates the inventory impairment charges related to the inventory clearance initiatives discussed in the previous paragraph (in millions): Balance at January 28, 2017 Additions Utilization Ending Balance October 28, 2017 Inventory markdown on low-productive inventory (2016 initiatives) $ 8.0 1.5 (3.9 ) $ 5.6 Inventory provision for freight capitalization expense (2016 initiatives) 1.2 — (0.7 ) 0.5 Inventory markdown on low-productive inventory (2017 initiatives) — 14.3 — 14.3 Inventory provision for freight capitalization expense (2017 initiatives) — 1.3 — 1.3 Total $ 9.2 $ 17.1 $ (4.6 ) $ 21.7 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Oct. 28, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 3: STOCK-BASED COMPENSATION The Company accounts for its stock-based compensation plans in accordance with FASB ASC 718 “ Compensation – Stock Compensation. FASB ASC 718 also requires the benefits of income tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required prior to FASB ASC 718. A summary of the Company’s stock-based compensation (a component of selling, general and administrative expenses) and related income tax benefit is as follows: (in thousands) Thirteen Weeks Ended Thirty-Nine Weeks Ended October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016 Stock option expense $ 357 $ 468 $ 1,326 $ 349 Restricted stock expense 1,074 185 3,089 1,698 ESPP expense 244 60 428 162 Total stock-based compensation $ 1,675 $ 713 $ 4,843 $ 2,209 Income tax benefit on stock-based compensation $ 414 $ 131 $ 1,206 $ 510 The fair value of each option granted during the thirteen and thirty-nine week periods ended October 28, 2017 and October 29, 2016 is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: Thirteen Weeks Ended Thirty-Nine Weeks Ended October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016 Stock Options Expected volatility 46.1 % 33.4 % 41.8 % 33.3 % Risk-free interest rate 1.9 % 1.3 % 2.1 % 1.4 % Expected option life (in years) 5.84 5.84 5.84 5.84 Expected dividend yield 1.98 % 1.81 % 1.87 % 1.80 % Weighted average fair value at grant date $ 2.44 $ 3.33 $ 4.20 $ 3.87 Employee Stock Purchase Plan Expected volatility 86.1 % 57.4 % 82.2 % 59.0 % Risk-free interest rate 1.0 % 0.9 % 1.0 % 0.9 % Expected option life (in years) 0.75 0.75 0.50 0.50 Expected dividend yield 1.24 % 1.19 % 0.81 % 0.79 % Weighted average fair value at grant date $ 7.95 $ 4.01 $ 6.86 $ 3.74 The following is a summary of the methodology applied to develop each assumption: Expected Volatility Risk-free Interest Rate Expected Lives Dividend Yield Employee Stock Purchase Plan The 2004 Employee Stock Purchase Plan (the “2004 Plan”), which was approved by Fred’s shareholders, permits eligible employees to purchase shares of our common stock through payroll deductions at the lower of 85% of the fair market value of the stock at the time of grant, or 85% of the fair market value at the time of exercise. There were 59,210 shares issued during the thirty-nine weeks ended October 28, 2017. There are 1,410,928 shares approved to be issued under the 2004 Plan and as of October 28, 2017, there were 626,697 shares available. Stock Options The following table summarizes stock option activity during the thirty-nine weeks ended October 28, 2017: Options Weighted-Average Exercise Price Weighted-Average Contractual Life (years) Aggregate Intrinsic Value (000s) Outstanding at January 28, 2017 1,607,656 $ 13.55 6.0 $ 2,070 Granted 234,312 11.93 Cancelled (275,616 ) 13.29 Exercised — — Outstanding at October 28, 2017 1,566,352 $ 13.35 5.4 — Exercisable at October 28, 2017 385,799 $ 15.10 4.5 — The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between Fred’s closing stock price on the last trading day of the period ended October 28, 2017 and the exercise price of the option multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on that date. As of October 28, 2017, total unrecognized stock-based compensation expense net of estimated forfeitures related to non-vested stock options was approximately $2.6 million, which is expected to be recognized over a weighted average period of approximately 3.6 years. The total fair value of options vested during the thirty-nine weeks ended October 28, 2017 was $1.1 million. Restricted Stock The following table summarizes restricted stock activity during the thirty-nine weeks ended October 28, 2017: Number of Shares Weighted-Average Grant Date Fair Value Non-vested Restricted Stock at January 28, 2017 598,784 $ 15.08 Granted 315,716 9.65 Forfeited / Cancelled (39,363 ) 16.00 Vested (333,665 ) 14.09 Non-vested Restricted Stock at October 28, 2017 541,472 $ 12.34 The aggregate pre-tax intrinsic value of restricted stock outstanding as of October 28, 2017 is $2.6 million with a weighted average remaining contractual life of 7.1 years. The unrecognized compensation expense net of estimated forfeitures, related to the outstanding stock is approximately $3.8 million, which is expected to be recognized over a weighted average period of approximately 3.6 years. The total fair value of restricted stock awards that vested during the thirty-nine weeks ended October 28, 2017 was $4.3 million. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Oct. 28, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 4 — FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. ● Level 1, defined as quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. ● Level 2, defined as inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. ● Level 3, defined as unobservable inputs for the asset or liability, which are based on an entity’s own assumptions as there is little, if any, observable activity in identical assets or liabilities. Due to their short-term nature, the Company’s financial instruments, which include cash and cash equivalents, receivables and accounts payable, are presented on the condensed consolidated balance sheets at a reasonable estimate of their fair value as of October 28, 2017 and January 28, 2017. There were $154.5 million and $114.3 million of borrowings on the Company’s revolving line of credit as of October 28, 2017 and January 28, 2017, respectively. Refer to Note 10 – Indebtedness. The fair value of the revolving lines of credit and our mortgage loans are estimated using Level 2 inputs based on the Company’s current incremental borrowing rate for comparable borrowing arrangements. The table below details the fair value and carrying values for the revolving line of credit, notes payable and mortgage loans as of the following dates: October 28, 2017 January 28, 2017 (in thousands) Carrying Value Fair Value Carrying Value Fair Value Revolving line of credit $ 154,493 $ 154,493 $ 114,331 $ 114,331 Mortgage loans on land & buildings 1,594 1,811 1,639 1,881 Notes Payable 13,000 12,611 13,000 12,740 