UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(MARK ONE)
For the fiscal year ended December 31, 2003
OR
o Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 (No Fee Required) for the Transition Period from ___________ to _____________
Commission file number 1-09100
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
GOTTSCHALKS Inc. Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
GOTTSCHALKS Inc.
7 River Park Place East
Fresno, CA 93720
(559) 434-4800
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee (or other persons who administer the employee benefit plan) has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
GOTTSCHALKS Inc.
Retirement Savings Plan
Date: June 25, 2004
By /s/ J. Gregory Ambro
Chief Administrative Officer
GOTTSCHALKS Inc.
Retirement Savings Plan
December 31, 2003 and 2002
GOTTSCHALKS INC.
RETIREMENT SAVINGS PLAN
Financial Statements and Supplemental Schedules
December 31, 2003 and 2002
Table of Contents
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Page |
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Independent Accountants' Report |
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Financial Statements: |
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Statements of Net Assets Available for Benefits |
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Statements of Changes in Net Assets Available for Benefits |
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Notes to Financial Statements |
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Supplemental Schedules as of and for the year ended December 31, 2003 |
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Schedule H, Line 4i - Schedule of Assets (Held at End of Year) |
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INDEPENDENT ACCOUNTANTS' REPORT
To the Participants and
Plan Administrator of the
GOTTSCHALKS Inc.
Retirement Savings Plan
We have audited the financial statements of the GOTTSCHALKS Inc. Retirement Savings Plan (the Plan) as of December 31, 2003 and 2002, and for the years then ended, as listed in the accompanying table of contents. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Plan's management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2003 and 2002, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules, as listed in the accompanying table of contents, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole.
By /s/ Mohler, Nixon & Williams
MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
May 25, 2004
GOTTSCHALKS INC.
See notes to financial statements.
GOTTSCHALKS INC.
See notes to financial statements.
GOTTSCHALKS INC. NOTES TO FINANCIAL STATEMENTS Note 1 - The Plan and its significant accounting policies General - The following description of the GOTTSCHALKS Inc.
Retirement Savings Plan (the Plan) provides only general information.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions. The Plan is a defined contribution plan that was established in 1986 by
Gottschalks Inc. (the Company) to provide benefits to eligible employees, as
defined in the Plan document. The Plan covers all full-time employees of the
Company who have a minimum of one year of service with not less than 1,000 hours
of service, are age 21 or older and not otherwise covered by a collective
bargaining agreement, or a leased employee. The Plan administrator believes that
the Plan is currently designed and operated in compliance with the applicable
requirements of the Internal Revenue Code, as amended and the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA), as amended. Effective January 1, 2002, the Plan was amended to comply with recent changes
to the relevant provisions of the Internal Revenue Code. Administration - The Company has appointed the Plan
Administration Committee (the Committee) to manage the operation and
administration of the Plan. A third-party administrator, appointed by the
Committee, processes and maintains the records of participant data. The Company
has contracted with The Charles Schwab Trust Company (Charles Schwab) to act as
the trustee. All significant expenses incurred for administering the Plan are
paid by the Company, except for loan fees, which are paid by the participants,
and an annual management trustee fee, which is paid by the Plan. Estimates - The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, and changes therein, and disclosure
of contingent assets and liabilities. Actual results could differ from those
estimates. Basis of accounting - The financial statements of the Plan are
prepared on the accrual method of accounting in accordance with accounting
principles generally accepted in the United States of America. Forfeited accounts - Forfeited nonvested accounts at December
31, 2003 totaled approximately $1,800 and will be used to reduce future employer
contributions. Forfeitures utilized to reduce the employer's contribution for
the years ended December 31, 2003 and 2002 amounted to approximately $53,000 and
$31,200, respectively. Investments - Investments of the Plan are held by Charles
Schwab, and invested based solely upon instructions received from participants
for participant directed funds. Participants can direct their employee
contributions among any of the investment options. No assurance of actual fund
performance can be given. Employer contributions to the Plan are
nonparticipant-directed and invested in the Gottschalks Inc. Common Stock Fund. The Plan's investments in a common collective trust, mutual funds and common
stock are valued at fair value as of the last day of the Plan year, as measured
by quoted market prices or as reported by Charles Schwab.
