1
EXHIBIT 99
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF TENNESSEE
In re: Case No.: 399-02649
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SERVICE MERCHANDISE COMPANY, INC. THROUGH 399-02680
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Judge: PAINE
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Chapter 11
Debtor(s)
MONTHLY OPERATING REPORT FOR PERIOD ENDING April 2, 2000
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COMES NOW, SERVICE MERCHANDISE COMPANY, INC.
--------------------------------
Debtor-In-Possession, and hereby submits its Monthly Operating Report for
the period commencing February 28, 2000 and ending April 2, 2000 as
shown by the report and exhibits consisting of 16 pages and containing the
following as indicated:
[X] Monthly Reporting Questionnaire (Attachment 1)
[X] Comparative Balance Sheets (Forms OPR-1 & OPR-2)
[N/A] Summary of Accounts Receivable (Form OPR-3)
[X] Schedule of Postpetition Liabilities (Form OPR-4)
[X] Statement of Income (Loss) (Form OPR-5)
I declare under penalty of perjury that this report and all the
attachments are true and correct to the best of my knowledge and belief. I
also hereby certify that the original Monthly Operating Report was filed
with the Bankruptcy Court Clerk and a copy delivered to the U.S. Trustee.
Date: 4/24/00 DEBTOR - IN - POSSESSION
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By: /s/ Tom Garrett
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Name and Title: TOM GARRETT,
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SENIOR VICE PRESIDENT & CFO
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Address: 7100 SERVICE MERCHANDISE DRIVE
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BRENTWOOD, TENNESSEE 37027
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Telephone No: 660-3477
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Note: Report subject to further verification and account reconciliation
procedures
2
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: FEBRUARY 28, 2000 THROUGH APRIL 2, 2000
1. Payroll
WAGES TAXES
OFFICERS TITLE GROSS NET DUE PAID
- -----------------------------------------------------------------------------------------------------------------------------------
SAM CUSANO CHIEF EXECUTIVE OFFICER 70,154.77 45,286.78 4,515.26 19,951.13
STEVE MOORE SENIOR VICE PRESIDENT, CHIEF ADMINISTRATIVE OFFICER,
GENERAL COUNSEL AND SECRETARY 189,358.63 132,651.85 2,198.69 54,535.64
TOM GARRETT SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER 161,242.25 114,237.46 1,648.99 45,004.55
GARY SEASE SENIOR VICE PRESIDENT, LOGISTICS 163,073.44 113,323.81 2,054.11 46,736.89
CHARLES SEPTER PRESIDENT AND CHIEF OPERATING OFFICER 218,178.72 150,292.27 3,417.43 63,487.27
KENNETH BRAME SENIOR VICE PRESIDENT, INFORMATION SERVICES AND
CHIEF INFORMATION OFFICER 1,084,980.75 (a) 765,110.93 271,258.58 48,611.24
ROBERT J. PINDRED VICE PRESIDENT AND TREASURER 63,040.40 41,976.48 507.37 16,535.65
JOE M. ELLIOTT VICE PRESIDENT, PROPERTY ADMINISTRATION 45,549.40 28,454.23 626.85 12,905.03
ERIC KOVATS VICE PRESIDENT, STORES 139,096.66 93,490.95 1,517.80 49,108.28
KARREN PRASIFKA ASSISTANT GENERAL COUNSEL VICE PRESIDENT 76,570.02 53,651.88 1,275.28 21,534.46
BILLY STEWART ASSISTANT TAX VICE PRESIDENT, TAX 29,645.69 18,709.13 332.66 8,609.07
KENNETH A CONWAY VICE PRESIDENT AND CONTROLLER 72,052.27 51,516.52 656.06 19,460.69
Note: The above amounts reflect bonuses paid in March, 2000.
(a) Includes $921,082 related to severance pay.
