PINX:BLKIA Belk Inc Class A Quarterly Report 10-Q Filing - 7/28/2012

Effective Date 7/28/2012

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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

    x     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended July 28, 2012

OR

 

    ¨     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from         to         

Commission file number 000-26207

 

 

BELK, INC.

(Exact Name of Registrant as Specified In Its Charter)

 

 

 

Delaware   56-2058574

(State or Other Jurisdiction of

Incorporation or Organization)

 

(I.R.S. Employer

Identification No.)

2801 West Tyvola Road, Charlotte, NC   28217-4500
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s Telephone Number, including Area Code (704) 357-1000

N/A

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report.

 

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    x  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer    ¨    Accelerated filer    x
Non-accelerated filer    ¨  (Do not check if a smaller reporting company)    Smaller reporting company    ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    ¨  Yes    x  No

At August 28, 2012, the registrant had issued and outstanding 41,815,380 shares of class A common stock and 902,500 shares of class B common stock.

 

 

 


Table of Contents

BELK, INC.

Index to Form 10-Q

 

     Page
Number
 

PART I. FINANCIAL INFORMATION

  

Item 1. Condensed Consolidated Financial Statements (unaudited)

  

Condensed Consolidated Statements of Income for the Three and Six Months Ended July  28, 2012 and July 30, 2011

     4   

Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended July  28, 2012 and July 30, 2011

     5   

Condensed Consolidated Balance Sheets as of July 28, 2012 and January 28, 2012

     6   

Condensed Consolidated Statement of Changes in Stockholders’ Equity for the Six Months Ended July  28, 2012

     7   

Condensed Consolidated Statements of Cash Flows for the Six Months Ended July 28, 2012 and July  30, 2011

     8   

Notes to Unaudited Condensed Consolidated Financial Statements

     9   

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     14   

Item 3. Quantitative and Qualitative Disclosures about Market Risk

     18   

Item 4. Controls and Procedures

     18   

PART II. OTHER INFORMATION

  

Item 1. Legal Proceedings

     19   

Item 1A. Risk Factors

     19   

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

     19   

Item 3. Defaults upon Senior Securities

     19   

Item 4. Mine Safety Disclosures

     19   

Item 5. Other Information

     19   

Item 6. Exhibits

     19   


Table of Contents

This Report Contains Forward-Looking Statements

Certain statements made in this report, and other written or oral statements made by or on behalf of the Company, may constitute “forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and the Company’s future performance, as well as our expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. You can identify these forward-looking statements through our use of words such as “may,” “will,” “intend,” “project,” “expect,” “anticipate,” “believe,” “estimate,” “continue” or other similar words.

Forward-looking statements include information concerning possible or assumed future results from merchandising, marketing and advertising in our stores and through the Internet, general economic conditions, the success of our re-branding and our ability to be competitive in the retail industry, our ability to execute profitability and efficiency strategies, our ability to execute growth strategies, anticipated benefits from our strategic initiatives to strengthen our merchandising and planning organizations, anticipated benefits from our belk.com website and our eCommerce fulfillment center, the expected benefit of new systems and technology, anticipated benefits from our acquisitions and the anticipated benefit under our Program Agreement with GE. These forward-looking statements are subject to certain risks and uncertainties that may cause our actual results to differ significantly from the results we discuss in such forward-looking statements.

We believe that these forward-looking statements are reasonable. However, you should not place undue reliance on such statements. Any such forward-looking statements are qualified by the following important risk factors and other risks which may be disclosed from time to time in our filings that could cause actual results to differ materially from those predicted by the forward-looking statements. Forward-looking statements relate to the date initially made, and we undertake no obligation to update them.

Risks and uncertainties that might cause our results to differ from those we project in our forward-looking statements include, but are not limited to:

 

   

Economic, political and business conditions, nationally and in our market areas, including rates of economic growth, interest rates, inflation or deflation, consumer credit availability, levels of consumer debt and bankruptcies, tax rates and policy, unemployment trends, a health pandemic, catastrophic events, potential acts of terrorism and threats of such acts and other matters that influence consumer confidence and spending;

 

   

Our ability to anticipate the demands of our customers for a wide variety of merchandise and services, including our predictions about the merchandise mix, quality, style, service, convenience and credit availability of our customers;

 

   

Unseasonable and extreme weather conditions in our market areas;

 

   

Seasonal fluctuations in quarterly net income due to the significant portion of our revenues generated during the holiday season in the fourth fiscal quarter and the significant amount of inventory we carry during that time;

 

   

Competition from other department and specialty stores and other retailers, including luxury goods retailers, general merchandise stores, Internet retailers, mail order retailers and off-price and discount stores, in the areas of price, merchandise mix, quality, style, service, convenience, credit availability and advertising;

 

   

Our ability to effectively use advertising, marketing and promotional campaigns to generate high customer traffic in our stores and, to a lesser degree, through on-line sales;

 

   

Variations in the amount of vendor allowances;

 

   

Our ability to operate successfully our belk.com website, enhance our information technology systems, operate successfully our fulfillment facilities and manage our social community engagement;

 

   

Our ability to manage multiple initiatives simultaneously;

 

   

Our ability to find qualified vendors from which to source our merchandise and our ability to access products in a timely and efficient manner from a wide variety of domestic and international vendors;

 

   

Increases in the price of merchandise, raw materials, fuel and labor or their reduced availability;

 

   

The income we receive from, and the timing of receipt of, payments from GE, the operator of our private label credit card business, which depends upon the amount of purchases made through the proprietary credit cards, the level of finance charge income generated from the credit card portfolio, the number of new accounts generated, changes in customers’ credit card use, and GE’s ability to extend credit to our customers;

