SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 1994 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number 0-6074 Nordstrom, Inc. ______________________________________________________ (Exact name of Registrant as specified in its charter) Washington 91-0515058 _______________________________ ___________________ (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1501 Fifth Avenue, Seattle, Washington 98101 ____________________________________________________ (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (206) 628-2111 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO _____ _____ Common stock outstanding as of May 31, 1994: 82,107,884 shares of common stock. 1 of 8 NORDSTROM, INC. AND SUBSIDIARIES -------------------------------- INDEX ----- Page Number PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statements of Earnings Three months ended April 30, 1994 and 1993 (Unaudited) 3 Consolidated Balance Sheets April 30, 1994 and 1993 and January 31, 1994 (unaudited) 4 Consolidated Statements of Cash Flows Three months ended April 30, 1994 and 1993 (Unaudited) 5 Notes to Consolidated Financial Information 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II. OTHER INFORMATION Item 1. Legal Proceedings 8 Item 6. Exhibits and Reports on Form 8-K 8 2 of 8 NORDSTROM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (dollars in thousands except per share amounts) (unaudited) These statements should be read in conjunction with the Notes to Consolidated Financial Statements contained herein and in the Nordstrom 1993 Annual Report to Shareholders. 3 of 8
Three Months Ended April 30, ------------------- 1994 1993 -------- -------- Net sales $762,062 $695,559 Costs and expenses: Cost of sales and related buying and occupancy costs 510,135 482,588 Selling, general and administrative 214,864 208,199 Interest, net 7,942 9,870 Service charge income and other, net (23,652) (23,493) -------- -------- Total costs and expenses 709,289 677,164 -------- -------- Earnings before income taxes 52,773 18,395 Income taxes 20,800 7,100 -------- -------- Net earnings $ 31,973 $ 11,295 ======== ======== Net earnings per average share of common stock $ .39 $ .14 ======== ======== Cash dividends paid per share of common stock outstanding $ .085 $ .085 ======== ======== NORDSTROM, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in thousands) (unaudited) These statements should be read in conjunction with the Notes to Consolidated Financial Statements contained herein and in the Nordstrom 1993 Annual Report to Shareholders. 4 of 8
April 30, January 31, April 30, 1994 1994 1993 ---------- ----------- ---------- ASSETS Current Assets: Cash and cash equivalents $ 101,654 $ 91,222 $ 54,580 Accounts receivable, net 530,673 586,441 535,266 Merchandise inventories 621,962 585,602 624,170 Prepaid income taxes and other 52,007 51,649 50,431 ---------- ----------- ---------- Total current assets 1,306,296 1,314,914 1,264,447 Property, buildings and equipment, net 862,073 845,596 815,721 Other assets 20,810 16,971 11,330 ---------- ----------- ---------- $2,189,179 $2,177,481 $2,091,498 ========== =========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Notes payable $ 52,146 $ 40,337 $ 102,842 Accounts payable 279,550 264,055 265,680 Accrued salaries, wages and taxes 120,470 156,947 118,760 Accrued expenses 34,512 35,994 31,249 Accrued income taxes 22,042 27,988 10,048 Current portion of long-term debt 112,164 102,164 16,316 ---------- ----------- ---------- Total current liabilities 620,884 627,485 544,895 Long-term debt 326,182 336,410 440,422 Deferred income taxes and other 49,326 47,082 49,624 Shareholders' equity: Common stock, without par value: 250,000,000 shares authorized; 82,099,115, 82,059,128 and 81,984,171 shares issued and outstanding 158,660 157,374 155,639 Retained earnings 1,034,127 1,009,130 900,918 ---------- ----------- ---------- Total shareholders' equity 1,192,787 1,166,504 1,056,557 ---------- ----------- ---------- $2,189,179 $2,177,481 $2,091,498 ========== =========== ========== NORDSTROM, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) (unaudited) These statements should be read in conjunction with the Notes to Consolidated Financial Statements contained herein and in the Nordstrom 1993 Annual Report to Shareholders. 5 of 8
Three Months Ended April 30, ------------------ 1994 1993 -------- -------- OPERATING ACTIVITIES: Net earnings $ 31,973 $11,295 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 24,862 24,462 Change in: Accounts receivable, net 55,768 67,932 Merchandise inventories (36,360) (87,431) Prepaid income taxes and other (358) 340 Accounts payable 15,495 45,504 Accrued salaries, wages and taxes (36,477) (39,268) Accrued expenses (1,482) 108 Income tax liabilities and other (3,702) (11,858) -------- ------- Net cash provided by operating activities 49,719 11,084 -------- ------- INVESTING ACTIVITIES: Additions to property, buildings and equipment, net (41,209) (15,911) Other (3,969) (2,276) -------- -------- Net cash used in investing activities (45,178) (18,187) -------- -------- FINANCING ACTIVITIES: Increase in notes payable 11,809 64,523 Proceeds from issuance of common stock 1,286 200 Principal payments on long-term debt (228) (25,207) Cash dividends paid (6,976) (6,969) -------- ------- Net cash provided by financing activities 5,891 32,547 -------- ------- Net increase in cash and cash equivalents 10,432 25,444 Cash and cash equivalents at beginning of period 91,222 29,136 -------- ------- Cash and cash equivalents at end of period $101,654 $54,580 ======== ======= NORDSTROM, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED APRIL 30, 1994 AND 1993 (dollars in thousands) (unaudited) Note 1: The consolidated balance sheets of Nordstrom, Inc. and subsidiaries as of April 30, 1994 and 1993, and the related consolidated statements of earnings and cash flows for the periods then ended, have been prepared from the accounts without audit. The consolidated financial information is applicable to interim periods and is not necessarily indicative of the results to be expected for the year ending January 31, 1995. It is not considered necessary to include detailed footnote information as of April 30, 1994 and 1993. The financial information should be read in conjunction with the Notes to Consolidated Financial Statements contained in the Nordstrom 1993 Annual Report to Shareholders. In the opinion of management, the consolidated financial information includes all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position of Nordstrom, Inc. and subsidiaries as of April 30, 1994 and 1993, and the results of their operations and cash flows for the periods then ended, in accordance with generally accepted accounting principles applied on a consistent basis. Note 2: The components of net interest are as follows: Note 3: The summarized combined results of operations of Nordstrom Credit, Inc. and Nordstrom National Credit Bank are as follows:
Three Months Ended April 30, 1994 1993 ------- ------- Interest expense $9,647 $10,349 Interest income (719) (306) Capitalized interest (986) (173) ------- ------- Interest, net $7,942 $ 9,870 ======= ======= 6 of 8
Three Months Ended April 30, 1994 1993 ------- ------- Service charge and merchant fee income $24,742 $24,012 Earnings before income taxes 10,285 8,639 Net earnings 6,585 5,564 NORDSTROM, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the Management Discussion and Analysis section of the Nordstrom 1993 Annual Report to Shareholders. Results of Operations: - - ---------------------- During the first quarter of 1994, sales increased 9.6% when compared with the same quarter of 1993. Sales for comparable stores increased 6.9% during the quarter, with the remainder of the increase coming from new units. The increase in comparable store sales was the highest increase since 1989 and reflects improving trends in all areas of the Company's operations. The Company, however, remains cautious with respect to sales predictions for the remainder of the year. Cost of sales and related buying and occupancy costs decreased as a percentage of sales for the quarter due primarily to improved merchandise margins. Buying and occupancy costs also decreased compared to the same quarter last year. Selling, general and administrative expenses decreased as a percentage of sales when compared with the same quarter last year. The Company continued its efforts to reduce the rate of growth in operating expenses, and as a result, noted improvement in most expense categories. Specific areas which decreased significantly included employee benefits, selling costs, sales promotion and bad debts. Net interest expense decreased as a percentage of sales for the quarter due to lower levels of debt outstanding during the quarter. Income taxes as a percentage of earnings before income taxes increased when compared to the same quarter of 1993 due to the effects of the Omnibus Budget Reconciliation Tax Act, which was signed into law on August 10, 1993. Financial Condition: - - -------------------- The Company's working capital at April 30, 1994 decreased compared to the prior year primarily due to an increase in current maturities of long-term debt. The Company's financial condition remains strong and the Company has continued to fund its working capital needs internally. However, with its increased spending on expansion and the maturity of over $100 million in long-term debt, it is likely that the Company will require some external capital later this year. 7 of 8 NORDSTROM, INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Financial Condition (continued): - - -------------------------------- In May 1994, Nordstrom National Credit Bank commenced its VISA card program, which is also expected to increase the external financing needs of the Company. During the quarter, the Company opened a full-line store in Annapolis Mall, Annapolis, Maryland, and a clearance store in Schaumburg, Illinois. Construction is progressing as planned on new stores scheduled to open later this year and in 1995. PART II - OTHER INFORMATION Item 1. Legal Proceedings - - -------------------------- The Company is not involved in any material pending legal proceedings, other than routine litigation in the ordinary course of business. Item 6. Exhibits and Reports on Form 8-K - - ----------------------------------------- No reports on Form 8-K were filed during the quarter for which this report is filed. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NORDSTROM, INC. (Registrant) ------------------------------------------ John A. Goesling, Executive Vice President and Treasurer (Principal Financial and Accounting Officer) Date: June 3, 1994 - - ----------------------- 8 of 8