3
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: FEBRUARY 28, 2000 THROUGH APRIL 2, 2000
2. INSURANCE
COVERAGE POLICY EXPIRATION PREMIUM DATE COVERAGE
TYPE NAME OF CARRIER AMOUNT NUMBER DATE AMOUNT PAID THRU
- ------------------------------------------------------------------------------------------------------------------------------------
Property Fireman's Fund Insurance Co $5 Million CCIPWI2011 12/31/00 $1,441,249 12/31/00
Royal $5 Million RHD314289 12/31/00 $ 100,000 12/31/00
Westchester Fire $15 Million IXA394310 12/31/00 $ 50,100 12/31/00
Allianz Insurance Co $12 Million CLP1034720 12/31/00 $ 20,040 12/31/00
TIG Insurance Co $13 Million XPT38797667 12/31/00 $ 32,500 12/31/00
Westchester Fire $20 Million IXA394311 12/31/00 $ 10,020 12/31/00
Allianz Insurance Co $30 Million CLP1034720 12/31/00 $ 15,030 12/31/00
Allianz Insurance Co $25 Million CLP1034720 12/31/00 $ 6,680 12/31/00
Boiler & Machinery Hartford Steam Boiler $10 Million BMTBD 05/01/00 $ 11,900 05/01/00
Transit Security Ins Co of Hartford $1 Million CCIMG72820 05/01/00 $ 10,000 05/01/00
Ocean Cargo Phoenix Assurance Co of NY $10 Million CR37211 05/01/00 $ 40,000 05/01/00
Special Crime Reliance Insurance Co $25 Million NFK1951937 05/01/02 $ 13,458 05/01/02
Crime National Union Fire Ins Co $10 Million 858-O797 03/01/01 $ 56,505 03/01/01
Fiduciary National Union Fire Ins Co $10 Million 267-81-30 03/01/01 $ 19,140 03/01/01
Employment Practices Liability Chubb Insurance Co $10 Million 81278901A 03/01/01 $ 8,992 04/01/00
Royal Insurance Co $10 Million PSFOOOO10 03/01/01 $ 3,749 04/01/00
Directors & Officers Continental Insurance Co $10 Million 300714943 03/01/01 $ 453,500 03/01/01
Chubb Insurance Co $10 million 81278902-A 03/01/01 $ 266,666 03/01/01
Royal Insurance Co $10 Million PSFOO0009 03/01/01 $ 133,000 03/01/01
Umbrella Federal Insurance Co $50 Million 79763295 12/31/01 $ 63,357 12/31/00
Excess Liability American Guarantee & Liab $50 million AEC287610700 12/31/00 $ 25,000 12/31/00
International Ace American Ins Co $1 Million PHF051491 12/31/00 $ 2,500 12/31/00
Punitive Damages Chubb Atlantic Indemnity $50 Million (00) 3310-05-98 12/31/00 $ 17,160 12/31/00
Punitive Damages - Excess Zurich International Bermuda $50 Million ZTEB-091 PD) 12/31/00 $ 5,000 12/31/00
General Liability Ace American Ins Co $5 Million XSLG19903254 12/31/00 $ 11,032 03/31/00
Workers' Compensation Pacific Employers Ins Co Statutory WLRC42662112 12/31/00 $ 19,978 03/31/00
WC Excess Ace American Ins Co Statutory XWCO11950 12/31/00 $ 1,601 03/31/00
WC Contractual Indemnity Illinois Union Insurance Co Statutory CTPG19903461 12/31/00 $ 2,083 03/31/00
WC Nevada Ace American Ins Co Statutory NWCC42662173 12/31/00 $ 1,737 03/31/00
Auto Pacific Employers Ins Co $1 Million ISAH07571008 12/31/00 $ 2,083 03/31/00
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CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: FEBRUARY 28, 2000 THROUGH APRIL 2, 2000
3. BANK ACCOUNTS
TOTAL CASH AND CASH EQUIVALENTS
CASH IN STORES AND HOME OFFICE
HOME OFFICE $ 11,250
RETAIL SAFE FUNDS 1,948,492
CORPORATE ACCOUNTS 3,274,896
STORE DEPOSITORY ACCOUNTS
FIRST TENNESSEE 868,702
FIRSTAR 34,406
SOCIETY NATIONAL BANK 423,233
BANK OF BOSTON 765,940
BANK OF BOSTON CONNECTICUT 228,816
MERCANTILE BANK 57,322
FIRST UNION 3,690,784
HARRIS TRUST 1,060,990
BANK ONE LOUISIANA 359,146
ABN - AMRO BANK 285,449
COMERICA BANK 207,797
AM SOUTH 190,150
BANK OF AMERICA CALIFORNIA 283,876
FIRST AMERICAN NATIONAL BANK 182,573
HERITAGE BANK OF NEVADA 775
BANK OF OKLAHOMA 188,428
CHASE BANK OF TEXAS 835,073
HIBERNIA 49,636
SINGLE STORE DEPOSITORY ACCOUNTS 364,072
FIRST NATIONAL BANK OF MARYLAND 4,300
WELLS FARGO BANK 80,057
NATIONSBANK 233,991
BANK ONE, IN 183,477
PNC BANK 758,962
BANK ONE, TEXAS 40,450
