SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ___________ to ___________
Commission File Number: 33-78586
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
The Profit Sharing and 401(k) Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Retail Ventures, Inc.
3241 Westerville Rd.
Columbus, Ohio 43224
THE PROFIT SHARING AND 401(k) PLAN
Financial Statements as of and for the Years Ended December 31, 2003 and 2002,
Supplemental Schedule as of December 31, 2003 and Report of Independent
Registered Public Accounting Firm
THE PROFIT SHARING AND 401(k) PLAN
TABLE OF CONTENTS
PAGE
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 1
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2003 AND 2002:
Statements of Net Assets Available for Plan Benefits 2
Statements of Changes in Net Assets Available for Plan Benefits 3
Notes to Financial Statements 4-6
SUPPLEMENTAL SCHEDULE -- 7
Form 5500 Schedule H, Line 4i, Schedule of Assets (Held at End of
Year) as of December 31, 2003 8
SIGNATURE 9
INDEX TO EXHIBITS 10
The following exhibits are being filed herewith:
Exhibit No. Description
----------- -----------
23.1 Consent of Deloitte & Touche LLP,
Independent Registered Public Accounting Firm 11
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Plan Committee
The Profit Sharing and 401(k) Plan
We have audited the accompanying statements of net assets available for plan
benefits of The Profit Sharing and 401(k) Plan (the "Plan") as of December 31,
2003 and 2002, and the related statements of changes in net assets available for
plan benefits for the years then ended. 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 audit 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 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 plan benefits of the Plan as
of December 31, 2003 and 2002, and the related changes in net assets available
for plan benefits for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) as of December 31, 2003 is presented for the purpose of
additional analysis and is not a required part of the basic financial statements
but is 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. This supplemental schedule is the responsibility of the
Plan's management. This supplemental schedule has been subjected to the auditing
procedures applied in the audit of the basic 2003 financial statements and, in
our opinion, is fairly stated in all material respects when considered in
relation to the basic 2003 financial statements taken as a whole.
/s/ Deloitte & Touche
June 23, 2004
1
THE PROFIT SHARING AND 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2003 AND 2002
2003 2002
-------------- --------------
INVESTMENTS -- At fair value:
Mutual funds $ 112,105,470 $ 79,082,321
Common collective fund 67,938,162 65,896,076
Common stock 7,347,405 5,198,623
-------------- --------------
Total investments -- at fair value 187,391,037 150,177,020
PARTICIPANT LOANS 9,695,441 9,059,471
RECEIVABLES:
Employee contributions 539,174 515,634
Employer matching contributions 625,942 327,885
Employer profit sharing contributions 1,222,367 1,147,505
-------------- --------------
Total receivables 2,387,483 1,991,024
-------------- --------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 199,473,961 $ 161,227,515
============== ==============
See notes to financial statements.
2
THE PROFIT SHARING AND 401(k) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31, 2003 AND 2002
2003 2002
-------------- --------------
ADDITIONS TO NET ASSETS:
Investment income:
Dividends and interest $ 3,975,843 $ 4,484,966
Net realized and unrealized appreciation
(depreciation) in fair value of investments 21,464,678 (24,452,485)
-------------- --------------
Total investment gain (loss) -- net 25,440,521 (19,967,519)
-------------- --------------
Contributions:
Employee 18,675,533 18,481,751
Employer matching 10,982,200 10,805,933
Employer profit sharing 1,610,230 1,309,866
Rollovers 461,955 1,458,713
Total contributions 31,729,918 32,056,263
-------------- --------------
Total additions 57,170,439 12,088,744
-------------- --------------
DEDUCTIONS FROM NET ASSETS:
Distributions to participants 18,810,637 17,163,434
Fees 113,356 95,497
-------------- --------------
Total deductions 18,923,993 17,258,931
-------------- --------------
NET INCREASE (DECREASE) 38,246,446 (5,170,187)
NET ASSETS AVAILABLE FOR PLAN BENEFITS --
Beginning of year 161,227,515 166,397,702
-------------- --------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS --
End of year $ 199,473,961 $ 161,227,515
============== ==============
See notes to financial statements.
3
THE PROFIT SHARING AND 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003 AND 2002
1. DESCRIPTION OF THE PLAN
GENERAL -- The following description of The Profit Sharing and 401(k) Plan
(the "Plan") is provided for general information only. Interested parties
should refer to the Plan document for more complete information.
The Plan was adopted by Schottenstein Stores Corporation and affiliated
companies (the "Company") effective August 1, 1989 for the profit sharing
provisions of the Plan and effective October 1, 1989 for the 401(k)
provisions of the Plan. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA").
