Financial Information for the Company and its Subsidiaries

12 Months Ended

Feb. 02, 2019

Financial Information For The Company And Its Subsidiaries [Abstract]

Financial Information for the Company and its Subsidiaries

FINANCIAL INFORMATION FOR THE COMPANY AND ITS SUBSIDIARIES

The Company's Senior Notes are fully and unconditionally and jointly and severally guaranteed by all of its existing and future subsidiaries that are guarantors under the Credit Agreement, as further discussed in Note 12 to the consolidated financial statements. The following table presents the condensed consolidating financial information for each of Caleres, Inc. (“Parent”), the Guarantors, and subsidiaries of the Parent that are not Guarantors (the “Non-Guarantors”), together with consolidating eliminations, as of and for the periods indicated. Guarantors are 100% owned by the Parent. On December 13, 2016, Allen Edmonds was joined to the Credit Agreement as a guarantor and on October 31, 2018, Vionic was joined to the Credit Agreement as a guarantor. After giving effect to the joinders, the Company is the lead borrower, and Sidney Rich Associates, Inc., BG Retail, LLC, Allen Edmonds and Vionic are each co-borrowers and guarantors under the Credit Agreement.

The condensed consolidating financial statements have been prepared using the equity method of accounting in accordance with the requirements for presentation of such information. Management believes that the information, presented in lieu of complete financial statements for each of the Guarantors, provides meaningful information to allow investors to determine the nature of the assets held by, and operations and cash flows of, each of the consolidated groups.

CONDENSED CONSOLIDATING BALANCE SHEET
AS OF FEBRUARY 2, 2019
					Non-Guarantors
($ thousands)	Parent		Guarantors					Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	2	$	9,148	$	21,050		$	—		$	30,200
Receivables, net	130,684		32,319		28,719			—			191,722
Inventories, net	175,697		470,610		36,864			—			683,171
Prepaid expenses and other current assets	31,195		32,556		7,603			—			71,354
Intercompany receivable - current	190		42		15,279			(15,511		)	—
Total current assets	337,768		544,675		109,515			(15,511		)	976,447
Property and equipment, net	62,608		157,270		10,906			—			230,784
Goodwill and intangible assets, net	108,884		331,810		109,203			—			549,897
Other assets	68,707		11,824		909			—			81,440
Investment in subsidiaries	1,499,209		—		(24,838		)	(1,474,371		)	—
Intercompany receivable - noncurrent	597,515		578,821		762,281			(1,938,617		)	—
Total assets	$	2,674,691	$	1,624,400	$	967,976		$	(3,428,499	)	$	1,838,568
Liabilities and Equity
Current liabilities:
Borrowings under revolving credit agreement	$	335,000	$	—	$	—		$	—		$	335,000
Trade accounts payable	146,400		130,670		39,228			—			316,298
Other accrued expenses	95,498		86,015		20,525			—			202,038
Intercompany payable - current	10,781		—		4,730			(15,511		)	—
Total current liabilities	587,679		216,685		64,483			(15,511		)	853,336
Other liabilities:
Long-term debt	197,932		—		—			—			197,932
Other liabilities	105,689		41,149		5,027			—			151,865
Intercompany payable - noncurrent	1,149,338		115,114		674,165			(1,938,617		)	—
Total other liabilities	1,452,959		156,263		679,192			(1,938,617		)	349,797
Equity:
Caleres, Inc. shareholders’ equity	634,053		1,251,452		222,919			(1,474,371		)	634,053
Noncontrolling interests	—		—		1,382			—			1,382
Total equity	634,053		1,251,452		224,301			(1,474,371		)	635,435
Total liabilities and equity	$	2,674,691	$	1,624,400	$	967,976		$	(3,428,499	)	$	1,838,568