 

   

Our ability to manage our expense structure;

 

   

Our ability to continue to open new stores, or to remodel or expand existing stores, including the availability of existing retail stores or store sites on acceptable terms and our ability to successfully execute the Company’s retailing concept in new markets and geographic regions;

 

   

The customer response to our re-branding initiative;

 

   

The efficient and effective operation of our distribution network and information systems to manage sales, distribution, merchandise planning and allocation functions;

 

   

Our ability to prevent a security breach that results in the unauthorized disclosure of company, employee or customer information;

 

   

The effectiveness of third parties in managing our outsourced business;

 

   

Loss of qualified employees or an inability to attract, retain and motivate additional highly skilled employees;

 

   

Changes in federal, state or local laws and regulations;

 

   

Our ability to comply with debt covenants, which could adversely affect our capital resources, financial condition and liquidity; and

 

   

Our ability to realize the planned efficiencies from our acquisitions and effectively integrate and operate the acquired stores and businesses, including our fiscal year 2007 acquisition of Parisian stores and our fiscal year 2007 acquisition of the assets of Migerobe and commencement of our owned fine jewelry business.

For a detailed description of the risks and uncertainties that might cause our results to differ from those we project in our forward-looking statements, we refer you to the section captioned “Risk Factors” in our annual report on Form 10-K for the fiscal year ended January 28, 2012 that we filed with the SEC on April 10, 2012. Our other filings with the SEC may contain additional information concerning the risks and uncertainties listed above, and other factors you may wish to consider. Upon request, we will provide copies of these filings to you free of charge.


Table of Contents

PART I — FINANCIAL INFORMATION

 

Item 1. Financial Statements

BELK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share amounts)

(unaudited)

 

     Three Months Ended     Six Months Ended  
     July 28,
2012
    July 30,
2011
    July 28,
2012
    July 30,
2011
 

Revenues

   $ 867,944      $ 831,777      $ 1,777,742      $ 1,680,364   

Cost of goods sold (including occupancy, distribution and buying expenses)

     578,903        555,111        1,181,431        1,117,497   

Selling, general and administrative expenses

     234,826        227,905        467,687        457,467   

Gain on sale of property and equipment

     569        599        1,715        1,263   

Asset impairment and exit costs

     96        (853     195        (737
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     54,688        50,213        130,144        107,400   

Interest expense, net

     (12,418     (12,396     (24,944     (24,921
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     42,270        37,817        105,200        82,479   

Income tax expense

     14,899        12,802        37,539        25,595   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 27,371      $ 25,015      $ 67,661      $ 56,884   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic net income per share

   $ 0.63      $ 0.55      $ 1.53      $ 1.24   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted net income per share

   $ 0.63      $ 0.55      $ 1.52      $ 1.24   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding:

        

Basic

     43,342,305        45,179,482        44,180,342        45,795,534   

Diluted

     43,481,839        45,349,274        44,401,748        46,016,363   

See accompanying notes to unaudited condensed consolidated financial statements.

 

4


Table of Contents

BELK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

 

     Three Months Ended      Six Months Ended  
     July 28,
2012
     July 30,
2011
     July 28,
2012
     July 30,
2011
 

Net income

   $ 27,371       $ 25,015       $ 67,661       $ 56,884   

Other comprehensive income:

           

Unrealized gain on interest rate swap, net of $396 and $740 income taxes for the three and six months ended July 28, 2012, respectively and $355 and $658 income taxes for the three and six months ended July 30, 2011, respectively.

     363         598         945         1,108   

Defined benefit plan adjustments, net of $1,160 and $2,323 income taxes for the three and six months ended July 28, 2012, respectively and $768 and $1,536 income taxes for the three and six months ended July 30, 2011, respectively.

     1,957         1,294         3,912         2,587   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total other comprehensive income

     2,320         1,892         4,857         3,695   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total comprehensive income

   $ 29,691       $ 26,907       $ 72,518       $ 60,579   
  

 

 

    

 

 

    

 

 

    

 

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

5


Table of Contents

BELK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

(unaudited)

 

     July 28,
2012
    January 28,
2012
 

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 254,336      $ 456,272   

Accounts receivable, net

     43,182        39,431   

Merchandise inventory

     909,006        887,029   

Prepaid income taxes, expenses and other current assets

     38,761        22,362   
  

 

 

   

 

 

 

Total current assets

     1,245,285        1,405,094   

Property and equipment, net of accumulated depreciation and amortization of $1,527,974 and $1,468,243 as of July 28, 2012 and January 28, 2012, respectively.

     1,026,495        993,122   

Deferred income taxes

     59,705        83,034   

Other assets

     38,576        32,966   
  

 

 

   

 

 

 

Total assets

   $ 2,370,061      $ 2,514,216   
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

    

Current liabilities:

    

Accounts payable

   $ 260,698      $ 216,438   

Accrued liabilities

     210,839        186,820   

Accrued income taxes

     —          20,684   

Deferred income taxes

     19,097        27,570   

Current installments of long-term debt and capital lease obligations

     9,515        108,164   
  

 

 

   

 

 

 

Total current liabilities

     500,149        559,676   

Long-term debt and capital lease obligations, excluding current installments

     410,148        415,515   

Retirement obligations and other noncurrent liabilities

     283,804        302,795   
  

 

 

   

 

 

 

Total liabilities

     1,194,101        1,277,986   
  

 

 

   

 

 

 

Stockholders’ equity:

    

Preferred stock

     —          —     

Common stock, 400 million shares authorized and 42.7 and 44.9 million shares issued and outstanding as of July 28, 2012 and January 28, 2012, respectively.

