UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 16, 2006
CIRCUIT CITY STORES, INC.
-------------------------
(Exact name of registrant as specified in its charter)
Virginia
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(State or other jurisdiction of incorporation)
001-05767 54-0493875
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(Commission File Number) (I.R.S. Employer
Identification Number)
9950 Mayland Drive, Richmond, Virginia 23233
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(Address of principal executive offices) (Zip Code)
(804) 527-4000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
SECTION 7 - REGULATION FD
Item 7.01 Regulation FD Disclosure.
The following quarterly information is being provided to reflect revisions
and reclassifications to prior year consolidated financial statements as
disclosed in Note 1, Basis of Presentation, and in Note 22, Quarterly Financial
Data (Unaudited), of the Notes to the Consolidated Financial Statements,
included in Item 8, Financial Statements and Supplementary Data, of the
Company's Annual Report on Form 10-K for the fiscal year ended February 28,
2006. Such revisions and reclassifications include the following:
o The company recorded a $7.5 million reduction to retained earnings at March
1, 2003, for corrections of errors related to lease accounting and for
other matters.
o Amounts previously reported as rent expense have been reclassified to
interest expense, and the related financing lease obligation has been
reclassified from accrued straight-line rent and deferred rent credits to
long-term debt on the consolidated balance sheets.
o Interest income has been reclassified from selling, general and
administrative expenses to a separate line item on the consolidated
statements of operations.
o The results of two domestic subsidiaries have been presented as results
from discontinued operations.
o Investments in variable rate demand notes have been reclassified from cash
and cash equivalents to short-term investments; and deposits in transit
have been reclassified from accounts payable to cash and cash equivalents.
o In order to provide a better measure of net-owned inventory, the company
reclassified items previously classified as accounts payable to merchandise
payable; expenses payable; accrued expenses and other current liabilities;
and accounts receivable.
In addition, the following quarterly information reflects the reclassification
of stock-based compensation from a separate line item on the consolidated
statements of operations to selling, general and administrative expenses.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CIRCUIT CITY STORES, INC.
By: /s/ Philip J. Dunn
Philip J. Dunn
Senior Vice President, Treasurer, Corporate
Controller and Chief Accounting Officer
Dated: June 16, 2006
CIRCUIT CITY STORES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands except per share data)
(UNAUDITED)
Three Months Ended
----------------------------------------------------- Fiscal Year Ended
May 31, August 31, November 30, February 28, February 28,
2005 2005 2005 2006 2006
----------- ------------ ------------ ------------ ---------------
NET SALES $2,227,850 $2,557,091 $2,901,385 $3,911,360 $11,597,686
Cost of sales, buying and warehousing 1,669,958 1,947,449 2,201,371 2,947,976 8,766,754
----------- ------------ ------------ ------------ ---------------
GROSS PROFIT 557,892 609,642 700,014 963,384 2,830,932
Selling, general and administrative expenses 583,008 608,099 686,668 732,758 2,610,533
----------- ------------ ------------ ------------ ---------------
OPERATING (LOSS) INCOME (25,116) 1,543 13,346 230,626 220,399
Interest income 6,292 4,602 4,334 6,598 21,826
Interest expense 415 215 1,113 1,400 3,143
----------- ------------ ------------ ------------ ---------------
(Loss) earnings from continuing
operations before income taxes (19,239) 5,930 16,567 235,824 239,082
