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 27, 1996.
[ ] 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 September 10, 1996, there were 12,756,284 shares of the issuer's Common
Stock outstanding.
Page 2 of 15
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 27, July 29,
1996 1995
---------------- ----------------
Net sales $ 10,326 $ 30,108
Other income 9 1
---------------- ----------------
Total revenue 10,335 30,109
---------------- ----------------
Cost and expenses:
Cost of merchandise sold 7,311 21,953
Selling, operating and
administrative expenses 5,029 10,096
Depreciation and amortization 493 860
Interest expense:
Capitalized leases 6 51
Other 467 795
Gain on sale of facilities - (955)
Provision for restructuring 408 -
---------------- ----------------
13,714 32,800
---------------- ----------------
Loss before provision for income taxes (3,379) (2,691)
Provision for income taxes (Note 3) - -
---------------- ----------------
Net loss $ (3,379) $ (2,691)
================ ================
Weighted average shares outstanding $ 12,757 12,759
---------------- ----------------
Net loss per share $ (0.26) $ (0.21)
---------------- ----------------
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BRENDLE'S INCORPORATED
Consolidated Statement of Income
(Unaudited)
(In thousands except per share data)
Six Months Ended
-------------------------------------
July 27, July 29,
1996 1995
---------------- ----------------
Net sales $ 36,011 $ 54,028
Other income 18 234
---------------- ----------------
Total revenue 36,029 54,262
---------------- ----------------
Cost and expenses:
Cost of merchandise sold 26,922 38,930
Selling, operating and
administrative expenses 15,641 19,577
Depreciation and amortization 1,113 1,724
Interest expense:
Capitalized leases 23 102
Other 1,229 1,420
Gain on sale of facilities - (955)
Provision for restructuring 9,622 (1)
---------------- ----------------
54,550 60,797
---------------- ----------------
Loss before provision for income taxes (18,521) (6,535)
Provision for income taxes (Note 3) - -
---------------- ----------------
Net loss $ (18,521) $ (6,535)
================ ================
Weighted average shares outstanding 12,757 12,759
---------------- ----------------
Net loss per share $ (1.45) $ (0.51)
---------------- ----------------
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BRENDLE'S INCORPORATED
Consolidated Balance Sheet
(Unaudited)
(In thousands except per share data)
July 27, January 27, July 29,
1996 1996 1995
---------------- ---------------- ---------------
Assets
Current Assets:
Cash and temporary cash investments $ 2,841 $ 1,380 $ 2,130
Accounts receivable 899 1,295 973
Merchandise inventories 18,358 50,147 49,696
Other current assets 2,040 1,211 3,128
---------------- ---------------- ---------------
Total current assets 24,138 54,033 55,927
Property and equipment, less accumulated
depreciation and amortization 6,511 7,387 7,699
Other assets 772 568 401
---------------- ---------------- ---------------
$ 31,421 $ 61,988 $ 64,027
================ ================ ===============
Liabilities and Shareholders' Equity
Current liabilities:
Revolving credit facility $ (4) $ 22,275 $ 21,601
Accounts payable
Trade 1,602 4,709 5,590
Outstanding checks (Note #5) 777 3,432 2,295
Current portion of capitalized lease obligations - 168 454
Current portion of restructuring reserve 200 206 426
Other accrued liabilities (Note #6) 7,038 4,150 3,494
---------------- ---------------- ---------------
Total current liabilities 9,613 34,940 33,860
Reorganization notes 202 207 368
Capitalized lease obligations, less current portion - 282 365
Other liabilities 1,148 1,328 1,083
Other deferred credit 425 425 529
---------------- ---------------- ---------------
Total long-term liabilities 1,775 2,242 2,345
Liabilities subject to compromise 13,748 - -
Total Liabilities 25,136 37,182 36,205
---------------- ---------------- ---------------
Shareholders' equity:
Common stock, $1 par value, 20,000,000
shares authorized, 12,756,284, 12,756,284
and 12,758,717 shares issued and outstanding 12,756 12,756 12,759
Capital in excess of par value 20,895 20,895 20,896
Retained earnings (deficit) (27,366) (8,845) (5,833)
---------------- ---------------- ---------------
Total shareholders' equity 6,286 24,806 27,822
---------------- ---------------- ---------------
$ 31,422 $ 61,988 $ 64,027
================ ================ ===============
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BRENDLE'S INCORPORATED
Consolidated Statement of Cash Flows
(Unaudited)
(In thousands)
Six Months Ended
-------------------------------------
July 27, July 29,
1996 1995
---------------- ----------------
Operating activities:
Net loss $ (18,521) $ (6,535)
Items not requiring (providing) cash:
Depreciation and amortization 1,113 1,724
Changes in assets and liabilities:
Accounts receivable 396 (2)
Merchandise inventories 31,789 (1,245)
Other current assets (829) (1,767)
Accounts payable and accrued liabilities (219) 2,133
---------------- ----------------
Cash provided (used) by operating activities 13,729 (5,692)
---------------- ----------------
Investing Activities:
Additions to property and equipment (448) (647)
Retirements of property and equipment 211 -
Addition in other assets (204) 387
---------------- ----------------
Cash used by investing activities (441) (260)
---------------- ----------------
Financing Activities:
Increase in liabilities subject to compromise 13,748 -
Outstanding checks (2,655) 1242
Decrease in long-term liabilities (467) (284)
Decrease in capitalized lease obligations (168) (871)
Borrowings on revolving credit facility (22,279) 6,233
Decrease in reorganization reserve (6) (19)
-------------------------------------
Cash provided (used) by financing activities (11,827) 6,301
---------------- ----------------
Net increase (decrease) in cash and
temporary cash investments 1,461 349
Cash and temporary cash investments
- beginning of year 1,380 1,781
---------------- ----------------
Cash and temporary cash investments
- end of year $ 2,841 $ 2,130
================ ================
Page 6 of 15
BRENDLE'S INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. In the opinion of management, the accompanying unaudited
condensed consolidated financial statements reflect all
adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the results of the interim period.
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.
On September 29, 1995, Patty Brendle Redway, one of the four
shareholders, died. The Company subsequently recognized a gain
of approximately $2,555,000 from life insurance proceeds,
which represents the face value of the policy ($3,000,000),
less cash surrender value previously recorded. The Estate of
Mrs. Redway has exercised the right to cause the Company to
redeem from the Estate 1,812,667 shares of stock. The Company
has recorded a liability of $988,000 for the potential
purchase of this Common Stock with a corresponding cumulative
reduction in retained earnings. This liability is included in
liabilities subject to compromise. The Company will not be
able to comply with the terms of this Agreement without the
approval of the Bankruptcy Court.
An amount equal to the cash surrender value of these remaining
policies at July 27, 1996 and July 29, 1995 of $425,000 and
$529,000, respectively, has been shown as an other deferred
credit on the balance sheet with a corresponding reduction in
retained earnings. As of July 27, 1996, the Company has taken
out loans against the cash surrender value of these policies
in the sum of $1,852,000 to finance current capital
requirements.
Note 3. 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. 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
Page 7 of 15
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.
Note 5. Outstanding checks totaling $777,000 on July 27, 1996 were
classified under current liabilities (as outstanding checks)
and included in cash at July 27, 1996.
Note 6. The Company received a tax refund of $3,385,000 related to
net operating loss carrybacks of previous years. This refund
is currently under review by the Internal Revenue Service
(IRS). The Company did not record a benefit for the item, but
recorded it in accrued liabilities until clearance is received
from the IRS.
Page 8 of 15
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Overview
On April 16, 1996 the Company filed for protection under Chapter 11
of the Bankruptcy Code in order to implement a new strategic business plan
premised upon a significantly revised merchandise strategy, which eliminated
certain departments of merchandise, presented new product lines in the
"Party Universe" and crafts departments and expanded offerings in "for the
home" merchandise. The strategy also included corporate down-sizing, closing
18 of the Company's 30 stores and renovation of the twelve "go-forward" stores.
The Company discontinued normal operations in the eighteen stores
during the first week of May and over the next 10 weeks conducted inventory
liquidation sales of merchandise from those 18 stores and the inventory from
the exited departments using the servies of Schottenstein Bernstein Capital
Group. The inventory liquidation sales are not reflected in sales and gross
margin results for the quarter, but the estimated loss on inventory was
included in the restructuring expense shown in the first quarter of Fiscal
1997.
