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[X]
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Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended
November 1, 2014
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[ ]
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _____________ to _____________
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BROWN SHOE COMPANY, INC.
(
Exact name of registrant as specified in its charter)
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New York
(State or other jurisdiction
of incorporation or organization)
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43-0197190
(IRS Employer Identification Number)
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8300 Maryland Avenue
St. Louis, Missouri
(Address of principal executive offices)
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63105
(Zip Code)
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(314) 854-4000
(Registrant's telephone number, including area code)
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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FINANCIAL INFORMATION
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ITEM 1
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FINANCIAL STATEMENTS
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BROWN SHOE COMPANY, INC.
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||||||
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||||||
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(Unaudited)
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||||||
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($ thousands)
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November 1, 2014
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November 2, 2013
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February 1, 2014
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|||
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Assets
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|||||
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Current assets
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||||||
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Cash and cash equivalents
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$
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39,080
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$
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42,406
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$
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82,546
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Receivables, net
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138,217
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112,491
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129,217
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Inventories, net
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567,777
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544,589
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547,531
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|||
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Prepaid expenses and other current assets
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37,845
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52,234
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33,136
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|||
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Current assets – discontinued operations
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—
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181
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119
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|||
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Total current assets
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782,919
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751,901
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792,549
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|||
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||||||
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Other assets
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139,878
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111,647
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139,621
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|||
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Goodwill
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13,954
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13,954
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13,954
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Intangible assets, net
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121,820
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61,227
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59,719
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Property and equipment
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439,166
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428,137
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428,540
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Allowance for depreciation
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(287,877
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)
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(279,955
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)
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(284,980
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)
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|||
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Net property and equipment
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151,289
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148,182
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143,560
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Total assets
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$
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1,209,860
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$
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1,086,911
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$
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1,149,403
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||||||
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Liabilities and Equity
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Current liabilities
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|||
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Borrowings under revolving credit agreement
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$
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14,000
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$
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—
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$
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7,000
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Trade accounts payable
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203,062
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200,706
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226,602
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|||
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Other accrued expenses
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172,077
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151,142
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152,545
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Current liabilities – discontinued operations
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—
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2,110
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708
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Total current liabilities
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389,139
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353,958
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386,855
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Other liabilities
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Long-term debt
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199,150
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198,963
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199,010
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Deferred rent
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37,571
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37,548
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38,593
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Other liabilities
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42,983
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44,483
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47,583
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Total other liabilities
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279,704
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280,994
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285,186
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Equity
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Common stock
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437
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432
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434
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Additional paid-in capital
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138,682
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125,831
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131,398
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Accumulated other comprehensive income (loss)
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15,511
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(21
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)
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16,676
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Retained earnings
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385,624
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325,059
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328,191
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Total Brown Shoe Company, Inc. shareholders’ equity
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540,254
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451,301
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476,699
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Noncontrolling interests
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763
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658
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663
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Total equity
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541,017
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451,959
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477,362
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Total liabilities and equity
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$
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1,209,860
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$
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1,086,911
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$
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1,149,403
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BROWN SHOE COMPANY, INC.
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||||||||
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CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
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||||||||||||
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|||||||||||
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(Unaudited)
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|||||||||||
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Thirteen Weeks Ended
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Thirty-nine Weeks Ended
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||||||||||
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($ thousands, except per share amounts)
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November 1, 2014
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November 2, 2013
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November 1, 2014
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November 2, 2013
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||||
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Net sales
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$
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729,277
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$
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702,788
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$
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1,956,316
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$
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1,913,150
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Cost of goods sold
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438,547
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424,548
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1,163,603
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1,140,268
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Gross profit
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290,730
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278,240
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792,713
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772,882
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Selling and administrative expenses
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237,517
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233,572
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679,472
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678,522
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Restructuring and other special charges, net
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—
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—
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—
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1,262
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||||
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Impairment of assets held for sale
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—
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—
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—
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4,660
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||||
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Operating earnings
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53,213
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44,668
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113,241
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88,438
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||||
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Interest expense
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(5,207
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)
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(5,254
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)
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(15,637
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)
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(16,167
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)
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||||
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Interest income
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109
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132
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294
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282
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||||
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Earnings before income taxes from continuing operations
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48,115
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39,546
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97,898
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72,553
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||||
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Income tax provision
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(14,878
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)
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(12,495
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)