Income tax (benefit) provision (7,356) 2,065 6,415 86,846 87,970
----------- ------------ ------------ ------------ ---------------
NET (LOSS) EARNINGS FROM CONTINUING OPERATIONS (11,883) 3,865 10,152 148,978 151,112
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX (1,226) (2,517) (10) (5,260) (9,013)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET OF TAX - - - (2,353) (2,353)
----------- ------------ ------------ ------------ ---------------
NET (LOSS) EARNINGS $ (13,109) $ 1,348 $ 10,142 $ 141,365 $ 139,746
=========== ============ ============ ============ ===============
Weighted average common shares:
Basic 184,729 179,057 174,438 171,433 177,456
=========== ============ ============ ============ ===============
Diluted 184,729 181,801 177,509 175,516 180,653
=========== ============ ============ ============ ===============
(LOSS) EARNINGS PER SHARE:
Basic:
Continuing operations $ (0.06) $ 0.02 $ 0.06 $ 0.87 $ 0.85
Discontinued operations $ (0.01) $ (0.01) $ - $ (0.03) $ (0.05)
Cumulative effect of change in accounting principle $ - $ - $ - $ (0.01) $ (0.01)
Net (loss) earnings $ (0.07) $ 0.01 $ 0.06 $ 0.82 $ 0.79
Diluted:
Continuing operations $ (0.06) $ 0.02 $ 0.06 $ 0.85 $ 0.84
Discontinued operations $ (0.01) $ (0.01) $ - $ (0.03) $ (0.05)
Cumulative effect of change in accounting principle $ - $ - $ - $ (0.01) $ (0.01)
Net (loss) earnings $ (0.07) $ 0.01 $ 0.06 $ 0.81 $ 0.77
CIRCUIT CITY STORES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands except per share data)
(UNAUDITED)
Three Months Ended
-------------------------------------------------- Fiscal Year Ended
May 31, August 31, November 30, February 28, February 28,
2004 2004 2004 2005 2005
----------- ----------- ----------- ----------- -------------
NET SALES $ 2,093,911 $ 2,375,714 $ 2,531,659 $ 3,468,264 $ 10,469,548
Cost of sales, buying and warehousing 1,599,357 1,784,746 1,894,145 2,623,187 7,901,435
----------- ----------- ----------- ----------- -------------
GROSS PROFIT 494,554 590,968 637,514 845,077 2,568,113
Finance income 5,564 - - - 5,564
Selling, general and administrative expenses 508,696 608,338 646,746 717,054 2,480,834
----------- ----------- ----------- ----------- -------------
OPERATING (LOSS) INCOME (8,578) (17,370) (9,232) 128,023 92,843
Interest income 2,116 3,208 3,442 5,638 14,404
Interest expense 948 1,396 1,072 1,035 4,451
----------- ----------- ----------- ----------- -------------
(Loss) earnings from continuing
operations before income taxes (7,410) (15,558) (6,862) 132,626 102,796
Income tax (benefit) provision (2,709) (5,618) (2,141) 48,908 38,440
----------- ----------- ----------- ----------- -------------
NET (LOSS) EARNINGS FROM CONTINUING OPERATIONS (4,701) (9,940) (4,721) 83,718 64,356
(LOSS) EARNINGS FROM DISCONTINUED OPERATIONS, NET OF TAX (1,240) (1,983) (1,179) 1,704 (2,698)
----------- ----------- ----------- ----------- -------------
NET (LOSS) EARNINGS $ (5,941) $ (11,923) $ (5,900) $ 85,422 $ 61,658
=========== =========== =========== =========== =============
Weighted average common shares:
Basic 199,429 195,350 195,135 187,797 193,466
=========== =========== =========== =========== =============
Diluted 199,429 195,350 195,135 190,667 196,227
=========== =========== =========== =========== =============
(LOSS) EARNINGS PER SHARE:
Basic:
Continuing operations $ (0.02) $ (0.05) $ (0.02) $ 0.45 $ 0.33
Discontinued operations $ (0.01) $ (0.01) $ (0.01) $ 0.01 $ (0.01)
Net (loss) earnings $ (0.03) $ (0.06) $ (0.03) $ 0.45 $ 0.32
Diluted:
Continuing operations $ (0.02) $ (0.05) $ (0.02) $ 0.44 $ 0.33
Discontinued operations $ (0.01) $ (0.01) $ (0.01) $ 0.01 $ (0.01)
Net (loss) earnings $ (0.03) $ (0.06) $ (0.03) $ 0.45 $ 0.31
CIRCUIT CITY STORES, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(UNAUDITED)
-----------------------------------------------