     427        449   

Paid-in capital

     265,722        364,590   

Retained earnings

     1,079,272        1,045,509   

Accumulated other comprehensive loss

     (169,461     (174,318
  

 

 

   

 

 

 

Total stockholders’ equity

     1,175,960        1,236,230   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 2,370,061      $ 2,514,216   
  

 

 

   

 

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

6


Table of Contents

BELK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)

 

                             Accumulated        
                             Other        
     Common Stock     Paid-in     Retained     Comprehensive        
     Shares     Amount     Capital     Earnings     Income (Loss)     Total  

Balance at January 28, 2012

     44,916      $ 449      $ 364,590      $ 1,045,509      $ (174,318   $ 1,236,230   

Net income

     —          —          —          67,661        —          67,661   

Other comprehensive income

     —          —          —          —          4,857        4,857   

Cash dividends

     —          —          —          (33,898     —          (33,898

Issuance of stock-based compensation

     —          —          (4,352     —          —          (4,352

Stock-based compensation expense

     —          —          6,636        —          —          6,636   

Common stock issued

     303        3        870        —          —          873   

Repurchase and retirement of common stock

     (2,501     (25     (102,022     —          —          (102,047
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at July 28, 2012

     42,718      $ 427      $ 265,722      $ 1,079,272      $ (169,461   $ 1,175,960   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

7


Table of Contents

BELK, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

     Six Months Ended  
     July 28,
2012
    July 30,
2011
 

Cash flows from operating activities:

    

Net income

   $ 67,661      $ 56,884   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Asset impairment and exit costs

     195        (737

Deferred income tax expense

     8,435        11,407   

Depreciation and amortization expense

     60,243        60,766   

Stock-based compensation expense

     9,004        8,350   

(Gain) loss on sale of property and equipment

     (400     52   

Amortization of deferred gain on sale and leaseback

     (1,315     (1,315

Amortization of deferred debt issuance costs

     414        512   

Increase in:

    

Accounts receivable, net

     (3,751     (16,917

Merchandise inventory

     (21,977     (49,218

Prepaid income taxes, expenses and other assets

     (23,648     (13,960

Increase (decrease) in:

    

Accounts payable and accrued liabilities

     40,889        51,221   

Accrued income taxes

     (20,680     (8,130

Retirement obligations and other liabilities

     (4,459     (36,769
  

 

 

   

 

 

 

Net cash provided by operating activities

     110,611        62,146   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchases of property and equipment

     (69,153     (59,782

Proceeds from sales of property and equipment

     918        995   

Proceeds from sales of short-term investments

     —          6,150   
  

 

 

   

 

 

 

Net cash used by investing activities

     (68,235     (52,637
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Principal payments on long-term debt and capital lease obligations

     (104,015     (2,405

Repurchase and retirement of common stock

     (102,047     (54,996

Dividends paid

     (33,898     (25,592

Stock compensation tax benefit

     1,858        816   

Cash paid for withholding taxes in lieu of stock-based compensation shares

     (6,210     (3,301
  

 

 

   

 

 

 

Net cash used by financing activities

     (244,312     (85,478
  

 

 

   

 

 

 

Net decrease in cash and cash equivalents

     (201,936     (75,969

Cash and cash equivalents at beginning of period

     456,272        453,403   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 254,336      $ 377,434   
  

 

 

   

 

 

 

Supplemental disclosures of cash flow information:

    

Income taxes paid

   $ 57,064      $ 25,860   

Interest paid, net of capitalized interest

     15,084        30,453   

Supplemental schedule of noncash investing activities:

    

Increase in property and equipment through accrued purchases

   $ 24,489      $ 17,958   

Increase in property and equipment through assumption of capital leases

     —          2,837   

See accompanying notes to unaudited condensed consolidated financial statements.

 

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Table of Contents

BELK, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Belk, Inc. and subsidiaries (the “Company”) have been prepared in accordance with the instructions to Form 10-Q promulgated by the United States Securities and Exchange Commission (“SEC”) and should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended January 28, 2012. In the opinion of management, this information is fairly presented and all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the results for the interim periods have been included; however, certain items are included in these statements based on estimates for the entire year. Also, operating results for the three and six months ended July 28, 2012 may not be indicative of the operating results that may be expected for the full fiscal year.

(2) New Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board issued Accounting Standards Update 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS,” which amends current fair value measurement and disclosure guidance to include increased transparency around valuation inputs and investment categorization. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company adopted this guidance beginning in the first quarter of fiscal year 2013 when it was required. The adoption of this update did not have a material effect on the Company’s consolidated results of operations, financial position or cash flows.

In June 2011, the Financial Accounting Standards Board issued Accounting Standards Update 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income,” which eliminates the option to report other comprehensive income and its components in the statement of changes in stockholders’ equity. The total of comprehensive income, the components of net income, and the components of other comprehensive income must be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and must be retrospectively applied to all reporting periods presented. The Company adopted this guidance beginning in the first quarter of fiscal year 2013 when it was required. As this update only relates to financial statement presentation, the adoption did not have a material effect on the Company’s consolidated results of operations, financial position or cash flows.

(3) Accumulated Other Comprehensive Loss

The following table sets forth the components of accumulated other comprehensive loss:

 

     July 28,
2012
    January 28,
2012
 
     (in thousands)  

Unrealized loss on interest rate swap, net of $740 of income taxes as of January 28, 2012.

