UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Amendment No. 1)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 30, 2004
Commission file number 1-10738
ANNTAYLOR STORES CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 13-3499319 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
| 7 Times Square, 15th Floor, New York, NY | 10036 | |
| (Address of principal executive offices) | (Zip Code) | |
(212) 541-3300
(Registrant’s telephone number, including area code)
142 West 57th Street, New York, NY 10019
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange 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 ¨.
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨.
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 November 26, 2004 | |
| Common Stock, $.0068 par value | 70,565,961 |
EXPLANATORY NOTE
This amendment No. 1 on Form 10-Q/A to the AnnTaylor Stores Corporation (“the Company”) quarterly report on Form 10-Q for the fiscal quarter ended October 30, 2004 (“Original Filing”), initially filed with the Securities and Exchange Commission on December 6, 2004, is being filed to reflect corrections and changes in the Company’s Condensed Consolidated Balance Sheet at October 30, 2004 and the Company’s Condensed Consolidated Statements of Income for the quarters and nine months ended October 30, 2004 and November 1, 2003 and the Company’s Condensed Consolidated Statements of Cash Flows for the nine months ended October 30, 2004 and November 1, 2003 and the notes related thereto. The corrections made are to properly account for construction allowances and free rent periods, while also reclassifying auction rate securities to short-term investments. For a more detailed description of these matters, see Note 2, “Restatement of Financial Statements” to the accompanying condensed consolidated financial statements and the section entitled “Restatement of Financial Statements” in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Form 10-Q/A.
This Form 10-Q/A includes the Original Filing in its entirety for the convenience of the reader. However, this Form 10-Q/A only amends and restates Items 1, 2 and 4 of Part I of the Original Filing and no other material information in the Original Filing is amended herein. The foregoing items have not been updated to reflect other events occurring after the Original Filing or to modify or update those disclosures affected by subsequent events. In addition, Item 6 of Part II of the Original Filing has been amended to contain currently-dated certifications from the Company’s Chief Executive Officer and Chief Financial Officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. These certifications are attached to this Form 10-Q/A as Exhibits 31.1, 31.2 and 32.1, respectively.
Except for the foregoing amended information, this Form 10-Q/A continues to describe conditions as of the date of the Original Filing, and does not update disclosures contained herein to reflect events that occurred at a later date. Amendments to the Quarterly Reports on Form 10-Q for the quarterly periods ended May 1, 2004 and July 31, 2004 are being filed concurrently with this filing of the Form 10-Q/A.
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Note: In April 2004, the Company’s Board of Directors approved a 3-for-2 split of the Company’s common stock in the form of a stock dividend. Prior period share and per share amounts herein are presented on a post-split basis.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Quarters and Nine Months Ended
October 30, 2004 (Restated) and November 1, 2003 (Restated)
(unaudited)
| Quarters Ended | Nine Months Ended | |||||||||||
| Oct. 30, 2004 | Nov. 1, 2003 | Oct. 30, 2004 | Nov. 1, 2003 | |||||||||
| (as restated, see Note 2) | (as restated, see Note 2) | (as restated, see Note 2) | (as restated, see Note 2) | |||||||||
| (in thousands, except per share amounts) | ||||||||||||
Net sales | $ | 460,365 | $ | 396,807 | $ | 1,366,245 | $ | 1,139,031 | ||||
Cost of sales | 225,359 | 168,031 | 628,041 | 518,679 | ||||||||
Gross margin | 235,006 | 228,776 | 738,204 | 620,352 | ||||||||
Selling, general and administrative expenses | 212,034 | 177,821 | 611,723 | 503,370 | ||||||||
Operating income | 22,972 | 50,955 | 126,481 | 116,982 | ||||||||
Interest income | 1,290 | 803 | 3,586 | 2,268 | ||||||||
Interest expense | 464 | 1,716 | 3,213 | 5,084 | ||||||||
Income before income taxes | 23,798 | 50,042 | 126,854 | 114,166 | ||||||||
Income tax provision | 9,886 | 20,014 | 51,109 | 45,194 | ||||||||
Net income | $ | 13,912 | $ | 30,028 | $ | 75,745 | $ | 68,972 | ||||
Basic earnings per share of common stock | $ | 0.20 | $ | 0.45 | $ | 1.09 | $ | 1.04 | ||||
Diluted earnings per share of common stock | $ | 0.19 | $ | 0.42 | $ | 1.04 | $ | 0.98 | ||||
See accompanying notes to condensed consolidated financial statements.
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CONDENSED CONSOLIDATED BALANCE SHEETS
October 30, 2004 (Restated) and January 31, 2004
(unaudited)
| October 30, 2004 | January 31, 2004 | |||||||
(as restated, see Note 2) | ||||||||
| (in thousands) | ||||||||
| ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 58,530 | $ | 26,559 | ||||
Short-term investments | 130,100 | 310,375 | ||||||
Accounts receivable | 20,299 | 12,629 | ||||||
Merchandise inventories | 287,990 | 172,058 | ||||||
Prepaid expenses and other current assets | 85,161 | 60,228 | ||||||
Total current assets | 582,080 | 581,849 | ||||||
Property and equipment, net | 406,798 | 361,805 | ||||||
Goodwill | 286,579 | 286,579 | ||||||
Deferred financing costs, net | 1,473 | 4,887 | ||||||
Other assets | 12,138 | 21,277 | ||||||
Total assets | $ | 1,289,068 | $ | 1,256,397 | ||||
| LIABILITIESAND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 63,727 | $ | 52,170 | ||||
Accrued expenses | 138,595 | 129,381 | ||||||
Total current liabilities | 202,322 | 181,551 | ||||||
Long-term debt, net | — | 125,152 | ||||||
Deferred lease costs and other liabilities | 154,336 | 130,838 | ||||||
Stockholders’ equity: | ||||||||
Common stock, $.0068 par value; 120,000,000 shares authorized; 80,050,075 and 74,198,430 shares issued, respectively | 544 | 505 | ||||||
Additional paid-in capital | 662,866 | 516,655 | ||||||
Retained earnings | 457,254 | 382,146 | ||||||
Deferred compensation on restricted stock | (11,091 | ) | (6,148 | ) | ||||
| 1,109,573 | 893,158 | |||||||
Treasury stock, 9,564,685 and 6,131,430 shares, respectively, at cost | (177,163 | ) | (74,302 | ) | ||||
Total stockholders’ equity | 932,410 | 818,856 | ||||||
Total liabilities and stockholders’ equity | $ | 1,289,068 | $ | 1,256,397 | ||||
See accompanying notes to condensed consolidated financial statements.
