Note 18 - Financial Information for the Company and its Subsidiaries

3 Months Ended

May 02, 2020

Notes to Financial Statements

Financial Information For Company and Its Subsidiaries [Text Block]

Note 18 Financial Information for the Company and its Subsidiaries

The Company issued senior notes, which are fully and unconditionally and jointly and severally guaranteed by all of its existing and future subsidiaries that are guarantors under the Company's revolving credit facility ("Credit Agreement").  The following tables present 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 October 31, 2018, Vionic was joined to the Credit Agreement as a guarantor.  After giving effect to the joinder, 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.

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

May 2, 2020

					Non-
($ thousands)	Parent		Guarantors		Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	160,348	$	14,519	$	12,850		$	—		$	187,717
Receivables, net		86,937		32,440		25,956			—			145,333
Inventories, net		97,256		453,183		34,868			—			585,307
Prepaid expenses and other current assets		72,275		11,925		7,233			—			91,433
Intercompany receivable – current		936		49		8,073			(9,058	)		—
Total current assets		417,752		512,116		88,980			(9,058	)		1,009,790
Other assets		79,938		9,913		1,062			—			90,913
Goodwill and intangible assets, net		81,950		135,194		56,504			—			273,648
Lease right-of-use assets		133,685		488,964		25,885			—			648,534
Property and equipment, net		75,417		117,015		8,368			—			200,800
Investment in subsidiaries		1,288,981		—		(26,620	)		(1,262,361	)		—
Intercompany receivable – noncurrent		616,970		656,272		813,909			(2,087,151	)		—
Total assets	$	2,694,693	$	1,919,474	$	968,088		$	(3,358,570	)	$	2,223,685
Liabilities and Equity
Current liabilities
Borrowings under revolving credit agreement	$	438,500	$	—	$	—		$	—		$	438,500
Trade accounts payable		101,286		162,062		34,209			—			297,557
Lease obligations		5,674		146,725		7,739			—			160,138
Other accrued expenses		111,005		49,282		21,057			—			181,344
Intercompany payable – current		4,131		—		4,927			(9,058	)		—
Total current liabilities		660,596		358,069		67,932			(9,058	)		1,077,539
Other liabilities
Noncurrent lease obligations		142,862		432,669		25,602			—			601,133
Long-term debt		198,506		—		—			—			198,506
Other liabilities		59,255		1,558		571			—			61,384
Intercompany payable – noncurrent		1,351,178		76,612		659,361			(2,087,151	)		—
Total other liabilities		1,751,801		510,839		685,534			(2,087,151	)		861,023
Equity
Caleres, Inc. shareholders’ equity		282,296		1,050,566		211,795			(1,262,361	)		282,296
Noncontrolling interests		—		—		2,827			—			2,827
Total equity		282,296		1,050,566		214,622			(1,262,361	)		285,123
Total liabilities and equity	$	2,694,693	$	1,919,474	$	968,088		$	(3,358,570	)	$	2,223,685

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

FOR THE thirteen weeks ended May 2, 2020

							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	118,153		$	268,253		$	39,788		$	(29,010	)	$	397,184
Cost of goods sold		106,051			172,154			22,001			(24,920	)		275,286
Gross profit		12,102			96,099			17,787			(4,090	)		121,898
Selling and administrative expenses		49,116			112,040			68,128			(4,090	)		225,194
Impairment of goodwill and intangible assets		24,154			238,565			-			-			262,719
Restructuring and other special charges, net		23,139			37,057			-			-			60,196
Operating loss		(84,307	)		(291,563	)		(50,341	)		-			(426,211	)
Interest (expense) income		(9,474	)		(20	)		16			-			(9,478	)
Other income, net		3,540			-			45			-			3,585
Intercompany interest income (expense)		2,463			(2,523	)		60			-			-
Loss before income taxes		(87,778	)		(294,106	)		(50,220	)		-			(432,104	)
Income tax benefit (provision)		18,031			68,485			(584	)		-			85,932
Equity in loss of subsidiaries, net of tax		(276,091	)		-			(496	)		276,587			-
Net loss		(345,838	)		(225,621	)		(51,300	)		276,587			(346,172	)
Less: Net loss attributable to noncontrolling interests		-			-			(334	)		-			(334	)
Net loss attributable to Caleres, Inc.	$	(345,838	)	$	(225,621	)	$	(50,966	)	$	276,587		$	(345,838	)
Comprehensive loss	$	(347,211	)	$	(226,031	)	$	(52,812	)	$	278,490		$	(347,564	)
Less: Comprehensive loss attributable to noncontrolling interests		-			-			(353	)		-			(353	)
Comprehensive loss attributable to Caleres, Inc.	$	(347,211	)	$	(226,031	)	$	(52,459	)	$	278,490		$	(347,211	)

