FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 29, 1995.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
From the transition period from_____________ to___________________
__________________________________________________________________
Commission file number__ 33-13622_________________________________
__________________________________________________________________
BRENDLE'S INCORPORATED
Elkin, North Carolina 56-0497852
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1919 North Bridge Street, Elkin, North Carolina 28621
(910) 526-5600
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant 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 registrant was required to file such
reports and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No________
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13,
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes X No________ Not Applicable________
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.
As of August 15, 1995, there were 12,758,717 shares of the
issuer's Common Stock outstanding.
Page 2 of 17
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
BRENDLE'S INCORPORATED
Consolidated Statement of Income
(Unaudited)
(In thousands except per share data)
Three Months Ended
July 29, July 30,
1995 1994
Net sales $30,108 $ 32,742
Other income 1 31
Total revenue 30,109 32,773
Cost and expenses:
Cost of merchandise sold 21,953 25,137
Selling, operating and
administrative expenses 10,096 9,701
Depreciation and amortization 860 882
Interest expense:
Capitalized leases 51 111
Other 795 355
Gain on sale of facilities (955) ---
Provision for restructuring --- 596
32,800 36,782
Loss before provision for income taxes
and extraordinary item (2,691) (4,009)
Provision for income taxes (Note 3) --- ---
Loss before extraordinary item (2,691) (4,009)
Extraordinary item-gain from debt forgiveness (Note 6) --- (1,576)
Net loss $(2,691) $ (2,433)
Weighted average shares outstanding 12,759 12,766
Net loss per share $ (0.21) $ (0.19)
Page 3 of 17
BRENDLE'S INCORPORATED
Consolidated Statement of Income
(Unaudited)
(In thousands except per share data)
Six Months Ended
July 29, July 30,
1995 1994
Net sales $ 54,028 $ 58,690
Other income 234 62
Total revenue 54,262 58,752
Cost and expenses:
Cost of merchandise sold 38,930 43,946
Selling, operating and
administrative expenses 19,577 19,229
Depreciation and amortization 1,724 1,761
Interest expense:
Capitalized leases 102 222
Other 1,420 596
Gain on sale of facilities (955) ---
Provision for restructuring (1) 846
60,797 66,600
Loss before provision for income taxes
and extraordinary item (6,535) (7,848)
Provision for income taxes (Note 3) --- ---
Loss before extraordinary item (6,535) (7,848)
Extraordinary item-gain from debt forgiveness (Note 6) --- (30,249)
Net income (loss) $(6,535) $ 22,401
Weighted average shares outstanding 12,759 10,582
Net income (loss) per share $(0.51) $ 2.12
Page 4 of 17
BRENDLE'S INCORPORATED
Consolidated Balance Sheet
(Unaudited)
(In thousands except per share data)
July 29, January 28, July 30,
1995 1995 1994
Assets
Current Assets:
Cash and temporary cash investments $ 2,130 $ 1,781 $ 2,304
Accounts receivable 973 971 1,216
Merchandise inventories 49,696 48,451 53,657
Other current assets 3,128 1,361 3,056
Total current assets 55,927 52,564 60,233
Property and equipment, less accumulated
depreciation and amortization 7,699 8,776 10,170
Other assets 401 788 745
$64,027 $ 62,128 $ 71,148
Liabilities and Shareholders' Equity
Current liabilities:
Revolving credit facility $21,601 $ 15,368 $ 16,476
Accounts payable
Trade 5,590 4,192 6,574
Outstanding checks (Note #5) 2,295 1,053 3,244
Current portion of capitalized lease obligations 454 1,241 1,514
Current portion of restructuring reserve 426 445 509
Other accrued liabilities 3,494 2,759 3,026
Total current liabilities 33,860 25,058 31,343
Reorganization notes 368 403 276
Capitalized lease obligations, less current portion 365 449 2,292
Other liabilities 1,083 1,332 398
Other deferred credit 529 529 220
Total long-term liabilities 2,345 2,713 3,186
Liabilities subject to compromise (Note #6) --- --- 1,510
Total Liabilities 36,205 27,771 36,039
Shareholders' equity:
Common stock, $1 par value, 20,000,000
shares authorized, 12,758,717, 12,758,717
and 12,769,145 shares issued and outstanding 12,759 12,759 12,761
