1
Exhibit 99
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF TENNESSEE
In re: Case No.: 399-02649 THROUGH 399-02680
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SERVICE MERCHANDISE COMPANY, INC.
---------------------------------
Judge: PAINE
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Chapter 11
Debtor(s)
MONTHLY OPERATING REPORT FOR PERIOD ENDING November 26, 2000
--------------------
COMES NOW, SERVICE MERCHANDISE COMPANY, INC.
------------------------------------------------
Debtor-In-Possession, and hereby submits its Monthly Operating Report for the
period commencing October 30, 2000 and ending November 26, 2000 as shown by
the report and exhibits consisting of 15 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: 12/18/00 DEBTOR - IN - POSSESSION
--------------
By: /s/ KENNETH A. CONWAY
-----------------------------------
Name and Title: KENNETH A. CONWAY, VICE PRESIDENT
AND CONTROLLER
---------------------------------
Address: 7100 SERVICE MERCHANDISE DRIVE
---------------------------------
BRENTWOOD, TENNESSEE 37027
---------------------------------
Telephone No: (615) 660-3340
---------------------------------
Note: Report subject to further verification and account reconciliation
procedures
Page 1
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: OCTOBER 30, 2000 THROUGH NOVEMBER 26, 2000
1. Payroll
WAGES TAXES
OFFICERS TITLE GROSS NET DUE PAID
- ----------------------------------------------------------------------------------------------------------------------------------
SAM CUSANO CHIEF EXECUTIVE OFFICER 50,188.10 24,037.33 6,500.54 19,269.97
C. STEVEN MOORE SENIOR VICE PRESIDENT, CHIEF ADMINISTRATIVE OFFICER,
GENERAL COUNSEL AND SECRETARY 27,752.86 18,603.87 2,185.87 6,712.01
CHARLES K. SEPTER PRESIDENT AND CHIEF OPERATING OFFICER 39,229.81 24,680.08 3,595.07 10,056.61
ROBERT J. PINDRED VICE PRESIDENT AND TREASURER 11,558.88 6,334.34 1,265.93 3,777.93
JOE M. ELLIOTT VICE PRESIDENT, PROPERTY ADMINISTRATION 11,597.13 8,274.93 678.42 1,978.17
KARREN PRASIFKA ASSISTANT GENERAL COUNSEL VICE PRESIDENT 14,665.05 9,919.37 1,169.88 3,454.17
BILLY STEWART ASSISTANT TAX VICE PRESIDENT 7,327.42 5,288.80 - 1,876.11
KENNETH A. CONWAY VICE PRESIDENT AND CONTROLLER 12,335.22 9,598.39 649.17 1,920.76
ERIC A. KOVATS SENIOR VICE PRESIDENT, STORES 22,000.46 15,116.87 1,536.50 4,751.38
ROSE C. SEPTER SENIOR VICE PRESIDENT, JEWELRY MERCHANDISING 21,270.03 14,695.76 1,647.16 4,810.96
JERRY E. FOREMAN SENIOR VICE PRESIDENT, MERCHANDISING 25,861.43 5,371.91 5,022.83 15,183.93
Page 2
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: October 30, 2000 THROUGH November 26, 2000
2. INSURANCE
COVERAGE POLICY EXPIRATION PREMIUM DATE COVERAGE
TYPE NAME OF CARRIER AMOUNT NUMBER DATE AMOUNT PAID THROUGH
- -----------------------------------------------------------------------------------------------------------------------------------
Property Fireman's Fund Insurance Co $5 Million CCIPW12011 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 1XA394310 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 1XA394311 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 4914539 12/31/00 $8,383 12/31/00
Transit Fireman's Fund Insurance Co $1 Million CCIMG72820 12/31/00 $8,525 12/31/00
Ocean Cargo Fireman's Fund Insurance Co $10 Million CR37211 12/31/00 $25,000 12/31/00
Special Crime Reliance Insurance Co $25 Million NFK1951937 05/01/02 $13,458 05/01/02
Crime National Union Fire Ins Co $10 Million 858-0797 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 $130,845 03/01/01
Royal Insurance Co $10 Million PSF000010 03/01/01 $56,364 03/01/01
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 PSF000009 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 ZGEB-091 PD 12/31/00 $5,000 12/31/00
