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JO Ann Fabric is a private company-Michaels Stores, Inc. Hancock Fabrics, Inc.

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Question;JO Ann Fabric is a private company. Could not retrieve financial information of the private company.4(a)Michaels Stores, Inc.Hancock Fabrics, Inc.Consolidated Statements of Cash FlowsConsolidated Statements of Cash Flows(In millions)Operating activities:Net incomeAdjustments:Depreciation and amortizationShare-based compensationDebt issuance costs amortizationAccretion of long-term debtChange in fair value of contingent considerationChange in fair value of interest rate capRefinancing costs and losses on early extinguishments of debtImpairment of intangible assetsChanges in assets and liabilities:Merchandise inventoriesPrepaid expenses and otherDeferred income taxesAccounts payableAccrued interestAccrued liabilities and otherIncome taxesOther long-term liabilitiesNet cash provided by operating activities20132012$264$200106349(1)14-972114338(38)(8)(3)102(8)(12)54468(21)(7)(2)(35)(10)(16)18(1)299Investing activities:Additions to property and equipmentNet cash used in investing activities(112)(112)(124)(124)Financing activities:Borrowings on Restated Term Loan Credit FacilityRepayments on senior secured term loan facilityBorrowings on asset-based revolving credit facilityPayments on asset-based revolving credit facilityIssuance of senior notes due 2018Repurchase of subordinated discount notes due 2016Repurchase of senior subordinated notes due 2016Issuance of senior subordinated notes due 2020Payment of debt issuance costsPayment of refinancing costsPayment of capital leasesChange in cash overdraftPayments on behalf of Parent and otherNet cash used in financing activities(12)389(390)(403)260(3)(2)(3)(4)(10)(178)1,640(1,996)322(321)213(315)(13)(12)(3)(5)(490)Net increase (decrease) in cash and equivalentsCash and equivalents at beginning of periodCash and equivalents at end of period17856$234(315)371$56Supplemental Cash Flow Information:Cash paid for interestCash paid for income taxes$183$145$239$108Years Ended January 25, 2014, January 26,2013, and January 28, 2012(in thousands)Cash flows from operating activities:Net lossAdjustments to reconcile net loss to cashflows used in operating activitiesDepreciation and amortization, includingcost of goods soldAmortization of deferred loan costsAmortization of note discountAmortization of prepaid rentStock-based compensationInventory valuation reserveImpairment on property and equipment,goodwill, and other assetsLoss on disposition of property andequipmentOtherChange in assets and liabilities:Receivables and prepaid expensesInventoriesOther assetsAccounts payableAccrued liabilitiesPostretirement benefits other than pensionsPension and SERP liabilitiesOther liabilitiesNet cash used in operating activities20132012$(1,942)$(8,510)4,6937203791386234315,3524663,136271718(634)--15927144(55)(997)(6,569)(67)1,764(339)(1,096)(3,420)(204)(5,700)693(5,039)50(648)(2,353)(963)(3,138)(768)(11,278)Cash flows from investing activities:Additions to property and equipmentProceeds from the disposition of propertyand equipmentNet cash used in investing activities(4,509)(2,698)22(4,487)259(2,439)Cash flows from financing activities:Net borrowings on revolving credit facilityNet payments on notesPayments for loan costsOtherNet cash provided by financing activities14,079(5,141)(817)(190)7,93125,071(8,206)(1,595)(139)15,131Increase (decrease) in cashCash:Beginning of yearEnd of yearSupplemental disclosures:Cash paid during the period for:InterestContributions to the defined benefit pensionplanIncome taxesNon-cash change in funded status of benefitplans(2,256)1,4144,062$1,8062,648$4,062$4,879$3,6485,420-5,012-$1,945$(3,585)4(b)Under the indirect methodof presenting the statement of cash flows, the presentation of this statement begins with net income or loss, with subsequent additions to or deductions from that amount for non-cash revenue and expense items, resulting in net income provided by operating activities.The format of the indirect method appears in the following example. In the presentation format, cash flows are divided into the following general classifications:Cash Flow from operating activitiesCash Flow from investing activitiesCash Flow from financing activitiesMethod Used:Michaels Stores, Inc.4(c)Hancock Fabrics, Inc.Indirect MethodIndirect MethodAnalysis:Michaels Stores, Inc.Net cash provided by operating activities was $468 million in fiscal year 2013 and $299 million in fiscal year 2012. It represents that company ulitized its resources well and performed well during 2013. Net income also increased to $264 million from $200 million which showed increase in revenue and better cost management.Net cash used by investing activities was ($112) million in 2013 and ($124) million in 2012. It represents that company invested less in plants and equipments during the 2013 as compare to 2012 investments.Net cash used in financing activities was ($178) million in 2013 and ($490) million in 2012. It shows that company repaid its debt during 2013 and repurchased subordinated notes.Net increase in cash flow for 2013 is $178 million and ($315) million in 2012. Increase in cash flow shows the better performance of the company in 2013.Hancock Fabrics, Inc.Net cash provided by operating activities was ($5700) thousands in fiscal year 2013 and ($11278) thousands in fiscal year 2012. It represents that company ulitized its resources well and performed well during 2013. Company is trying to recover from its previous losses. Net losses decreased to ($1942) thousands from ($8510) thousands.Net cash used by investing activities was ($4487) thousands in 2013 and ($2439) thousands in 2012. It represents that company is investing in fixed assets like plants and equipments during the 2013. Company is using expansion strategy to diversify its portfolio and to reduce risk and losses.Net cash used in financing activities was $7931 thousands in 2013 and $15131 thousands in 2012. It shows that company is using external financing (debt) to run its operations. In 2013, company repaid its debt and try to decrease the external financing.Net increase in cash flow for 2013 was ($2256) thousands and $1414 thousands in 2012. Company is trying to repay its debt, operation activities cash is representing company's better performance in 2013 as compare to 2012.

 

Paper#47632 | Written in 18-Jul-2015

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