May 31, 2005 Aug. 31, 2005 Nov. 30, 2005 Feb. 28, 2006
-------------- -------------- -------------- --------------
ASSETS
Current Assets:
Cash and cash equivalents $ 543,649 $ 387,639 $ 417,802 $ 315,970
Short-term investments 273,389 300,484 132,474 521,992
Accounts receivable, net of allowance for doubtful accounts 199,673 184,552 298,182 220,869
Merchandise inventory 1,673,631 1,664,854 2,676,695 1,698,026
Deferred income taxes 29,278 26,121 26,646 29,598
Income tax receivable 10,094 7,891 12,142 5,571
Prepaid expenses and other current assets 48,767 57,606 65,665 41,315
-------------- -------------- -------------- --------------
Total Current Assets 2,778,481 2,629,147 3,629,606 2,833,341
Property and equipment, net of accumulated depreciation 704,778 759,621 803,531 839,356
Deferred income taxes 90,895 93,426 99,868 97,889
Goodwill 206,267 224,928 228,593 223,999
Other intangible assets, net of accumulated amortization 30,057 32,547 29,763 30,372
Other assets 39,358 40,238 38,968 44,087
-------------- -------------- -------------- --------------
TOTAL ASSETS $ 3,849,836 $ 3,779,907 $ 4,830,329 $ 4,069,044
============== ============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Merchandise payable $ 836,371 $ 863,345 $ 1,655,524 $ 850,359
Expenses payable 209,283 151,984 306,506 202,300
Accrued expenses and other current liabilities 388,842 399,638 518,942 464,511
Accrued income taxes - - - 75,909
Short-term debt - 16,848 68,560 22,003
Current installments of long-term debt 1,329 1,442 1,488 7,248
-------------- -------------- -------------- --------------
Total Current Liabilities 1,435,825 1,433,257 2,551,020 1,622,330
Long-term debt, excluding current installments 20,463 22,173 38,410 51,985
Accrued straight-line rent and deferred rent credits 245,713 250,442 253,308 256,120
Accrued lease termination costs 82,696 75,216 64,880 79,091
Other liabilities 90,764 92,417 94,399 104,885
-------------- -------------- -------------- --------------
TOTAL LIABILITIES 1,875,461 1,873,505 3,002,017 2,114,411
-------------- -------------- -------------- --------------
Stockholders' Equity:
Common stock 91,491 91,235 88,516 87,395
Capital in excess of par value 640,635 562,057 475,727 458,211
Retained earnings 1,221,429 1,219,559 1,226,482 1,364,740
Accumulated other comprehensive income 20,820 33,551 37,587 44,287
-------------- -------------- -------------- --------------
TOTAL STOCKHOLDERS' EQUITY 1,974,375 1,906,402 1,828,312 1,954,633
-------------- -------------- -------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,849,836 $ 3,779,907 $ 4,830,329 $ 4,069,044
============== ============== ============== ==============
CIRCUIT CITY STORES, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(UNAUDITED)
-----------------------------------------------
May 31, 2004 Aug. 31, 2004 Nov. 30, 2004 Feb. 28, 2005
-------------- -------------- -------------- --------------
ASSETS
Current Assets:
Cash and cash equivalents $ 1,024,556 $ 969,457 $ 768,513 $ 879,660
Short-term investments - - - 125,325
Accounts receivable, net of allowance for doubtful accounts 167,186 136,236 187,421 230,605
Merchandise inventory 1,533,402 1,632,643 2,454,526 1,455,170
Deferred income taxes - - - 31,194
Prepaid expenses and other current assets 53,462 51,391 46,889 23,203
Assets of discontinued operations 5,085 - - -
-------------- -------------- -------------- --------------
Total Current Assets 2,783,691 2,789,727 3,457,349 2,745,157
Property and equipment, net of accumulated depreciation 698,187 723,391 749,676 726,940
Deferred income taxes 87,751 70,648 74,582 79,935
Goodwill 181,347 208,316 223,954 215,884
Other intangible assets, net of accumulated amortization 37,480 31,696 33,559 31,331
Other assets 38,753 32,325 27,698 40,763
-------------- -------------- -------------- --------------
TOTAL ASSETS $ 3,827,209 $ 3,856,103 $ 4,566,818 $ 3,840,010