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended October 30, 2004 (Restated) and November 1, 2003 (Restated)
(unaudited)
| Nine Months Ended | ||||||||
| October 30, 2004 | November 1, 2003 | |||||||
(as restated, see Note 2) | (as restated, see Note 2) | |||||||
| (in thousands) | ||||||||
Operating activities: | ||||||||
Net income | $ | 75,745 | $ | 68,972 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Amortization of deferred compensation | 6,287 | 2,419 | ||||||
Deferred income taxes | 333 | 776 | ||||||
Depreciation and amortization | 56,527 | 49,882 | ||||||
Loss on disposal and write-down of property and equipment | 845 | 724 | ||||||
Non-cash interest | 1,767 | 3,277 | ||||||
Tax benefit from exercise of stock options | 6,330 | 3,100 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (7,670 | ) | (7,221 | ) | ||||
Merchandise inventories | (115,932 | ) | (41,750 | ) | ||||
Prepaid expenses and other current assets | (17,243 | ) | (9,810 | ) | ||||
Accounts payable and accrued expenses | 20,772 | 45,373 | ||||||
Other non-current assets and liabilities, net | 24,613 | 9,577 | ||||||
Net cash provided by operating activities | 52,374 | 125,319 | ||||||
Investing activities: | ||||||||
Purchases of available-for-sale securities | (278,800 | ) | (257,350 | ) | ||||
Sales of available-for-sale securities | 459,075 | 195,950 | ||||||
Purchases of property and equipment | (102,366 | ) | (71,134 | ) | ||||
Net cash provided (used) by investing activities | 77,909 | (132,534 | ) | |||||
Financing activities: | ||||||||
Issuance of common stock pursuant to associate discount stock purchase plan | 2,239 | 1,156 | ||||||
Proceeds from exercise of stock options | 20,304 | 16,106 | ||||||
Payment of financing costs | (22 | ) | — | |||||
Repurchases of common and restricted stock | (120,833 | ) | (13,867 | ) | ||||
Net cash (used) provided by financing activities | (98,312 | ) | 3,395 | |||||
Net increase (decrease) in cash | 31,971 | (3,820 | ) | |||||
Cash and cash equivalents, beginning of period | 26,559 | 47,623 | ||||||
Cash and cash equivalents, end of period | $ | 58,530 | $ | 43,803 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 1,417 | $ | 1,442 | ||||
Income taxes | $ | 55,944 | $ | 22,940 | ||||
Conversion of long-term debt: | ||||||||
Conversion of Convertible Debentures into common stock, net of unamortized deferred financing costs | $ | 123,484 | $ | — | ||||
See accompanying notes to condensed consolidated financial statements.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of Presentation
The condensed consolidated financial statements are unaudited but, in the opinion of management, contain all adjustments (which are of a normal recurring nature) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. All significant intercompany accounts and transactions have been eliminated.
The results of operations for the Fiscal 2004 interim periods presented in this report are not necessarily indicative of results to be expected for the Fiscal year.
The January 31, 2004 Condensed Consolidated Balance Sheet amounts have been derived from the previously restated audited Consolidated Balance Sheet of AnnTaylor Stores Corporation (the “Company”).
Detailed footnote information is not included in this Report. The financial information set forth herein should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2005. Certain Fiscal 2003 amounts have been reclassified to conform to the Fiscal 2004 presentation.
2. Restatement of Financial Statements
Subsequent to the issuance of the Company’s interim condensed consolidated financial statements for the period ended October 30, 2004, and following a review of its lease-related accounting practices, the Company’s management determined that the manner in which it accounted for construction allowances and the period over which it recognized rent expense was not in accordance with Financial Accounting Standards Board (“FASB”) Technical Bulletin No. 88-1, “Issues Relating to Accounting for Leases” (“FTB No. 88-1”).
With respect to construction allowances, FTB No. 88-1 states that lease incentives should be treated by the lessee as a reduction of rental expense and amortized on a straight-line basis over the term of the lease in accordance with FTB No. 85-3 “Accounting for Operating Leases with Scheduled Rent Increases”. Accordingly, the Company established liabilities (current and long-term) for the unamortized portion of construction allowances (deferred lease incentives) which are amortized over the lease term on a straight-line basis as a reduction of rent expense. The Company had previously capitalized these allowances as a reduction of property and equipment and amortized them over the lease term as a reduction of depreciation expense. This affects the presentation of construction allowances in the Company’s Condensed Consolidated Statements of Cash Flows, as construction allowances are presented within operating activities, rather than as previously reported as a reduction of capital expenditures in investing activities. Since both depreciation and rent expense are included in selling, general and administrative expenses, there is no net impact to the Company’s Condensed Consolidated Statements of Income.
In determining the proper period over which to recognize rent expense with free rent periods and/or rent escalation, FTB No.
88-1 considers the lessee’s possession or right to control the physical use of the property, and requires that straight-line rent expense begin when the lessee takes possession of or controls the use of the space. The Company had previously recorded straight-line rent expense beginning on the store opening date, as the Company believed that “possession” under FTB No. 88-1 occurred on the date it took physical control of the space through occupancy, without considering the construction build-out period. The Company now considers possession to occur on the date it enters the space and begins construction build-out. The correcting adjustments are recorded as rent expense in the Company’s Condensed Consolidated Statements of Income and deferred rent expense in its Condensed Consolidated Balance Sheets.
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ANNTAYLOR STORES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(unaudited)
2. Restatement of Financial Statements (continued)
In addition, investments in auction rate securities have been reclassified from cash and cash equivalents to short-term investments on the Company’s Condensed Consolidated Balance Sheets. The reclassification was effected as the securities had stated maturities beyond three months but are priced and traded as short-term instruments due to the liquidity provided through the interest rate reset mechanism of 28 or 35 days. The amount of the investments in auction rate securities as of October 30, 2004 and January 31, 2004 was $130.1 million and $310.4 million, respectively. This reclassification also resulted in changes in the Company’s Condensed Consolidated Statements of Cash Flows. The purchase and sale of short-term investments previously presented as cash and cash equivalents have been reclassified to investing activities in the Company’s Condensed Consolidated Statements of Cash Flows.