Due to the changes discussed above, the second quarter of Fiscal
1997 was a transition period from the old concept to "the New Brendle's."
The results for the quarter reflect the impact of the disruption in business
from the transition and is not representative of the results anticipated
once the strategic plan is completed.
Comparison of Operations
Second Quarter Fiscal 1997 Compared to Second Quarter Fiscal 1996
Net sales for the second quarter of FYE January 1997, ("Fiscal 1997")
were $10,326,000 versus $30,108,000 for the same period last year which is a
decrease of $19,782,000, or 65.7%. This decrease in sales is attributed to the
Company operating 18 fewer stores during the second quarter of Fiscal 1997
compared to the second quarter of Fiscal 1996. Comparable store sales decreased
24.3% from the second quarter of last year due primarily to the elimination of
certain merchandise offerings in accordance with the new merchandise strategy as
discussed above, the general disruption in sales during the change-over of the
existing stores to "the New Brendle's" format, and cancellation of one
promotional flyer during the month of July.
Other income, which consists of miscellaneous non-recurring items was
$9,000 for the second quarter of Fiscal 1997 compared to $1 for the same period
last year.
The cost of merchandise sold in the second quarter of Fiscal 1997 was
$7,311,000 compared to $21,953,000 for the same period last year. The decrease
in cost of goods sold was primarily the result of the decrease in sales because
of store closings.
Gross margin as a percentage of revenues was 29.26% for the second
quarter of Fiscal 1997 compared to 27.09% for the same period last year. This
increase in the gross margin percentage is primarily the result of the
elimination of certain lower margin departments of merchandise in accordance
with the new merchandise strategy, as discussed above, and the cancellation of
one promotional flyer.
Selling, operating, and administrative expenses ("SO & A") for the
second quarter of Fiscal 1997 and 1996 were $5,029,000 and $10,096,000,
respectively. This decrease is primarily the result of operating 18 fewer stores
than last year. SO & A expenses, as a percentage of revenues, increased to
48.7%, compared to 33.5% for the same period last year. The increase in SO & A
expense, as a percentage of revenues, is attributed to the decrease in total
sales dollars.
Page 9 of 15
Depreciation and amortization expense for the second quarter of Fiscal
1997 and Fiscal 1996 was $493,000 and $860,000, respectively. Expense for fixed
asset depreciation and amortization is less because certain assets have become
fully depreciated and certain leases which were previously accounted for as
capital leases were renewed in the third quarter of last year and have been
included as operating leases in SO & A expense.
Interest on capital leases for Fiscal 1997 and Fiscal 1996 was $6,000
and $51,000, respectively. This interest expense is less due to the renewal of
nine leases in the third quarter of last year, which are being accounted for as
operating leases and the cost is reflected in the SO & A expense. Interest
expense on other debt and bank fees was $467,000 compared to $795,000 for the
same quarter last year. This decrease in interest expense is due to decreased
borrowings under the Company's $25 million Debtor-in-Possession Revolving Credit
Facility ("DIP Facility"). Borrowings were less than last year because of
inventory liquidation in the eighteen closed stores and the resulting paydown on
the DIP Facility.
Reorganization costs of $408,000 for the second quarter of Fiscal 1997
reflect the costs associated with the closing of the 18 stores, corporate
down-sizing, and other costs of the Chapter 11 Proceeding. There were no
reorganization costs for the second quarter of Fiscal 1996.
Net loss for the second quarter of Fiscal 1997 was $3,379,000 compared
to $2,691,000 for the second quarter of Fiscal 1996. Fiscal 1997 net loss
includes $408,000 of reorganization costs as discussed above. Management
believes earnings (loss) before interest, taxes, depreciation, amortization and
reorganization items ("EBITDA") is a useful tool for measuring performance
because net income (loss) is not comparable with the previous period due to the
Chapter 11 Proceeding.
EBITDA(loss) for the second quarter of Fiscal 1997 was ($2,005,000)
compared with ($1,940,000) 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 1997 Compared to First Six Months Fiscal 1996
Net sales of $36,011,000 for the first six months of FYE January 1997,
("Fiscal 1997") decreased $18,017,000, or 33.3% from $54,028,000 for the same
period last year. The Company operated 30 stores during a substantial portion of
the first quarter of both years. However, following store closings in the first
week of May, 1996, second quarter results for Fiscal 1997 included sales for
only 12 stores compared to thirty stores for the second quarter of last year.