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Oct. 28, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5: PROPERTY AND EQUIPMENT Property and equipment are carried at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of assets. Improvements to leased premises are amortized using the straight-line method over the shorter of the initial term of the lease or the useful life of the improvement. Leasehold improvements added late in the lease term are amortized over the shorter of the remaining term of the lease (including the upcoming renewal option, if the renewal is reasonably assured) or the useful life of the improvement. Assets under capital leases are amortized in accordance with the Company’s normal depreciation policy for owned assets or over the lease term (regardless of renewal options), if shorter, and the charge to earnings is included in depreciation expense in the consolidated financial statements. Gains or losses on the sale of assets are recorded as a component of selling, general and administrative expenses. The following illustrates the breakdown of the major categories within property and equipment (in thousands): October 28, 2017 January 28, 2017 Property and equipment, at cost: Buildings and building improvements $ 118,649 $ 117,501 Leasehold improvements 86,599 86,019 Automobiles and vehicles 4,940 5,029 Airplane 4,697 4,697 Furniture, fixtures and equipment 285,317 288,868 500,202 502,114 Less: Accumulated depreciation and amortization (389,593 ) (381,579 ) 110,609 120,535 Construction in progress 2,134 1,806 Land 8,581 8,581 Total Property and equipment, at depreciated cost $ 121,324 $ 130,922 |
EXIT AND DISPOSAL ACTIVITIES
EXIT AND DISPOSAL ACTIVITIES | 9 Months Ended |
Oct. 28, 2017 | |
Restructuring and Related Activities [Abstract] | |
EXIT AND DISPOSAL ACTIVITIES | NOTE 6: EXIT AND DISPOSAL ACTIVITIES Fixed Assets The Company’s policy is to review the carrying value of all long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. We measure impairment losses of fixed assets and leasehold improvements as the amount by which the carrying amount of a long-lived asset exceeds its fair value as prescribed by FASB ASC 360, “Impairment or Disposal of Long-Lived Assets.” In 2015, the Company recorded impairment charges for fixed assets and leasehold improvements related to 2014 and 2015 planned store closures. In 2016, the Company utilized all of the impairment charges related to the 2015 store closures and $0.2 million related to the 2014 store closures, leaving $0.5 million of impairment charges. None of the remaining $0.5 million impairment charges were utilized as of October 28, 2017. During fiscal 2016, a decision was made to close 39 underperforming stores in fiscal year 2017, which included 18 underperforming pharmacies. As a result, the Company recorded charges in the amount of $2.0 million in selling, general and administrative expense for the impairment of fixed assets associated with the closing stores and pharmacies and $2.3 million for the accelerated recognition of amortization of intangible assets associated with the closing pharmacies of which $0.1 million was utilized during 2016. Additional impairment charges of $3.6 million were for fixed asset impairments related to the corporate headquarters. During the first quarter of 2017, the locations were closed and the Company utilized the remaining balance of $4.2 million of impairment charges relating to the 2016 planned store closures. None of the impairment charges relating to the corporate headquarters were utilized as of October 28, 2017. In the second quarter of 2017, in association with the planned closure of additional underperforming stores and pharmacies, the Company recorded charges in the amount of $0.8 million in selling, general and administrative expense for the impairment of fixed assets associated with the closing stores and pharmacies and $1.4 million for the accelerated recognition of amortization of intangible assets associated with the closing pharmacies. None of these charges were utilized as of October 28, 2017. In the third quarter of 2017, a decision was made to sell the Company-owned airplane. The sale was completed in the fourth quarter, and an impairment charge of $2.6 million was recorded in the third quarter related to the planned sale of this asset. Inventory As discussed in Note 2 - Inventories, we adjust inventory values on a consistent basis to reflect current market conditions. In accordance with FASB ASC 330, “Inventories,” In the third quarter of 2016, the Company recorded a below-cost inventory adjustment of approximately $3.2 million (including $1.3 million for the accelerated recognition of freight capitalization expense) to value inventory at the lower of cost or market in 39 stores that were planned for closure in 2017. In the fourth quarter of 2016, an additional below-cost inventory adjustment was recorded in the amount of $1.1 million and $0.2 million of the acceleration recognition of freight cap expense was utilized, leaving $4.1 million (including $1.1 million for the accelerated recognition of freight capitalization expense) at the end of 2016. In the first quarter of 2017, the locations were closed and the Company utilized the full amount of the inventory adjustment charges including the accelerated recognition of freight capitalization expense. Lease Termination For lease obligations related to closed stores, we record the estimated future liability associated with the rental obligation on the cease use date (when the stores were closed). The lease obligations are established at the cease use date for the present value of any remaining operating lease obligations, net of estimated sublease income, and at the communication date for severance and other exit costs, as prescribed by FASB ASC 420, “ Exit or Disposal Cost Obligations During fiscal 2016, the Company increased the lease liability for stores closed between 2014 and 2016 by $0.5 million and utilized $0.3 million, leaving a liability of $0.2 million. In the first quarter of 2017, $0.1 million of this reserve was utilized. The amount of liability utilized during the second and third quarters of 2017 was less than $0.1 million, leaving $0.1 million at October 28, 2017. In the first quarter of 2017, the Company recorded a lease liability relating to the 39 underperforming store closures in fiscal 2017 of $8.2 million. In the second quarter of 2017, $1.1 million was utilized. In the third quarter of 2017, $0.5 million was utilized, leaving $6.6 million at October 28, 2017. The following table illustrates the exit and disposal activity related to store closures, inventory strategic initiatives along with the lease liability related to the planned store closures discussed in the previous paragraphs (in millions): Balance at Additions Utilization Ending Balance