EXHIBIT 99
UNAUDITED HISTORICAL AND PRO FORMA COMBINED FINANCIAL STATEMENTS
The following Unaudited Historical and Pro Forma Combined Financial
Statements give effect to the acquisition (the "CAT/Cygne Transaction") of the
remaining 60% interest of CAT U.S., Inc. ("CAT") and the AnnTaylor Woven
Division of Cygne Design, Inc. ("Division") (collectively, the "Acquired
Businesses") by an indirect wholly owned subsidiary of AnnTaylor Stores
Corporation (the "Company") under the "purchase" method of accounting. Cygne
Designs, Inc. owns the Division and a 60% interest in CAT. These Unaudited
Historical and Pro Forma Combined Financial Statements are presented for
illustrative purposes only, and therefore are not necessarily indicative of the
operating results and financial position that might have been achieved had the
CAT/Cygne Transaction occurred as of an earlier date, nor are they necessarily
indicative of operating results and financial position that may occur in the
future.
An Unaudited Historical and Pro Forma Combined Balance Sheet is provided as
of February 3, 1996, giving effect to the CAT/Cygne Transaction as though it had
been consummated on that date. Unaudited Historical and Pro Forma Combined
Statements of Operations are provided for the fiscal year ended February 3,
1996, giving effect to the CAT/Cygne Transaction as though it had occurred at
the beginning of such year.
The historical fiscal year ended February 3, 1996 information has been
derived from the audited financial statements of the Company. The data at and
for the fiscal year ended February 3, 1996 for the Acquired Businesses have been
derived from the unaudited financial statements which, in the opinion of the
management of the Acquired Businesses, include all adjustments, consisting only
of normal recurring adjustments, necessary for a fair presentation of the
results for the unaudited year.
ANN TAYLOR STORES CORPORATION AND ACQUIRED COMPANIES
UNAUDITED HISTORICAL AND PRO FORMA COMBINED FINANCIAL INFORMATION
BALANCE SHEETS
FEBRUARY 3, 1996
(IN THOUSANDS)
HISTORICAL PRO FORMA
----------------------- --------------------------
ACQUIRED
COMPANY BUSINESSES ADJUSTMENTS COMBINED
-------- ----------- ----------- --------
ASSETS
Current Assets
Cash and cash equivalents.................. $ 1,283 $ 200 $ -- $ 1,483
Accounts receivable, net................... 70,395 22,284 (22,007)(a) 70,672
Inventories................................ 102,685 21,728 3,985(b) 128,398
Prepaid and other current assets........... 24,307 291 (3,262)(a) 21,336
-------- ----------- ----------- --------
Total current assets................. 198,670 44,503 (21,284) 221,889
Property and equipment, net.................. 153,895 4,315 -- 158,210
Other assets................................. 12,619 187 (5,438)(c) 7,368
Goodwill, net................................ 313,525 -- 37,788(d) 351,313
-------- ----------- ----------- --------
Total assets................................. $678,709 49,005 11,066 738,780
-------- ----------- ----------- --------
-------- ----------- ----------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt.......... $ 40,266 $ 1,576 $ -- $ 41,842
Accounts payable........................... 42,909 21,090 (17,284)(a) 46,715
Accrued expenses........................... 29,018 2,105 1,000(e) 32,123
-------- ----------- ----------- --------
Total current liabilities............ 112,193 24,771 (16,284) 120,680
Long-term debt............................... 232,192 684 14,900(f) 247,776
Other liabilities............................ 8,636 -- 8,636
Stockholders' equity
Common stock............................... 157 -- 14(g) 171
Additional paid in capital................. 311,284 -- 35,986(g) 347,270
Retained earnings and other items.......... 14,247 23,550 (23,550)(g) 14,247
-------- ----------- ----------- --------
Total stockholders' equity........... 325,688 23,550 12,450 361,688
-------- ----------- ----------- --------
Total liabilities and stockholders' equity... $678,709 $49,005 $ 11,066 $738,780
-------- ----------- ----------- --------
-------- ----------- ----------- --------
See notes to unaudited historical and pro forma combined financial information.
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ANN TAYLOR STORES CORPORATION AND ACQUIRED COMPANIES
UNAUDITED HISTORICAL AND PRO FORMA STATEMENTS OF OPERATIONS
FISCAL YEAR ENDED FEBRUARY 3, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
HISTORICAL
---------------------- PRO FORMA
ACQUIRED -----------------------------
COMPANY BUSINESSES ADJUSTMENTS COMBINED
-------- ---------- ----------- --------
Net sales.................................. $731,142 $ 231,385 $ (231,385)(h) $731,142
Cost of sales.............................. 425,225 204,236 (214,749)(h)(i)(j) 414,712
-------- ---------- ----------- --------
Gross profit............................... 305,917 27,149 (16,636) 316,430
Selling, general and administrative
expenses................................... 271,136 17,387 (17,387)(j) 271,136
Amortization of goodwill................... 9,506 -- 1,512(k) 11,018
-------- ---------- ----------- --------
Operating income........................... 25,275 9,762 (761) 34,276
Interest expense........................... 20,956 1,088 750(i) 22,794
Other (income) expense, net................ 38 -- 1,646(l) 1,684
-------- ---------- ----------- --------
Income before income taxes................. 4,281 8,674 (3,157) 9,798
Income tax provision....................... 5,157 2,637 (329)(l)(m) 7,465
-------- ---------- ----------- --------
Net income (loss).......................... $ (876) $ 6,037 $ (2,828) $ 2,333
-------- ---------- ----------- --------
-------- ---------- ----------- --------
Net income (loss) per share................ $ (0.04) $ 0.09
-------- --------
-------- --------
See notes to unaudited historical and pro forma combined financial information.
