SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) March 18, 2003
Charming Shoppes, Inc.
(Exact Name of Registrant as Specified in its Charter)
Pennsylvania
(State or Other Jurisdiction of Incorporation)
0-7258 23-1721355
(Commission File Number) (I.R.S. Employer Identification No.)
450 Winks Lane, Bensalem, PA 19020
(Address of Principal Executive Offices) (Zip Code)
(215) 245-9100
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Item 9. Regulation FD Disclosure.
On March 18, 2003 the Company announced its earnings for the fourth quarter
and fiscal year ended February 1, 2003. The earnings announcement included the
following disclosure:
Related to the Emerging Issues Task Force (EITF) of the Financial
Accounting Standards Board, Issue 02-16, "Accounting by a Reseller for Cash
Consideration Received from a Vendor," the Company elected to early adopt the
provisions of the EITF retroactive to the first quarter of fiscal 2003. This
change in accounting had the following impact on our reported results for fiscal
2003:
1. A portion of cash received from vendors is deferred and remains in
inventory until the product is sold. As of February 1, 2003, $7,944,000 of
cash received from vendors has been deferred into inventory and will be
recognized as inventory is sold.
2. The Company recorded a charge of $5,123,000 (net of income taxes of
$2,758,000) or $0.04 per diluted share that represents the cumulative
effect of this accounting change for the deferral of cash received from
vendors as of the beginning of fiscal 2003. The impact of the adoption of
EITF 02-16 for the fourth quarter and year ended February 1, 2003 was an
increase to cost of goods sold of $361,000 and $216,000, respectively.
The tables on the following pages present the Company's results of
operations for the Company's fiscal quarters and year-to-date periods ended May
4, 2002, August 3, 2002, and November 2, 2002 as originally included in the
Reports on Form 10-Q as filed for the respective fiscal quarters and as restated
for the adoption of EITF 02-16 as of February 2, 2002. NEITHER THE FURNISHING OF
THIS INFORMATION, NOR THE POSTING OF THE INFORMATION ON THE COMPANY'S WEBSITE IS
INTENDED TO, AND DOES NOT, CONSTITUTE A DETERMINATION BY THE COMPANY THAT THE
INFORMATION IS MATERIAL OR THAT THE DISSEMINATION OF THE INFORMATION IS REQUIRED
BY REGULATION FD.
Charming Shoppes, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Thirteen Weeks Ended
May 4, 2002
(in thousands, except per share amounts) As Reported Restated
----------- --------
Net sales ................................................................. $630,616 $630,616
-------- --------
Cost of goods sold, buying, and occupancy expenses ........................ 438,808 437,235
Selling, general, and administrative expenses ............................. 159,156 159,156
-------- --------
Total operating expenses .................................................. 597,964 596,391
-------- --------
Income from operations .................................................... 32,652 34,225
Other income, principally interest ........................................ 444 444
Interest expense .......................................................... (6,802) (6,802)
-------- --------
Income before income taxes and cumulative effect of accounting changes .... 26,294 27,867
Income tax provision ...................................................... 10,044 10,656
-------- --------
Income before minority interest and cumulative effect of accounting changes 16,250 17,211
Minority interest in net loss of consolidated subsidiary,
net of income taxes of $37 ........................................... 61 61
-------- --------
Income before cumulative effect of accounting changes ..................... 16,311 17,272
Cumulative effect of accounting changes ................................... (43,975) (49,098)
-------- --------
Net loss .................................................................. $(27,664) $(31,826)
======== ========
Basic net income (loss) per share:
Income before cumulative effect of accounting changes ..................... $ 0.15 $ 0.15
Cumulative effect of accounting changes ................................... (0.39) (0.44)
------ ------
Net loss ............................................................. $(0.25)(a) $(0.28)(a)
====== ======
Net income (loss) per share, assuming dilution:
Income before cumulative effect of accounting changes ..................... $ 0.14 $ 0.14
Cumulative effect of accounting changes ................................... (0.35) (0.39)
------ ------
Net loss ............................................................. $(0.21) $(0.24)(a)
====== ======
(a) Results do not add due to rounding
Charming Shoppes, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Thirteen Weeks Ended Twenty-six Weeks Ended
August 3, 2002 August 3, 2002
-------------- --------------
(in thousands, except per share amounts) As Reported Restated As Reported Restated
----------- -------- ----------- --------
Net sales........................................ $638,307 $638,307 $1,268,923 $1,268,923
Cost of goods sold, buying, and occupancy
expenses.................................... 441,246 441,376 880,054 878,611