The following tables present a summary of the effects of these restatements and reclassification on the Company’s Condensed Consolidated Statements of Income for the quarters and nine months ended October 30, 2004 and November 1, 2003, Condensed Consolidated Balance Sheet as of October 30, 2004, and Condensed Consolidated Statements of Cash Flows for the nine months ended October 30, 2004 and November 1, 2003.
| Condensed Consolidated Statements of Income | ||||||||||
| As previously reported | Adjustments | As restated | ||||||||
| (in thousands, except per share amounts) | ||||||||||
| Quarter Ended October 30, 2004 | ||||||||||
Selling, general and administrative expenses | $ | 211,470 | $ | 564 | $ | 212,034 | ||||
Operating income | 23,536 | (564 | ) | 22,972 | ||||||
Income before income taxes | 24,362 | (564 | ) | 23,798 | ||||||
Income tax provision | 10,117 | (231 | ) | 9,886 | ||||||
Net income | 14,245 | (333 | ) | 13,912 | ||||||
Basic earnings per share | $ | 0.20 | $ | — | $ | 0.20 | ||||
Diluted earnings per share | $ | 0.20 | $ | (0.01 | ) | $ | 0.19 | |||
| Quarter Ended November 1, 2003 | ||||||||||
Selling, general and administrative expenses | $ | 177,356 | $ | 465 | $ | 177,821 | ||||
Operating income | 51,420 | (465 | ) | 50,955 | ||||||
Income before income taxes | 50,507 | (465 | ) | 50,042 | ||||||
Income tax provision | 20,202 | (188 | ) | 20,014 | ||||||
Net income | 30,305 | (277 | ) | 30,028 | ||||||
Basic earnings per share | $ | 0.45 | $ | — | $ | 0.45 | ||||
Diluted earnings per share | $ | 0.42 | $ | — | $ | 0.42 | ||||
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ANNTAYLOR STORES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(unaudited)
2. Restatement of Financial Statements (continued)
| Condensed Consolidated Statements of Income | ||||||||||
| As previously reported | Adjustments | As restated | ||||||||
| (in thousands, except per share amounts) | ||||||||||
| Nine Months Ended October 30, 2004 | ||||||||||
Selling, general and administrative expenses | $ | 610,917 | $ | 806 | $ | 611,723 | ||||
Operating income | 127,287 | (806 | ) | 126,481 | ||||||
Income before income taxes | 127,660 | (806 | ) | 126,854 | ||||||
Income tax provision | 51,436 | (327 | ) | 51,109 | ||||||
Net income | 76,224 | (479 | ) | 75,745 | ||||||
Basic earnings per share | $ | 1.10 | $ | (0.01 | ) | $ | 1.09 | |||
Diluted earnings per share | $ | 1.05 | $ | (0.01 | ) | $ | 1.04 | |||
| Nine Months Ended November 1, 2003 | ||||||||||
Selling, general and administrative expenses | $ | 502,634 | $ | 736 | $ | 503,370 | ||||
Operating income | 117,718 | (736 | ) | 116,982 | ||||||
Income before income taxes | 114,902 | (736 | ) | 114,166 | ||||||
Income tax provision | 45,492 | (298 | ) | 45,194 | ||||||
Net income | 69,410 | (438 | ) | 68,972 | ||||||
Basic earnings per share | $ | 1.05 | $ | (0.01 | ) | $ | 1.04 | |||
Diluted earnings per share | $ | 0.99 | $ | (0.01 | ) | $ | 0.98 | |||
| Condensed Consolidated Balance Sheet | ||||||||||
| As previously reported | Adjustments | As restated | ||||||||
| (in thousands) | ||||||||||
| As of October 30, 2004 | ||||||||||
Cash and cash equivalents | $ | 188,732 | $ | (130,202 | ) | $ | 58,530 | |||
Short-term investments | — | 130,100 | 130,100 | |||||||
Accounts receivable | 20,197 | 102 | 20,299 | |||||||
Prepaid and other current assets | 75,401 | 9,760 | 85,161 | |||||||
Property and equipment, net | 286,636 | 120,162 | 406,798 | |||||||
Total assets | 1,159,146 | 129,922 | 1,289,068 | |||||||
Accrued expenses | 115,115 | 23,480 | 138,595 | |||||||
Deferred lease costs and other liabilities | 35,634 | 118,702 | 154,336 | |||||||
Total liabilities | 214,476 | 142,182 | 356,658 | |||||||
Retained earnings | 469,514 | (12,260 | ) | 457,254 | ||||||
Total liabilities and stockholders’ equity | 1,159,146 | 129,922 | 1,289,068 | |||||||
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ANNTAYLOR STORES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(unaudited)
2. Restatement of Financial Statements (continued)
| Condensed Consolidated Statements of Cash Flow | ||||||||||||
| As previously reported | Adjustments | As restated | ||||||||||
| (in thousands) | ||||||||||||
| Nine Months Ended October 30, 2004 | ||||||||||||
Net cash provided by operating activities | $ | 15,525 | $ | 36,849 | $ | 52,374 | ||||||
Net cash (used) provided by investing activities | (65,590 | ) | 143,499 | 77,909 | ||||||||
| Nine Months Ended November 1, 2003 | ||||||||||||
Net cash provided by operating activities | $ | 108,438 | $ | 16,881 | $ | 125,319 | ||||||
Net cash used by investing activities | (54,241 | ) | (78,293 | ) | (132,534 | ) | ||||||
3. Earnings Per Share
Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share assumes the issuance of additional shares of common stock by the Company upon exercise of all outstanding stock options, conversion of all outstanding convertible securities and vesting of unvested restricted stock, if the effect is dilutive. As discussed further in Note 5, the June 2004 conversion of the Company’s Convertible Debentures had no effect on diluted earnings per share.