Participant loans are valued at cost, which approximates fair value. Cash and cash equivalents - All highly liquid investments
purchased with an original maturity of three months or less (generally money
market funds) are considered to be cash equivalents. These investments are
usually held for a short period of time, pending long-term investment. Income taxes - The Plan has received a favorable determination
letter dated August 20, 2003. The Company believes that the Plan is operated in
accordance with, and qualifies under, the applicable requirements of the
Internal Revenue Code and related state statutes, and that the trust, which
forms a part of the Plan, is exempt from federal income and state franchise
taxes. Reconciliation of financial statements to Form 5500 - The
differences between the information reported in the financial statements and the
information reported in the Form 5500 arise primarily from presenting the
financial statements on the accrual basis of accounting. Risks and uncertainties - The Plan provides for various
investment options in any combination of investment securities offered by the
Plan, including Company common stock. Investment securities are exposed to
various risks, such as interest rate, market fluctuations and credit risks. Due
to the risk associated with certain investment securities, it is at least
reasonably possible that changes in market values, interest rates or other
factors in the near term could materially affect participants' account balances
and the amounts reported in the statements of net assets available for benefits
and the statements of changes in net assets available for benefits. Note 2 - Related party transactions Certain Plan investments are managed by Charles Schwab, the trustee of
the Plan. Any purchases and sales of these funds are performed in the open
market at fair market value. Such transactions, while considered
party-in-interest transactions under ERISA regulations, are permitted under the
provisions of the Plan and are specifically exempt from the prohibition of
party-in-interest transactions under ERISA. Employer contributions are invested in common stock of the Company. In
addition, as allowed by the Plan, participants may elect to invest a portion of
their accounts in the common stock of the Company. Aggregate investment in
Company common stock at December 31, 2003 and 2002 was as
follows: Date Number of shares Fair value Cost 2003 1,926,972 $6,782,941 $8,030,506 2002 1,511,716 $2,343,160 $7,530,657 The Gottschalks Inc. Common Stock Fund invests primarily in the Company's
common stock. The remainder of the fund is invested in the Schwab Retirement
Money Fund to allow for timely handling of exchanges, withdrawals and
distributions. Investments in the Retirement Money Fund were $31,265 and $10,678
at December 31, 2003 and 2002, respectively. Note 3 - Participation and benefits Participant contributions - Participants may elect to have the
Company contribute up to 100% of their eligible pre-tax compensation not to
exceed the amount allowable under current income tax regulations. Participants
who elect to have the Company contribute a portion of their compensation to the
Plan agree to accept an equivalent reduction in taxable compensation.
Contributions withheld are invested in accordance with the participant's
direction and are allocated to funds in whole percentage increments. Participants are also allowed to make rollover contributions of amounts
received from other tax-qualified employer-sponsored retirement plans. Such
contributions are deposited in the appropriate investment funds in accordance
with the participant's direction and the Plan's provisions. Employer contributions - The Company is allowed to make
matching contributions as defined in the Plan and as approved by the Board of
Directors. The Company's contributions may be made in the form of cash or common
stock of the Company. An employee must be employed on the last day of the
calendar quarter and have made a contribution to the Plan during the quarter to
receive matching contributions. During 2003 and 2002, the Company made
discretionary contributions on a quarterly basis of up to 3% of a participants'
quarterly eligible compensation. The Company's actual contribution is reduced by
available forfeitures, if any, during the Plan year. Vesting - Participants are immediately vested in their
contributions. Participants vest ratably and are fully vested in the employer's
matching contributions allocated to their account after four years of credited
service, after age 65 or because of disability or death. Participant accounts - Each participant's account is credited
with the participant's contribution, Plan earnings or losses and an allocation
of the Company's contribution, if any. Allocation of the Company's contribution
is based on participant contributions or eligible compensation, as defined in
the Plan. Payment of benefits - Upon termination, the participants or
beneficiaries will receive their total benefits in a lump sum amount in cash, or
for any portion of the account that is invested in employer stock only, in cash
or employer stock, equal to the value of the participant's vested interest in
their account. The Plan allows for automatic lump sum distribution of
participant vested account balances that do not exceed $5,000. Loans to participants - The Plan allows participants to borrow
not less than $500 and up to the lesser of $50,000 or 50% of their vested
account balance. The loans are secured by the participant's vested balance. Such
loans bear interest at the available market financing rates and must be repaid
to the Plan within a five-year period, unless the loan is used for the purchase
of a principal residence in which case the maximum repayment period may be
longer. The specific terms and conditions of such loans are established by the
Committee. Outstanding loans at December 31, 2003 carry interest rates ranging
from 5% to 10.5%. Note 4 - Plan obligations Included in net assets available for benefits at December 31, 2003 and
2002 are benefits due to withdrawing participants for benefit claims, which have
been processed and approved for payment prior to year end, but not yet paid, of
approximately $137,600 and $84,400, respectively. Note 5 - Investments The following table presents the fair values of investments and
investment funds that include 5% or more of the Plan's net assets at December 31: 2003 2002 Schwab S&P 500 Fund $ 5,342,798 $ 3,774,495 Gottschalks Inc. Common Stock Fund 1,496,415 695,275 Gottschalks Inc. Common Stock Fund 5,317,791 * 1,658,563 * One Group Bond Fund 3,422,508 3,396,246 Schwab Value Advantage Money Fund 46 2,562,386 Capital World Growth & Income Fund 1,890,178 Gartmore Morley Stable Value 2,737,837 Janus World Wide Fund 1,398,094 Other funds individually less than 5% of net assets 13,101,145 10,279,883 $ 33,308,718 $ 23,764,942 *Nonparticipant-directed The Plan's investments (including gains and losses on investments bought and