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS (LOSS)
FOR THE FISCAL YEAR ENDED FEBRUARY 2, 2019
($ thousands)	Parent			Guarantors			Non-Guarantors			Eliminations			Total
Net sales	$	888,234		$	1,975,219		$	237,607		$	(266,214	)	$	2,834,846
Cost of goods sold	619,120			1,157,558			124,037			(222,213		)	1,678,502
Gross profit	269,114			817,661			113,570			(44,001		)	1,156,344
Selling and administrative expenses	267,584			760,754			57,428			(44,001		)	1,041,765
Impairment of goodwill and intangible assets	—			—			98,044			—			98,044
Restructuring and other special charges, net	9,734			6,400			—			—			16,134
Operating (loss) earnings	(8,204		)	50,507			(41,902		)	—			401
Interest (expense) income	(19,048		)	(25		)	796			—			(18,277		)
Loss on early extinguishment of debt	(186		)	—			—			—			(186		)
Other income (expense)	12,408			—			(100		)	—			12,308
Intercompany interest income (expense)	11,436			(11,494		)	58			—			—
(Loss) earnings before income taxes	(3,594		)	38,988			(41,148		)	—			(5,754		)
Income tax benefit (provision)	1,687			(7,719		)	6,305			—			273
Equity in loss of subsidiaries, net of tax	(3,534		)	—			(1,275		)	4,809			—
Net (loss) earnings	(5,441		)	31,269			(36,118		)	4,809			(5,481		)
Less: Net loss attributable to noncontrolling interests	—			—			(40		)	—			(40		)
Net (loss) earnings attributable to Caleres, Inc.	$	(5,441	)	$	31,269		$	(36,078	)	$	4,809		$	(5,441	)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
FOR THE FISCAL YEAR ENDED FEBRUARY 2, 2019
							Non-Guarantors
($ thousands)	Parent			Guarantors						Eliminations		Total
Net (loss) earnings	$	(5,441	)	$	31,269		$	(36,118	)	$	4,809	$	(5,481	)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment	—			—			(1,224		)	—		(1,224		)
Pension and other postretirement benefits adjustments	(13,663		)	—			(220		)	—		(13,883		)
Derivative financial instruments	(1,967		)	(38		)	630			—		(1,375		)
Other comprehensive loss from investment in subsidiaries	(801		)	—			—			801		—
Other comprehensive loss, net of tax	(16,431		)	(38		)	(814		)	801		(16,482		)
Comprehensive (loss) income	(21,872		)	31,231			(36,932		)	5,610		(21,963		)
Comprehensive loss attributable to noncontrolling interests	—			—			(91		)	—		(91		)
Comprehensive (loss) income attributable to Caleres, Inc.	$	(21,872	)	$	31,231		$	(36,841	)	$	5,610	$	(21,872	)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED FEBRUARY 2, 2019
							Non-Guarantors
($ thousands)	Parent			Guarantors						Eliminations		Total
Net cash provided by operating activities	$	21,220		$	84,546		$	23,823		$	—	$	129,589
Investing activities
Purchases of property and equipment	(34,583		)	(25,871		)	(2,029		)	—		(62,483		)
Capitalized software	(3,962		)	(454		)	—			—		(4,416		)
Acquisition of Blowfish Malibu, net of cash received	(16,792		)	—			—			—		(16,792		)
Acquisition of Vionic, net of cash received	(352,666		)	—			—			—		(352,666		)
Intercompany investing	(137		)	137			—			—		—
Net cash (used for) provided by investing activities	(408,140		)	(26,188		)	(2,029		)	—		(436,357		)
Financing activities
Borrowings under revolving credit agreement	360,000			—			—			—		360,000
Repayments under revolving credit agreement	(25,000		)	—			—			—		(25,000		)
Repayments of capital lease obligation	—			(406		)	—			—		(406		)
Dividends paid	(11,983		)	—			—			—		(11,983		)
Debt issuance costs	(1,298		)	—			—			—		(1,298		)
Acquisition of treasury stock	(43,771		)	—			—			—		(43,771		)
Issuance of common stock under share-based plans, net	(4,372		)	—			—			—		(4,372		)
Intercompany financing	87,257			(48,804		)	(38,453		)	—		—
Net cash (used for) provided by financing activities	360,833			(49,210		)	(38,453		)	—		273,170
Effect of exchange rate changes on cash and cash equivalents	—			—			(249		)	—		(249		)
Increase (decrease) in cash and cash equivalents	(26,087		)	9,148			(16,908		)	—		(33,847		)
Cash and cash equivalents at beginning of year	26,089			—			37,958			—		64,047
Cash and cash equivalents at end of year	$	2		$	9,148		$	21,050		$	—	$	30,200