Capital in excess of par value 20,896 20,896 20,898
Retained earnings (deficit) (5,833) 702 1,450
Total shareholders' equity 27,822 34,357 35,109
$ 64,027 $ 62,128 $ 71,148
Page 5 of 17
BRENDLE'S INCORPORATED
Consolidated Statement of Cash Flows
(Unaudited)
(In thousands)
Six Months Ended
July 29, July 30,
1995 1994
Operating activities:
Net income (loss) $(6,535) $ 22,401
Items not requiring (providing) cash:
Depreciation and amortization 1,724 1,761
Extraordinary item- gain from debt forgiveness --- (30,249)
Changes in assets and liabilities:
Accounts receivable (2) 264
Merchandise inventories (1,245) 476
Other current assets (1,767) (2,086)
Accounts payable and accrued liabilities 2,133 6,999
Cash used by operating activities (5,692) (434)
Investing Activities:
Additions to property and equipment (647) (232)
Retirements of property and equipment --- 4,068
Addition in other assets 387 (306)
Cash provided (used) by investing activities (260) 3,530
Financing Activities:
Decrease in liabilities subject to compromise --- (52,070)
Outstanding checks 1,242 ---
Increase in long-term liabilities (284) 618
Increase in reorganization notes --- 276
Decrease in capitalized lease obligations (871) (851)
Borrowings on revolving credit facility 6,233 16,476
Decrease in reorganization reserve (19) ---
Redemption of common stock --- (8)
Decrease in paid-in-capital --- (7)
Cash provided (used) by financing activities 6,301 (35,566)
Net increase (decrease) in cash and
temporary cash investments 349 (32,470)
Cash and temporary cash investments
- beginning of year 1,781 34,774
Cash and temporary cash investments
- end of year $2,130 $ 2,304
Supplemental disclosure of non-cash financing activities:
During fiscal year 1995, the Company issued 4,469,201 shares of Common Stock
valued at $7,263,000 to creditors under the terms of its Plan of Reorganization
which resulted in an increase in capital in excess of par value of $2,793,000.
Page 6 of 17
BRENDLE'S INCORPORATED
NOTES TO FINANCIAL STATEMENTS
Note 1. In the opinion of management, the accompanying
unaudited financial statements reflect all adjustments,
consisting only of normal recurring adjustments,
necessary to present fairly the results of the interim
period in accordance with generally accepted accounting
principles.
Note 2. In April 1986, four shareholders of the Company agreed
not to transfer or sell their Common Stock to any
unrelated party (as defined) without the written
consent of the other parties to the agreement. In
addition, in the event of the death of one of the four
shareholders, the Company can be required to purchase
their Common Stock at fair value up to the life
insurance proceeds, consisting of policies with a face
value of $5,250,000, $5,000,000, $3,070,000 and
$3,000,000, respectively. An amount equal to the cash
surrender value of these policies at July 29, 1995 and
July 30, 1994 of $529,000 and $529,000, respectively,
has been shown as an other deferred credit on the
balance sheet with a corresponding reduction in
retained earnings. At July 29, 1995, the Company has
taken out loans against the cash surrender value of
these policies in the sum of $2,535,000 to finance
current capital requirements.
Note 3. Due to the current net operating loss, there was no
provision for income taxes. Tax refunds resulting from
losses incurred are calculated using tax payments of
three prior years. Any losses in excess of those
allowed for carry-back are carried forward for use as
future earnings allow. These loss carry-forwards at
January 28, 1995 were approximately $66,000,000. Tax
loss carry-backs were exhausted during the second
quarter of Fiscal 1992.
Note 4. Effective for the first quarter of Fiscal 1994, the
Company implemented Statement of Financial Accounting
Standards 109, "Accounting for Income Taxes," (SFAS
109). SFAS 109 mandates the use of the liability
method to calculate deferred taxes. SFAS 109 permits
restatement of earlier years or presentation of the
cumulative effect of the change in the years adopted.
The Company has adopted the Statement prospectively,
and the adoption does not impact the Company's
financial condition or results of operations due to the
fact that the Company has recorded a valuation
allowance against the deferred tax asset which
primarily results from the Company's net operating loss
carry-forwards.