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE thirteen weeks ended May 2, 2020

							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations		Total
Net cash (used for) provided by operating activities	$	(4,257	)	$	4,939		$	46		$	—	$	728
Investing activities
Purchases of property and equipment		(1,205	)		(2,318	)		—			—		(3,523	)
Capitalized software		(817	)		(160	)		—			—		(977	)
Intercompany investing		(84	)		84			—			—		—
Net cash used for investing activities		(2,106	)		(2,394	)		—			—		(4,500	)
Financing activities
Borrowings under revolving credit agreement		168,500			—			—			—		168,500
Repayments under revolving credit agreement		(5,000	)		—			—			—		(5,000	)
Dividends paid		(2,810	)		—			—			—		(2,810	)
Acquisition of treasury stock		(12,932	)		—			—			—		(12,932	)
Issuance of common stock under share-based plans, net		(906	)		—			—			—		(906	)
Other		—			(323	)		—			—		(323	)
Intercompany financing		640			8,419			(9,059	)		—		—
Net cash provided by (used for) financing activities		147,492			8,096			(9,059	)		—		146,529
Effect of exchange rate changes on cash and cash equivalents		—			—			(258	)		—		(258	)
Increase (decrease) in cash and cash equivalents		141,129			10,641			(9,271	)		—		142,499
Cash and cash equivalents at beginning of period		19,219			3,878			22,121			—		45,218
Cash and cash equivalents at end of period	$	160,348		$	14,519		$	12,850		$	—	$	187,717

UNAUDITED CONDENSED CONSOLIDATING BALANCE SHEET

May 4, 2019

					Non-
($ thousands)	Parent		Guarantors		Guarantors			Eliminations			Total
Assets
Current assets
Cash and cash equivalents	$	6,812	$	14,703	$	14,263		$	—		$	35,778
Receivables, net		91,170		39,619		17,698			—			148,487
Inventories, net		124,703		492,630		30,812			—			648,145
Prepaid expenses and other current assets		31,046		18,077		6,586			(807	)		54,902
Intercompany receivable – current		314		76		8,800			(9,190	)		—
Total current assets		254,045		565,105		78,159			(9,997	)		887,312
Property and equipment, net		75,763		149,955		10,539			—			236,257
Goodwill and intangible assets, net		108,328		331,689		108,491			—			548,508
Other assets		73,066		11,793		852			—			85,711
Lease right-of-use assets		130,006		572,551		32,725			—			735,282
Investment in subsidiaries		1,503,973		—		(25,376	)		(1,478,597	)		—
Intercompany receivable – noncurrent		586,453		620,752		775,061			(1,982,266	)		—
Total assets	$	2,731,634	$	2,251,845	$	980,451		$	(3,470,860	)	$	2,493,070
Liabilities and Equity
Current liabilities
Borrowings under revolving credit agreement	$	318,000	$	—	$	—		$	—		$	318,000
Trade accounts payable		83,559		183,057		22,455			—			289,071
Lease obligations		11,096		118,041		6,868			—			136,005
Other accrued expenses		65,845		83,503		19,683			(807	)		168,224
Intercompany payable – current		4,669		—		4,521			(9,190	)		—
Total current liabilities		483,169		384,601		53,527			(9,997	)		911,300
Other liabilities
Noncurrent lease obligations		132,565		497,527		32,658			—			662,750
Long-term debt		198,046		—		—			—			198,046
Other liabilities		88,358		2,848		1,136			—			92,342
Intercompany payable – noncurrent		1,202,260		113,338		666,668			(1,982,266	)		—
Total other liabilities		1,621,229		613,713		700,462			(1,982,266	)		953,138
Equity
Caleres, Inc. shareholders’ equity		627,236		1,253,531		225,066			(1,478,597	)		627,236
Noncontrolling interests		—		—		1,396			—			1,396
Total equity		627,236		1,253,531		226,462			(1,478,597	)		628,632
Total liabilities and equity	$	2,731,634	$	2,251,845	$	980,451		$	(3,470,860	)	$	2,493,070