Impairment charge for the sale of the Company-owned airplane $ — $ 2.6 $ — $ 2.6 Impairment charge for the disposal of fixed assets for 2017 planned closures — 0.8 — 0.8 Impairment charge for the disposal of intangible assets for 2017 planned closures — 1.4 — 1.4 Impairment charge for the disposal of fixed assets for 2016 planned closures 2.0 — (2.0 ) — Impairment charge for the disposal of intangible assets for 2016 planned closures 2.2 — (2.2 ) — Impairment charge for the disposal of fixed assets for corporate office 3.6 — — 3.6 Impairment charge for the disposal of fixed assets for 2014 planned closures 0.5 — — 0.5 Inventory markdowns for 2016 planned closures 3.0 — (3.0 ) — Inventory provision for freight capitalization expense, 2016 planned closures 1.1 — (1.1 ) — Subtotal $ 12.4 $ 4.8 $ (8.3 ) $ 8.9 Lease contract termination liability, 2014 - 2016 closures 0.2 — (0.1 ) 0.1 Lease contract termination liability, 2017 closures — 8.2 (1.6 ) 6.6 Total $ 12.6 $ 13.0 $ (10.0 ) $ 15.6 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 9 Months Ended |
Oct. 28, 2017 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | NOTE 7: ACCUMULATED OTHER COMPREHENSIVE INCOME Comprehensive income consists of two components, net income and other comprehensive income (loss). Other comprehensive income (loss) refers to gains and losses that are recorded as an element of shareholders’ equity but are excluded from net income pursuant to GAAP. The Company’s accumulated other comprehensive income includes the unrecognized prior service costs, transition obligations and actuarial gains/losses associated with our post-retirement benefit plan. The following table illustrates the activity in accumulated other comprehensive income: Thirteen Weeks Ended Year Ended (in thousands) October 28, 2017 October 29, 2016 January 28, 2017 Accumulated other comprehensive income $ 466 $ 475 $ 765 Amortization of post-retirement benefit — — (299 ) Ending balance $ 466 $ 475 $ 466 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Oct. 28, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 8: RELATED PARTY TRANSACTIONS Atlantic Retail Investors, LLC, which is partially owned by Michael J. Hayes, a former director of the Company, owns the land and buildings occupied by three Fred’s stores. Richard H. Sain, former Senior Vice President of Retail Pharmacy Business Development, owns the land and building occupied by one of Fred’s Xpress Pharmacy locations. The terms and conditions regarding the leases on these locations were consistent in all material respects with other stores’ leases of the Company with unrelated landlords. The total rental payments made to related party leases were $392.9 thousand and $396.8 thousand for the thirty-nine weeks ended October 28, 2017 and October 29, 2016, respectively. On April 10, 2015, the Company completed the acquisition of Reeves-Sain Drug Store, Inc., a provider of retail and specialty pharmaceutical services. As part of the total consideration for the purchase, Fred’s provided notes payable totaling $13.0 million to the sellers of Reeves-Sain Drug Store, Inc., who became employees of Fred’s as part of the acquisition. As of October 28, 2017, the sellers were former employees. The notes payable are due in three equal installments to be paid on January 31 st |
LEGAL CONTINGENCIES
LEGAL CONTINGENCIES | 9 Months Ended |
Oct. 28, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL CONTINGENCIES | NOTE 9: LEGAL CONTINGENCIES On October 15, 2015, a lawsuit entitled Southern Independent Bank v. Fred’s, Inc. was filed in the United States District Court, Middle District of Alabama related to the data security incident. The complaint includes allegations made by the plaintiff on behalf of itself and financial institutions similarly situated (“alleged class of financial institutions”) that the Company was negligent in failing to use reasonable care in obtaining, retaining, securing and deleting the personal and financial information of customers who use debit cards issued by the plaintiff and alleged class of financial institutions to make purchases at Fred’s stores. The complaint also includes allegations that the Company made negligent misrepresentations that the Company possessed and maintained adequate data security measures and systems that were sufficient to protect the personal and financial information of shoppers using debit cards issued by the plaintiff and alleged class of financial institutions. The complaint seeks monetary damages and equitable relief to be proved at trial as well as attorneys’ fees and costs. The Company has denied the allegations and has filed a motion to dismiss all claims. This motion has since been denied, and the Company filed a motion to reconsider by certifying the question to the Alabama Supreme Court for clarity. However the Company’s motion was denied, and the Company has now completed discovery and is moving to trial. Future costs or liabilities related to the incident may have a material adverse effect on the Company. The Company has not made an accrual for future losses related to these claims at this time as the future losses are not considered probable. The Company has general liability policy with a $10 million limit and $350,000 deductible. The $350,000 deductible represents the Company’s estimate of potential exposure related to this matter. On July 27, 2016, a lawsuit entitled The State of Mississippi v. Fred’s Inc., et al was filed in the Chancery Court of Desoto County, Mississippi, Third Judicial District. The complaint alleges that the Company fraudulently reported their usual and customary prices to Mississippi’s Division of Medicaid in order to receive higher reimbursements for prescription drugs. The complaint seeks declaratory and monetary relief for the profits alleged to have been unfairly earned as well as attorney costs. The Company denies these allegations and believes it acted appropriately in its dealings with the Mississippi Division of Medicaid. The Company successfully filed a Motion to Transfer to Circuit Court. The State filed and the Mississippi Supreme Court has accepted the State’s Petition for Interlocutory Appeal, despite the Company filing a Joint Response in opposition to the Petition. Future costs and liabilities related to this case may have a material adverse effect on the Company; however, the Company has not made an accrual for future probable losses related to these claims as future losses are not considered probable and an estimate is unavailable. The Company has multiple insurance policies which the Company believes will limit its potential exposure. On September 29, 2016, the Company reported to the Office of Civil Rights (“OCR”) that an unencrypted laptop containing clinical and demographic data for 9,624 individuals had been stolen from an