Selling, general, and administrative expenses.... 151,391 151,391 310,547 310,547
-------- -------- ---------- ----------
Total operating expenses......................... 592,637 592,767 1,190,601 1,189,158
-------- -------- ---------- ----------
Income from operations........................... 45,670 45,540 78,322 79,765
Other income, principally interest............... 719 719 1,163 1,163
Interest expense................................. (5,678) (5,678) (12,480) (12,480)
-------- -------- ---------- ----------
Income before income taxes and cumulative
effect of accounting changes................ 40,711 40,581 67,005 68,448
Income tax provision............................. 15,552 15,501 25,596 26,157
-------- -------- ---------- ----------
Income before minority interest and cumulative
effect of accounting changes................ 25,159 25,080 41,409 42,291
Minority interest in net loss of consolidated
subsidiary, net of income taxes of $242
and $279.................................... 390 390 451 451
-------- -------- ---------- ----------
Income before cumulative effect of accounting
changes..................................... 25,549 25,470 41,860 42,742
Cumulative effect of accounting changes.......... 0 0 (43,975) (49,098)
-------- -------- ---------- ----------
Net income (loss)................................ $ 25,549 $ 25,470 $ (2,115) $ (6,356)
======== ======== ========== ==========
Basic net income (loss) per share:
Income before cumulative effect of accounting
changes..................................... $0.22 $0.22 $ 0.37 $ 0.38
Cumulative effect of accounting changes.......... 0.00 0.00 (0.39) (0.43)
----- ----- ------ ------
Net income (loss)........................... $0.22 $0.22 $(0.02) $(0.06)(a)
===== ===== ====== ======
Net income (loss) per share, assuming dilution:
Income before cumulative effect of accounting
changes..................................... $0.20 $0.20 $ 0.33 $ 0.34
Cumulative effect of accounting changes.......... 0.00 0.00 (0.33) (0.37)
----- ----- ------ ------
Net income (loss)........................... $0.20 $0.20 $ 0.00 $(0.03)
===== ===== ====== ======
(a) Results do not add due to rounding
Charming Shoppes, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Thirteen Weeks Ended Thirty-nine Weeks Ended
November 2, 2002 November 2, 2002
---------------- ----------------
(in thousands, except per share amounts) As Reported Restated As Reported Restated
----------- -------- ----------- --------
Net sales........................................ $542,332 $542,332 $1,811,255 $1,811,255
Cost of goods sold, buying, and occupancy
expenses.................................... 389,748 391,047 1,269,802 1,269,658
Selling, general, and administrative expenses.... 148,323 148,323 458,870 458,870
Restructuring credit............................. (1,351) (1,351) (1,351) (1,351)
-------- -------- ---------- ----------
Total operating expenses......................... 536,720 538,019 1,727,321 1,727,177
-------- -------- ---------- ----------
Income from operations........................... 5,612 4,313 83,934 84,078
Other income, principally interest............... 698 698 1,861 1,861
Interest expense................................. (4,667) (4,667) (17,147) (17,147)
-------- -------- ---------- ----------
Income before income taxes and cumulative
effect of accounting changes................ 1,643 344 68,648 68,792
Income tax provision............................. 1,177 672 26,773 26,829
-------- -------- ---------- ----------
Income (loss) before minority interest and
cumulative effect of accounting changes..... 466 (328) 41,875 41,963
Minority interest in net loss of consolidated
subsidiary, net of income taxes of $22
and $301.................................... 36 36 487 487
-------- -------- ---------- ----------
Income (loss) before cumulative effect of
accounting changes.......................... 502 (292) 42,362 42,450
Cumulative effect of accounting changes.......... 0 0 (43,975) (49,098)
-------- -------- ---------- ----------
Net income (loss)................................ $ 502 $ (292) $ (1,613) $ (6,648)
======== ======== ========== ==========
Basic net income (loss) per share:
Income before cumulative effect of accounting
changes..................................... $0.00 $0.00 $ 0.37 $ 0.37
Cumulative effect of accounting changes.......... 0.00 0.00 (0.38) (0.43)
----- ----- ------ ------
Net income (loss)........................... $0.00 $0.00 $(0.01) $(0.06)
===== ===== ====== ======
Net income (loss) per share, assuming dilution:
Income before cumulative effect of accounting
changes..................................... $0.00 $0.00 $ 0.35 $ 0.35
Cumulative effect of accounting changes.......... 0.00 0.00 (0.33) (0.37)
----- ----- ------ ------
Net income (loss)........................... $0.00 $0.00 $ 0.01 (a) $(0.02)
===== ===== ====== ======
(a) Results do not add due to rounding
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CHARMING SHOPPES, INC.
----------------------
(Registrant)
Dated: March 18, 2003 By: /S/ ERIC M. SPECTER
------------------------
Name: Eric M. Specter
Title: Executive Vice President and
Chief Financial Officer