In April 2004, the Company’s Board of Directors approved a 3-for-2 split of the Company’s common stock, in the form of a stock dividend. One additional share of common stock for every two shares owned was distributed on May 26, 2004 to stockholders of record at the close of business on May 11, 2004. Shares and per share data in the table below, and throughout this document, are presented on a post-split basis.
| Quarters Ended | ||||||||||||||||
| October 30, 2004 | November 1, 2003 | |||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||
| Net Income | Shares | Per Share | Net Income | Shares | Per Share | |||||||||||
| Basic Earnings per Share | ||||||||||||||||
Income available to common stockholders | $ | 13,912 | 70,354 | $ | 0.20 | $ | 30,028 | 67,046 | $ | 0.45 | ||||||
| Effect of Dilutive Securities | ||||||||||||||||
Stock options and restricted stock | — | 1,202 | — | 1,560 | ||||||||||||
Convertible Debentures | — | — | 722 | 5,409 | ||||||||||||
| Diluted Earnings per Share | ||||||||||||||||
Income available to common stockholders | $ | 13,912 | 71,556 | $ | 0.19 | $ | 30,750 | 74,015 | $ | 0.42 | ||||||
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ANNTAYLOR STORES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(unaudited)
3. Earnings Per Share (continued)
| Nine Months Ended | ||||||||||||||||
| October 30, 2004 | November 1, 2003 | |||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||
| Net Income | Shares | Per Share | Net Income | Shares | Per Share | |||||||||||
Basic Earnings per Share | ||||||||||||||||
Income available to common stockholders | $ | 75,745 | 69,564 | $ | 1.09 | $ | 68,972 | 66,383 | $ | 1.04 | ||||||
Effect of Dilutive Securities | ||||||||||||||||
Stock options and restricted stock | — | 1,440 | — | 882 | ||||||||||||
Convertible Debentures | 1,113 | 2,734 | 2,168 | 5,409 | ||||||||||||
Diluted Earnings per Share | ||||||||||||||||
Income available to common stockholders | $ | 76,858 | 73,738 | $ | 1.04 | $ | 71,140 | 72,674 | $ | 0.98 | ||||||
Options to purchase 1,775,925 and 1,487,800 shares of common stock during the quarter and nine months ended October 30, 2004, respectively, and 22,500 and 1,362,092 shares of common stock during the quarter and nine months ended November 1, 2003, respectively, were excluded from the above computations of weighted average shares for diluted earnings per share, due to the antidilutive effect of the options’ exercise prices as compared to the average market price of the common shares during those periods.
4. Share-based Payments
The Company accounts for stock-based awards and employees’ purchase rights under the Associate Discount Stock Purchase Plan (the “Stock Purchase Plan”) using the intrinsic value-based method of accounting in accordance with Accounting Principles Board Opinion No. 25, under which no compensation cost is recognized for stock option awards granted at fair market value and employees’ purchase rights under the Stock Purchase Plan. Had compensation costs of option awards and employees’ purchase rights been determined under a fair value alternative method as stated in SFAS No. 148 “Accounting for Stock-Based Compensation – Transition and Disclosure, an amendment of FASB Statement No. 123”, the Company would have been required to prepare a fair value model for such options and employees’ purchase rights, and record such amount in the condensed consolidated financial statements as compensation expense. Pro forma stock based employee compensation costs, net income and earnings per share, as they would have been recognized if the fair value method had been applied to all awards, are presented in the table below:
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ANNTAYLOR STORES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(unaudited)
4. Share-based Payments (continued)
| Quarters Ended | Nine Months Ended | |||||||||||||||
| Oct. 30, 2004 | Nov. 1, 2003 | Oct. 30, 2004 | Nov. 1, 2003 | |||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||
Net income: | ||||||||||||||||
As reported | $ | 13,912 | $ | 30,028 | $ | 75,745 | $ | 68,972 | ||||||||
Add: Stock-based employee compensation expense included in net income, net of related tax effects | 1,368 | 527 | 3,753 | 1,461 | ||||||||||||
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects | (2,111 | ) | (1,094 | ) | (6,680 | ) | (3,873 | ) | ||||||||
Pro forma | $ | 13,169 | $ | 29,461 | $ | 72,818 | $ | 66,560 | ||||||||
Basic earnings per share: | ||||||||||||||||
As reported | $ | 0.20 | $ | 0.45 | $ | 1.09 | $ | 1.04 | ||||||||
Pro forma | $ | 0.19 | $ | 0.44 | $ | 1.05 | $ | 1.00 | ||||||||
Diluted earnings per share: | ||||||||||||||||
As reported | $ | 0.19 | $ | 0.42 | $ | 1.04 | $ | 0.98 | ||||||||
Pro forma | $ | 0.18 | $ | 0.41 | $ | 1.00 | $ | 0.95 | ||||||||
The estimated fair value of each option grant is calculated using the Black-Scholes option-pricing model, with the following weighted average assumptions:
|
| |||||||||||||||
| Quarters Ended | Nine Months Ended | |||||||||||||||
| Oct. 30, 2004 | Nov. 1, 2003 | Oct. 30, 2004 | Nov. 1, 2003 | |||||||||||||
Expected volatility | 30.7 | % | 45.3 | % | 34.1 | % | 52.5 | % | ||||||||
Risk-free interest rate | 1.6 | % | 1.0 | % | 1.0 | % | 1.2 | % | ||||||||
Expected life (years) | 4.0 | 4.0 | 4.0 | 4.0 | ||||||||||||
Dividend yield | — | — | — | — | ||||||||||||
5. Long-Term Debt
During Fiscal 1999, the Company issued an aggregate of $199,072,000 principal amount at maturity Convertible Subordinated Debentures due 2019 (the “Convertible Debentures”). On May 20, 2004, the Company notified the holders that it would redeem these Convertible Debentures on June 18, 2004 at $635.42 per $1,000.00 of the principal amount. The holders had the option to convert their Convertible Debentures into common stock of the Company prior to redemption. On June 18, 2004, all the Convertible Debentures were converted for an aggregate total of 5,409,867 shares of common stock. The conversion of Convertible Debentures had no effect on diluted earnings per share.
In November 2003, Ann Taylor and certain of its subsidiaries entered into a Second Amended and Restated $175,000,000 senior secured revolving credit facility (the “Credit Facility”) with Bank of America N.A.