employee’s vehicle while the vehicle was parked at the employee’s residence. On January 13, 2017, the OCR opened an investigation into the incident. The Company has fully complied with the investigation and timely responded to all requests for information from the OCR. Future costs and liabilities related to this case may have a material adverse effect on the Company; however, the Company has not made an accrual for future probable losses related to these claims as future losses are not considered probable and an estimate is unavailable. On March 30, 2017, a lawsuit entitled Tiffany Taylor, individually and on behalf of others similarly situated, v. Fred’s Inc. and Fred’s Stores of Tennessee, Inc. was filed in the United Stated District Court for the Northern District of Alabama Southern Division. The complaint alleges that the Company wrongfully and willfully violated the Fair and Accurate Credit Transactions Act (“FACTA”). On April 11, 2017, a lawsuit entitled Melanie Wallace, Sascha Feliciano, and Heather Tyler, on behalf of themselves and all others similarly situated, v. Fred’s Stores of Tennessee, Inc. was filed in the Superior Court of Fulton County in the state of Georgia. The complaint alleges that the Company wrongfully and willfully violated FACTA. On April 13, 2017, a lawsuit entitled Lillie Williams and Cussetta Journey, on behalf of themselves and all others similarly situated, v. Fred’s Stores of Tennessee, Inc. was filed in the Superior Court of Fulton County in the state of Georgia. The complaint also alleges that the Company wrongfully and willfully violated FACTA. The complaints are filed as Class Actions, with the class being open for five (5) years before the date the complaint was filed. The complaint seeks statutory damages, attorney’s fees, punitive damages, an injunctive order, and other such relief that the court may deem just and equitable. The Company has filed a Motion to Dismiss the Taylor complaint, and this Motion is still pending before the court. The Company filed and the Court Granted Motions to Remove and Motions to Transfer the Williams and Wallace matters to the Northern District of Alabama. Since the Williams and Wallace matters were removed and transferred to the Northern District of Alabama, the Company has filed a Motion to Consolidate the Taylor, Williams, and Wallace matters. The Court has yet to rule on the Motion to Consolidate. Plaintiff’s counsel for the Williams and Wallace matters has filed a Motion to Remand the matters. Fred’s has opposed the Motion to Remand, and the Motion to Remand is still pending. Future costs and liabilities related to this case may have a material adverse effect on the Company; however, the Company has not made an accrual for future probable losses related to these claims as future losses are not considered probable and an estimate is unavailable. In addition to the matters disclosed above, the Company is party to several pending legal proceedings and claims arising in the normal course of business. Although the outcomes of these proceedings and claims against the Company cannot be determined with certainty, management of the Company is of the opinion that these proceedings and claims should not have a material adverse effect on the Company’s financial statements as a whole. However, litigation involves an element of uncertainty. Future developments could cause these actions or claims, individually or in aggregate, to have a material adverse effect on the Company’s financial statements as a whole. The Company has not made an accrual for future losses related to these proceedings and claims as future losses are not considered probable at this time and estimates are unavailable. |
INDEBTEDNESS
INDEBTEDNESS | 9 Months Ended |
Oct. 28, 2017 | |
Debt Disclosure [Abstract] | |
INDEBTEDNESS | NOTE 10: INDEBTEDNESS On April 9, 2015, the Company entered into a Revolving Loan and Credit Agreement (the “Agreement”) with Regions Bank and Bank of America to replace the Company’s previous revolving credit facility. The proceeds were used to refinance amounts outstanding under the prior credit and to support acquisitions and the Company’s working capital needs. The Agreement initially provided for a $150.0 million secured revolving line of credit, including a sublimit for letters of credit and swingline loans. The Agreement, which expires on April 9, 2020, was amended effective January 30, 2017 to increase the loan commitment from $150 million to $225 million. On July 31, 2017 the Company amended the Agreement and related security agreement to: (i) increase the revolving loan commitment from $225 million to $270 million, (ii) increase the pharmacy scripts advance rate, (iii) revise the excess availability requirements for certain acquisitions, and (iv) add Bank of America as a co-collateral agent. Draws are limited to the lesser of the commitment amount or the borrowing base, which is periodically determined by reference to the value of certain receivables, inventory and scripts, less applicable reserves. The Company may choose to borrow at a spread to either LIBOR or a Base Rate. For LIBOR loans the spread ranges from 1.75% to 2.25% and for Base Rate loans the spread ranges from 0.75% to 1.25%. The spread depends on the level of excess availability. Commitment fees on the unused portion of the credit line are 37.5 basis points. The Agreement included an up-front credit facility fee which is being amortized over the Agreement term. There were $154.5 million of borrowings outstanding and $100.7 million, net of borrowings and letters of credit, remaining available under the Agreement at October 28, 2017. On December 19, 2016, the Company entered into a commitment letter with respect to a senior secured asset based loan facility (the “ABL Commitment Letter”), and a commitment letter with respect to a term loan facility (the “Term Loan Commitment Letter”); and on January 18, 2017, the Company entered into an amended and restated ABL Commitment Letter (the “Amended and Restated ABL Commitment Letter”). The Amended and Restated ABL Commitment Letter and the Term Loan Commitment Letter were entered into with lenders who agreed to provide $1.65 billion of debt financing to be used by the Company to fund its proposed acquisition of 865 stores, certain intellectual property and certain other tangible assets of Rite Aid Corporation. On June 9, 2017, the Company amended and restated the Amended and Restated ABL Commitment (the “Second Amended and Restated ABL Commitment Letter”), and the Term Loan Commitment Letter (the “Amended and Restated Term Loan Commitment Letter”) for the purpose of increasing the aggregate committed debt financing available thereunder to $2.2 billion. Upon termination of that certain Asset Purchase Agreement, dated as of December 19, 2016, by and between the