The Plan is administered by the Company, and all Plan expenses, with the
exception of loan fees, are paid by the Company. ("MFS") Heritage Trust
Company is the trustee and asset custodian of the Plan; Lifestyle and
Company stock fund assets are in the custody of Reliance Trust Company.
CONTRIBUTIONS TO THE PLAN -- The Plan is a defined contribution plan.
Pursuant to the 401(k) feature of the Plan, an eligible employee may
contribute up to 30% of his or her cash compensation on a pretax basis,
not to exceed $12,000 and $11,000 per participant for the year ended
December 31, 2003 and 2002 ($14,000 and $12,000 for participants of at
least age 50 for 2003 and 2002, respectively). Effective January 1, 2001
the match formula is as follows:
EMPLOYEE CONTRIBUTION EMPLOYER MATCH
--------------------- --------------
1% 1%
2% 2%
3% 3%
4% 3.5%
5% 4%
6% 4.5%
The Company may also elect to make a discretionary profit sharing
contribution. Such contributions are allocated to eligible participants,
as defined by the Plan, based on the ratio of each participant's
compensation to the total of all eligible participants' compensation.
Total discretionary contributions for 2003 and 2002 were approximately
$1,222,000 and $1,147,000.
INVESTMENT OPTIONS -- Participants have the option to direct the
investment of their accounts among alternative investment funds selected
by the Plan committee. A participant chooses from a number of different
mutual and money market fund options. In addition, participants who are
employees of Schottenstein Stores Corporation and Retail Ventures, Inc.
are able to invest in the stock of Retail Ventures, Inc. and employees of
American Eagle Outfitters, Inc. are able to invest in the stock of
American Eagle Outfitters, Inc.
4
ELIGIBILITY AND VESTING -- Full-time employees are eligible for
participation in the Plan on the first of the month following the
completion of 60 days of service, and having attained the age of
twenty-one. Part-time employees are eligible after completion of 1,000
hours of service within a year.
Amounts contributed by the participants and earnings thereon are fully
vested and nonforfeitable at all times. Amounts contributed by the Company
(matching and profit sharing contributions) to a participant's account and
earnings thereon vest at the rate of 25% per year, beginning with the
second full year of service. Participants are fully vested at the end of
the fifth year of service.
ALLOCATION OF INVESTMENT INCOME AND FORFEITURES -- Investment income for
each fund is allocated to the applicable participants' accounts based on
the ratio of each participant's account balance to the total of all
participants' account balances in that fund, as defined. Forfeitures have
historically been used to offset employer contributions after five
consecutive one year service breaks, as defined by the Plan, based on the
ratio of each eligible participant's compensation to the total of all
eligible participants' compensation. The Plan's forfeitures are
immediately available to offset employer contributions.
BENEFIT PAYMENTS -- Benefits are generally payable upon the participating
employee's retirement, death, disability or termination of employment and
are paid as a lump-sum amount.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING -- The financial statements are prepared using the
accrual basis of accounting.
USE OF 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 disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
The Plan utilizes various investment instruments. Investment securities,
in general, are exposed to various risks, such as interest rate, credit
and overall market volatility. Due to the level of risk associated with
certain investment securities, it is reasonably possible that changes in
the values of investment securities will occur in the near term and that
such changes could materially affect the amounts reported in the
statements of net assets available for plan benefits.
VALUATION OF INVESTMENTS -- Investments are stated at fair value.
Unrealized appreciation (depreciation) of assets is based on fair values
at year end and fair values at the beginning of the Plan year or cost at
the time of purchase during the year. Realized appreciation (depreciation)
on sale or redemption of assets is based on the proceeds and the fair
value of the assets at the beginning of the Plan year or cost at the time
of purchase during the year.
Purchases and sales of securities are recorded on a trade date basis.
Dividends are recorded on the ex-dividend date.
PARTICIPANT LOANS -- Subject to certain provisions, a participant may
borrow from their account balances. The participant executes a promissory
note with an interest rate based upon prevailing commercial lending rates.
Loan principal and interest are paid over a period in excess of one year
as determined by the Plan committee. Principal and interest are paid
ratably through payroll deductions. Participant loans are valued at cost
which approximates fair value.
5
RECLASSIFICATIONS -- Certain reclassifications have been made to the 2002
financial statements to conform to the 2003 presentation.
3. TAX STATUS
The Internal Revenue Service has determined and informed the Company, by a
letter dated July 1, 2003, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code ("IRC").