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ANNTAYLOR STORES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(unaudited)
5. Long-Term Debt (continued)
and a syndicate of lenders. The Credit Facility matures on November 13, 2008 and is used by Ann Taylor and certain of its subsidiaries for letters of credit and other general corporate purposes. There were no borrowings outstanding under the Credit Facility at any point during the first nine months of Fiscal 2004 or as of the date of this filing. The Credit Facility permits the payment of cash dividends by the Company (and dividends by certain of its subsidiaries to fund such cash dividends) if liquidity (as defined in the Credit Facility) is at least $35,000,000. Certain subsidiaries of the Company are also permitted to: pay dividends to the Company to fund certain taxes owed by the Company; fund ordinary operating expenses of the Company not in excess of $500,000 per annum; repurchase common stock held by employees not in excess of $100,000 per annum (with certain specified exceptions); and for certain other stated purposes.
6. Employee Benefits
The following table summarizes the components of net periodic pension cost for the Company:
| Quarters Ended | Nine Months Ended | |||||||||||||||
| Oct. 30, 2004 | Nov. 1, 2003 | Oct. 30, 2004 | Nov. 1, 2003 | |||||||||||||
| (in thousands) | ||||||||||||||||
Service cost | $ | 1,051 | $ | 751 | $ | 3,154 | $ | 2,253 | ||||||||
Interest cost | 298 | 242 | 893 | 726 | ||||||||||||
Expected return on plan assets | (375 | ) | (317 | ) | (1,125 | ) | (951 | ) | ||||||||
Amortization of prior service cost | 2 | 2 | 6 | 6 | ||||||||||||
Amortization of net loss | 164 | 165 | 492 | 495 | ||||||||||||
Net periodic pension cost | $ | 1,140 | $ | 843 | $ | 3,420 | $ | 2,529 | ||||||||
While no contributions to the Company’s pension plan are required in Fiscal 2004, the Company may make a contribution during the year.
7. Securities Repurchase Programs
The Company repurchased 2,590,000 shares of its common stock at a cost of approximately $69,000,000 under the $75,000,000 securities repurchase program announced on March 9, 2004. On August 11, 2004, the Company announced a new $100,000,000 securities repurchase program, which replaced the March 9, 2004 plan. The Company has repurchased 2,100,000 shares of its common stock at a cost of approximately $50,000,000 under the August 11, 2004 plan through the date of this filing.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Restatement of Financial Statements
On February 7, 2005, the Office of the Chief Accountant of the Securities and Exchange Commission (“SEC”) issued a letter to the American Institute of Certified Public Accountants expressing its views regarding certain operating lease accounting issues and their application under accounting principles generally accepted in the United States of America (“GAAP”). The Company’s management subsequently initiated a review of its lease-related accounting practices and determined that the manner in which it accounted for construction allowances and the period over which it recognized rent expense was not in accordance with Financial Accounting Standards Board (“FASB”) Technical Bulletin No. 88-1 “Issues Relating to Accounting for Leases” (“FTB No. 88-1”).
With respect to construction allowances, FTB No. 88-1 states that lease incentives should be treated by the lessee as a reduction of rental expense and amortized on a straight-line basis over the term of the lease in accordance with FTB No. 85-3 “Accounting for Operating Leases with Scheduled Rent Increases”. Accordingly, the Company established liabilities (current and long-term) for the unamortized portion of construction allowances (deferred lease incentives) which are amortized over the lease term on a straight-line basis as a reduction of rent expense. The Company had previously capitalized these allowances as a reduction of property and equipment and amortized them over the lease term as a reduction of depreciation expense. This affects the presentation of construction allowances in the Company’s Condensed Consolidated Statements of Cash Flows, as construction allowances are presented within operating activities, rather than as previously reported as a reduction of capital expenditures in investing activities. Since both depreciation and rent expense are included in selling, general and administrative expenses, there is no impact to the Company’s Condensed Consolidated Statements of Income.
In determining the proper period over which to recognize rent expense with free rent periods and/or rent escalation, FTB No.
88-1 considers the lessee’s possession or right to control the physical use of the property, and requires that straight-line rent expense begin when the lessee takes possession of or controls the use of the space. The Company had previously recorded straight-line rent expense beginning on the store opening date, as the Company believed that “possession” under FTB No. 88-1 occurred on the date it took physical control of the space through occupancy, without considering the construction build-out period. The Company now considers possession to occur on the date it enters the space and begins construction build-out. The correcting adjustments are recorded as rent expense in the Company’s Condensed Consolidated Statements of Income and deferred rent expense in its Condensed Consolidated Balance Sheets.
In addition, investments in auction rate securities have been reclassified from cash and cash equivalents to short-term investments on the Company’s Condensed Consolidated Balance Sheets. The reclassification was effected as the securities had stated maturities beyond three months but are priced and traded as short-term instruments due to the liquidity provided through the interest rate reset mechanism of 28 or 35 days. This reclassification also resulted in changes in the Company’s Condensed Consolidated Statements of Cash Flows. The purchase and sale of short-term investments previously presented as cash and cash equivalents have been reclassified to investing activities in the Company’s Condensed Consolidated Statements of Cash Flows.
The effects of the corrections and changes are discussed in Note 2, “Restatement of Financial Statements” in the Notes to Condensed Consolidated Financial Statements (unaudited). The following discussion has been updated to give effect to the restatement.
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Management Overview
The Company reported lower operating income and net income in the third quarter of Fiscal 2004 compared to the third quarter of Fiscal 2003, primarily due to lower than anticipated sales and lower gross margin from increased promotional activity at Ann Taylor. Due to the strong results at Ann Taylor in the first half of Fiscal 2004 as well as Ann Taylor Loft’s growth and performance through the third quarter, year-to-date net sales, operating income and net income remain higher than the comparable Fiscal 2003 period. Comparable store sales at Ann Taylor were down 4.2% in the third quarter of Fiscal 2004, as a result of higher than anticipated promotional activity. Comparable store sales at Ann Taylor Loft in the third quarter of Fiscal 2004 increased 9.2%. Total store net sales for the third quarter of Fiscal 2004 were up 16.0% over the third quarter of Fiscal 2003 primarily due to Ann Taylor Loft’s store growth and comparable store sales.
