Note 19 - Financial Information for the Company and its Subsidiaries

12 Months Ended

Feb. 01, 2020

Notes to Financial Statements

Financial Information For Company and Its Subsidiaries [Text Block]

19.    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 1, 2020

($ thousands)	Parent		Guarantors		Non-Guarantors			Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	19,219	$	3,878	$	22,121		$	—		$	45,218
Receivables, net		100,997		32,168		29,016			—			162,181
Inventories, net		142,370		435,794		40,242			—			618,406
Prepaid expenses and other current assets		35,576		13,603		7,315			—			56,494
Intercompany receivable - current		260		30		9,072			(9,362	)		—
Total current assets		298,422		485,473		107,766			(9,362	)		882,299
Property and equipment, net		76,587		138,461		9,798			—			224,846
Goodwill and intangible assets, net		106,660		326,565		106,354			—			539,579
Other assets		77,444		10,953		992			—			89,389
Lease right-of-use assets		137,374		528,393		29,827			—			695,594
Investment in subsidiaries		1,572,577		—		(26,123	)		(1,546,454	)		—
Intercompany receivable - noncurrent		606,648		663,640		809,060			(2,079,348	)		—
Total assets	$	2,875,712	$	2,153,485	$	1,037,674		$	(3,635,164	)	$	2,431,707
Liabilities and Equity
Current liabilities:
Borrowings under revolving credit agreement	$	275,000	$	—	$	—		$	—		$	275,000
Trade accounts payable		113,484		112,108		41,426			—			267,018
Lease obligations		4,679		116,738		6,452			—			127,869
Other accrued expenses		86,661		73,122		21,280			—			181,063
Intercompany payable - current		5,349		—		4,013			(9,362	)		—
Total current liabilities		485,173		301,968		73,171			(9,362	)		850,950
Other liabilities:
Noncurrent lease obligations		145,845		454,343		28,844			—			629,032
Long-term debt		198,391		—		—			—			198,391
Other liabilities		101,386		1,878		940			—			104,204
Intercompany payable - noncurrent		1,298,967		115,005		665,376			(2,079,348	)		—
Total other liabilities		1,744,589		571,226		695,160			(2,079,348	)		931,627
Equity:
Caleres, Inc. shareholders’ equity		645,950		1,280,291		266,163			(1,546,454	)		645,950
Noncontrolling interests		—		—		3,180			—			3,180
Total equity		645,950		1,280,291		269,343			(1,546,454	)		649,130
Total liabilities and equity	$	2,875,712	$	2,153,485	$	1,037,674		$	(3,635,164	)	$	2,431,707

CONDENSED CONSOLIDATING STATEMENT OF EARNINGS 

FOR THE FISCAL YEAR ENDED February 1, 2020

($ thousands)	Parent			Guarantors			Non-Guarantors			Eliminations			Total
Net sales	$	823,620		$	2,072,226		$	264,815		$	(239,099	)	$	2,921,562
Cost of goods sold		570,273			1,226,445			141,226			(200,742	)		1,737,202
Gross profit		253,347			845,781			123,589			(38,357	)		1,184,360
Selling and administrative expenses		239,973			794,046			70,098			(38,357	)		1,065,760
Restructuring and other special charges, net		11,270			3,517			—			—			14,787
Operating earnings		2,104			48,218			53,491			—			103,813
Interest (expense) income		(33,126	)		(104	)		107			—			(33,123	)
Other income (expense)		7,934			—			(31	)		—			7,903
Intercompany interest income (expense)		10,799			(10,891	)		92			—			—
(Loss) earnings before income taxes		(12,289	)		37,223			53,659			—			78,593
Income tax benefit (provision)		1,029			(9,476	)		(8,064	)		—			(16,511	)
Equity in earnings (loss) of subsidiaries, net of tax		74,079			—			(1,283	)		(72,796	)		—
Net earnings		62,819			27,747			44,312			(72,796	)		62,082
Less: Net loss attributable to noncontrolling interests		—			—			(737	)		—			(737	)
Net earnings attributable to Caleres, Inc.	$	62,819		$	27,747		$	45,049		$	(72,796	)	$	62,819

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME 

FOR THE FISCAL YEAR ENDED February 1, 2020

($ thousands)	Parent			Guarantors			Non-Guarantors			Eliminations			Total
Net earnings	$	62,819		$	27,747		$	44,312		$	(72,796	)	$	62,082
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment		—			—			(607	)		—			(607	)
Pension and other postretirement benefits adjustments		76			(131	)		(61	)		—			(116	)
Derivative financial instruments		588			7			(79	)		—			516
Other comprehensive loss from investment in subsidiaries		(906	)		—			—			906			—
Other comprehensive loss, net of tax		(242	)		(124	)		(747	)		906			(207	)
Comprehensive income		62,577			27,623			43,565			(71,890	)		61,875
Comprehensive loss attributable to noncontrolling interests		—			—			(702	)		—			(702	)
Comprehensive income attributable to Caleres, Inc.	$	62,577		$	27,623		$	44,267		$	(71,890	)	$	62,577

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE FISCAL YEAR ENDED February 1, 2020

($ thousands)	Parent			Guarantors			Non-Guarantors			Eliminations		Total
Net cash provided by operating activities	$	26,546		$	90,612		$	53,628		$	—	$	170,786
Investing activities
Purchases of property and equipment		(23,695	)		(18,336	)		(2,502	)		—		(44,533	)
Disposals of property and equipment		636			—			—			—		636
Capitalized software		(5,363	)		(256	)		—			—		(5,619	)
Intercompany investing		(421	)		421			—			—		—
Net cash used for investing activities		(28,843	)		(18,171	)		(2,502	)		—		(49,516	)
Financing activities
Borrowings under revolving credit agreement		288,500			—			—			—		288,500
Repayments under revolving credit agreement		(348,500	)		—			—			—		(348,500	)
Dividends paid		(11,422	)		—			—			—		(11,422	)
Acquisition of treasury stock		(33,424	)		—			—			—		(33,424	)
Issuance of common stock under share-based plans, net		(2,644	)		—			—			—		(2,644	)
Contributions by noncontrolling interests		—			—			2,500			—		2,500
Other		(85	)		(1,257	)		—			—		(1,342	)
Intercompany financing		129,089			(76,454	)		(52,635	)		—		—
Net cash provided by (used for) financing activities		21,514			(77,711	)		(50,135	)		—		(106,332	)
Effect of exchange rate changes on cash and cash equivalents		—			—			80			—		80
Increase (decrease) in cash and cash equivalents		19,217			(5,270	)		1,071			—		15,018
Cash and cash equivalents at beginning of year	$	2		$	9,148		$	21,050		$	—		30,200
Cash and cash equivalents at end of year	$	19,219		$	3,878		$	22,121		$	—	$	45,218

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF February 2, 2019

($ thousands)	Parent		Guarantors		Non- 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

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

FOR THE FISCAL YEAR ENDED February 2, 2019

($ thousands)	Parent			Guarantors			Non-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

($ thousands)	Parent			Guarantors			Non-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 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 provided by (used for) financing activities		360,833			(49,210	)		(38,453	)		—		273,170
Effect of exchange rate changes on cash and cash equivalents		—			—			(249	)		—		(249	)
(Decrease) increase 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 STATEMENT OF EARNINGS

FOR THE FISCAL YEAR ENDED February 3, 2018

($ thousands)	Parent			Guarantors			Non-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

($ thousands)	Parent		Guarantors		Non-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

($ thousands)	Parent			Guarantors			Non-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