Company, Buyer, Rite Aid and Walgreens, on July 21, 2017, the Company terminated the Second Amended and Restated ABL Commitment Letter and the Amended and Restated Term Loan Commitment Letter. In connection with such termination, the Company incurred applicable termination fees contemplated by the Second Amended and Restated ABL Commitment Letter and Amended and Restated Term Loan Commitment Letter, which were paid in the third quarter of 2017. In connection with the aforementioned commitment letters, the Company incurred approximately $30 million of debt issuance costs. These costs are reflected in selling, general and administrative expenses in the Statement of Operations. The $25 million termination fee paid by Walgreens, on June 30, 2017, discussed in Note 1: Basis of Presentation, partially offset these costs. During the second and third quarter of fiscal 2007, the Company acquired the land and buildings, occupied by seven Fred’s stores which we had previously leased. In consideration for the seven properties, the Company assumed debt that has fixed interest rates from 6.31% to 7.40%. Mortgages remain on two locations with a combined balance of $1.6 million outstanding at October 28, 2017. The weighted average interest rate on mortgages outstanding at October 28, 2017 was 7.40%. The debt is collateralized by the land and buildings. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Oct. 28, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11: INCOME TAXES The Company accounts for its income taxes in accordance with FASB ASC 740 “ Income Taxes |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Oct. 28, 2017 | |
Subsequent Event | |
SUBSEQUENT EVENT | NOTE 12: SUBSEQUENT EVENT On December 6, 2017, the Company announced that it has cancelled its quarterly cash dividend and amended the Company’s previously authorized 2012 share repurchase program. The amended program will allow for the repurchase of up to 3.8 million shares of the Company’s outstanding Class A voting common stock (the “common stock”). Under the amended program, the common stock may be purchased through a combination of a Rule 10b5-1 automatic trading plan and discretionary purchases on the open market, block trades or in privately negotiated transactions. The amount and timing of any purchases will depend on a number of factors, including trading price, trading volume and general market conditions. No assurance can be given that any particular amount of common stock will be repurchased. This repurchase program is valid for up to two years and may be modified, extended or terminated by the Board at any time. As of the date of this filing, no shares have been repurchased under the amended program. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory impairment charges | The following table illustrates the inventory impairment charges related to the inventory clearance initiatives discussed in the previous paragraph (in millions): Balance at January 28, 2017 Additions Utilization Ending Balance October 28, 2017 Inventory markdown on low-productive inventory (2016 initiatives) $ 8.0 1.5 (3.9 ) $ 5.6 Inventory provision for freight capitalization expense (2016 initiatives) 1.2 — (0.7 ) 0.5 Inventory markdown on low-productive inventory (2017 initiatives) — 14.3 — 14.3 Inventory provision for freight capitalization expense (2017 initiatives) — 1.3 — 1.3 Total $ 9.2 $ 17.1 $ (4.6 ) $ 21.7 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of company's stock-based compensation | A summary of the Company’s stock-based compensation (a component of selling, general and administrative expenses) and related income tax benefit is as follows: (in thousands) Thirteen Weeks Ended Thirty-Nine Weeks Ended October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016 Stock option expense $ 357 $ 468 $ 1,326 $ 349 Restricted stock expense 1,074 185 3,089 1,698 ESPP expense 244 60 428 162 Total stock-based compensation $ 1,675 $ 713 $ 4,843 $ 2,209 Income tax benefit on stock-based compensation $ 414 $ 131 $ 1,206 $ 510 |
Schedule of stock option granted using the Black-Scholes option-pricing model | The fair value of each option granted during the thirteen and thirty-nine week periods ended October 28, 2017 and October 29, 2016 is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions: Thirteen Weeks Ended Thirty-Nine Weeks Ended October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016 Stock Options Expected volatility 46.1 % 33.4 % 41.8 % 33.3 % Risk-free interest rate 1.9 % 1.3 % 2.1 % 1.4 % Expected option life (in years) 5.84 5.84 5.84 5.84 Expected dividend yield 1.98 % 1.81 % 1.87 % 1.80 % Weighted average fair value at grant date $ 2.44 $ 3.33 $ 4.20 $ 3.87 Employee Stock Purchase Plan Expected volatility 86.1 % 57.4 % 82.2 % 59.0 % Risk-free interest rate 1.0 % 0.9 % 1.0 % 0.9 % Expected option life (in years) 0.75 0.75 0.50 0.50 Expected dividend yield 1.24 % 1.19 % 0.81 % 0.79 % Weighted average fair value at grant date $ 7.95 $ 4.01 $ 6.86 $ 3.74 |
Schedule of stock option activity | The following table summarizes stock option activity during the thirty-nine weeks ended October 28, 2017: Options Weighted-Average Exercise Price Weighted-Average Contractual Life (years) Aggregate Intrinsic Value (000s) Outstanding at January 28, 2017 1,607,656 $ 13.55 6.0 $ 2,070 Granted 234,312 11.93 Cancelled (275,616 ) 13.29 Exercised — — Outstanding at October 28, 2017 1,566,352 $ 13.35 5.4 — Exercisable at October 28, 2017 385,799 $ 15.10 4.5 — |
Schedule of restricted stock activity | The following table summarizes restricted stock activity during the thirty-nine weeks ended October 28, 2017: Number of Shares Weighted-Average Grant Date Fair Value Non-vested Restricted Stock at January 28, 2017 598,784 $ 15.08 Granted 315,716 9.65 Forfeited / Cancelled (39,363 ) 16.00 Vested (333,665 ) 14.09 Non-vested Restricted Stock at October 28, 2017 541,472 $ 12.34 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value and carrying values for the revolving line of credit, notes payable and mortgage loans | The table below details the fair value and carrying values for the revolving line of credit, notes payable and mortgage loans as of the following dates: October 28, 2017 January 28, 2017 (in thousands) Carrying Value Fair Value Carrying Value Fair Value Revolving line of credit $ 154,493 $ 154,493 $ 114,331 $ 114,331 Mortgage loans on land & buildings 1,594 1,811 1,639 1,881 Notes Payable 13,000 12,611 13,000 12,740 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property plant and equipment | The following illustrates the breakdown of the major categories within property and equipment (in thousands): October 28, 2017 January 28, 2017 Property and equipment, at cost: Buildings and building improvements $ 118,649 $ 117,501 Leasehold improvements 86,599 86,019 Automobiles and vehicles 4,940 5,029 Airplane 4,697 4,697 Furniture, fixtures and equipment 285,317 288,868 500,202 502,114 Less: Accumulated depreciation and amortization (389,593 ) (381,579 ) 110,609 120,535 Construction in progress 2,134 1,806 Land 8,581 8,581 Total Property and equipment, at depreciated cost $ 121,324 $ 130,922 |