The retail environment remains very competitive. The Company plans to continue its store opening schedule using cash flow from operations. Management’s plan for future growth is based on offering clients brand-appropriate merchandise at convenient, accessible locations. The Company’s ability to achieve this objective will be dependent on factors such as those outlined in the “Statement Regarding Forward-Looking Disclosures”.
Results of Operations
The following table sets forth consolidated income statement data expressed as a percentage of net sales:
| Quarters Ended | Nine Months Ended | |||||||||||
| Oct. 30, 2004 | Nov. 1, 2003 | Oct. 30, 2004 | Nov. 1, 2003 | |||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||
Cost of sales | 49.0 | 42.3 | 46.0 | 45.5 | ||||||||
Gross margin | 51.0 | 57.7 | 54.0 | 54.5 | ||||||||
Selling, general and administrative expenses | 46.1 | 44.8 | 44.8 | 44.2 | ||||||||
Operating income | 4.9 | 12.9 | 9.2 | 10.3 | ||||||||
Interest income | 0.3 | 0.2 | 0.2 | 0.2 | ||||||||
Interest expense | 0.1 | 0.5 | 0.2 | 0.5 | ||||||||
Income before income taxes | 5.1 | 12.6 | 9.2 | 10.0 | ||||||||
Income tax provision | 2.1 | 5.0 | 3.7 | 3.9 | ||||||||
Net income | 3.0 | % | 7.6 | % | 5.5 | % | 6.1 | % | ||||
The following table sets forth consolidated income statement data expressed as a percentage increase (decrease) from the comparable prior year period:
| Quarters Ended | Nine Months Ended | |||||||||||
| Oct. 30, 2004 | Nov. 1, 2003 | Oct. 30, 2004 | Nov. 1, 2003 | |||||||||
| Increase(decrease) | ||||||||||||
Net sales | 16.0 | % | 16.6 | % | 19.9 | % | 10.7 | % | ||||
Operating income | (54.9 | )% | 23.2 | % | 8.1 | % | 8.9 | % | ||||
Net income | (53.7 | )% | 21.1 | % | 9.8 | % | 8.1 | % | ||||
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Sales
The following table sets forth certain sales and store data:
| Quarters Ended | Nine Months Ended | |||||||||||||||
| Oct. 30, 2004 | Nov. 1, 2003 | Oct. 30, 2004 | Nov. 1, 2003 | |||||||||||||
Net sales (in thousands) | ||||||||||||||||
Total Company (a) | $ | 460,365 | $ | 396,807 | $ | 1,366,245 | $ | 1,139,031 | ||||||||
Ann Taylor | 199,615 | 207,077 | 634,700 | 624,441 | ||||||||||||
Ann Taylor Loft | 215,447 | 157,023 | 609,375 | 416,954 | ||||||||||||
Comparable stores sales percentage increase(decrease) (b) | ||||||||||||||||
Total Company | 1.4 | % | 6.2 | % | 6.6 | % | 1.7 | % | ||||||||
Ann Taylor | (4.2 | )% | 1.9 | % | 0.2 | % | (0.6 | )% | ||||||||
Ann Taylor Loft | 9.2 | % | 13.4 | % | 16.7 | % | 5.7 | % | ||||||||
Number of Stores | ||||||||||||||||
Open at beginning of period | 687 | 603 | 648 | 584 | ||||||||||||
New stores | 41 | 36 | 81 | 57 | ||||||||||||
Expanded stores | 1 | 1 | 2 | 5 | ||||||||||||
Closed stores | 1 | — | 2 | 2 | ||||||||||||
Open at end of period | 727 | 639 | 727 | 639 | ||||||||||||
Total square footage at end of period (in thousands) (c) | 4,125 | 3,603 | ||||||||||||||
| (a) | Total Company sales includes sales at Ann Taylor, Ann Taylor Loft and Ann Taylor Factory stores, as well as internet sales. |
| (b) | Comparable store sales are calculated by excluding the net sales of a store for any month of one period if the store was not also open during the same month of the prior period. A store that is expanded by more than 15% is treated as a new store for the first year following the opening of the expanded store. |
| (c) | Unless otherwise indicated, references herein to square feet are to gross square feet, rather than net selling space. |
Net sales increased $63,558,000 or 16.0% in the third quarter of Fiscal 2004 over the comparable 2003 period due primarily to the opening of additional stores. Ann Taylor Loft continued to report positive comparable store sales. Sales at Ann Taylor did not meet expectations in the third quarter due to an overemphasis on a versatile separates strategy. The Company’s net sales increased $227,214,000 or 19.9% in the first nine months of Fiscal 2004 over the comparable 2003 period.
Gross Margin
Gross margin as a percentage of net sales decreased to 51.0% in the third quarter of Fiscal 2004 from 57.7% in the third quarter of Fiscal 2003. The decrease in gross margin as a percentage of net sales was primarily due to increased promotional activity at Ann Taylor. For the nine months ended October 30, 2004, gross margin as a percentage of net sales was 54.0% compared to 54.5% in 2003.
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Selling, General and Administrative Expenses
Selling, general and administrative expenses as a percentage of net sales increased in the third quarter of Fiscal 2004 to 46.1% from 44.8% in the comparable 2003 period. This increase was primarily due to higher marketing costs, partially offset by a decrease in the provision for management performance bonus. For the nine-month period ended October 30, 2004, selling, general and administrative expenses as a percentage of sales increased primarily due to higher marketing costs, partially offset by increased leverage on fixed expenses as a result of higher comparable store sales.
Interest Income
Interest income increased substantially in both the third quarter and nine-month periods of Fiscal 2004 from the comparable periods in Fiscal 2003 due to increased cash balances and more favorable rates.
Interest Expense
Interest expense decreased $1,252,000 in the third quarter of Fiscal 2004 from the comparable 2003 period. This decrease was due to the interest savings associated with the conversion of the outstanding Convertible Debentures in the second quarter of Fiscal 2004, as discussed more fully below.
Income Taxes
The Company increased its effective tax rate to 41.5% in the third quarter of Fiscal 2004. This increase was primarily attributable to higher state taxes and the nondeductability of certain executive compensation.