============== ============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Merchandise payable $ 699,866 $ 810,160 $ 1,331,696 $ 635,674
Expenses payable 119,691 119,773 261,864 170,629
Accrued expenses and other current liabilities 371,381 382,969 467,413 433,110
Accrued income taxes 70,343 35,974 26,771 75,183
Deferred income taxes 13,935 12,418 4,165 -
Short-term debt - 3,850 12,648 -
Current installments of long-term debt 12,416 13,434 13,461 888
Liabilities of discontinued operations 2,691 - - -
-------------- -------------- -------------- --------------
Total Current Liabilities 1,290,323 1,378,578 2,118,018 1,315,484
Long-term debt, excluding current installments 35,100 21,916 21,617 19,944
Accrued straight-line rent and deferred rent credits 216,701 222,429 239,013 242,001
Accrued lease termination costs 52,698 57,131 52,652 90,734
Other liabilities 79,754 83,818 88,290 91,920
-------------- -------------- -------------- --------------
TOTAL LIABILITIES 1,674,576 1,763,872 2,519,590 1,760,083
-------------- -------------- -------------- --------------
Stockholders' Equity:
Common stock 99,650 97,592 95,625 94,075
Capital in excess of par value 867,300 818,167 759,406 721,038
Retained earnings 1,182,388 1,166,965 1,157,642 1,239,714
Accumulated other comprehensive income 3,295 9,507 34,555 25,100
-------------- -------------- -------------- --------------
TOTAL STOCKHOLDERS' EQUITY 2,152,633 2,092,231 2,047,228 2,079,927
-------------- -------------- -------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,827,209 $ 3,856,103 $ 4,566,818 $ 3,840,010
============== ============== ============== ==============
CIRCUIT CITY STORES, INC.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Consolidated
Three Months Ended Fiscal Year Ended
May 31, 2005 August 31, 2005 November 30, 2005 February 28, 2006 February 28, 2006
(Dollar amounts in millions) $ % of Sales $ % of Sales $ % of Sales $ % of Sales $ % of Sales
-----------------------------------------------------------------------------------------------------------------------------------
Store expenses $500.2 22.5% $520.2 20.3% $583.8 20.1% $645.5 16.5% $2,249.7 19.4%
General and administrative expenses 77.4 3.5 78.9 3.1 86.6 3.0 74.9 1.9 317.8 2.7
Stock-based compensation expense 3.2 0.1 6.6 0.3 9.3 0.3 7.8 0.2 26.9 0.2
Remodel expenses - - - - - - - - - -
Relocation expenses 2.0 0.1 0.3 - 2.6 0.1 2.2 - 7.1 0.1
Pre-opening expenses 0.2 - 2.1 0.1 4.3 0.2 2.4 0.1 9.0 0.1
----------------------------------------------------------------------------------------------
Total $583.0 26.2% $608.1 23.8% $686.7 23.7% $732.8 18.7% $2,610.5 22.5%
----------------------------------------------------------------------------------------------
Three Months Ended Fiscal Year Ended
May 31, 2004 August 31, 2004 November 30, 2004 February 28, 2005 February 28, 2005
(Dollar amounts in millions) $ % of Sales $ % of Sales $ % of Sales $ % of Sales $ % of Sales
-----------------------------------------------------------------------------------------------------------------------------------
Store expenses $449.1 21.5% $516.1 21.7% $548.7 21.7% $636.5 18.4% $2,150.4 20.5%
General and administrative expenses 50.8 2.4 63.6 2.7 69.0 2.7 71.0 2.0 254.4 2.4
Stock-based compensation expense 6.0 0.3 8.4 0.4 6.4 0.2 (1.7) - 19.1 0.2
Remodel expenses 0.1 - - - 0.2 - - - 0.3 -
Relocation expenses 1.9 0.1 16.5 0.7 14.9 0.6 7.5 0.2 40.8 0.4
Pre-opening expenses 0.8 - 3.7 0.1 7.5 0.3 3.8 0.1 15.8 0.2
-----------------------------------------------------------------------------------------------
Total $508.7 24.3% $608.3 25.6% $646.7 25.5% $717.1 20.7% $2,480.8 23.7%
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Domestic
Three Months Ended Fiscal Year Ended
May 31, 2005 August 31, 2005 November 30, 2005 February 28, 2006 February 28, 2006
(Dollar amounts in millions) $ % of Sales $ % of Sales $ % of Sales $ % of Sales $ % of Sales