CREDIT CARD CASH ACCOUNTS (SALES PROCESSED BY CREDIT CARD COMPANY) 12,069,253
OTHER DEPOSITORY ACCOUNTS
SERVICE MERCHANDISE - MUSCULAR DYSTROPHY ASSOC. 38,379
OTHER CASH ACCOUNTS 792,169
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TOTAL CASH PER GENERAL LEDGER $29,512,842
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CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: FEBRUARY 28, 2000 THROUGH APRIL 2, 2000
RECEIPTS AND DISBURSEMENTS
(DOLLARS IN THOUSANDS)
ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL TOTAL
Monday 02/28/00 03/06/00 03/13/00 03/20/00 03/27/00 02/28/00
Sunday 03/05/00 03/12/00 03/19/00 03/26/00 04/02/00 04/02/00
--------- -------- -------- -------- -------- --------
Receipts:
Sales Receipts $29,533 $28,997 $26,796 $29,438 $28,718 $143,482
Miscellaneous Receipts -- 819 -- 9 3,164 3,992
------- ------- ------- ------- ------- --------
Total Available collections 29,533 29,816 26,796 29,447 31,882 147,474
Disbursements:
Merchandise disbursements 20,128 8,034 13,656 15,511 15,750 73,079
Non-merchandise disbursements 14,858 16,044 13,822 16,589 23,926 85,239
------- ------- ------- ------- ------- --------
Total Disbursements: 34,986 24,078 27,478 32,100 39,676 158,318
------- -------- -------- -------- -------- --------
Net Receipts/(Disbursements) $(5,453) $ 5,738 $ (682) $(2,653) $(7,794) $(10,844)
======= ======= ======= ======= ======= ========
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CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: FEBRUARY 28, 2000 THROUGH APRIL 2, 2000
ROLLING REVISED CASH FLOW FORECAST
(DOLLARS IN THOUSANDS)
Actual Forecast Forecast Forecast
04/09/00 04/30/00 05/28/00 07/02/00
--------- -------- -------- --------
Ending Total Revolver Balance $104,063 $177,994 $141,835 $ 97,184
Term Loan 99,000 60,000 60,000 60,000
Standby Letters of Credit 27,056 44,663 38,737 32,975
Trade Letters of Credit 20,899 1,830 9,999 28,224
-------- -------- -------- -------
Total Extensions of Credit 251,018 284,487 250,571 218,383
Borrowing Base 510,118 508,593 480,246 408,377
-------- -------- -------- --------
Availability $259,100 $224,106 $229,675 $189,994
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CHAPTER II
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER. 399-02649 THROUGH 399-02680
PERIOD: FEBRUARY 28, 2000 THROUGH APRIL 2, 2000
4. Payments to Professionals: February 28, 2000 through April 2, 2000
Vendor # Vendor Name Check Amt. Check Date Check #
- --------------------------------------------------------------------------------------------------------------------
57117 Deloitte & Touche $124,856.00 02/28/00 30039177
57117 Deloitte & Touche $37,733.96 02/28/00 30039178
86237 Brusniak, Clement, Harrison & McCool, PC, Inc. $1,382.58 03/03/00 30039665
71403 Seyfarth, Shaw, Fairweather & Geraldson $6,874.52 03/06/00 30039788
98378 Skadden, Arps, Slate, Meagher & Flom $274,072.00 03/06/00 B0012100
100906 Peter J. Solomon $78,750.00 03/06/00 B0021195
71217 Bass Berry & Sims $51,959.50 03/06/00 B0021198
79108 Ernst & Young $60,315.00 03/06/00 B0021199
99104 Jay Alix & Associates $105,708.00 03/06/00 B0021201
99391 Otterbourg, Steindler, Houston, Rosen, PC $91,746.36 03/06/00 B0021202
99454 Harwell, Howard, Hyne, Gabbert, & Manner, PC, Inc. $18,505.11 03/06/00 B0021203
57117 Deloitte & Touche $124,856.00 03/07/00 30039843
57117 Deloitte & Touche $30,821.03 03/07100 30039844
99329 Aegis Property Tax Specialists $10,312.50 03/10/00 30040541
99329 Aegis Property Tax Specialists $817.77 03/10/00 30040542
99329 Aegis Property Tax Specialists $8,647.62 03/13/00 30040728
50995 Brann & Isaacson $2,933.40 03/17/00 30041417
57117 Deloitte & Touche $178,309.99 03/27/00 30042311
94414 Keen Realty Consultants, Inc. $5,166.00 03/27/00 30042320