Liquidity and Capital Resources
The Company’s primary source of working capital is cash flow from operations. For the nine months ended October 30, 2004, cash flow provided by operating activities totaled $52,374,000. The following table sets forth other primary measures of the Company’s liquidity:
| October 30, 2004 | January 31, 2004 | |||||
| (dollars in thousands) | ||||||
Working capital | $ | 379,758 | $ | 400,298 | ||
Current ratio | 2.88:1 | 3.20:1 | ||||
For the first nine months of Fiscal 2004, net cash provided by operating activities increased primarily as a result of income before depreciation and amortization, partially offset by an increase in merchandise inventories. Inventory increased 12.0% on a per square foot basis at the end of the third quarter of Fiscal 2004 from the end of the third quarter of Fiscal 2003. This increase resulted from lower than anticipated sales and planned seasonal receipts.
Cash provided by investing activities during the first nine months of Fiscal 2004 amounted to $77,909,000, and primarily related to the opening of new stores, store remodels and investments in information systems, and investments in and maturities of short-term investments.
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Cash used by financing activities during the first nine months of Fiscal 2004 primarily related to the repurchase of common stock partially offset by proceeds received in connection with stock based compensation programs.
The Company repurchased 2,590,000 shares of its common stock at a cost of approximately $69,000,000 under the $75,000,000 securities repurchase program announced on March 9, 2004. On August 11, 2004, the Company announced a new $100,000,000 securities repurchase program, which replaced the March 9, 2004 plan. The Company has repurchased 2,100,000 shares of its common stock at a cost of approximately $50,000,000 under the August 11, 2004 plan through the date of this filing.
In April 2004, the Company’s Board of Directors approved a 3-for-2 split of the Company’s common stock, in the form of a stock dividend. All share and per share data presented herein are presented on a post-split basis.
The Company expects its total capital expenditure requirements in Fiscal 2004 will be approximately $150,000,000. An important aspect of the Company’s business strategy is its store expansion program designed to reach new customers through the opening of new stores. The actual amount of the Company’s capital expenditures will depend in part on the number of stores opened, expanded and refurbished and on the amount of construction allowances the Company receives from the landlords of its new or expanded stores. During the remainder of Fiscal 2004, the Company plans to open an additional four Ann Taylor and 10 Ann Taylor Loft stores, bringing the total stores added in Fiscal 2004 to 10 Ann Taylor, 77 Ann Taylor Loft and eight Ann Taylor Factory stores. The Company expects to use cash flow from operations to fund its capital expenditure requirements.
A portion of the Fiscal 2004 capital expenditures relates to costs associated with the anticipated Fiscal 2005 relocation of the Company’s corporate offices in New York City. As a result of this relocation, the Company is adjusting the remaining lives of certain fixed assets to correlate to the expected move, the impact of which is not significant to the results of operations. In addition, the Company is expecting a one-time write-off of lease costs associated with the remaining term of the lease for the existing offices (which expires in September 2006) upon cessation of their use, the impact of which has not been determined.
During Fiscal 1999, the Company issued an aggregate of $199,072,000 principal amount at maturity Convertible Subordinated Debentures due 2019 (the “Convertible Debentures”). On May 20, 2004 the Company notified the holders that it would redeem these Convertible Debentures on June 18, 2004 at $635.42 per $1,000.00 of the principal amount. The holders had the option to convert their Convertible Debentures into common stock of the Company prior to redemption. On June 18, 2004, all the Convertible Debentures were converted for an aggregate total of 5,409,867 shares of common stock. The conversion of Convertible Debentures has no effect on diluted earnings per share. As the result of the conversion of the Convertible Debentures, the Company’s total contractual obligations decreased by the face value of these securities, $199,072,000.
Critical Accounting Policies
Management has determined that the Company’s most critical accounting policies are those related to merchandise inventory valuation, intangible asset impairment, and income taxes. The Company continually monitors its accounting policies to ensure proper application. There have been no changes to these policies as discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2005.
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Statement Regarding Forward-Looking Disclosures
Sections of this Quarterly Report on Form 10-Q/A, including the preceding Management’s Discussion and Analysis of Financial Condition and Results of Operations, contain various forward-looking statements, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements may use the words “expect”, “anticipate”, “plan”, “intend”, “project”, “may”, “believe” and similar expressions. These forward-looking statements reflect the Company’s current expectations concerning future events, and actual results may differ materially from current expectations or historical results. Any such forward-looking statements are subject to various risks and uncertainties, including the impact and effect of the Company’s lease accounting and pension review and restatement of its financial statements, failure by the Company to predict accurately client fashion preferences; decline in the demand for merchandise offered by the Company; competitive influences; changes in levels of store traffic or consumer spending habits; effectiveness of the Company’s brand awareness and marketing programs; the inability of the Company to secure and protect trademarks and other intellectual property rights in the United States and/or foreign countries; general economic conditions or a downturn in the retail industry; the inability of the Company to locate new store sites or negotiate favorable lease terms for additional stores or for the expansion of existing stores; lack of sufficient consumer interest in the Company’s Online Stores; a significant change in the regulatory environment applicable to the Company’s business; risks associated with the possible inability of the Company, particularly through its sourcing and logistics functions, to operate within production and delivery constraints; the impact of quotas, and the elimination thereof; an increase in the rate of import duties or export quotas with respect to the Company’s merchandise; financial or political instability in any of the countries in which the Company’s goods are manufactured; the potential impact of natural disasters and health concerns relating to severe infectious diseases, particularly on manufacturing operations of the Company’s vendors; acts of war or terrorism in the United States or worldwide; work stoppages, slowdowns or strikes; the inability of the Company to hire, retain and train key personnel, and other factors set forth in the Company’s filings with the SEC. The Company does not assume any obligation to publicly update or revise any forward-looking statements at any time for any reason.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
The market risk of the Company’s cash and cash equivalents as of October 30, 2004 have not significantly changed since January 31, 2004. The Company redeemed its outstanding convertible debentures in the second quarter of Fiscal 2004. Information regarding the Company’s financial instruments and market risk as of January 29, 2005 is disclosed in the Company’s 2004 Annual Report on Form 10-K.
Item 4. Controls and Procedures
The Company conducted an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.
The Company’s evaluation included consideration of the facts and circumstances surrounding the correction in the Company’s lease accounting practices as described in Note 2, “Restatement of Financial Statements” in the Notes to the accompanying condensed consolidated financial statements. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of the end of the period covered by this report in alerting them on a timely basis to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company’s reports filed or submitted under the Exchange Act.