   $ —        $ (945

Defined benefit plans, net of $101,977 and $104,300 of income taxes as of July 28, 2012 and January 28, 2012, respectively.

     (169,461     (173,373
  

 

 

   

 

 

 

Accumulated other comprehensive loss

   $ (169,461   $ (174,318
  

 

 

   

 

 

 

(4) Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets and liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. As of July 28, 2012, the Company held company-owned life insurance measured at fair value on a recurring basis.

 

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Table of Contents

BELK, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The Company has equity and fixed income investments related to its company-owned life insurance. The fair value of the investments is the estimated amount that the Company would receive if the policy was terminated, taking into consideration the current creditworthiness of the insurer. The fair value of the company-owned life insurance is determined by inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Additionally, the change in the fair value of the company-owned life insurance is marked to market through income.

The Company occasionally enters into interest rate swap agreements with financial institutions to manage the exposure to changes in interest rates. When doing so, the fair value of interest rate swap agreements is the estimated amount that the Company would pay or receive to terminate the swap agreement, taking into account the current creditworthiness of the swap counterparties. The fair values of swap contracts are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. The Company has consistently applied these valuation techniques in all periods presented. Additionally, the change in the fair value of a swap designated as a cash flow hedge is marked to market through accumulated other comprehensive income.

The Company’s assets and liabilities measured at fair value on a recurring basis at July 28, 2012 and January 28, 2012, respectively, were as follows:

 

     Fair Value at July 28, 2012      Fair Value at January 28, 2012  

Description

   Level 1      Level 2      Level 3      Total      Level 1      Level 2      Level 3      Total  
     (in thousands)         

Assets measured at fair value

                       

Company-owned life insurance (a)

   $ —         $ 22,649       $ —         $ 22,649       $ —         $ 15,884       $ —         $ 15,884   

Liabilities measured at fair value

                       

Interest rate swap liability (b)

   $ —         $ —         $ —         $ —         $ —         $ 1,685       $ —         $ 1,685   

 

(a) Amounts are presented net of loans that are secured by some of these policies of $135.2 million and $137.3 million at July 28, 2012 and January 28, 2012, respectively.
(b) On July 12, 2012, the underlying $80.0 million floating rate senior note matured and was repaid using cash on hand. It became current as of July 2011, and the interest rate swap liability was reclassified to accrued liabilities in the current liabilities section as presented in the condensed consolidated balance sheet.

Certain long-lived assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). The fair value measurements related to long-lived assets are determined using expected future cash flow analyses. The Company estimates future cash flows based on historical experience and its expectation of future performance. The analyses use discounted cash flows and take into consideration any anticipated salvage value or sales price for the store. The analyses also assume available option periods through 20 years unless there is a real estate event. The Company classifies these measurements as Level 3. There were no significant impairments of long-lived assets for the three and six months ended July 28, 2012 and July 30, 2011.

The following table presents the carrying amounts and estimated fair values of financial instruments not recorded at fair value in the condensed consolidated balance sheets. The Company classifies these measurements as Level 2. As of July 28, 2012, these included the Company’s fixed rate long-term debt, including the current portion.

 

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BELK, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

     July 28, 2012      January 28, 2012  
     Carrying      Fair      Carrying      Fair  
     Value      Value      Value      Value  
     (in thousands)  

Long-term debt, including current portion (excluding capitalized leases)

   $ 392,780       $ 415,867       $ 492,780       $ 527,735   

The fair value of the Company’s fixed rate long-term debt is estimated based on the current rates offered to the Company for debt of the same remaining maturities.

(5) Asset Impairment and Exit Costs

During the three and six months ended July 30, 2011, the Company recorded $0.9 million revision to a previously estimated lease termination reserve.

(6) Borrowings

On July 12, 2012, the Company paid, upon maturity, $80.0 million of its floating rate senior note and $20.0 million of its 5.05% fixed rate senior note. The $80.0 million floating rate senior note had an associated interest rate swap, with a fixed interest rate of 5.2%, designated as a cash flow hedge of variable interest payments.

(7) Income Taxes

Income tax expense for the three months ended July 28, 2012 was $14.9 million, or 35.2% of pre-tax income, compared to $12.8 million, or 33.9%, for the three months ended July 30, 2011. The increase in the rate was due primarily to the $0.7 million release of a portion of the valuation allowance in the prior year due to projected utilization of state income tax net operating losses.

Income tax expense for the six months ended July 28, 2012 was $37.5 million, or 35.7% of pre-tax income, compared to $25.6 million, or 31.0%, for the six months ended July 30, 2011. The increase in the rate was due primarily to a $2.3 million reduction in the accrual for uncertain tax reserves during the first quarter of fiscal year 2012, which was the result of expired state related statutes of limitations.

Due to a change in an IRS audit policy regarding capitalization of costs relating to tangible property, the Company, during the first quarter of fiscal year 2013, reduced the overall reserve for uncertain tax positions by $6.5 million, which resulted in a reduction in deferred tax assets with no effect on current period income tax expense. The overall reserve was $22.0 million for the fiscal year ended January 28, 2012 and $16.7 million as of July 28, 2012.

(8) Pension, SERP and Postretirement Benefits

The Company has a defined benefit pension plan, the Belk Pension Plan, which prior to fiscal year 2010 had been partially frozen and closed to new participants. Pension benefits were suspended for fiscal year 2010, and effective December 31, 2009, the Pension Plan was frozen for those remaining participants whose benefits were not previously frozen.