EXIT AND DISPOSAL ACTIVITIES (T
EXIT AND DISPOSAL ACTIVITIES (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of exit and disposal reserves | The following table illustrates the exit and disposal activity related to store closures, inventory strategic initiatives along with the lease liability related to the planned store closures discussed in the previous paragraphs (in millions): Balance at Additions Utilization Ending Balance Impairment charge for the sale of the Company-owned airplane $ — $ 2.6 $ — $ 2.6 Impairment charge for the disposal of fixed assets for 2017 planned closures — 0.8 — 0.8 Impairment charge for the disposal of intangible assets for 2017 planned closures — 1.4 — 1.4 Impairment charge for the disposal of fixed assets for 2016 planned closures 2.0 — (2.0 ) — Impairment charge for the disposal of intangible assets for 2016 planned closures 2.2 — (2.2 ) — Impairment charge for the disposal of fixed assets for corporate office 3.6 — — 3.6 Impairment charge for the disposal of fixed assets for 2014 planned closures 0.5 — — 0.5 Inventory markdowns for 2016 planned closures 3.0 — (3.0 ) — Inventory provision for freight capitalization expense, 2016 planned closures 1.1 — (1.1 ) — Subtotal $ 12.4 $ 4.8 $ (8.3 ) $ 8.9 Lease contract termination liability, 2014 - 2016 closures 0.2 — (0.1 ) 0.1 Lease contract termination liability, 2017 closures — 8.2 (1.6 ) 6.6 Total $ 12.6 $ 13.0 $ (10.0 ) $ 15.6 |
ACCUMULATED OTHER COMPREHENSI24
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 9 Months Ended |
Oct. 28, 2017 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income | The following table illustrates the activity in accumulated other comprehensive income: Thirteen Weeks Ended Year Ended (in thousands) October 28, 2017 October 29, 2016 January 28, 2017 Accumulated other comprehensive income $ 466 $ 475 $ 765 Amortization of post-retirement benefit — — (299 ) Ending balance $ 466 $ 475 $ 466 |
BASIS OF PRESENTATION (Details
BASIS OF PRESENTATION (Details Narrative) $ in Thousands | Jun. 30, 2017USD ($) | Oct. 28, 2017Number | Dec. 19, 2016USD ($)Number |
Number of pharmacy facilities | 3 | ||
Number of states | 15 | ||
General Merchandise [Member] | |||
Number of retail store | 597 | ||
Number of pharmacy | 349 | ||
Franchised Fred's Stores [Member] | |||
Number of franchisee | 13 | ||
Rite Aid Corporation [Member] | Asset Purchase Agreement [Member] | |||
Number of retail store | 865 | ||
Face amount | $ | $ 950,000 | ||
Walgreens Boots Alliance, Inc. [Member] | Asset Purchase Agreement [Member] | |||
Agreement termination fees | $ | $ 25,000 |
INVENTORIES (Details)
INVENTORIES (Details) $ in Thousands | 9 Months Ended |
Oct. 28, 2017USD ($) | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Balance at beginning | $ 9,200 |
Additions | 17,100 |
Utilization | (4,600) |
Balance at ending | 21,700 |
Inventory Markdown on Low Productive Inventory (2016 Initiatives) [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Balance at beginning | 8,000 |
Additions | 1,500 |
Utilization | (3,900) |
Balance at ending | 5,600 |
Inventory Provision For Freight Capitalization Expense (2016 initiatives) [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Balance at beginning | 1,200 |
Additions | |
Utilization | (700) |
Balance at ending | 500 |
Inventory Markdown on Low Productive Inventory (2017 Initiatives) [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Balance at beginning | |
Additions | 14,300 |
Utilization | |
Balance at ending | 14,300 |
Inventory Provision For Freight Capitalization Expense (2017 initiatives) [Member] | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |
Balance at beginning | |
Additions | 1,300 |
Utilization | |
Balance at ending | $ 1,300 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Oct. 28, 2017 | Jul. 29, 2017 | Apr. 29, 2017 | Jan. 28, 2017 | |
Inventory | $ 317,220 | $ 331,809 | ||
Inventory adjustments | 1,500 | $ 9,200 | 13,000 | |
Freight capitalization expense | 1,200 | 1,600 | ||
Inventory adjustments utilized | 2,700 | $ 1,400 | 500 | |
Utilized freight capitalization expense | 300 | $ 200 | $ 200 | |
Inventory Markdown on Low Productive Inventory (2017 Initiatives) [Member] | ||||
Inventory adjustments utilized | 15,600 | |||
Utilized freight capitalization expense | 1,300 | |||
Merchandise Inventory [Member] | ||||
Procurement and storage costs and inbound freight cost | 19,900 | 19,100 | ||
Pharmacy Department [Member] | ||||
Inventory | 31,600 | 39,500 | ||
LIFO inventory amount | $ 53,100 | $ 52,800 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - Selling, General and Administrative Expenses [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
Total stock-based compensation | $ 1,675 | $ 713 | $ 4,843 | $ 2,209 |
Income tax benefit on stock-based compensation | 414 | 131 | 1,206 | 510 |
2004 Employee Stock Purchase Plan [Member] | ||||
Total stock-based compensation | 244 | 60 | 428 | 162 |
Stock Option [Member] | ||||
Total stock-based compensation | 357 | 468 | 1,326 | 349 |
Restricted Stock [Member] | ||||
Total stock-based compensation | $ 1,074 | $ 185 | $ 3,089 | $ 1,698 |
STOCK-BASED COMPENSATION (Det29
STOCK-BASED COMPENSATION (Details 1) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Oct. 29, 2016 | Oct. 28, 2017 | Oct. 29, 2016 | |
2004 Employee Stock Purchase Plan [Member] | ||||
Expected volatility | 86.10% | 57.40% | 82.20% | 59.00% |
Risk-free interest rate | 1.00% | 0.90% | 1.00% | 0.90% |
Expected option life (in years) | 9 months | 9 months | 6 months | 6 months |
Expected dividend yield | 1.24% | 1.19% | 0.81% | 0.79% |
Weighted average fair value at grant date | $ 7.95 | $ 4.01 | $ 6.86 | $ 3.74 |
Stock Option [Member] | ||||
Expected volatility | 46.10% | 33.40% | 41.80% | 33.30% |
Risk-free interest rate | 1.90% | 1.30% | 2.10% | 1.40% |
Expected option life (in years) | 5 years 10 months 24 days | 5 years 10 months 24 days | 5 years 10 months 24 days | 5 years 10 months 24 days |
Expected dividend yield | 1.98% | 1.81% | 1.87% | 1.80% |
Weighted average fair value at grant date | $ 2.44 | $ 3.33 | $ 4.20 | $ 3.87 |
STOCK-BASED COMPENSATION (Det30
STOCK-BASED COMPENSATION (Details 2) - Stock Option [Member] $ / shares in Units, $ in Thousands | 9 Months Ended |
Oct. 28, 2017USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding, beginning | shares | 1,607,656 |
Granted | shares | 234,312 |
Cancelled | shares | (275,616) |
Exercised | shares | |
Outstanding, ending | shares | 1,566,352 |