Comparable store sales for the first six months of Fiscal 1997 decreased 11.0%
because of the elimination of certain merchandise departments that were sold
during
Page 10 of 15
the prior year and the disruption in sales by remodeling stores to make way for
new merchandise departments.
Other income, which consists of miscellaneous non-recurring items was
$18,000 for the first six months of Fiscal 1997 compared to $234,000 for the
same period last year.
The cost of merchandise sold in the first six months of Fiscal 1997 was
$26,922,000 compared to $38,930,000 for the same period last year. The decrease
in cost of goods sold was primarily the result of the decrease in sales during
the second quarter of Fiscal 1997, as discussed above, offset by a store closing
sale in Greensboro, North Carolina during the first quarter of the year.
Gross margin as a percentage of revenues was 25.3% for the first six
months of Fiscal 1997 compared to 28.3% for the same period last year. This
decrease in the gross margin percentage is primarily the result of the store
closing sale during the first quarter of this year offset by the elimination of
lower gross profit percentages on exited product lines during the second quarter
of Fiscal 1997.
Selling, operating, and administrative expenses ("SO & A") for the
first six months of Fiscal 1997 and 1996 were $15,641,000 and $19,577,000,
respectively. This decrease is primarily the result of operating 18 fewer stores
during the second quarter of the year. SO & A expenses, as a percentage of
revenues, increased to 43.4%, compared to 36.1% for the same period last year.
The increase in SO & A expense, as a percentage of revenues, is attributed to
the decrease in total sales dollars.
Depreciation and amortization expense for the first six months of
Fiscal 1997 and Fiscal 1996 was $1,113,000 and $1,724,000, respectively. Expense
for fixed asset depreciation and amortization is less because certain assets
have become fully depreciated and certain leases which were previously accounted
for as capital leases were renewed during the third quarter of last year and
have been included as operating leases in SO & A expense.
Interest on capital leases for Fiscal 1997 and Fiscal 1996 was $23,000
and $102,000, respectively. This interest expense is less due to the renewal of
nine leases during the third quarter of last year, which are being accounted for
as operating leases and the cost is reflected in the SO & A expense. Interest
expense on other debt and bank fees was $1,229,000 compared to $1,420,000 for
the same period last year. This decrease in interest expense is due to a
decrease in borrowings under the Company's DIP Facility in the second quarter of
Fiscal 1997.
Reorganization costs of $9,622,000 for the first six months of Fiscal
1997 reflect the reserve for the liquidation of inventory and other costs
associated with the closing of the 18 stores, corporate down-sizing, and other
costs of the Chapter 11 Proceeding. There were no reorganization costs for the
first six months of Fiscal 1996.
Page 11 of 15
Net loss for the first six months of Fiscal 1997 was $18,521,000
compared to $6,535,000 for the first six months of Fiscal 1996. Fiscal 1997 net
loss includes $9,622,000 of reorganization costs as discussed above. Management
believes earnings (loss) before interest, taxes, depreciation, amortization and
reorganization items ("EBITDA") is a useful tool for measuring performance
because net income (loss) is not comparable with the previous period due to the
Chapter 11 Proceeding.
EBITDA(loss) for the first six months of Fiscal 1997 was ($6,534,000)
compared with ($4,245,000) 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.
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.
As a product of the Chapter 11 Proceeding, Brendle's liquidity position
has been positively affected because the cash requirements for the payment of
accounts payable and certain other liabilities that were incurred prior to the
filing of the Chapter 11 Proceeding have, in most cases, been deferred until a
Plan of Reorganization is confirmed by the Bankruptcy Court. For financial
statement purposes, pre-petition liabilities which are dependent on the Chapter
11 Proceeding have been segregated and classified as "liabilities subject to
compromise" on the balance sheet. At July 27, 1996 liabilities subject to
compromise were $13,748,000.
The Company's cash balance at July 27, 1996 was $2,841,000 compared to
$2,130,000 at July 29, 1995.
Merchandise inventories were $18,358,000 at July 27, 1996, compared to
$49,696,000 at July 29, 1995. The decline in inventories was the result of
closing 18 stores and exiting certain merchandise categories per the new
merchandising strategy.