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(31,146
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)
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(24,522
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)
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||||
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Net earnings from continuing operations
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33,237
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27,051
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66,752
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48,031
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||||
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Discontinued operations:
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Earnings (loss) from discontinued operations, net of tax (expense) benefit of $0, ($114), $0 and $6,057, respectively
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—
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233
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—
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(4,784
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)
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||||
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Disposition/impairment of discontinued operations, net of tax of $0
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—
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—
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—
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(11,512
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)
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||||
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Net earnings (loss) from discontinued operations
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—
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233
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—
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(16,296
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)
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||||
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Net earnings
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33,237
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27,284
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66,752
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31,735
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||||
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Net earnings (loss) attributable to noncontrolling interests
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124
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(30
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)
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146
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(174
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)
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||||
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Net earnings attributable to Brown Shoe Company, Inc.
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$
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33,113
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$
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27,314
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$
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66,606
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$
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31,909
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||||||||
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Basic earnings (loss) per common share:
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||||
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From continuing operations
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$
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0.76
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$
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0.63
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$
|
1.53
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$
|
1.12
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From discontinued operations
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—
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—
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—
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(0.38
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)
|
||||
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Basic earnings per common share attributable to Brown Shoe Company, Inc. shareholders
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$
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0.76
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$
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0.63
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$
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1.53
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$
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0.74
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||||||||
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Diluted earnings (loss) per common share:
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||||
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From continuing operations
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$
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0.75
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$
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0.62
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$
|
1.52
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$
|
1.11
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From discontinued operations
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—
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0.01
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—
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(0.38
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)
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||||
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Diluted earnings per common share attributable to Brown Shoe Company, Inc. shareholders
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$
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0.75
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$
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0.63
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$
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1.52
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$
|
0.73
|
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|
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|
||||||||
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Dividends per common share
|
$
|
0.07
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$
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0.07
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$
|
0.21
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$
|
0.21
|
|
|
BROWN SHOE COMPANY, INC.
|
|
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||||||||
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|||||||||||||
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|
||||||||||
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(Unaudited)
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(Unaudited)
|
||||||||||
|
|
Thirteen Weeks Ended
|
|
Thirty-nine Weeks Ended
|
||||||||||
|
($ thousands)
|
November 1, 2014
|
|
November 2, 2013
|
|
|
November 1, 2014
|
|
November 2, 2013
|
|
||||
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Net earnings
|
$
|
33,237
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$
|
27,284
|
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$
|
66,752
|
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$
|
31,735
|
|
|
Other comprehensive (loss) income, net of tax:
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|
||||
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Foreign currency translation adjustment
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(1,159
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)
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(100
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)
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(28
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)
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(1,690
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)
|
||||
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Pension and other postretirement benefits adjustments
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(28
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)
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138
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(84
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)
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419
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||||
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Derivative financial instruments
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57
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(32
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)
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(1,053
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)
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366
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|
||||
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Other comprehensive (loss) income, net of tax
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(1,130
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)
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6
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(1,165
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)
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(905
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)
|
||||
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Comprehensive income
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32,107
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|
27,290
|
|
|
65,587
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|
30,830
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|
||||
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Comprehensive income (loss) attributable to noncontrolling interests
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93
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(25
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)
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|
100
|
|
(114
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)
|
||||
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Comprehensive income attributable to Brown Shoe Company, Inc.
|
$
|
32,014
|
|
$
|
27,315
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$
|
65,487
|
|
$
|
30,944
|
|
|
BROWN SHOE COMPANY, INC.
|
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|
||||
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|
||||
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(Unaudited)
|
|||||
|
|
Thirty-nine Weeks Ended
|
|||||
|
($ thousands)
|
November 1, 2014
|
|
November 2, 2013
|
|
||
|
Operating Activities
|
|
|
|
|||
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Net earnings
|
$
|
66,752
|
|
$
|
31,735
|
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
||
|
Depreciation
|
26,034
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|
26,645
|
|
||
|
Amortization of capitalized software
|
9,548
|
|
9,728
|
|
||
|
Amortization of intangible assets
|
2,963
|
|
4,741
|
|
||
|
Amortization of debt issuance costs and debt discount
|
1,885
|
|
1,885
|
|
||
|
Share-based compensation expense
|
4,568
|
|
4,066
|
|
||
|
Tax benefit related to share-based plans
|
(2,482
|
)
|
(2,581
|
)
|
||
|
Loss on disposal of facilities and equipment
|
1,400
|
|
960
|
|
||
|
Impairment charges for facilities and equipment
|
1,248
|
|
1,072
|
|
||
|
Impairment of assets held for sale
|
—
|
|
4,660
|
|
||
|
Disposition/impairment of discontinued operations
|
—
|
|
11,512
|
|
||
|
Net loss on sale of subsidiaries
|
—
|
|
576
|
|
||
|
Deferred rent
|
(1,022
|
)
|
3,837
|
|
||
|
Provision for doubtful accounts
|
298
|
|
388
|
|
||
|
Changes in operating assets and liabilities, net of dispositions:
|
|
|
|
|
||
|
Receivables
|
(9,328
|
)
|
(385
|
)
|
||
|
Inventories
|
(20,241
|
)
|
(41,180
|
)
|
||
|
Prepaid expenses and other current and noncurrent assets
|
(1,201
|
)
|
(6,748
|
)
|
||
|
Trade accounts payable
|
(23,661
|
)
|
(12,933
|
)
|
||
|
Accrued expenses and other liabilities
|
14,376
|
|
23,848
|
|
||
|
Other, net
|
(2,635
|
)
|
159
|
|
||
|
Net cash provided by operating activities
|
68,502
|
|
61,985
|
|
||
|
|
|
|
||||
|
Investing Activities
|
|
|
|
|
||
|
Purchases of property and equipment
|
(36,531
|
)
|
(37,888
|
)
|
||
|
Capitalized software
|
(3,849
|
)
|
(3,715
|
)
|
||
|
Acquisition of trademarks
|
(65,065
|
)
|
—
|
|
||
|
Investment in nonconsolidated affiliate
|
(7,000
|
)
|
—
|
|
||
|
Net proceeds from sale of subsidiaries
|
—
|
|
69,347
|
|
||
|
Net cash (used for) provided by investing activities
|
(112,445
|
)
|
27,744
|
|
||
|
|
|
|
||||
|
Financing Activities
|
|
|
|
|
||
|
Borrowings under revolving credit agreement
|
741,000
|
|
966,000
|
|
||
|
Repayments under revolving credit agreement
|
(734,000
|
)
|
(1,071,000
|
)
|
||
|
Dividends paid
|
(9,173
|
)
|
(9,073
|
)
|
||
|
Issuance of common stock under share-based plans, net
|
237
|
|
(2,406
|
)
|
||
|
Tax benefit related to share-based plans
|
2,482
|
|
2,581
|
|
||
|
Net cash provided by (used for) financing activities
|
546
|
|
(113,898
|
)
|
||
|
Effect of exchange rate changes on cash and cash equivalents
|
(69
|
)
|
(1,648
|
)
|
||
|
Decrease in cash and cash equivalents
|
(43,466
|
)
|
(25,817
|
)
|
||
|
Cash and cash equivalents at beginning of period
|
82,546
|
|
68,223
|
|
||
|
Cash and cash equivalents at end of period
|
$
|
39,080
|
|
$
|
42,406
|
|
|
BROWN SHOE COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
|
Note 1
|
Basis of Presentation
|
|
Note 2
|
Impact of New Accounting Pronouncements
|
|
Note 3
|
Discontinued Operations
|
|
($ thousands)
|
November 1, 2014
|
|
November 2, 2013
|
|
February 1, 2014
|
|
|||
|
|
|
|
|
||||||
|
Assets of Discontinued Operations
|
|
|
|
|
|
|
|||
|
Current assets
|
|
|
|
|
|
|
|||
|
Receivables, net
|
$
|
—
|
|
$
|
73
|
|
$
|
—
|
|
|
Inventories, net
|
—
|
|
75
|
|
111
|
|
|||
|
Prepaid expenses and other current assets
|
—
|
|
33
|
|
8
|
|
|||
|
Current assets - discontinued operations
|
—
|
|
181
|
|
119
|
|
|||
|
Total assets - discontinued operations
|
$
|
—
|
|
$
|
181
|
|
$
|
119
|
|
|
|
|
|
|
||||||
|
Liabilities of Discontinued Operations
|
|
|
|
|
|
|
|||
|
Current liabilities
|
|
|
|
|
|
|
|||
|
Trade accounts payable
|
$
|
—
|
|
$
|
178
|
|
$
|
139
|
|
|
Other accrued expenses
|
—
|
|
1,932
|
|
569
|
|
|||
|
Current liabilities - discontinued operations
|
—
|
|
2,110
|
|
708
|
|
|||
|
Total liabilities - discontinued operations
|
$
|
—
|
|
$
|
2,110
|
|
$
|
708
|
|
|
|
Thirteen Weeks Ended
|
Thirty-nine Weeks Ended
|
||||||||||
|
($ thousands
)
|
November 1, 2014
|
|
November 2, 2013
|
|
November 1, 2014
|
|
November 2, 2013
|
|
||||
|
Net sales
|
$
|
—
|
|
$
|
1,171
|
|
$
|
—
|
|
$
|
25,482
|
|
|
Cost of goods sold
|
—
|
|
748
|
|
—
|
|
19,599
|
|
||||
|
Gross profit
|
—
|
|
423
|
|
—
|
|
5,883
|
|
||||
|
Selling and administrative expenses
|
—
|
|
60
|
|
—
|
|
5,942
|
|
||||
|
Restructuring and other special charges, net
|
—
|
|
—
|
|
—
|
|
10,768
|
|
||||
|
Operating earnings (loss)
|
—
|
|
363
|
|
—
|
|
(10,827
|
)
|
||||
|
Interest expense
|
—
|
|
(16
|
)
|
—
|
|
(14
|
)
|
||||
|
Earnings (loss) before income taxes from discontinued operations
|
—
|
|
347
|
|
—
|
|
(10,841
|
)
|
||||
|
Income tax (provision) benefit
|
—
|
|
(114
|
)
|
—
|
|
6,057
|
|
||||
|
Earnings (loss) from discontinued operations, net of tax
|
—
|
|
233
|
|
—
|
|
(4,784
|
)
|
||||
|
Disposition/impairment of discontinued operations, net of tax
|
—
|
|
—
|
|
—
|
|
(11,512
|
)
|
||||
|
Net earnings (loss) from discontinued operations
|
$
|
—
|
|
$
|
233
|
|
$
|
—
|
|
$
|
(16,296
|
)
|
|
Note 4
|
Earnings (Loss) Per Share
|
|
|
Thirteen Weeks Ended
|
Thirty-nine Weeks Ended
|
||||||||||
|
($ thousands, except per share amounts)
|
November 1, 2014
|
|
November 2, 2013
|
|
November 1, 2014
|
|
November 2, 2013
|
|
||||
|
NUMERATOR
|
|
|
|
|
|
|
|
|
||||
|
Net earnings from continuing operations
|
$
|
33,237
|
|
$
|
27,051
|
|
$
|
66,752
|
|
$
|
48,031
|
|
|
Net (earnings) loss attributable to noncontrolling interests
|
(124
|
)
|
30
|
|
(146
|
)
|
174
|
|
||||
|
Net earnings allocated to participating securities
|
(1,208
|
)
|
(1,097
|
)
|
(2,486
|
)
|
(2,098
|
)
|
||||
|