General Liability Ace American Ins Co $5 Million XSLG19903254 12/31/00 $11,032 12/31/00
Workers' Compensation Pacific Employers Ins Co Statutory WLRC42662112 12/31/00 $19,978 12/31/00
WC Excess Ace American Ins Co Statutory XWC011950 12/31/00 $1,601 12/31/00
WC Contractual Indemnity Illinois Union Insurance Co Statutory CTPG19903461 12/31/00 $2,083 12/31/00
WC Nevada Ace American Ins Co Statutory NWCC42662173 12/31/00 $1,737 12/31/00
Auto Pacific Employers Ins Co $1 Million ISAH07571008 12/31/00 $2,083 12/31/00
Page 3
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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: OCTOBER 30, 2000 THROUGH NOVEMBER 26, 2000
3. BANK ACCOUNTS
TOTAL CASH AND CASH EQUIVALENTS
CASH IN STORES AND HOME OFFICE
- ------------------------------
HOME OFFICE $ 10,750
RETAIL SAFE FUNDS 2,552,744
CORPORATE ACCOUNTS 1,949,509
- ------------------
STORE DEPOSITORY ACCOUNTS
- -------------------------
FIRST TENNESSEE 1,461,015
KEY NATIONAL BANK 931,707
BANK OF BOSTON 675,464
BANK OF BOSTON CONNECTICUT 347,823
FIRST UNION 6,588,871
BANK ONE LOUISIANA 1,215,900
ABN - AMRO BANK 508,159
COMERICA BANK 597,657
AM SOUTH 1,161,107
BANK OF AMERICA CALIFORNIA 250,186
BANK OF OKLAHOMA 406,246
CHASE BANK OF TEXAS 1,929,867
SINGLE STORE DEPOSITORY ACCOUNTS 1,056,521
WELLS FARGO BANK 175,310
BANK OF AMERICA 444,634
BANK ONE, IN 432,023
PNC BANK 1,394,866
OAK BROOK BANK 1,484,856
CREDIT CARD CASH ACCOUNTS (SALES PROCESSED BY CREDIT CARD COMPANY) 28,256,402
- ------------------------------------------------------------------
OTHER DEPOSITORY ACCOUNTS
- -------------------------
SERVICE MERCHANDISE - MUSCULAR DYSTROPHY ASSOC. 31,639
OTHER CASH ACCOUNTS 673,959
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TOTAL CASH PER GENERAL LEDGER $ 54,537,215
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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: OCTOBER 30, 2000 THROUGH NOVEMBER 26, 2000
RECEIPTS AND DISBURSEMENTS
(DOLLARS IN THOUSANDS)
ACTUAL ACTUAL ACTUAL ACTUAL TOTAL
Monday 10/30/00 11/06/00 11/13/00 11/20/00 10/30/00
Sunday 11/05/00 11/12/00 11/19/00 11/26/00 11/26/00
-------- -------- -------- --------- ---------
Receipts:
Sales receipts $ 17,439 $ 18,428 $ 22,721 $ 27,541 $ 86,129
Miscellaneous receipts -- 714 -- -- 714
-------- -------- -------- -------- ---------
Total available collections 17,439 19,142 22,721 27,541 86,843
Disbursements:
Merchandise disbursements 20,337 17,523 21,893 15,022 74,775
Non-merchandise disbursements 19,779 15,679 23,963 16,388 75,809
-------- -------- -------- -------- ---------
Total disbursements 40,116 33,202 45,856 31,410 150,584
-------- -------- -------- -------- ---------
Net receipts/(disbursements) $(22,677) $(14,060) $(23,135) $ (3,869) $ (63,741)
======== ======== ======== ======== =========
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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: OCTOBER 30, 2000 THROUGH NOVEMBER 26, 2000
ROLLING REVISED CASH FLOW FORECAST
(DOLLARS IN THOUSANDS)
Actual Forecast Forecast Forecast
12/10/00 12/17/00 12/31/00 01/21/01
-------- -------- -------- --------
Ending total revolver balance $252,918 $231,568 $ 86,248 $124,313
Term loan 60,000 60,000 60,000 60,000
Standby letters of credit 26,434 25,684 25,684 24,884
Trade letters of credit 16,782 17,564 14,713 15,024
-------- -------- -------- --------
Total extensions of credit 356,134 334,816 186,645 224,221
Borrowing base 532,466 523,013 439,652 406,254
-------- -------- -------- --------
Availability $176,332 $188,197 $253,007 $182,033
======== ======== ======== ========
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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: October 30, 2000 THROUGH November 26, 2000