Page 7 of 17
Note 5. Outstanding checks totaling $2,295,000 on July 29, 1995
were classified under current liabilities (as
outstanding checks) and included in cash at July 29,
1995.
Note 6. Settlement of pre-petition liabilities resulted in debt
forgiveness that is shown as an extraordinary item on
the income statement. On July 30, 1994, liabilities
subject to compromise included disputed claim
obligations where claim objections were filed with the
Bankruptcy Court, which have subsequently been
resolved.
Page 8 of 17
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Overview
Since May 29, 1993, the Company has operated 30 retail
stores, which are merchandised as a group of specialty stores
under one roof offering an in-depth selection of jewelry, gifts,
electronics, housewares and juvenile products. Given the current
competitive retail environment, management has attempted be
proactive in an effort to strengthen the Company's niche in the
marketplace. The Company has undertaken several strategies to
achieve this goal, including, but not limited to, the following:
The Company is expanding its "store-within-a-store" concept
by adding Brendle's "Party Universe" departments to its merchandise
offering. The Party Universe departments will offer a full array
of party and paper products including, but not limited to, color
coordinated drink-ware, plates, serving trays, gift wrap, theme
party decorations, banquet supplies and seasonal departments
(Valentines, Graduation, Halloween, Christmas, etc.). Party
Universe is a franchised department and is expected to be placed
in twelve of the Company's stores in 1995. The Company plans to
have a Party Universe department in all stores within the next
year. Management elected to implement a franchised department of
these product lines to take advantage of the franchisor's
marketing and merchandising expertise. This assortment of
consumable party goods and discount paper products is expected to
increase traffic in the stores and complement the current
selection of gifts for any occasion.
At the end of the second quarter of Fiscal 1996, the Company
was nearing the completion of conversion to a fully integrated
management information system. When completed, these systems will
link new point-of-sale ("POS") equipment in the stores and new
merchandising, warehouse, inventory and financial control systems
at the home office. Utilization of this modern technology will
provide many benefits including better customer service from
improved POS equipment, enhanced sales analysis for merchandise
selection and evaluation, merchandise-demand forecasting/
marketing information, effective linkage with suppliers for
purchasing decisions and automatic replenishment and reorder
systems to improve inventory performance. The POS equipment and
financial systems have been installed, and management plans for
the balance of the systems conversion to be completed by the end
of August, 1995.
Page 9 of 17
Also during the quarter ended July 29, 1995, the Company sold
its lease in Chapel Hill, North Carolina. This will allow the
company to relocate that store to Cary, North Carolina, which is
located in the Raleigh-Durham / Research Triangle Park area.
Based on market research and the retail demographics, this area
should provide the Company with potential to grow its market
share. The Company conducted a moving sale that was completed on
August 5, 1995. The new Cary store is scheduled to open in
October 1995 and will include a 6,000-square foot Party Universe
department.
Comparison of Operations
Second Quarter Fiscal 1996 Compared to Second Quarter Fiscal 1995
Net sales for the second quarter of FYE January 1996,
("Fiscal 1996") decreased $2,634,000, or 8.1%, compared to the
same period last year. The Company operated 30 stores during
both years; therefore, the comparable store sales decrease was
also 8.1%. The decrease in sales was due partially to the planned
elimination of one promotional flyer in the second quarter of
Fiscal 1996. For the second quarter of Fiscal 1995, sales
reflected the impact of aggressive markdowns on items dropped from
the Company's merchandise assortment(discontinued items). For the
second quarter of Fiscal 1996, the Company's reduced inventory
position in discontinued items eliminated the need for such
aggressive clearance promotions. These less aggressive clearance
promotions had a negative impact on sales, but positively affected
gross margin as discussed below.
Other income, which consists of miscellaneous non-recurring
items, was $1,000 for the second quarter of Fiscal 1996 compared
to $31,000 for the same period last year.
The cost of merchandise sold in the second quarter of Fiscal
1996 was $21,953,000 compared to $25,137,000 for the same period
last year. The decrease in cost of goods sold was primarily the
result of the decrease in sales partially offset by the
improvement in the gross margin percentage, as discussed above.