Current liabilities at July 27, 1996 were $9,613,000 compared with
$33,860,000 at July 29, 1995. This decrease resulted from the pay-down of the
revolving credit upon the liquidation of inventory at the 18 closed stores and
debt reclassified as liabilities subject to compromise which will be resolved
under the Chapter 11 Proceeding as discussed above.
Page 12 of 15
On April 30, 1996, the Company received Bankruptcy Court Approval for a
one-year $25 million Debtor-In-Possession Revolving Credit Facility ("DIP
Facility") to be used to retire Foothill's pre-petition secured loan and, to the
extent necessary, fund working capital requirements. The $25 million DIP
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. As the inventory at the eighteen closing stores was liquidated, the
proceeds were applied to the balance of the DIP Facility. The Company had no
borrowings under the DIP Facility on July 27, 1996.
Under the DIP 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 $25
million. The maximum borrowing capacity was reduced to $15 million on June 2,
1996. The Revolving Credit Facility includes a sublimit of $2 million for
documentary and stand-by letters of credit.
The DIP Facility provides that each loan shall bear interest at a rate
of prime plus two (2.00) percentage points. Interest on these loans shall be
payable monthly in arrears on the first day of each month. Also, under the DIP
Credit Facility, the Company pays an unused line fee for an amount equal to
one-half of one percent (.50%) per annum on the unused portion of the DIP
Facility and a 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 DIP Facility also requires a monthly servicing
fee of $3,500 per month. The Company also paid a one-time fee of $150,000 in
order to establish the DIP Facility.
The Company's ability to continue as a going concern is dependent, in
part, on its ability to obtain merchandise on a timely basis from vendors on
acceptable terms. Many vendors have agreed to resume shipments and negotiations
with vendors are returning payment terms and credit lines to more acceptable
levels. Management of the Company believes the DIP facility will have a
significant positive impact on terms it is able to receive from its vendors.
In addition to cash used for operations, approximately $448,358 was
also used for capital expenditures during the first six months of Fiscal 1997.
The Company anticipates total capital expenditures for Fiscal 1997 of
approximately $1,300,000 primarily for normal facility maintenance and the
refurbishing of the twelve (12) go-forward stores in accordance with the 1996
strategic plan.
Management believes the DIP Facility, together with the cash from
operations and vendor credit, should be adequate to cover working capital
requirements and capital expenditures.
Page 13 of 15
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On April 16, 1996, the Company filed a Voluntary Petition with the
United States Bankruptcy Court for the Middle District of North Carolina
instituting a Chapter 11 reorganization proceeding. The case has been assigned
number B-96-50495C-11W. Subsequent to the filing of the voluntary Petition, the
Company sought and obtained numerous orders from the Bankruptcy Court which were
intended to stabilize and enhance its business operations. These include, among
others, orders (i) authorizing the employment of various professionals to assist
the Debtor and Committees; (ii) authorizing payment of employee wages and
benefits in the ordinary course of its business; (iii) authorizing the Company
to maintain its existing bank accounts; (iv) authorizing the Company to honor
all layaway agreements, gift certificates and merchandise credits; (v)
authorizing the Company to continue in effect all employee benefit plans; (vi)
authorizing the Company to make payment to utility companies in the ordinary
course of business and determining that such payments constituted adequate
assurance of future performance; (vii) establishing an expedited claims bar date
of July 15, 1996; (viii)authorizing store closings and approving the sale of
inventory located therein; (ix) authorizing and approving a revolving post
petition credit line with Foothill Capital Corporation; (x) authorizing the
retention of professionals to market closed store leases; (xi) authorizing the
auction sale of equipment at closed store locations; (xii) establishing fee
guideline procedures; (xiii) approving a stock balancing program which allows
the Debtor to return merchandise to creditors for credits against pre-petition
claims; and (xiv) approving various lease termination agreements and settlements
reached with landlords.
ITEM 2. CHANGES IN SECURITIES None
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
(a) The Company filed a Form 8-K on April 29, 1996, reporting under
Item 3 the filing of the April 1996 Chapter 11 Proceeding.
Page 14 of 15
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 10, 1996
Page 15 of 15