Net earnings from continuing operations
|
31,905
|
|
25,984
|
|
64,120
|
|
46,107
|
|
||||
|
Net earnings (loss) from discontinued operations
|
—
|
|
233
|
|
—
|
|
(16,296
|
)
|
||||
|
Net (earnings) loss allocated to participating securities
|
—
|
|
(9
|
)
|
—
|
|
712
|
|
||||
|
Net earnings (loss) from discontinued operations
|
—
|
|
224
|
|
—
|
|
(15,584
|
)
|
||||
|
Net earnings attributable to Brown Shoe Company, Inc. after allocation of earnings to participating securities
|
$
|
31,905
|
|
$
|
26,208
|
|
$
|
64,120
|
|
$
|
30,523
|
|
|
|
|
|
|
|
||||||||
|
DENOMINATOR
|
|
|
|
|
|
|
|
|
||||
|
Denominator for basic continuing and discontinued earnings per common share attributable to Brown Shoe Company, Inc. shareholders
|
42,144
|
|
41,447
|
|
42,035
|
|
41,288
|
|
||||
|
Dilutive effect of share-based awards for continuing operations and discontinued operations
|
184
|
|
319
|
|
210
|
|
283
|
|
||||
|
Denominator for diluted continuing and discontinued earnings per common share attributable to Brown Shoe Company, Inc. shareholders
|
42,328
|
|
41,766
|
|
42,245
|
|
41,571
|
|
||||
|
|
|
|
|
|
||||||||
|
Basic earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
||||
|
From continuing operations
|
$
|
0.76
|
|
$
|
0.63
|
|
$
|
1.53
|
|
$
|
1.12
|
|
|
From discontinued operations
|
—
|
|
—
|
|
—
|
|
(0.38
|
)
|
||||
|
Basic earnings per common share attributable to Brown Shoe Company, Inc. shareholders
|
$
|
0.76
|
|
$
|
0.63
|
|
$
|
1.53
|
|
$
|
0.74
|
|
|
|
|
|
|
|
||||||||
|
Diluted earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
||||
|
From continuing operations
|
$
|
0.75
|
|
$
|
0.62
|
|
$
|
1.52
|
|
$
|
1.11
|
|
|
From discontinued operations
|
—
|
|
0.01
|
|
—
|
|
(0.38
|
)
|
||||
|
Diluted earnings per common share attributable to Brown Shoe Company, Inc. shareholders
|
$
|
0.75
|
|
$
|
0.63
|
|
$
|
1.52
|
|
$
|
0.73
|
|
|
Note
5
|
Restructuring and Other Initiatives
|
|
|
Thirteen Weeks Ended
|
Thirty-nine Weeks Ended
|
||||||||||||||||
|
($ millions, except per share data)
|
Pre-tax Expense
|
|
After-tax Expense
|
|
Loss Per Diluted Share
|
|
Pre-tax Expense
|
|
After-tax Expense
|
|
Loss Per Diluted Share
|
|
||||||
|
November 2, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Business exits and cost reductions
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1.2
|
|
$
|
0.8
|
|
$
|
0.02
|
|
|
Non-cash impairments/dispositions
|
—
|
|
—
|
|
—
|
|
4.7
|
|
4.7
|
|
0.11
|
|
||||||
|
Total Continuing Operations
|
—
|
|
—
|
|
—
|
|
5.9
|
|
5.5
|
|
0.13
|
|
||||||
|
Discontinued Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Business exits and cost reductions
|
—
|
|
—
|
|
—
|
|
13.3
|
|
6.4
|
|
0.13
|
|
||||||
|
Non-cash impairments/dispositions
|
—
|
|
—
|
|
—
|
|
11.5
|
|
11.5
|
|
0.28
|
|
||||||
|
Total Discontinued Operations
|
—
|
|
—
|
|
—
|
|
24.8
|
|
17.9
|
|
0.41
|
|
||||||
|
Total
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
30.7
|
|
$
|
23.4
|
|
$
|
0.54
|
|
|
|
|
|
|
|
|
Total by Classification
|
|||||||||||||||
|
($ millions)
|
Employee
|
Markdowns and Royalty
Shortfalls
|
Facility
|
Other
|
Total
|
Continuing Operations
|
Discontinued Operations
|
||||||||||||||
|
Reserve balance at February 2, 2013
|
$
|
1.7
|
|
$
|
0.2
|
|
$
|
3.3
|
|
$
|
0.3
|
|
$
|
5.5
|
|
$
|
5.3
|
|
$
|
0.2
|
|
|
Additional charges in 2013
|
2.6
|
|
2.7
|
|
0.1
|
|
25.3
|
|
30.7
|
|
5.9
|
|
24.8
|
|
|||||||
|
Amounts settled in 2013
|
(3.3
|
)
|
(2.9
|
)
|
(2.0
|
)
|
(25.6
|
)
|
(33.8
|
)
|
(9.7
|
)
|
(24.1
|
)
|
|||||||
|
Reserve balance at February 1, 2014
|
$
|
1.0
|
|
$
|
—
|
|
$
|
1.4
|
|
$
|
—
|
|
$
|
2.4
|
|
$
|
1.5
|
|
$
|
0.9
|
|
|
Amounts settled in first quarter 2014
|
(0.4
|
)
|
—
|
|
(0.1
|
)
|
—
|
|
(0.5
|
)
|
(0.1
|
)
|
(0.4
|
)
|
|||||||
|
Reserve balance at May 3, 2014
|
$
|
0.6
|
|
$
|
—
|
|
$
|
1.3
|
|
$
|
—
|
|
$
|
1.9
|
|
$
|
1.4
|
|
$
|
0.5
|
|
|
Amounts settled in second quarter 2014
|
(0.4
|
)
|
—
|
|
(0.1
|
)
|
—
|
|
(0.5
|
)
|
—
|
|
(0.5
|
)
|
|||||||
|
Reserve balance at August 2, 2014
|
$
|
0.2
|
|
$
|
—
|
|
$
|
1.2
|
|
$
|
—
|
|
$
|
1.4
|
|
$
|
1.4
|
|
$
|
—
|
|
|
Amounts settled in third quarter 2014
|
(0.1
|
)
|
—
|
|
(0.1
|
)
|
—
|
|
(0.2
|
)
|
(0.2
|
)
|
—
|
|
|||||||
|
Reserve balance at November 1, 2014
|
$
|
0.1
|
|
$
|
—
|
|
$
|
1.1
|
|
$
|
—
|
|
$
|
1.2
|
|
$
|
1.2
|
|
$
|
—
|
|
|
Note 6
|
Business Segment Information
|
|
|
Famous
|
Wholesale
|
Specialty
|
|
|
||||||||||
|
($ thousands)
|
Footwear
|
Operations
|
Retail
|
Other
|
Total
|
||||||||||
|
Thirteen Weeks Ended November 1, 2014
|
|||||||||||||||
|
External sales
|
$
|
435,380
|
|
$
|
242,562
|
|
$
|
51,335
|
|
$
|
—
|
|
$
|
729,277
|
|
|
Intersegment sales
|
552
|
|
39,852
|
|
—
|
|
—
|
|
40,404
|
|
|||||
|
Operating earnings (loss)
|
37,554
|
|
27,848
|
|
(355
|
)
|
(11,834
|
)
|
53,213
|
|
|||||
|
Segment assets - continuing operations
|
529,608
|
|
479,855
|
|
57,806
|
|
142,591
|
|
1,209,860
|
|
|||||
|
|
|
|
|
|
|
||||||||||
|
Thirteen Weeks Ended November 2, 2013
|
|||||||||||||||
|
External sales
|
$
|
439,605
|
|
$
|
205,269
|
|
$
|
57,914
|
|
$
|
—
|
|
$
|
702,788
|
|
|
Intersegment sales
|
543
|
|
51,343
|
|
—
|
|
—
|
|
51,886
|
|
|||||
|
Operating earnings (loss)
|
37,047
|
|
16,782
|
|
221
|
|
(9,382
|
)
|
44,668
|
|
|||||
|
Segment assets - continuing operations
|
485,217
|
|
379,249
|
|
93,747
|
|
128,517
|
|
1,086,730
|
|
|||||
|
|
|
|
|
|
|
||||||||||
|
Thirty-nine Weeks Ended November 1, 2014
|
|||||||||||||||
|
External sales
|
$
|
1,183,633
|
|
$
|
628,616
|
|
$
|
144,067
|
|
$
|
—
|
|
$
|
1,956,316
|
|
|
Intersegment sales
|
1,611
|
|
125,110
|
|
—
|
|
—
|
|
126,721
|
|
|||||
|
Operating earnings (loss)
|
91,983
|
|
60,851
|
|
(6,833
|
)
|
(32,760
|
)
|
113,241
|
|
|||||
|
|
|
|
|
|
|
||||||||||
|
Thirty-nine Weeks Ended November 2, 2013
|
|||||||||||||||
|
External sales
|
$
|
1,180,143
|
|
$
|
567,334
|
|
$
|
165,673
|
|
$
|
—
|
|
$
|
1,913,150
|
|
|
Intersegment sales
|
1,753
|
|
152,276
|
|
—
|
|
—
|
|
154,029
|
|
|||||
|
Operating earnings (loss)
|
95,057
|
|
28,085
|
|
(2,934
|
)
|
(31,770
|
)
|
88,438
|
|
|||||
|
|
Thirteen Weeks Ended
|
Thirty-nine Weeks Ended
|
||||||||||
|
($ thousands)
|
November 1, 2014
|
|
November 2, 2013
|
|
November 1, 2014
|
|
November 2, 2013
|
|
||||
|
Operating earnings
|
$
|
53,213
|
|
$
|
44,668
|
|
$
|
113,241
|
|
$
|
88,438
|
|
|
Interest expense
|
(5,207
|
)
|
(5,254
|
)
|
(15,637
|
)
|
(16,167
|
)
|
||||
|
Interest income
|
109
|
|
132
|
|
294
|
|
282
|
|
||||
|
Earnings before income taxes from continuing operations
|
$
|
48,115
|
|
$
|
39,546
|
|
$
|
97,898
|
|
$
|
72,553
|
|
|
Note
7
|
Goodwill and Intangible Assets
|
|
($ thousands)
|
November 1, 2014
|
|
November 2, 2013
|
|
February 1, 2014
|
|
|||
|
Intangible Assets
|
|
|
|
|
|
|
|||
|
Famous Footwear
|
$
|
2,800
|
|
$
|
2,800
|
|
$
|
2,800
|
|
|
Wholesale Operations
|
183,068
|
|
118,003
|
|
118,003
|
|
|||
|
Specialty Retail
|
200
|
|
200
|
|
200
|
|
|||
|
Total intangible assets
|
186,068
|
|
121,003
|
|
121,003
|
|
|||
|
Accumulated amortization
|
(64,248
|
)
|
(59,776
|
)
|
(61,284
|
)
|
|||
|
Total intangible assets, net
|
121,820
|
|
61,227
|
|
59,719
|
|
|||
|
Goodwill
|
|
|
|
|
|
|
|||
|
Wholesale Operations
|
13,954
|
|
13,954
|
|
13,954
|
|
|||
|
Total goodwill
|
13,954
|
|
13,954
|
|
13,954
|
|
|||
|
Goodwill and intangible assets, net
|
$
|
135,774
|
|
$
|
75,181
|
|
$
|
73,673
|
|
|
Note
8
|
Shareholders’ Equity
|
|
|
|
|
|
||||||
|
($ thousands)
|
Brown Shoe Company, Inc. Shareholders’ Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
|
|||
|
Equity at February 1, 2014
|
$
|
476,699
|
|
$
|
663
|
|
$
|
477,362
|
|
|
Net earnings
|
66,606
|
|
146
|
|
66,752
|
|
|||
|
Other comprehensive loss
|
(1,165
|
)
|
(46
|
)
|
(1,211
|
)
|
|||
|
Dividends paid
|
(9,173
|
)
|
—
|
|
(9,173
|
)
|
|||
|
Issuance of common stock under share-based plans, net
|
237
|
|
—
|
|
237
|
|
|||
|
Tax benefit related to share-based plans
|
2,482
|
|
—
|
|
2,482
|
|
|||
|
Share-based compensation expense
|
4,568
|
|
—
|
|
4,568
|
|
|||
|
Equity at November 1, 2014
|
$
|
540,254
|
|
$
|
763
|
|
$
|
541,017
|
|
|
|
|
|
|
||||||
|
($ thousands)
|
Brown Shoe Company, Inc. Shareholders’ Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
|
|||
|
Equity at February 2, 2013
|
$
|
425,129
|
|
$
|
772
|
|
$
|
425,901
|
|
|
Net earnings (loss)
|
31,909
|
|
(174
|
)
|
31,735
|
|
|||
|
Other comprehensive (loss) income
|
(905
|
)
|
60
|
|
(845
|
)
|
|||
|
Dividends paid
|
(9,073
|
)
|
—
|
|
(9,073
|
)
|
|||
|
Issuance of common stock under share-based plans, net
|
(2,406
|
)
|
—
|
|
(2,406
|
)
|
|||
|
Tax benefit related to share-based plans
|
2,581
|
|
—
|
|
2,581
|
|
|||
|
Share-based compensation expense
|
4,066
|
|
—
|
|
4,066
|
|
|||
|
Equity at November 2, 2013
|
$
|
451,301
|
|
$
|
658
|
|
$
|
451,959
|
|
|
|
|
|
|
|
||||||||
|
($ thousands)
|
Foreign Currency Translation
|
Pension and Other Postretirement Transactions
|
Derivative Transactions
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||
|
Balance August 2, 2014
|
$
|
3,487
|
|
$
|
13,526
|
|
$
|
(372
|
)
|
$
|
16,641
|
|
|
Other comprehensive (loss) income before reclassifications
|
(1,159
|
)
|
—
|
|
80
|
|
(1,079
|
)
|
||||
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
(28
|
)
|
(23
|
)
|
(51
|
)
|
||||
|
Other comprehensive (loss) income
|
(1,159
|
)
|
(28
|
)
|
57
|
|
(1,130
|
)
|
||||
|
Balance November 1, 2014
|
$
|
2,328
|
|
$
|
13,498
|
|
$
|
(315
|
)
|
$
|
15,511
|
|
|
|
|
|
|
|
||||||||
|
Balance August 3, 2013
|
$
|
5,322
|
|
$
|
(5,666
|
)
|
$
|
317
|
|
$
|
(27
|
)
|
|
Other comprehensive (loss) income before reclassifications
|
(100
|
)
|
—
|
|
79
|
|
(21
|
)
|
||||
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
138
|
|
(111
|
)
|
27
|
|
||||
|
Other comprehensive (loss) income
|
(100
|
)
|
138
|
|
(32
|
)
|
6
|
|
||||
|
Balance November 2, 2013
|
$
|
5,222
|
|
$
|
(5,528
|
)
|
$
|
285
|
|
$
|
(21
|
)
|
|
|
|
|
|
|
||||||||
|
Balance February 1, 2014
|
$
|
2,356
|
|
$
|
13,582
|
|
$
|
738
|
|
$
|
16,676
|
|
|
Other comprehensive (loss) income before reclassifications
|
(28
|
)
|
—
|
|
(1,014
|
)
|
(1,042
|
)
|
||||
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
(84
|
)
|
(39
|
)
|
(123
|
)
|
||||
|
Other comprehensive (loss) income
|
(28
|
)
|
(84
|
)
|
(1,053
|
)
|
(1,165
|
)
|
||||
|
Balance November 1, 2014
|
$
|
2,328
|
|
$
|
13,498
|
|
$
|
(315
|
)
|
$
|
15,511
|
|
|
|
|
|
|
|
||||||||
|
Balance February 2, 2013
|
$
|
6,912
|
|
$
|
(5,947
|
)
|
$
|
(81
|
)
|
$
|
884
|
|
|
Other comprehensive (loss) income before reclassifications
|
(1,690
|
)
|
—
|
|
714
|
|
(976
|
)
|
||||
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
419
|
|
(348
|
)
|
71
|
|
||||
|
Other comprehensive (loss) income
|
(1,690
|
)
|
419
|
|
366
|
|
(905
|
)
|
||||
|
Balance November 2, 2013
|
$
|
5,222
|
|
$
|
(5,528
|
)
|
$
|
285
|
|
$
|
(21
|
)
|
|
|
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)
|
|
||||||||||||||
|
|
Thirteen Weeks Ended
|
|
Thirty-nine Weeks Ended
|
Affected Line Item in the Condensed Consolidated Statements of Earnings
|
||||||||||||
|
($ thousands)
|
November 1, 2014
|
|
November 2, 2013
|
|
November 1, 2014
|
|
November 2, 2013
|
|||||||||
|
Net gains from derivative financial instruments
(1)
|
$
|
(30
|
)
|
|
$
|
(168
|
)
|
|
$
|
(53
|
)
|
|
$
|
(530
|
)
|
Costs of goods sold and selling and administrative expenses
|
|
Tax provision
|
7
|
|
|
57
|
|
|
14
|
|
|
182
|
|
Income tax provision
|
||||
|
Net gains from derivative financial instruments, net of tax
|
(23
|
)
|
|
(111
|
)
|
|
(39
|
)
|
|
(348
|
)
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Pension and other postretirement benefits actuarial (gain) loss
(2)
|
(58
|
)
|
|
216
|
|
|
(173
|
)
|
|
661
|
|
Selling and administrative expenses
|
||||
|
Pension benefits prior service expense
(2)
|
7
|
|
|
4
|
|
|
21
|
|
|
10
|
|
Selling and administrative expenses
|
||||
|
Pension and other postretirement benefits adjustments
|
(51
|
)
|
|
220
|
|
|
(152
|
)
|
|
671
|
|
|
||||
|
Tax provision (benefit)
|
23
|
|
|
(82
|
)
|
|
68
|
|
|
(252
|
)
|
Income tax provision
|
||||
|
Pension and other postretirement benefits adjustments, net of tax
|
(28
|
)
|
|
138
|
|
|
(84
|
)
|
|
419
|
|
|
||||
|
Amounts reclassified from accumulated other comprehensive income (loss)
|
$
|
(51
|
)
|
|
$
|
27
|
|
|
$
|
(123
|
)
|
|
$
|
71
|
|
|
|
(1)
|
See Note 11 and 12 to the condensed consolidated financial statements for additional information related to derivative financial instruments.
|
|
(2)
|
See Note 10 to the condensed consolidated financial statements for additional information related to pension and other postretirement benefits.
|
|
Note 9
|
Share-Based Compensation
|
|
Note
10
|
Retirement and Other Benefit Plans
|
|
|
Pension Benefits
|
Other Postretirement Benefits
|
||||||||||
|
|
Thirteen Weeks Ended
|
Thirteen Weeks Ended
|
||||||||||
|
($ thousands)
|
November 1, 2014
|
|
November 2, 2013
|
|
November 1, 2014
|
|
November 2, 2013
|
|
||||
|
Service cost
|
$
|
2,413
|
|
$
|
2,583
|
|
$
|
—
|
|
$
|
—
|
|
|
Interest cost
|
3,558
|
|
3,305
|
|
12
|
|
35
|
|
||||
|
Expected return on assets
|
(6,190
|
)
|
(6,200
|
)
|
—
|
|
—
|
|
||||
|
Amortization of:
|
|
|
|
|
|
|
|
|
||||
|
Actuarial loss (gain)
|
50
|
|
238
|
|
(108
|
)
|
(20
|
)
|
||||
|
Prior service expense
|
7
|
|
4
|
|
—
|
|
—
|
|
||||
|
Total net periodic benefit (income) cost
|
$
|
(162
|
)
|
$
|
(70
|
)
|
$
|
(96
|
)
|
$
|
15
|
|
|
|
|
|
|
|
||||||||
|
|
Pension Benefits
|
Other Postretirement Benefits
|
||||||||||
|
|
Thirty-nine Weeks Ended
|
Thirty-nine Weeks Ended
|
||||||||||
|
($ thousands)
|
November 1, 2014
|
|
November 2, 2013
|
|
November 1, 2014
|
|
November 2, 2013
|
|
||||
|
Service cost
|
$
|
7,239
|
|
$
|
8,057
|
|
$
|
—
|
|
$
|
—
|
|
|
Interest cost
|
10,674
|
|
9,940
|
|
36
|
|
105
|
|
||||
|
Expected return on assets
|
(18,571
|
)
|
(18,576
|
)
|
—
|
|
—
|
|
||||
|
Amortization of:
|
|
|
|
|
|
|
|
|
||||
|
Actuarial loss (gain)
|
152
|
|
723
|
|
(325
|
)
|
(60
|
)
|
||||
|
Prior service expense
|
21
|
|
10
|
|
—
|
|
—
|
|
||||
|
Total net periodic benefit (income) cost
|
$
|
(485
|
)
|
$
|
154
|
|
$
|
(289
|
)
|
$
|
45
|
|
|
Note 11
|
Risk Management and Derivatives
|
|
|
Contract Notional Amount
|
||||||||
|
(U.S. $ equivalent in thousands)
|
November 1, 2014
|
|
November 2, 2013
|
|
February 1, 2014
|
|
|||
|
Financial Instruments
|
|
|
|
||||||
|
U.S. dollars (purchased by the Company’s Canadian division with Canadian dollars)
|
$
|
20,391
|
|
$
|
18,024
|
|
$
|
20,197
|
|
|
Chinese yuan
|
14,659
|
|
14,860
|
|
15,278
|
|
|||
|
Euro
|
14,583
|
|
8,729
|
|
11,270
|
|
|||
|
Japanese yen
|
1,505
|
|
1,657
|
|
1,586
|
|
|||
|
Other currencies
|
1,540
|
|
1,372
|
|
1,345
|
|
|||
|
Total financial instruments
|
$
|
52,678
|
|
$
|
44,642
|
|
$
|
49,676
|
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||
|
($ thousands)
|
Balance Sheet Location
|
Fair Value
|
|
|
Balance Sheet Location
|
Fair Value
|
|
||
|
|
|
|
|
|
|
||||
|
Foreign exchange forward contracts:
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
||||
|
November 1, 2014
|
Prepaid expenses and other current assets
|
$
|
440
|
|
|
Other accrued expenses
|
$
|
923
|
|
|
November 2, 2013
|
Prepaid expenses and other current assets
|
417
|
|
|
Other accrued expenses
|
184
|
|
||
|
February 1, 2014
|
Prepaid expenses and other current assets
|
1,056
|
|
|
Other accrued expenses
|
222
|
|
||
|
|
Thirteen Weeks Ended
|
Thirteen Weeks Ended
|
||||||||||
|
($ thousands)
|
November 1, 2014
|
November 2, 2013
|
||||||||||
|
|
|
|
|
|
||||||||
|
Foreign exchange forward contracts:
Income Statement Classification Gains (Losses) - Realized
|
Gain (Loss) Recognized in OCI on Derivatives
|
|
Gain (Loss) Reclassified from Accumulated OCI into Earnings
|
|
Gain (Loss)Recognized in OCI on Derivatives
|
|
Gain Reclassified from Accumulated OCI into Earnings
|
|
||||
|
|
|
|
|
|
||||||||
|
Net sales
|
$
|
114
|
|
$
|
16
|
|
$
|
161
|
|
$
|
59
|
|
|
Cost of goods sold
|
(388
|
)
|
30
|
|
(163
|
)
|
24
|
|
||||
|
Selling and administrative expenses
|
268
|
|
(16
|
)
|
145
|
|
85
|
|
||||
|
Interest expense
|
5
|
|
—
|
|
(3
|
)
|
—
|
|
||||
|
|
Thirty-nine Weeks Ended
|
Thirty-nine Weeks Ended
|
||||||||||
|
($ in thousands)
|
November 1, 2014
|
November 2, 2013
|
||||||||||
|
|
|
|
|
|
||||||||
|
Foreign exchange forward contracts:
Income Statement Classification Gains (Losses) - Realized
|
Gain (Loss) Recognized in OCI on Derivatives
|
|
Gain Reclassified from Accumulated OCI into Earnings
|
|
Gain Recognized in OCI on Derivatives
|
|
Gain Reclassified from Accumulated OCI into Earnings
|
|
||||
|
|
|
|
|
|
||||||||
|
Net sales
|
$
|
110
|
|
$
|
32
|
|
$
|
278
|
|
$
|
207
|
|
|
Cost of goods sold
|
(1,145
|
)
|
19
|
|
382
|
|
51
|
|
||||
|
Selling and administrative expenses
|
(442
|
)
|
2
|
|
354
|
|
272
|
|
||||
|
Interest expense
|
(12
|
)
|
—
|
|
8
|
|
—
|
|
||||
|
Note 12
|
Fair Value Measurements
|
|
•
|
Level 1 – Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;
|
|
•
|
Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly;
|
|
•
|
Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.