Gross margin as a percentage of revenues was 27.1% for the
second quarter of Fiscal 1996 compared to 23.3% for the same
period last year. This increase in the gross margin percentage is
the result of an increase in the jewelry sales mix, coupled with
the Company's planned reduction in promotional and clearance sales
as discussed above.
Selling, operating, and administrative expenses ("SO & A") for
the second quarter of Fiscal 1996 and 1995 were $10,096,000 and
$9,701,000, respectively. This increase is primarily the result
of
Page 10 of 17
increased advertising costs due to increased paper costs and costs
associated with the implementation of the Company's new management
information system. SO & A expenses, as a percentage of revenues,
increased to 33.5%, compared to 29.6% for the same period last
year, primarily due to the decrease in total sales as discussed
above.
Interest on capital leases for the second quarters of Fiscal
1996 and Fiscal 1995 was $51,000 and $111,000, respectively. This
interest expense is less because the Company's capital leases are
near the end of term. For the second quarter of Fiscal 1996, fees
associated with the Revolving Credit Facility of $155,000 are
included in other interest. Interest expense on other debt was
$640,000 compared to $355,000 for the same quarter last year. This
increase in interest expense is due to higher interest rates and
increased borrowings under the Company's $45,000,000 Revolving
Credit Facility.
Gain on sale of facilities of $955,000 for Fiscal 1996 was
from the sale of the lease at the Chapel Hill, North Carolina
store which the Company is relocating to Cary, North Carolina.
Reorganization costs of $457,000 for the second quarter of
Fiscal 1995 consists of costs associated with the Chapter 11
proceeding, revolving credit facility fees of $143,000, and store
closing expenses for stores closed in prior years. Because the
Company has achieved consummation of its Plan of Reorganization,
there were no reorganization costs for the second quarter of
Fiscal 1996.
Debt forgiveness recorded for the second quarter of Fiscal
1995 was $1,576,000. This amount represents the pre-petition debt
forgiven under the Plan of Reorganization subsequent to April 29,
1994. The Company did not report any debt forgiveness for the
second quarter of Fiscal 1996.
Net loss for the second quarter of Fiscal 1996 was $2,691,000
compared to a net loss of $2,433,000 for the second quarter of
Fiscal 1995. Comparing the results of the second quarters of both
years is somewhat complicated due to the unusual financial
occurrences of the bankruptcy proceeding. Therefore, management
believes earnings (loss) before interest, taxes, depreciation,
amortization and reorganization items ("EBITDA") is a useful tool
for measuring performance.
Page 11 of 17
EBITDA (loss) for the second quarter of Fiscal 1996 was
($1,940,000) compared with ($2,065,000) for the same period last
year.
The Company's tax loss carry-backs were exhausted in Fiscal
1992 resulting in the loss of any tax benefit for the first
quarter of Fiscal 1996. The loss carry-forwards will be used as
future earnings allow.
First Six Months Fiscal 1996 Compared to First Six Months Fiscal 1995
Net sales for the first six months of FYE January 1996 were
$54,028,000 compared with $58,690,000, a 7.9% decrease from the
same period last year. The Company operated 30 stores during
both years; therefore, the comparable store sales decrease was
also 7.9%. The decrease in sales was primarily the result of a
competitive retail environment, the elimination of three
promotional flyers in the first half of the year, and less
aggressive "clearance promotions."
Other income, which consists of miscellaneous non-recurring
items was $234,000 for the first half of Fiscal 1996 compared to
$62,000 for the same period last year.
The cost of merchandise sold in the first six months of
Fiscal 1996 was $38,930,000 compared to $43,946,000 for the same
period last year. The decrease in cost of merchandise sold was
primarily the result of the decrease in sales as discussed above.
Gross margin as a percentage of revenues was 28.3% for the
first six months of Fiscal 1996 compared to 25.2% for the same
period last year. This increase in the gross margin percentage is
the result of an increase in the jewelry sales mix, coupled with
the Company's planned reduction in promotional and clearance sales
as discussed above.