4. Payments to Professionals October 30, 2000 through November 26, 2000
Vendor # Vendor Name Check Amt. Check Date Check #
- ------------------------------------------------------------------------------------------------------------------
2642 Waller, Lansden, Dortch & Davis $4,191.00 10/30/00 50022621
67017 Barkley & Thompson $15,000.00 10/30/00 50022623
79366 Feldman & Kieffer $2,942.30 10/30/00 50022624
84740 Taft, Stettinius & Hollister $1,001.24 10/30/00 50022625
91420 Magenheim, Bateman, Robinson, Wrotenberry & Helfand, LLP $5,000.00 10/30/00 50022626
93547 D'Assaro & Hall $5,000.00 10/30/00 50022628
57117 Deloitte & Touche $106,250.00 11/09/00 50023589
57117 Deloitte & Touche $11,484.91 11/09/00 50023590
101232 E & Y Capital Advisors, LLC $52,235.00 11/10/00 B0023325
101625 DG Hart Associates, Inc. $106,926.09 11/10/00 B0023326
101993 Rothschild, Inc. $67,500.00 11/10/00 B0023327
71217 Bass, Berry & Sims $48,621.97 11/10/00 B0023329
98378 Skadden, Arps, Slate, Meagher & Flom $335,335.00 11/10/00 B0023331
99104 Jay Alix & Associates $98,643.01 11/10/00 B0023332
99391 Otterbourg, Steindler, Houston, Rosen, PC $69,344.78 11/10/00 B0023333
99454 Harwell, Howard, Hyne, Gabbert & Manner PC, Inc. $22,312.24 11/10/00 B0023334
99459 Robert L. Berger & Associates $73,944.55 11/14/00 B0023369
71217 Bass, Berry & Sims $99,485.09 11/16/00 B0023379
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FORM OPR - 1 AND 2
SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DEBTOR - IN - POSSESSION)
(IN THOUSANDS)
November 26, October 29,
2000 2000
----------- -----------
ASSETS
Current Assets:
Cash and cash equivalents $ 54,537 $ 21,081
Accounts receivable 9,065 7,557
Inventories 591,214 583,822
Prepaid expenses and other assets 25,778 20,892
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TOTAL CURRENT ASSETS 680,594 633,352
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PROPERTY AND EQUIPMENT
Owned assets, net of accumulated depreciation 355,619 352,758
Capitalized leases, net of accumulated amortization 12,537 12,728
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TOTAL PROPERTY AND EQUIPMENT 368,156 365,486
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Other assets and deferred charges 47,346 47,390
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TOTAL ASSETS $ 1,096,096 $ 1,046,228
=========== ===========
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Liabilities Not Subject To Compromise
Current Liabilities:
Notes payable to banks $ 281,351 $ 217,956
Accounts payable 89,987 91,977
Accrued expenses 140,641 143,236
State & local sales tax 11,402 10,627
Current maturities capitalized leases 90 92
----------- -----------
TOTAL CURRENT LIABILITIES 523,471 463,888
----------- -----------
Long -Term Liabilities:
Long-term debt 60,000 60,000
Capitalized lease obligations 2,404 2,412
Liabilities Subject To Compromise:
Accrued restructuring costs 42,326 42,329
Capitalized lease obligations 22,606 22,916
Long-term debt 418,128 418,796
Accounts payable 197,660 197,602
Accrued expenses 68,267 68,046
----------- -----------
Total Liabilities Subject To Compromise 748,987 749,689
TOTAL LIABILITIES 1,334,862 1,275,989
----------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' (DEFICIT) EQUITY
Common stock 49,954 49,954
Additional paid-in-capital 6,017 6,017
Deferred compensation (303) (315)
Retained (deficit) earnings (294,434) (285,417)
----------- -----------
TOTAL SHAREHOLDERS' (DEFICIT) EQUITY (238,766) (229,761)
TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY $ 1,096,096 $ 1,046,228
=========== ===========