The Company has a non-qualified defined benefit Supplemental Executive Retirement Plan, (“Old SERP”), which provides retirement and death benefits to certain qualified executives. Old SERP has been closed to new executives and has been replaced by the 2004 Supplemental Executive Retirement Plan (“2004 SERP”), a non-qualified defined contribution plan.

 

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BELK, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The Company also provides postretirement medical and life insurance benefits to certain employees, and was closed to new participants in 2002. The Company accounts for postretirement benefits by recognizing the cost of these benefits over an employee’s estimated term of service with the Company, in accordance with ASC 715, “Compensation — Retirement Benefits.”

The components of net periodic benefit expense for these plans are as follows:

 

     Three Months Ended  
     Pension Plan     Old SERP Plan      Postretirement Plan  
     July 28,
2012
    July 30,
2011
    July 28,
2012
     July 30,
2011
     July 28,
2012
     July 30,
2011
 
     (in thousands)  

Service cost

   $ —        $ —        $ 38       $ 26       $ 29       $ 27   

Interest cost

     5,854        6,373        140         155         266         300   

Expected return on plan assets

     (7,240     (7,017     —           —           —           —     

Amortization of transition obligation

     —          —          —           —           49         65   

Amortization of net loss

     2,842        1,967        119         64         107         (34
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Net periodic benefit expense

   $ 1,456      $ 1,323      $ 297       $ 245       $ 451       $ 358   
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 
     Six Months Ended  
     Pension Plan     Old SERP Plan      Postretirement Plan  
     July 28,
2012
    July 30,
2011
    July 28,
2012
     July 30,
2011
     July 28,
2012
     July 30,
2011
 
     (in thousands)  

Service cost

   $ —        $ —        $ 76       $ 51       $ 58       $ 54   

Interest cost

     11,708        12,746        280         310         532         600   

Expected return on plan assets

     (14,480     (14,033     —           —           —           —     

Amortization of transition obligation

     —          —          —           —           98         131   

Amortization of net loss

     5,684        3,933        238         128         214         (69
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Net periodic benefit expense

   $ 2,912      $ 2,646      $ 594       $ 489       $ 902       $ 716   
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

During the three months and six months ended July 28, 2012, the Company made contributions to its Pension Plan of $4.5 million and $9.0 million, respectively. The Company expects to make additional contributions totaling approximately $9.0 million to the Pension Plan before fiscal year end. During the three and six months ended July 30, 2011, the Company made discretionary contributions to its Pension Plan of $16.2 million and $32.4 million, respectively.

(9) Earnings per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of shares of common stock outstanding for the period. The diluted EPS calculation includes the effect of contingently issuable stock-based compensation awards with performance vesting conditions as being outstanding at the beginning of the period in which all vesting conditions are met.

If all necessary conditions have not been satisfied by the end of the period, the contingently issuable shares included in diluted EPS are based on the number of dilutive shares that would be issuable at the end of the contingency period. Contingently-issuable non-vested share awards are included in the diluted EPS calculation as of the beginning of the period (or as of the date of the contingent share agreement, if later).

The reconciliation of basic and diluted shares for the three and six months ended July 28, 2012 and July 30, 2011, are as follows:

 

     Three Months Ended      Six Months Ended  
     July 28,
2012
     July 30,
2011
     July 28,
2012
     July 30,
2011
 

Basic Shares

     43,342,305         45,179,482         44,180,342         45,795,534   

Dilutive contingently-issuable non-vested share awards

     138,238         162,893         217,598         214,928   

Dilutive contingently-issuable vested share awards

     1,296         6,899         3,808         5,901   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted Shares

     43,481,839         45,349,274         44,401,748         46,016,363   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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BELK, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

(10) Repurchase of Common Stock

On March 28, 2012, the Company’s Board of Directors approved a self-tender offer to purchase up to 1,950,000 shares of Class A and 500,000 shares of Class B common stock at a price of $40.80 per share. The tender offer was initiated on April 23, 2012 and completed on May 22, 2012 when the Company accepted for purchase 2,235,009 shares of Class A and 266,136 shares of Class B common stock for $102.0 million. In accordance with the offer to purchase and SEC rules, the Company accepted for purchase 285,009 additional shares of Class A common stock that were tendered by stockholders, which is less than 2.0% of the outstanding shares of Class A stock that were subject to the offer.

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Belk, Inc., together with its subsidiaries (collectively, the “Company” or “Belk”), is the largest privately owned mainline department store business in the United States. As of July 28, 2012, the Company had 303 stores in 16 states, located primarily in the southern United States. The Company generated revenues of $3.7 billion for the fiscal year ended January 28, 2012, and together with its predecessors, has been successfully operating department stores since 1888 by seeking to provide superior service and merchandise that meets customers’ needs for fashion, value and quality.

The following discussion, which presents the results of the Company, should be read in conjunction with the Company’s consolidated financial statements as of January 28, 2012 and for the year then ended, and related Notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations, all contained in the Company’s Annual Report on Form 10-K for the year ended January 28, 2012.

The Company’s fiscal year is a 52- or 53- week period ending on the Saturday closest to each January 31. All references to “fiscal year 2012” refer to the 52-week fiscal year ended January 28, 2012, all references to “fiscal year 2013” refer to the 53-week fiscal year that will end February 2, 2013, and all references to “fiscal year 2014” refer to the 52-week fiscal year that will end February 1, 2014.