Exercisable, ending | shares | 385,799 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding, beginning | $ / shares | $ 13.55 |
Granted | $ / shares | 11.93 |
Cancelled | $ / shares | 13.29 |
Exercised | $ / shares | |
Outstanding, ending | $ / shares | 13.35 |
Exercisable, ending | $ / shares | $ 15.10 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Weighted Average Remaining Contractual Life [Roll Forward] | |
Outstanding, beginning | 6 years |
Outstanding, ending | 5 years 4 months 24 days |
Exercisable, ending | 4 years 6 months |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Aggregate Intrinsic Value [Roll Forward] | |
Outstanding, beginning | $ | $ 2,070 |
Outstanding, ending | $ | |
Exercisable, ending | $ |
STOCK-BASED COMPENSATION (Det31
STOCK-BASED COMPENSATION (Details 3) - Restricted Stock [Member] | 9 Months Ended |
Oct. 28, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | |
Non-vested Restricted Stock at Beginning | shares | 598,784 |
Granted | shares | 315,716 |
Forfeited / Cancelled | shares | (39,363) |
Vested | shares | (333,665) |
Non-vested Restricted Stock at Ending | shares | 541,472 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Non-vested Restricted Stock at Beginning | $ / shares | $ 15.08 |
Granted | $ / shares | 9.65 |
Forfeited / Cancelled | $ / shares | 16 |
Vested | $ / shares | 14.09 |
Non-vested Restricted Stock at Ending | $ / shares | $ 12.34 |
STOCK-BASED COMPENSATION (Det32
STOCK-BASED COMPENSATION (Details Narrative) $ in Thousands | 9 Months Ended |
Oct. 28, 2017USD ($)shares | |
Stock Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares granted | shares | 234,312 |
Unrecognized compensation expense | $ 2,600 |
Recognized weighted average period | 3 years 7 months 6 days |
Fair value of awards vested | $ 1,100 |
Stock Option [Member] | Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expiration term | 7 years |
Stock Option [Member] | Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expiration term | 10 years |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation expense | $ 3,800 |
Recognized weighted average period | 3 years 7 months 6 days |
Intrinsic value | $ 2,600 |
Weighted average remaining contractual life | 7 years 1 month 6 days |
Fair value of awards vested | $ 4,300 |
2004 Employee Stock Purchase Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized | shares | 1,410,928 |
Number of shares available for grant | shares | 626,697 |
Description of plan | Purchase shares of our common stock through payroll deductions at the lower of 85% of the fair market value of the stock at the time of grant, or 85% of the fair market value at the time of exercise. |
Number of shares granted | shares | 59,210 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 |
Revolving Line of Credit [Member] | ||
Short-term Debt [Line Items] | ||
Carrying Value | $ 154,493 | $ 114,331 |
Fair Value | 154,493 | 114,331 |
Mortgage Loans On Land & Buildings [Member] | ||
Short-term Debt [Line Items] | ||
Carrying Value | 1,594 | 1,639 |
Fair Value | 1,811 | 1,881 |
Notes Payable [Member] | ||
Short-term Debt [Line Items] | ||
Carrying Value | 13,000 | 13,000 |
Fair Value | $ 12,611 | $ 12,740 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Oct. 28, 2017 | Jan. 28, 2017 |
Property and equipment, at cost: | ||
Total Property and equipment, at depreciated cost | $ 121,324 | $ 130,922 |
Buildings and building improvements [Member] | ||
Property and equipment, at cost: | ||
Property and equipment, gross | 118,649 | 117,501 |
Leasehold improvements [Member] | ||
Property and equipment, at cost: | ||
Property and equipment, gross | 86,599 | 86,019 |
Automobiles and vehicles [Member] | ||
Property and equipment, at cost: | ||
Property and equipment, gross | 4,940 | 5,029 |
Airplane [Member] | ||
Property and equipment, at cost: | ||
Property and equipment, gross | 4,697 | 4,697 |
Furniture, fixtures and equipment [Member] | ||
Property and equipment, at cost: | ||
Property and equipment, gross | 285,317 | 288,868 |
Construction in progress [Member] | ||
Property and equipment, at cost: | ||
Total Property and equipment, at depreciated cost | 2,134 | 1,806 |
Land [Member] | ||
Property and equipment, at cost: | ||
Total Property and equipment, at depreciated cost | 8,581 | 8,581 |
Property, Plant and Equipment [Member] | ||
Property and equipment, at cost: | ||
Property and equipment, gross | 500,202 | 502,114 |
Less: Accumulated depreciation and amortization | (389,593) | (381,579) |
Total Property and equipment, at depreciated cost | $ 110,609 | $ 120,535 |
EXIT AND DISPOSAL ACTIVITIES (D
EXIT AND DISPOSAL ACTIVITIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2017 | Jul. 29, 2017 | Apr. 29, 2017 | Oct. 28, 2017 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning Balance | $ 12,600 | $ 12,600 | ||
Additions | 13,000 | |||
Utilization | (10,000) | |||
Ending Balance | $ 15,600 | 15,600 | ||
Impairment charge for the sale of the Company-owned airplane [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning Balance | ||||
Additions | 2,600 | |||
Utilization | ||||
Ending Balance | 2,600 | 2,600 | ||
Impairment charge for the disposal of fixed assets for 2017 planned closures [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning Balance | ||||
Additions | 800 | |||
Utilization | ||||
Ending Balance | 800 | 800 | ||
Impairment charge for the disposal of intangible assets for 2017 planned closures [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning Balance | ||||
Additions | 1,400 | |||
Utilization | ||||
Ending Balance | 1,400 | 1,400 | ||
Impairment charge for the disposal of fixed assets for 2016 planned closures [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning Balance | 2,000 | 2,000 | ||
Additions | ||||
Utilization | (2,000) | |||
Ending Balance | ||||
Impairment charge for the disposal of intangible assets for 2016 planned closures [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning Balance | 2,200 | 2,200 | ||
Additions | ||||
Utilization | (2,200) | |||
Ending Balance | ||||
Impairment charge for the disposal of fixed assets for corporate office [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning Balance | 3,600 | 3,600 | ||
Additions | ||||
Utilization | ||||
Ending Balance | 3,600 | 3,600 | ||
Impairment charge for the disposal of fixed assets for 2014 planned closures [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning Balance | 500 | 500 | ||
Additions | ||||
Utilization | ||||
Ending Balance | 500 | 500 | ||
Inventory markdowns for 2016 planned closures [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning Balance | 3,000 | 3,000 | ||
Additions | ||||
Utilization | (3,000) | |||
Ending Balance | ||||
Inventory provision for freight capitalization expense, 2016 planned closures [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning Balance | 1,100 | 1,100 | ||