Selling, operating, and administrative expenses ("SO & A")
for the first six months of Fiscal 1996 and 1995 were $19,577,000
and $19,229,000, respectively. This increase is primarily the
result of increased advertising costs due to increased paper and
postage costs and costs associated with the implementation of the
Company's new management information system. SO & A expenses, as a
percentage of revenues, increased to 36.1%, compared to 32.7% for
the same period last year, primarily due to the decrease in total
sales as discussed above.
Interest on capital leases for the first six months of
Fiscal 1996 and Fiscal 1995 was $102,000 and $222,000,
respectively. This interest expense is less because the Company's
capital leases are
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near the end of term. For the first six months of Fiscal 1996,
bank fees of $289,000 are included in other interest compared to
zero for the same period last year. Interest expense on other
debt was $1,131,000 compared to $596,000 for the same period last
year. This increase in interest expense is due to higher interest
rates and increased borrowings under the Company's $45,000,000
Revolving Credit Facility.
Gain on sale of facilities of $955,000 for Fiscal 1996 was
from the sale of the Company's lease at its Chapel Hill, North
Carolina store which is being relocated to Cary, North Carolina.
Reorganization costs of $846,000 for the first six months of
Fiscal 1995 consists of costs associated with the Chapter 11
proceeding, revolving credit facility fees of $143,000, and store
closing expenses for stores closed in prior years. Because the
Company has achieved consummation of its Plan of Reorganization,
there were no reorganization costs for Fiscal 1996.
Debt forgiveness recorded for the first six months of Fiscal
1995 was $30,249,000. This amount represents the pre-petition
debt forgiven under the Plan of Reorganization subsequent to
April 29, 1994. The Company did not report any debt forgiveness
for the second quarter of Fiscal 1996.
Net loss for the first six months of Fiscal 1996 was
$6,535,000 compared to a net income of $22,401,000 for the same
period last year. Comparing the results of both years is somewhat
complicated due to the unusual financial occurrences of the
bankruptcy proceeding. For instance, the net income for the first
six months of Fiscal 1995 included reorganization costs of
$703,000 and debt forgiveness of $30,249,000. The first six
months of Fiscal 1996 reflect more normalized operations.
Therefore, management believes earnings (loss) before interest,
taxes, depreciation, amortization and reorganization items
("EBITDA") is a useful tool for measuring performance.
EBITDA (loss) for the first six months of Fiscal 1996 was
($4,245,000) compared with ($4,427,000) for the same period last
year.
The Company's tax loss carry-backs were exhausted in Fiscal
1992 resulting in the loss of any tax benefit for the first
quarter of Fiscal 1996. The loss carry-forwards will be used as
future earnings allow.
Page 13 of 17
Liquidity and Capital Resources
The Company's business is highly seasonal with operating cash
and working capital needs fluctuating during the year in relation
to seasonal inventory levels. These requirements are financed by
internally generated funds, borrowings under the Company's
Revolving Credit Facility and vendor credit terms. Cash flow from
operations is primarily generated in the fourth quarter of the
fiscal year.
The Company's cash balance at July 29, 1995 was $2,130,000
compared to $2,304,000 at July 30, 1994 and is consistent with
management's expectations.
Merchandise inventories were $49,696,000 at July 29, 1995,
compared to $53,657,000 at July 30, 1994. The decline in
inventories was primarily the result of a planned reduction in the
number of units kept in stock.
Current liabilities at July 29, 1995 were $33,860,000, as
anticipated in the Company's business plan, compared with
$31,343,000 at July 30, 1994.
On April 20, 1994, the Company received Bankruptcy Court
approval for a five-year, $45,000,000 Revolving Credit Facility
which was used to fund payments to creditors and to fund working
capital, inventory purchases, capital expenditures, and other
general corporate purposes. The $45,000,000 Revolving Credit
Facility includes restrictions on capital expenditures as well as
standard covenants found in similar agreements. These include two
financial ratio covenants: (1) current ratio, and (2) total
liabilities to tangible net worth ratio. At July 29, 1995, the
Company was in compliance with all covenants.
Under the Revolving Credit Facility, the lender agrees to
make revolving loans and issue or guarantee letters of credit for
the Company in an amount not exceeding the lesser of the Borrowing
Base (as defined in the Loan Agreement), or $45,000,000. The
Revolving Credit Facility includes a sub-limit of $10,000,000 for
documentary and stand-by letters of credit.