|
|
|
|
|
Fair Value Measurements
|
|||||||||
|
($ thousands)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
||||
|
Asset (Liability)
|
|
|
|
|
|
|
|
|
||||
|
As of November 1, 2014:
|
|
|
|
|
||||||||
|
Cash equivalents – money market funds
|
$
|
7,463
|
|
$
|
7,463
|
|
$
|
—
|
|
$
|
—
|
|
|
Non-qualified deferred compensation plan assets
|
2,849
|
|
2,849
|
|
—
|
|
—
|
|
||||
|
Non-qualified deferred compensation plan liabilities
|
(2,849
|
)
|
(2,849
|
)
|
—
|
|
—
|
|
||||
|
Deferred compensation plan liabilities for non-employee directors
|
(1,923
|
)
|
(1,923
|
)
|
—
|
|
—
|
|
||||
|
Restricted stock units for non-employee directors
|
(8,019
|
)
|
(8,019
|
)
|
—
|
|
—
|
|
||||
|
Performance share units
|
(1,240
|
)
|
(1,240
|
)
|
—
|
|
—
|
|
||||
|
Derivative financial instruments, net
|
(483
|
)
|
—
|
|
(483
|
)
|
—
|
|
||||
|
As of November 2, 2013:
|
|
|
|
|
||||||||
|
Cash equivalents – money market funds
|
$
|
4,472
|
|
$
|
4,472
|
|
$
|
—
|
|
$
|
—
|
|
|
Non-qualified deferred compensation plan assets
|
2,081
|
|
2,081
|
|
—
|
|
—
|
|
||||
|
Non-qualified deferred compensation plan liabilities
|
(2,081
|
)
|
(2,081
|
)
|
—
|
|
—
|
|
||||
|
Deferred compensation plan liabilities for non-employee directors
|
(1,565
|
)
|
(1,565
|
)
|
—
|
|
—
|
|
||||
|
Restricted stock units for non-employee directors
|
(7,068
|
)
|
(7,068
|
)
|
—
|
|
—
|
|
||||
|
Performance share units
|
(1,868
|
)
|
(1,868
|
)
|
—
|
|
—
|
|
||||
|
Derivative financial instruments, net
|
233
|
|
—
|
|
233
|
|
—
|
|
||||
|
As of February 1, 2014:
|
|
|
|
|
||||||||
|
Cash equivalents – money market funds
|
$
|
41,236
|
|
$
|
41,236
|
|
$
|
—
|
|
$
|
—
|
|
|
Non-qualified deferred compensation plan assets
|
2,191
|
|
2,191
|
|
—
|
|
—
|
|
||||
|
Non-qualified deferred compensation plan liabilities
|
(2,191
|
)
|
(2,191
|
)
|
—
|
|
—
|
|
||||
|
Deferred compensation plan liabilities for non-employee directors
|
(1,668
|
)
|
(1,668
|
)
|
—
|
|
—
|
|
||||
|
Restricted stock units for non-employee directors
|
(7,769
|
)
|
(7,769
|
)
|
—
|
|
—
|
|
||||
|
Performance share units
|
(2,300
|
)
|
(2,300
|
)
|
—
|
|
—
|
|
||||
|
Derivative financial instruments, net
|
834
|
|
—
|
|
834
|
|
—
|
|
||||
|
|
November 1, 2014
|
November 2, 2013
|
February 1, 2014
|
|||||||||||||||
|
|
Carrying
|
|
Fair
|
|
Carrying
|
|
Fair
|
|
Carrying
|
|
Fair
|
|
||||||
|
($ thousands)
|
Amount
|
|
Value
|
|
Amount
|
|
Value
|
|
Amount
|
|
Value
|
|
||||||
|
Long-term debt – Senior Notes
|
$
|
199,150
|
|
$
|
208,500
|
|
$
|
198,963
|
|
$
|
210,500
|
|
$
|
199,010
|
|
$
|
210,500
|
|
|
Note 13
|
Income Taxes
|
|
Note 14
|
Related Party Transactions
|
|
Note 15
|
Commitments and Contingencies
|
|
Note 16
|
Financial Information for the Company and its Subsidiaries
|
|
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
|
|||||||||||||||
|
AS OF NOVEMBER 1, 2014
|
|||||||||||||||
|
|
|
|
Non-
|
|
|
|
|||||||||
|
($ thousands)
|
Parent
|
|
Guarantors
|
|
Guarantors
|
|
Eliminations
|
|
Total
|
|
|||||
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cash and cash equivalents
|
$
|
—
|
|
$
|
23,217
|
|
$
|
15,863
|
|
$
|
—
|
|
$
|
39,080
|
|
|
Receivables, net
|
115,520
|
|
1,413
|
|
21,284
|
|
—
|
|
138,217
|
|
|||||
|
Inventories, net
|
128,709
|
|
431,679
|
|
7,389
|
|
—
|
|
567,777
|
|
|||||
|
Prepaid expenses and other current assets
|
33,828
|
|
971
|
|
3,046
|
|
—
|
|
37,845
|
|
|||||
|
Intercompany receivable – current
|
466
|
|
521
|
|
15,487
|
|
(16,474
|
)
|
—
|
|
|||||
|
Total current assets
|
278,523
|
|
457,801
|
|
63,069
|
|
(16,474
|
)
|
782,919
|
|
|||||
|
Other assets
|
124,472
|
|
14,785
|
|
621
|
|
—
|
|
139,878
|
|
|||||
|
Goodwill and intangible assets, net
|
118,416
|
|
17,358
|
|
—
|
|
—
|
|
135,774
|
|
|||||
|
Property and equipment, net
|
28,000
|
|
121,554
|
|
1,735
|
|
—
|
|
151,289
|
|
|||||
|
Investment in subsidiaries
|
935,580
|
|
190,534
|
|
—
|
|
(1,126,114
|
)
|
—
|
|
|||||
|
Intercompany receivable – noncurrent
|
410,794
|
|
524,296
|
|
252,220
|
|
(1,187,310
|
)
|
—
|
|
|||||
|
Total assets
|
$
|
1,895,785
|
|
$
|
1,326,328
|
|
$
|
317,645
|
|
$
|
(2,329,898
|
)
|
$
|
1,209,860
|
|
|
|
|
|
|
|
|
||||||||||
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|||||||
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Borrowings under revolving credit agreement
|
$
|
14,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
14,000
|
|
|
Trade accounts payable
|
53,944
|
|
129,350
|
|
19,768
|
|
—
|
|
203,062
|
|
|||||
|
Other accrued expenses
|
91,738
|
|
70,881
|
|
9,458
|
|
—
|
|
172,077
|
|
|||||
|
Intercompany payable – current
|
2,803
|
|
173
|
|
13,498
|
|
(16,474
|
)
|
—
|
|
|||||
|
Total current liabilities
|
162,485
|
|
200,404
|
|
42,724
|
|
(16,474
|
)
|
389,139
|
|
|||||
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Long-term debt
|
199,150
|
|
—
|
|
—
|
|
—
|
|
199,150
|
|
|||||
|
Other liabilities
|
36,267
|
|
44,082
|
|
205
|
|
—
|
|
80,554
|
|
|||||
|
Intercompany payable – noncurrent
|
957,629
|
|
146,262
|
|
83,419
|
|
(1,187,310
|
)
|
—
|
|
|||||
|
Total other liabilities
|
1,193,046
|
|
190,344
|
|
83,624
|
|
(1,187,310
|
)
|
279,704
|
|
|||||
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Brown Shoe Company, Inc. shareholders’ equity
|
540,254
|
|
935,580
|
|
190,534
|
|
(1,126,114
|
)
|
540,254
|
|
|||||
|
Noncontrolling interests
|
—
|
|
—
|
|
763
|
|
—
|
|
763
|
|
|||||
|
Total equity
|
540,254
|
|
935,580
|
|
191,297
|
|
(1,126,114
|
)
|
541,017
|
|
|||||
|
Total liabilities and equity
|
$
|
1,895,785
|
|
$
|
1,326,328
|
|
$
|
317,645
|
|
$
|
(2,329,898
|
)
|
$
|
1,209,860
|
|
|
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||
|
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 1, 2014
|
|||||||||||||||
|
|
|
|
Non-
|
|
|
|
|||||||||
|
($ thousands)
|
Parent
|
|
Guarantors
|
|
Guarantors
|
|
Eliminations
|
|
Total
|
|
|||||
|
Net sales
|
$
|
233,606
|
|
$
|
488,876
|
|
$
|
41,363
|
|
$
|
(34,568
|
)
|
$
|
729,277
|
|
|
Cost of goods sold
|
165,734
|
|
274,595
|
|
32,786
|
|
(34,568
|
)
|
438,547
|
|
|||||
|
Gross profit
|
67,872
|
|
214,281
|
|
8,577
|
|
—
|
|
290,730
|
|
|||||
|
Selling and administrative expenses
|
62,554
|
|
172,758
|
|
2,205
|
|
—
|
|
237,517
|
|
|||||
|
Operating earnings
|
5,318
|
|
41,523
|
|
6,372
|
|
—
|
|
53,213
|
|
|||||
|
Interest expense
|
(5,207
|
)
|
—
|
|
—
|
|
—
|
|
(5,207
|
)
|
|||||
|
Interest income
|
6
|
|
56
|
|
47
|
|
—
|
|
109
|
|
|||||
|
Intercompany interest income (expense)
|
3,608
|
|
(3,504
|
)
|
(104
|
)
|
—
|
|
—
|
|
|||||
|
Earnings before income taxes
|
3,725
|
|
38,075
|
|
6,315
|
|
—
|
|
48,115
|
|
|||||
|
Income tax benefit (provision)
|
551
|
|
(14,190
|
)
|
(1,239
|
)
|
—
|
|
(14,878
|
)
|
|||||
|
Equity in earnings of subsidiaries, net of tax
|
28,837
|
|
4,952
|
|
—
|
|
(33,789
|
)
|
—
|
|
|||||
|
Net earnings
|
33,113
|
|
28,837
|
|
5,076
|
|
(33,789
|
)
|
33,237
|
|
|||||
|
Less: Net earnings attributable to noncontrolling interests
|
—
|
|
—
|
|
124
|
|
—
|
|
124
|
|
|||||
|
Net earnings attributable to Brown Shoe Company, Inc.