------------------------------------------------------------------------------------------------------------------------------------
Store expenses $465.9 22.0% $484.0 20.1% $539.5 19.8% $596.0 16.0% $2,085.4 19.0%
General and administrative expenses 57.0 2.7 62.6 2.6 68.5 2.5 64.4 1.7 252.5 2.3
Stock-based compensation expense 3.1 0.1 6.4 0.3 9.0 0.3 7.4 0.2 25.9 0.2
Remodel expenses - - - - - - - - - -
Relocation expenses 2.0 0.1 0.3 - 2.6 0.1 2.2 0.1 7.1 0.1
Pre-opening expenses 0.2 - 2.1 0.1 4.3 0.2 2.4 0.1 9.0 0.1
-----------------------------------------------------------------------------------------------
Total $528.2 25.0% $555.4 23.0% $623.9 22.8% $672.4 18.1% $2,379.9 21.7%
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Three Months Ended Fiscal Year Ended
May 31, 2004 August 31, 2004 November 30, 2004 February 28, 2005 February 28, 2005
(Dollar amounts in millions) $ % of Sales $ % of Sales $ % of Sales $ % of Sales $ % of Sales
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Store expenses $442.6 21.4% $484.1 21.4% $510.5 21.4% $592.2 18.0% $2,029.4 20.3%
General and administrative expenses 49.4 2.4 55.3 2.5 60.6 2.5 61.1 1.9 226.4 2.3
Stock-based compensation expense 5.9 0.3 8.4 0.4 6.2 0.3 (2.0) (0.1) 18.5 0.2
Remodel expenses 0.1 - - - 0.2 - - - 0.3 -
Relocation expenses 1.9 0.1 16.5 0.7 14.9 0.6 7.5 0.2 40.8 0.4
Pre-opening expenses 0.9 - 3.6 0.2 7.5 0.3 3.8 0.1 15.8 0.2
-----------------------------------------------------------------------------------------------
Total $500.8 24.2% $567.9 25.2% $599.9 25.1% $662.6 20.1% $2,331.2 23.3%
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CIRCUIT CITY STORES, INC.
SEGMENT PERFORMANCE SUMMARY
Domestic Segment Performance Summary
Three Months Ended Fiscal Year Ended
May 31, August 31, November 30, February 28, February 28,
(Amounts in millions) 2005 2005 2005 2006 2006
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Net sales $2,114.7 $2,414.0 $2,730.8 $3,714.5 $10,974.0
Gross profit $ 512.9 $ 557.8 $ 641.1 $ 892.7 $ 2,604.5
Selling, general and administrative expenses $ 528.2 $ 555.4 $ 623.9 $ 672.4 $ 2,379.9
Net (loss) earnings from continuing operations $ (5.9) $ 4.4 $ 13.1 $ 143.2 $ 154.8
Three Months Ended Fiscal Year Ended
May 31, August 31, November 30, February 28, February 28,
(Amounts in millions) 2004 2004 2004 2005 2005
---------------------------------------------------------------------------------------------------------------------------------
Net sales $2,072.2 $ 2,257.9 $2,389.7 $3,294.8 $10,014.6
Gross profit $ 486.0 $ 544.7 $ 581.5 $ 773.4 $ 2,385.6
Selling, general and administrative expenses $ 500.8 $ 567.9 $ 599.9 $ 662.6 $ 2,331.2
Net (loss) earnings from continuing operations $ (5.1) $ (13.3) $ (10.2) $ 73.3 $ 44.7
International Segment Performance Summary
Three Months Ended Fiscal Year Ended
May 31, August 31, November 30, February 28, February 28,
(Amounts in millions) 2005 2005 2005 2006 2006
---------------------------------------------------------------------------------------------------------------------------------
Net sales $113.2 $143.0 $170.6 $196.8 $ 623.7
Gross profit $ 45.0 $ 51.9 $ 58.9 $ 70.7 $ 226.4
Selling, general and administrative expenses $ 54.8 $ 52.7 $ 62.8 $ 60.3 $ 230.6
Net (loss) earnings from continuing operations $ (6.0) $ (0.5) $ (3.0) $ 5.8 $ (3.7)
May 12 - Three Months Ended Fiscal Year Ended
May 31, August 31, November 30, February 28, February 28,
(Amounts in millions) 2004 2004 2004 2005 2005
---------------------------------------------------------------------------------------------------------------------------------
Net sales $21.7 $117.8 $142.0 $173.5 $ 454.9
Gross profit $ 8.6 $ 46.2 $ 56.0 $ 71.7 $ 182.6
Selling, general and administrative expenses $ 7.9 $ 40.4 $ 46.9 $ 54.4 $ 149.7
Net earnings from continuing operations $ 0.4 $ 3.4 $ 5.5 $ 10.5 $ 19.7