CONDENSED CONSOLIDATING BALANCE SHEET
AS OF FEBRUARY 3, 2018
					Non- Guarantors
($ thousands)	Parent		Guarantors					Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	26,089	$	—	$	37,958		$	—		$	64,047
Receivables, net	124,957		3,663		23,993			—			152,613
Inventories, net	146,068		394,438		28,873			—			569,379
Prepaid expenses and other current assets	26,284		30,456		8,394			(4,384		)	60,750
Intercompany receivable - current	521		74		9,250			(9,845		)	—
Total current assets	323,919		428,631		108,468			(14,229		)	846,789
Property and equipment, net	35,474		165,227		12,098			—			212,799
Goodwill and intangible assets, net	111,108		40,937		187,123			—			339,168
Other assets	76,317		13,610		732			—			90,659
Investment in subsidiaries	1,329,428		—		(23,565		)	(1,305,863		)	—
Intercompany receivable - noncurrent	774,588		520,362		704,810			(1,999,760		)	—
Total assets	$	2,650,834	$	1,168,767	$	989,666		$	(3,319,852	)	$	1,489,415
Liabilities and Equity
Current liabilities:
Trade accounts payable	136,797		102,420		33,745			—			272,962
Other accrued expenses	65,817		74,006		21,758			(4,384		)	157,197
Intercompany payable - current	5,524		—		4,321			(9,845		)	—
Total current liabilities	208,138		176,426		59,824			(14,229		)	430,159
Other liabilities:
Long-term debt	197,472		—		—			—			197,472
Other liabilities	101,784		35,574		5,464			—			142,822
Intercompany payable - noncurrent	1,425,951		98,610		475,199			(1,999,760		)	—
Total other liabilities	1,725,207		134,184		480,663			(1,999,760		)	340,294
Equity:
Caleres, Inc. shareholders’ equity	717,489		858,157		447,706			(1,305,863		)	717,489
Noncontrolling interests	—		—		1,473			—			1,473
Total equity	717,489		858,157		449,179			(1,305,863		)	718,962
Total liabilities and equity	$	2,650,834	$	1,168,767	$	989,666		$	(3,319,852	)	$	1,489,415

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS
FOR THE FISCAL YEAR ENDED FEBRUARY 3, 2018
							Non-Guarantors
($ thousands)	Parent			Guarantors						Eliminations			Total
Net sales	$	837,849		$	1,935,265		$	211,815		$	(199,345	)	$	2,785,584
Cost of goods sold	580,038			1,090,354			109,104			(162,561		)	1,616,935
Gross profit	257,811			844,911			102,711			(36,784		)	1,168,649
Selling and administrative expenses	246,208			771,027			55,600			(36,784		)	1,036,051
Restructuring and other special charges, net	3,942			756			217			—			4,915
Operating earnings	7,661			73,128			46,894			—			127,683
Interest (expense) income	(17,743		)	(14		)	432			—			(17,325		)
Other income	12,348			—			—			—			12,348
Intercompany interest income (expense)	8,354			(8,813		)	459			—			—
Earnings before income taxes	10,620			64,301			47,785			—			122,706
Income tax provision	(24,963		)	(175		)	(10,337		)	—			(35,475		)
Equity in earnings (loss) of subsidiaries, net of tax	101,543			—			(1,619		)	(99,924		)	—
Net earnings	87,200			64,126			35,829			(99,924		)	87,231
Less: Net earnings attributable to noncontrolling interests	—			—			31			—			31
Net earnings attributable to Caleres, Inc.	$	87,200		$	64,126		$	35,798		$	(99,924	)	$	87,200

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE FISCAL YEAR ENDED FEBRUARY 3, 2018
					Non-Guarantors
($ thousands)	Parent		Guarantors					Eliminations			Total
Net earnings	$	87,200	$	64,126	$	35,829		$	(99,924	)	$	87,231
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	—		—		1,116			—			1,116
Pension and other postretirement benefits adjustments	18,855		—		(61		)	—			18,794
Derivative financial instruments	1,539		14		(452		)	—			1,101
Other comprehensive income from investment in subsidiaries	544		—		—			(544		)	—
Other comprehensive income, net of tax	20,938		14		603			(544		)	21,011
Comprehensive income	108,138		64,140		36,432			(100,468		)	108,242
Comprehensive income attributable to noncontrolling interests	—		—		104			—			104
Comprehensive income attributable to Caleres, Inc.	$	108,138	$	64,140	$	36,328		$	(100,468	)	$	108,138

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED FEBRUARY 3, 2018
							Non-Guarantors
($ thousands)	Parent			Guarantors						Eliminations		Total
Net cash provided by operating activities	$	40,601		$	90,745		$	60,029		$	—	$	191,375
Investing activities
Purchases of property and equipment	(9,522		)	(31,159		)	(4,039		)	—		(44,720		)
Capitalized software	(5,950		)	(483		)	(25		)	—		(6,458		)
Intercompany investing	(20,224		)	197,929			(177,705		)	—		—
Net cash (used for) provided by investing activities	(35,696		)	166,287			(181,769		)	—		(51,178		)
Financing activities
Borrowings under revolving credit agreement	454,000			—			—			—		454,000
Repayments under revolving credit agreement	(564,000		)	—			—			—		(564,000		)
Dividends paid	(12,027		)	—			—			—		(12,027		)
Acquisition of treasury stock	(5,993		)	—			—			—		(5,993		)
Issuance of common stock under share-based plans, net	(3,816		)	—			—			—		(3,816		)
Intercompany financing	129,021			(266,061		)	137,040			—		—
Net cash (used for) provided by financing activities	(2,815		)	(266,061		)	137,040			—		(131,836		)
Effect of exchange rate changes on cash and cash equivalents	—			—			354			—		354
Increase (decrease) in cash and cash equivalents	2,090			(9,029		)	15,654			—		8,715
Cash and cash equivalents at beginning of year	23,999			9,029			22,304			—		55,332
Cash and cash equivalents at end of year	$	26,089		$	—		$	37,958		$	—	$	64,047