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NOTES TO UNAUDITED HISTORICAL AND PRO FORMA FINANCIAL STATEMENTS
NOTE 1--BASIS OF PRESENTATION
The Unaudited Historical and Pro Forma Combined Financial Statements are
presented for illustrative purposes only, giving effect to the acquisition of
the Acquired Businesses by the Company accounted for as a "Purchase", as such
term is used under generally accepted accounting principles. The Acquired
Businesses' information includes the acquisition by the Company of CAT and the
Division.
Certain amounts reported in the Acquired Business' historical financial
information have been reclassified to conform with the Company presentations in
the Unaudited Historical and Pro Forma Combined Balance Sheets and Statements of
Operations.
The Unaudited Historical and Pro Forma Financial Statements giving effect to
the acquisition of the Acquired Businesses by the Company have been prepared
assuming the Company elected to treat the transaction as a stock acquisition,
which will provide no step up in basis for income tax purposes.
NOTE 2--ACCOUNTING PERIOD
The pro forma periods for the fiscal year ended February 3, 1996 are the
historical financial reporting periods of both the Company and the Acquired
Businesses. The Company and the Acquired Businesses have historically reported a
52- or 53-week reporting period.
NOTE 3--PURCHASE PRICE DETERMINATION
The purchase price of $50.9 million was computed assuming (i) the issuance
of 2,117,647 shares of common stock of the Company at a price of $17.00 per
share, (ii) cash consideration of $12.9 million, and (iii) the assumption of the
obligation to make payment to the president of CAT of approximately $2.0 million
becoming due under his existing employment agreement with CAT as a result of the
CAT/Cygne Transaction. The cash portion of the purchase price (including the
obligation to the president of CAT) will be provided by additional bank
borrowings, assumed to be approximately $14.9 million at 8% per annum. The
aggregate purchase price includes an amount payable to an executive of CAT
pursuant to his employment contract, which requires a payment to him based on
the value of the shares of CAT being transferred.
NOTE 4--PRO FORMA ADJUSTMENTS
The following items were recorded as adjustments to effect the combination
of the Company and the Acquired Businesses.
4(a) Adjustments recorded to reflect (i) the elimination of amounts due to/from the
Company and the Acquired Businesses, and (ii) the elimination of advances made to
the Division.
4(b) Adjustments to reduce the inventories of CAT and the Division to the current fair
value, and the elimination of advances made to the Division.
4(c) The elimination of the investment account on the Company's books for the 40%
interest in CAT.
4(d) Adjustment recorded to reflect the creation of goodwill representing the excess
of purchase price over net assets acquired which results in a $37.7 million
adjustment, based on management's estimate and without the performance of any due
diligence procedures. Accordingly, such estimate of goodwill is preliminary and
subject to change. At this time, the Company has not attributed any value to
intangible assets other than goodwill.
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NOTES TO UNAUDITED HISTORICAL AND
PRO FORMA FINANCIAL STATEMENTS--(CONTINUED)
NOTE 4--PRO FORMA ADJUSTMENTS--(CONTINUED)
4(e) Adjustment to record a liability for an estimate of fees related to the CAT/Cygne
Transaction.
4(f) Adjustments to reflect a portion of the purchase price expected to be financed
through additional bank borrowings.
4(g) Common stock, additional paid-in capital and retained earnings have been adjusted
to eliminate the equity balances of the Acquired Businesses and reflect the
common stock and additional paid-in capital for the issuance of 2,117,647 million
shares of common stock of the Company at an assumed price of $17.00 per share.
4(h) To eliminate sales previously recorded by the Acquired Businesses against the
cost of sales previously recorded by the Company. Cost of sales is reduced by the
reclassification of certain expenses discussed in Notes 4(i) and 4(j).
4(i) To reclassify interest expense from cost of sales as reported in the Acquired
Businesses' historical financial information to interest expense, to conform with
the Company's presentations.
4(j) Historically, the Acquired Businesses have classified certain expenses as
selling, general and administrative expenses. An adjustment has been recorded to
reclassify certain expenses, such as costs of design and procurement, to cost of
sales.
4(k) Adjusted to reflect the charge relating to the amortization of goodwill, which
represents the excess of purchase price over net assets acquired. Such goodwill
will be amortized over a 25 year life.
4(l) The elimination of the equity in earnings of 40% of the net income of CAT by the
Company and the related income tax expense.
4(m) The income tax provision represents the assumed effective tax rate for the
Acquired Businesses assuming (i) approximately 50% of the Acquired Businesses'
income is foreign source and not subject to U.S. taxation until repatriation and
(ii) amortized goodwill is not deductible.
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