99444 Sitrick & Company, Inc. $89,984.89 03/27/00 B0021359
63078 Weil, Gotshak & Manges $21,181.67 03/27/00 B0021360
98378 Skadden, Arps, Slate, Meagher & Flom $844,728.00 03/27/00 B0021362
79108 Ernst & Young $19,555.00 03/27/00 B0021363
99104 Jay Alix & Associates $180,681.31 03/27/00 B0021365
99391 Otterbourg Steindler, Houston, Rosen, PC $179,158.86 03/27/00 B0021366
99454 Harwell, Howard, Hyne, Gabbert, & Manner, PC, Inc. $44,808.43 03/27/00 B0021367
71217 Bass Berry & Sims $147,560.41 03/27/00 B0021368
100906 Peter J. Solomon $121,093.91 03/27/00 B0021371
99459 Robert L. Berger $35,364.51 03/31/00 B0021435
101606 Service Real Estate Venture $150,000.00 03/02/00 B0021180
101606 Service Real Estate Venture $33,529.27 03/17/00 B0021318
101606 Service Real Estate Venture $150,000.00 03/31/00 B0021445
101625 DG Hart Associates, Inc. $96,780.44 03/27/00 B0021369
101625 DG Hart Associates, Inc. $165,208.86 03/27/00 B0021370
101232 E & Y Restructuring $46,038.00 03/06/00 B0021196
101232 E & Y Restructuring $118,786.00 03/27/00 B0021364
**Payments issued to E & Y Restructuring in a prior period that
were inadvertently not reported**
101232 E & Y Restructuring $139,120.00 01/28/00 B0020885
101232 E & Y Restructuring $135,047.00 02/25/00 B0021130
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SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DEBTOR-IN-POSSESSION)
(IN THOUSANDS)
APRIL 2, FEBRUARY 27,
2000 2000
---------- -----------
ASSETS
Current Assets:
Cash and cash equivalents $ 29,513 $ 38,010
Accounts receivable 6,135 7,028
Inventories 644,368 662,722
Prepaid expenses and other assets 24,174 24,851
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TOTAL CURRENT ASSETS 704,190 732,611
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PROPERTY AND EQUIPMENT
Owned assets, net of accumulated depreciation 346,340 348,136
Capitalized leases, net of accumulated amortization 14,200 14,464
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TOTAL PROPERTY AND EQUIPMENT 360,540 362,600
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Other assets and deferred charges 45,337 44,937
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TOTAL ASSETS $1,110,066 $1,140,148
========== ==========
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Liabilities Not Subject To Compromise
Current Liabilities:
Notes payable to banks $ 97,146 $ 86,232
Accounts payable 60,382 62,075
Accrued expenses 138,243 159,570
State & local sales tax 12,672 13,319
Current maturities of long-term debt 1,000 1,000
Current maturities capitalized leases 118 85
---------- ----------
TOTAL CURRENT LIABILITIES 309,561 322,281
Long-Term Liabilities:
Long-term debt 98,250 98,250
Capitalized lease obligations 2,467 2,474
Liabilities Subject To Compromise:
Accrued restructuring costs 44,604 45,495
Capitalized lease obligations 26,405 27,305
Long-term debt 426,844 428,232
Accounts payable 192,829 191,673
Accrued expenses 64,562 60,284
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Total Liabilities Subject To Compromise 755,244 752,990
TOTAL LIABILITIES 1,165,521 1,175,995
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COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' (DEFICIT) EQUITY
Common stock 49,989 49,989
Additional paid-in-capital 6,288 6,288
Deferred compensation (565) (587)
Accumulated other comprehensive loss -- --
Retained (deficit) earnings (111,167) (91,539)
----------- -----------
TOTAL SHAREHOLDERS' (DEFICIT) EQUITY (55,455) (35,848)
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY $ 1,110,066 $ 1,140,148
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CHAPTER 11
MONTHLY OPERATING REPORT
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: FEBRUARY 28, 2000 THROUGH APRIL 2, 2000