The Company’s revenues increased 4.3% in the second quarter of fiscal year 2013 to $867.9 million due primarily to a continuation of positive sales trends and execution of the Company’s key strategies. Comparable store revenues increased 4.9%. The Company calculates comparable store revenue as sales from stores that have reached the one-year anniversary of their opening as of the beginning of the fiscal year and eCommerce revenues, but excludes closed stores. Stores undergoing remodeling, expansion or relocation remain in the comparable store revenue calculation. Definitions and calculations of comparable store revenue differ among companies in the retail industry. Operating income increased to $54.7 million in the second quarter of fiscal year 2013 compared to $50.2 million during the same period in fiscal year 2012. Net income increased to $27.4 million or $0.63 per basic and diluted share in the second quarter of fiscal year 2013 compared to $25.0 million or $0.55 per basic and diluted share during the same period in fiscal year 2012. The increase in net income was due primarily to continued positive results from initiatives focused on increasing revenues and improving operating margin performance.

The Company’s revenues increased 5.8% in the first six months of fiscal year 2013 to $1,777.7 million. Comparable store sales increased 6.2%. Operating income increased to $130.1 million in the first six months of fiscal year 2013 compared to $107.4 million during the same period in fiscal year 2012. Net income increased to $67.7 million or $1.53 per basic share and $1.52 per diluted share compared to $56.9 million or $1.24 per basic and diluted share during the same period in fiscal year 2012. The increase in net income was due primarily to continued positive results from initiatives focused on increasing revenues and improving operating margin performance.

Belk stores seek to provide customers the convenience of one-stop shopping, with an appealing merchandise mix and extensive offerings of brands, styles, assortments and sizes. Belk stores sell top national brands of fashion apparel, shoes and accessories for women, men and children, as well as cosmetics, home furnishings, housewares, fine jewelry, gifts and other types of quality merchandise. The Company also sells exclusive private label brands, which offer customers differentiated merchandise selections. Larger Belk stores may include hair salons, spas, restaurants, optical centers and other amenities.

The Company seeks to be the leading department store in its markets by selling merchandise to customers that meet their needs for fashion, selection, value, quality and service. To achieve this goal, Belk’s business strategy focuses on quality merchandise assortments, effective marketing and sales promotional strategies, attracting and retaining talented, well-qualified associates to deliver superior customer service, and operating efficiently with investments in information technology and process improvement.

The Company operates department stores in the highly competitive retail industry. Management believes that the principal competitive factors for retail department store operations include merchandise selection, quality, value, customer service and convenience. The Company believes its stores are strong competitors in all of these areas. The Company’s primary competitors are traditional department stores, mass merchandisers, national apparel chains, individual specialty apparel stores and direct merchant firms, including J.C. Penney Company, Inc., Dillard’s, Inc., Kohl’s Corporation, Macy’s, Inc., Sears Holding Corporation, Target Corporation and Wal-Mart Stores, Inc.

 

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The Company has focused its growth strategy in the last several years on remodeling and expanding existing stores, developing new merchandising concepts in targeted demand centers, and expanding its online capabilities. The Company will, however, continue to explore new store opportunities in markets where the Belk name and reputation are well known and where Belk can distinguish its stores from the competition.

Results of Operations

The following table sets forth, for the periods indicated, the percentage relationship to revenues of certain items in the Company’s unaudited condensed consolidated statements of income, as well as a period comparison of changes in comparable store net revenue.

 

     Three Months Ended     Six Months Ended  
     July 28,
2012
    July 30,
2011
    July 28,
2012
    July 30,
2011
 

SELECTED FINANCIAL DATA

        

Revenues

     100.0     100.0     100.0     100.0

Cost of goods sold (including occupancy, distribution and buying expenses)

     66.7        66.7        66.5        66.5   

Selling, general and administrative expenses

     27.1        27.4        26.3        27.2   

Gain on sale of property and equipment

     0.1        0.1        0.1        0.1   

Asset impairment and exit costs

     —          (0.1     —          —     

Operating income

     6.3        6.0        7.3        6.4   

Interest expense, net

     1.4        1.5        1.4        1.5   

Income before income taxes

     4.9        4.5        5.9        4.9   

Income tax expense

     1.7        1.5        2.1        1.5   

Net income

     3.2        3.0        3.8        3.4   

Comparable store net revenue increase

     4.9        5.2        6.2        5.5   

Revenues

The following table gives information regarding the percentage of revenues contributed by each merchandise area for each of the respective periods. There were no material changes for the periods as reflected in the table below.

 

     Three Months Ended     Six Months Ended  

Merchandise Areas

   July 28,
2012
    July 30,
2011
    July 28,
2012
    July 30,
2011
 

Women’s

     38     39     37     38

Cosmetics, Shoes and Accessories

     31        31        32        32   

Men’s

     18        17        17        16   

Home

     8        8        8        8   

Children’s

     5        5        6        6   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     100     100     100     100
  

 

 

   

 

 

   

 

 

   

 

 

 

Comparison of the Three and Six Months Ended July 28, 2012 and July 30, 2011

Revenues. The Company’s revenues for the three months ended July 28, 2012 increased 4.3%, or $36.2 million, to $867.9 million from $831.8 million during the same period in fiscal year 2012. The increase is primarily attributable to a 4.9% increase in revenues from comparable stores.

The Company’s revenues for the six months ended July 28, 2012 increased 5.8%, or $97.4 million, to $1,777.7 million from $1,680.4 million during the same period in fiscal year 2012. The increase is primarily attributable to a 6.2% increase in revenues from comparable stores, partially offset by a decrease in revenues from closed stores of $1.8 million.

 

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Cost of goods sold. Cost of goods sold was $578.9 million, or 66.7% of revenues, for the three months ended July 28, 2012 compared to $555.1 million, or 66.7% of revenues, for the same period in fiscal year 2012. The increase in cost of goods sold was attributable to an increase in revenues for the three months ended July 28, 2012.