|
$
|
33,113
|
|
$
|
28,837
|
|
$
|
4,952
|
|
$
|
(33,789
|
)
|
$
|
33,113
|
|
|
|
|
|
|
|
|
||||||||||
|
Comprehensive income
|
$
|
32,014
|
|
$
|
27,896
|
|
$
|
5,107
|
|
$
|
(32,910
|
)
|
$
|
32,107
|
|
|
Less: Comprehensive income attributable to noncontrolling interests
|
—
|
|
—
|
|
93
|
|
—
|
|
93
|
|
|||||
|
Comprehensive income attributable to Brown Shoe Company, Inc.
|
$
|
32,014
|
|
$
|
27,896
|
|
$
|
5,014
|
|
$
|
(32,910
|
)
|
$
|
32,014
|
|
|
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||
|
FOR THE THIRTY-NINE WEEKS ENDED NOVEMBER 1, 2014
|
|
||||||||||||||
|
|
|
|
Non-
|
|
|
|
|||||||||
|
($ thousands)
|
Parent
|
|
Guarantors
|
|
Guarantors
|
|
Eliminations
|
|
Total
|
|
|||||
|
Net sales
|
$
|
596,364
|
|
$
|
1,335,655
|
|
$
|
134,483
|
|
$
|
(110,186
|
)
|
$
|
1,956,316
|
|
|
Cost of goods sold
|
429,633
|
|
736,588
|
|
107,568
|
|
(110,186
|
)
|
1,163,603
|
|
|||||
|
Gross profit
|
166,731
|
|
599,067
|
|
26,915
|
|
—
|
|
792,713
|
|
|||||
|
Selling and administrative expenses
|
168,900
|
|
509,956
|
|
616
|
|
—
|
|
679,472
|
|
|||||
|
Operating (loss) earnings
|
(2,169
|
)
|
89,111
|
|
26,299
|
|
—
|
|
113,241
|
|
|||||
|
Interest expense
|
(15,636
|
)
|
(1
|
)
|
—
|
|
—
|
|
(15,637
|
)
|
|||||
|
Interest income
|
19
|
|
181
|
|
94
|
|
—
|
|
294
|
|
|||||
|
Intercompany interest income (expense)
|
11,410
|
|
(12,118
|
)
|
708
|
|
—
|
|
—
|
|
|||||
|
(Loss) earnings before income taxes
|
(6,376
|
)
|
77,173
|
|
27,101
|
|
—
|
|
97,898
|
|
|||||
|
Income tax benefit (provision)
|
2,698
|
|
(30,106
|
)
|
(3,738
|
)
|
—
|
|
(31,146
|
)
|
|||||
|
Equity in earnings of subsidiaries, net of tax
|
70,284
|
|
23,217
|
|
—
|
|
(93,501
|
)
|
—
|
|
|||||
|
Net earnings
|
66,606
|
|
70,284
|
|
23,363
|
|
(93,501
|
)
|
66,752
|
|
|||||
|
Less: Net earnings attributable to noncontrolling interests
|
—
|
|
—
|
|
146
|
|
—
|
|
146
|
|
|||||
|
Net earnings attributable to Brown Shoe Company, Inc.
|
$
|
66,606
|
|
$
|
70,284
|
|
$
|
23,217
|
|
$
|
(93,501
|
)
|
$
|
66,606
|
|
|
|
|
|
|
|
|
||||||||||
|
Comprehensive income
|
$
|
65,487
|
|
$
|
69,892
|
|
$
|
23,373
|
|
$
|
(93,165
|
)
|
$
|
65,587
|
|
|
Less: Comprehensive income attributable to noncontrolling interests
|
—
|
|
—
|
|
100
|
|
—
|
|
100
|
|
|||||
|
Comprehensive income attributable to Brown Shoe Company, Inc.
|
$
|
65,487
|
|
$
|
69,892
|
|
$
|
23,273
|
|
$
|
(93,165
|
)
|
$
|
65,487
|
|
|
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
|||||||||||||||
|
FOR THE THIRTY-NINE WEEKS ENDED NOVEMBER 1, 2014
|
|||||||||||||||
|
|
|
|
Non-
|
|
|
|
|||||||||
|
($ thousands)
|
Parent
|
|
Guarantors
|
|
Guarantors
|
|
Eliminations
|
|
Total
|
|
|||||
|
Net cash (used for) provided by operating activities
|
$
|
(31,850
|
)
|
$
|
71,874
|
|
$
|
28,478
|
|
$
|
—
|
|
$
|
68,502
|
|
|
|
|
|
|
|
|
||||||||||
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Purchases of property and equipment
|
(5,142
|
)
|
(31,092
|
)
|
(297
|
)
|
—
|
|
(36,531
|
)
|
|||||
|
Capitalized software
|
(3,787
|
)
|
(32
|
)
|
(30
|
)
|
—
|
|
(3,849
|
)
|
|||||
|
Acquisition of trademarks
|
(65,065
|
)
|
—
|
|
—
|
|
—
|
|
(65,065
|
)
|
|||||
|
Investment in nonconsolidated affiliate
|
(7,000
|
)
|
—
|
|
—
|
|
—
|
|
(7,000
|
)
|
|||||
|
Intercompany investing
|
(717
|
)
|
717
|
|
—
|
|
—
|
|
—
|
|
|||||
|
Net cash used for investing activities
|
(81,711
|
)
|
(30,407
|
)
|
(327
|
)
|
—
|
|
(112,445
|
)
|
|||||
|
|
|
|
|
|
|
||||||||||
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Borrowings under revolving credit agreement
|
741,000
|
|
—
|
|
—
|
|
—
|
|
741,000
|
|
|||||
|
Repayments under revolving credit agreement
|
(734,000
|
)
|
—
|
|
—
|
|
—
|
|
(734,000
|
)
|
|||||
|
Dividends paid
|
(9,173
|
)
|
—
|
|
—
|
|
—
|
|
(9,173
|
)
|
|||||
|
Issuance of common stock under share-based plans, net
|
237
|
|
—
|
|
—
|
|
—
|
|
237
|
|
|||||
|
Tax benefit related to share-based plans
|
2,482
|
|
—
|
|
—
|
|
—
|
|
2,482
|
|
|||||
|
Intercompany financing
|
113,015
|
|
(48,183
|
)
|
(64,832
|
)
|
—
|
|
—
|
|
|||||
|
Net cash provided by (used for) financing activities
|
113,561
|
|
(48,183
|
)
|
(64,832
|
)
|
—
|
|
546
|
|
|||||
|
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
(69
|
)
|
—
|
|
—
|
|
(69
|
)
|
|||||
|
Decrease in cash and cash equivalents
|
—
|
|
(6,785
|
)
|
(36,681
|
)
|
—
|
|
(43,466
|
)
|
|||||
|
Cash and cash equivalents at beginning of period
|
—
|
|
30,002
|
|
52,544
|
|
—
|
|
82,546
|
|
|||||
|
Cash and cash equivalents at end of period
|
$
|
—
|
|
$
|
23,217
|
|
$
|
15,863
|
|
$
|
—
|
|
$
|
39,080
|
|
|
CONDENSED CONSOLIDATING BALANCE SHEET
|
|||||||||||||||
|
AS OF FEBRUARY 1, 2014
|
|||||||||||||||
|
|
|
|
Non-
|
|
|
|
|||||||||
|
($ thousands)
|
Parent
|
|
Guarantors
|
|
Guarantors
|
|
Eliminations
|
|
Total
|
|
|||||
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cash and cash equivalents
|
$
|
—
|
|
$
|
30,002
|
|
$
|
52,544
|
|
$
|
—
|
|
$
|
82,546
|
|
|
Receivables, net
|
84,428
|
|
2,349
|
|
42,440
|
|
—
|
|
129,217
|
|
|||||
|
Inventories, net
|
119,131
|
|
421,101
|
|
7,299
|
|
—
|
|
547,531
|
|
|||||
|
Prepaid expenses and other current assets
|
38,069
|
|
16,024
|
|
3,984
|
|
(24,941
|
)
|
33,136
|
|
|||||
|
Current assets – discontinued operations
|
119
|
|
—
|
|
—
|
|
—
|
|
119
|
|
|||||
|
Intercompany receivable – current
|
602
|
|
191
|
|
8,860
|
|
(9,653
|
)
|
—
|
|
|||||
|
Total current assets
|
242,349
|
|
469,667
|
|
115,127
|
|
(34,594
|
)
|
792,549
|
|
|||||
|
Other assets
|
123,066
|
|
15,864
|
|
691
|
|
—
|
|
139,621
|
|
|||||
|
Goodwill and intangible assets, net
|
55,225
|
|
18,448
|
|
—
|
|
—
|
|
73,673
|
|
|||||
|
Property and equipment, net
|
27,201
|
|
114,359
|
|
2,000
|
|
—
|
|
143,560
|
|
|||||
|
Investment in subsidiaries
|
865,700
|
|
165,970
|
|
—
|
|
(1,031,670
|
)
|
—
|
|
|||||
|
Intercompany receivable – noncurrent
|
457,507
|
|
482,180
|
|
230,572
|
|
(1,170,259
|
)
|
—
|
|
|||||
|
Total assets
|
$
|
1,771,048
|
|
$
|
1,266,488
|
|
$
|
348,390
|
|
$
|
(2,236,523
|
)
|
$
|
1,149,403
|
|
|
|
|
|
|
|
|
||||||||||
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
||||||
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Borrowings under revolving credit agreement
|
$
|
7,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
7,000
|
|
|
Trade accounts payable
|
72,349
|
|
116,604
|
|
37,649
|
|
—
|
|
226,602
|
|
|||||
|
Other accrued expenses
|
81,902
|
|
87,045
|
|
8,539
|
|
(24,941
|
)
|
152,545
|
|
|||||
|
Current liabilities – discontinued operations
|
708
|
|
—
|
|
—
|
|
—
|
|
708
|
|
|||||
|
Intercompany payable – current
|
4,689
|
|
766
|
|
4,198
|
|
(9,653
|
)
|
—
|
|
|||||
|
Total current liabilities
|
166,648
|
|
204,415
|
|
50,386
|
|
(34,594
|
)
|
386,855
|
|
|||||
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Long-term debt
|
199,010
|
|
—
|
|
—
|
|
—
|
|
199,010
|
|
|||||
|
Other liabilities
|
38,657
|
|
46,055
|
|
1,464
|
|
—
|
|
86,176
|
|
|||||
|
Intercompany payable – noncurrent
|
890,034
|
|
150,318
|
|
129,907
|
|
(1,170,259
|
)
|
—
|
|
|||||
|
Total other liabilities
|
1,127,701
|
|
196,373
|
|
131,371
|
|
(1,170,259
|
)
|
285,186
|
|
|||||
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Brown Shoe Company, Inc. shareholders’ equity
|
476,699
|
|
865,700
|
|
165,970
|
|
(1,031,670
|
)
|
476,699
|
|
|||||
|
Noncontrolling interests
|
—
|
|
—
|
|
663
|
|
—
|
|
663
|
|
|||||
|
Total equity
|
476,699
|
|
865,700
|
|
166,633
|
|
(1,031,670
|
)
|
477,362
|
|
|||||
|
Total liabilities and equity
|
$
|
1,771,048
|
|
$
|
1,266,488
|
|
$
|
348,390
|
|
$
|
(2,236,523
|
)
|
$
|
1,149,403
|
|
|
UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET
|
|||||||||||||||
|
AS OF NOVEMBER 2, 2013
|
|||||||||||||||
|
|
|
|
Non-
|
|
|
|
|||||||||
|
($ thousands)
|
Parent
|
|
Guarantors
|
|
Guarantors
|
|
Eliminations
|
|
Total
|
|
|||||
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cash and cash equivalents
|
$
|
—
|
|
$
|
29,722
|
|
$
|
12,684
|
|
$
|
—
|
|
$
|
