Saks Incorporated Announces Results For The Second Quarter And Six Months Ended August 3, 2013
In accordance with FASB Accounting Standard Codification 470 related to accounting for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) (“ASC 470”), issuers of convertible debt instruments must separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The discount (the difference between the convertible rate and a nonconvertible borrowing rate) on the Company’s remaining convertible note issuance is being accreted to interest expense through the note maturity date. Accordingly, at August 3, 2013, $1.6 million of the $91.2 million 7.5% convertible notes balance was classified in equity.
The Company did not repurchase any common stock during the second quarter. For the six month period, the Company repurchased approximately $255,000 of common stock (24,200 shares at an average price per share of $10.52).
At the end of the second quarter, the Company had approximately $10.1 million of cash on hand and $200.0 million of outstanding borrowings on its revolving credit facility.
Funded debt (including the balance on the revolving credit facility, capitalized leases, senior notes, and the debt and equity components of the convertible debenture) at August 3, 2013 totaled approximately $343.2 million, and debt-to-capitalization was 22.9% (without giving effect to cash on hand).Net capital spending for the second quarter and six months ended August 3, 2013 totaled approximately $22.8 million and $76.1 million, respectively. Sales Detail Total sales numbers below represent owned department sales, leased department commissions, shipping and handling revenue, and sales return adjustments for Saks Fifth Avenue stores, Saks Fifth Avenue OFF 5TH stores, and Saks Direct. Total sales (in millions) for the second quarter and six months ended August 3, 2013 compared to last year’s second quarter and six months ended July 28, 2012 were:
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