Cost of goods sold was $1,181.4 million, or 66.5% of revenues, for the six months ended July 28, 2012 compared to $1,117.5 million, or 66.5% of revenues, for the same period in fiscal year 2012. The increase in cost of goods sold was attributable to an increase in revenues for the six months ended July 28, 2012.

Selling, general and administrative expenses. Selling, general and administrative (“SG&A”) expenses were $234.8 million, or 27.1% of revenues for the three months ended July 28, 2012, compared to $227.9 million, or 27.4% of revenues for the same period in fiscal year 2012. The increase in SG&A expenses was primarily due to an increase in payroll, employee benefits, and professional services for the three months ended July 28, 2012.

SG&A expenses were $467.7 million, or 26.3% of revenues for the six months ended July 28, 2012, compared to $457.5 million, or 27.2% of revenues for the same period in fiscal year 2012. The increase in SG&A expenses was primarily due to an increase in payroll and employee benefits for the six months ended July 28, 2012. The SG&A expense rate decreased due to the 6.2% increase in comparable store revenues combined with a decrease in depreciation expense.

Asset Impairment and Exit Costs. During the three and six months ended July 30, 2011, the Company recorded a $0.9 million revision to a previously estimated lease termination reserve.

Income tax expense. Income tax expense for the three months ended July 28, 2012 was $14.9 million, or 35.2% of pre-tax income, compared to $12.8 million, or 33.9%, for the three months ended July 30, 2011. The increase in the rate was due primarily to the $0.7 million release of a portion of the valuation allowance in the prior year due to projected utilization of state income tax net operating losses.

Income tax expense for the six months ended July 28, 2012 was $37.5 million, or 35.7% of pre-tax income, compared to $25.6 million, or 31.0%, for the six months ended July 30, 2011. The increase in the rate was due primarily to a $2.3 million reduction in the accrual for uncertain tax reserves during the first quarter of fiscal year 2012, which was the result of expired state related statutes of limitations.

Seasonality and Quarterly Fluctuations

The Company has historically experienced and expects to continue to experience seasonal fluctuations in its revenues, operating income and net income due to the seasonal nature of the retail business. The highest revenue period for the Company is the fourth quarter, which includes the holiday selling season. A disproportionate amount of the Company’s revenues and a substantial amount of the Company’s operating and net income are realized during the fourth quarter. If for any reason the Company’s revenues were below seasonal norms during the fourth quarter, the Company’s annual results of operations could be adversely affected. The Company’s inventory levels generally reach their highest levels in anticipation of increased revenues during these months. The Company’s quarterly results of operations could also fluctuate significantly as a result of a variety of factors, including the timing of new store openings.

Liquidity and Capital Resources

The Company’s primary sources of liquidity are cash on hand of $254.3 million as of July 28, 2012, cash flows from operations, and borrowings under the $350.0 million credit facility.

The credit facility, which matures in November 2015, allows for up to $250.0 million of outstanding letters of credit. The credit facility charges interest based upon certain Company financial ratios and the interest spread was calculated at July 28, 2012 using LIBOR plus 125 basis points, or 1.50%. The credit facility contains restrictive financial covenants including leverage and fixed charge coverage ratios. The Company’s calculated leverage ratio dictates the LIBOR spread that will be charged on outstanding borrowings in the subsequent quarter. The leverage ratio is calculated by dividing adjusted debt, which is the sum of the Company’s outstanding debt and rent expense multiplied by a factor of eight, by pre-tax income plus net interest expense and non-cash items, such as depreciation, amortization, and impairment expense. At July 28, 2012, the maximum leverage ratio allowed under the credit facility was 4.0, and the calculated leverage ratio

 

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was 1.87. The Company was in compliance with all covenants as of July 28, 2012 and expects to remain in compliance with all debt covenants for the next twelve months and foreseeable future. As of July 28, 2012, the Company had $40.4 million of standby letters of credit outstanding under the credit facility, and availability under the credit facility was $309.6 million.

The senior notes have restrictive covenants that are similar to the Company’s credit facility, and had the following terms as of July 28, 2012:

 

Amount

(in millions)

     Type of Rate    Rate     Maturity Date  
$ 100.0       Fixed      5.31     July 2015   
  125.0       Fixed      6.20     August 2017   
  50.0       Fixed      5.70     November 2020   
  100.0       Fixed      5.21     January 2022   

 

 

         
$ 375.0           

 

 

         

Additionally, the Company has a $17.8 million, 20-year variable rate, 0.21% at July 28, 2012, state bond facility which matures in October 2025.

On July 12, 2012, the Company paid, upon maturity, $80.0 million of its floating rate senior note and $20.0 million of its 5.05% fixed rate senior note. The $80.0 million floating rate senior note had an associated interest rate swap, with a fixed interest rate of 5.2%, designated as a cash flow hedge of variable interest payments.

The debt facilities place certain restrictions on mergers, consolidations, acquisitions, sales of assets, indebtedness, transactions with affiliates, leases, liens, investments, dividends and distributions, exchange and issuance of capital stock and guarantees, and require maintenance of minimum financial ratios, which include a leverage ratio, consolidated debt to consolidated capitalization ratio and a fixed charge coverage ratio. These ratios are calculated exclusive of non-cash charges, such as fixed asset, goodwill and other intangible asset impairments.