42,406
|
|
|
Receivables, net
|
93,097
|
|
1,275
|
|
18,119
|
|
—
|
|
112,491
|
|
|||||
|
Inventories, net
|
98,548
|
|
439,807
|
|
6,234
|
|
—
|
|
544,589
|
|
|||||
|
Prepaid expenses and other current assets
|
37,418
|
|
11,423
|
|
3,393
|
|
—
|
|
52,234
|
|
|||||
|
Current assets – discontinued operations
|
158
|
|
—
|
|
23
|
|
—
|
|
181
|
|
|||||
|
Intercompany receivable – current
|
162
|
|
210
|
|
8,780
|
|
(9,152
|
)
|
—
|
|
|||||
|
Total current assets
|
229,383
|
|
482,437
|
|
49,233
|
|
(9,152
|
)
|
751,901
|
|
|||||
|
Other assets
|
95,221
|
|
15,812
|
|
614
|
|
—
|
|
111,647
|
|
|||||
|
Goodwill and intangible assets, net
|
56,369
|
|
18,812
|
|
—
|
|
—
|
|
75,181
|
|
|||||
|
Property and equipment, net
|
26,908
|
|
118,976
|
|
2,298
|
|
—
|
|
148,182
|
|
|||||
|
Investment in subsidiaries
|
851,906
|
|
152,992
|
|
—
|
|
(1,004,898
|
)
|
—
|
|
|||||
|
Intercompany receivable – noncurrent
|
431,414
|
|
483,444
|
|
225,061
|
|
(1,139,919
|
)
|
—
|
|
|||||
|
Total assets
|
$
|
1,691,201
|
|
$
|
1,272,473
|
|
$
|
277,206
|
|
$
|
(2,153,969
|
)
|
$
|
1,086,911
|
|
|
|
|
|
|
|
|
||||||||||
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
||||||
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Trade accounts payable
|
44,889
|
|
136,669
|
|
19,148
|
|
—
|
|
200,706
|
|
|||||
|
Other accrued expenses
|
58,289
|
|
83,483
|
|
9,370
|
|
—
|
|
151,142
|
|
|||||
|
Current liabilities – discontinued operations
|
2,065
|
|
—
|
|
45
|
|
—
|
|
2,110
|
|
|||||
|
Intercompany payable – current
|
2,979
|
|
147
|
|
6,026
|
|
(9,152
|
)
|
—
|
|
|||||
|
Total current liabilities
|
108,222
|
|
220,299
|
|
34,589
|
|
(9,152
|
)
|
353,958
|
|
|||||
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Long-term debt
|
198,963
|
|
—
|
|
—
|
|
—
|
|
198,963
|
|
|||||
|
Other liabilities
|
29,395
|
|
51,192
|
|
1,444
|
|
—
|
|
82,031
|
|
|||||
|
Intercompany payable – noncurrent
|
903,320
|
|
149,076
|
|
87,523
|
|
(1,139,919
|
)
|
—
|
|
|||||
|
Total other liabilities
|
1,131,678
|
|
200,268
|
|
88,967
|
|
(1,139,919
|
)
|
280,994
|
|
|||||
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Brown Shoe Company, Inc. shareholders’ equity
|
451,301
|
|
851,906
|
|
152,992
|
|
(1,004,898
|
)
|
451,301
|
|
|||||
|
Noncontrolling interests
|
—
|
|
—
|
|
658
|
|
—
|
|
658
|
|
|||||
|
Total equity
|
451,301
|
|
851,906
|
|
153,650
|
|
(1,004,898
|
)
|
451,959
|
|
|||||
|
Total liabilities and equity
|
$
|
1,691,201
|
|
$
|
1,272,473
|
|
$
|
277,206
|
|
$
|
(2,153,969
|
)
|
$
|
1,086,911
|
|
|
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||
|
FOR THE THIRTEEN WEEKS ENDED NOVEMBER 2, 2013
|
|||||||||||||||
|
|
|
|
Non-
|
|
|
|
|||||||||
|
($ thousands)
|
Parent
|
|
Guarantors
|
|
Guarantors
|
|
Eliminations
|
|
Total
|
|
|||||
|
Net sales
|
$
|
213,028
|
|
$
|
498,383
|
|
$
|
36,753
|
|
$
|
(45,376
|
)
|
$
|
702,788
|
|
|
Cost of goods sold
|
157,500
|
|
282,617
|
|
29,807
|
|
(45,376
|
)
|
424,548
|
|
|||||
|
Gross profit
|
55,528
|
|
215,766
|
|
6,946
|
|
—
|
|
278,240
|
|
|||||
|
Selling and administrative expenses
|
53,327
|
|
178,810
|
|
1,435
|
|
—
|
|
233,572
|
|
|||||
|
Operating earnings
|
2,201
|
|
36,956
|
|
5,511
|
|
—
|
|
44,668
|
|
|||||
|
Interest expense
|
(5,254
|
)
|
—
|
|
—
|
|
—
|
|
(5,254
|
)
|
|||||
|
Interest income
|
4
|
|
69
|
|
59
|
|
—
|
|
132
|
|
|||||
|
Intercompany interest income (expense)
|
3,558
|
|
(3,693
|
)
|
135
|
|
—
|
|
—
|
|
|||||
|
Intercompany dividend
|
—
|
|
7,778
|
|
(7,778
|
)
|
—
|
|
—
|
|
|||||
|
Earnings (loss) before income taxes from continuing operations
|
509
|
|
41,110
|
|
(2,073
|
)
|
—
|
|
39,546
|
|
|||||
|
Income tax provision
|
(5,011
|
)
|
(6,822
|
)
|
(662
|
)
|
—
|
|
(12,495
|
)
|
|||||
|
Equity in earnings (loss) from continuing operations of subsidiaries, net of tax
|
31,583
|
|
(2,705
|
)
|
—
|
|
(28,878
|
)
|
—
|
|
|||||
|
Net earnings (loss) from continuing operations
|
27,081
|
|
31,583
|
|
(2,735
|
)
|
(28,878
|
)
|
27,051
|
|
|||||
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Earnings (loss) from discontinued operations, net of tax
|
300
|
|
(44
|
)
|
(23
|
)
|
—
|
|
233
|
|
|||||
|
Equity in loss from discontinued operations of subsidiaries, net of tax
|
(67
|
)
|
(23
|
)
|
—
|
|
90
|
|
—
|
|
|||||
|
Net earnings (loss) from discontinued operations
|
233
|
|
(67
|
)
|
(23
|
)
|
90
|
|
233
|
|
|||||
|
Net earnings (loss)
|
27,314
|
|
31,516
|
|
(2,758
|
)
|
(28,788
|
)
|
27,284
|
|
|||||
|
Less: Net loss attributable to noncontrolling interests
|
—
|
|
—
|
|
(30
|
)
|
—
|
|
(30
|
)
|
|||||
|
Net earnings (loss) attributable to Brown Shoe Company, Inc.
|
$
|
27,314
|
|
$
|
31,516
|
|
$
|
(2,728
|
)
|
$
|
(28,788
|
)
|
$
|
27,314
|
|
|
|
|
|
|
|
|
||||||||||
|
Comprehensive income (loss)
|
$
|
27,315
|
|
$
|
31,308
|
|
$
|
(2,758
|
)
|
$
|
(28,575
|
)
|
$
|
27,290
|
|
|
Less: Comprehensive loss attributable to noncontrolling interests
|
—
|
|
—
|
|
(25
|
)
|
—
|
|
(25
|
)
|
|||||
|
Comprehensive income (loss) attributable to Brown Shoe Company, Inc.
|
$
|
27,315
|
|
$
|
31,308
|
|
$
|
(2,733
|
)
|
$
|
(28,575
|
)
|
$
|
27,315
|
|
|
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||
|
FOR THE THIRTY-NINE WEEKS ENDED NOVEMBER 2, 2013
|
|||||||||||||||
|
|
|
|
Non-
|
|
|
|
|||||||||
|
($ thousands)
|
Parent
|
|
Guarantors
|
|
Guarantors
|
|
Eliminations
|
|
Total
|
|
|||||
|
Net sales
|
$
|
551,962
|
|
$
|
1,361,742
|
|
$
|
136,825
|
|
$
|
(137,379
|
)
|
$
|
1,913,150
|
|
|
Cost of goods sold
|
412,736
|
|
754,229
|
|
110,682
|
|
(137,379
|
)
|
1,140,268
|
|
|||||
|
Gross profit
|
139,226
|
|
607,513
|
|
26,143
|
|
—
|
|
772,882
|
|
|||||
|
Selling and administrative expenses
|
169,097
|
|
504,351
|
|
5,074
|
|
—
|
|
678,522
|
|
|||||
|
Restructuring and other special charges, net
|
686
|
|
576
|
|
—
|
|
—
|
|
1,262
|
|
|||||
|
Impairment of assets held for sale
|
—
|
|
—
|
|
4,660
|
|
—
|
|
4,660
|
|
|||||
|
Operating (loss) earnings
|
(30,557
|
)
|
102,586
|
|
16,409
|
|
—
|
|
88,438
|
|
|||||
|
Interest expense
|
(16,076
|
)
|
(91
|
)
|
—
|
|
—
|
|
(16,167
|
)
|
|||||
|
Interest income
|
17
|
|
201
|
|
64
|
|
—
|
|
282
|
|
|||||
|
Intercompany interest income (expense)
|
10,487
|
|
(10,879
|
)
|
392
|
|
—
|
|
—
|
|
|||||
|
Intercompany dividend
|
—
|
|
7,778
|
|
(7,778
|
)
|
—
|
|
—
|
|
|||||
|
(Loss) earnings before income taxes from continuing operations
|
(36,129
|
)
|
99,595
|
|
9,087
|
|
—
|
|
72,553
|
|
|||||
|
Income tax benefit (provision)
|
2,630
|
|
(26,995
|
)
|
(157
|
)
|
—
|
|
(24,522
|
)
|
|||||
|
Equity in earnings from continuing operations of subsidiaries, net of tax
|
81,704
|
|
9,104
|
|
—
|
|
(90,808
|
)
|
—
|
|
|||||
|
Net earnings from continuing operations
|
48,205
|
|
81,704
|
|
8,930
|
|
(90,808
|
)
|
48,031
|
|
|||||
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|||||
|
(Loss) earnings from discontinued operations, net of tax
|
(5,582
|
)
|
1,137
|
|
(339
|
)
|
—
|
|
(4,784
|
)
|
|||||
|
Disposition/impairment of discontinued operations, net of tax
|
—
|
|
1,042
|
|
(12,554
|
)
|
—
|
|
(11,512
|
)
|
|||||
|
Equity in loss from discontinued operations of subsidiaries, net of tax
|
(10,714
|
)
|
(12,893
|
)
|
—
|
|
23,607
|
|
—
|
|
|||||
|
Net loss from discontinued operations
|
(16,296
|
)
|
(10,714
|
)
|
(12,893
|
)
|
23,607
|
|
(16,296
|
)
|
|||||
|
Net earnings (loss)
|
31,909
|
|
70,990
|
|
(3,963
|
)
|
(67,201
|
)
|
31,735
|
|
|||||
|
Less: Net loss attributable to noncontrolling interests
|
—
|
|
—
|
|
(174
|
)
|
—
|
|
(174
|
)
|
|||||
|
Net earnings (loss) attributable to Brown Shoe Company, Inc.
|
$
|
31,909
|
|
$
|
70,990
|
|
$
|
(3,789
|
)
|
$
|
(67,201
|
)
|
$
|
31,909
|
|
|
|
|
|
|
|
|
||||||||||
|
Comprehensive income (loss)
|
$
|
30,944
|
|
$
|
69,709
|
|
$
|
(7,285
|
)
|
$
|
(62,538
|
)
|
$
|
30,830
|
|
|
Less: Comprehensive loss attributable to noncontrolling interests
|
—
|
|
—
|
|
(114
|
)
|
—
|
|
(114
|
)
|
|||||
|
Comprehensive income (loss) attributable to Brown Shoe Company, Inc.