The Revolving Credit Facility provides that each loan shall
bear interest at a rate of prime plus one and forty-four one
hundredths (1.44) percentage points. Interest on these loans
shall be payable monthly in arrears on the first day of each
month. Also, under the Revolving Credit Facility, the Company
pays an unused line fee for an amount equal to one-half percent
(.50%) per annum on the unused portion of the Revolving Credit
Facility and a
Page 14 of 17
letter of credit fee equal to two and one-half percent (2.5%) per
annum on the average daily balance of the aggregate undrawn
letters of credit and letter of credit guarantees outstanding
during the immediately preceding month and certain other fees.
The Revolving Credit Facility also requires an annual facility fee
equal to one-half of one percent (.50%) of the maximum amount of
the facility payable on each anniversary of the Facility closing date
and a monthly servicing fee of $3,500 per month. The Company also paid
an initial, one-time fee of $450,000 in order to establish the Revolving
Credit Facility.
At July 29, 1995, the Company had borrowed $21,601,000 from
the Revolving Credit Facility and had outstanding $1,984,000 in
open letters of credit, for a total of $23,585,000. At July 29,
1995, the total available under the Revolving Credit Facility
based on the borrowing base formula (55% of eligible inventory)
was $25,014,000. From August 1 through December 15 of each year,
the borrowing base formula increases to 65% of the eligible
inventory, increasing the total available under the Facility on
August 1, 1995 by approximately $5,000,000.
The Company's capacity to continue as a going concern is
dependent, in part, on the Company's ability to obtain merchandise
on a timely basis from its vendors under favorable credit terms.
Since the filing of the Chapter 11 Proceeding, the Company's
ability to obtain credit through arrangements such as the
Revolving Credit Facility, and vendor credit lines have continued
to improve and are at the highest level experienced since the
Chapter 11 filing. Management of the Company believes that its
ability to obtain credit should continue to improve based on the
acceptable performance of the Company.
In addition to cash used for operations, approximately
$488,000 was also used for capital expenditures during the first
six months of Fiscal 1996. The Company anticipates Fiscal 1996
capital expenditures will be primarily for normal facility
maintenance, store relocation, and various projects to improve
information systems.
Management believes the Revolving Credit Facility, together
with the cash from operations and vendor credit, should be
adequate to cover working capital requirements and capital
expenditures.
Page 15 of 17
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On November 22, 1992, the Company and its wholly-owned
principal operating subsidiary, Brendle's Stores, Inc. (BSI),
(collectively sometimes referred to as the "Company") filed for
protection under Chapter 11 of the Bankruptcy Code. Under Chapter
11, the Company and BSI, Debtors In Possession, continued to
conduct business in the ordinary course under the protection of
the Bankruptcy Code while a Plan of Reorganization was developed
to restructure and reorganize the debt structure and allow the
debtor to strengthen its financial position.
On November 10, 1993, the Company filed a modified Plan of
Reorganization (the "Plan") with the United States Bankruptcy
Court for the Middle District of North Carolina. The Plan was
approved by the Company's creditors and shareholders in December,
1993, and was confirmed by the Bankruptcy Court by order entered
on December 20, 1993. On April 29, 1994, the Company
substantially consummated its Plan of Reorganization by making
payments to creditors in accordance with the Plan and distributing
stock for the benefit of certain unsecured creditors.
ITEM 2. CHANGES IN SECURITIES
On April 29, 1994, the date the Plan of Reorganization was
substantially consummated, the Company issued 4,469,191 shares of
Common Stock, or 35% of the outstanding stock, to Arnold Zahn of
Zahn and Associates, Inc., as escrow agent for the Unsecured
Creditors, pending the resolution of certain disputed claims.
These shares were valued at $7,263,000 and brought the total
shares outstanding to 12,769,145 at April 30, 1994.
ITEM 3. DEFAULT UPON SENIOR SECURITIES None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None
ITEM 5. OTHER INFORMATION None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
Page 16 of 17
SIGNATURES
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.
BRENDLE'S INCORPORATED
(Registrant)
_______________________
David R. Renegar
Vice President and
Chief Financial Officer
Date: September 12, 1995
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