The Company utilized derivative financial instruments (interest rate swap agreements) to manage the interest rate risk associated with its borrowings. As of July 28, 2012, the Company does not have any interest rate swaps outstanding. The Company has not historically traded, and does not anticipate prospectively trading, in derivatives. These swap agreements were used to reduce the potential impact of increases in interest rates on variable rate debt. The difference between the fixed rate leg and the variable rate leg of the swap, to be paid or received, was accrued and recognized as an adjustment to interest expense. Additionally, the change in the fair value of a swap designated as a cash flow hedge was marked to market through accumulated other comprehensive income.

Management believes that cash on hand of $254.3 million as of July 28, 2012, cash flows from operations and existing credit facilities will be sufficient to cover working capital needs, stock repurchases, dividends, capital expenditures, pension contributions and debt service requirements for the next twelve months and foreseeable future.

The Company has planned investments totaling approximately $600 million over a five-year period that began in fiscal year 2011 in key strategic initiatives including store remodels and service improvements; eCommerce; information technology; merchandise planning and processes; marketing and branding; and improved sourcing practices.

Net cash provided by operating activities was $110.6 million for the six months ended July 28, 2012 compared to $62.1 million for the same period in fiscal year 2012. The increase in cash flows from operating activities for the six months ended July 28, 2012 was principally due to a $31.1 million decrease in inventory, net of merchandise payables, as a result of our increased sales trends, a $23.4 million decrease in pension contributions in fiscal year 2013, and a $10.8 million increase in net income for the current period.

Net cash used by investing activities was $68.2 million for the six months ended July 28, 2012 compared to $52.6 million for the same period in fiscal year 2012. The increase in cash used by investing activities primarily resulted from increased purchases of property and equipment resulting from our strategic investments in eCommerce and information technology infrastructure, and proceeds from the sale of short-term investments of $6.2 million in the first quarter of fiscal year 2012.

 

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Net cash used by financing activities was $244.3 million for the six months ended July 28, 2012 compared to $85.5 million for the same period in fiscal year 2012. The increase in cash used by financing activities primarily relates to the $100.0 million payment of senior notes, a $47.1 million increase in the repurchase and retirement of common stock and an $8.3 million increase in dividends paid.

Contractual Obligations and Commercial Commitments

A table representing the scheduled maturities of the Company’s contractual obligations and commercial commitments as of January 28, 2012 was included under the heading “Contractual Obligations and Commercial Commitments” of the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2012. There have been no material changes from the information included in the Form 10-K.

Off-Balance Sheet Arrangements

The Company has not created, and is not party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating the Company’s business. The Company does not have any arrangements or relationships with entities that are not consolidated into the financial statements that are reasonably likely to materially affect the Company’s liquidity or the availability of capital resources.

Impact of Inflation or Deflation

Although the Company expects that operations will be influenced by general economic conditions, including rising food, fuel and energy prices, management does not believe that inflation has had a material effect on the Company’s results of operations. However, there can be no assurance that our business will not be affected by such factors in the future.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the Company’s quantitative and qualitative market risk disclosures during the three and six months ended July 28, 2012 from the disclosures contained in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2012.

 

Item 4. Controls and Procedures

The Company’s management conducted an evaluation pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, under the supervision and with the participation of its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective.

During the period covered by this report, there were no changes in the Company’s internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

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PART II — OTHER INFORMATION

 

Item 1. Legal Proceedings

In the ordinary course of business, the Company is subject to various legal proceedings and claims. The Company believes that the ultimate outcome of these matters will not have a material adverse effect on its consolidated financial position, cash flows or results of operations.

 

Item 1A. Risk Factors

There have been no material changes from the risk factors disclosed in the Company’s Annual Report on Form 10-K filed on April 10, 2012.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

 

Item 3. Defaults Upon Senior Securities

Not applicable.

 

Item 4. Mine Safety Disclosures

Not applicable.

 

Item 5. Other Information

Not applicable.

 

Item 6. Exhibits

 

(a) Exhibits

 

  3.1    Form of Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to pages B-24 to B-33 of the Company’s Registration Statement on Form S-4, filed on March 5, 1998 (File No. 333-42935)), as amended by the Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K, filed on June 5, 2012).
  3.2    Form of Second Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the Company’s Annual Report on Form 10-K, filed on April 15, 2004), as amended by the First Amendment to the Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 of the Company’s Form 8-K, filed on June 5, 2012).
  4.1    Articles Fourth, Fifth and Seventh of the Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to pages B-24 to B-33 of the Company’s Registration Statement on Form S-4, filed on March 5, 1998 (File No. 333-42935)), as amended by the Certificate of Amendment to the Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K, filed on June 5, 2012).
  4.2    Articles I and IV of the Second Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the Company’s Annual Report on Form 10-K, filed on April 15, 2004).
31.1    Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2    Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted under Section 302 of the Sarbanes-Oxley Act of 2002.

 

19


Table of Contents
32.1    Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2    Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

20


Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    BELK, INC.
Dated: September 5, 2012     By:  

/s/ Ralph A. Pitts

      Ralph A. Pitts
      Executive Vice President, General Counsel and
Corporate Secretary
      (Authorized Officer of the Registrant)
    By:  

/s/ Brian T. Marley

      Brian T. Marley
      Executive Vice President and Chief Financial Officer
      (Principal Financial Officer)

 

21

PINX:BLKIA Belk Inc Class A Quarterly Report 10-Q Filling

Belk Inc Class A PINX:BLKIA Stock - Get Quarterly Report SEC Filing of Belk Inc Class A PINX:BLKIA stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

PINX:BLKIA Belk Inc Class A Quarterly Report 10-Q Filing - 7/28/2012
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