sold, as well as held during the year) appreciated (depreciated) in value as
follows for the years ended December 31:
RETIREMENT SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31,
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2003 2002
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Assets:
Investments, at fair value $32,270,052 $22,715,665
Participant loans 1,038,666 1,049,277
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Assets held for investment purposes 33,308,718 23,764,942
Employer's contribution receivable 252,317 286,039
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Net assets available for benefits $33,561,035 $24,050,981
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RETIREMENT SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Years ended December 31,
------------------------
2003 2002
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Additions to net assets attributed to:
Investment income (loss):
Dividends and interest $ 505,554 $ 532,904
Net realized and unrealized appreciation
(depreciation) in fair value of investments 7,466,154 (4,608,726)
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7,971,708 (4,075,822)
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Contributions:
Participants' 3,672,193 4,153,580
Employer's 1,127,934 1,347,118
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4,800,127 5,500,698
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Total additions 12,771,835 1,424,876
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Deductions from net assets attributed to:
Withdrawals and distributions (3,083,458) (2,824,979)
Administrative expenses (178,323) (97,788)
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Total deductions (3,261,781) (2,922,767)
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Net increase (decrease) in net assets 9,510,054 (1,497,891)
Net assets available for benefits:
Beginning of year 24,050,981 25,548,872
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End of year $33,561,035 $24,050,981
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RETIREMENT SAVINGS PLAN
DECEMBER 31, 2003 AND 2002
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2003 |
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2002 |
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Strategy Portfolio Funds |
$ |
2,728,997 |
$ |
(2,050,072) |
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Mutual Funds |
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1,108,545 |
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(950,185) |
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Gottschalks Inc. Common Stock Fund |
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3,617,623 |
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(1,608,469) |
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Common Collective Trust |
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10,989 |
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$ |
7,466,154 |
$ |
(4,608,726) |
Note 6 - Nonparticipant-directed investments
Information about the net assets and the significant components of the changes in net assets relating to participant and nonparticipant-directed matching accounts is as follows for the years ended December 31:
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2003 |
2002 |
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Net assets: |
$ 5,317,791 |
$ 1,658,563 |
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Years ended December 31, |
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2003 |
2002 |
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Changes in net assets: |
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Contributions |
$ 1,127,934 |
$ 1,347,118 |
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Net appreciation (depreciation) |
2,882,862 |
(1,284,070) |
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Benefits paid to participants |
(351,568) |
(219,254) |
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$ 3,659,228 |
$(156,206) |
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Note 7 - Plan termination or modification
The Company intends to continue the Plan indefinitely for the benefit of its participants; however, it reserves the right to terminate or modify the Plan at any time by resolution of its Board of Directors and subject to the provisions of ERISA. In the event the Plan is terminated in the future, participants would become fully vested in their accounts.
EIN: 77-0159791
GOTTSCHALKS INC.
* Parties-in-interest
EIN: 77-0159791
GOTTSCHALKS INC.
PLAN #001
RETIREMENT SAVINGS PLAN
SCHEDULE H, LINE 4i -SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2003
Identity of issue, borrower, Description of investment including maturity date, Current
lessor or similar party rate of interest, collateral, par or maturity value Cost value
------------------------------------------------ ---------------------------------------------------- ---------- -----------
Cash $ 16,796
* ** Schwab Retirement Money Fund Mutual Fund $ 31,265 31,265
* Schwab Value Advantage Money Fund Mutual Fund 46
* Gottschalks Inc. Common Stock Fund Common Stock 1,496,415
* ** Gottschalks Inc. Common Stock Fund Common Stock 6,262,731 5,286,526
Loomis Sayles Bond Fund Mutual Fund 1,101,269
* Managers Special Equity Fund Mutual Fund 1,236,724
Morgan Stanley Institution Mid-Cap Value Fund Mutual Fund 1,560,550
PIMCO Foreign Bond Fund Mutual Fund 847,605
PIMCO High-Yield Fund Mutual Fund 483,486
* Schwab S&P 500 Fund Mutual Fund 5,342,798
One Group Bond Fund Mutual Fund 3,422,508
Axa Rosenberg U.S. Small Cap Institutional Fund Mutual Fund 838,975
Capital World Growth & Income Fund Mutual Fund 1,890,178
Gartmore Morley Stable Value Common Collective Trust 2,737,837
Dodge & Cox Stock Fund Mutual Fund 1,347,249
Masters' Select International Fund Mutual Fund 1,087,808
PIMCO Short Term Institutional Fund Mutual Fund 1,018,889
Royce Low - Priced Stock Fund Mutual Fund 466,083
Tweedy, Browne Global Value Fund Mutual Fund 744,635
Wilshire Target Large Growth Investment Fund Mutual Fund 1,312,410
* Participant loans Interest rates ranging from 5% to 10.5% 1,038,666
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Total $33,308,718
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** Nonparticipant-directed
PLAN #001
RETIREMENT SAVINGS PLAN
SCHEDULE H, LINE 4j - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 2003
Expense Current value
Description of assets incurred Cost of asset on
Identity of (include interest rate and Purchase Selling Lease with of transaction Net gain
party involved maturity in case of a loan) price price rental transaction asset date or (loss)
----------------- --------------------------- ----------- --------- --------- ----------- ----------- ------------ ---------
Gottschalks Inc. Common Stock $ 1,234,068 $ 1,234,068 $ 1,234,068
Gottschalks Inc. Common Stock $ 358,076 $ 716,724 $(358,648)