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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: OCTOBER 30, 2000 THROUGH NOVEMBER 26, 2000
SUMMARY OF ACCOUNTS RECEIVABLE
Month Ended: 11/26/00
FORM OPR-3 NOT APPLICABLE
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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: OCTOBER 30, 2000 THROUGH NOVEMBER 26, 2000
SCHEDULE OF POST PETITION LIABILITIES-ACCOUNTS PAYABLE
Month Ended: 11/26/2000
FORM OPR-4
Total
--------
Trade Accounts Payable (Merchandise) $ 89,987
Total
--------
Expense & other payables $140,641
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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: OCTOBER 30, 2000 THROUGH NOVEMBER 26, 2000
SCHEDULE OF POST PETITION LIABILITIES
FORM OPR-4
Date Date Total
TAXES PAYABLE Incurred Due Due
------------------------------------------
Federal income tax ** Various Various 7,843,442
State income tax Various Various (76,830)
-----------
SUBTOTAL 7,766,612
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Sales/use tax SUBTOTAL * Various Various 11,583,965
-----------
Personal property tax * Various Various 3,037,540
Real estate taxes * Various Various 13,186,183
Inventory taxes * Various Various -
Gross receipts/bus. licenses * Various Various 105,922
Franchise taxes * Various Various 535,122
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SUBTOTAL 16,864,767
-----------
-----------
TOTAL TAXES PAYABLE 36,215,344
===========
* liability included in accrued expenses on OPR-2
** tax reserve
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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: OCTOBER 30, 2000 THROUGH NOVEMBER 26, 2000
SCHEDULE OF POST PETITION LIABILITIES
FORM OPR-4
(DOLLARS IN THOUSANDS)
TOTAL DUE
DATE (11/26/00
INCURRED DATE DUE BALANCE)
------------------------------------------
POST PETITION SECURED DEBT
Revolver borrowings 04/14/00 04/14/04 $ 281,351
Facility standby letters of credit 04/14/00 04/14/04 27,187
Facility trade letters of credit 04/14/00 04/14/04 16,768
Term loans 04/14/00 04/14/04 60,000
---------
TOTAL EXTENSIONS OF CREDIT $ 385,306
=========
ACCRUED INTEREST PAYABLE $ 1,997
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FORM OPR- 5
SERVICE MERCHANDISE COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DEBTOR - IN - POSSESSION)
(IN THOUSANDS)
ACTIVITY
OCTOBER 30, 2000
THROUGH
NOVEMBER 26, 2000
-----------------
Net Sales $ 112,727
Costs of merchandise sold and buying and occupancy expense 80,538
---------
Gross margin after cost of merchandise sold and buying and occupancy expenses 32,189
Selling, General and Administrative Expenses:
Net Employment Expense 15,176
Net Advertising 11,557
Banking and Other Fees 1,663
Real Estate and Other Taxes 1,742
Supplies 1,190
Communication and Equipment 295
Travel 375
UCC and Other Services 372
Legal and Professional 299
Sales and Shipping 46
Insurance 397
Miscellaneous 86
Credit Card Services (45)
---------
Total Selling, General and Administrative Expenses 33,153
Other expense/(income), net (411)
Restructuring charge (credit) 2
Depreciation and amortization 3,093
---------
Earnings (loss) before interest, reorganization items, and income tax (3,648)
Interest expense - debt 3,721
Interest expense - capitalized leases 280
---------
Earnings (loss) before reorganization items, and income tax (7,649)
Reorganization Items:
Legal and Professional 1,595
Miscellaneous fees 436
Loss (Gain) on Disposal of Assets 53
Close Store Charges (716)
---------
Total Reorganization Items 1,368
Earnings (loss) before income tax (9,017)
Income tax benefit --
Cumulative Effect of Change in Accounting Principles --
---------
Net earnings (loss) $ (9,017)
=========
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