|
$
|
30,944
|
|
$
|
69,709
|
|
$
|
(7,171
|
)
|
$
|
(62,538
|
)
|
$
|
30,944
|
|
|
UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
|||||||||||||||
|
FOR THE THIRTY-NINE WEEKS ENDED NOVEMBER 2, 2013
|
|||||||||||||||
|
|
|
|
Non-
|
|
|
|
|||||||||
|
($ thousands)
|
Parent
|
|
Guarantors
|
|
Guarantors
|
|
Eliminations
|
|
Total
|
|
|||||
|
Net cash provided by (used for) operating activities
|
$
|
27,271
|
|
$
|
60,573
|
|
$
|
(25,859
|
)
|
$
|
—
|
|
$
|
61,985
|
|
|
|
|
|
|
|
|
||||||||||
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Purchases of property and equipment
|
(3,389
|
)
|
(33,737
|
)
|
(762
|
)
|
—
|
|
(37,888
|
)
|
|||||
|
Capitalized software
|
(3,591
|
)
|
(117
|
)
|
(7
|
)
|
—
|
|
(3,715
|
)
|
|||||
|
Intercompany investing
|
(1,024
|
)
|
1,024
|
|
—
|
|
—
|
|
—
|
|
|||||
|
Net proceeds from sale of subsidiaries
|
—
|
|
69,347
|
|
—
|
|
—
|
|
69,347
|
|
|||||
|
Net cash (used for) provided by investing activities
|
(8,004
|
)
|
36,517
|
|
(769
|
)
|
—
|
|
27,744
|
|
|||||
|
|
|
|
|
|
|
||||||||||
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Borrowings under revolving credit agreement
|
966,000
|
|
—
|
|
—
|
|
—
|
|
966,000
|
|
|||||
|
Repayments under revolving credit agreement
|
(1,071,000
|
)
|
—
|
|
—
|
|
—
|
|
(1,071,000
|
)
|
|||||
|
Dividends paid
|
(9,073
|
)
|
—
|
|
—
|
|
—
|
|
(9,073
|
)
|
|||||
|
Issuance of common stock under share-based plans, net
|
(2,406
|
)
|
—
|
|
—
|
|
—
|
|
(2,406
|
)
|
|||||
|
Tax benefit related to share-based plans
|
2,581
|
|
—
|
|
—
|
|
—
|
|
2,581
|
|
|||||
|
Intercompany financing
|
94,631
|
|
(97,780
|
)
|
3,149
|
|
—
|
|
—
|
|
|||||
|
Net cash (used for) provided by financing activities
|
(19,267
|
)
|
(97,780
|
)
|
3,149
|
|
—
|
|
(113,898
|
)
|
|||||
|
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
(1,648
|
)
|
—
|
|
—
|
|
(1,648
|
)
|
|||||
|
Decrease in cash and cash equivalents
|
—
|
|
(2,338
|
)
|
(23,479
|
)
|
—
|
|
(25,817
|
)
|
|||||
|
Cash and cash equivalents at beginning of period
|
—
|
|
32,060
|
|
36,163
|
|
—
|
|
68,223
|
|
|||||
|
Cash and cash equivalents at end of period
|
$
|
—
|
|
$
|
29,722
|
|
$
|
12,684
|
|
$
|
—
|
|
$
|
42,406
|
|
|
ITEM 2
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
OVERVIEW
|
|
•
|
Consolidated net sales increased
$26.5 million
, or
3.8%
, to
$729.3 million
for the
third quarter of 2014
, compared to
$702.8 million
for the
third quarter of 2013
. Our Wholesale Operations segment experienced continued improvement as net sales increased by $37.3 million, or 18.2%. Our Specialty Retail segment reported a decline in net sales of $6.6 million, primarily driven by a lower store count, a decrease in same-store sales, and a lower Canadian dollar exchange rate. Our Famous Footwear segment experienced slightly lower net sales of $4.2 million during the third quarter of 2014, reflecting a lower store count and a decline in same-store sales of 0.2%.
|
|
•
|
Consolidated operating earnings increased
$8.5 million
, or 19.1%, to
$53.2 million
in the
third quarter of 2014
, compared to
$44.7 million
for the
third quarter of 2013
, driven by higher sales and better leveraging of our expense base.
|
|
•
|
Consolidated net earnings attributable to Brown Shoe Company, Inc. were
$33.1 million
, or
$0.75
per diluted share, in the
third quarter of 2014
, compared to net earnings of
$27.3 million
, or
$0.63
per diluted share, in the
third quarter of 2013
.
|
|
•
|
Franco Sarto Trademarks Acquisition – On February 3, 2014, we acquired the Franco Sarto trademarks for $65.0 million. As a result of acquiring the trademarks, our license agreement, which granted us the right to sell footwear and other products using the Franco Sarto trademarks through 2019, was terminated. The license agreement required us to pay royalty expense on sales of Franco Sarto branded products. Beginning February 3, 2014, the date of acquisition, we are no longer required to record royalty expense for these sales, resulting in lower cost of goods sold and higher gross profit. See Note 7 to the condensed consolidated financial statements for additional information.
|
|
•
|
Portfolio Realignment – Our portfolio realignment efforts included the sale of our Avia and Nevados divisions; the sale of AND 1; exiting certain women’s specialty and private label brands; exiting the children’s wholesale business; the sale and closure of certain sourcing and supply chain assets; closing or relocating numerous underperforming or poorly aligned retail stores; the termination of the Etienne Aigner license agreement; the election not to renew the Vera Wang license; and other infrastructure changes. Refer to Note 3 and Note 5 to the condensed consolidated financial statements for further discussion.
|
|
CONSOLIDATED RESULTS
|
|||||||||||||||||||||
|
|
Thirteen Weeks Ended
|
|
Thirty-nine Weeks Ended
|
||||||||||||||||||
|
|
November 1, 2014
|
November 2, 2013
|
|
November 1, 2014
|
November 2, 2013
|
||||||||||||||||
|
|
|
% of Net Sales
|
|
|
% of Net Sales
|
|
|
|
% of Net Sales
|
|
|
% of Net Sales
|
|
||||||||
|
|
|
|
|
|
|
||||||||||||||||
|
($ millions)
|
|
|
|
|
|
||||||||||||||||
|
Net sales
|
$
|
729.3
|
|
100.0
|
%
|
$
|
702.8
|
|
100.0
|
%
|
|
$
|
1,956.3
|
|
100.0
|
%
|
$
|
1,913.2
|
|
100.0
|
%
|
|
Cost of goods sold
|
438.6
|
|
60.1
|
%
|
424.6
|
|
60.4
|
%
|
|
1,163.6
|
|
59.5
|
%
|
1,140.3
|
|
59.6
|
%
|
||||
|
Gross profit
|
290.7
|
|
39.9
|
%
|
278.2
|
|
39.6
|
%
|
|
792.7
|
|
40.5
|
%
|
772.9
|
|
40.4
|
%
|
||||
|
Selling and administrative expenses
|
237.5
|
|
32.6
|
%
|
233.5
|
|
33.2
|
%
|
|
679.5
|
|
34.7
|
%
|
678.5
|
|
35.5
|
%
|
||||
|
Restructuring and other special charges, net
|
—
|
|
—
|
%
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
1.3
|
|
0.1
|
%
|
||||
|
Impairment of assets held for sale
|
—
|
|
—
|
%
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
4.7
|
|
0.2
|
%
|
||||
|
Operating earnings
|
53.2
|
|
7.3
|
%
|
44.7
|
|
6.4
|
%
|
|
113.2
|
|
5.8
|
%
|
88.4
|
|
4.6
|
%
|
||||
|
Interest expense
|
(5.2
|
)
|
(0.7
|
)%
|
(5.3
|
)
|
(0.8
|
)%
|
|
(15.6
|
)
|
(0.8
|
)%
|
(16.1
|
)
|
(0.8
|
)%
|
||||
|
Interest income
|
0.1
|
|
0.0
|
%
|
0.1
|
|
—
|
%
|
|
0.3
|
|
—
|
%
|
0.3
|
|
0.0
|
%
|
||||
|
Earnings before income taxes from continuing operations
|
48.1
|
|
6.6
|
%
|
39.5
|
|
5.6
|
%
|
|
97.9
|
|
5.0
|
%
|
72.6
|
|
3.8
|
%
|
||||
|
Income tax provision
|
(14.9
|
)
|
(2.1
|
)%
|
(12.4
|
)
|
(1.7
|
)%
|
|
(31.2
|
)
|
(1.6
|
)%
|
(24.6
|
)
|
(1.2
|
)%
|
||||
|
Net earnings from continuing operations
|
33.2
|
|
4.5
|
%
|
27.1
|
|
3.9
|
%
|
|
66.7
|
|
3.4
|
%
|
48.0
|
|
2.6
|
%
|
||||
|
Discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Earnings (loss) from discontinued operations, net of tax
|
—
|
|
—
|
%
|
0.2
|
|
0.0
|
%
|
|
—
|
|
—
|
%
|
(4.8
|
)
|
(0.3
|
)%
|
||||
|
Disposition/impairment of discontinued operations, net of tax
|
—
|
|
—
|
%
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
(11.5
|
)
|
(0.6
|
)%
|
||||
|
Net earnings (loss) from discontinued operations
|
—
|
|
—
|
%
|
0.2
|
|
0.0
|
%
|
|
—
|
|
—
|
%
|
(16.3
|
)
|
(0.9
|
)%
|
||||
|
Net earnings
|
33.2
|
|
4.5
|
%
|
27.3
|
|
3.9
|
%
|
|
66.7
|
|
3.4
|
%
|
31.7
|
|
1.7
|
%
|
||||
|
Net earnings (loss) attributable to noncontrolling interests
|
0.1
|
|
0.0
|
%
|
—
|
|
—
|
%
|
|
0.1
|
|
0.0
|
%
|
(0.2
|
)
|
(0.0
|
)%
|
||||
|
Net earnings attributable to Brown Shoe Company, Inc.
|
$
|
33.1
|
|
4.5
|
%
|
$
|
27.3
|
|
3.9
|
%
|
|
$
|
66.6
|
|
3.4
|
%
|
$
|
31.9
|
|
1.7
|
%
|
|
FAMOUS FOOTWEAR
|
||||||||||||||||||||
|
|
Thirteen Weeks Ended
|
Thirty-nine Weeks Ended
|
||||||||||||||||||
|
|
November 1, 2014
|
November 2, 2013
|
November 1, 2014
|
November 2, 2013
|
||||||||||||||||
|
|
|
% of Net Sales
|
|
|
% of Net Sales
|
|
|
% of Net Sales
|
|
|
% of Net Sales
|
|
||||||||
|
($ millions, except sales per square
|
|
|
|
|
||||||||||||||||
|
foot)
|
|
|
|
|
||||||||||||||||
|
Operating Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net sales
|
$
|
435.4
|
|
100.0
|
%
|
$
|
439.6
|
|
100.0
|
%
|
$
|
1,183.6
|
|
100.0
|
%
|
$
|
1,180.1
|
|
100.0
|
%
|
|
Cost of goods sold
|
246.5
|
|
56.6
|
%
|
252.3
|
|
57.4
|
%
|
655.3
|
|
55.4
|
%
|
657.1
|
|
55.7
|
%
|
||||
|
Gross profit
|
188.9
|
|
43.4
|
%
|
187.3
|
|
42.6
|
%
|
528.3
|
|
44.6
|
%
|
523.0
|
|
44.3
|
%
|
||||
|
Selling and administrative expenses
|
151.3
|
|
34.8
|
%
|
150.3
|
|
34.2
|
%
|
436.3
|
|
36.8
|
%
|
427.9
|
|
36.2
|
%
|
||||
|
Operating earnings
|
$
|
37.6
|
|
8.6
|
%
|
$
|
37.0
|
|
8.4
|
%
|
$
|
92.0
|
|
7.8
|
%
|
$
|
95.1
|
|
8.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Key Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Same-store sales % change
|
(0.2
|
)%
|
|
|
4.9
|
%
|
|
|
0.8
|
%
|
|
|
4.3
|
%
|
|
|
||||
|
Same-store sales $ change
|
$
|
(0.9
|
)
|
|
|
$
|
19.5
|
|
|
|
$
|
9.3
|
|
|
|
$
|
47.0
|
|
|
|
|
Sales change from new and closed stores, net
|
$
|
(3.3
|
)
|
|
$
|
(16.7
|
)
|
|
$
|
(5.8
|
)
|
|
$
|
(1.1
|
)
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Sales per square foot, excluding e-commerce (thirteen and thirty-nine weeks ended)
|
$
|
61
|
|
|
$
|
59
|
|
|
$
|
166
|
|
|
$
|
160
|
|
|
||||
|
Sales per square foot, excluding e-commerce (trailing twelve months)
|
$
|
213
|
|
|
$
|
208
|
|
|
$
|
213
|
|
|
$
|
208
|
|
|
||||
|
Square footage (thousand sq. ft.)