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS
FOR THE FISCAL YEAR ENDED JANUARY 28, 2017
							Non-Guarantors
($ thousands)	Parent			Guarantors						Eliminations			Total
Net sales	$	825,654		$	1,692,093		$	227,557		$	(165,916	)	$	2,579,388
Cost of goods sold	583,131			938,169			129,410			(133,313		)	1,517,397
Gross profit	242,523			753,924			98,147			(32,603		)	1,061,991
Selling and administrative expenses	227,149			690,292			57,757			(32,603		)	942,595
Restructuring and other special charges, net	15,333			433			7,638			—			23,404
Operating earnings	41			63,199			32,752			—			95,992
Interest (expense) income	(14,291		)	(9		)	569			—			(13,731		)
Other income	14,993			—			—			—			14,993
Intercompany interest income (expense)	8,888			(9,033		)	145			—			—
Earnings before income taxes	9,631			54,157			33,466			—			97,254
Income tax provision	(5,075		)	(20,084		)	(6,009		)	—			(31,168		)
Equity in earnings (loss) of subsidiaries, net of tax	61,102			—			(2,422		)	(58,680		)	—
Net earnings	65,658			34,073			25,035			(58,680		)	66,086
Less: Net earnings attributable to noncontrolling interests	—			—			428			—			428
Net earnings attributable to Caleres, Inc.	$	65,658		$	34,073		$	24,607		$	(58,680	)	$	65,658

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME
FOR THE FISCAL YEAR ENDED JANUARY 28, 2017
						Non-Guarantors
($ thousands)	Parent			Guarantors					Eliminations			Total
Net earnings	$	65,658		$	34,073	$	25,035		$	(58,680	)	$	66,086
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	—			—		1,045			—			1,045
Pension and other postretirement benefits adjustments	(24,790		)	—		62			—			(24,728		)
Derivative financial instruments	181			—		(1,115		)	—			(934		)
Other comprehensive income from investment in subsidiaries	39			—		—			(39		)	—
Other comprehensive loss, net of tax	(24,570		)	—		(8		)	(39		)	(24,617		)
Comprehensive income	41,088			34,073		25,027			(58,719		)	41,469
Comprehensive income attributable to noncontrolling interests	—			—		381			—			381
Comprehensive income attributable to Caleres, Inc.	$	41,088		$	34,073	$	24,646		$	(58,719	)	$	41,088

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JANUARY 28, 2017
							Non-Guarantors
($ thousands)	Parent			Guarantors						Eliminations		Total
Net cash provided by operating activities	$	66,800		$	71,781		$	45,041		$	—	$	183,622
Investing activities
Purchases of property and equipment	(4,769		)	(41,606		)	(4,148		)	—		(50,523		)
Capitalized software	(5,521		)	(3,481		)	(37		)	—		(9,039		)
Acquisition cost, net of cash received	(259,932		)	—			—			—		(259,932		)
Intercompany investing	(3,257		)	3,257			—			—		—
Net cash used for investing activities	(273,479		)	(41,830		)	(4,185		)	—		(319,494		)
Financing activities
Borrowings under revolving credit agreement	623,000			—			—			—		623,000
Repayments under revolving credit agreement	(513,000		)	—			—			—		(513,000		)
Dividends paid	(12,104		)	—			—			—		(12,104		)
Acquisition of treasury stock	(23,139		)	—			—			—		(23,139		)
Issuance of common stock under share-based plans, net	(4,188		)	—			—			—		(4,188		)
Excess tax benefit related to share-based plans	2,251			—			—			—		2,251
Intercompany financing	126,858			(20,922		)	(105,936		)	—		—
Net cash provided by (used for) financing activities	199,678			(20,922		)	(105,936		)	—		72,820
Effect of exchange rate changes on cash and cash equivalents	—			—			233			—		233
(Decrease) increase in cash and cash equivalents	(7,001		)	9,029			(64,847		)	—		(62,819		)
Cash and cash equivalents at beginning of year	31,000			—			87,151			—		118,151
Cash and cash equivalents at end of year	$	23,999		$	9,029		$	22,304		$	—	$	55,332