There was no change in the Company’s internal control over financial reporting during the third quarter of fiscal 2004 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table sets forth information concerning purchases made by the Company of its common stock for the periods indicated:
| Total Number of Shares Purchased (a) | Average Price Paid Per Share | Total of Publicly | Approximate of Shares that May Yet Be Purchased Under Publicly Announced Plan | |||||||
August 1, 2004 to August 28, 2004 | 1,540,000 | $ | 23.98 | 1,540,000 | $ | 73,090,340 | ||||
August 29, 2004 to October 2, 2004 | 402,711 | 24.35 | 400,000 | 63,354,780 | ||||||
October 3, 2004 to October 30, 2004 | 600,650 | 22.02 | 600,000 | 50,143,720 | ||||||
| 2,543,361 | $ | 23.58 | 2,540,000 | |||||||
| (a) | Includes 3,361 shares of restricted stock repurchased in connection with employee compensation plans. |
| (b) | 440,000 of these shares were purchased at a cost of approximately $10,000,000 under the Company’s previous $75,000,000 securities repurchase plan which was announced on March 9, 2004. All other shares set forth herein were part of a $100,000,000 securities repurchase plan, announced by the Company on August 11, 2004. This plan replaced the March 9, 2004 plan and will expire when the Company has repurchased all securities authorized for repurchase thereunder, unless terminated earlier by resolution of the Board of Directors. |
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The information required by this Item is incorporated herein by reference to the Form 8-K filed by the Company on October 29, 2004, reporting a grant of stock options to a non-employee director.
| Exhibit Number | Description | |
| 10.1 | Form of Director Non-Qualified Stock Option Agreement under the 2002 Stock Option and Restricted Stock and Unit Award Plan, as amended. Incorporated by reference to Exhibit 10.1 of Form 8-K of the Company filed on October 29, 2004. | |
| 10.2 | Form of Director Non-Statutory Stock Option Agreement under the 2003 Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.2 of Form 8-K of the Company filed on October 29, 2004. | |
| 10.3 | Form of Non-Qualified Stock Option Agreement under the 2002 Stock Option and Restricted Stock and Unit Award Plan, as amended. Incorporated by reference to Exhibit 10.3 of Form 8-K of the Company filed on October 29, 2004. | |
| 10.4 | Form of Non-Statutory Stock Option Agreement under the 2003 Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.4 of Form 8-K of the Company filed on October 29, 2004. | |
| 10.5 | Form of Restricted Stock Award Agreement under the 2002 Stock Option and Restricted Stock and Unit Award Plan, as amended. Incorporated by reference to Exhibit 10.5 of Form 8-K of the Company filed on October 29, 2004. | |
| 10.6 | Form of Restricted Stock Award Agreement under the 2003 Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.6 of Form 8-K of the Company filed on October 29, 2004. | |
| 10.7 | Form of Non-Statutory Stock Option Agreement (three year time-vesting) under the 2003 Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.1 of Form 8-K of the Company filed on November 9, 2004. | |
| 10.8 | Form of Restricted Stock Award Agreement (performance-vesting) under the 2003 Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.2 of Form 8-K of the Company filed on November 9, 2004. | |
| 10.9+ | Amendment No. 1, dated as of September 22, 2004, to Employment Agreement between the Company and Katherine Lawther Krill, dated as of January 29, 2004. | |
| 10.10+ | Summary of Compensation Announcements for Non-Employee Directors. | |
| 31.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2* | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1* | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| + | Exhibit previously filed with the original filing of this Quarterly Report on Form 10-Q on December 6, 2004. |
| * | Filed electronically herewith. |
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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.
| AnnTaylor Stores Corporation | ||||
Date: May 26, 2005 | By: | /s/ J. Patrick Spainhour | ||
| J. Patrick Spainhour | ||||
| Chairman, Chief Executive | ||||
| Officer | ||||
| (Principal Executive Officer) | ||||
Date: May 26, 2005 | By: | /s/ James M. Smith | ||
| James M. Smith | ||||
| Executive Vice President, | ||||
| Chief Financial Officer and | ||||
| Treasurer | ||||
| (Principal Financial Officer) | ||||
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| Exhibit Number | Description | |
| 10.1 | Form of Director Non-Qualified Stock Option Agreement under the 2002 Stock Option and Restricted Stock and Unit Award Plan, as amended. Incorporated by reference to Exhibit 10.1 of Form 8-K of the Company filed on October 29, 2004. | |
| 10.2 | Form of Director Non-Statutory Stock Option Agreement under the 2003 Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.2 of Form 8-K of the Company filed on October 29, 2004. | |
| 10.3 | Form of Non-Qualified Stock Option Agreement under the 2002 Stock Option and Restricted Stock and Unit Award Plan, as amended. Incorporated by reference to Exhibit 10.3 of Form 8-K of the Company filed on October 29, 2004. | |
| 10.4 | Form of Non-Statutory Stock Option Agreement under the 2003 Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.4 of Form 8-K of the Company filed on October 29, 2004. | |
| 10.5 | Form of Restricted Stock Award Agreement under the 2002 Stock Option and Restricted Stock and Unit Award Plan, as amended. Incorporated by reference to Exhibit 10.5 of Form 8-K of the Company filed on October 29, 2004. | |
| 10.6 | Form of Restricted Stock Award Agreement under the 2003 Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.6 of Form 8-K of the Company filed on October 29, 2004. | |
| 10.7 | Form of Non-Statutory Stock Option Agreement (three year time-vesting) under the 2003 Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.1 of Form 8-K of the Company filed on November 9, 2004. | |
| 10.8 | Form of Restricted Stock Award Agreement (performance-vesting) under the 2003 Equity Incentive Plan, as amended. Incorporated by reference to Exhibit 10.2 of Form 8-K of the Company filed on November 9, 2004. | |
| 10.9+ | Amendment No. 1, dated as of September 22, 2004, to Employment Agreement between the Company and Katherine Lawther Krill, dated as of January 29, 2004. | |
| 10.10+ | Summary of Compensation Announcements for Non-Employee Directors. | |
| 31.1* | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2* | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1* | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| + | Exhibit previously filed with the original filing of this Quarterly Report on Form 10-Q on December 6, 2004. |
| * | Filed electronically herewith. |
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