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

FOR THE thirteen weeks ended May 4, 2019

							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations			Total
Net sales	$	191,404		$	488,321		$	52,426		$	(54,397	)	$	677,754
Cost of goods sold		129,259			289,541			27,095			(47,977	)		397,918
Gross profit		62,145			198,780			25,331			(6,420	)		279,836
Selling and administrative expenses		55,941			194,585			18,005			(6,420	)		262,111
Restructuring and other special charges, net		856			—			—			—			856
Operating earnings		5,348			4,195			7,326			—			16,869
Interest (expense) income		(7,339	)		(22	)		21			—			(7,340	)
Other income (expense)		2,637			—			(18	)		—			2,619
Intercompany interest income (expense)		2,841			(2,817	)		(24	)		—			—
Earnings before income taxes		3,487			1,356			7,305			—			12,148
Income tax provision		(1,312	)		(355	)		(1,396	)		—			(3,063	)
Equity in earnings (loss) of subsidiaries, net of tax		6,908			—			(538	)		(6,370	)		—
Net earnings		9,083			1,001			5,371			(6,370	)		9,085
Less: Net earnings attributable to noncontrolling interests		—			—			2			—			2
Net earnings attributable to Caleres, Inc.	$	9,083		$	1,001		$	5,369		$	(6,370	)	$	9,083
Comprehensive income	$	8,811		$	923		$	4,570		$	(5,479	)	$	8,825
Less: Comprehensive loss attributable to noncontrolling interests		—			—			14			—			14
Comprehensive income attributable to Caleres, Inc.	$	8,811		$	923		$	4,556		$	(5,479	)	$	8,811

UNAUDITED CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE thirteen weeks ended May 4, 2019

							Non-
($ thousands)	Parent			Guarantors			Guarantors			Eliminations		Total
Net cash (used for) provided by operating activities	$	(5,419	)	$	47,435		$	7,894		$	—	$	49,910
Investing activities
Purchases of property and equipment		(14,787	)		(2,833	)		(823	)		—		(18,443	)
Capitalized software		(2,911	)		(6	)		—			—		(2,917	)
Intercompany investing		(120	)		120			—			—		—
Net cash used for investing activities		(17,818	)		(2,719	)		(823	)		—		(21,360	)
Financing activities
Borrowings under revolving credit agreement		84,000			—			—			—		84,000
Repayments under revolving credit agreement		(101,000	)		—			—			—		(101,000	)
Dividends paid		(2,947	)		—			—			—		(2,947	)
Issuance of common stock under share-based plans, net		(2,559	)		—			—			—		(2,559	)
Other		(394	)		—			—			—		(394	)
Intercompany financing		52,947			(39,161	)		(13,786	)		—		—
Net cash provided by (used for) financing activities		30,047			(39,161	)		(13,786	)		—		(22,900	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(72	)		—		(72	)
Increase (decrease) in cash and cash equivalents		6,810			5,555			(6,787	)		—		5,578
Cash and cash equivalents at beginning of period		2			9,148			21,050			—		30,200
Cash and cash equivalents at end of period	$	6,812		$	14,703		$	14,263		$	—	$	35,778

CONDENSED CONSOLIDATING BALANCE SHEET

February 1, 2020

					Non-
($ thousands)	Parent		Guarantors		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