The Plan has been amended since the latest determination letter. However,
the Plan administrator believes the Plan, as currently designed, is in
compliance and is being operated within the applicable requirements of the
IRC.
4. INVESTMENTS
The fair value of investments, which represent 5% or more of net assets
available for Plan benefits, as of December 31, 2003 and 2002, is as
follows:
2003 2002
-------------- --------------
MFS Institutional Fixed Fund $ 67,635,587 $ 65,742,160
Massachusetts Investors Growth Stock Fund 16,915,859 13,476,284
Reliance Trust Conservative Portfolio 22,366,600 12,166,014
Reliance Trust Moderate Portfolio 28,217,411 8,385,493
Reliance Trust Aggressive Portfolio 13,447,406 6,849,004
During 2003 and 2002, 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:
2003 2002
-------------- --------------
Mutual funds $ 17,521,501 $ (19,778,197)
Common stock 3,943,177 (4,674,288)
-------------- --------------
Total appreciation (depreciation) $ 21,464,678 $ (24,452,485)
============== ==============
5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to terminate the Plan at any time subject to the
provisions of ERISA. In the event of Plan termination, participants will
become 100% vested in their accounts.
6. RELATED PARTY TRANSACTIONS
Certain Plan investments are funds managed by MFS. MFS is the asset
custodian of the Plan, and therefore, these transactions qualify as a
party in interest. Additionally, as Retail Ventures, Inc ("RVI") and
American Eagle are affiliated companies, the transactions in the RVI Stock
Fund and American Eagle Stock Fund qualify as a party in interest.
Participant loans also qualify as a party in interest.
******
6
SUPPLEMENTAL SCHEDULE
7
THE PROFIT SHARING AND 401(k) PLAN
FORM 5500 SCHEDULE H, LINE 4i, SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2003
IDENTITY OF ISSUER, BORROWERS, NUMBER OF
LESSOR, OR SIMILAR PARTY DESCRIPTION OF ASSET SHARES FAIR VALUE
-------------------------------- ------------------------------- ----------- ---------------
MUTUAL FUNDS:
Reliance Trust Company Conservative Option Fund 2,025,281 $ 22,366,600
Reliance Trust Company Moderate Option Fund 2,864,392 28,217,411
Reliance Trust Company Aggressive Option Fund 1,415,248 13,447,406
PIMCO Total Return Fund 546,664 5,854,768
*MFS Total Return Fund 215,542 3,254,679
Vanguard 500 Index Fund 55,302 7,451,348
*MFS Massachusetts Investors Trust 37,521 586,073
*MFS Massachusetts Investors
Growth Stock Fund 1,494,334 16,915,859
*MFS Capital Opportunities Fund 49,816 592,813
*MFS Emerging Growth Fund 27,863 787,700
Lord Abbett Developing Growth Fund 39,356 604,111
American Funds New Perspectives Fund 126,254 3,091,971
American Funds Europacific Growth Fund 112,596 3,401,514
GUP Conservative Portfolio 2,158 21,060
GUP Moderate Portfolio 640 5,376
GUP Aggressive Portfolio 529 3,844
Ariel Ariel Fund 26,051 1,175,420
Delaware Trend Fund 86,107 1,623,978
Dreyfus Mid-Cap Index 51,652 1,206,584
Armada Core Equity Fund 13,076 145,540
Dreyfus Small Cap Index 47,643 816,608
MFS Value Fund 26,293 534,807
---------------
Total mutual funds 112,105,470
---------------
COMMON COLLECTIVE FUND --
*MFS Institutional Fixed Fund 67,938,162 67,938,162
COMMON STOCK:
Retail Ventures, Inc. Common Stock 808,425 3,840,019
American Eagle Outfitters, Inc. Common Stock 213,865 3,507,386
---------------
Total common stock 7,347,405
---------------
TOTAL INVESTMENTS --
AT FAIR VALUE 187,391,037
PARTICIPANT LOANS --
*Various Participants Outstanding Participants Loans
(with interest rates ranging
from 5% to 10%, with maturities
through 2021) 9,695,441
---------------
TOTAL $ 197,086,478
===============
*Denotes party-in-interest.
8
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE PROFIT SHARING AND 401(k) PLAN
Date: June 28, 2004 By: /s/ George Dailey
------------------------------------
Name: George Dailey
Title: Plan Administrator
9
THE PROFIT SHARING AND 401(k) PLAN
ANNUAL REPORT ON FORM 11-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003
INDEX TO EXHIBITS
Exhibit No. Description
----------- -----------
23.1 Consent of Deloitte & Touche LLP,
Independent Registered Public Accounting Firm
10