Additions | ||||
Utilization | (1,100) | |||
Ending Balance | ||||
Subtotal [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning Balance | 12,400 | 12,400 | ||
Additions | 4,800 | |||
Utilization | (8,300) | |||
Ending Balance | 8,900 | 8,900 | ||
Lease contract termination liability, 2014 - 2016 closures [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning Balance | 200 | 200 | ||
Additions | ||||
Utilization | (100) | |||
Ending Balance | 100 | 100 | ||
Lease contract termination liability, 2017 closures [Member] | ||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||
Beginning Balance | ||||
Additions | 8,200 | 8,200 | ||
Utilization | (500) | $ (1,100) | (1,600) | |
Ending Balance | $ 6,600 | $ 6,600 |
EXIT AND DISPOSAL ACTIVITIES 36
EXIT AND DISPOSAL ACTIVITIES (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Oct. 28, 2017USD ($) | Jul. 29, 2017USD ($) | Apr. 29, 2017USD ($)Number | Jan. 28, 2017USD ($) | Oct. 29, 2016USD ($) | Oct. 28, 2017USD ($) | Oct. 29, 2016USD ($) | Jan. 28, 2017USD ($)Number | Jan. 30, 2016USD ($)Number | |
Number of underperforming stores | Number | 39 | ||||||||
Number of underperforming pharmacies | Number | 18 | ||||||||
Asset impairment charges | $ 21,878 | $ 24,114 | |||||||
Freight capitalization expense | $ 1,200 | $ 1,600 | |||||||
Additions lease contract termination liability | 13,000 | ||||||||
Utilization Lease contract termination liability | (10,000) | ||||||||
Lease contract termination liability | $ 15,600 | $ 12,600 | 15,600 | 12,600 | |||||
Impairment charge for the sale of the Company-owned airplane [Member] | |||||||||
Asset impairment charges | 2,600 | ||||||||
Additions lease contract termination liability | 2,600 | ||||||||
Utilization Lease contract termination liability | |||||||||
Lease contract termination liability | 2,600 | 2,600 | |||||||
Lease contract termination liability, between 2014 and 2016 closures [Member] | |||||||||
Additions lease contract termination liability | $ 500 | ||||||||
Utilization Lease contract termination liability | (100) | $ (100) | $ (100) | (300) | |||||
Lease contract termination liability | 100 | 100 | 200 | ||||||
Lease contract termination liability, 2017 closures [Member] | |||||||||
Number of underperforming stores | Number | 39 | ||||||||
Additions lease contract termination liability | $ 8,200 | 8,200 | |||||||
Utilization Lease contract termination liability | (500) | (1,100) | (1,600) | ||||||
Lease contract termination liability | $ 6,600 | 6,600 | |||||||
Selling, General and Administrative Expenses [Member] | |||||||||
Asset impairment charges | 800 | 2,000 | |||||||
2015 Store Closures [Member] | |||||||||
Asset impairment charges | 500 | 200 | |||||||
2014 Store Closures [Member] | |||||||||
Asset impairment charges | $ 500 | 500 | |||||||
Pharmacy closures [Member] | |||||||||
Amortization of intangible assets | $ 1,400 | 2,300 | |||||||
Utilization of amortization of intangible assets | 100 | ||||||||
Corporate Headquarters [Member] | |||||||||
Asset impairment charges | 3,600 | ||||||||
Store Closures [Member] | |||||||||
Utilization of amortization of intangible assets | $ 4,200 | ||||||||
Below cost inventory adjustment | 1,100 | $ 3,200 | $ 3,200 | $ 1,100 | 4,100 | ||||
Freight capitalization expense | $ 200 | $ 1,300 | $ 1,100 |
ACCUMULATED OTHER COMPREHENSI37
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Oct. 28, 2017 | Oct. 29, 2016 | Jan. 28, 2017 | |
Equity [Abstract] | |||
Accumulated other comprehensive income | $ 466 | $ 475 | $ 765 |
Amortization of post-retirement benefit | (299) | ||
Ending balance | $ 466 | $ 475 | $ 466 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Apr. 10, 2015 | Oct. 28, 2017 | Oct. 29, 2016 |
Reeves-Sain Drug Store, Inc [Member] | |||
Adjusted purchase consideration in notes payable | $ 13,000 | ||
Description of notes payable | Three equal installments to be paid on January 31st of 2021, 2022 and 2023. | ||
Atlantic Retail Investors ( Partially owned by Michael J. Hayes) [Member] | |||
Total rental payments | $ 392,900 | $ 396,800 |
LEGAL CONTINGENCIES (Details Na
LEGAL CONTINGENCIES (Details Narrative) $ in Thousands | 9 Months Ended |
Oct. 28, 2017USD ($) | |
Defined Contribution Plan Disclosure [Line Items] | |
General liability policy limit | $ 10,000 |
General liability deductible amount | 350 |
First Tennessee Bank National Association [Member] | |
Defined Contribution Plan Disclosure [Line Items] | |
General liability deductible amount | $ 350 |
INDEBTEDNESS (Details Narrative
INDEBTEDNESS (Details Narrative) $ in Thousands | Jun. 30, 2017USD ($) | Apr. 09, 2015USD ($) | Oct. 28, 2017USD ($) | Jul. 31, 2017USD ($) | Jun. 09, 2017USD ($) | Jan. 30, 2017USD ($) | Jan. 28, 2017USD ($) | Dec. 19, 2016USD ($)Number | Oct. 31, 2007 |
Weighted average interest rate | 7.40% | ||||||||
Purchase of mortgage debt | $ 1,600 | ||||||||
Description of collateral | Land and buildings. | ||||||||
Noncurrent assets issuance cost | $ 999 | $ 6,104 | |||||||
Minimum [Member] | |||||||||
Fixed interest rates | 6.31% | ||||||||
Maximum [Member] | |||||||||
Fixed interest rates | 7.40% | ||||||||
Rite Aid Corporation [Member] | Asset Purchase Agreement [Member] | |||||||||
Number of stores | Number | 865 | ||||||||
Face amount | $ 950,000 | ||||||||
Walgreens Boots Alliance, Inc. [Member] | Asset Purchase Agreement [Member] | |||||||||
Agreement termination fees | $ 25,000 | ||||||||
Commitment Letters [Member] | Lenders [Member] | Rite Aid Corporation [Member] | |||||||||
Debt issuance costs | $ 30,000 | ||||||||
Number of stores | Number | 865 | ||||||||
Face amount | $ 2,200,000 | $ 165,000,000 | |||||||
Revolving Line of Credit [Member] | |||||||||
Maximum line of credit | $ 150,000 | $ 270,000 | $ 225,000 | ||||||
Maturity date of agreement | Apr. 9, 2020 | ||||||||
Commitment fees for unsued portion | 3.75% | ||||||||
Current borrowing line of credit | $ 154,500 | ||||||||
Aggregate line of credit | $ 100,700 | ||||||||
Revolving Line of Credit [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||
Description of variable rate basis | The Company may choose to borrow at a spread to either LIBOR or a Base Rate. For LIBOR loans the spread ranges from 1.75% to 2.25% and for Base Rate loans the spread ranges from 0.75% to 1.25%. |
SUBSEQUENT EVENT (Details Narra
SUBSEQUENT EVENT (Details Narrative) - Subsequent Event [Member] - 2012 Share Repurchase Program [Member] - Common Class A [Member] | Dec. 06, 2017shares |
Subsequent Event [Line Items] | |
Description of repurchase program term | This repurchase program is valid for up to two years and may be modified, extended or terminated by the Board at any time. |
Maximum [Member] | |
Subsequent Event [Line Items] | |
Number of shares repurchased | 3,800 |