SUMMARY OF ACCOUNTS RECEIVABLE
Month Ended: 04/02/00
FORM OPR-3 NOT APPLICABLE
10
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: FEBRUARY 27, 2000 THROUGH APRIL 2, 2000
SCHEDULE OF POST PETITION LIABILITIES-ACCOUNTS PAYABLE
Month Ended: 04/02/2000
FORM OPR-4
Total Current
--------- --------
Trade Accounts Payable (Merchandise) $ 60,382 $ 60,382
Total Current
--------- --------
Expense & other payables $ 138,243 $138,243
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CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: FEBRUARY 28, 2000 THOUGH APRIL 2, 2000
SCHEDULE OF POST PETITION LIABILITIES
FORM OPR-4
Date Date Total 0-30
TAXES PAYABLE Incurred Due Due Days
-------- ------- ----------- -----------
Federal income tax ** Various Various $ 7,811,842 $ 7,811,842
State income tax Various Various (9,570) (9,570)
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SUBTOTAL 7,802,272 7,802,272
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Sales/use tax SUBTOTAL * Various Various 12,672,367 12,672,367
------------ ------------
Personal property tax * Various Various 1,952,001 1,952,001
Real estate taxes * Various Various 8,649,565 8,649,565
Inventory taxes * Various Various 0 0
Gross receipts/bus. licenses * Various Various (1,479) (1,479)
Franchise taxes * Various Various 491,835 491,835
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SUBTOTAL 11,091,922 11,091,922
------------ ------------
------------ ------------
TOTAL TAXES PAYABLE $ 31,566,561 $ 31,566,561
============ ============
* liability included in accrued expenses on OPR-2
** tax reserve
12
CHAPTER 11
MONTHLY OPERATING REPORT
MONTHLY REPORTING QUESTIONNAIRE
CASE NAME: SERVICE MERCHANDISE COMPANY, INC. et. al.
CASE NUMBER: 399-02649 THROUGH 399-02680
PERIOD: FEBRUARY 28, 2000 THROUGH APRIL 2, 2000
SCHEDULE OF POST PETITION LIABILITIES
FORM OPR-4
(DOLLARS IN THOUSANDS)
DATE TOTAL DUE
INCURRED DATE DUE (4/2/00 BALANCE)
POST PETITION SECURED DEBT -------------------------------------------
Revolver Borrowings 03/27/99 06/30/01 $ 97,146
Facility Standby Letters of Credit 03/27/99 06/30/01 27,056
Facility Trade Letters of Credit 03/27/99 06/30/01 22,408
Term Loans 03/27/99 06/30/01 99,250
--------
TOTAL EXTENSIONS OF CREDIT $245,860
========
ACCRUED INTEREST PAYABLE $ 1,007
========
13
SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)
(Debtor - in - Possession)
(In thousands)
ACTIVITY
FEBRUARY 27, 2000
THROUGH
APRIL 2, 2000
-----------------
Net Sales $ 128,556
Costs of merchandise sold and buying and occupancy expense 99,293
---------
Gross margin after cost of merchandise sold and buying and occupancy expenses 29,263
Selling, General and Administrative Expenses:
Net Employment Expense 25,675
Net Advertising 4,696
Banking and Other Fees 1,719
Real Estate and Other Taxes 2,098
Supplies 1,235
Communication and Equipment 464
Travel 650
UCC and Other Services (899)
Legal and Professional 426
Sales and Shipping 85
Insurance 194
Miscellaneous (38)
Credit Card Services (30)
---------
Total Selling, General and Administrative Expenses 36,277
Other expense/(income), net (10,818)
Restructuring charge (credit) (836)
Depreciation and amortization 3,831
---------
Earnings (loss) before interest, reorganization items, and income tax 809
Interest expense - debt 3,887
Interest expense - capitalized leases 290
---------
Earnings (loss) before reorganization items, and income tax (3,368)
Reorganization Items:
Severance 9,423
Legal and Professional 2,899
Miscellaneous fees 166
Close Store Charges 3,774
---------
Total Reorganization Items 16,262
Earnings (loss) before income tax (19,630)
Income tax benefit --
Cumulative Effect of Change in Accounting Principles --
---------
Net earnings (loss) $ (19,630)
=========