|
6,983
|
|
|
|
7,095
|
|
|
|
6,983
|
|
|
|
7,095
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Stores opened
|
12
|
|
|
|
11
|
|
|
|
40
|
|
|
|
42
|
|
|
|
||||
|
Stores closed
|
6
|
|
|
|
22
|
|
|
|
43
|
|
|
|
49
|
|
|
|
||||
|
Ending stores
|
1,041
|
|
|
|
1,048
|
|
|
|
1,041
|
|
|
|
1,048
|
|
|
|
||||
|
WHOLESALE OPERATIONS
|
||||||||||||||||||||
|
|
Thirteen Weeks Ended
|
Thirty-nine Weeks Ended
|
||||||||||||||||||
|
|
November 1, 2014
|
November 2, 2013
|
November 1, 2014
|
November 2, 2013
|
||||||||||||||||
|
|
|
% of Net Sales
|
|
|
% of Net Sales
|
|
|
% of Net Sales
|
|
|
% of Net Sales
|
|
||||||||
|
|
|
|
|
|
||||||||||||||||
|
($ millions)
|
|
|
|
|
||||||||||||||||
|
Operating Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net sales
|
$
|
242.6
|
|
100.0
|
%
|
$
|
205.3
|
|
100.0
|
%
|
$
|
628.6
|
|
100.0
|
%
|
$
|
567.3
|
|
100.0
|
%
|
|
Cost of goods sold
|
162.8
|
|
67.1
|
%
|
140.1
|
|
68.2
|
%
|
423.5
|
|
67.4
|
%
|
388.4
|
|
68.5
|
%
|
||||
|
Gross profit
|
79.8
|
|
32.9
|
%
|
65.2
|
|
31.8
|
%
|
205.1
|
|
32.6
|
%
|
178.9
|
|
31.5
|
%
|
||||
|
Selling and administrative expenses
|
52.0
|
|
21.4
|
%
|
48.4
|
|
23.6
|
%
|
144.2
|
|
22.9
|
%
|
144.9
|
|
25.5
|
%
|
||||
|
Restructuring and other special charges, net
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1.2
|
|
0.2
|
%
|
||||
|
Impairment of assets held for sale
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4.7
|
|
0.8
|
%
|
||||
|
Operating earnings
|
$
|
27.8
|
|
11.5
|
%
|
$
|
16.8
|
|
8.2
|
%
|
$
|
60.9
|
|
9.7
|
%
|
$
|
28.1
|
|
5.0
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Key Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Unfilled order position at end of period
|
$
|
333.4
|
|
|
|
$
|
311.7
|
|
|
|
|
|
|
|
|
|
|
|
||
|
SPECIALTY RETAIL
|
|
|||||||||||||||||||
|
|
Thirteen Weeks Ended
|
Thirty-nine Weeks Ended
|
||||||||||||||||||
|
|
November 1, 2014
|
November 2, 2013
|
November 1, 2014
|
November 2, 2013
|
||||||||||||||||
|
|
|
% of Net Sales
|
|
|
% of Net Sales
|
|
|
% of Net Sales
|
|
|
% of Net Sales
|
|
||||||||
|
($ millions, except sales per square foot)
|
|
|
|
|
||||||||||||||||
|
Operating Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net sales
|
$
|
51.3
|
|
100.0
|
%
|
$
|
57.9
|
|
100.0
|
%
|
$
|
144.1
|
|
100.0
|
%
|
$
|
165.7
|
|
100.0
|
%
|
|
Cost of goods sold
|
29.2
|
|
57.0
|
%
|
32.1
|
|
55.5
|
%
|
84.8
|
|
58.8
|
%
|
94.7
|
|
57.1
|
%
|
||||
|
Gross profit
|
22.1
|
|
43.0
|
%
|
25.8
|
|
44.5
|
%
|
59.3
|
|
41.2
|
%
|
71.0
|
|
42.9
|
%
|
||||
|
Selling and administrative expenses
|
22.5
|
|
43.7
|
%
|
25.6
|
|
44.1
|
%
|
66.1
|
|
45.9
|
%
|
73.9
|
|
44.7
|
%
|
||||
|
Operating (loss) earnings
|
$
|
(0.4
|
)
|
(0.7
|
)%
|
$
|
0.2
|
|
0.4
|
%
|
$
|
(6.8
|
)
|
(4.7
|
)%
|
$
|
(2.9
|
)
|
(1.8
|
)%
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Key Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Same-store sales % change
|
(6.9
|
)%
|
|
|
0.6
|
%
|
|
|
(3.5
|
)%
|
|
|
1.7
|
%
|
|
|
||||
|
Same-store sales $ change
|
$
|
(2.5
|
)
|
|
|
$
|
0.2
|
|
|
|
$
|
(3.5
|
)
|
|
|
$
|
1.8
|
|
|
|
|
Sales change from new and closed stores, net
|
$
|
(2.8
|
)
|
|
|
$
|
(1.3
|
)
|
|
|
$
|
(9.5
|
)
|
|
|
$
|
(3.7
|
)
|
|
|
|
Impact of changes in Canadian exchange rate on sales
|
$
|
(1.0
|
)
|
|
|
$
|
(0.9
|
)
|
|
|
$
|
(2.7
|
)
|
|
|
$
|
(1.4
|
)
|
|
|
|
Sales change of e-commerce subsidiary
|
$
|
(0.3
|
)
|
|
|
$
|
(2.9
|
)
|
|
|
$
|
(5.9
|
)
|
|
|
$
|
(3.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Sales per square foot, excluding e-commerce (thirteen and thirty-nine weeks ended)
|
$
|
100
|
|
|
|
$
|
109
|
|
|
|
$
|
289
|
|
|
|
$
|
302
|
|
|
|
|
Sales per square foot, excluding e-commerce (trailing twelve months)
|
$
|
384
|
|
|
|
$
|
400
|
|
|
|
$
|
384
|
|
|
|
$
|
400
|
|
|
|
|
Square footage (thousand sq. ft.)
|
304
|
|
|
|
325
|
|
|
|
304
|
|
|
|
325
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Stores opened
|
3
|
|
|
|
4
|
|
|
|
7
|
|
|
|
10
|
|
|
|
||||
|
Stores closed
|
1
|
|
|
|
34
|
|
|
|
14
|
|
|
|
47
|
|
|
|
||||
|
Ending stores
|
172
|
|
|
|
185
|
|
|
|
172
|
|
|
|
185
|
|
|
|
||||
|
OTHER
|
|
LIQUIDITY AND CAPITAL RESOURCES
|
|
|
November 1,
|
November 2,
|
February 1,
|
||||||
|
($ millions)
|
2014
|
2013
|
2014
|
||||||
|
Borrowings under revolving credit agreement
|
$
|
14.0
|
|
$
|
—
|
|
$
|
7.0
|
|
|
Long-term debt – Senior Notes
|
199.2
|
|
199.0
|
|
199.0
|
|
|||
|
Total debt
|
$
|
213.2
|
|
$
|
199.0
|
|
$
|
206.0
|
|
|
Year
|
Percentage
|
|
|
2014
|
105.344
|
%
|
|
2015
|
103.563
|
%
|
|
2016
|
101.781
|
%
|
|
2017 and thereafter
|
100.000
|
%
|
|
|
Thirty-nine Weeks Ended
|
|
|
||||||
|
|
November 1,
|
November 2,
|
Increase/
|
||||||
|
($ millions)
|
2014
|
2013
|
(Decrease)
|
||||||
|
Net cash provided by operating activities
|
$
|
68.5
|
|
$
|
62.0
|
|
$
|
6.5
|
|
|
Net cash (used for) provided by investing activities
|
(112.4
|
)
|
27.7
|
|
(140.1
|
)
|
|||
|
Net cash provided by (used for) financing activities
|
0.5
|
|
(113.9
|
)
|
114.4
|
|
|||
|
Effect of exchange rate changes on cash and cash equivalents
|
(0.1
|
)
|
(1.6
|
)
|
1.5
|
|
|||
|
Decrease in cash and cash equivalents
|
$
|
(43.5
|
)
|
$
|
(25.8
|
)
|
$
|
(17.7
|
)
|
|
•
|
Higher net earnings; and
|
|
•
|
A smaller increase in inventories in the nine months ended November 1, 2014 compared to the comparable period in 2013; partially offset by
|
|
•
|
A larger decrease in trade accounts payable in the nine months ended November 1, 2014 compared to the comparable period in 2013 due to the timing of payments; and
|
|
•
|
A smaller increase in accrued expenses and other liabilities in the nine months ended November 1, 2014 compared to the comparable period in 2013 primarily due to the timing of payments.
|
|
|
November 1, 2014
|
|
November 2, 2013
|
|
February 1, 2014
|
|
|||
|
Working capital
($ millions
)
(1)
|
$
|
393.8
|
|
$
|
397.9
|
|
$
|
405.7
|
|
|
|
|
|
|
|
|
|
|||
|
Current ratio
(2)
|
2.01:1
|
|
2.12:1
|
|
2.05:1
|
|
|||
|
|
|
|
|
|
|
|
|||
|
Debt-to-capital ratio
(3)
|
28.3
|
%
|
30.6
|
%
|
30.1
|
%
|
|||
|
(1)
|
Working capital has been computed as total current assets less total current liabilities.
|
|
(2)
|
The current ratio has been computed by dividing total current assets by total current liabilities.
|
|
(3)
|
The debt-to-capital ratio has been computed by dividing total debt by total capitalization. Total debt is defined as long-term debt and borrowings under the revolving credit agreement. Total capitalization is defined as total debt and total shareholders’ equity.
|
|
CONTRACTUAL OBLIGATIONS
|
|
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
|
|
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
|
|
FORWARD-LOOKING STATEMENTS
|
|
ITEM 3
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
ITEM 4
|
CONTROLS AND PROCEDURES
|
|
|
OTHER INFORMATION
|
|
ITEM 1
|
LEGAL PROCEEDINGS
|
|
ITEM 1A
|
RISK FACTORS
|
|
ITEM 2
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
|
|
|
|
|
|
Maximum Number of Shares that May Yet be Purchased Under the Program (1)
|
|||||||
|
|
|
|
|
|
Total Number Purchased as Part of Publicly Announced Program (1)
|
||||||||
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
|||||||||
|
|
|
|
|||||||||||
|
Fiscal Period
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|||||||
|
August 3, 2014 – August 30, 2014
|
—
|
|
|
$
|
—
|
|
|
—
|
|
2,500,000
|
|
||
|
|
|
|
|
|
|
|
|||||||
|
August 31, 2014 – October 4, 2014
|
6,682
|
|
(2
|
)
|
28.46
|
|
(2
|
)
|
—
|
|
2,500,000
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
October 5, 2014 – November 1, 2014
|
2,475
|
|
(2
|
)
|
26.11
|
|
(2
|
)
|
—
|
|
2,500,000
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Total
|
9,157
|
|
(2
|
)
|
$
|
27.82
|
|
(2
|
)
|
—
|
|
2,500,000
|
|
|
(1)
|
On August 25, 2011, the Board of Directors approved a stock repurchase program authorizing the repurchase of up to 2.5 million shares of our outstanding common stock. We can utilize the repurchase program to repurchase shares on the open market or in private transactions from time to time, depending on market conditions. The repurchase program does not have an expiration date. Under this plan, no shares were repurchased through the end of the third quarter of 2014; therefore, there were 2.5 million shares authorized to be purchased under the program as of
November 1, 2014
. Our repurchases of common stock are limited under our debt agreements.
|
|
(2)
|
Reflects shares that were tendered by employees related to certain share-based awards. These shares were tendered in satisfaction of the exercise price of stock options and/or to satisfy minimum tax withholding amounts for non-qualified stock options, restricted stock and stock performance awards. Accordingly, these share purchases are not considered a part of our publicly announced stock repurchase program.
|
|
ITEM 3
|
DEFAULTS UPON SENIOR SECURITIES
|
|
ITEM 4
|
MINE SAFETY DISCLOSURES
|
|
ITEM 5
|
OTHER INFORMATION
|
|
ITEM 6
|
EXHIBITS
|
|
Exhibit
No.
|
|
|
|
3.1
|
|
Restated Certificate of Incorporation of Brown Shoe Company, Inc. (the “Company”) incorporated herein by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended May 5, 2007, and filed June 5, 2007.
|
|
3.2
|
|
Bylaws of the Company as amended through May 29, 2014, incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K dated and filed May 30, 2014.
|
|
31.1
|
†
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2
|
†
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
†
|
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
†
|
XBRL Instance Document
|
|
101.SCH
101.CAL
101.LAB
101.PRE
101.DEF
|
†
†
†
†
†
|
XBRL Taxonomy Extension Schema Document
XBRL Taxonomy Extension Calculation Linkbase Document
XBRL Taxonomy Extension Label Linkbase Document
XBRL Taxonomy Presentation Linkbase Document
XBRL Taxonomy Definition Linkbase Document
|
|
SIGNATURES
|
|
|
|
BROWN SHOE COMPANY, INC.
|
|
|
|
|
|
Date: December 9, 2014
|
|
/s/ Russell C. Hammer
|
|
|
|
Russell C. Hammer
Senior Vice President and Chief Financial Officer
on behalf of the Registrant and as the
Principal Financial Officer
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|